Pipeline News July 2012

PIPELINE NEWS Saskatchewan’s Petroleum Monthly

July 2012

Canada Post Publication No. 40069240

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Volume 5 Issue 2

Oil¿eld's Essential Compound

H2O Making a

SPLASH 4TH ANNUAL SASK. OIL AND GAS FORUM WBPC

2012

There’s a lot of water Ňowing when the pumps are turned on at the new Ideal Water facility, between Forget and Kisbey. The operaƟon supplies fresh water, the vast majority of which is used for fracking.

Photo by Brian Zinchuk

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PIPELINE NEWS July 2012

INSIDE SECTION A 4

Husky CO2 LiquefacƟon Facility

17 Husky Donates

5

Q&A With MLA Tim McMillan

19 Wanska Energy Alliance

12 Baker Hughes H2prO Unit

28 Lloyd. Ladies of the Patch Tee It Up

14 CAODC Tweaks Drilling Forecast

31 Lloyd. Contributes $50K

SECTION B 1

WBPC - Wade Koeser

10 WBPC - ScoƩ Tinker

4

U.S. Needs Energy Security

12 LandSoluƟons New Lampman Oĸce

6

Williston Lodges

16 WBPC - Jim Volker

8

Californian Working In North Dakota

SECTION C 1

Ideal Water

5

Dean PoƩer Talks About Junior Companies

8

12 Stephen Crocker On PTI Working With First NaƟons 15 Vivek Warrier Speaks at Sask. Oil And Gas Forum

Jihad Traya On Natural Gas

10 Savanna Partners With First NaƟons

18 TransGas' Mobile Compression

PIPELINE NEWS Saskatchewan’s Petroleum Monthly

August 2012 Focus

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PIPELINE NEWS July 2012

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TOP NEWS Husky Place a building block for Lloyd

Husky CEO Asim Ghosh, holding the scissors used to cut the ribbon at the opening of Husky Place, shakes hands with Vermilion-Lloydminster MLA Richard Starke while Lloydminster Mayor Jeī Mulligan, leŌ, and Cutknife-Turtleford MLA Larry Doke, right, look on.

By Geoff Lee Pipeline News Lloydminster – The grand opening of Husky Place in Lloydminster is concrete proof Husky Energy intends to maintain its heavy oil production operations in the region for years to come.

The new landmark is also a state-of-the-art office building designed to accommodate up to 375 employees in a collaborative work environment to advance Husky’s business plan.

“The building, as a place to work is OK, but what is more exciting is the work we are doing,” said Husky CEO Asim Ghosh following the ribbon-cutting ceremony on May 17.

Ghosh was also on hand for the official opening of Husky’s new carbon capture and liquefaction facility that uses processed CO2 from its ethanol plant to enhance oil recovery in candidate reservoirs.

“The work that we are doing is taking one of our oldest producing assets and transforming the technology to extend the life of it,” said Ghosh.

“It is very seldom that oilfields that are 65 years old are still producing and still growing.”

Husky produces approximately 90,000 to 100,000 barrels of oil a day from its Lloydminster operations including nearly 20,000 bpd recovered with thermal technologies.

“What we are really excited about is with the new technologies – the shift to thermal, the shift to horizontal wells, we are seeing growth again in Lloyd,” added Ghosh.

“And not only that, we are in investing in the next generation after that in enhanced oil recovery – so this is sort of a passing phase – when we can see a long life ahead for this field. That is the really exciting part.

“The building is good because it creates a working environment. We are trying very hard at Husky to break down silos to have cross-functional learning, and the building allows that to happen.

“But at the end of the day, it’s not about the building, it’s about the business.”

Ben Tao, Husky’s senior project manager and the architect of Husky Place, said his vision was to

create “a very open and collaborative building that would help improve the way we do business,” and leverage technology, communication and employee wellness for employee productivity.

The 105,000 sq.-ft. three-storey building will also serve as a regional data centre for Husky’s facilities in the Lloydminster area with a 300-megabit per second information technology system supported by a backup generator.

“We have advanced technology in the AV and communication network for IT,” said Tao, who led tours of the building.

“The overall health and safety – we’ve got a fitness centre; we have a really efficient air handling system for clean air and a healthy environment, and lots of natural light.

“The right to light philosophy is an underlying design factor for the design of the office environment.”

The grand opening took place in the glassed north atrium.

Hundreds of employees and invited guests filled the open space and the overhead stairwells to hear speakers touch on the theme of Husky’s long-term outlook in Lloydminster.

“Really it’s about more than a building. It’s a significant commitment to our region,” said Lloydminster Mayor Jeff Mulligan.

“It’s about confirming stable, long-term employment in the Lloydminster area, and it’s adding valuable infrastructure for the professionals who work for Husky.

“Husky Energy in Lloydminster is much more than a facility, much more than a building – much more than an energy employer.”

The opening ceremony included Husky’s $1.1 million donation to Lakeland College to train new power engineers who are in demand in the heavy oil industry.

“Their corporate citizenship leads all, second to none. The way that their staff don’t just work here and do a great job in the energy sector, but also, so many of these people are coaches, volunteers, community leaders, caring for our community and building a great place for families to live, work and

play,” added Mulligan.

Construction of Husky Place began in 2010 with a sod turning attended by Saskatchewan Premier Brad Wall and Tim McMillan, minister responsible for Crown Investment Corporation.

“It’s very gratifying to see Husky Place now open as a new landmark in the city,” said CutknifeTurtleford MLA, Larry Doke who brought greetings on behalf of the Saskatchewan government.

“Two years ago, the premier talked about what deep roots Husky has with Lloydminster roots that go back 65 years when Husky built a refinery to process oil from its heavy oil leases,” said Doke.

“This building is a shining example of what continues to flower from those roots. It’s an attractive building to be sure, and state-of-the-art when it comes to energy efficiency.

“What will distinguish it in the future is the activity that will go on within these four walls.”

Doke’s riding includes the location of some of Husky’s CO2 pilot projects in Edam, Mervyn, Lashburn and Tangleflags that he calls a win-win situation for industry and the environment.

“As it has shown over the years and again today, Husky is an innovator in enhanced oil recovery technologies which is helping industry to tap the potential of our vast crude oil resources,” he said.

“Husky obviously likes doing business in Saskatchewan, and our government wants it to continue doing business in Saskatchewan for a long, long time.

“Successful innovative companies like Husky are contributing to a growing thriving Saskatchewan. They are helping to build an energy power house on the Canadian prairie,” Doke said.

The grand opening included a welcoming statement from Husky’s Paul Zorgdrager, vice-president of production operations for heavy oil, and congratulations from Alberta Premier Alison Redford delivered by Vermilion-Lloydminster MLA, Richard Starke.

There was also an unveiling of a building plaque

by Asim Ghosh and John Simpson, president of CANA Group of Companies that built Husky Place.

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PIPELINE NEWS July 2012

BRIEFS Longview focuses on Nevis

Longview Oil Corp. began its 2012 capital expenditure program this quarter with the addition of producing wells that has maintained stable production levels.

During the third and fourth quarters of 2011, Longview conducted a number of well workovers and reactivations, primarily in southeast Saskatchewan, which resulted in higherthan-normal operating costs. The company expects operating costs to decrease during 2012 as fewer well workovers and reactivations are planned.

Capital expenditures for the three months ended March 31, 2012, were $18.6 million. The company drilled 9.9 net oil wells (16 gross) at 100 per cent success rate with 6.8 net oil wells to be brought on production after quarter end. Drilling was focused at the Nevis property in Alberta.

The 2012 capital budget is roughly $73 million, which includes the drilling of 25.3 net (34 gross) wells.

The company has contracted three rigs, two of which will target Alberta prospects with the additional rig targeting the Midale formation in southeast Saskatchewan.

The capital expenditure program also includes analysis of cores that were taken from the Duvernay and Nordegg shale formations on a well that was drilled at Sunset in the fourth quarter of 2011.

Detailed core analysis is expected by this summer.

Briefs courtesy Nickle’s Daily Oil Bulletin

Ed Connolly, senior vice-president of heavy oil, oĸciated at the grand opening of Husky’s new CO2 capture and liquefacƟon facility in Lloydminster. In the background are three 900,000 gallon tanks that store liquid CO2 ready to be trucked to injecƟon sites for enhanced oil recovery applicaƟons.

CO2 Áoods to sustain Husky production

By Geoff Lee Lloydminster – Husky Energy is adding some long acting fizz to its heavy oil wells in the Lloydminster area with the startup of its new carbon dioxide capture and liquefaction facility.

Carbon dioxide sourced from the ethanol plant is pure enough to carbonate soft drinks, but will be used by Husky to enhance and sustain oil recovery in new and existing reservoirs.

“We produce 90,000 to 100,000 barrels of oil a day out of this Lloydminster block,” said Ed Connolly, senior vice-president of heavy oil, following the facility opening on May 17.

“Our long term plan is to sustain that production for 10, 20 and 30 years. There is enough oil to do that.

“We are not trying to grow production. We are trying to sustain it because other technologies play out – in the mature phase – then they decline.

“This is intended to replace those volumes.”

Husky’s innovative liquefaction technology provides a double benefit by allowing more oil to be recovered while reducing CO2 emissions produced by the fermentation process in the ethanol plant.

The ethanol plant produces approximately 130 million litres of ethanol a year from non-food quality grain and corn.

The new CO2 facility will convert 250 tonnes per day of clean CO2 into a high pressure refrigerated liquid for use in enhanced oil recovery projects.

The compressed liquid CO2 will be trucked to target well locations where it will be stored on site, vapourized and injected into reservoirs to displace oil, making it easier to extract.

When the reservoirs are fully depleted, the CO2 will be permanently stored underground.

Connolly said hundreds of wells in the Lloydminster area will get the CO2 injection and carbon storage treatment in the long term.

“In the short term, we have several pilots. We have two pilots in process right now,” he said.

The CO2 pilots are located in Edam, Mervyn, Lashburn and Tangleflags.

“About 15 wells are what we see in the start-up phase,” added Connolly.

Husky has no plans to sell its CO2, a point confirmed by CEO Asim Ghosh on a major news day for his company in Lloydminster.

“At this point, what we can see, we can use ourselves,” he said follow the official opening of the new Husky Place office and a donation of $1.1 million to Lakeland College energy programs.

“If it turns out that we have more than we need, then we would be open to selling it to others as well. At this point, we can see that we can use all that we produce.”

Connolly pointed out that about 90 per cent of the reservoirs are suitable for CO2 flooding in the Lloydminster area.

“The other 10 per cent – we use a different techniques – we use thermal processes,” he said.

“We are developing those with steam floods and SAGD steam processes.” ɸ Page A8

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PIPELINE NEWS July 2012

McMillan energized by cabinet shufÁe

By Geoff Lee Regina – Saskatchewan Premier Brad Wall shuffled his cabinet on May 25 with the biggest change being the creation of a super size Ministry of the Economy headed by former Energy and Resource minister Bill Boyd.

Reporting to Boyd is Lloydminster MLA Tim McMillan as minister of Energy, and minister of Tourism Saskatchewan and Trade. McMillan also becomes minister responsible for SaskEnergy.

Prior to the cabinet switch, McMillan’s main portfolio was minister responsible for Crown Investments Corporation.

McMillan made his first speech as minister of Energy and Resources at the Saskatchewan Oil and Gas Forum in Regina on May 31. The following day, McMillan did a Q and A interview with the Pipeline News.

The topics covered comments he made in Regina regarding national NDP leader Thomas Mulcair’s call that a high dollar from booming natural resource exports is hurting Canadian manufacturers.

Mulcair calls that “Dutch disease” which McMillan takes exception to as a spokesman for Saskatchewan’s growing energy sector that includes oil and gas, potash and uranium mining.

ties I had before the shuffle, they are completely different types of portfolios. This one is pretty exciting with a lot of stakeholders that are doing a lot of really innovative things to produce, oil and gas, uranium and potash.

PN: How does your ministry relate to the super size Ministry of the Economy?

McMillan: Bill is minister for the Economy and he is responsible for all aspects of the financial health of our province.

Within that are Energy and Resources, Tourism and Trade. Those are the ones that I am specifically responsible for.

PN: How do Energy and Resources and SaskEnergy go together?

McMillan: SaskEnergy is going to be very interesting. Before the cabinet shuffle, I was minister of the Crown Investments Corporation which oversaw all of the Crown corporations.

I have quite a bit of familiarity with SaskEnergy, but now I am getting a lot more immersed in the details of the company. Their core business is the sale and distribution of natural gas to business and residential customers.

PN: What are you doing between now and the fall legislature?

McMillan: In the short term, I have a lot of binders that I am PN: What was your reaction bepowering through – and briefings ing named minister of Energy with officials. and Resources on May 25?

We will be meeting with a lot McMillan: I was pretty exof stakeholders in the next short cited. It’s something I have been Lloydminster MLA Tim McMillan while to start building relationinterested in for a very long time. ships, because I think that is important Lloydminster is my riding, and before for a minister to have those relationI got elected, I worked in the oil and gas industry so it’s something I have a great of interest for. I ships.

Inevitably things change, and being able to pick up a phone think it’s very important for our province that it’s done well. I in either direction is something I have always found very helpam very pleased that the premier asked me. ful in my previous positions.

PN: Where were you raised and where do you live now?

PN: What are your priorities as the minister of Energy McMillan: I went to school in Lashburn and our family farm (century old homestead) is almost equal distance between and Resources?

McMillan: There is a very strong industry especially on the Lashburn and Lloydminster. oil side right now. We’ve been very clear as a government about PN: What kind of oilfield business did you run?

McMillan: It was just heavy equipment. I had road graders; maintaining a stable royalty regime, ensuring that our regulators I had a road sander for awhile; I did some towing in the oilfield are working with industry and building strong relationships to get the result that works for both the industry and for governin the Tangleflags area. ment.

PN: What did that teach you about the industry?

Some broader goals are the lack of pipeline capacity – the McMillan: How hard people worked, and how important it is to be committed to the work you are doing. If somebody large price differentials between the oil stranded here in Canada wants a road fixed or sanded, it’s very important that all the little and what we could get for it if we had good pipeline capacity pieces happen when they should, so that production carries on down to the Gulf Coast.

We are pushing anyway we can to get the XL (TransCanand there isn’t a problem.

PN: Has your phone being ringing off the hook since the ada Keystone XL) and the Northern Gateway (Enbridge Inc.) moving forward as well. cabinet shuffle on May 25? ɸ Page A9 McMillan: It’s been busy. Coming from the responsibili-

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BRIEFS Allstar Energy

Allstar Energy Limited, a 100 per cent owned subsidiary of 49 North Resources Inc., recently completed a re-entry program on an existing suspended vertical well on the Riverside lands that was purchased from a third party in the first quarter of 2012.

After re-initiating inflow from the formation, the well exhibited “extremely encouraging” pump rates in excess of 100 boepd, the company said. After 30 days of initial production, pump rates have been restricted to and stabilized at approximately 60-70 boepd.

Given the strong results from the initial re-entry program, Allstar is currently in the process of accumulating and reviewing proprietary 2D seismic data acquired with the asset acquisition.

Allstar has also begun permitting an extensive 3D seismic program on the Riverside lands for the purpose of further defining the reservoir and future drilling locations. Concurrent to this, Allstar has applied for regulatory approval to re-enter an abandoned wellbore that exists within the currently held lands. Using the existing 2D seismic and proposed 3D seismic program, Allstar plans to develop an aggressive drilling program for the summer and fall of 2012.

Allstar now holds approximately 31,360 acres in the vicinity of Leader, Saskatchewan, which is collectively referred to as the Riverside properties. Given the sizeable land position now held, Allstar said it is very encouraged by the positive results of the initial re-entry program.

Briefs courtesy Nickle’s Daily Oil Bulletin

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PIPELINE NEWS July 2012

PIPELINE NEWS

EDITORIAL

Mission Statement: Pipeline News’ mission is to illuminate importance of Saskatchewan oil as an integral part of the province’s sense of community and to show the general public the strength and character of the industry’s people.

Publisher: Brant Kersey - Estevan Ph: 1.306.634.2654 Fax: 1.306.634.3934 Editorial Contributions: SOUTHEAST Brian Zinchuk - Estevan 1.306.461.5599 SOUTHWEST Swift Current 1.306.461.5599 NORTHWEST Geoff Lee - Lloydminster 1.780.875.5865 Associate Advertising Consultants: SOUTHEAST • Estevan 1.306.634.2654 Cindy Beaulieu Candace Wheeler Kristen O’Handley Deanna Tarnes Teresa Hrywkiw CENTRAL Al Guthro 1.306.715.5078 al@prairieng.com SOUTHWEST • Swift Current 1.306.773.8260 Stacey Powell NORTHWEST • Lloydminster Randi Mast 1.780.808.3007 MANITOBA • Virden - Dianne Hanson 1.204.748.3931 • Estevan - Cindy Beaulieu 1.306.634.2654 CONTRIBUTORS • Estevan - Nadine Elson To submit a stories or ideas: Pipelines News is always looking for stories or ideas for stories from our readers. To contribute please contact your local contributing reporter.

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Whisky is for drinking; water is for Àghting over “The Saskatchewan oil industry is a bit of a misnomer. It’s actually a water industry that produces the by-product oil,” said Malcolm Wilson, PhD., CEO of the Petroleum Technology Research Centre in Regina.

He’s right, of course. People in the industry know this, but the general public isn’t nearly as familiar with the concept. They think of gushers, or Jed Clampett huntin’ for some food, and up from the ground come a-bubblin’ crude.

A Manitoba producer who had a lot of “stripper wells” once told us they should be called the Virden Water Utility. With wells putting out water cuts as as high as 96 per cent, it was akin to cleaning the sheen of oil off a puddle under the leaky oil pan of an old truck.

A Baker Hughes water specialist pointed out that worldwide, typically three to six times as much water comes out of a well as does oil.

Produced water, always salty, can be used in a waterflood to increase oil production. In the natural course of things, this is often happens as initial production declines.

For the most part, water, in the form of produced water, is a nuisance issue. It needs to be disposed of, usually down disposal wells. In Ohio, they’ve ended up with a few disposal wells near a fault, causing some small earthquakes – around a magnitude 4.0 on the Richter scale. But as soon as you use “earthquake” and “oil” in the same sentence, the industry gets a black eye.

So too, it is with water consumption. The advent of hydraulic fracturing as the new norm for shale oil and shale gas means the requirements for huge amounts of water. There’s a push to minimize the

amount of fresh water used by treating produced water and making use of that. It’s not likely to completely replace fresh water needs, but it can at least reduce the impact.

In a society where the oil industry is under increasing scrutiny for everything it does, a few black eyes make it difficult for everyone.

Anyone who has watched the news and seen a farmer light their kitchen tap water on fire due to nearby coal bed methane extraction will never forget it.

A few years ago, Quebec shut down fracking due to concerns over water. New York state is in a tizzy over it. New Jersey banned it, although one presenter at the Williston Basin Petroleum Conference noted they had nothing to frac in the first place.

But that’s the entire point. Messing with the water supply in any way shape or form gets people upset.

Not just upset, but totally off-their-rocker irrational.

This is the battle in the U.S. right now. The energy industry, which has all of a sudden seen a renaissance in oil and gas production, is scared witless that its golden goose – fracking – is about to be regulated to death. Say the letters “EPA” at a conference, and the whole room shudders.

The answers are relatively simple: reduce fresh water consumption as much as possible. Do everything possible, especially in well design, to protect fresh water aquifers. And whatever you do, don’t be the guy that lets his guard down and gives the industry another black eye.

Mark Twain is quoted as noting, “Whisky is for drinking; water is for fighting over.”

With the concerns over water and fracking, perhaps it’s time to have a drink.

PIPELINE NEWS July 2012

From the Top of The Pile

A7

OPINION

By Brian Zinchuk

Williston N.D.: Meet Fort Mac, U.S.A. If there was ever a cross between the Klondike gold rush and Fort McMurray, you would find it in a little city known as Williston, North Dakota.

It’s the community from which the Williston Basin takes its name. It’s also the epicentre of the Bakken play for North Dakota. That play has seen oil production more than double in two years, eclipsing Saskatchewan and rising to the second highest production numbers for a state in the U.S. of A. Only Texas produces more oil now, with California and Alaska recently surpassed.

According to the mayor of Williston, Ward Koeser, 90 per cent of that drilling is happening within 70 miles of his community.

Driving from home from the Williston Basin Petroleum Conference which took place in Bismarck, N.D., I decided to take the slightly longer route and travel via Dickinson and Williston.

Once you turn north near Dickinson, you start seeing activity – a lot of it. The building crescendo travelling north on U.S. Route 85 is like the opening of 2001: A Space Odyssey, culminating in the city of Williston itself, before quickly falling off north of the city.

First you see leases with numerous frac trailers.

Then a yard that probably had a few hundred.

Then it’s the campers. Everywhere you look, you see more campers – in towns, on farms, along the highway. One site was filled with row upon row of campers, possibly former FEMA trailers, as they were identical and without the decals typical of RVs sold to individual customers.

Williston, itself, has seen its industrial areas spread to the north and south of the city. The new Baker Hughes is huge. Not only does it have enough fuel bowsers to pass for a medium sized truck stop in Saskatchewan, the entire site is paved – in concrete – acres and acres of concrete.

You can’t swing a dead cat near Williston without

hitting another camp. In and around Williston and the surrounding county, there are apparently 10,000 beds in what they call “man camps,” and that number is growing. (If a woman stays there, do they change the name?)

I visited the largest, the Bear Paw Lodge, operated by Target Logistics. They have three facilities on the same site. Target has 10 in North Dakota now, all installed in the past three years.

Across the fence from the Bear Paw Lodge is another large camp. And a half mile from it, yet another is under construction.

Both inside the city and along its outskirts, numerous hotels are under construction or have been recently built. I used the fudge term “numerous” because I literally was not able to count them all. Every time I turned, I saw another one.

The city is considering relocating its airport so that it can develop that large space within its limits. A temporary bypass is being built with haste to relieve the pressure on the truck bumper-to-truck bumper existing bypass.

At the Walmart, I found two security guards in a small SUV. They weren’t greeters. They were shoo-ers, as in, “You, in your RV – shoo!”

Walmart typically is quite open to people staying in their RV overnight in one of their numerous parking lots, because the people will often shop before they leave. Except in Williston, where finding accommodations anywhere is a challenge, let alone affordable accommodations, those in their campers weren’t leaving.

It became a squatters’ camp, and social ills soon followed.

As a result, the campers got the heave-ho, and the guards now watch the parking lot.

The mayor said rent for a new construction onebedroom apartment is now $2,350 per month. No wonder the parking lot was filling up. Now the city is considering banning people living in their RVs

within city limits.

The city has built 2,000 housing units in 2011, and anticipates 3,000 to 3,500 this year. That makes construction in places like Estevan and Weyburn seem miniscule in comparison. Yet a decade ago, the population of Williston was 12,500. Now it’s more like 20,000.

In a country that has 12.7 million unemployed, and an unemployment rate of 8.2 per cent as of May 2012, there are still 3,000 unfulfilled jobs in Williston. If you have a pulse, you have work. It amazes me that even more people haven’t flooded in.

While a presentation two years ago at the same conference that predicted one million barrels a day of Bakken production by 2020 (mostly in North Dakota, but including Canada) received derision, now it was prescient.

The question I had for the president of the North Dakota Petroleum Council, Ron Ness, was “These numbers are only referring to primary production, right?”

That is correct. They haven’t even taken a look at secondary production, i.e. waterflood, or tertiary production, like CO2 injection. With those technologies, the Weyburn field will likely be producing for nearly 100 years after it was first developed. Who knows how long they will stretch out the Bakken play?

The first Bakken well was drilled in 1951, 30 miles northeast of Williston. It took nearly 60 years for it to click.

Six decades on, the story of Williston is just beginning.

Brian Zinchuk is editor of Pipeline News. He can be reached at brian.zinchuk@sasktel.net.

Lee Side of Lloyd

By Geoff Lee

Husky homers in Lloyd’s ballpark

Lloydminster scored a three run economic homer from the bat of Husky Energy on May 17 that will keep the city and Husky in a league of its own for years to come.

Husky’s historic rounding of the bases for Lloydminster included the grand opening of its Husky Place office, a donation of $1.1 million to Lakeland College, and the official start-up of its new carbon dioxide capture and liquefaction facility.

All three major investments and newsmakers represent a significant boost of confidence in the long term economic health of Lloydminster – with a promising outlook for sustainable production of heavy oil by Husky for years to come.

The overwhelming feeling of confidence from the triple whammy started with the official opening of Husky’s new Husky Place office that demonstrates the company’s long term commitment to the region.

Husky and its employees have been in Lloydminster for more than 65 years. The company currently employs more than 900 people including a staff of more 300 workers at Husky Place.

The new building provides a state-of-the art environment for employees with room to accommodate 375 employees in a growth industry.

The biggest round of applause was reserved for Husky’s $1.1 million donation for the expansion of Lakeland College’s power engineering lab and programming.

The donation is the largest Husky has made in the Lloydminster area and will help fund the construction of a larger power engineering lab to be named the Husky Energy Power Engineering Lab. Some of the funds will go toward scholarships for power engineering students and expanded programming aimed at addressing the shortage of power engineers in the region.

Husky produces approximately 20,000 barrels of heavy oil per day from thermal technologies that require power engineers to maintain and operate.

Pikes Peak South and Paradise Hill are the newest thermal projects in Saskatchewan to start production in 2012.

The company’s total daily production of 90,000 to 100,000 bpd from Lloydminster operations is also sustainable with the start-up of the new CO2 capture and liquefaction facility.

In fact, Husky estimates current levels could be sustainable for up to 30 years by capturing 250 tonnes a day of CO2 from its Lloydminster Ethanol Plant for use in enhanced oil recovery projects in the area.

All of the CO2 will eventually be permanently stored underground.

The three run homer helped to underscore the fact that Husky and its employees have been a part of the Lloydminster community for more than six decades in a mutually beneficial relationship.

No one would have blamed Lloydminster Mayor Jeff Mulligan if he had used the “I am the luckiest man on the face of the Earth” quote from the late New York Yankees’ great Lou Gehrig during his speech on Husky’s banner news day in Lloydminster.

Sure it would have been corny, but we are all the luckiest people on Earth to be living in community that is growing, thriving, well educated, and more diverse than ever in a world that is still dependent on oil.

Husky is not the only heavy oil player in town, but the delight of the hometown crows on May 17, it proved once again to be the heaviest hitter in Lloydminster’s own ballpark.

PIPELINE NEWS INVITES OPPOSING VIEW POINTS. EDITORIALS AND LETTERS TO THE EDITOR ARE WELCOME. Email to: brian.zinchuk@sasktel.net

A8

PIPELINE NEWS July 2012

Husky carbon capture Éş Page A4 Husky’s 8,000 barrel per day Pikes Peak South thermal project and the 3,000 bpd Paradise Hill thermal project in the Lloydminster, Saskatchewan area are on target to begin production in the third quarter of 2012. “In the heavy oil business, the major key to that is new technology to enhance oil recovery,â€? said Connolly. “We only produce a small amount of oil with conventional techniques, so we use an enhanced oil recovery process to

increase that recovery.�

The CO2 capture and liquefaction project is a partnership involving Husky, the federal government and the government of Saskatchewan. “Natural Resources Canada has contributed $14 million toward this eort over the last few years,â€? said Connolly in his opening remarks. “The province of Saskatchewan, through their royalty incentives, has contributed $9 million. We wouldn’t be here without that partnership. “This is a good

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story. It’s a big environmental achievement to take that carbon dioxide out of the air. From an energy perspective, it goes a long way to helping to provide the energy people in the world need. “From an economic impact perspective, certainly Lloyd will help Husky maintain its strength in sustaining our oil production for a long time. “There’s a strong economic beneďŹ t to the provinces of Saskatchewan and Alberta, and particularly this community in Lloydminster,â€? he said.

The ongoing ďŹ eld piloting program also receives support from the Saskatchewan government through the Petroleum Research Incentive program. “The unveiling of the new carbon dioxide and liquefaction facility that captures CO2 emissions from the ethanol plant here is all very exciting,â€? said CutknifeTurtleford MLA Larry Doke who helped cut the ribbon.

Larry Doke MLA for Cutnkife-Turtleford, shakes hands with Lloydminster Mayor JeÄŤ Mulligan following a ribbon cuĆŤng exercise, joined by Ed Connolly, senior vice president of heavy oil, leĹŒ, Husky CEO Asim Ghosh, centre, and Vermilion-Lloydminster MLA Richard Starke to open the new CO2 capture and liquefacĆ&#x;on facility near the ethanol plant.

“This has a double beneďŹ t in that CO2 emissions are reduced and CO2 that is captured helps in the recovery of heavy oil. “That’s a win-win for Husky, the industry, our economy and it’s a win-win for the environment.â€?

Connolly touched on the CO2 process that starts with the collection of CO2 euent from the ethanol plant with the aid of a 500 horsepower blower.

The CO2 is then

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Husky’s new CO2 storage facility in Lloydminster is equipped with two automated truck loading staĆ&#x;ons and three 20-tonne liquid CO2 tanker trucks that transport CO2 to the oilÄŽeld.

transferred by pipeline to the CO2 capture facility.

The CO2 goes through several stages of compression, cooling and dehydration to convert it from a gas to liquid that is then stored in one of three 900,000-gallon storage bullets. “One of those tanks will capture one day’s production,� said Connolly.

The storage facility is equipped with two automated trucking loading stations and three 20-tonne liquid CO2 tanker trucks that ďŹ ll up about 10 times a day for transport to the oilďŹ eld. “When we get to the oilďŹ eld, we have another storage tank like that, about one-third the size – 90 tonnes,â€? said Connolly. “We transfer the liquid carbon dioxide from the truck to that tank. Then, we turn

around and vapourize the carbon dioxide and we pump into the well about 1,800 feet below the ground. “We take all the CO2 that comes o the ethanol plant and each day, we pump it into the well.â€?

Injected CO2 mixes with the oil, helps to reduce its viscosity and energizes the oilďŹ eld which pushes more oil into the wellbore. “We increase our oil recovery substantially by injecting the carbon dioxide,â€? said Connolly. “If any carbon dioxide comes up with the oil, we recapture that at the local site and reuse it again, so it keeps building and building. “Eventually, we have taken as much incremental oil as we can using that process, and the carbon dioxide stays underground.

That is pretty much in a nutshell, the process,�

Connolly.

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PIPELINE NEWS July 2012

A9

A strong resource sector is good for all of Canada ɺ Page A5 PN: What does Husky’s new office and CO2 capture and storage facility mean to heavy oil in the Lloydminster area?

McMillan: Husky is obviously a great company and their commitment to Saskatchewan is very much appreciated. They were rebuilding their head office, and to put it right beside the old one when they had other options was very much noticed and appreciated in Saskatchewan.

I think a lot of companies are looking at ways to enhance oil recovery – at the same time, there are the environment aspects which are very positive by utilizing CO2. I think there are going to be a lot of different solutions.

This is one that hopefully works very well for them.

PN: Did you get applause for refuting NDP leader Thomas Mulcair’s criticism of the West for inciting so-called Dutch disease in your first speech?

McMillan: [laughs] There was a lot of discussion about Mulcair’s comments on this Dutch disease idea he has. Not many people in the room were buying into it.

They share my view that a strong resource sector is good for all of Canada, and I think studies show that the oil rich Western provinces are the export markets

for Eastern manufacturing.

They sell a great amount of manufactured goods to Western Canada and we are all stronger because of it.

There was also a lot of discussion about the pipeline issues – the Keystone XL. The NDP have been active in Washington lobbying against that pipeline. That is something that as minister, I am going to be working very hard at to put forward a clear message coming from the government of Saskatchewan – that we do believe in a strong resource sector.

We think pipeline capacity is a major issue.

We want to see a result.

PN: Alberta Wildrose Party leader Danielle Smith called Mulcair a bully. Is that a fair comment?

McMillan: Our premier (Brad Wall) has used some pretty strong language. I think it boils down to him (Mulcair) thinking this is good politics in Quebec. I don’t think it is solid economics.

I don’t think it’s necessarily good for Quebec or Canada. It is a little scary when it’s been batted around for political reasons.

A public opinion poll came out last week and I think it said if an election were held today, Mulcair would win a minority government right in the middle of all this Dutch disease talk.

PN: Your gloves

came off in the very first week of your new position?

McMillan: I guess I am a believer that our resource sector is extremely important to our province and our country and I am now responsible to be somewhat of a spokesperson that keeps it moving forward.

A large part of my job is communicating that Mulcair’s ideology is not good for Canada.

PN: Will you continue to help break down interprovincial energy barriers within the New West Partnership?

McMillan: Absolutely. Where it makes sense for us to co-operate we should. When there is talk coming out of Eastern Canada from Mulcair and the NDP, I think Western Canada can stand together with a common voice and say ‘no we don’t share that view.’

Western Canada, as a group, believes that our resources are a benefit to Canada. It’s stronger than each of us

saying it individually.

To industry, when we start harmonizing our rules around trucking and recognizing certain types of certifications of professions, it makes it easier for industry to do the work they do. That benefits us all as well.

PN: What is your take on the future development of the oilsands?

McMillan: I am

obviously very hopeful.

A lot of good work has been done there in the past – but the business model didn’t seem to pan out (Oilsands Quest). I think they are currently working through a process on that. I have heard from others that there is more interest up there. I think at some point it is going to be a great resource for us.

Technology changes

continually and we see it around Lloydminster – really everywhere in the oil industry – oil that was not attainable five years, a new pump comes out, a new fracking technique and that oil becomes accessible.

We know the oil is in place in Northern Saskatchewan and we know at some point fairly soon that technology with catch up with it.

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A10

PIPELINE NEWS July 2012

McMillan takes on Mulcair in Àrst speech as Saskatchewan Energy and Resources Minister

By Brian Zinchuk Pipeline News Regina – Saskatchewan’s new minister of Energy and Resources, Tim McMillan, wasted no time in taking a swipe at the federal leader of the Opposition, Thomas Mulcair, when he delivered his first public speech in his new portfolio.

McMillan was one of the keynote speakers at the Insight Information Saskatchewan Oil and Gas Forum in Regina on May 31.

The new minister’s inaugural speech was on that same day that Mulcair visited the oilsands for the first time. Mulcair had raised the hackles of western premiers in previous weeks by calling them messengers of Prime Minister Stephen Harper and saying Canada is suffering a case of “Dutch disease” in which Eastern Canada’s manufacturing sector is being hurt by Western Canada’s resource riches.

McMillan, who represents heavy oil capital Lloydminster in the Saskatchewan legislature, had operated an oilfield service company prior to becoming an MLA. He also holds a degree in economics.

“In some circles, we continue to face a perception challenge. As you are well aware, it was recently suggested by NDP leader Thomas Mulcair, that high resource prices is not positive for the Canadian economy. He’s been suggesting high resource prices drive up the value of the Canadian dollar – that the success of the resource-rich provinces – therefore are penalizing the provinces that which historically have heavy manufacturing bases – due to reduced competitiveness,” McMillan said.

“Not long after this argument was advanced,

the Institute for Research on Public Policy released a major study, and the study was Dutch Disease – or the Failure to Compete? A Diagnosis for Canadian Manufacturing Woes.”

McMillan pointed out the study said Canada’s manufacturing woes were primarily due to a failure to compete. They were not attributed to the success on the part of resource-centred economies such as Saskatchewan or Alberta. “The IRPP concluded . . . manufacturing output is not impacted by the strong Canadian dollar. This includes the automobile industry,” he said.

“The government of Saskatchewan does not agree with the notion that Western Canada success has been detrimental to the success of Canada as a whole.

He quoted another study by the MacDonald Laurier Institute, saying, “The growth and success of Western Canada was driving the manufacturing sector across the country. The oil and gas industry, in turn, uses those higher revenues to purchase vast amounts of goods and services in the rest of the country. In effect, petroleum rich provinces have become export markets for the rest of the country.

Canadians in general, including the manufacturing sector, are enriched by the presence of valuable resource commodities.”

“There is no basis in fact for what Thomas Mulcair put forward, and I sincerely hope that those who advance this hypothesis will acknowledge that, and recognize this serves no purpose in supporting the Canadian economy as a whole,” McMillan said.

Importance of sector

The oil and gas sector accounts for approximately 20.7 per cent of real GDP in Saskatchewan, he noted. Saskatchewan is the second largest oil producing province and third largest producer of natural gas.

Oil and gas has $4.5 billion in investments in exploration and development in Saskatchewan in the last year, up nine per cent from 2010.

“There were just over 3,500 oil wells drilled in 2011. This was a 29 per cent increase from the previous year,” McMillan said, adding a record had been set for horizontal wells. They are up 30 per cent, year-over-year.

“The momentum has continued in our current year. The number of oil wells drilled to May 1, 2012 is up 18 per cent over the same period last year, a good indicator of the direction of the industry here in Saskatchewan.”

Timely access to markets is high on the list of challenges to the industry, he said. “Where oil is concerned, the current pipeline glut is directly impeding our ability to grow. It limits how much we can sell to other countries, and also limits what price we receive for it. This is simply not acceptable.

“In order to alleviate some of these pressures, our government has made it very clear that we are fully in support of both construction of the Keystone XL pipeline and the Northern Gateway pipeline. Western Canadian oil needs better access to markets. These pipelines are one way to get there.

“In addition, we continue to support development of expanding oil-to-rail operations in our province as another alternative to deal with transportation issues.” ɸ Page A11

PIPELINE NEWS July 2012 ɺ Page A10 Royalties On royalties, McMillan said, “We are committed to a stable and competitive royalty regime. We have been told repeatedly, ‘We value fairness, we want stability, we want predictability with no surprises.’

“Saskatchewan has tried to offer this through a strong, stable royalty regime. Along with competitive taxes and royalties, we continue to provide incentives for enhanced oil recovery. We’ve also extended the Saskatchewan petroleum research incentive program for another five years.

“We continue to support leading edge technology. Our flagship in this regard is the Petroleum Technology Research Centre.”

McMillan also spoke of skills training to address the tight labour supply, in particular for First Nations youth.

“Our Ministry of Energy and Resources has a reputation of being approachable and prepared to work with industry, all within the framework of responsible resource development. I’m confident this will continue to be the case.

He noted the ministry’s efforts in recent years to overhaul and update its business processes.

“There are always potential challenges that lie ahead. This is the case in every industry, not just oil and gas. I would suggest we’re playing a strong hand here, in Saskatchewan, no matter what the future holds. We have a solid resource base, along with one of the most diversified energy resources in the world. Saskatchewan also has a very good business climate, and the oil and gas industry is no small factor,” McMillan concluded.

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PIPELINE NEWS July 2012

A lot more water than oil comes out of a well Calgary – There’s a pretty common public perception that when you drill for oil, you get oil.

What they don’t realize it is that what really comes up is not a-bubblin’ crude, but rather mostly water, with some crude mixed in.

Brett Chandler, a technical support specialist with Baker Hughes’ water management group in Calgary, explained, “For most wells, the world average is 3:1 to 6: 1. That’s three barrels of water to one barrel of crude, to six barrels of water to one barrel of crude.

“All wells have produced water, water that is naturally from the formation,” Chandler said.

As for what comes out of a well, he said, “It comes out in what we refer to as an emulsion – oil and water mixed.”

That oil and water will separate at the surface, given time. There are processes, physical and chemical, that will speed up the separation such as treaters and separators. Once separated, the producer has to decide what to do with the produced water.

That water is invariably salty. The amount of salinity varies from low to high concentrations, but you will always have salt in it, according to Chandler.

Most companies will pump the produced water into another formation via a disposal well.

That well typically goes to a deeper formation than the one the oil is being produced from. The preference is to dispose of produced water nearby, but if that isn’t possible, the water is then trucked to a disposal well.

“They’re literally trying to get rid of it,” Chandler said.

There are times, however, when the industry is seeking more water, rather than to get rid of it.

After a field has been producing for several years and the amount of oil production declines, a waterflood will often be incorporated. Injector wells, either converted from former producer wells, or drilled for injection purposes, pump water back into the producing formation.

Chandler explained that the increased pressure due to the waterflood will push more oil to the producing well.

While it’s common to simply use produced water for injection purposes, he noted there are times when it is advisable to treat the water first.

“If it’s high in suspended solids, we recommend treatment prior to use,” he said. Too much suspended solids can end up plugging up an injector well over time.

That determination on whether or not to treat produced water is based on testing. Basically, one needs to test everything, according to Chandler.

“Each water itself is quite unique, even one well to another a couple kilometres away,” according to Chandler. “Understand what you have to determine your game plan on how to proceed.”

Water recycling in hydraulic fracturing Water usage is under heavy public scrutiny these days, particularly when it comes to fresh water usage for the water-intensive process of hydraulic fracturing. While fracking, copious amounts of water are pumped at high pressure into typically a horizontal well, causing the rocks to crack. In a multi-stage frac, the most common type, this process is repeated many times.

Each stage requires substantial amounts of water, and that water is usually trucked to the site. But when a frac is done, some of that water flows back out of the well.

Using this “flowback” for further fracs can substantially reduce the amount of total water required for the job. That means fewer trucks on the road, and correspondingly less traffic.

“As little as 10 per cent and as much as 50 per cent comes as flowback,” he said. ɸ Page A13

This is the seƩling trailer used in Baker Hughes’ H2prO system.

Photo submiƩed

PIPELINE NEWS July 2012

A13

These plates dissolve into coagulant for water treatment. Photo submiƩed

ɺ Page A12 “The technology we use is our H2prO system,” Chandler said. That’s their system for treating water, be it produced water described above, or more commonly, for fracking.

It’s a mobile, three-trailer system, including a generator, a processing trailer

and sedimentation tank.

The generator supplies power to the processing unit.

The processor has an oil/water separator as its beginning. Then it’s time to for the electricity.

“The workhorse is the electro-coagulation unit. It uses electricity to generate a coagulant on the fly,” Chandler said.

That process can be varied, based on the water’s initial quality and chemistry.

The system applies a voltage to iron or aluminium plates. They dissolve into ions and form a coagulant to remove suspended solids.

The water then goes to a sedimentation tank, and clarified water comes out of the back end. It goes back to the processing trailer for filtration. That filtration will often use a sand media, but can incorporate ultra- and nano-filtration technologies.

While the process originates from domestic water treatment, Chandler said the ingenuity provided by Baker Hughes comes in making it portable and their extensive chemical knowledge and fracturing experience.

There’s a dynamic, wide range of what Chandler calls “troubled waters,” that require sophisticated treatment techniques.

“The focus has been on frac water,” Chandler said of the system. Driving factors for its usage are legislation, water scarcity, and a desire to reduced trucking and water usage. It saves customers money while reducing environmental impact.

Treating on site, they can handle as much as 250 to 500 cubic metres of water per day. If additional capacity is required, more units can be added. This treated water can be used for a later frac stage, or in the case of pad drilling, on a subsequent well.

By recycling water on site, they can offset fresh water use.

In Canada, this system has been largely used in Alberta and northeastern British Columbia. In B.C. especially, the reduced road infrastructure and large size of the frac jobs has led to an industry push to reduce truck traffic.

“It comes back down to environmental, trucking and disposal cost,” Chandler said, adding public perception is also an important factor. “You recycle the water, you remove trucks, you make people happier.

In West Texas, Baker Hughes is testing a system that uses a mobile evaporator, essentially a distiller, to clean the water. Water treated within tight tolerances, especially for salinity, could potentially be discharged at the surface.

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PIPELINE NEWS July 2012

CAODC tweaks drilling forecast The eÄŤects of 2009 are sĆ&#x;ll being felt today as drilling operators struggle to ÄŽnd skilled rig hands. Here, Precision Drilling Rig 381 could be found drilling north of Benson on June 13.

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„ By Geo Lee Calgary – The shortage of skilled rig workers continues to restrain drilling contractors from reaching their forecast potential.

Labour issues are cited by the Canadian Association of Oilwell Drilling Contractors for causing a downward tweak of some drilling numbers from its original 2012 activity forecast published last November. “The greatest limiting factor when examining the numbers continues to be a shortage of skilled rig workers,â€? said CAODC in its May 29 revised forecast. “Industry suered a great loss of skills and knowledge during the downturn of 2009 and it has struggled to attract these experienced workers back. “While the numbers of new workers joining industry is encouraging, it will take time to develop their skills.â€?

The most substantial revision to the forecast is a smaller than expected Canadian rig eet.

In November 2011, CAODC expected a signiďŹ cant number of new rigs to be added to the registered eet.

The association continues to witness strong building programs from its member companies. However, due to delays at busy shop facilities, new equipment is not arriving in the ďŹ eld as quickly as expected.

Also, traditionally, brand new rigs are not activated during the demanding ďŹ rst quarter of winter drilling.

Industry now expects approximately 830 rigs to be registered with CAODC by the end of 2012, down from the original prediction of 840.

Because this equipment will become operational later in the year, the association also has adjusted the annual average eet size for 2012 to 812.

For the rest of the year, CAODC expects utilization to remain consistent with its original forecast.

Second quarter ending June 30 will remain at 20 per cent utilization, with an average of 161 rigs working.

The third quarter, from July through September, will be busy again in 2012 with 53 per cent utilization, or 433 rigs working Finally, in the fourth quarter, industry expects utilization of 55 per cent, or 456 rigs working.

In the ďŹ rst quarter of 2012, rig utilization averaged 68 per cent in Western Canada; exactly as CAODC projected last November.

The industry ran an average of 540 rigs from January to March.

In Alberta, utilization averaged 68 per cent (399 rigs running out of a eet of 591); in Saskatchewan, it was 65 per cent (78 rigs out of 119 available); in British Columbia, 75 per cent (49 out of 65 available rigs); and in Manitoba, 63 per cent (14 out of 21 rigs available).

Based on ďŹ rst quarter results, CAODS is also decreasing its forecast well count by approximately 7 per cent to 11,834 wells based from 12,672 wells.

Industry continues to drill increasingly complex horizontal wells.

With the associated time to drill them, the association has also increased its days per well ďŹ gure from 11.5 days per well to 12 days per well.

First quarter operating days fell slightly short of original predictions – actual operating days were 48,109, while the original forecast anticipated 50,090 days.

Due to the lengthened time to drill the wells, CAODC has only revised its overall annual operating days prediction by two per cent from 143,979 operating days to 141,654 days.

This represents a 2.4 per cent drop from 2011 when industry worked 145,118 operating days.

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PIPELINE NEWS July 2012

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PIPELINE NEWS July 2012

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A17

Husky’s $1.1M gift thrills Lakeland

By Geoff Lee Lloydminster – Husky Energy employees celebrated the grand opening of the new Husky Place heavy oil operations centre in Lloydminster with speeches and presentations that gave Lakeland College officials cause to party as well.

The opening of Husky’s new three storey office building on May 17 featured a $1.1 million donation from Husky to Lakeland College.

The money will allow the college to be able to train more power engineers needed by the heavy oil industry.

The cheque was payable to the Lakeland College Centennial Campaign for new programming and capital construction projects to help celebrate Lakeland’s 100th anniversary in 2013.

“Husky has had a long history of working with the college to develop skills which are needed by the oil and gas industry,” said Husky CEO Asim Ghosh in an official statement.

“This donation will help address the shortage of power engineers in the region.”

Of the total amount, $750,000 will go toward expansion and training upgrades to Lakeland’s Oil and Gas Technology Centre in Lloydminster along with a new power engineering lab.

The remaining $360,000 will go

Husky CEO Asim Ghosh, leŌ, was happy to present Lakeland College president and CEO Glenn Charlesworth with a cheque for $1.1 million to go toward power engineering programs and the construcƟon of a new power engineering Lab at the Lloydminster campus. The presentaƟon was part of the grand opening of the new Husky Place building for heavy oil operaƟons in Lloydminster.

Photo by Geoī Lee

into an endowment fund to create student scholarships and provide financial support for power engineering students.

“Husky has invested in the future; Husky has invested in education; Husky has invested in our young people,” said Glenn Charlesworth, president and CEO of Lakeland in his thank you speech.

“This is the largest private gift made to this campaign. In addition, it creates much needed scholarships for our students.

“This donation will help us expand our oil and gas training facilities at the Lloydminster campus.

“Anybody, I think, who is the oil business understands the critical shortage of power engineers that

exists throughout Western Canada,” continued Charlesworth.

“We are, with the help of this very generous donation, going to try to make a little bit of a dent in that and generate a lot more power engineering graduates at Lakeland College.”

The donation by Husky also officially launched Lakeland’s Centennial Campaign to raise $5 million in corporate donations to begin construction of the first phase of the power engineering lab in Lloydminster.

“It’s a $15 million or $16 million building. We are trying to raise about $5 million from industry to help complete the project,” said Charlesworth.

“We have $10 million from government already in place.

“We are hoping to have a shovel ceremony sometime in the fall, and we are hoping to open the building in our centennial year and perhaps on our centennial date which would be Nov. 17. 2013.

“We have appointed architects, and we are in the design and drawing stages.”

Charlesworth took the opportunity to give Husky a stellar report card for their unwavering support for education and training at the Lloydminster and Vermilion campuses over the years. ɸ Page A18

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A18

PIPELINE NEWS July 2012

ɺ Page A17 “Our success at Lakeland over the years – we have about 8,000 students a year now – is a reflection of the support we have received from so many individuals, organizations and community corporations,” Charlesworth told invited guests and Husky Place employees.

“Chief among our supporters is Husky.

There is no question, that in our almost 100

year history, Husky Energy stands out as one of Lakeland’s most significant supporters.”

Husky contributed $2 million toward the construction cost of the Lloydminster campus residences. Residents in the early ’90s which were first used to house construction workers building the Husky Lloydminster Upgrader.

The residences were turned over to Lakeland College for student

housing in the fall of 1992 and named Husky Energy Residence Place.

“As you drive into the campus, the first sign you see is Husky Energy Residence Village,” said Charlesworth.

“Practicum placements, equipment donations, scholarships, employment opportunities, money for development, and contributions to past campaigns are among the many other ways Husky Energy has

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supported Lakeland College.

“That support is continuing today. I can’t thank you enough.”

In recognition of the donation, a lab will be named the Husky Energy Power Engineering Lab. Kara Johnson, director Energy, Entrepreneurship & Saskatchewan Programming at the Lloydminster campus, was also quick to express her gratitude for Husky’s latest financial contribution to energy training.

“I think it’s phenomenal. I feel like a kid on Christmas today.

Husky is already a great supporter of our programming,” she said.

“I don’t think there is anyone in the building today happier than I am – because what it means is that we have listened to industry and our new school of energy has been really responsive to what industry needs.

“This, to me, is validation that what we are doing is right. It signifies that Husky is on-board supporting us, and they are showing the world that they are supporting us.

“They take our practicum students, they sit on our advisory council and they help us with curriculum development.”

In 2011, the upgrader contributed $81,500 toward the development of programming for a third class power engineering certificate.

Other Husky notable contributions include an annual entrance scholarship and a $125,000 donation in 2004 to a capital

Hundreds of Husky employees jammed the foyer and the stairways for the grand opening of the new three storey Husky Place oĸce building in Lloydminster May 17. The event featured a donaƟon of $1.1 million from Husky CEO Asim Ghosh to Lakeland College to train more qualiĮed power engineers needed for Husky’s thermal operaƟons.

campaign to build the existing Bill Kondro Wing at the Lloydminster campus.

“I think today, this really shows Husky’s dedication to education, be it post-secondary or continuing education, professional development,” said Johnston.

“This will help us have a really good world class training facility in Lloydminster on the Lakeland College campus. This training facility is going to be the flagship of the Lloydminster campus.

“It gives us the opportunity to be more responsive to industry’s needs and to be able to give them higher number of graduates to help alleviate their skilled

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Milt Wakefield, chairman of the Lakeland College Board of Governors, said the $1.1 million donation from Husky will “be huge” to oil and gas training in Lloydminster.

“With contributions like this, we are going to be able to continue building our programming, scholarships for people coming into Lakeland College, and in essence, we’re preparing on behalf of Husky in this case, for the future of these young people,” he said.

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A19

Four First Nations sign energy treaties Â&#x201E; By GeoďŹ&#x20AC; Lee Fort Pitt â&#x20AC;&#x201C; Onion Lake Cree First Nation plans to march toward economic independence with three like-minded First Nations in Alberta as members of a new Wanska Energy Alliance.

Chiefs from Onion Lake, Sucker Creek, Ermineskin and Drift Pile First Nations signed the oil and gas development alliance in an economic treaty during an historic Treaty 6 Summit at Fort Pitt June 3-7. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a working relationship alliance to assist each other in resource development and exploration and employment and training â&#x20AC;&#x201C; all aspects of the industry,â&#x20AC;? said Onion Lake Chief Wallace Fox. Onion Lake also signed an energy education and training treaty with the Northwestern

Band of the Shoshone Nation from Utah. â&#x20AC;&#x153;They have developed an energy training institute on their territory in Idaho,â&#x20AC;? said Fox. â&#x20AC;&#x153;We want to bring that same concept to our territory to build an energy and mines institute, not on a labour component, but on a technical component where our people would be trained how to operate the mechanics, the pumps and the computers that operate that type of industry equipment.â&#x20AC;?

The treaty signings with four other First Nations were the ďŹ rst for Onion Lake since Treaty 6 was ratiďŹ ed in 1876 and coincide with Queen Elizabethâ&#x20AC;&#x2122;s diamond jubilee marking the 60th year of her reign.

The Wanska Energy Alliance includes the Ermineskin First Na-

tion within Treaty 6 and the Sucker Creek and Drift Pile First Nations in Treaty 8.

Onion Lake will play the lead role in helping the alliance members to structure their resource deals on their traditional territories based on the success of Onion Lake Energy Ltd. Fox negotiated a deal a few years ago that gives Onion Lake the ability to make their own deals with oil and gas exploration and drilling companies without having to go through Indian Oil and Gas Canada permitting processes.

Onion Lake Energy operates more proďŹ tably with its joint venture partner Fogo Energy Ltd. in Calgary, with 50 per cent of the money from every barrel of oil sold going to the band. ɸ Page A23

A lot of signatures were needed to complete the Wanska Energy Alliance. Signing leĹ&#x152; to right are Ermineskin Cree First NaĆ&#x;on Chief, Craig Mackinaw, Onion Lake Cree First NaĆ&#x;on Chief Wallace Fox, Sucker Lake First NaĆ&#x;on Chief, James Badger and DriĹ&#x152; Pile First NaĆ&#x;on Chief, Rose Laboucane. Onion Lake also signed an energy related treaty with the Northwestern Band of the Shoshone NaĆ&#x;on from Utah at historic Fort PiĆŠ, Saskatchewan.

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PIPELINE NEWS July 2012

PIPELINE NEWS July 2012

A21

235 weather the course at Lloyd oilmen’s Story and photos by Geoff Lee Lloydminster – Steady rain on the opening day of the 34th annual Lloydminster Oilmen’s Golf Tournament failed to dampen the enthusiasm of the 235 golfers who took part.

Unlike last year, when a torrential downpour washed out a portion of the course and the final day of the tournament for the first time in its history, this year’s rain simply helped the grass to grow.

“Unfortunately, conditions are just something that you can’t control,” said Kyle Mulligan, general manager at the 18-hole Lloydminster Golf and Country Club on a wet June 15.

“We would all love to have 30 degree and sun every day of the year – we’d be millionaires if we could figure out how to do that.

“For us, we are just trying to make everything as pleasant as possible. The guys have been pretty good about it.

“They understand there is nothing we can do and they are playing through, and the sponsors and the tents are handing out coffee and Baileys and getting the burgers out, and just try to make it as fun as we can.”

The final day of the tournament was played under beautiful blue skies, leaving a smile on the face of tournament chair Don Bertrand, who works at MRC Midfield.

“It was awesome. It was a big change from yesterday. One good day and a half is better than none,” said Bertrand.

“It went very well. The guys are all pleased. The committee was pleased. Everybody had a good time.”

One of the happiest and luckiest guys on the final day was tournament newbie Tim Landrie from Baker

Hughes who won the 51-inch flat screen TV as the winner of the charity putting competition.

“It’s kind of nice that I come out of here with something. This is the first year that I have been in the Oilmen’s and I really enjoyed it. It was quite the event,” said Landrie who explained the TV will be heading to his basement as soon as he finishes it.

The putt-off helped to raise approximately $2,700 for the KidSport Canada charity. The competition is

This woodsman is none other than Casey Phipps who found a playable lie under the branches of these trees.

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sponsored annually by Noralta Technologies to raise money to assist kids who can’t afford to play sports or purchase equipment.

“It goes there for a good cause,” said Noralta Technology CEO Cam Zarowny after presenting Landrie with the TV. The oilmen’s was also financially rewarding for John Higgins who walked off with a large bag of Calcutta money for being the only player to hit the green in the million dollar chip a hole-in-one competition that no one has ever claimed.

“I was surprised the only one who hit the green was me,” said Higgins.

Higgins works for Wild Rows Machining and provided the first of several player comments about the rain on the opening day.

“If you don’t golf in the rain, you don’t golf,” was his positive spin about Mother Nature.

“I just bought rain gloves so I should be better on the back nine. Keeping the grips dry is the main thing.”

His stay dry strategy helped him to earn a gift certificate as the third place winner in competitive stroke play.

The stroke play champ was Shawn Loney who dressed for rain with towels and gloves at the ready during his opening 18 holes.

“You can’t do anything but have fun out there,” he said. “The weather changes hour to hour so we’ll see what happens. It’s the oilmen’s. What else can you do?”

Loney is no stranger to Lloyd weather having been born, raised and settled here until last March when he shuffled off to Moose Jaw for a job with Gibson.

Brad Cruikshank, who works for Hunting Energy and played senior men’s hockey with the local Border Kings in this year’s Allen Cup in Lloydminster, excused his bogey-heavy scorecard on the rain.

“Once the rain hit, she fell apart. It’s good fun though,” he said.

The 34th annual Lloydminster Oilmen’s Golf Tournament was tailor-made for John Higgins who Įnished third in stroke play compeƟƟon and won the lion’s share of CalcuƩa money in the million dollar hole-in-one compeƟƟon sponsored by MRC MidĮeld and Europump.

Tournament chair Don Bertrand congratulates Higgins for being closest to the hole chip.

Gary Reid, leŌ, and Dwayne Erb are all smiles explaining the data on Erb’s hand-held SkyCaddie rangeĮnder during a rainy opening round of golf.

“This is my first year at the event. I moved up here last July and got a job and play for the Border Kings. I had a good time during the Allen Cup. Too bad we couldn’t have had a little more success.”

Rain and sports chatter continued throughout the first day including this sound bite from Doug Gilby who just completed his soggy opener in match play competition.

“It’s a little damp. Ever since we changed to June, it seems to rain. They may call it the rainmaker tournament from now on,” he joked.

“I don’t know how much it rained this morning, but it rained a terrific amount from the get-go.”

Rain may have contributed to washing away his hopes for a final day match play flight title, but Gilby took a sunny side up approach to what lay ahead in a Texas scramble on June 16.

“Tomorrow afternoon, the second game winners go in the scramble in the afternoon, and we’ll be playing when the sun is shining,” he said.

Proceeds from the tournament go to fund improvements at the golf club and various non-profit community organizations, a fact that Mulligan said makes the tournament special.

“There’s something about our community and our oilpatch companies – they do a good job of taking care of this event – not only this event, but the community and the kids that are in our junior program,” he said.

“A lot of money that’s raised through this event gets filtered back in the community – a huge thank you to the oilmen’s society and the sponsors that are

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“As far as I know from talking with the executive and the people that are charge of it, the sponsorship is where it’s always been.”

The sponsors and donations included a trophy for each of the flight winners along with gift certificates of declining value for the top three in each grouping.

The winners of Flights 1 to 5 were Chris Olson, Greg Braham, Paul Klaassen, Jeff Latos and Bud Polkosnik.

Flights 6 to 10 champs were Jared Kaluski, Marty Bowes, Reese Castle, Dwayne Fosson and Robert King.

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The winners of Flights 16 to 20 were Ron Mulka, Steven Kisser, Tyler Morrissette, Lionel Cornet and David Hoskins.

Trophies for the champions of the remaining Flights 21 to 27 went to Malcolm Laird, John Matemisz, Russ Beckley, Jerry Christman, Tim Holman, Lohnie Lamoureux, and Courtney Ward.

Cam Zarowny, CEO of Noralta Technologies, leŌ, presents Tim Landrie with a 51-inch TV for winning the puƫng contest that raised money for KidSport Canada.

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A22

PIPELINE NEWS July 2012

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A23

Wanska Energy Alliance Éş Page A19 The band also receives royalty payments from heavy oil produced by companies such as BlackPearl Resources and Canadian Natural Resources at Onion Lake.

The joint venture with Fogo allows Onion Lake the ďŹ rst right of refusal to provide all goods and services. â&#x20AC;&#x153;Many First Nations are ďŹ nding out that the royalty deals donâ&#x20AC;&#x2122;t work,â&#x20AC;? said Fox. â&#x20AC;&#x153;Now, they are coming to us because of our joint ventures and how we have structured the ďŹ eld. â&#x20AC;&#x153;We provide some guidance and advice hopefully to enhance their income revenue in the resource base and to provide more training and employment for their communities. Thatâ&#x20AC;&#x2122;s the whole idea behind it.â&#x20AC;?

Fox said current oil production at Onion Lake is about 16,000 barrels per day, a number that is expected to rise as Onion Lake Energy has started drilling 10 of its own wells in partnership with Fogo. â&#x20AC;&#x153;We are hoping to drill another 24 wells by the end of December,â&#x20AC;? said Fox. â&#x20AC;&#x153;Today, the asset value of our Onion Lake Energy is about $108 million. With the additional wells coming on-board â&#x20AC;&#x201C; just on our own exploration â&#x20AC;&#x201C; by the end of December it will be about a $300 million asset value.â&#x20AC;?

The Onion Lake Business Development Corporation also runs its own ďŹ&#x201A;uid hauling company called Aski Apoy Hauling GP Ltd. It has grown to more than 40 trailers and owner operators.

Beretta Pipeline Construction Ltd. is another BDC business entity that provides lease and road construction services to the band.

The BDC has recently purchased some vacuum

Onion Lake Cree First NaĆ&#x;on Chief Wallace Fox led the signing of two energy related economic development treaĆ&#x;es with four other First NaĆ&#x;ons at Fort PiĆŠ during a Treaty 6 Summit June 3-7.

and pressure trucks and is taking delivery of its ďŹ rst service rig in June with a second unit to be assembled by August.

Onion Lake Cree nation has invested over $38 million in strategic projects for the well being of the community including $15 million for a new water distribution system.

Other projects in various stages of development or completion at Onion Lake include an elevated water reservoir for ďŹ reďŹ ghting and the Naspatinahk and West T subdivision projects. â&#x20AC;&#x153;Because of our success with diversiďŹ cation and employment â&#x20AC;&#x201C; now we are looking at other op-

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portunities internationally â&#x20AC;&#x201C; we have 650 full-time employees in all sectors within the nation,â&#x20AC;? said Fox. â&#x20AC;&#x153;That tells me on the reserve population, there is 50 per cent yet to be employed. Thatâ&#x20AC;&#x2122;s a big, big jump from where we were 10 years ago.â&#x20AC;?

More employment is likely as Onion Lake Energy gears up to launch a major steam assisted gravity drainage or SAGD project with BlackPearl Resources. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s coming up very soon,â&#x20AC;? said Lisa Whitford, Onion Lake Energy director. â&#x20AC;&#x153;There are lots of companies that are coming to us right now that want to work with us, but right now our goal is to work First Nation to First Nation and come together in partnerships rather than doing them with industry. â&#x20AC;&#x153;Industry looks after their shareholders, we look after our members. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s the big diďŹ&#x20AC;erence. Working in relationships with another First Nation is understanding how important the oil and gas industry is to our community.â&#x20AC;?

The Ermineskin First Nation from the Hobbema area near Wetaskiwin has a lengthy history of working in the oil and gas industry while Drift Pile near Lesser Slave Lake and Sucker Creek near Enilda have limited oil and activity on their territories. â&#x20AC;&#x153;Drift Pile is starting their own oil and gas as well as Sucker Creek,â&#x20AC;? said Whitford. â&#x20AC;&#x153;There are lots of companies that are approaching them in their Treaty 8 territory. â&#x20AC;&#x153;We are going to be sharing our services so basically anything we have to oďŹ&#x20AC;er at Onion Lake with our gravel hauling, oil hauling â&#x20AC;&#x201C; we can have some of their band members come here and get the training to do the same on their own land.â&#x20AC;?

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PIPELINE NEWS July 2012

Onion Lake-Shoshone sign energy pact Â&#x201E; By GeoďŹ&#x20AC; Lee Fort Pitt â&#x20AC;&#x201C; Onion Lake Cree First Nation plans to establish an energy training institute of its own on reserve land in partnership with the Northwestern Band of the Shoshone Nation from Utah.

The development of an energy training facility forms the basis of an economic development treaty that Onion Lake and the Shoshone signed at Fort Pitt during a Treaty 6 Summit June 3-7.

Onion Lake also signed the Wanska Energy Alliance treaty at Fort Pitt to help the Ermineskin, Drift Pile and Sucker Creek First Nations develop oil and gas ventures and mineral development opportunities on their traditional territories.

The treaty signings were the ďŹ rst for Onion Lake since their 1876 signing of Treaty 6 and are aimed at

establishing economic alliances in Canada and the United States.

The treaty with the Shoshone brings together the renewable energy leadership of the Utah band with its new Tribal Nations Development Institute located next to Idaho State University with heavy oil and gas development going on at Onion Lake. â&#x20AC;&#x153;Today, we are signing an agreement between the two nations to solidify a relationship and begin some economic development ventures,â&#x20AC;? said Jason Walker, chairman of the Northwestern Band of the Shoshone Nation prior to the signing ceremony on June 5. â&#x20AC;&#x153;We focus on renewable energy.

We are right next to the university where most of the technology is coming from.â&#x20AC;?

The band has a partnership with a solar company based in California and operates two tribal companies

that specialize in computer software, construction, background checking and SAP software through a federal small business program.

Walker said he envisions shar-

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Jason Walker, chairman of the Northwestern Band of the Shoshone NaĆ&#x;on in Utah, signed an economic treaty with Onion Lake Cree First NaĆ&#x;on at Fort PiĆŠ on June 5.

ing his bandâ&#x20AC;&#x2122;s interest in energy with Onion Lake through online networking and virtual classrooms in addition to exchange trips between both centres.

Onion Lake Chief Wallace Fox said the development of an energy institute at Onion Lake would be modeled on the Shoshoneâ&#x20AC;&#x2122;s Tribal Nations Development Institute and focus on learning how to operate oil and gas equipment. â&#x20AC;&#x153;We want to bring that same concept to our territory to build an energy and mines institute, not on a labour component, but on a technical component where our people would be trained on how to operate the mechanics, the pumps and the computers that operate that type of equipment,â&#x20AC;? said Fox. Onion Lake currently produces about 16,000 barrels of heavy oil a day through Onion Lake Energy and its joint management partner Fogo Energy Ltd. based in Calgary.

Having an energy institute at Onion Lake for all First Nations people will allow the Shoshone to get the training they need for oil and gas opportunities in the U.S. â&#x20AC;&#x153;The nations are all starting to form their own little resource companies,â&#x20AC;? said Lisa Whitford, Onion Lake Energy director. ɸ Page A25

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PIPELINE NEWS July 2012

Lisa WhiĆ&#x17E;ord, Onion Lake Energy director, says the establishment of an energy training insĆ&#x;tute at Onion Lake in co-operaĆ&#x;on with the Northwestern Band of the Shoshone NaĆ&#x;on in Utah will be open to all First NaĆ&#x;ons people wanĆ&#x;ng to develop oil and gas employment and economic development opportuniĆ&#x;es

Éş Page A24 â&#x20AC;&#x153;To have one major place for First Nations people to come together and do the training â&#x20AC;&#x201C; itâ&#x20AC;&#x2122;s like an umbrella eďŹ&#x20AC;ect â&#x20AC;&#x201C; it kind of goes out and spreads more and more. â&#x20AC;&#x153;A lot of them donâ&#x20AC;&#x2122;t have the capital to start up oil and gas ventures.

They have to get into joint venture opportunities like we did.â&#x20AC;?

Onion Lake First Nation and the Northwestern Shoshone Nation were brought

together by Doyle Anderson, president of First Nations University of Canada in Regina.

Prior to be named president, Anderson taught courses at First Nations U as well as a native American business administration program at Idaho State University. â&#x20AC;&#x153;He brought to us a new way of thinking about economic development about training our native people for the business world,â&#x20AC;? said Walker.

â&#x20AC;&#x153;With the help of Anderson, we started our renewable energy.

We look forward to the signing and to what the future holds for both tribes.â&#x20AC;?

Anderson had a seat at the treaty signing table and was excited about the possible energy outcomes between the two nations. â&#x20AC;&#x153;The Northwestern Shoshone have distinguished themselves in renewable energy and Onion Lake is more in the oil and gas area, but there is a great opportunity for expanding beyond oil and gas for longer term self determination,â&#x20AC;? said Anderson. â&#x20AC;&#x153;The Shoshone Nation and Onion Lake are two nations that I highly respect â&#x20AC;&#x201C; the work that they do and the work that they have done. There are lots of opportunities for synergy. â&#x20AC;&#x153;Some of the leaders of these communities are former students when I was on faculty at First Nations University and Idaho State University.

â&#x20AC;&#x153;There is a lot of capacity thatâ&#x20AC;&#x2122;s been developed. They are powerful nations and what they can do together is even more powerful. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a very exciting day.â&#x20AC;?

Anderson is a member of the Red Pheasant First Nation that is working with 49 North Resources based in Saskatoon to advance heavy oil production on band land, and he knows the value of education and training for economic independence. â&#x20AC;&#x153;This institute thatâ&#x20AC;&#x2122;s been developed between

the Onion Lake band and Northwestern band is providing education opportunities to help our First Nation people move into leadership roles in technology, science and engineering and management roles in resource sectors,â&#x20AC;? said Anderson. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s really what this institute is all about â&#x20AC;&#x201C; itâ&#x20AC;&#x2122;s very powerful capacity developing initiatives. â&#x20AC;&#x153;One of the keys is developing capacity for our people to step into the career opportunities in resource develop-

A25

ment. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s my role to create those opportunities and help the leaders of the future acquire the tools they need to be successful.â&#x20AC;?

Anderson said the new training centre at Onion Lake will be based on a distributed education model similar the Tribal Nations Development Institute in Idaho. â&#x20AC;&#x153;There will be two centres. There will be opportunities for education regionally across Canada and across the U.S,â&#x20AC;? he said.

The two treaĆ&#x;es signed by Onion Lake were draĹ&#x152;ed by Crystal Fafard, chief execuĆ&#x;ve adviser of Onion Lake Cree NaĆ&#x;on who is a member of the Lakeland College board of directors. The event itself was co-ordinated by Henry Lewis, director of treaty governance. The signing was preceded by a pipe ceremony, breakfast and a lively drum demonstraĆ&#x;on inside a big tent.

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PIPELINE NEWS July 2012

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A27

Devon Safety Expo worth repeating Lloydminster – The safest place to be on June 2 was the Wildrose Pavilion at the Lloydminster Exhibition Grounds.

That was the scene of a Devon Safety Expo held in partnership with the Lloydminster Safety Construction Association to promote safety at work, home and play.

“What we’ve done is gathered some local organizations to showcase what they are about, focusing on safety,” said Mike Meynberg, district superintendent of Devon Canada’s operations in Lloydminster.

“It’s not just about safety at work, it’s safety at home and at play.”

Devon gave everyone who attended a safety passport booklet with spaces to stamp all 17 safety exhibits and demos at the site involving 15 local organizations.

Bandit Pipeline sponsored a barbecue with proceeds going to local 4-H groups.

The biggest safety draws were demos such as a child car safety seat demo

by SGI, an interactive fire extinguisher practice for kids by Astec Safety, and a power safety demo by ATCO Electric.

Some of the other messages of the day were public safety by the RCMP, the safe disposal of hazardous waste by the City of Lloydminster, brain injury prevention by the Lloydminster and Area Brain Injury Society and drinking and driving prevention by MADD Lloydminster.

“Typically, we look at safety as being focused on at work, but it’s more than just being about work,” stressed Meynberg.

“It also is about being at home and being at play with your family and making sure the message about safety is getting across to all areas.”

Devon held a similar safety expo in Grande Prairie on June 9 in partnership with Grande Prairie & Area Safe Communities’ SAFETY CITY. “This is the first time we have done this in Lloydminster,” said Meynberg.

“The intent is, we want to see what the involvement is and the feedback here. We’d like to make this an annual event.”

The Devon safety passport also included messages about construction safety by the Lakeland Regional Safety Committee and the Alberta Safety Construction Association co-sponsor.

Meynberg brought about 12 of his 60 employees based in Lloydminster to help deliver Devon’s corporate message about safety. As an oil producer, Devon has approximately 1,900 workers in Canada.

“Safety is a cornerstone of our operations,” said Meynberg.

“It’s not just about people who work for us and our contractors, but making sure that the message also gets home.

“If people get hurt, whether it’s at work or home or play – it puts a burden on them and the family and on ourselves.

Meynberg oversees all of the Lloydminster operations including the well operations, the technical team and the administration.

“We are about getting oil out of the ground safely and economically,” he said.

“Right now with heavy oil in the area, it’s fairly active. We’ve got a lot of activity going on.”

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PIPELINE NEWS July 2012

Ladiesâ&#x20AC;&#x2122; golf classic scores for charity The Ladies of the Patch commiĆŠee, presented Muriel Ralston, execuĆ&#x;ve director of the Lloydminster Sexual Assault & InformaĆ&#x;on Centre with a cheque for $25,000. Ralston, centre, is Ĺ&#x2021;anked on her leĹ&#x152; by Michelle Robinson, Joanne Derewynka, Rachel Horbach and Debbie Horbach, and on the right by Margie Florence, Trista Bielesch, Erin Stark, Sheila McFadzen and Jackie MohrbuĆŠer. (missing is Tracy Wiltermuth).

Flower power may have worked for these golfers at the Ladies of the Patch golf tournament at Rolling Green Fairways in Lloydminster. Pictured (l-r) are Lana Thiessen, Tennille Tiedeman, Katherine Hemsworth and Danielle Morgan.

Â&#x201E; Story and photos by GeoďŹ&#x20AC; Lee Lloydminster â&#x20AC;&#x201C; Once again, the Lloydminster Sexual Assault & Information Centre emerged as the winner of the seventh annual PWM Steel Petroleum Golf Classic for the ladies of the patch.

The event is a charity fundraiser for the sexual assault centre that was presented with a cheque for $25,000 thanks to the record registration of 164 women golfers for the May 25 event.

Blue sunny skies and no wind got the event oďŹ&#x20AC; to good start at the 18-hole Rolling Green Fairways with hopes high that it would stay that way after two previous days of rain. â&#x20AC;&#x153;We are so happy with this weather. I think this is the ďŹ rst time in seven years that we started the day in beautiful sunshine,â&#x20AC;? said Debbie Horbach, chair of the Ladies of the Patch committee minutes before tee-oďŹ&#x20AC;.

Little did she know it would brieďŹ&#x201A;y pour later in the day, but wacky weather is par for the course for the ladies of the patch. â&#x20AC;&#x153;A lot of our golfers have been here all seven years so they have experienced snow and sleet and rain, so it will nice to experience sunshine for today,â&#x20AC;? hoped Horbach.

The committee loaded the course

with contestant prize holes and had no problem, as usual, attracting donations and sponsorships from the oil and gas companies. â&#x20AC;&#x153;This is the only kind of event for the women that work in the patch to get together and socialize,â&#x20AC;? said Horbach. â&#x20AC;&#x153;I just think the guys in the patch realize that and support us wholeheartedly. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s not the freewheeling days of the late â&#x20AC;&#x2122;80s anymore, but I think because of the type of function this is for the women that work in the patch, the support is out there.â&#x20AC;?

Thatâ&#x20AC;&#x2122;s the way it is for Clint McKinlay from Target Safety Services who ďŹ&#x201A;ips burgers each year at one of several sponsored refreshments tents on the course. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a good event. Itâ&#x20AC;&#x2122;s for a good cause. Itâ&#x20AC;&#x2122;s for the sexual assault centre, so we like to do our part and lend a hand,â&#x20AC;? said McKinlay. â&#x20AC;&#x153;Events like this canâ&#x20AC;&#x2122;t happen without support of local business, so we are happy to help out.â&#x20AC;?

Ditto the enthusiasm from Justin Getzinger at the Brightling Equipment refreshment tent that opted for a beach theme with water guns over last yearâ&#x20AC;&#x2122;s Hawaiian dress mode. ɸ Page A29

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PIPELINE NEWS July 2012 These happy campers represenƟng L&L OilĮeld (l-r) Paige Fulkerth, Kate Sugg, Emmylou Wicker and Kaytlin Heck are waiƟng for the start of the Texas scramble.

ɺ Page A28 “We haven’t missed a year. We like to sponsor the local events, “said Getzinger.

“We are going with a beach theme this year. It’s a nice day, so we’ll have fun with that – water guns.

There was no foreboding of any goosebumps for Kate Sugg who was working on a team tan with her L&L Oilfield cartmates Paige Fulkerth, Emmylou Wicker and Kaytlin Heck prior to tee-off.

“I hope that our team goes really well and gets a couple of birdies, some pars – we are all just going to meet some people and have a good time and play some golf,” she said.

The ex-Aussie joked she flew 20,000 kilometres from Down Under for the tournament, albeit five years ago when she immigrated to Canada.

Sugg is the daughter in-law of Jackie Mohrbutter who was on hand to give out umbrellas as part of the platinum sponsorship provided by her Mohr Advertising company.

“I plan to party a little – with my daughter in-law and my staff,” said Mohrbutter who also celebrated her birthday that day.

Donna Orbeck, who does production accounting for Bonavistsa Energy, has a perfect attendance record at the event, and also came ready to golf in a fun atmosphere.

“It’s a good time every year. I always make it.

It’s nice weather today. It should be a good time,” she said adding not to expect any hole-in-one prizes from her.

“That would be nice, but I am not banking on it. This is my first time out this year – it will be interesting.

“It’s a good time. It’s well organized and there are good sponsorships. It’s a really good thing for the ladies,” she added.

Miranda Reid from Husky Energy was pinching herself at the reality of rare blue skies at the start of the event with her foursome raring

A29

to go.

“It’s a beautiful day. We’ve golfed in snow; we’ve golfed in rain in years past, and today it being a beautiful sunny day and not much wind, it’s a perfect day,” said Reid.

“This is our seventh year in a row that we have supported the tournament. It’s been a great time every single year, and it’s for a very good cause as well.”

The Petroleum Golf Classic has raised more than $100,000 since its inception with the proceeds going to the sexual assault centre to fund its awareness programs.

“This sustains our public information program,” said Muriel Ralston, executive director of the sexual assault centre in Lloydminster.

“We don’t have funding for the public education department without this, so this keeps it going. That is huge department. It’s a huge compendium.

“Over the course of the seven years that the ladies of the patch have offered this to us, it has not only built our information program but grown to reach close to 2,000 kids in 2011 with education. ɸ Page A30

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PIPELINE NEWS July 2012

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Raising awareness Éş Page A29 â&#x20AC;&#x153;We were able to hire a half-time public educator.â&#x20AC;? â&#x20AC;&#x153;As long as children and youth are educated, they stand a better chance of protecting themselves against sexual assaults and bullying. â&#x20AC;&#x153;We know that bullying starts at a very young age and can turn into sexual violence.â&#x20AC;?

The centre recognized Sexual Assault Awareness Week in Lloydminster from May 7 to 13 with a assault awareness walk this year.

They also launched a â&#x20AC;&#x153;who do you tell?â&#x20AC;? program for young children ages ďŹ ve to 12. The focus of the program centres on children being able to tell someone if they have been touched inappropriately.

The centre also took part in the â&#x20AC;&#x153;Donâ&#x20AC;&#x2122;t Be That Guyâ&#x20AC;? poster campaign in Alberta and Saskatchewan that speaks to young men that sex without consent is sexual assault and that being drunk is no excuse for committing a violent crime.

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A31

Lloydminster buys into Lakeland 100th A decade later, the college was offering programs and courses in a number of leased facilities throughout the city. As the community grew, so too did the demand for programming.

“Fortunately for our college, there were people who wanted to see a campus built in Lloydminster,” said Charlesworth.

The Lloydminster campus opened in 1990, with the City of Lloydminster donating 30 of the 65 acres of land the campus is situated on.

The campus footprint has since expanded to include the Vic Juba Community Theatre and the Bill Kondro Wing.

The next major expansion at the Lloydminster campus will be a power engineering and oil and gas training facility with the sod-turning this fall.

Lloydminster – The City of Lloydminster has contributed $50,000 to the centennial celebrations of Lakeland College and the right to be named a leadership sponsor partner.

“We are pleased to show our support and commemorate Lakeland College’s centennial achievement,” said Mayor Jeff Mulligan in a June 14 announcement.

“Lakeland College is a key resource for our young adults as well as those adapting to new work environments or learning new skill sets.

“As a local post-secondary education option, Lakeland College is vital for the professional development of our residents and the overall economic prosperity of Lloydminster.”

The donation from the City will help fund a year of 14 centennial events in the countdown to the 100th anniversary on November 17, 2013.

“We’re thrilled that the City of Lloydminster is a partner in our centennial celebrations,” said Glenn Charlesworth, president of Lakeland College.

“The City’s contribution will help us create memorable events that will energize the community and bring incredible exposure to Lakeland College and Lloydminster.”

The fun will begin Nov. 1 with the Great Prairie Steak Cook-off grill competition between the City of Lloydminster and Lakeland College Alumni to kick off the Lakeland College Rustlers basketball and volleyball seasons.

The next event is the Pioneer Celebration on Nov. 17 – the 99th anniversary of the official opening of the college.

Guest speakers, mattress dominoes, homecoming events, women’s volleyball national championships, a President’s Centennial Gala and golf tournaments are among the scheduled activities during the year.

Centennial celebrations will conclude in November 2013 with a four-day finale and recognition of the college’s strong links to Lloydminster.

During the 1965-66 academic year, the Vermilion Agricultural and Vocational College, as it was known then, offered welding, motor tune-up, and secretarial upgrading courses.

Lakeland College president Glenn Charlesworth, pictured at the grand opening of Husky Place was over the moon with word of a $50,000 donaƟon from the City of Lloydminster for Lakeland centennial events starƟng Nov. 1 unƟl the 100th anniversary date of Nov. 17, 2013.

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A32

PIPELINE NEWS July 2012

PIPELINE NEWS July 2012

A33

High pressure air recovers deep heavy oil Lloydminster – High pressure air injection or HPAI with in-situ combustion has the potential to double the world’s heavy oil production.

That’s the belief of Myron Kuhlman, owner of MK Tech Solutions in Houston, Texas, who made a presentation on HPAI technology to recover deep heavy oil at the May luncheon of the Lloydminster chapter of Society of Petroleum Engineers.

Kuhlman is a member of the global SPE Distinguished Lecturer program celebrating its 50th anniversary in 2012.

He wants readers to take home the message that any form of gas co-injection with water or steam or any thermal process with heavy oil is beneficial.

Kuhlman began by playing devil’s advocate by answering his own question, why not use steam, with the fact most heavy oil is too deep for steam.

“Some reservoirs are so deep that steam loses it heat to the wellbore.

That means you just basically injecting hot water,” said Kuhlman.

“In a reservoir deeper than 800 metres, you seldom inject steam because you’ve lost the energy.

“Steam can lose 70 per cent of its heat by the time you get down to 2,000 metres deep.

“I’m going to be talking about oil that exists below 800 m.

There are 6 to 8 trillion barrels of that in the world.”

Kuhlman describes HPAI as a proven technique for the recovery of light oil that is simply a pressure maintenance process that maintains reservoir pressure and oil production.

“It’s high pressure air injection. It’s practiced a lot in the United States particularly in the Williston Basin. They are producing approximately 25,000 bpd that way,” he said.

“All I am saying is that you can do the same thing in the heavy oil. The difference between light oil and heavy oil is viscosity.”

Most, but not all of the heavy oil reservoirs in the Lloydminster are too shallow for HPAI, but Kuhlman said there are at least 50 billion barrels of Canadian heavy oil deep enough to warrant an in-situ combustion process.

“The reservoir requirements for a good gas injection candidate are that it must be viscous dominated – that means low permeability,” said Kuhlman.

“It’s also good to have dead oil (contains no dissolved gas) so the gas you are co-injecting dissolves in the oil and reduces the viscosity a lot.”

Dissolved gas (air) can reduce viscosity by 90 per cent which accelerates production.

“If you had a problem producing oil because you had no gas to drive it, then gas coinjection is a good idea,” said Kuhlman.

“You need to get the reservoir hot one way or

another – greater than 70 C is the minimum temperature for light oil, and 350 C for heavy oil.

“The difference is that that light oil contains a larger volume of diesel boiling-range compounds which ignite easily.

“Higher temperature is generally done with electrical heat or by injecting steam. Just injecting very hot water, for instance, ahead of the air can start the process.”

High pressure air co-injected with water is the best way to create a steam bank that helps to consume oxygen and prevent it from breaking through the reservoir.

“Producing oxygen is a good way to have a fire or to oxide the well

– it’s a problem,” said Kuhlman who repeatedly made the point that

high pressure accelerates combustion. ɸ Page A34

Lloydminster SPE chairman, Mike McIntosh, leŌ, presents guest speaker Myron Kuhlman with giŌ at the end of his presentaƟon on high pressure air injecƟon for deep heavy oil. Kuhlman is a member of the global SPE DisƟnguished Lecturer program marking its 50th anniversary this year.

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PIPELINE NEWS July 2012

Myron Kuhlman speaks to Lloydminster SPE ɺ Page A33 That’s what has made HPAI safe to use in operations over the last 40 years.

High pressure air also has a positive effect on steam that tends to condense deep in the reservoir, improve heat transfer and accelerate oil production.

The steam front makes the process stable and safe. In addition, the steam is generated from combustion and evaporation.

“It’s cheaper than steam because you don’t have to supply fuel, said Kuhlman.

“You can get a higher temperature because of the in-situ combustion. Because you have a higher

temperature, the oil can be upgraded.”

Kuhlman noted the toe to heal air injection or THAI technology being used by Petrobank Energy at Kerrobert and its Whitesands pilot project is an example of air injection that also upgrades oil.

“Their first process wasn’t particularly high pressure. The second one may be, and I think it will work better if it’s high pressure,” suggested Kuhlman.

Kuhlman said his company is one of seven vendors that he knows about that is developing downhole steam generators that are similar to HPAI in function.

“Like any new process, they need to get field

experience to show how they work well and how valuable they can be,” he said.

Kuhlman touched on other alternatives, but said if you want to produce deep heavy oil cheaply, you would look at a process like HPAI. In conclusion, Kuhlman said the process works for four reasons.

“One is the flue gas can dissolved in the oil,” he said.

“The second is the flue gas changes the behaviors of the steam bank you’ve generated.

“This accelerates oil production and the final reason is that the extra pressure you put in pushes oil out.”

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PIPELINE NEWS July 2012

Lakeland plugs into renewable energy Lloydminster – Solar, wind and geothermal energy are under the microscope at the Vermilion campus of Lakeland College.

The college opened its new Centre for Sustainable Innovation (CSI) on May 31 as a multi-systems energy research and demonstration site.

The CSI study site includes repurposed buildings that came with the purchase of Barrhill Farms in 2010. The study has an aim to showcase applied research and training in renewable energy.

One of the houses on the site is the Renewable Energy Learning Centre outfitted and powered by geothermal heat, solar thermal collection and solar electrical energy from both fixed and tracking systems, and a wind turbine.

“People want to know how effective these renewable energy systems are in a typical home,” said Lakeland College president Glenn Charlesworth.

“Our researchers will be able to measure and compare many aspects of geothermal, solar and micro-wind energy.

“They’ll also examine the efficiency potential of thermal energy storage. Many people, organizations and businesses will benefit from the results of this research.”

The Renewable Energy Learning Centre and other CSI buildings will also serve as a grid-connected learning centre for students in the college’s renewable energy and conservation diploma program.

This will complement the information they learn via the Energy Cabin, the program’s off-grid lab.

Many of the renewable energy tools and systems at the CSI were purchased with a $2.3 million fiveyear grant from the Natural Sciences and Engineering Research Council of Canada (NSERC) “We are pleased to be able to support Lakeland College’s Centre for Sustainable Innovation through our Community and College Innovation Program,” said Suzanne Fortier, president of NSERC. “The applied research being done in our colleges creates new opportunities for local businesses, enables researchers to take their ideas out of the lab and into the world, and provides excellent training for students.

“With the opening of this new centre, Lakeland College will provide a hub for local innovation and growth.”

Lakeland College also received support from other partners including Alberta Enterprise and Advanced Education to create the multi-disciplinary applied research facility.

James Sandercock, leŌ, chair of alternaƟve energy technology at NAIT, gets a brieĮng on the energy data collected at the Renewable Energy Learning Centre from Robert Baron, renewable energy conservaƟon program heart at Lakeland College.

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PIPELINE NEWS July 2012

Golfers tip their hats at Maidstone LeŌ: Dan Roberge from Redhead Equipment shakes hands with fellow employee Wes Young (in the green shirt) at the start of their match play. LeŌ, is Sterling Gaudaur also with Redhead. Hidden by Young is Vince Richardson, another Redhead golfer from Lloydminster.

LeŌ: Jeī WaƩ leans on a special granite bench erected in memory of past oilmen president, Vaughn Sharp, who died unexpectedly in March.

The bench is located at the players’ favourite ĮŌh hole beer pit stop. Sharp’s name will be added to this year Ernold Priest Memorial Trophy as the most sportsmanlike player.

Right: Jeī Taylor completes his follow through on this “drive for show” aƩempt in match play compeƟƟon in Maidstone.

Story and photos

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Maidstone – The late Vaughn Sharp, the popular past president of the Maidstone Heavy Crude Men’s Golf Tournament, was the players’ unanimous pick for this year’s most sportsmanlike player award.

Sharp died expectedly in March and left a lasting impression of goodwill on players and the tournament he helped to build as a long-term organizer, committee member and

player.

Jeff Watt, who took over the organizing role, said the committee also installed a granite bench in memory of Sharp at the tournament’s favourite fifth hole beer stop.

“He did a lot of work that I think went unnoticed,” said Watt, acknowledging that co-ordinating the event as Sharp did, is tougher than it seems.

“It’s a little overwhelming. It’s a little more than a guy expects when you step into it,” said Watt at the start of the tournament held on June 8 at the Silver Lake Regional Park Golf Course.

Watt works for TWB Construction in Maidstone, a company that contributed to the usual treasure trove of sponsorship and donations.

“This year’s been great. Our prize donation is exquisite. There are more than ample prizes for every golfer in the tournament,” said Watt.

A full draw of 72 players turned out for match play competition that kicked off with the annual $500 chip-off on the ninth hole.

“We just throw everybody’s name in a bucket,” explained Watt. “Everybody gets the same chance for the chip off.”

The winning shot that landed just 15 feet from the pin was delivered by Justin Clarke who knew right away where he was spending his loot.

“I am going to Vegas next week, so it’s a little extra spending cash,” he joked.

Clarke, who works for R &M Energy System in Lloydminster, vows to come back next year to make it three in a row.

“I came last year too. It’s a good event. I think it’s a good time so I come every year now,” he said.

Watt no doubt hoped that a rich man like Clarke wouldn’t mind paying to see Watt’s dreadlocks cut off at the post-event fundraiser that kept Watt from golfing.

“I am actually double booked,” said Watt.

“I am doing a Relay for Life walk in southern Saskatchewan tonight. We are doing a hair cut fundraiser at supper.

“I am shaving my head for cancer. I’ve had dreadlocks for about nine years. We are going to do a haircut right before supper, and then I’m off.”

The Maidstone tournament raises money for charities and supports a scholarship for a local high school student to pursue postsecondary education leading to a career in the oil and gas industry.

“MS is here,” said committee member Cliff Bailey at the famous 5th hole oasis.

“They are doing a 50/50 draw and a raffle for a wheelbarrow full of booze.” ɸ Page A37

PIPELINE NEWS July 2012

Hot Tools hostesses Chelcie Gilmour, leĹ&#x152;, and Serena Lodoen were two of the happiest peas in a pod on a shuĆŠle mission at the Maidstone oilmenâ&#x20AC;&#x2122;s.

Éş Page A36 Bailey also made note of the fact it was a rare beautiful sunny day with no wind and just a few pesky mosquitoes to deal with.

Ken Moser, who works for Rick Sims Trucking in St. Walburg, likely had a toque in his golf bag along with some OFF â&#x20AC;&#x201C; just in case. â&#x20AC;&#x153;This is my second time here,â&#x20AC;? he said. â&#x20AC;&#x153;I was golďŹ ng 10 years ago on a real cold weekend. After that, I stuck with the later tournaments. â&#x20AC;&#x153;I donâ&#x20AC;&#x2122;t mind the mosquitoes. Weâ&#x20AC;&#x2122;ve got OFF for that. There is no wind. I am not used to that.

The last two weeks weâ&#x20AC;&#x2122;ve had wind â&#x20AC;&#x201C; it makes it a little diďŹ&#x20AC;erent out here.â&#x20AC;?

Jamie Johnson, who works for Pyramid Corporation in Lloydminster, was in the zone with no weather worries clouding his mind.

A37

CommiĆŠee member CliÄŤ Bailey, leĹ&#x152;, congratulates JusĆ&#x;n Clarke for winning the $500 chip oÄŤ contest.

â&#x20AC;&#x153;I am a local guy. I live in Maidstone. I thought I would come out and go for a couple of rounds of golf and have some fun with the boys,â&#x20AC;? he said. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s really fun so far â&#x20AC;&#x201C; great group to golf with.

Everyone is really friendly here. Everyone that runs the tourney is doing an absolutely fantastic job. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a beautiful day. You canâ&#x20AC;&#x2122;t complain about it.â&#x20AC;?

Ditto the enthusiasm for Rick McMahon, a sales rep from Frontier Peterbilt in Lloydminster, with golďŹ ng foremost on his mind. â&#x20AC;&#x153;I love coming here. Itâ&#x20AC;&#x2122;s a great course for the size of it outside of Lloydminster,â&#x20AC;? he said. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a good way to get together and just have a good time of golďŹ ng and fellowship. Itâ&#x20AC;&#x2122;s great. â&#x20AC;&#x153;The bugs are a little bad, but if you have the bug spray youâ&#x20AC;&#x2122;ll be OK. â&#x20AC;&#x153;This is my third time. We sponsor it. Weâ&#x20AC;&#x2122;ve

done the $10,000 hole-in-one for the last three years and we oďŹ&#x20AC;er some prizes to help out.â&#x20AC;?

The door prizes, hole prizes and event prizes were handed out at the wrap-up barbecue including the champion round spoils that went Robyn Moroziuk.

Prizes were also awarded to the ďŹ rst ďŹ ve ďŹ&#x201A;ight winners who included Nathan Blanchette, Kevin Gagnon, Dan Redhead, Morris Donovon and Warner Schmitt.

The winners of ďŹ&#x201A;ights six to 10 were Ryan Hamelin, Lyle Duhaime, JeďŹ&#x20AC; Taylor, Ryan Rowan and Justin Clarke.

Prizes for the winners of ďŹ&#x201A;ights 11 to 15 went to Wayne Johnson, Wes Young, Jim Krepps, Drake Lockhart and Barry Taylor.

Roger Schneider and Glen Leroy claimed the ďŹ nal two ďŹ&#x201A;ights.

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PIPELINE NEWS July 2012

Lakelandâ&#x20AC;&#x2122;s energy diploma ratiĂ&#x20AC;ed Lloydminster â&#x20AC;&#x201C; Itâ&#x20AC;&#x2122;s oďŹ&#x192;cial. The new twoyear heavy oil diploma program with a focus on third class power engineering will begin this fall at the Lloydminster campus.

The new oil and gas program was approved

by Alberta Enterprise and Advanced Education at the end of May â&#x20AC;&#x201C; with more than 30 people interested in enrolling by the following week.

The advanced energy program will complement Lakelandâ&#x20AC;&#x2122;s one year heavy oil operations technician certiďŹ cate program that focuses on fourth class power engineering training and ďŹ eld operator skills. â&#x20AC;&#x153;This diploma program was developed in response to industry demand,â&#x20AC;? said Kara Johnston, director of energy, entrepreneurship and Saskatchewan programming at Lakeland College. â&#x20AC;&#x153;The need for skilled workers for the oil and gas sector in this region is staggering.â&#x20AC;?

A survey released June 12 by employment services ďŹ rm Manpower, showed 32 per cent of Edmonton-region employers plan to hire for the third quarter spanning July to September.

The result indicates the demand for labour in the nearby Edmonton area has returned to levels not seen since pre-recession 2008. â&#x20AC;&#x153;Industry told us that they needed more third class power engineers and that they have a need for more complete operators with advanced heavy oil knowledge as well as upgrading and steam-assisted gravity drainage (SAGD) training,â&#x20AC;? said Johnston.

According to Canadaâ&#x20AC;&#x2122;s Oil and Gas Labour

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Market Outlook to 2015 released May 29 by the Petroleum Human Resources Council of Canada, between now and 2015, the oil and gas industry will need to ďŹ ll almost 10,000 positions due to industry growth and retirements.

Husky Energy, Cenovus Energy, and Keyera Corp. are among the industry partners that helped develop the two year diploma curriculum.

Allan Markin, former chairman of Canadian Natural Resources Ltd. who heads a charity called Pure North Sâ&#x20AC;&#x2122;Energy Foundation, also contributed funds towards the creation of the program.

Lakeland is also updating its current power engineering lab and will expand its training facilities to create a modern petroleum technology centre. â&#x20AC;&#x153;We will have a new boiler in our power engineering lab by September so students in this program will be able to use it,â&#x20AC;? said Johnston. â&#x20AC;&#x153;As for the expansion, weâ&#x20AC;&#x2122;re just ďŹ nalizing the building plans and intend to do the groundbreaking ceremony this fall.â&#x20AC;?

When the facility is completed, students will be able to simulate complete heavy oil upgrading and SAGD processes from start to ďŹ nish.

Lakeland College will eventually have about 160 full-time students on campus taking the two heavy oil programs plus hundreds more taking evening, oďŹ&#x20AC;-site, and online oil and gas related courses and programs.

Husky CEO Asim Ghosh, leĹ&#x152;, and John Simpson, president of CANA Group of Companies that built Husky Place, unveil a plaque to commemorate the new oĸce building in Lloydminster. The grand opening was held on May 17.

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PIPELINE NEWS

SECTION B July 2012

Ward Koeser is a commissioner in Williston, North Dakota, a city that could perfectly Įt the deĮniƟon of Boomtown, U.S.A.

Williston is building housing by the thousands of units, and it’s not enough

By Brian Zinchuk Bismarck, N.D. – Ward Koeser is in the centre of a whirlwind.

As the commission president of Williston, North Dakota, the epicentre of the explosive Bakken play, a whirlwind may be understating it. Perhaps a hurricane would be a better metaphor.

North Dakota has seen its oil production more than double in two years, to the point where it has now far surpassed Saskatchewan’s. Nearly all of that has been centred on Williston.

In a civic structure known as a city commission, Koeser is the equivalent of a mayor. There are four other members of the commission, each with different responsibilities such as police, engineering, and water.

Koeser spoke to the Williston Basin Petroleum Conference in Bismarck, North Dakota, about the changes that his city has undergone.

The city is the centre of the basin which bears its name.

The first successful Bakken well was drilled 30 miles northwest of Williston on April 4, 1951. It was the first successful oil well in North Dakota.

Now 90 per cent of current drilling rigs working in the state are within about 70 miles of the city. As a result, service companies like to locate there, numbering about 400 now. On April 2, there were 209 active drilling rigs.

“Because of all that activity, we’ve had an incredible amount of jobs cre-

ated,” he said. “Starting in January 2010 and ending September 2011, Williams County had 12,000 jobs created.”

With about one per cent unemployment, Koeser said, “We believe that’s probably the lowest in the United States.”

There are 3,000 job openings in the Williston area available now, he said.

“The oil and gas industry makes up a lot of our employment,” he said. In Williams County, 53 per cent of the workers in the county work in the oil and gas business.

The average wage in third-quarter 2011 was $71,000 per year. “We believe that is now higher,” Koeser said.

“The comment is made that if you are going to compete with the oil industry, even in the service sector, if you’re McDonalds, you’re probably going to have to pay $15 an hour to keep workers.”

Williston’s average wage in 2006 was $32,000, now it’s pushing close to $80,000.

The city is No. 1 in rent inflation in the state. An advertisement for a new construction one bedroom apartment is now $2,350 per month. For two bedrooms, one bath, it’s $2,850 per month. Two bedrooms, two baths is $3050. ɸ Page B2

B2

PIPELINE NEWS July 2012

On the north end of Williston, everywhere you turn, you ÄŽnd another camp. This large one is just across a fence from a huge Target LogisĆ&#x;cs facility.

Welcome to the city that needs everything Éş Page B1 â&#x20AC;&#x153;This causes a lot of problems for a community,â&#x20AC;? Koeser said. â&#x20AC;&#x153;A lot of people in our community donâ&#x20AC;&#x2122;t make salaries that allow them to rent a place to stay.â&#x20AC;?

Thatâ&#x20AC;&#x2122;s been an issue for attracting more retail in the community, as employees canâ&#x20AC;&#x2122;t aďŹ&#x20AC;ord a place to stay. â&#x20AC;&#x153;Rent is a huge problem,â&#x20AC;? he said, especially for seniors or those on a ďŹ xed income.

Williston saw $338 million in construction in 2011, twice what the next largest city would be. â&#x20AC;&#x153;We build houses, apartments, industrial, you name it, itâ&#x20AC;&#x2122;s under construc-

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tion,â&#x20AC;? he said.

There were almost 2,000 housing units built in 2011, and â&#x20AC;&#x153;In 2012, we expect somewhere between 3,000 and 3,500 housing units.

A lot of it depends on issues like ďŹ nancing, getting the infrastructure in. Thatâ&#x20AC;&#x2122;s our goal.

The truck bypass in town had 9,000 vehicles a day on that bypass in 2008.

Last year there were 28,000 a day, of which 9,000 were trucks. â&#x20AC;&#x153;We said we have to do three things to try to help us get through this boom.â&#x20AC;?

The ďŹ rst is planning. They ďŹ rst noticed activity increasing in 2004. They started increasing infrastructure planning, but studies became obsolete as soon as they were complete. â&#x20AC;&#x153;We are annexing very rapidly. For years, no one wanted to be annexed.

Now they do.â&#x20AC;?

The city was quickly running out of infrastructure capacity, but he said, â&#x20AC;&#x153;We think weâ&#x20AC;&#x2122;re going to solve that issue. ɸ Page B3 Nabors Rig 177 could be found working north of Williston, near a substanĆ&#x;al baĆŠery.

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B3

Baker Hughesâ&#x20AC;&#x2122; facility in Estevan is quite a bit compared to what they have recently moved into in Williston. This large facility has enough fuel bowsers for their Ĺ&#x2021;eet to make it a medium-sized truck stop in Saskatchewan. And the whole site is paved, with concrete.

â&#x20AC;&#x153;With thousands of new people, mostly young people, you want to ensure you have things for them to do and a quality of life to realize.â&#x20AC;?

Partnerships is the last area. â&#x20AC;&#x153;We try to partner with whoever will partner with us.â&#x20AC;?

That includes everything from a rail park to developers to medical centres to recreational centres. With all the young people in town, a birthing centre has become a priority.

In the meantime, older people are moving out, in large part due to the rising cost of living. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re becoming a much younger town, and a more diverse community,â&#x20AC;? he said.

Koeser ďŹ nished by saying Williston is an exciting place to live. â&#x20AC;&#x153;We will be a better community than when we started.â&#x20AC;?

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â&#x20AC;&#x153;For those of you who have been in an oil boom, you can say certain things are going to happen. But not a lot of it is set in concrete. It depends what the price of crude is, how fast companies need to drill, what their leases are, what the technology is. Thereâ&#x20AC;&#x2122;s a lot of factors to plan for. We do know we need to plan for more roads, water, sewer, landďŹ ll. â&#x20AC;&#x153;We have about $544.2 million worth in projects that need to be done. Some are short term, some are longer term.â&#x20AC;?

The city is working with the Department of Transportation on a temporary reliever truck route to get the truck traďŹ&#x192;c out of town. That should be in place this summer.

An expansion or relocation of the airport is planned. To move it would cost $150 million.

Fire halls, police stations, city hall expansions â&#x20AC;&#x201C;

all are needed. â&#x20AC;&#x153;We need everything. In a town growing as rapidly as we are, we literally need everything,â&#x20AC;?

Koeser said.

The city is now paying a monthly housing stipend for its staďŹ&#x20AC;.

The cityâ&#x20AC;&#x2122;s population has grown from 12,500 in 2000 to 17,000 in 2010 and about 20,000 today. â&#x20AC;&#x153;In the past three to four years, weâ&#x20AC;&#x2122;ve grown approximately 60 per cent. We have people from all 50 states working here.â&#x20AC;? â&#x20AC;&#x153;You canâ&#x20AC;&#x2122;t build housing that fast, so we have a lot of temporary housing in crew camps, or mancamps, as we call them.

There are 10,000 crew camp units in Williston and Williams County area. The one used by Halliburton was used at the Vancouver Winter Olympics. â&#x20AC;&#x153;We need to make sure we remain a place people want to live,â&#x20AC;? Koeser said.

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PIPELINE NEWS July 2012

The meaning of energy security to the U.S. Bismarck, N.D. – Harold Hamm, CEO of Continental Resources

said, “A reporter asked me the other day, what’s the big deal about

energy independence? It means you don’t have to send your kid over there

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“That’s what it means. That’s a big deal, certainly a big deal to

conference.

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amount, about twothirds of what was here on earth was immobile, and that’s what we’re

“A reporter asked me the other day, what’s the big deal about energy independence?

It means you don’t have to send your kid over there to get killed!”

- Harold Hamm, CEO, Continental Resources

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me.”

Hamm opened up as the lead presenter on a Bakken CEO panel during the Williston Basin Petroleum Conference in May. He picked up on the theme of energy independence that he spoke about two years ago at the previous

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and the Barrack Obama administration. That was abundantly clear when Hamm said, “I’ve got it down to three words,” he said. “Beat Barrack Obama.”

That was something of an opening joke, but the applause was appreciative.

“Some of our detractors will get you in a ditch real quick. They get you talking about fracking and things like that. Fracking is not the story. The story is, with this energy renaissance that’s going on in the world today, is that one thing that got us here. That one thing is horizontal drilling.

That got us into the immobile portion of the oil and gas left on Earth that we couldn’t produce conventionally. It’s a tremendous

tapping into with horizontal drilling,” Hamm said.

“We need fracking and multi-stage completions and all those things, but you don’t always need it.”

“I think energy is going to play a tremendous role in this political scene – in this presidential election, and a lot of other elections.

“Why is that? Why is it such a high level issue this year? It’s pretty simple: because of the failure of Obama’s energy policy. It was a total failure. He had a policy based on scarcity.

We were running out, going to be out, so we had to turn to these alternatives – solar wind, everything else you can think of – algae – to replace oil and gas. ɸ Page B5

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PIPELINE NEWS July 2012

B5

ConƟnental Resources CEO Harold Hamm is blunt about energy independence. It means fewer foreign wars.

ɺ Page B4 “It’s certainly not the case. He’s had a wave that’s crested over him.”

Hamm stated, “I started talking about energy independence two years ago, and everyone thought, ‘Gosh, you know, that’s not going to happen.’

“Maybe we ought to say self-sufficiency.

I don’t think, in North America, we ever need to be totally independent, but certainly self-sufficient in North America.

“Can we get there in 10 years? Yeah, we can get there in 10 years.

If we had three to five million barrels (per day) additional, yeah, we’d be pretty self-sufficient.

He said the Bakken development may last 50, 60, 70 years. “Who knows?”

Regarding the rig count that had grown

to 215 by mid-May and was on its way to 225, he said that the rigs have plateaued at 200 and may hit 210.

“What does it look like going forward? For our company, we’re planning a lot of pad rigs.

“We’ll be drilling at least 50 per cent pad locations.

“There’s one constant pressure we’re going to focus in on. I’m sorry contractors, I’ve been in the service business a long time. You guys may have to settle for a little bit slower jet, maybe a bit smaller jet.

You guys have to figure out how to bid on jobs again. Those people will have to look for efficiencies.”

The reason for that is the Bakken rate of return is substantially lower than other plays in the U.S. “That doesn’t cut it,” he said.

Pipelines

“What is happening in the world?

“We need pipelines to get our oil to water, to get it to the ocean where we can ship it anywhere in the world.

The $16 differential out there right now between Brent and WTI, I don’t know if that bothers y’all or not, it certainly bothers me.

“We ought to be at parity with that. We need major pipelines in here. People ask which pipelines you’re going to support? I’m going to support them all.

We need all we can get here. We need to get rid of this differential, and do it now. Certainly we don’t need to be dependent just on (Keystone) XL. We need several

major lines to this field.

He quoted a recent article that said, “Adios, OPEC.” “That’s a big one.

We’ve been under somebody else’s control for 50 years. We don’t like doing that. We don’t like being under some-

body else’s control.

“We are going to see the end, we have seen the end, of that control. It’s a different world. It means energy security. It means national security. It means integration of wealth in America. A lot of things

grow from American oil.

“One of those, of course, is psychology – that we can do it in America. That feels pretty good, dudn’t it?

It did me. I felt pretty good about it,” Hamm concluded.

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PIPELINE NEWS July 2012

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Bismarck, Williston, N.D. â&#x20AC;&#x201C; Thereâ&#x20AC;&#x2122;s simply no way permanent housing like houses and apartments can come close to meeting the crushing demand in Williston, North Dakota, centre of one of the biggest oil booms in years. As a result, camp operators like Target Logistics have moved in. New camps are springing up all around Williston.

Tryo Schrenk, senior vice-president of sales said, â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;s a tremendous demand for a housing solution that ďŹ ts this oil play. â&#x20AC;&#x153;We believe the demand is temporary, not permanent. We have approximately 4,000 beds in the Bakken. We are the largest provider.â&#x20AC;?

More are on the way. However, with so much going on, itâ&#x20AC;&#x2122;s hard to measure the market. A high number of workers are turning to RVs, park units,

single wide trailers, motor homes, as just some of the places to lay their head, so itâ&#x20AC;&#x2122;s diďŹ&#x192;cult to know what the exact count it.

Schrenk said of their option, â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re a semi-permanent housing solution designed to stay on a site ďŹ ve to 15 years. â&#x20AC;&#x153;We believe the demand for our housing will continue to grow.

When the life cycle of the play is on the downside and the workforce starts to migrate out, we want to ensure we leave housing intact. There is a risk of oversupply on the permanent side.â&#x20AC;?

The people staying at their accommodations, while not permanent themselves, spend money in the community, at places like barbershops and restaurants. â&#x20AC;&#x153;Theyâ&#x20AC;&#x2122;re up here to perform a job. Our job at Target Logistics is to provide them with the most comfortable, high

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quality living conditions,â&#x20AC;? he said.

Schrenk noted there is a correlation to housing and worker productivity and safety, via reduced travel time. That in turn reduces on-site accidents and fatigue.

Their clients include oil, drilling, construction, fracking, trucking companies, as just a partial example. Producing companies will typically get a block of rooms for their workers and contractors. Unlike open camps you ďŹ nd in Saskatchewan and Manitoba, there are not individual rooms booked. â&#x20AC;&#x153;The minimum stay in our lodges is 30 days,â&#x20AC;? he said. They are running at 90 per cent occupancy.

Guerdon Modular Building of Boise, Idaho has been a key supplier of their facilities, and shared a booth with Target Logistics at the show. ɸ Page B7

Thereâ&#x20AC;&#x2122;s an Internet cafe down the hall from the incamp convenience store.

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B7

The Bear Paw Lodge is the showcase for Target LogisĆ&#x;cs at Williston.

This is a typical room at the Bear Paw Lodge. Set up in a Jack-and-Jill conÄŽguraĆ&#x;on, where a bathroom is shared between two rooms.

Éş Page B6 Tour Following the Williston Basin Petroleum Conference in May, Pipeline News was able to tour the Bear Paw Lodge, the largest facility at Williston in the Target Logistics ďŹ&#x201A;eet.

It shares a 42-acre site with two other facilities, the Williston North 40 and Destiny Cabins. The North 40 has separate buildings, while the other has â&#x20AC;&#x153;cabins,â&#x20AC;? done in rustic fashion, with their own kitchen facilities, but no food services. The Bear Paw Lodge had a central corridor linking all buildings, with numerous wings coming oďŹ&#x20AC; of it.

In VIP rooms, each has its own private bathroom and a pillow-top mattress.

The remaining rooms are Jack-and-Jill setups, where two rooms share a common bathroom between them. All the rooms have televisions and DVD players.

Thereâ&#x20AC;&#x2122;s wireless Internet throughout, and a computer room for those who donâ&#x20AC;&#x2122;t have their own computers.

A Jack-and-Jill room goes for $129 per night, if you lease it for a year. For shorter terms, the cost is $10 higher, and â&#x20AC;&#x153;subject to availability,â&#x20AC;? according to North Dakota sales manager Brad Oâ&#x20AC;&#x2122;Neil.

VIP rooms are $149 a night based on a 12-month lease, and $159 otherwise. Cabins, which are two-bedroom units, go for $79 per night per room, but, as mentioned above, donâ&#x20AC;&#x2122;t include meals.

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The workout room in the Bear Paw Lodge is extensive, with lines of treadmills and other equipment. There are two saunas in the exercise area.

That adjoins the large recreation area, with pool tables and foosball.

Laundry facilities are included, and detergent is supplied.

The kitchen works 24 hours a day, and serves three meals a day.

All Targetâ&#x20AC;&#x2122;s facilities have a no drugs, alcohol, ďŹ rearms or visitors policy.

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PIPELINE NEWS July 2012

Former high tech project manager Ă&#x20AC;nds work in Williston Williston, N.D. â&#x20AC;&#x201C; Terry Legions was a project manager for Seagate, one of the worldâ&#x20AC;&#x2122;s major hard drive

manufacturers, until the recession hit a few years ago. Now sheâ&#x20AC;&#x2122;s the assistant manager at the largest camp in Wil-

liston, North Dakota, and has her sights set on advancement.

Legions works at Target Logistics Bear

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Terry Legions spent decades working on hard disks. She headed up a research and development unit with a leading manufacturer. The fallout of the global ÄŽnancial crisis has led to her ÄŽnding work as an assistant camp manager in Williston, North Dakota.

Paw Lodge, one of three Target Logistics facilities that share a site just north of Williston.

She calls Santa Cruz, California home. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ve been here since last July,â&#x20AC;? she said.

Itâ&#x20AC;&#x2122;s the ďŹ rst camp that sheâ&#x20AC;&#x2122;s worked at, and she said, â&#x20AC;&#x153;I love it here. â&#x20AC;&#x153;I worked for a high tech disk drive company in Scotts Valley, and they closed our division.

I couldnâ&#x20AC;&#x2122;t ďŹ nd a job for like two years.â&#x20AC;? â&#x20AC;&#x153;I was a project manager for R&D,â&#x20AC;? she said. â&#x20AC;&#x153;I loved working for Seagate in California.â&#x20AC;? â&#x20AC;&#x153;I couldnâ&#x20AC;&#x2122;t ďŹ nd a job in California that would pay. Iâ&#x20AC;&#x2122;m 55, but I donâ&#x20AC;&#x2122;t

feel like it.â&#x20AC;?

She had gone back to school for medical billing and coding as part of a retraining eďŹ&#x20AC;ort. â&#x20AC;&#x153;After an internship, I felt there was no way in heck I could do this. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;m happy to have this job. â&#x20AC;&#x153;My brother works for a large company that stays here (Williston).

He talked to the camp manager, and got me the job. I started in the front oďŹ&#x192;ce, and now am assistant camp manager.â&#x20AC;? â&#x20AC;&#x153;My dadâ&#x20AC;&#x2122;s from North Dakota, and all my relatives live in Fargo, Grand Forks and Jamestown.â&#x20AC;?

Legions also lived nearby while in elementary school, on a 300acre farm in Minnesota.

Her father took up dairy farming after being discharged from the navy, where he had been a chief petty oďŹ&#x192;cer. â&#x20AC;&#x153;You work 12 hour days, seven days a week,â&#x20AC;? she explained. The rota-

tion is six weeks, then two unpaid weeks oďŹ&#x20AC;.

The camps are consistently full, so thereâ&#x20AC;&#x2122;s no room to stay at the camp during the oďŹ&#x20AC; weeks.

Divorced, her older son, his wife and kids live in her house and take care of it in Santa Cruz. On her rotational days oďŹ&#x20AC;, she alternates between going home to Santa Cruz and visiting her other son in Florida.

Noting North Dakotaâ&#x20AC;&#x2122;s unemployment rate is around one per cent, she wonders why others havenâ&#x20AC;&#x2122;t done the same as she has and seek the numerous jobs available. â&#x20AC;&#x153;I donâ&#x20AC;&#x2122;t know if theyâ&#x20AC;&#x2122;re beat down because they havenâ&#x20AC;&#x2122;t worked for so long. â&#x20AC;&#x153;It motivates me to know Iâ&#x20AC;&#x2122;ll have two weeks oďŹ&#x20AC; at a time. I live by the beach,â&#x20AC;? Legions said. â&#x20AC;&#x153;I love it. This is the best job ever. I wish I had found it years ago.â&#x20AC;?

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PIPELINE NEWS July 2012

B9

Jason Feit, Alliance Pipelineâ&#x20AC;&#x2122;s business development manager out of Calgary, holds up a sample cross-secĆ&#x;on of the Alliance Pipeline mainline. Alliance is planning on a new lateral for North Dakota Bakken gas.

Alliance Pipeline getting Bakken on-ramp Bismarck, N.D. â&#x20AC;&#x201C; The Alliance Pipeline was originally built in 19992000 with the intentions of bringing gas from northeastern British Columbia and northwestern Alberta to market. However, its construction would put it in right in the middle of one of the hottest oil plays in the world, the Bakken, and that play is gassy.

The Alliance mainline is rated for 1,325 mmcf/d in Canada, but 1,513 mmcf/d in the U. S. That means that it has additional capacity that can be used to pick up American gas production.

As a result, Alliance is building an on-ramp, as it were, allowing Bakken gas production from North Dakota onto its pipeline. Itâ&#x20AC;&#x2122;s a big development in an area that is ďŹ&#x201A;aring substantial amounts of gas because they canâ&#x20AC;&#x2122;t get it to market.

Tony Straquadine, manager of government aďŹ&#x20AC;airs with Alliance, said, â&#x20AC;&#x153;We are anticipating approval for the permit later this year, likely in August.â&#x20AC;?

That permit will be for the Tioga lateral. It will be a 79 mile, 12-inch pipeline, that will run northeast from Tioga, N.D. to join with the main line at Sherwood, N.D., just south of the Saskatchewan border. It will originate

at a new full fractionation plant being built by Hess Corporation.

The pipelineâ&#x20AC;&#x2122;s design capacity is approximately 106 million cubic feet per day (mmcf/d). Hess has signed up for 61.5 mmcf/d. The remainder of the capacity was put out to an open season last fall.

The pipelineâ&#x20AC;&#x2122;s capacity is expandable with looping and additional compression. It has a site established for mid-point compression if deemed necessary. Construction is planned for this fall, with the intention to be operational by July 2013, according to Jason Feit, Allianceâ&#x20AC;&#x2122;s business development manager out of Calgary.

He noted it will be similar to the main line, operating at high pressure and dense phase. â&#x20AC;&#x153;We run right through the Bakken, and a lot of the new development in Canada,â&#x20AC;? he said.

TransGas has a hold on the marketplace in Saskatchewan, Feit said, but added, â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re open for business. â&#x20AC;&#x153;Most pipelines canâ&#x20AC;&#x2122;t carry NGLs in their pipelines like we can,â&#x20AC;? he said.

As a result, not as much processing is needed before the gas goes on the main line.

Alliance, via its sister company,

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Aux Sable Midstream, purchased the Palermo, N.D. 80 mmcf/d plant in this past year. That plant went into service in 2011.

This past spring, they added a natural gas liquid truck unloading facility with a capacity of 5,000 bpd.

The NGL mix will be injected into the Palermo Plant/Prairie Rose Pipeline system for delivery and processing at Aux

Sableâ&#x20AC;&#x2122;s Channahon, Illinois facility. The new truck unloading facility can be easily expanded to 10,000 barrels per day.

There are two unloading spots allowing for an oďŹ&#x201E;oad time of half an hour. The company noted its oďŹ&#x201E;oad station is within a reasonable radius of most existing and planned NGL producing facilities in North Dakota, Montana, and Saskatchewan.

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B10

PIPELINE NEWS July 2012

U.S. energy policy is simple: import oil Bismarck, N.D. – When you make a documentary on energy and claim it’s the first objective film on the subject, you are invariably going to make some people uncomfortable.

Scott Tinker, the man behind the documentary Switch, is the director of the Bureau of Economic Geology,

at the University of Texas – Austin. With a PhD in geological sciences, he holds the Edwin Allday Endowed Chair in Subsurface Geology. Prior to his return to academia, his work included being an advanced senior geologist with Marathon Oil for 12 years in Littleton, Colorado.

Tinker was one of

the platform speakers at the Williston Basin Petroleum Conference in May. The event took place in Bismarck, North Dakota. His speech did have a few people getting uncomfortable.

“I worked in the industry for 17 years.

I found too much salt water, so they made me a professor,” Tinker said.

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“We’re adding a billion people every 13 years, and energy tracks right along that,” he said.

While the OECD countries’ demand has been flat, developing countries’ energy demands are a hockey stick graph, going straight up.

“We waste over half of the energy we use,” Tinker said, pointing to heat going up smokestacks and out of car exhaust pipes.”

On the scale of industrialization, he noted, “China is about 100 years behind where the U.S. is today, but we had 100 million people then, and they have 1.3 billion people now.

“Six years ago, China sold one-third of the cars (compared to) the U.S. Now they sell 50 per cent more.”

As for America’s energy policy, he said, “We don’t have one.

Our policy is: import oil.”

Yet there have been developments in U.S. production, particularly in shale. Pointing to doing a core of Eagle Ford Shale, one of the hot plays in Texas right now, he said, “If we cored something like

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that in the ’80s, we’d get fired. You missed your core point. Now everyone in the world wants to see that core.”

The intensity of Eagle Ford development could reach as high as 55 acre spacings per well, he noted.

As unconventional oil approaches four million barrels per day, he said “That’s impressive.”

The oilsands, he noted, has the consistency of a hockey puck.

About 20 per cent are mined, and the remainder is in situ pad production. But one of the challenges is getting it to the U.S. “I can’t believe we’re not going to build a pipeline from Canada to Texas. My guess is, Nov. 3, that pipeline will be approved, regardless of who is elected.”

He noted the incident level is higher for trains, trucks and barges than it is for pipelines.

“We say we need oil that’s not imported from faraway places.

Canada’s not far away.

I’m guessing the president made a political decision on votes from both sides.

He noted, “They’re commissioning a new gigawatt coal plant in China every 10 days.”

A further 24 nuclear power plants are under construction in that country.

“Get ready for 2.5 billion people growing their economy in China and India,” he said.

As for liquefied natural gas, Tinker said Qatar has 900 trillion cubic feet (Tcf ) of reserves, making up one-third of the global

LNG market. Their production trains are a kilometre long, and they can load a tanker in 12 hours.

“You heard about peak gas in the ’70s, and then the peakers got really quiet,” Tinker said.

Not much is heard about coalbed methane, he noted.

Looking at global shale basins, in Siberia there’s a basin bigger than Texas. The unconventional gas challenge includes finding production sweet spots, developing fracturing and stimulation approaches.

It’s important to keep scale, though, he said, showing a graphic of the vertical underground distances between drinking water aquifers and the producing well. It had the height of three Empire State Buildings between them.

Looking at what’s coming down the road, he said, “If you’re going to have energy policies, you better understand what you have.”

Tinker pointed out some of the quirks of the fracturing debate.

“Nobody told New Jersey they don’t have anything to frac,” he said, as the state has put the kibosh on hydraulic fracturing.

Germany banned fracking, then Fukushima happened, so German then banned nuclear power. The result? “Dear Moscow, please send gas.”

“They don’t have much wind, and (their) solar intensity map looks much like Seattle,” Tinker said. ɸ Page B11

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PIPELINE NEWS July 2012

B11

The world is going to have a lot more people, and they are all going to want energy. That was one of the thrusts of ScoƩ Tinker’s presentaƟon to the Williston Basin Petroleum Conference in Bismarck, N.D. on May 24.

ɺ Page B10 Shale is going to be a big item in the future, but the above-ground challenges are real. Revealing frac ingredients hurts competitive advantages, but may be necessary, as “You get to keep operating.”

Looking to the distant future, in 2080, he noted oil consumption as a percentage of energy production has already peaked, in 1979, at 49 per cent of global energy. “Renewables will come up steeply (as a percentage of global energy consumption) when you solve storage. You have to have complete backstopping until you can store electricity.”

There can be disruptive technology, an example being hydrogen.

He tells young people, “If you truly want to change the world, solve storage.”

Examples include pumped water, compressed air, enhanced capacitors, and flywheels.

“I’m worried we will box ourselves in with well intended – corn ethanol – but silly energy policies.

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Fuel diversity is important, he said, but picking fuel winners is a bad idea.

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PIPELINE NEWS July 2012

LandSolutions holds grand opening in Lampman Cuƫng the ribbon at the LandSoluƟons grand opening were, front row, leŌ to right: Tyler Lyne, land agent; Josh House, land agent; Char Pouliot-land admin.; Chad Hughes - president of LandSoluƟons; Candace Frecon, land admin.; Shawn Howard, senior manager, LandSoluƟons. Back row, from leŌ to right: Leighton Schroeder, land agent; Randy Fleck, manager, Williston Basin; Patrick Dobbyn, land agent.

Photo submiƩed

By Brian Zinchuk Lampman – LandSolutions LP, one of the more prominent land agencies in the oilpatch, has re-affirmed its commitment to Lampman by holding its grand opening for its new location, right on Main Street.

It’s the latest in several offices the company has occupied over the past six years, each larger than the

last. Now, with 2,200 square-feet on each of two floors, they should have room, at least for a while.

The company had to endure pouring rain just before the big event on June 7, curtailing some attendance.

Even so, local manager Randy Fleck said, “We ended up with about 90 people. We would have had more it if wasn’t pouring rain.”

The event was

celebrated by a barbecue lunch and presentations by dignitaries. LandSolutions president Chad Hughes was there, as well as senior manager Shawn Howard. Speaker of the House Dan D’Autremont, MLA for Cannington, and Don Toth, MLA for Moosomin, and several other local officials.

Fleck started the southeast Saskatchewan operation six years ago in his own house. They

This is probably the Įrst new business building on Lampman’s Main Street in 20 years, according to LandSoluƟons manager Randy Fleck.

Photo submiƩed

then moved to a one bedroom apartment, followed by a former church. Still, that wasn’t

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enough. “We needed more space,” Fleck said.

The new building is a permanent, two floor setup. The lower floor is rented out to a consulting business, Woodley Well Service, and is intended for future expansion.

“The company thought Lampman was a good fit,” Fleck said.

That town was chosen in large part because that was where Fleck called home, although initially they did look at Estevan. “We can do everything in Lampman we can do in Estevan,” he said. “Personally, I’d like to see a small town

grow. It’s probably the first new business building on Main Street in 20 years.

“We’ve hired a lot of local people. It’s worked.”

LandSolutions has five land agents and two administration staff working out of Lampman.

Things in the field have been a little slower this spring activity-wise, a fact Fleck attributes to the frequent rain southeast Saskatchewan has been seeing. “The work is out there. Our paperwork is done,” he said. Now it just needs to dry up.

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PIPELINE NEWS July 2012

B13

Hard workin' man

From the way he runs up and down the hill behind his drilling rig, as well as the way he talks, it’s immediately apparent Levi Kolesar spent Ɵme in the military. The former marine is a motorhand on Nomac Rig 316, working just north of Williston, North Dakota on May 25. The rig was so close to town, it could have been drilling beneath it. Behind Kolesar is a baƩery with a substanƟal number of tanks. Inset: Nomac Rig 316, a triple, working near Williston.

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B14

PIPELINE NEWS July 2012

Shifting Gears

One Woman’s Perspective on Life, Liberty and the Pursuit of Land Locations

By Nadine Elson I hadn’t seen him in years. I was struck by the fact that he had aged- but then I realized so had I. Dennis Ball had been my father’s law partner once upon a time, and I had been a teenaged babysitter to his kids. Now a sitting judge in Regina, he spoke to the assembled people in Estevan with the gentle, quiet authority that I imagine is consistent with how he conducts his courtroom. He gave the eulogy, and we mourned the loss of our friend, business leader, sport enthusiast and loved one as we listened.

After the service, I approached Dennis and told him what an inspirational message he had delivered under very difficult circumstances. He was the brother-in-law of the deceased. I never imagined, two months to the day later, that I would be delivering my own mother’s eulogy in a cathedral in Kelowna filled with mourners.

I was in Denver when I got the text. I was our local club’s delegate for Region 7 meetings of the

To live life well, live as though you are dying Association of Desk and Derrick Clubs. My mother had just been admitted to hospital, the text read.

She had been in hospital a few times this spring – to heal infections or to get blood. I had just returned from a visit to Kelowna, while road bans were on in Saskatchewan.

I wasn’t surprised or concerned. My mother was invincible, or so I thought. Diagnosed with a chronic type of leukemia nearly 35 years ago, she was told by doctors that they had never seen someone as young as she with this type of cancer. She was 43 at the time. Old people get it and they die of other causes, they said. They didn’t know what to expect, they said.

She had chemotherapy and radiation. The treatments created havoc with her immune system.

Many times, over the years, she fought pneumonia and bladder infections, and one of the worst cases of shingles her doctors had ever seen, requiring hospitalization in an isolation ward.

She was diagnosed with bowel cancer. Surgery was performed. Then later, bowel cancer cells were found to be growing in her liver. She found a doctor in Edmonton who took out the cancer and half her liver. A few years later, she survived toxic shock and a coma arising from a systemic blood infection from an insect bite. She spent two weeks in ICU with that. Over and over, we prepared ourselves for her death. Again and again, we thanked God that she was given life.

Mom, who didn’t know what to expect at age 43 with a cancer diagnosis, did see her 50th birthday, her 60th birthday, and then her 70th birthday.

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She celebrated her 50th wedding anniversary with her family on a cruise in the Caribbean. She was lucky and she knew it. She had been given the gift of life. By this time, she had seen six grandchildren born, and one great grand-child.

So when the call came, I calmly told my Desk and Derrick friends that my mother had been hospitalized. “You should call the hospital,” Shelley said. I replied that she wouldn’t have a phone. “That doesn’t matter,” she said. “Call the nurses’ station.”

She continued to insist and I did, calling Kelowna Hospital long distance from Denver.

Mom was weak but lucid. “I love you,” she said as she always did at the end of our goodbyes.

That was my last conversation with her. The next afternoon, my father was told that Mom just wasn’t going to make it and to call in the family.

Despite Shelley’s skill with airlines, computers and ticketing agents, she just couldn’t get me out of Denver and into Kelowna in time to kiss my mother goodbye one last time, and I was alone in the Calgary airport at 1 a.m. when I learned that Mom had passed away. It was surreal. I had been prepared for her death many times over the years, and yet when it finally happened, I was so unprepared.

My sister found the paper a few days later in Mom’s desk. Brief and dated last fall, it gave instructions for a memorial service. We had been unaware of its existence days earlier. Sandra and I looked it over. Amazingly, we had planned most of the service correctly without knowing of the paper.

We did know our mother. “Look at this,” my sister said, pointing to an entry.

“Eulogy” it read, “given by Nadine.”

Mom had been aware of my Toastmaster membership and my column but I had not considered this. “What do you think?” I asked my sister.

“Well that’s good enough for me,” said my sister, which is how I found myself writing my mother’s eulogy. I thought of the funerals that I had attended; the people to whom I had said goodbye.

How does one condense a life well lived into 2000 words and a ten minute talk?

At my mother’s memorial service, I stood and walked to the pulpit. I looked out at the sea of faces, some familiar and some unfamiliar. I told them that my mother’s life had been a gift from God. I told them about the loving gifts that my mother had bestowed on family, friends, and strangers – the generous gifts of time and service to causes she believed in; the practical gifts of cookies and sewing to grandchildren; the delicious gifts of hospitality and food; the incomparable gifts of travel and memories; and the soul gifts of daily watching her live her Christian faith.

It was only when I had flown home, retrieved my truck from long term parking for the drive back to Estevan, and being alone for the first time in three weeks, turned on the radio to hear Tim McGraw’s voice that I realized that perhaps the greatest gift Mom gave was to live like she was dying. Not in a bucket-list-selfish way but a living-on-the-edge-of-eternity inspiring way.

It was a great example. It was a wonderful life. It was a life well lived.

“And I loved deeper And I spoke sweeter And I gave forgiveness I’d been denying.

And he said, someday I hope you get the chance, To live like you were dying.”

Live Like You Were Dying – Tim McGraw In loving memory of my mother Eileen Charlotte Hill, July 4, 1935 – May 18, 2012.

Nadine lives in Estevan, with her husband and family, and works as a hot shot driver in the oil patch regularly delivering goods in and around Estevan and Shaunavon, and Sinclair and Waskada, Man. Her mission, beyond delivering the goods quickly, is to have every interaction be a positive one. She can be reached at missiondriver@hotmail. ca

PIPELINE NEWS July 2012

B15

Drilling upstages June land sales Regina â&#x20AC;&#x201C; Have land, will drill. Thatâ&#x20AC;&#x2122;s the story for the June sale of petroleum and natural gas rights that raised just $10.5 million in revenue for Saskatchewan.

Minister responsible for Energy and Resources, Tim McMillan said June land sales are historically quieter in terms of industry interest and number of hectares on oďŹ&#x20AC;er, and that companies used the June sale to add to their large existing land inventories. â&#x20AC;&#x153;What weâ&#x20AC;&#x2122;re seeing right now from oil companies is a focus on working the dispositions they currently have,â&#x20AC;? said McMillan. â&#x20AC;&#x153;That's reďŹ&#x201A;ected in the level of drilling activity so far in 2012.â&#x20AC;?

That was also the case for the April sale that brought in a modest $16.4 million for the province with the focus on drilling spilling over from 2011. â&#x20AC;&#x153;Last year was our second-best year for oil well drilling and a record year for horizontal oil well drilling,â&#x20AC;? said McMillan. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re ahead of the pace on both counts so far this year, and that activity helped us set an all-time record for monthly oil production in March.â&#x20AC;? â&#x20AC;&#x153;While weâ&#x20AC;&#x2122;re not witnessing new largescale land acquisitions right now, the industry is very busy, and all indicators are pointing to a banner year for investment and activity in Saskatchewan's oilďŹ elds.â&#x20AC;?

The June sale included 133 lease parcels that brought in $9.4 million in bonus bids and three petroleum and natural gas exploration licences that sold for $1.1 million.

The Weyburn-Estevan area received the most bids with sales of $4 million. The Lloydminster area was next at $2.65 million, followed by the Swift Current area at $2.64 million and the KindersleyKerrobert area at $1.2 million.

The highest price

for a single parcel was $782,957. Sandstone Land & Mineral Company Ltd. acquired this 1,036-hectare exploration licence southwest of Fox Valley.

The highest price on a per-hectare basis was $14,017.

Standard Land Company Inc. bid $226,931 for a 16-hectare lease parcel north of Loverna.

The next sale of Crown petroleum and natural gas dispositions will be held on August 13, 2012.

WeyburnEstevan area (numbers rounded up) The top purchaser of acreage was Triwest Exploration Inc. that spent $928,697 to acquire three lease parcels.

The top price paid for a single lease in this area was $454,271

by Triwest for a 64.75 hectare parcel situated within the ViewďŹ eld Bakken Sand Oil Pool, 10 kilometres southeast of Stoughton.

This is the highest dollar per hectare in this area at $7,016/ hectare.

Lloydminster area The top purchaser of acreage was Ranger Land Services Ltd. that spent $595,391 to acquire two lease parcels.

The top price paid for a single lease in this area was $440,426, paid

by Rockwell Resources Inc. for a 243 hectare parcel situated within the Edam West Mannville Sands Oil Pools, 12 kilometres southeast of St.Walburg.

The highest dollar per hectare in this area was received from Mineral Consulting Services Ltd., at $5,637/ hectare for a 16.19 hectare parcel located adjacent to the Spruce Lake Mannville Sand Gas Pool, 10 kilometres southwest of Edam.

No bids were received on four of the Oil Sands Special Exploratory Permits and there were no acceptable bids on the other two.

Swift Current area The top purchaser of acreage in this area

was Sandstone Land & Mineral Company Ltd. that spent $782,957 to acquire one exploration licence.

The top price paid for a single lease in this area was $51,257 paid by Husky Oil Operations Limited for a 32.37 hectare parcel situated within the Gull Lake South Upper Shaunavon Oil Pool, 11 kilometres southwest of the town of Gull Lake.

This is the highest dollar per hectare in this area at $1,583/ hectare.

The top price paid for a single licence in this area was $782,957 paid by Sandstone Land & Mineral Company Ltd. for a 1,036 hectare block situated within the Hatton Milk River- Medicine Hat Sand and Richmound 2nd White Specks Gas Pools, eight kilometres southwest of Fox Valley.

Kindersley-Kerrobert area The top purchaser of acreage in this area was Plunkett Resources Ltd. that spent $630,683 to acquire two lease parcels.

The top price paid for a single lease was $627,013 paid by Plunkett Resources Ltd.

for a 518 hectare parcel situated 10 kilometres southeast of the Mantario South Basal Mannville Sand Oil Pool,

eight kilometres west of Eatonia.

The highest dollar per hectare in this area was received from Standard Land Company

Inc. at $14,017/hectare for a 16.19 hectare parcel located within the Fusilier Bakken Sand Oil Pool, 10 kilometres north of Loverna.

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PIPELINE NEWS July 2012

Electron microscopes crucial in identifying good Bakken prospects Bismarck, N.D. – “It just gets better,” said Jim Volker, CEO, president and chairman of Whiting Petroleum, when talking about the North Dakota Bakken play. “It gets better for people in the state, it gets better for state revenue, and it gets better for all the people we are bringing in to enjoy the quality of life here in North Dakota.

“It’s something we treasure, and I pledge to you, this day, that Whiting will do its part in maintaining that quality of life.”

Whiting is one of the leading producers in that play. Volker was speaking as part of a CEO panel during Williston Basin Petroleum Conference in Bismarck, North Dakota.

“We control about 700,000 net acres, gross 1.1 million acres in the Williston Basin,” he said.

In the Sanish area, he said the time to payout for a well is between half a

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year and a year. The return on investment is generally between 3:1 and 8:1 on their money. Other areas see a payout of one to two years.

When asked if they will ever find anything as good as their Sanish field, the answer was a resounding “yes,” he said. “We found, we think in our Pronghorn area . . . both on I.P.s and rates of production for the first 30, 60 and 90 days, Pronghorn is every bit as good as Sanish was, and we’re just beginning developing Pronghorn.”

Volker noted they have an average of approximately 90,000 barrels production in the first six months for a well. That compares to an average across the basin of 30,000 barrels.

“Sweet spot theory” is one of the ways they reach that. Volker posed, “How do we find the sweet spots?

“We’re a big believer in the analysis of core,” he said. The company has its own scanning electron microscopes it uses at its Denver headquarters.

Looking at scans 10 microns square, he said, “We find that essentially with a porosity generally between three per cent and eight per cent, and a permeability between 10 and 100 microdarcies . . . and a total hydrocarbon saturation between the 40 and 60 per cent range.”

By calibrating core samples to logs, it allows Whiting to identify good prospects.

The very thin slices scanned by the electron microscope allow them to quickly re-qualify a reservoir to see if they want to lease and drill in it. Such a detailed pore throat description will tell them if those pore throats are big enough to allow the “chubby little oil molecules” to move thorough.

Gas collection “We have a goal at Whiting of zero emissions from our facilities,” he said.

In their Sanish field, the company now has a gas plant at Robinson Lake that cost $122 million. They have about 400 miles of oil and gas gathering pipelines.

“We’re capturing all the gas from 500 wells, roughly half from Whiting operated wells, and half from other operators.

“We expect it will ultimately become 1,000 wells connected to that plant.” ɸ Page B17

PIPELINE NEWS July 2012

B17

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Éş Page B16 Similar work is happening at their Pronghorn area, where they already have over 100 miles of line in the ground, and will ultimately have 300 to 400 wells connected. â&#x20AC;&#x153;By the time weâ&#x20AC;&#x2122;re doing there, our investment will be around $400 million.â&#x20AC;?

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PIPELINE NEWS July 2012

PIPELINE NEWS July 2012

B19

2012 Estevan OTS tees oďŹ&#x20AC; on two courses The Estevan OTS Oilmenâ&#x20AC;&#x2122;s Golf Tournament took place on June 1-3.

Due to damage done to the Estevan Woodlawn Golf and Club last year in the ďŹ&#x201A;ood, this tournament was split between Woodlawn and Hidden Valley Golf Resort. Hidden Valley provided the front nine, while Woodlawn acted as the back nine. OTS President Brett Campbell said attendance was down a little bit, but 97 players golfed 36 holes, and 187 took in 18 holes. He also thanked the numerous sponsors. â&#x20AC;&#x153;It was a success,â&#x20AC;? he said. â&#x20AC;&#x153;Being at two courses was a little crazy, but we didnâ&#x20AC;&#x2122;t have any complaints. Thanks to the committee members. Without them, this wouldnâ&#x20AC;&#x2122;t happen.â&#x20AC;?

On June 2, the traditional steak or lobster supper was held at the curling rink with music by Slow Motion Walker.

Assistant pro A m a n d a Minchin helped the guys out on one of the holes.

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PIPELINE NEWS July 2012

WaterSkrubr taps into water treatments Calgary â&#x20AC;&#x201C; WaterSkrubr Canada used the 2012 Global Petroleum Show in Calgary to oďŹ&#x192;cially launch its start-up as a Canadian owned supplier of water and wastewater treatment and puriďŹ cation systems.

The company, coowned by Tim Claughton and Craig March, set up one of their ultraďŹ ltration demo units at the show. The unit generated a lot of interest as a cost-eďŹ&#x20AC;ective and eďŹ&#x192;cient water treatment

solution for residential, commercial and industrial applications. â&#x20AC;&#x153;We are projecting from a start-up at this show that we should pull out of this show at least $1 million worth of sales,â&#x20AC;? said Claugh-

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ton, vice-president of corporate development and sales in Calgary. â&#x20AC;&#x153;If nothing else, we built a great awareness with many people in diďŹ&#x20AC;erent segments, what is available and what we are capable of doing.â&#x20AC;?

WaterSkrubr is partnered with the new water ďŹ ltration division of global industrial ďŹ ltration giant Mann+Hummel with the rights to distribute their water ďŹ ltration products and systems in Canada.

The company plans to build scalable systems that can treat from 5,000 litres of water a day, to large municipal units with ďŹ ltration systems based on the use of hollow core membranes.

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â&#x20AC;&#x153;The key to what we do is our ďŹ ltration. Itâ&#x20AC;&#x2122;s a very low cost alternative to what the competition is out there,â&#x20AC;? said Claughton. â&#x20AC;&#x153;We are signiďŹ cantly lower than the major competitors, but we are still putting out one of the top quality products in the marketplace. â&#x20AC;&#x153;Hollow core ďŹ bre membranes are the key.

The beauty of them is they have a life capacity of three to ďŹ ve years or beyond. Itâ&#x20AC;&#x2122;s quite impressive to have a ďŹ lter that retails for about $2,500 last for that long.â&#x20AC;?

The technology developed by Mann+Hummel is packaged as a complete built-in system scalable for any facility or for mobile containerized and skid-mounted units.

WaterSkrubr is targeting the oil and gas and remote mining camp market, but will set up a manufacturing base near St. Johnâ&#x20AC;&#x2122;s, NďŹ&#x201A;d. where as many as 200 communities have an immediate need

to meet new federal wastewater treatment legislation. â&#x20AC;&#x153;We are the lowcost alternative. We have ďŹ nancial solutions, so a small community can lease this unit and solve their problem immediately without a huge capital outlay,â&#x20AC;? said Claughton.

A manufacturing plant will be set up in Blaketown, NďŹ&#x201A;d., where there is an available labour pool of workers to start a new industry with oil and gas clients available. â&#x20AC;&#x153;What we are looking at initially is camps where we can treat the wastewater and put it back into the environment or to reuse it for potable standards,â&#x20AC;? said Claughton. â&#x20AC;&#x153;Our biggest advantage is that we can draw from a lake or a pond and turn it to drinking water. A lot of people are looking at the back end and we are looking at the front end. ɸ Page B21

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PIPELINE NEWS July 2012

B21

WaterSkrubr launched their business start-up at the 2012 Global Petroleum Show in Calgary and generated a ton of interest in the water and wastewater treatment soluĆ&#x;ons with this portable lab unit.

Photo submiĆŠed

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Éş Page B20 â&#x20AC;&#x153;We can treat that water and put it back in the environment where we got it from.â&#x20AC;?

WaterSkrubr is also working with a Calgary company on the potential use of solar and wind power to further reduce the low energy load to run the ďŹ ltration systems at remote locations. â&#x20AC;&#x153;Being very low power is one of the keys,â&#x20AC;? said Claughton. â&#x20AC;&#x153;The other thing is the longevity of our ďŹ ltration so the operating cost is minimal. â&#x20AC;&#x153;The capital cost of our 50,000-litre unit runs around $300,000 plus shipping, but that includes the set up and everything related to that.â&#x20AC;?

Claughton said half the questions tossed his way at the oil show in June were about the ďŹ ltration of frac water, an area of market interest for WaterSkrubr down the road. â&#x20AC;&#x153;The short answer is we are working on possibilities for that, but every application and hole is always diďŹ&#x20AC;erent.

You are dealing with a

whole variety of chemicals,â&#x20AC;? said Claughton.

WaterSkrubr sells a series of ďŹ ltration systems for various applications including a membrane bio-reactor system that provides a one-step process for water recycling through the removal of suspended solids and microorganisms. â&#x20AC;&#x153;For light oils, we can certainly do it with an MBR,â&#x20AC;? said Claughton.

WaterSkrubr is also working on potential desalination systems for oil companies with their reverse osmosis technology.

The oil show also led to the launch of a water and wastewater research partnership with SAIT and discussion about pilot projects with the University of Calgary.

WaterSkrubr wants to sell small $10,000 to $20,000 pilot units to companies that can test their eďŹ&#x20AC;ectiveness using their own products, and then design and build the actual systems for them. â&#x20AC;&#x153;The show launched our company and got

us into the market very fast,â&#x20AC;? said Claughton.

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PIPELINE NEWS July 2012

Husky Place grand opening Â&#x201E; Photos by GeoÄŤ lee

Husky CEO Asim Ghosh, leĹ&#x152;, assists John Simpson, president of CANA Group of Companies, with the unveiling of a plaque of Husky Place. The new oĸce building was built by CANA.

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PIPELINE NEWS July 2012 Husky CEO Asim Ghosh, leŌ, and John Simpson, president of CANA Group of Companies that built Husky Place, unveil a plaque to commemorate the new oĸce building in Lloydminster. The grand opening was held on May 17.

Husky mascot Dale Luedtke welcomed Husky’s Donna-Lee Egan, manager of HR business partners from Calgary, to the opening of the new Husky Place oĸce for heavy oil operaƟons in Lloydminster.

Lloydminster Mayor Jeī Mulligan said the grand opening of Husky Place oĸce building was a “great Lloydminster day,” and a “great Husky day.” The event included the oĸcial start-up of Husky Energy’s carbon capture and liquefacƟon facility in Lloydminster.

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PIPELINE NEWS July 2012

New Keystone route under review Calgary – A new environmental review of TransCanada Corporation’s Keystone XL pipeline began June 15.

The announcement by the U.S. State Department follows TransCanada’s new Presidential Permit application submitted in May to build the pipeline from the U.S./Canada border in Montana to Steele City, Nebraska.

The U.S State

3D

Department said the environmental assessment will consider a different route through Nebraska to avoid the ecologically-sensitive Sandhills region with a decision on the project expected in early 2013.

Agencies, organizations and members of the public have until the end of July to comment on possible environmental issues and the scope of the study.

Meanwhile,

TransCanada is expected to begin construction this summer on the $2.3 billion section of the pipeline from Cushing Okla. to the U.S. Gulf Coast in Texas as a standalone project.

Since the Gulf Coast project doesn’t cross the Canada/U.S. border it does not need U.S. presidential approval that tripped up TransCanada’s original proposal to pipe crude

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On Nov. 10, 2011, the Obama administration announced that no decision would be made on the long-sought Keystone XL pipeline pending a new route and a new comprehensive environmental review that would push a final decision into the first quarter of 2013.

“The fact the Department of State has reaffirmed its timeline for making a decision on a Presidential Permit for Keystone XL early next year is an important development, and we look forward to the detailed schedule of the steps needed to meet that Q1 2013 timeframe,” said Russ Girling, TransCanada's president and CEO. “It is important to

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recognize that by the time a final decision on this critical piece of North American energy infrastructure is made, Keystone XL will be well into its fifth year of exhaustive and detailed studies, the most extensive review for a crossborder pipeline ever.

“The final review should focus solely on the realigned route that avoids the Nebraska Sandhills,” noted Girling.

“The rest of the Keystone XL route remains the same. The geology of the route remains the same. The environmental conditions remain the same. Nothing else has changed since the FEIS (federal environment impact statement) was approved.”

Girling went on to point out that “the longer this project is de-

layed, the more critical the need for the energy it will supply becomes to American refiners and consumers.”

The Keystone XL pipeline is a proposed $7.6 billion, 1,700mile, 36-inch crude oil pipeline that will stretch from Hardisty Alta, to the Gulf Coast.

“Keystone XL has the support of labor unions, business, industry and communities along the route, all of whom understand the direct private sector spending that this multi-billion dollar project will create,” said Girling.

“Further delays will continue to impact the manufacturing sector, construction trades, contractors, equipment suppliers and communities along the Keystone XL route,” noted Girling.

A derrick can be seen over a rise near Kisbey on June 1.

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PIPELINE NEWS July 2012

B25

BC GasLink pipeline for exports Calgary â&#x20AC;&#x201C; TransCanadaâ&#x20AC;&#x2122;s contract to design, build, own and operate the proposed $4 billion Coastal GasLink pipeline for a Shell Canada group in northeastern British Columbia could generate up to 2,500 construction jobs over a two to three year period.

Employment is one of the many selling points of the proposed 700-kilometre pipeline that will transport natural gas from the Montney gas-producing region near Dawson Creek, B.C. to the recently-announced LNG Canada liqueďŹ ed natural gas export facility near Kitimat.

The new LNG Canada project is a joint venture led by Shell, with partners Korea Gas Corporation, Mitsubishi Corporation and PetroChina Company Limited.

Shell and TransCanada are working toward the execution of deďŹ nitive agreements on the Coastal GasLink project. The pipeline will use a large diameter pipe with a design capacity in excess of 1.7 billion cubic feet per day. â&#x20AC;&#x153;The potential Coastal GasLink pipeline project will allow British Columbians and all Canadians to beneďŹ t from the responsible development of valuable natural gas resources and will provide access to new markets for that gas,â&#x20AC;? said Russ Girling, TransCanadaâ&#x20AC;&#x2122;s president and CEO in the June 5 announcement. â&#x20AC;&#x153;The project will also create substantial employment opportunities for local, skilled labourers and businesses as part of our construction team. â&#x20AC;&#x153;We know the value and beneďŹ ts that strong relationships in British Columbia can bring to this project and we look forward to deepening those ties as our extensive pipeline network grows to meet market and customer needs.â&#x20AC;?

The projected completion date is near the end of the decade, subject to provincial and federal regulatory approvals.

The ďŹ nal route of the Coastal GasLink pipeline will be determined followings discussions with First Nations and stakeholders. The route will be based on lessons learned from route selection with TransCanadaâ&#x20AC;&#x2122;s controversial Keystone XL pipeline.

TransCanada was denied a Presidential Permit to build the Keystone last November pending the approval of new route through the environmentally sensitive Sandhills area of Nebraska.

Enbridge is also pursuing an extensive public engagement policy to seek regulatory approval to build its Northern Gateway crude oil pipeline from Bruderheim, Alberta to Kitimat. â&#x20AC;&#x153;Our team has the expertise to design, build and safely operate pipeline systems,â&#x20AC;? said Girling. â&#x20AC;&#x153;We look forward to having open and meaningful discussions with Aboriginal communities and key stakeholder groups, including local residents, elected oďŹ&#x192;cials and the government of British Columbia, where we will listen to feedback, build on the positive and seek to address any potential concerns. â&#x20AC;&#x153;Coastal GasLink will add value to British Columbians, particularly Aboriginals and communities along the conceptual route, by creating real jobs,

making direct investments in communities during construction and providing economic value for years to come.â&#x20AC;?

TransCanada currently has approximately 24,000 kilometres of pipelines in operation in Western Canada including 240 kilometres of pipelines in service in northeast B.C. The company also has another 125 kilometres of proposed additions that are either already approved or currently undergoing regulatory review.

These pipelines form an integral and growing part of TransCanada's NOVA Gas Transmission Ltd. (NGTL) System.

The company also owns other natural gas pipelines that have been safely operating in B.C. for more than 50 years as part of its Foothills pipeline system.

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PIPELINE NEWS July 2012

Bakken, Shaunavon inĂ&#x20AC;ll drilling can double Crescent Point's reserves, shareholders told Â&#x201E; By Pat Roche (Daily Oil Bulletin) Crescent Point Energy Corp. can double its reserves just through inďŹ ll drilling at its Shaunavon and ViewďŹ eld properties, shareholders heard on May 31.

Crescent Point's current proved plus probable reserves total 496.8 million bbls of oil equivalent.

This includes year-end 2011 reserves adjusted for 2012 acquisitions and dispositions, and assumes the closing of the Cutpick Energy Inc. acquisition.

â&#x20AC;&#x153;These two properties -- Shaunavon and ViewďŹ eld -- have the ability just through simple inďŹ ll drilling to double our reserve base as a company,â&#x20AC;? Crescent Point president Scott Saxberg told the company's annual meeting in Calgary.

Referring to the company's total asset base, he said: â&#x20AC;&#x153;We believe right now -- just through inďŹ ll drilling and some waterďŹ&#x201A;ooding on existing assets -- we have the potential to add over a billion barrels of reserves, above and beyond our current base.â&#x20AC;?

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He said the company has $16 billion worth of development inventory and more than 7,500 future drilling locations â&#x20AC;&#x201C; â&#x20AC;&#x153;all deďŹ ned by 3D seismic, geology and engineering.â&#x20AC;?

Crescent Point â&#x20AC;&#x201C; which is 91 per cent oil weighted â&#x20AC;&#x201C; is forecasting average 2012 production of 88,500 boepd, but has already surpassed that forecast. The company's ďŹ rst quarter output averaged a record 90,285 boepd.

In the ďŹ rst quarter the tight-oil producer bagged $1.3 billion worth of acquisitions, and is forecasting 2012 exit production of 97,500 boepd.

In 2012, the former income trust expects to pay dividends of $900 million, or $2.76 a share.

In other words, it expects to pay out roughly 57 per cent of its cash ďŹ&#x201A;ow to shareholders.

Crescent Point has a 2012 capital budget of $1.25 billion and plans to drill 408 net wells this year.

The company expects to increase production to about 132,500 boepd over the next ďŹ ve years.

That includes raising output from its Saskatchewan Bakken area to 74,000 boepd from about 60,000 boepd in the ďŹ rst quarter.

Shaunavon production would shoot up to 35,000 boepd over the next ďŹ ve years from 18,500 boepd in the ďŹ rst quarter. Production from the Viking formation would edge up to 8,000 from 7,000 boepd and Swan Hills output would more than double to 6,000 from 2,260 boepd.

The company's other core areas are in North Dakota, southern Alberta and Manitoba.

Saxberg described Crescent Point's Swan Hills, North Dakota and southern Alberta Viking properties as â&#x20AC;&#x153;emerging plays.â&#x20AC;? â&#x20AC;&#x153;We don't have a lot of growth in those areas at this stage in this ďŹ ve-year model,â&#x20AC;? he said. â&#x20AC;&#x153;I think that's key in the fact that we're not relying on some new area to grow the next ďŹ ve years....

This model is based on inďŹ ll drilling -- mainly Shaunavon and Bakken -- and the growth is [mainly] going to happen from there -- which is low risk and easily achievable.â&#x20AC;?

He also noted the plan to grow to 132,500 boepd in ďŹ ve years doesn't include any Bakken or Shaunavon waterďŹ&#x201A;ooding impact, and it doesn't include any additional acquisitions or increased output due to future technology improvements. â&#x20AC;&#x153;So we have a very low-risk, ďŹ ve-year plan to grow production four to eight per cent per year on a per-share basis for a six to seven per cent dividend,â&#x20AC;? said Saxberg.

Crescent Point reported a $3.89 million net loss in the ďŹ rst quarter compared with a net loss of $102.22 million in the corresponding 2011 period, but cash ďŹ&#x201A;ow totalled $397.98 million compared to $296.12 million the prior year (DOB, May 10, 2012 and DOB, May 11, 2012).

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B28

PIPELINE NEWS July 2012

Hip waders go with Lakeland water studies Vermilion – Rubber boots and hip waders are mandatory field wear for Lakeland College students studying a two-year diploma in Environmental Monitoring Protection at the Vermilion campus.

“Water protection is definitely a major part of the program,” said instructor and former EMP student Camille Scheibner in a May 31 interview.

“They take four courses that are based on different types of water management whether it is surface water or ground water or watershed management.

“We spend a lot of time in the Battle River in different water systems collecting samples or doing different types of measurements. There’s a lot of time outside.”

The EMP program is one of four majors in the

two-year diploma course emphasizing water quality protection, a growing area of employment and environmental concern.

“Water is one of those issues that have definitely come up to the forefront in recent years, and it’s just going to continue to build in importance,” said Scheibner.

“Our grads are going to have a lot of opportunities once they graduate from the college.

“There are a lot of jobs now where our students will go out and get hired on either as consultants or with consulting companies.

“They’ll be the ones who are actually going out and doing the water sampling and the monitoring program.

“Our program provides them with a good basis for that type of work in the oil and gas industry.”

About 75 per cent of Alberta’s oil production including conventional, in-situ and mining is water assisted according to a recent report by the Canadian Association of Petroleum Producers.

The public is concerned about industry’s operating practices affecting water quality, such as produced water management and disposal, potential effects of coalbed methane (CBM) development on groundwater, and drinking water wells.

There are also issues about drilling fluids contaminating groundwater during fracturing operations (especially fracture-intensive shale gas developments), and the impacts of tailings ponds on surface water.

“Grads aren’t specializing in those areas, but it’s something we definitely cover in course material,” said Scheibner. ɸ Page B29

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This EMP student is pictured collecƟng a water sample from a stream in the Cypress Hills Interprovincial Park in southern Alberta.

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PIPELINE NEWS July 2012

B29

Environmental monitoring protecĆ&#x;on students wearing chest waders use a Ĺ&#x2021;ow metre to determine discharge volumes in the BaĆŠle River near Wainwright. Photo submiĆŠed

Éş Page B28 â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s something they are exposed to and do a lot of research on. They are deďŹ nitely aware of the issues that are going on with the fracking processes. â&#x20AC;&#x153;They are also made aware of concerns of landowners â&#x20AC;&#x201C; why landowners are so concerned with the quality of their water and whatâ&#x20AC;&#x2122;s happening with their ground water sources. â&#x20AC;&#x153;As a consultant they would be working with oil companies going out to lease sites or project sites doing the monitoring and the environmental management for those projects.â&#x20AC;?

Students also develop employable skills in environmental sampling, site assessment and waste management. â&#x20AC;&#x153;In their water resources and watershed management course they do a lot of surface water quantity type methodology, said Scheibner. â&#x20AC;&#x153;We go out the Battle River near Wainwright; we do some discharge measurements; we do ďŹ&#x201A;ow rates â&#x20AC;&#x201C; just a good basic overview on how to measure water quantity rather than quality.â&#x20AC;?

Second year students start their term with a ďŹ eld trip to Cypress Hills for hands-on learning in sampling methodologies and ďŹ eld work.

Diploma grads can step up to the two-year Environmental Sciences degree program that includes one year of class time followed by an eight month practicum.

Thatâ&#x20AC;&#x2122;s the route Scheibner took to become an environmental advisor with the Department of National Defense after graduating from Lakeland in 2008. â&#x20AC;&#x153;We actually did quite a bit of work with oil and gas companies down in the Wainwright area,â&#x20AC;? she said. â&#x20AC;&#x153;Talisman was one. We had a pipeline going through the bottom of a range and training area so we did quite a bit of collaboration with them on that type of project.â&#x20AC;?

When Scheibner graduated she told the college she wanted to teach one day and the opportunity knocked last fall when she accepted a one year position teaching all of the courses that she had taken as part of her diploma and degree. â&#x20AC;&#x153;I jumped at the opportunity as a great learning experience for me,â&#x20AC;? she said. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s really broadened my horizons as an environmental practitioner in the ďŹ eld. â&#x20AC;&#x153;I am currently looking for employment, but there are so many jobs out there, and I actually had a couple of interviews this week. There are lots of jobs

both in the public and private sectors. â&#x20AC;&#x153;Our grads are in hot demand. The diploma students are going out as technologists. â&#x20AC;&#x153;A vast majority of our students go into the degree program. We will have one or two who go oďŹ&#x20AC; and get a job, but a lot want to do that extra year of schooling. â&#x20AC;&#x153;The practicum gets their foot in the door and it guarantees them work.â&#x20AC;?

Scheibner said the EMP major tends to attract more women than men who lean toward the environmental conservation and reclamation major with its heavier oil and gas weighting. â&#x20AC;&#x153;In the environmental monitoring and protection diploma, I think it deďŹ nitely appeals to a lot more women who want to go out and does this type of monitoring work,â&#x20AC;? said Scheibner. â&#x20AC;&#x153;In the second year of this particular diploma there are around 10 students.

We are expecting the same number for the ďŹ rst year. We are hoping to get that number up. â&#x20AC;&#x153;Most of our diplomas have around 25 students so we are working on promoting it and getting that program out there.â&#x20AC;?

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B30

PIPELINE NEWS July 2012

Onion Lake may send Ă&#x20AC;ve to Lakeland

Somewhere is this crowd gathered for the grand opening of Huskyâ&#x20AC;&#x2122;s new oĸce building in Lloydminster is Kara Johnston, director of Energy, Entrepreneurship & Saskatchewan Programming. Johnston used the opportunity to provide Pipeline News with an update of the IntroducĆ&#x;on of the Heavy Oil and Gas program taught at Onion Lake Cree NaĆ&#x;on.

Lloydminster â&#x20AC;&#x201C; Kara Johnston, director of Energy attended, Entrepreneurship & Saskatchewan Programming at Lakeland College came to the grand opening of the Husky Place oďŹ&#x192;ce building in Lloydminster in a talking mood.

Husky Energyâ&#x20AC;&#x2122;s $1.1 million donation to Lakelandâ&#x20AC;&#x2122;s energy programs at the May 17 event led Johnston to provide an update on Lakelandâ&#x20AC;&#x2122;s 21-week introductory heavy oil and gas program taught at Onion Lake Cree First Nation. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s going really well. We have 11 students. We wrap it up July 21,â&#x20AC;? said

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Johnston. â&#x20AC;&#x153;Right now, we have ďŹ ve students from that program who are interested in coming into our heavy oil operations technician (HOOT) program. â&#x20AC;&#x153;As long as they are successful, for the ďŹ rst time ever we will have First Nations students in our heavy oil training in our program, which is phenomenal from our point of view.â&#x20AC;?

The remaining six students will be employed in entry level oilďŹ eld jobs in the Onion Lake area.

The program began March 5 to prepare Aboriginal students to either work in the oilďŹ eld with entry level training or continue their education in the HOOT program at the Lloydminster campus. â&#x20AC;&#x153;We had to serve more than one purpose. It could either be education or employment,â&#x20AC;? said Johnston. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s really the focus with the skilled labour shortage â&#x20AC;&#x201C; engaging our First Nations and giving them tools to be successful. â&#x20AC;&#x153;Because we are going to Onion Lake and we are doing on-reserve training, they can stay at home to study â&#x20AC;&#x201C; the teachers are coming to them. â&#x20AC;&#x153;They donâ&#x20AC;&#x2122;t have the family constraints or issues like childcare or transportation or any of those things because they are able to do it in their own back yard. â&#x20AC;&#x153;Onion Lake has been a phenomenal partner with us. They have been so supportive and have helped us design the program.â&#x20AC;?

The program is instructed by Lakeland and funded by the Saskatchewan Ministry of Advanced Education Employment and Immigration. â&#x20AC;&#x153;The Saskatchewan government is so pleased with how well this program has been put together and how well itâ&#x20AC;&#x2122;s been run, that our goal is that it will be funded to run again,â&#x20AC;? said Johnston. â&#x20AC;&#x153;Likely, we will run it again after Christmas. Itâ&#x20AC;&#x2122;s too soon to run it this fall because we will just be wrapping up this one in July, and we need a chance to reďŹ&#x201A;ect and make it better.â&#x20AC;?

The course includes academic upgrading of math, physics and communication skills needed for entry into the HOOT program for fourth class power engineering. â&#x20AC;&#x153;This will be the ďŹ rst time we have had ďŹ ve Aboriginal students,â&#x20AC;? said Johnston. â&#x20AC;&#x153;This will set them up to be successful in the program. Thatâ&#x20AC;&#x2122;s really our goal. â&#x20AC;&#x153;We have had them in the program before, but they are unique in the way they face other challenges that other students donâ&#x20AC;&#x2122;t face. â&#x20AC;&#x153;Transportation is number one and being displaced from where they currently live.â&#x20AC;?

The prospective HOOT students from Onion Lake take part in a Life Skills course designed to help them adjust to living and learning oďŹ&#x20AC; reserve.

ɸ Page B31

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B31

)RU 5HQW Askiy Apoy Hauling GP Ltd., a business enĆ&#x;ty of Onion Lake Cree NaĆ&#x;on, operates a Ĺ&#x2021;eet of approximately 40 trailers hauling produced water and oil from oil companies in the area. The trucking company is hiring some Aboriginal graduates of a 21-week heavy oil and training program taught by Lakeland College at Onion Lake.

File photo

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Éş Page B30 â&#x20AC;&#x153;What this does is, it introduces them to college life and makes them comfortable plus it prepares them with all the skills they need to be successful in our programming,â&#x20AC;? said Johnston.

Johnston said Onion Lake has resurrected its transportation system and there is even some talk about Onion Lake having its own residence on the campus one day. â&#x20AC;&#x153;Right now itâ&#x20AC;&#x2122;s a phenomenal idea, but there is a lot of work to be a reality,â&#x20AC;? she said.

The 21-week course covers all four parts of a Gas Process Operations certiďŹ cate and ďŹ ve safety courses for students taking the oilďŹ eld work option. â&#x20AC;&#x153;We are running an oil truck operator course as well at Onion Lake,â&#x20AC;? said Johnston. â&#x20AC;&#x153;Students can run a vac truck, a semi vac or work on a pressure truck or an oil water hauler.

Onion Lake has its own trucking company, Askiy Apoy Hauling GP Ltd. that transports produced water and petroleum crude oil for several oil companies that operate in the area. â&#x20AC;&#x153;Askiy Apoy has been a great partner at Onion Lake and I know they are interested in helping out some of those students,â&#x20AC;? said Johnston.

This fall, Lakeland will begin its two year diploma program for third class power engineers.

Students in this yearâ&#x20AC;&#x2122;s one year certiďŹ cate program will wrap up part B of their fourth class power engineering program on July 21. â&#x20AC;&#x153;Over half of those students are going to return in the fall to continue in our diploma program for third class power engineering in advanced heavy oil training,â&#x20AC;? said Johnston. â&#x20AC;&#x153;This fall, we will have 40 students in our

ďŹ rst year of the program and 20 in our second.

If we could expand that number to 30 or 40 we would be elated.â&#x20AC;?

The $1.1 million donation from Husky will help fund scholarships and the expansion and upgrades to Lakelandâ&#x20AC;&#x2122;s Oil and Gas Technology Centre and power engineering lab in Lloydminster.

Weâ&#x20AC;&#x2122;re proud to be a part of your community. www.crescentpointenergy.com

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B32

PIPELINE NEWS July 2012

Mayor Kevin Glessing visited to the lease site of Deloro Resources Ltd. Deloro last drilled a well in the area in the fall of 2011 in a project partnership with Electro-Petroleum Inc. using direct current as an enhanced oil recovery method. This site has been inacƟve since last fall with an open gate to the lease pad.

FOR SALE BY TENDER Sealed, written tenders for the property described below will be received by: Meighan Haddad LLP, P.O. Box 397, Melita, MB.

Whither Wilkie with heavy oil?

PROPERTY: SE CORNER HWY 3 & 83, MELITA, MB. NW ¼ 31-3-26 LOT SIZE: LGTH: 495.5 FT, WDTH: 150 FT TWO BUILDINGS & ENCLOSED COMPOUND Exc all mines and minerals RM of Arthur OPEN HOUSE JULY 14, 2012 9:00 A.M. TO 5:00 P.M. CONDITIONS OF TENDERS: 1) Interested parties must rely on their own inspections and knowledge of the property and not on the above or any other particulars made by or on behalf of Arleigh Gibson. Inquires should be directed to Arleigh Gibson 522-6308 or agibson@mts.net 2) Tenders must be received on or before 2:00 P.M. Friday July 30TH, 2012. Early Tendering would be very much appreciated.

3) Each Tender must be accompanied by a $1000.00 deposit cheque payable to Meighan Haddad LLP. Deposits accompanying unaccepted bids will be refunded.

4) Highest or any tender not necessarily accepted.

TERMS AND CONDITIONS OF SALE: 1) The bidder whose tender is accepted will be required to complete an agreement covering terms and conditions of sale.

2) In addition to the deposit, the balance of the accepted tender must be paid on August 30th, 2012, or evidence that the purchase funds will be available under conditions acceptable to the Vendor. If the balance of the accepted tender is not paid within the set time limit, the deposit paid may be forfeited as liquidated damages and no as a penalty.

3) Possession is not authorized until acceptable arrangements for full payments is made following acceptance of tender.

4) All mines and minerals will be reserved from any transfer.

5) Successful bidders will be responsible for taxes commencing on possession date.

THANK YOU

Wilkie – There is an estimated resource of 63 million barrels of heavy oil in the McLaren formation under the Town of Wilkie where peas, lentils and canola crops continue to drive the local economy.

The game changer could be a company like Deloro Resources Ltd., which burst onto the scene in 2009 with the promise of using direct current electricity in partnership with Electro-Petroleum Inc. (EPI) as an enhanced oil recovery method.

After drilling pilot wells from 2009 to last September, their lease site with its high voltage power supply has been inactive, leaving residents to ponder the future of oil in Wilkie.

“It was all hyped up a few years back and it seems to have fizzled out. There hasn’t been much activity since they drilled that well back in

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September,” said Mayor Kevin Glessing.

“I talked to a fellow who lives nearby and there hasn’t been any action since the rig left.

I don’t know if there was a problem there – I don’t know what’s going on out there.”

A visit to the site, 13 kilometres south of town, revealed an open gate to a lease site with some oil tanks and a high voltage power unit left by EPI. “I don’t know these people from Deloro and haven’t met them, “ said Glessing.

“They haven’t been in contact with the town at all since I’ve been in office.

“Most things are hush-hush because they don’t want their competition to find out what’s going on. Apparently, there is some seismic activity going on out there.”

The lack of heavy oil production in the area isn’t stopping Wilkie from moving forward or celebrating its traditional agricultural roots.

Wilkie, which boasted a strong agricultural environment, celebrated its centennial by holding a party

in July 2011 in conjunction with the Outlaws, the local senior hockey team.

It was also noted that according to the 2011 census, the town’s population stood at 1,301 residents a 6.5 per cent increase over five years.

West Central Pelleting, Saskcan Pulse Trading, the Louis Dreyfus Inland Terminal, and Viterra acquired by Swiss-based Glencore on May 29, are among the major employers in town along with the Canadian Pacific Railway yard.

Several farmers in the area grow wheat for the Northwest Terminal in Unity that produces 25 million litres per year of ethanol.

Wilkie, located at the intersection of highways 14 and 29, is surrounded by oil producing communities including the Red Pheasant First Nation and Prince, north of the Battlefords.

“I guess we are not the only area in Saskatchewan that has got heavy oil under it that still hasn’t been tapped – but we are one of them for sure,” said Glessing. ɸ Page B33

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PIPELINE NEWS July 2012

B33

This Deloro Resources Ltd. lease site lies dormant with security barriers down and no signs of any recent acĆ&#x;vity. The Vancouver-based company began piloĆ&#x;ng the use of direct current electricity as an enhanced oil recovery method in 2009.

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Éş Page B32 â&#x20AC;&#x153;Oil and gas here â&#x20AC;&#x201C; weâ&#x20AC;&#x2122;re just waiting. I guess the reason they havenâ&#x20AC;&#x2122;t come into this immediate area is because itâ&#x20AC;&#x2122;s just so heavy down there, and they need to ďŹ nd a process to eďŹ&#x192;ciently bring it up.â&#x20AC;?

Developing an oil and gas service industry in town would help Wilkie to sell out its inventory of residential, commercial and industrial lots to diversify the economy. â&#x20AC;&#x153;We are always trying to attract new businesses. We have business tax incentives,â&#x20AC;? said Glessing. â&#x20AC;&#x153;I guess thatâ&#x20AC;&#x2122;s about the only drawing card we do have other than this is a nice quiet community and a good family community. â&#x20AC;&#x153;We have a bit of industrial land that is available too, just waiting for service industries for the oil and gas wanting to come in. They seem to head over Unity way.â&#x20AC;?

Several residents commute to Unity to work at Tervita Corporation oilďŹ eld waste disposal facility (formerly CCS) with several groups carpooling to jobs in Biggar and the Battlefords. â&#x20AC;&#x153;It seems these communities with oil and gas around them and all these service companies that service the oil and gas â&#x20AC;&#x201C; they support those communities with donations and things like that,â&#x20AC;? said Glessing. â&#x20AC;&#x153;That all helps a community project.â&#x20AC;?

Wilkie is the ďŹ nal year of a $4 million water main replacement project, with the Building Canada Fund providing two-thirds funding.

With no new government grants available, the town has taken out a loan to fund the initial $100,000 upgrade of its water treatment plant. â&#x20AC;&#x153;We just drilled another well last winter, so we have two good wells and plenty of water. Itâ&#x20AC;&#x2122;s good water. We have no problem expanding as far as water supply goes,â&#x20AC;? said Glessing. â&#x20AC;&#x153;What we need is for someone to get that ďŹ rst barrel of oil out of the ground. Right now, there is no one moving into town that is in the oil business. â&#x20AC;&#x153;I supposed itâ&#x20AC;&#x2122;s a bit of a Catch-22. Itâ&#x20AC;&#x2122;s always nice to have oil and gas in your area, but it always brings in heavy traďŹ&#x192;c thatâ&#x20AC;&#x2122;s hard on your infrastructure. ɸ Page B34

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B34

PIPELINE NEWS July 2012

Wilkie incentivizing young families

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ɺ Page B33 “It’s kind of a trade-off.”

Wilkie is offering tax incentives for the construction of new houses as well as for the sale of lots in the 5th Street East subdivision in a bid to attract young families Some lots are being offered for $27,000 plus taxes with a 100 per cent concession in the first two years after construction begins and 50 per cent in the third year.

“We would like more young people to move to town,” said Glessing.

Wilkie will be down to two schools next fall with the closure of St. George Separate School due to low enrolment.

“It would be nice to get more families in the area, but we need more businesses to attract more families. The heavy oil has got to come up,” said Glessing.

Wilkie is also a popular retirement community that continues to attract seniors from Ontario, Alberta and British Columbia who are seeking affordable living in a peaceful, rural setting.

The town supports the Wilkie Health Centre with the adjacent Poplar Courts long-term care facility and the 25-bed Bethany Assisted Living facility.

The charitable Wilkie & District Health Foundation has raised hundreds of thousands of dollars for health related expenditures in the community.

In 2010, the town poured a new floor in the Saskcan Community Centre that is home to the Wilkie Outlaws senior hockey team with an adjacent curling rink, community hall, and an outdoor pool.

Wilkie also boasts a nine hole golf course where Glessing works as the greenskeeper. He said he loves the laid back atmosphere of the area.

“I will take a small town any day,” said Glessing who moved to the town in 2008 from the nearby farming community of Handel.

“My family has been around here for years.

I have a lot of friends here. Everybody knows everybody,” he said.

The regional park and every empty lot in Wilkie were overflowing with former residents for Wilkie’s 100th anniversary last July.

“It was excellent,” said Glessing.

“Hopefully, we can grow and keep the infrastructure maintained up to standards. We need to do a lot of work on our streets. The pavement is getting quite old.”

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PIPELINE NEWS July 2012

B35

Pipeline News apologizes for inadvertently missing Redhead Equipmentâ&#x20AC;&#x2122;s Congratulations in the Three Star Trucking 50th Anniversary section.

B36

PIPELINE NEWS July 2012

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PIPELINE SECTION C NEWS Ideal Water – or is it I deal water?

July 2012

Heated water supplied for fracking Story and photos

by Brian Zinchuk Forget – The name of the new company can be taken two ways, and both are applicable.

Ideal Water Inc. is a new arrangement for an operation that has been around since the early days of the Bakken development, and is right in the heart of it. It can be considered “ideal water,” as in optimal water, or “I deal water,” in that the company sells fresh water primarily for fracking purposes.

This is the latest venture of Terry Johnston, who several years ago made headlines when he and a number of investors decided to get in on the Bakken action and drill an oil well not far from Kisbey.

That well turned out to be a disappointment, but their follow-on venture was not. A water disposal well just east of Arcola would see several expansions before it was purchased by CCS (now Terevita) last year.

In the meantime, supplying fresh water for fracking has been a constant project for Johnston. He was one of the first in the region to get permits from the provincial government to supply fresh water for industrial usage, and now holds four such permits.

“We were in it in 2007. We had industrial water permits for five years,” he said.

Drawing from 15 to

Ralph French, leŌ, and Terry Johnston have teamed up to provide heated water for frac operaƟons. French provides the heaƟng, while Johnston’s Ideal Water Inc. does the rest.

20 shallow wells varying from as shallow as eight feet to as deep as 30 feet, the outfit is able to produce substantial amounts of fresh water.

“Our biggest day would be about 100 trucks,”

Johnston explained.

About 80 per cent is used for fracking.

The most recent innovation has been the establishment of a new heating facility, just a mile north of Highway

13, between Forget and Kisbey. It’s on some of the most densely drilled Bakken land in the area, with lines of wells going off in all directions.

The water heating operation is being done

in partnership with R. French Transport of Forget, which is run

by Ralph French (See related story on Page C3). Johnston is supplying the land, wells, and building, while French

is providing the heat, by way of a frac heater trailer attached by umbilical hoses to the north side of the building.

“Ralph does 90 per cent of the trucking,” Johnston said, but added that water sales are open to anyone who is interested.

The key factor is the ability to heat water on site, and quickly. There are four 750 barreel fibreglass water tanks inside the building. At each end of the building is a source water well. The water leaving each well goes through a filter (one per well), and then through a manifold and out to the heater unit rates at 16 million BTUs. The water then flows back into the building, for storage in the fibreglass tanks, or directly into the receiving truck.

“We can put hot water at different temperatures into different tanks, if required,” Johnston said. They can also do individual loads at different temperatures, if needed.

“The water comes out of the ground around 6 C. We can pull it out of the ground, and heat it to 35 C at two cubes (cubic metres) per minute,” French said.

“We can load a 30 cube load onto a truck in under 10 minutes.”

Each pump is capable of 400 gallons per minute. There is one pump in each well. ɸ Page C2

C2

PIPELINE NEWS July 2012

Water temperatures matter

When you crank up a 400 gallon per minute pump, a lot of water comes out quickly.

Terry Johnston shows the connecĆ&#x;ons from the frac heaters to the building which houses the water tanks and truck connecĆ&#x;ons.

Éş Page C1

CUSTOM TREATING AND TERMINALS

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Alternatively, cold water can be pumped directly to the trucks after passing through the ďŹ lters. Cold, fresh water can be loaded at a rated of four cubic metres per minute. â&#x20AC;&#x153;You can go as hot as you want,â&#x20AC;?

Johnston said.

The most common temperatures are 25 C in the summer and 35 C in the winter. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve heated water up to 50 C,â&#x20AC;? French said.

The facility has the ability to load two trucks indoors, and another four outside, for a total of six at a time.

Having an enclosed facility should prove beneďŹ cial in wintertime. Trucks with frozen valves can thaw them indoors. â&#x20AC;&#x153;If you think youâ&#x20AC;&#x2122;re going to stay on top, you better keep innovating, because there are lots of guys trying to copy and improve,â&#x20AC;? Johnston said.

Their water has been tested, and has between 400 and 500 TDS, or total dissolvable solids.

Water usage has been in the news a lot recently. Johnston pointed out, â&#x20AC;&#x153;In all of southeast Saskatchewan, youâ&#x20AC;&#x2122;re using under 1,000 cubic decametres of industrial water.â&#x20AC;?

He said the total industrial usage for the southeast corner is less than

one acre-foot of water over ďŹ ve sections of land â&#x20AC;&#x201C; and that includes usage by all oil companies in the region. In contrast, thousands upon thousands of acres were covered under several feet of water last year.

The actual industrial usage, he said, is â&#x20AC;&#x153;a little wee pittance of water.â&#x20AC;?

Johnston added that the water they are using is part of the Moose Mountain Creek to Souris River watershed. â&#x20AC;&#x153;Rain will recharge it. Any ďŹ&#x201A;ood will recharge it.â&#x20AC;?

Indeed, due to the high amount of water in recent years, Johnston said, â&#x20AC;&#x153;We had to build a mile of road to get to our wells.â&#x20AC;?

He gives credit to SaskWater, saying they are careful in granting term water use permits and require regular reporting. â&#x20AC;&#x153;As long as SaskWater is cautious and responsible in their allocations, we should have no problems,â&#x20AC;? he said.

The water is primarily used within an 80 mile radius of the site. None of their water is crossing a border. â&#x20AC;&#x153;It has to stay in Saskatchewan. You cannot cross international or provincial borders. If one gallon crosses the U.S. border, my licences are gone immediately. They do not want to open that up,â&#x20AC;? Johnston said.

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PIPELINE NEWS July 2012

C3

R French Transport is geĆŤng into the water storage business with these new tanks, built in Saskathcewan. Ralph French sits in on the larger than typical frac trailer or 400-bbl. tank.

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Heat, haul, & store Handling your water needs Â&#x201E; By Brian Zinchuk Forget â&#x20AC;&#x201C; Fluid hauler R. French Transport of Forget is coming full circle with its water capabilities, particularly when it comes to fresh water usage for fracking. â&#x20AC;&#x153;We can heat your water, haul your water, store your water, haul your ďŹ&#x201A;ow back, and then haul your oil,â&#x20AC;? said Ralph French, who runs the company with his wife Colleen.

The company, which operates 32 units hauling fresh water, salt water, oil and emulsions, is now adding frac water storage to its capabilities.

They have 14 trucks dedicated to fresh water hauling, and take pains to ensure they are not contaminated.

R French Transport has partnered with Ideal Water Inc. of Kisbey, supplying the heating units for Idealâ&#x20AC;&#x2122;s new hot water heating facility located between Forget and Kisbey (see story Page C1). R. French is supplying a 16 million BTU frac heater hooked up to the building. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ve got a six million BTU we use as a backup or to do on-site heating,â&#x20AC;? French said.

The heaters are not pressurized, thus making it a lot easier to operate. â&#x20AC;&#x153;Anybody can run it,â&#x20AC;? French said.

He noted it is safer to heat water away from a wellsite, as there is less congestion on the lease, and no open ďŹ&#x201A;ames.

French added, â&#x20AC;&#x153;I have another one that I could pick up at any time. Itâ&#x20AC;&#x2122;s being revamped right now.â&#x20AC;?

Frac tanks â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve expanded our yard because our equipment inventory is growing all the time.

Weâ&#x20AC;&#x2122;ve just gotten into frac tanks. They are being built as we speak.â&#x20AC;?

Built in Saskatchewan, the ďŹ rst few have already been delivered to Forget. Horizontal cylinders on a triple skid, each has the capacity of 110 cubic metres, which puts it just shy of 700 barrels.

Theyâ&#x20AC;&#x2122;re insulated with a two-inch spray foam and a rubber-like coating.

French said, â&#x20AC;&#x153;Theyâ&#x20AC;&#x2122;re lined on the inside so theyâ&#x20AC;&#x2122;re always clean, with no rust in the tanks.â&#x20AC;?

Southeast Saskatchewan had largely used vertical, cylindrical 400bbl. tanks on an L-skid.

A recent development has been the inďŹ&#x201A;ux of frac trailers, which have their own ďŹ fth-wheel kingpin and rear axle, allowing them to be winched onto the back of a truckâ&#x20AC;&#x2122;s ďŹ fth wheel and then towed like a typical trailer.

French decided to forego that, however, in an eďŹ&#x20AC;ort to keep it simple. Frac trailers, he noted, are just that â&#x20AC;&#x201C; trailers. â&#x20AC;&#x153;Every tank becomes a trailer. Itâ&#x20AC;&#x2122;s got to be safetied. Youâ&#x20AC;&#x2122;ve got tires, brakes, lights. Itâ&#x20AC;&#x2122;s a lot of tires and brakes to

hold nothing.

For instance, he said, brakes can freeze up on a frac trailer in winter. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve got more capacity,â&#x20AC;? he added, comparing their units to 400 bbl. tanks and typical frac trailers. â&#x20AC;&#x153;This is almost like two 400 barrel tanks, but I can haul it in one move.â&#x20AC;?

The tanks are engineered and the design carries an engineers stamp. They are designed to be easy to empty completely. ɸ Page C4

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PIPELINE NEWS July 2012

Ralph French closes up the door on a 16 million BTU frac heater. It’s Ɵed into the Ideal Water facility, allowing a truck to be loaded with heated water in under ten minutes.

Little things make a big difference ɺ Page C3 “I’ve got a winch tractor and scissor neck lowboy. We’ll move what we can, but we have guys that will help us move more.

“Altogether, there will be 70 (tanks) available.”

Their manufacturer is currently putting out one to two tanks per day.

He’s even considering adding a small light tower to the front of each tank.

The electrical connection could be daisy-chained to a generator at the end. “We do a lot of work at night,” he said.

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“We want to have them so we can manifold them together as we spot them,” said French. Connections are the standard four-inch size. They can be parked right next to each other.

Crude-by-rail A recent development has been hauling oil to the new Crescent Point crude-by-rail facility at Stoughton. That began in March, and now they have six trucks dedicated to that haul, running 24 hours a day.

“We’ve been hauling there from the start,” French said.

“We’ve got some good customers. We look after all our customers and are looking forward to a busy year,” he said.

PIPELINE NEWS July 2012

C5

Technology development allows for exploitation Â&#x201E; By Brian Zinchuk Regina â&#x20AC;&#x201C; His current company is about two-thirds of the way through its life expectancy, but thatâ&#x20AC;&#x2122;s all right with him. His team will just start another one, and keep looking for more oil.

Dean Potter is president of Elkhorn Resources Inc., based in Calgary. He was one of the speakers at the Insight Information Saskatchewan Oil and Gas Forum in May. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re a 14 person company. We donâ&#x20AC;&#x2122;t work for Encana or something like that. We want to ďŹ nd oil and sell the company,â&#x20AC;? Potter said. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s really only 50 to 60 per cent oil, and the rest is water,â&#x20AC;? he said. â&#x20AC;&#x153;In an extremely eďŹ&#x192;cient ďŹ eld, we might get 25 per cent (of the oil). In a resource play like the Bakken, we might get one, two, three per cent. â&#x20AC;&#x153;They didnâ&#x20AC;&#x2122;t ďŹ nd new ďŹ elds, they just found a way to get the oil out,â&#x20AC;? he said. â&#x20AC;&#x153;I donâ&#x20AC;&#x2122;t see a border between us and the U.S. Iâ&#x20AC;&#x2122;ve played both sides of the border.â&#x20AC;?

Indeed, Elkhorn has had a rig working within a few miles of the U.S. border since late last fall, near Northgate.

Tech progress Potter reviewed the impact of the implementation of technology in Saskatchewanâ&#x20AC;&#x2122;s oilpatch. â&#x20AC;&#x153;In the 1950s, they started to ďŹ nd these ďŹ elds with very crude seismic or wild-

catting,â&#x20AC;? he said, noting the search was all over the province.

The 1960s saw the perfection of 2-D seismic and the application of waterďŹ&#x201A;ooding.

That was necessary as the energy for the oil to ďŹ&#x201A;ow into the wellbore had dissipated. â&#x20AC;&#x153;Youâ&#x20AC;&#x2122;ve eventually got to put water or gas into it to energize it,â&#x20AC;?

Potter said.

During the 1970s and 1980s, he said, â&#x20AC;&#x153;Technology was at a standstill. I looked like its sunset years.â&#x20AC;?

That was coupled with what Potter termed as disastrous government intervention. â&#x20AC;&#x153;They created SaskOil and drove the industry out.â&#x20AC;?

He noted that a similar thing happened in Alberta in 2007, when the Ed Stelmach government altered royalties.

The 1990s saw 3-D seismic become the norm. â&#x20AC;&#x153;It was like putting on your glasses and being able to read. You look for structure. 3-D really let us do that.â&#x20AC;?

Information technology, speciďŹ cally 3-D modelling, has also helped.

The big diďŹ&#x20AC;erence, however, was the implementation of horizontal drilling. â&#x20AC;&#x153;The tech was so unsophisticated, I donâ&#x20AC;&#x2122;t know how we did it,â&#x20AC;? he recalled. In the last 10 years, horizontal drilling has become much more sophisticated. â&#x20AC;&#x153;It took every producing ďŹ eld in Saskatchewan and North Dakota and redeveloped

them,â&#x20AC;? he said.

Costs went up dramatically, too, from $100,000 a well to $600,000. Saskatchewanâ&#x20AC;&#x2122;s royalty incentive program made a big diďŹ&#x20AC;erence.

Fracturing, too, has seen a big change.

Potter noted, â&#x20AC;&#x153;In the 1920s, they would lower nitroglycerine down a wellbore and give it a shake.â&#x20AC;?

Whereas some fracs now cost $5 million to do, for some junior companies, that used to be their entire annual budget.

Potter touched on the development of the Weyburn-Midale ďŹ eld, where drilling started in 1955. â&#x20AC;&#x153;A friend back

5

then said it would never produce past â&#x20AC;&#x2122;73,â&#x20AC;? he recalled.

Initially drilled at eight wells per section, Potter noted, â&#x20AC;&#x153;It was

a forgotten ďŹ eld, not much interest.â&#x20AC;? ɸ Page C6

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C6

PIPELINE NEWS July 2012

His company has another 12 months or so to go, and the president is OK with that ɺ Page C5 However, recapitalization with horizontal drilling brought it back to life. That field would then see carbon dioxideinjection for enhanced oil recovery.

This brought Potter to the Bakken and Three Forks plays, which Elkhorn is targeting.

There were minor economic Bakken fields

in the 1950s, first in North Dakota, then in Saskatchewan. A prophetic convention he attended in 1982 said there were billions of barrels of Bakken oil waiting to be developed.

“The data always supported there was a lot of oil in the Bakken.

We drilled through the Bakken. It was a very distinctive marker.

“Little did we know

we were drilling through the world’s biggest oilfield. Now we know,” Potter said.

Potter spoke of North Dakota wells that have produced 200,000 barrels of oil in their first four months, noting, “Without modern technology, you wouldn’t have got the first barrel out.

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ment of the Parshall Sanish field that set the whole basin onto the Bakken.

Showing a map of its development, he forecast, “That will be completely filled with producing wells.

But while the focus has primarily been on the Bakken, Potter said, “The Three Forks is actually the bigger play,” adding the two combined are an enormous play.

“It’s pretty clear 50 billion barrels are recoverable in the Bakken,” he said, noting

that’s equal to 10 years of U.S. consumption.

“It’s so huge, it distorts the market. When Brent crude was $115, the price at Cushing was $20 less. North Dakota and Saskatchewan oil was $80, a $35 to $40 difference. It has become a problem; we’re not sure how we’re going to deal with.”

In the 1990s, Potter said, “The (Saskatchewan) government had to admit they buggered up the industry so royally with Bill 42, they had to do something.” ɸ Page C7

PIPELINE NEWS July 2012 Éş Page C6 In 1998, for instance, there were 40 rigs working in Saskatchewan. At the same time, North Dakota had two rigs working, and Montana had zero. â&#x20AC;&#x153;There was not a single rig working,â&#x20AC;? he said.

More recently that number has been up to 120 in Saskatchewan. â&#x20AC;&#x153;Today there are over 215 rigs working in North Dakota. Itâ&#x20AC;&#x2122;s a boom of proportions we have never seen before. Fort Mac was great. This is spectacular. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s all about horizontal drilling, multi-stage fracs and tight reservoirs. Itâ&#x20AC;&#x2122;s always light oil, for the most part,â&#x20AC;? Potter said. â&#x20AC;&#x153;You can almost put that oil in your lawn mower. Itâ&#x20AC;&#x2122;s that good.

He added the Lower Shaunavon play has been for medium oil. â&#x20AC;&#x153;These tight oil resource plays are inherently expensive,â&#x20AC;? Potter said.

Out of the 500 square-miles in the Parshall portion of the Bakken play, Potter said they have 30 square miles. He added itâ&#x20AC;&#x2122;s huge, itâ&#x20AC;&#x2122;s homogenous, and can be drilled pretty much anywhere, and â&#x20AC;&#x153;itâ&#x20AC;&#x2122;s full of oil.â&#x20AC;?

Their core area is 20 miles wide and eight miles high.

However, the availability of services in North Dakota is â&#x20AC;&#x153;awful,â&#x20AC;? he said. â&#x20AC;&#x153;When we drill a well, we have to wait seven to 10 days to get a frac crew in there. South of the border, itâ&#x20AC;&#x2122;s more like nine months.â&#x20AC;? â&#x20AC;&#x153;Our typical well may cost $3 million. That same well, 600 feet across the border, is $5 million.â&#x20AC;? â&#x20AC;&#x153;When we started this business, we drilled a well for $80,000. The least expensive well we drill is $2.4 million,â&#x20AC;? he said. â&#x20AC;&#x153;We have to tailor the fracs to speciďŹ c reservoirs. Weâ&#x20AC;&#x2122;re getting better at it. I think weâ&#x20AC;&#x2122;re at an early stage. Itâ&#x20AC;&#x2122;s going to keep evolving. Thereâ&#x20AC;&#x2122;s no way weâ&#x20AC;&#x2122;re at the end.â&#x20AC;? â&#x20AC;&#x153;Technology is going to keep leading us. Obviously this technology is going to be exported to other basins world-wide. We donâ&#x20AC;&#x2122;t want it to go too far, because we donâ&#x20AC;&#x2122;t want to ďŹ&#x201A;ood the world with oil.

Potter reďŹ&#x201A;ected on the drop in oil prices in recent months, saying, â&#x20AC;&#x153;With oil dropping to $86, I guarantee people will slow down their capital programs.

They have to.â&#x20AC;?

Juniors â&#x20AC;&#x153;Who ďŹ nds this? Itâ&#x20AC;&#x2122;s not Cenovus, believe me. Itâ&#x20AC;&#x2122;s not Crescent Point.

They buy us. They go buy the guys that left those companies and started their own companies. I represent one of them. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s people like us. Itâ&#x20AC;&#x2122;s the juniors that ďŹ nd it and sell it. Itâ&#x20AC;&#x2122;s always the engineer and geologist teams. Iâ&#x20AC;&#x2122;m a geologist. Lots of others are run by an engineer. Itâ&#x20AC;&#x2122;s always the two in conjunction. The big thing is principal investment.

Weâ&#x20AC;&#x2122;ve all got money in the game.

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C7

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PIPELINE NEWS July 2012

Natural gas is in for a big shakeup Â&#x201E; By Brian Zinchuk Regina â&#x20AC;&#x201C; The Beatles sang, â&#x20AC;&#x153;You say you want a revolution. Well, you know, we all want to change the world.â&#x20AC;? When it comes to natural gas production and markets, thatâ&#x20AC;&#x2122;s exactly whatâ&#x20AC;&#x2122;s happening right now.

That was the thrust of a speech by Jihad Traya, associate director on the North American gas team for IHS CERA, a global energy thinktank. Traya was speaking at Insight Information Saskatchewan Oil and Gas Forum in Regina. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re not talking imports. Weâ&#x20AC;&#x2122;re talking exports. Shale is the biggest driving factor. Itâ&#x20AC;&#x2122;s revolution, not evolution.

Shale production in the â&#x20AC;&#x153;Lower 48â&#x20AC;? (states) accounts for 21 Bcf per day. â&#x20AC;&#x153;In the context of North America, thatâ&#x20AC;&#x2122;s the Western Canadian Sedimentary Basin. That took 60 years to develop, billions of dollars, careers, lifetimes. That was done in ďŹ ve years.â&#x20AC;?

From 2005 to 2007, you were looking at 1,200 rigs to keep production ďŹ&#x201A;at. â&#x20AC;&#x153;Today you require just over 700 rigs running to maintain production. The scope and scale has changed. â&#x20AC;&#x153;In Alberta, in 2005, 22,000 wells for gas were drilled, and their production was falling. By my estimation, they needed 25,000 wells drilled. The scope and scale is massive.â&#x20AC;?

"When you step back and look at it, from the global perspective, what does it mean? I hate to use the clichĂŠ 'game changer,' but that's what it is. â&#x20AC;&#x153;Every nation in the world has looked at North America and asked, â&#x20AC;&#x2DC;Can we do this too?â&#x20AC;&#x2122; â&#x20AC;&#x153;What changed everything, in my opinion, was the shale in the Marcellus. That was right on top of a consumption area.

Gas from Alberta that would normally go into the northeast United States is now being pushed back. â&#x20AC;&#x153;It has forced pipeline companies to rethink directions and tolling,â&#x20AC;? he said. â&#x20AC;&#x153;It will force us to be that much more competitive.â&#x20AC;?

He noted you canâ&#x20AC;&#x2122;t put a technological revolu-

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Jihad Traya outlined the market opportunity for Canadian natural gas to supply Asian markets, especially Japan.

tion in your ďŹ ve or 10 year plan.

As for how exports have changed, from a Canadian perspective, in 2005, Canada had approximately 9 Bcf of exports. As of May 31, that has fallen to 5.4 Bcf. â&#x20AC;&#x153;Your east markets, New York, youâ&#x20AC;&#x2122;re traditional markets, itâ&#x20AC;&#x2122;s about a negative Bcf. Itâ&#x20AC;&#x2122;s displacing gas, back to Alberta, back to Saskatchewan. â&#x20AC;&#x153;We injected it into storage.â&#x20AC;? â&#x20AC;&#x153;There has to be some sort of rationalization.

We just cannot continue to produce. Something has to give.â&#x20AC;?

Natural declines make up some of it. â&#x20AC;&#x153;What is alarming to me is the rate declines are happening â&#x20AC;&#x201C; â&#x20AC;&#x2122;07, â&#x20AC;&#x2122;08, â&#x20AC;&#x2122;09. Why â&#x20AC;&#x2122;07, â&#x20AC;&#x2122;08, â&#x20AC;&#x2122;09? You would think we would have greater decline now. Most Canadian producers were smart enough to realize this wasnâ&#x20AC;&#x2122;t working. They shifted focus, and went to liquids and oil,â&#x20AC;? Traya said.

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While he anticipated more shut-ins this past spring due to low prices, a lot of production had already been taken oďŹ&#x201E;ine.

The Horn River play is the furthest in North America from any hub, and the most geographically remote. â&#x20AC;&#x153;It can be proďŹ table, but there has to be something to give. â&#x20AC;&#x153;Gas producers are very resourceful. They look across the ocean and say, â&#x20AC;&#x2DC;Hey. How come I canâ&#x20AC;&#x2122;t go sell my gas there? Iâ&#x20AC;&#x2122;m getting two bucks here, I can be getting $14- $16 equivalent in Asian markets.â&#x20AC;&#x2122;â&#x20AC;?

He said. â&#x20AC;&#x153;I call this the unicorn, the great arbitrage.â&#x20AC;?

There are three ways to do this, Traya said. In North America, there was a shift to natural gas, such as a change from oil-ďŹ red power generation to natural-gas ďŹ red. The second is to convert natural gas into an oil equivalent. The last is to physically move the gas.

With gas in North America at $2, when elsewhere in the world the price is more like $10, he noted, â&#x20AC;&#x153;Everybody says, â&#x20AC;&#x2DC;Letâ&#x20AC;&#x2122;s try this.â&#x20AC;&#x2122;â&#x20AC;?

The coasts of North America are now ringed with proposed export facilities, some of which were originally import facilities. Now weâ&#x20AC;&#x2122;re looking at 18 or more export facilities planned, with a capacity of 18 Bcf per day, in a global market of 33 Bcf per day. â&#x20AC;&#x153;How likely is that? â&#x20AC;&#x153;If you follow enough domestic politics, you realize how much hair there is on pipeline issues in Canada, let alone North America. Now imagine how much hair there is on LNG exports, from the U.S. perspective.â&#x20AC;?

He noted some in the U.S. see cheap natural gas as a competitive advantage, particularly from a manufacturing perspective. â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;s this discourse that the only jurisdictions the United States will export to nations those already in a free trade agreement with the United States,â&#x20AC;? Traya said. ɸ Page C9

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PIPELINE NEWS July 2012

Éş Page C8 Generally they are countries that are not in need of LNG, including Jordan, Israel, Canada and Mexico to name a few. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve seen a resurgence in the United States of manufacturing. I argue it has a lot to do with cheap natural gas.â&#x20AC;? â&#x20AC;&#x153;To me, British Columbia seems the most progressive, most optimal, and most realistic.â&#x20AC;? â&#x20AC;&#x153;Growth for LNG demand is coming out of Asia. Europe is not as lucrative as Asia. The Asian markets are also unique. They are not as price sensitive. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s not so much about price sensitivity. Itâ&#x20AC;&#x2122;s about price certainty.â&#x20AC;?

Alluding to the nuclear issues following last yearâ&#x20AC;&#x2122;s tsunami and the destruction of the Fukushima Daiichi nuclear power plant, Traya pointed out Japan is in a very unique situation.

They are going through a tough decision on nuclear power. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s near impossible for Japan to (shut down all nuclear) without sacrificing down their economy. â&#x20AC;&#x153;There is room for nukes. It has to come online. They are desperate. They do need the LNG, but they do need nuclear power. Our view is these (nuclear) plants will come back online, not all of them, but a good percentage of them, but there is a risk to this assumption.â&#x20AC;?

Chinaâ&#x20AC;&#x2122;s demand will grow by leaps and bounds, he noted. China also has approximately three times the resource potential of the United States, based on current technologies, but they have issues with logistics and costs. â&#x20AC;&#x153;In China they have to do it from scratch.

But if anyone has proven to the world they can do it, itâ&#x20AC;&#x2122;s most likely China,â&#x20AC;? Traya said.

On the downside, Australia, Qatar and Indonesia are all working on LNG for export growth, and targeting the same market. Australia is seeing inflation driving costs up. Traya provided an anecdote of an Australian welder making well over $300,000 a year. â&#x20AC;&#x153;The pressure on capital budgets is enough to make some of these projects uneconomical,â&#x20AC;? he said.

For America, thereâ&#x20AC;&#x2122;s a lot of proposed projects, but itâ&#x20AC;&#x2122;s a political issue. â&#x20AC;&#x153;Does the United States want to take away its competitive advantage of cheap energy? Thereâ&#x20AC;&#x2122;s a lot of political pressure to not let this happen.â&#x20AC;? â&#x20AC;&#x153;Canadaâ&#x20AC;&#x2122;s in such a unique situation,â&#x20AC;? he said.

There are two markets for Canada â&#x20AC;&#x201C; the

Pacific and Europe. Asia can pull from North America, Australia, Qatar. But a map Traya displayed was revealing.

The distance from Australia to Japan is approximately 3,100 and 3,800 nautical miles, depending on the port of origin, whereas itâ&#x20AC;&#x2122;s a 9,300 nautical mile trip from Louisiana via the Panama Canal. The distance from British Columbia to Japan, via the North Pacific, is 3,900 nautical miles.

Canada and Australia are very competitive, he said, at just 100 nautical miles difference from some Australian plants. â&#x20AC;&#x153;LNG from Kitimat will come primarily from the Horn River.

The barrier for Canada is not economic fac-

tors but political obstacles that will hold back development. â&#x20AC;&#x153;That in time will be resolved. I think all parties will realize itâ&#x20AC;&#x2122;s in the best interests of Canada. The analogy is Harperâ&#x20AC;&#x2122;s railway.â&#x20AC;?

Canadian gas is competitive from an international perspective, Canadian companies are easier to deal with. â&#x20AC;&#x153;They are realizing there is a potential for â&#x20AC;&#x2DC;patriotic risk,â&#x20AC;&#x2122; in the United States, that would strand their investment,â&#x20AC;? he said. â&#x20AC;&#x153;We lost over 3 Bcf per day of exports to the US. Weâ&#x20AC;&#x2122;re not going to go into the United States. Why not go after the premium market?â&#x20AC;?

Traya concluded. â&#x20AC;&#x153;If we lose that opportunity, itâ&#x20AC;&#x2122;s gone.â&#x20AC;?

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PIPELINE NEWS July 2012

Savanna Energy Services Corp

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Â&#x201E; By Brian Zinchuk Regina â&#x20AC;&#x201C; Savanna Energy Services Corp has taken a unique approach to involving First Nations communities in its business. It partners with them by letting them buy into its indiBrian Cardinal, leĹ&#x152;, and Dwayne Lamontagne, detailed Savidual drilling rigs.

Between Canada, the vanna Energy Services Corp.â&#x20AC;&#x2122;s successful Aborginal strategy.

United States and Australia, Savanna has 101 drilling rigs and 104 service rigs. Approximately twothirds are in Canada, with the intent to grow international operations to the point where they will be half of the ďŹ&#x201A;eet.

Dwayne Lamontagne and Brian Cardinal of Savanna in May spoke to the Insight Information Saskatchewan Oil and Gas Forum, detailing the companyâ&#x20AC;&#x2122;s unique approach to partnership with the Aboriginal community.

Savanna started with just four rigs, drilling shallow gas in 2002. The company, and its rig count, are much larger now.

When the company does partnerships with First Nations, the typical deal is a 50-50 per cent ownership with the First Nation â&#x20AC;&#x201C; half is the First Nationâ&#x20AC;&#x2122;s, the other half belongs to Savanna. Approximately 10 per cent of their drilling and service rigs are under this form of ownership.

The company is partnered with nine Alberta First Nations. â&#x20AC;&#x153;We do want to build partnerships in Saskatchewan,â&#x20AC;? Lamontagne said.

The Dene Thaâ&#x20AC;&#x2122; had up to ďŹ ve drilling rigs at one point. They sold three back to Savanna, in exchange for shares in the company.

Approximately three per cent of the $800 million company is owned by First Nations, Lamontagne explained. â&#x20AC;&#x153;When we started to form partnerships, the biggest issue was trust,â&#x20AC;? he said, touching on the importance of corporate governance and regulations. â&#x20AC;&#x153;Training and employment is very important to communities. We need people,â&#x20AC;? he said. â&#x20AC;&#x153;It used to be, in Saskatchewan, we would pick up some farm boys and take them to the rig. It worked out pretty well. Today, theyâ&#x20AC;&#x2122;re all going to school.â&#x20AC;?

That necessitated the need for a new source of labour. Young First Nations people are an untapped labour market, he said. ɸ Page C11

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PIPELINE NEWS July 2012 ɺ Page C10 Forming partnerships There are three things Savanna looks for when forming partnerships. The first is the desire between the First Nations community and the company to work together. They have to have an oil and gas customer that wants to work with a First Nations community and has a need for their high quality equipment and services.

The First Nation also has a strategy, knowing what they’re doing, not “building a partnership for the sake of building a partnership.”

He said there needs to be strong business reasons to benefit all parties.

Lamontagne pointed out, “This is not one or two years long. You’re building this for the long term.”

Cardinal, business development and partner relationships manager for Savanna, detailed some of the benefits of partnerships. He came to Savanna after being on the other side of the table.

Cardinal said, “Community leaders are always challenged with employment opportunities for community members.”

Another pertinent question is, “How much money are we going to make?”

Capacity building is another area communities are challenged with, Cardinal said.

He added there is a pride of ownership from the community’s perspective.

“When they can feel the iron, kick the tires and take pictures, that’s a source of pride.”

The money earned from such ventures helps with housing and moving into other business opportunities.

Lamontagne added there is now a lot more attention being paid by oil and gas companies to First Nations. By putting money back into communities, it’s a hand up, not a hand out. Over $40 million has been distributed to First Nations through these partnerships.

“The community needs a champion,” he said, the one person who can drive home the initiative and be the liaison between the First Nation’s chief and council and the company. They need to ensure the goals of Savanna and the community are aligned.

Those communities should seek professional advice, and not just use inhouse economic development resources.

Lamontagne added, “We’re not in the business of selling rigs, but operating rigs.”

He also noted the realities of the business, such as in 2008, when “the world fell apart.”

“Those meetings were not a lot of fun,” he said.

The company takes part in community powwows, golf fundraisers, Christ-

C11

mas feasts, rodeos, ceremonial events, and community meetings, Lamontagne said.

Training “We’ve made a commitment to offer training to all our partner communities,” Cardinal said.

This includes petroleum safety training, H2S Alive, first aid, core skills, and hands-on training, over the course of two weeks.

A mobile training unit wasn’t enough, they found. “You have to have actual hands-on training. The simulation just doesn’t work.”

Cardinal explained Savanna has a drilling rig and a service rig set up on non-producing “dummy holes.”

“They can run string, run and pull pipe for 12 hours. That’s the real world.

Twelve to 15 students at a training centre running pipe for 15 minutes is not the real world.”

The training program is integrated for all applicants, Aboriginal or not.

The company has also implemented a support system for individuals once they have completed training. Cardinal noted, “It’s a real cultural shock for community members.”

As a result, they have a support co-ordinator to “give guys a call.”

Lamontagne noted that as a result, they now have role models who go back to their respective communities. They have a paycheque, and perhaps buy a new truck.

“Building that role model is important to us,” he said.

That spills over to one of the other underrepresented groups in the oilfield – women.

“We had 12 women on the rigs this last year. That’s the most we’ve ever had,” Lamontagne said. Three were from the Aboriginal training program.

Savanna focuses its corporate donations on culture, youth and elders. It has a bursary program for petroleum engineering through SAIT for Metis, First Nations and Inuit students.

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PIPELINE NEWS July 2012

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nal involvement into the company.

Stephen Crocker of PTI told the Insight Information Saskatchewan Oil and Gas Forum how they tackled that issue.

A strategic plan was put together in 2009 with three directions. Those three directions would turn into 10 strategies and 60 tactics. The first was to make Aboriginal relations core to PTI’s business.

In regards to recruiting Aboriginal Canadians, Crocker said, “Mainstream practices are ineffective. They just don’t work,” he said.

Back then, PTI had no idea how many Aboriginals worked in the company, and didn’t have any information about Aboriginal communities. There was hardly any face-to-face contact, he noted.

But they did have this: “There was a sincere desire to improve.”

PTI needed a pilot project with a First Nation. That would end up being Saddle Lake Cree Nation, located west of St. Paul, Alta., on the north bank of the North Saskatchewan River.

“We started with a face-to-face meeting,” he said. They had a community presentation on employment opportunities – “tremendous opportunities” – as Crocker put it.

Their point of contact was the Cree Nation’s human resources department.

“The First Nation collects the resumes and applications. We go through the applications and make a first cut. We want them involved,” Crocker said.

In some cases a person make look good on paper, but not work out.

Barriers An important part of the strategy was identifying barriers to employment.

For instance, while doing a new hire orientation, covering what to bring or not to bring to a camp was a key point. ɸ Page C13

7KH 7UXWK %HKLQG 36% 7D[ &KDQJHV IRU WKH 2LO DQG *DV ,QGXVWU\ As a possible personal service business, you need to know what these changes mean for you.

Companies in the oil and gas industry have long known the elevated tax implications of being classified a Personal Service Business (PSB). But with proposed legislative changes that would substantially increase the corporate tax rates for these businesses, it is more important than ever to assess where your company stands and how it may be affected. Operations in Southern Saskatchewan and across Canada are already feeling the pinch.

tax rate increase of approximately 13%. “If you were making $200,000 a year, a three-year assessment could cost you more than $30,000 per year, plus interest,” he adds.

Fighting a possible reassessment in court would add legal and court costs to your total bill.

MINIMIZE YOUR RISK

“This could have a potential impact on hundreds of our clients and thousands of taxpayers in Southern Saskatchewan,” says David Hammermeister, MNP’s Regional Oilfield Services Leader.”With these changes, there is an absolute cost to being treated as a PSB and those affected need to be aware.”

While the rules governing what constitutes a PSB have been around for some time, in the past, the Canada Revenue Agency (CRA) was not seen strongly enforcing the designation. Now that has changed. “We have seen a definite increase in people being taken to court and being reassessed,” says Wayne Paproski, MNP Partner, Taxation Services, citing examples in Weyburn and Estevan, among others. “It is definitely the CRA auditors’ mandate to reassess when they identify a possible PSB. This is affecting PSBs everywhere, but is a major issue in the oil and gas sector given the nature of the industry.”

LEGISLATIVE CHANGES AND THE DOWNSIDE OF BEING A PSB On October 30, 2011, the federal government released proposed legislation that, if enacted, would significantly raise the income tax rate on PSBs. In Saskatchewan, the combined tax on PSB income would increase from 27% to 40%. The increase would be in addition to any personal income tax on salaries or dividends paid by the corporation.

“In the past, the worst case scenario for being a PSB was that the CRA would deny your small business deduction and your expenses. Now, that is still the case but you must face a significant tax increase, as well,” says Paproski.

THE RISK OF A REASSESSMENT Paproski acknowledges that many local businesses have rolled the dice by not filing as a PSB in the past, but must understand that the stakes have gotten higher: “These are not reassessments valued at $5,000 or $10,000, but in the hundreds of thousands.” When a CRA reassessment happens, the audit will look at the last three years of filings, but with a

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MNP has the largest tax team in Southern Saskatchewan, and when it comes to addressing the issues faced by PSBs, experience in the region counts. “The advantage of working with us is our expertise and knowledge in the area, not just of taxes but the industry and what’s going on. Most of our tax practitioners have spent years working with clients in the Weyburn and Estevan oil and gas industry. They know these businesses and how to help them,” says Hammermeister. “Companies have to talk to someone, because the last thing you want is to be caught off guard.”

To find out more about legislative changes and how MNP can help you, contact the tax specialist in your area: Estevan David Hammermeister, CA, Regional Oilfield Services Leader 306.634.2603 david.hammermeister@mnp.ca Regina Regan Exner, CGA, Partner, Taxation Services 306.790.7907 regan.exner@mnp.ca.

Weyburn Dale Dreis, CA, Partner, Assurance Services 306.842.8915 dale.dreis@mnp.ca

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PIPELINE NEWS July 2012 Stephen Crocker spoke of PTIâ&#x20AC;&#x2122;s successful Aboriginal recruitment strategy.

Éş Page C12 â&#x20AC;&#x153;We monitor the results initially with each of our employees and share the results with the First Nation.

Itâ&#x20AC;&#x2122;s an ongoing partnership. Without their help, we wouldnâ&#x20AC;&#x2122;t be successful.â&#x20AC;?

Another barrier is transportation, where some people would lack either a licence or a vehicle. As a result, the First Nation purchased a van, and PTI covered its costs. Crocker said, â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s working out wonderfully well. Everyone shows up on time, and safely.â&#x20AC;?

Saddle Lake now has three vans.

Bridge-building â&#x20AC;&#x153;What we found is weâ&#x20AC;&#x2122;re building a bridge,â&#x20AC;? Crocker said, â&#x20AC;&#x153;The people we are hiring are living in a First Nation community. Many of the people we have hired were social assistance recipients. Weâ&#x20AC;&#x2122;re moving them to an industrial culture and ďŹ nancial independence. We have to build a bridge to get them there. â&#x20AC;&#x153;PTI and industry in general can only provide part of that bridge. We need to work with the community in ďŹ lling in some of the gaps. And depending on the community, some of the gaps may be diďŹ&#x20AC;erent. â&#x20AC;&#x153;If we donâ&#x20AC;&#x2122;t work in partnership to ďŹ ll them, people are going to slip through the cracks. Theyâ&#x20AC;&#x2122;re not going to make it over to ďŹ nancial independence. We have to solve the problems, and overcome the barriers, and we have to do it together. PTI canâ&#x20AC;&#x2122;t do it alone, and neither can the First Nation. Itâ&#x20AC;&#x2122;s an ongoing process,â&#x20AC;? Crocker said.

Wapasu Creek Lodge would be the pilot, started in 2010. They hired 117 Aboriginal people for that project and, as of May, 83 of them are still working there, a 71 per cent retention rate over two years. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s as good as any other identiďŹ able group, and better than others,â&#x20AC;? Crocker said. â&#x20AC;&#x153;We donâ&#x20AC;&#x2122;t want to bring in temporary foreign workers. We donâ&#x20AC;&#x2122;t want to rent the worldâ&#x20AC;&#x2122;s poor to come here. Letâ&#x20AC;&#x2122;s start working with our Aboriginal communities to make them employable, and take them from social assistance to ďŹ nancial independence.â&#x20AC;?

Thereâ&#x20AC;&#x2122;s over $5.5 million in net income coming into Saddle Lake alone as a result of this initiative. Some of the impacts are new vehicles, new fridges, new stoves, kids have got boots, he noted. â&#x20AC;&#x153;People have got a sense of self worth. â&#x20AC;&#x2DC;I have a job.â&#x20AC;&#x2122;

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â&#x20AC;&#x153;There was one group from Saddle Lake â&#x20AC;&#x201C; six young ones. They, all on their own, went and got their passports â&#x20AC;&#x201C; organized that â&#x20AC;&#x201C; and organized a ďŹ&#x201A;ight from Fort McMurray to Edmonton, Edmonton to Mexico, stayed at a all-inclusive, turned around, took the ďŹ&#x201A;ight back, and never missed a minute of work.

These are people who were on social assistance six months before. None of them had been out of the country. None of them had worldly experience. The travel bug has bitten a few of them, and they have some more trips planned,â&#x20AC;?

Crocker said.

Theyâ&#x20AC;&#x2122;ve expanded the program beyond Saddle Lake and have formed partnership agreements with other First Nations.

Crocker said, â&#x20AC;&#x153;Along the way, our HR (human resources) staďŹ&#x20AC; is all tuned up and they are familiar with the process, and what their job is to do. All our Aboriginal relations have to do is make the introduction, outline the process, and our HR department can come in and do it. Weâ&#x20AC;&#x2122;ve empowered them to do it.â&#x20AC;?

Company-wide, PTI has hired 250 Aboriginal people since the process was implemented in April 2010, and 175 are still employed, for a 70 per cent retention rate. â&#x20AC;&#x153;Our HR department is delighted,â&#x20AC;? he said. â&#x20AC;&#x153;Now Saddle Lake is all empowered. They know what the process is. They get all the organizational work done for us prior to going. We have done no advertising for jobs in Saddle Lake.â&#x20AC;?

They already have 35 resumes lined up for the next meeting in July.

Company changes PTI created an internal Aboriginal relations committee with very senior management level members who meet every second month. It took a year to implement their internal tracking system, but now, Crocker said, â&#x20AC;&#x153;I know exactly how many Aboriginal people we have in every division.â&#x20AC;?

That number now stands at 9.6 per cent company-wide, in a corporation with a staďŹ&#x20AC; of over 3,000 people.

Aboriginal people are now moving up from hourly to supervisory salary positions. The company has developed an online Aboriginal awareness training program that will be required for all staďŹ&#x20AC;.

Crocker concluded by laying out the â&#x20AC;&#x153;inclusion continuum.â&#x20AC;? It goes from indiďŹ&#x20AC;erence to intimidation, image, initiation, incubation, integration and inclusion. PTI is now reaching the incubation level. â&#x20AC;&#x153;We found good Aboriginal relationships are good for business. Many of our customers require Aboriginal hiring if we want the contract. â&#x20AC;&#x153;Overall, good Aboriginal relations are just the right thing to do.â&#x20AC;?

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PIPELINE NEWS July 2012

Gibson opens Stoughton disposal well

Gibson Energyâ&#x20AC;&#x2122;s newest disposal well is just south of Stoughton.

Stoughton â&#x20AC;&#x201C; In early May Gibson Energyâ&#x20AC;&#x2122;s custom treating and terminals division opened the latest of its new disposal facilities in southeast Saskatchewan.

The new plant is six miles south of Stoughton on Highway 47 and half a mile west of the highway. Itâ&#x20AC;&#x2122;s a near carbon-copy of their Oungre facility that opened Feb. 1.

Both are located next to highways, and the Stoughton one has the beneďŹ t of being right in the heart of the proliďŹ c ViewďŹ eld Bakken play.

Both facilities are Saskatchewan Ministry of Energy and Resourceslicensed waste facilities.

Kyle Peterson, Gibsonâ&#x20AC;&#x2122;s district area manager for the Bakken ďŹ eld, explained, â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s for well workover completion ďŹ&#x201A;uids, frac water ďŹ&#x201A;uids, production ďŹ&#x201A;uids and spill ďŹ&#x201A;uids â&#x20AC;&#x201C; anything that can be received on a tanker. â&#x20AC;&#x153;We have ďŹ ve risers to oďŹ&#x201E;oad trucks.â&#x20AC;?

While both Oungre and Stoughton are designed for drive-through opera-

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tion with no turning or backing up required by the drivers, the Stoughton location has the added beneďŹ t of two entrances. That allows trucks to enter through one and leave through the second. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re happy with our disposal well,â&#x20AC;? Peterson said, noting it has been taking 40 to 50 cubic metres of ďŹ&#x201A;uid an hour. That works out to about 6,000 bpd capacity. â&#x20AC;&#x153;We have storage for 7,000 barrels of ďŹ&#x201A;uid.â&#x20AC;? He said.

As for activity, Peterson noted they have been fairly steady up till mid-June, but not overly active due to spring breakup. However, with the level of activity in the area planned for this summer, he expects they will be busy.

The new Stoughton plant will result in seven jobs. â&#x20AC;&#x153;We have six operators and one manager. Weâ&#x20AC;&#x2122;re running the facility 24 hours a day, seven days a week,â&#x20AC;? Peterson said.

Both of these new disposal facilities are satellites of Gibsonâ&#x20AC;&#x2122;s Midale plant, which was originally Palko Environmental, until Gibson took over the company last year. Solids are shipped to Midale, and oil goes to the Midale Gibson terminal.

Heward landďŹ ll While the company doesnâ&#x20AC;&#x2122;t have any further liquids disposal plants under construction as of yet, there are plans to begin construction this summer of a new Class II solids landďŹ ll two miles west and a mile north of Heward. It will be just oďŹ&#x20AC; of Highway 33.

The landďŹ ll is expected to be completed this fall. It will be the third landďŹ ll of its type in southeast Saskatchewan, and the ďŹ rst owned by Gibson Energy.

Just northwest of Stoughton, the Heward location will also be the closest landďŹ ll to the ViewďŹ eld Bakken play, with one of the other facilities located west of Colgate and the other south of Gladmar.

PIPELINE NEWS July 2012

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Engaging First Nations Regina – Do your due diligence was the thrust of a presentation by a lawyer whose work includes engaging First Nations in business relations.

“You want to identify the risks and any impediments,” said Vivek Warrier, a partner with legal firm Bennett Jones LLP. He was speaking at the Insight Information Saskatchewan Oil and Gas Forum in Regina.

Warrier touched on information gathering, the diversity of First Nations deals, and First Nations legal issues affecting business deals.

In doing your due diligence, he said one needs to identify risks and ways to potentially mitigate risks.

Business decisions need to be made – whether or not to proceed, to negotiate with First Nations, and ultimately, to form an agreement.

In doing this research, it is important to identify potentially affected aboriginal groups, as well as the scope of traditional territories. Identify those groups that need to be consulted, and the extent of Aboriginal relationships with government and those groups that have been established.

Next one needs to identify the nature and extent of consultation activities undertaken and their status.

The Aboriginal Affairs and Northern Development Canada Land Registry System is a helpful start.

Diversity of deals There are many forms of deals made with First Nations. The Kitimat LNG Inc. has a $40 million equity option and an employment program. The site is leased and the First Nation will receive rents. This type of impact benefit agreement ensures the First Nation derives benefits and proponents will not face objections.

The Haisla First Nation at Kitimat is also developing its own, smaller liquefied natural gas facility with a Houston partner. This shows increased commercial sophistication, Warrier noted.

“They what to directly participate in projects,” he said, adding that means directly enjoying benefits on their lands.

An example of a commercial deal is Encanto Potash Corp, which will pay a three per cent gross overriding royalty, and provide equity and shares to the affected First Nations.

“The other trend we’re seeing is hybrid co-operative agreemnents,” Warrier

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Contract enforcement Warrier said remedies for a breach of a private agreement by a band are only available under contract law, not administrative law. Band-owned corporations are subject to general contract law and are bound by their contracts.

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PIPELINE NEWS July 2012

PIPELINE NEWS July 2012

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Morgan Griĸn, leĹ&#x152;, and Dale WhiĆ&#x17E;ield loaded a basket of lobsters into the boiler.

C17

Dylan Gilliss got the steaks sizzling.

Mike LaCoste removed bands from lobster claws.

Photos by Brian Zinchuk

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PIPELINE NEWS July 2012

TransGas looks to mobile compression

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Regina â&#x20AC;&#x201C; TransGas, The SaskEnergy natural gas pipeline subsidiary, is taking a plug-n-play approach to some of its natural gas compression.

TransGas is starting to use mobile compressors to meet its needs, deploying them when and where they are needed. â&#x20AC;&#x153;It is our vision of how we will manage compressions services,â&#x20AC;? Debbie McKague, TransGas vice-president for business services told the Insight Information Saskatchewan Oil and Gas forum in May. â&#x20AC;&#x153;Gone are the days of building one on site, on cement.â&#x20AC;?

The Crown corporation now has two mobile units, and a third on order.

The compressors are build on a trailer base. â&#x20AC;&#x153;It looks like a camper trailer with a slide-out,â&#x20AC;? she said.

Compressor stations have been set up with â&#x20AC;&#x153;docking structuresâ&#x20AC;? for the mobile compressors to plug into.

One of the advantages of mobile units is they can be taken into shops in Calgary or perhaps Lloydminster for workovers, instead of sending a crew out to the compressor. â&#x20AC;&#x153;No longer do we have to bring employees into Saskatchewan to do overhauls,â&#x20AC;? McKague said.

Cost is a big factor, too, as she noted, â&#x20AC;&#x153;They are about one-third of the cost, about $2 million version $6 to $8 million.â&#x20AC;?

The ďŹ rst unit can be used not only as a booster, but also to draw down pipelines. This ďŹ&#x201A;exibility

allows these units to be used at diďŹ&#x20AC;erent places at diďŹ&#x20AC;erent times of the year. They also allow for contingencies, when a compressor needs to be replaced, pronto. â&#x20AC;&#x153;Our compressors are starting to get old,â&#x20AC;?

McKague noted.

Net zero electrical consumption McKague touched on SaskEnergyâ&#x20AC;&#x2122;s energy conservation goals, using waste heat to generate electricity. â&#x20AC;&#x153;Our goal is net zero corporate energy consumption within ďŹ ve years,â&#x20AC;? she said. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re well underway.â&#x20AC;?

Two sites have waste heat recovery systems.

Rosetownâ&#x20AC;&#x2122;s went into service in December 2011.

The $6.5 million project has a nominal output of 900 kilowatts and oďŹ&#x20AC;sets 5,800 tonnes of CO2 per year.

The Coleville site is a pilot project with a 100 kilowatt capacity. It is expected to be in service later this summer.

McKague noted that on the equipment used at the Coleville site, on a small compressor, can translate into the oilďŹ eld. â&#x20AC;&#x153;If this proves out, weâ&#x20AC;&#x2122;ve got other units of similar size we will put this on,â&#x20AC;? she said.

Saskatoon SaskEnergy is also doing a pilot project with the City of Saskatoon regarding using methane from the Cityâ&#x20AC;&#x2122;s landďŹ ll. The intent is to have that project, which will produce one megawatt of electricity, in place by fall 2013. ɸ Page C19

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PIPELINE NEWS July 2012

TransGas sees a future in using Ĺ&#x2021;exible mobile compressors.

C19

Photo courtesy TransGas

Your Non-Destructive Testing Specialists â&#x20AC;˘ Radiographic â&#x20AC;˘ Ultrasonic â&#x20AC;˘ Magnetic Particle â&#x20AC;˘ Liquid Penetrant â&#x20AC;˘ Positive Material IdentiďŹ cation â&#x20AC;˘ Hardness Testing â&#x20AC;˘ Digital Radiography Éş Page C18 Greenhouse gas reductions As part of the provincial Go-Green Project, SaskEnergy is seeking to reduce greenhouse gas emissions by 20 per cent from 2006 levels by 2020. This involves reducing vented methane and fugitive emissions while improving combustion eďŹ&#x192;ciency.

McKague gave the example of using thermal cameras to ďŹ nd minute leaks.

Oil and gas support McKague said they are supplying natural gas for enhanced oil recovery in northwest Saskatchewan, and recently added a pipeline for associated natural gas gathering in southwest Saskatchewan.

In the southeast, thereâ&#x20AC;&#x2122;s a new pilot for compressed natural gas in the Weyburn area. A truck with pressurized cylinders is used to fuel drilling rigs that have switched from diesel. The result is a cost savings and better greenhouse gas performance.

As for the proposed Vantage ethane pipeline that is intended to run across much of southern Saskatchewan, McKague said they are looking at a straddle plant for that line. â&#x20AC;&#x153;Ethane needs to be piped, not trucked,â&#x20AC;? she said, adding thereâ&#x20AC;&#x2122;s a big market for it in Alberta. While this line has National Energy Board approval, it is still waiting for U.S. Department of State approval.

As Saskatchewan is now a net importer of natural gas, McKague said, â&#x20AC;&#x153;We are looking at bringing in some natural gas from the Bakken in North Dakota.â&#x20AC;?

Thereâ&#x20AC;&#x2122;s the possibility of pulling in associated gas from Manitoba as well, and maybe even Montana.

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PIPELINE NEWS July 2012

49 North targets proĂ&#x20AC;table heavy oil Saskatoon â&#x20AC;&#x201C; 49 North Resources will focus summer exploration and drilling on its heavy oil lands to maximize the proďŹ t potential with light oil production on the backburner.

The company is targeting their heavy oil leases at the Red Pheasant First Nation in the Battleford area, and its recently expanded Riverside leases near Leader, Saskatchewan.

The Saskatoon-based investment company will also drill up to ďŹ ve horizontal wells in the light oil Viking play near Kindersley through its whollyowned subsidiary Allstar Energy Ltd. â&#x20AC;&#x201C; with an eye on market conditions. â&#x20AC;&#x153;We are always looking sideways at the oil price with an â&#x20AC;&#x2DC;if, and, or butâ&#x20AC;&#x2122; perspective,â&#x20AC;? said Tom MacNeill, 49 North president and CEO during an investor conference in late May. â&#x20AC;&#x153;The heavy oil that we are developing is a lot less risky than the light oil because the decline curve in Viking wells, which are light oil producers, is very steep in the ďŹ rst six months to a year. â&#x20AC;&#x153;When you look at ďŹ nding and development costs, our heavy oil is a heck of a lot cheaper. â&#x20AC;&#x153;We have high expectations for the two heavy oilďŹ elds we are now developing operations on.

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â&#x20AC;&#x153;What we are trying to do is get the most quantity of oil out of the ground with the lowest possible ďŹ nding and development cost. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s one of the reasons why we are excited about Riverside,â&#x20AC;? MacNeill said.

Allstarâ&#x20AC;&#x2122;s Riverside property is next to a leased ďŹ eld that has produced 45 million barrels of heavy oil since the mid-90s.

Allstar now holds approximately 31,360 acres at Riverside including an acquisition of 16,000 acres purchased from third party producers in the ďŹ rst quarter of 2012.

In total, the company has exclusive exploration and development permits covering approximately 58,000 acres of highly prospective Viking oil and gas and heavy oil lands all located in west central Saskatchewan. â&#x20AC;&#x153;We are ďŹ nding that ďŹ nding and development costs for heavy oil are very cheap because the area tends to be very huge,â&#x20AC;? said MacNeill. â&#x20AC;&#x153;The vertical wells tend to be the best producers and you can just go in and drill it.â&#x20AC;?

Allstar is currently licensing an abandoned vertical well on the new Riverside lands that is producing 60-70 barrels of oil per day after 30 days of initial production as May 29.

Given the strong results from the re-entry program, Allstar is reviewing the proprietary 2D seismic data that came with the land purchase with drilling to follow. â&#x20AC;&#x153;We are planning a pretty substantial 3D seismic program that will kick oďŹ&#x20AC; in the end of June,â&#x20AC;? Ashley Drobot, president of Allstar said to anxious shareholders. â&#x20AC;&#x153;We are just waiting on approval of that. From there, we will be picking some locations. â&#x20AC;&#x153;We would be putting the cart before the horse if we picked locations right now. If we are going to spend a million dollars on seismic, it doesnâ&#x20AC;&#x2122;t make a lot of sense to drill the locations before we know thatâ&#x20AC;&#x2122;s the best spot. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s kind of the Riverside plan right now.â&#x20AC;?

At Red Pheasant, 49 North shot 15 square kilometres of 3D seismic earlier in the year to identify locations for a waterďŹ&#x201A;ood pilot project in the Sparky formation and to map the Lower Manville channel.

MacNeill told investors they are working as fast as they can to develop the Red Pheasant. ɸ Page C21

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PIPELINE NEWS July 2012 ɺ Page C20 “We still have to test the lower Lloydminster channel there and then work on the Sparky above that – and that’s working in the confines of the IOGC (Indian Oil and Gas Canada) in the timing it takes for a federal organization to get permitting,” said MacNeill.

“It gives us comfort in our dealings with the native groups we are working with on both sides of the fence, but it takes longer.”

The federal IOGC permits will allow 49 North to begin drilling a series of test wells to locate sweet spots for the waterflood program.

“The Red Pheasant is phenomenal,” said MacNeill.

“It’s potentially huge given the area that’s extended the Sparky that has been proven with the seismic – and the six exploratory drill wells that are put in there – and the yet untapped potential of the lower Lloyd channel.”

Heavy oil produc-

tion on Red Pheasant land currently ranges from 50 to 75 bar-

are very profitable provided you can time them with the market.”

see the bottom in the price of oil in the short term so we can drill into

a rising price environment,” said MacNeill.

“That’s the only one

“I would rather drill a half a million dollar well and get the same production with a much shallower decline than a Viking well that costs twice as much and has a very steep decline.”

- Tom MacNeill, CEO 49 North rels per day with that number expected to rise substantially if the waterflood program is successful.

“We are excited because of the scope of it and because it’s cheap,” said MacNeill.

“I would rather drill a half a million dollar well and get the same production with a much shallower decline than a Viking well that costs twice as much and has a very steep decline.

“The Viking wells

Allstar Energy is drilling five new horizontal Viking wells in the Kindersley area, adding to the 17 wells 49 North has on production in the area.

Of the 17 wells, 15 were drilled by Allstar and two by 49 North with many more to come in a phased approach for maximum investor value.

“On the Viking we are ready to go and drill those wells – we just want to make sure we

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C21

that’s been held up.”

The drilling was to have started in March, but McNeill said that in March, the price discount on Viking oil was huge.

“It was $30 off West Texas Intermediate. It’s come back to about $10 dollars now,” he explained.

“The production from the Viking is about 25 per cent gas and 75 per cent oil – so there’s boe on the Viking and straight oil on the Red Pheasant and the Riverside property.”

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PIPELINE NEWS July 2012

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PIPELINE NEWS July 2012

C23

Oilsands Quest looks to Ontario Calgary â&#x20AC;&#x201C; Oilsands Quest Inc. has applied to delist its shares on the New York Stock Exchange (NYSE) while applying for a listing on the new Canadian National Stock Exchange called the CNSX that is based in Toronto.

The bid would allow beleaguered shareholders of Oilsands Quest to trade their shares once the new listing is complete.

The company expects the delisting from the NYSE MKT to be eďŹ&#x20AC;ective before the end of June with the hope its shares will be trading on the

CNSX on or before the delisting occurs.

The CNSX is the ďŹ rst full stock market approved by the Ontario Securities Commission in 70 years.

Total annual fees for an initial listing on the CNSX are only $13,600 and $3,600 per year after that compared to almost $60,000 for an initial listing on the broader TSX market also in Toronto.

Oilsands Quest continues to operate under the protection of the Companiesâ&#x20AC;&#x2122; Creditors Arrangement Act (Canada) and the supervision of a court-

appointed monitor.

The company is also continuing to pursue the previously announced process to solicit oďŹ&#x20AC;ers to acquire, restructure or recapitalize itself with the assistance of TD Securities Inc. Oilsands Quest had little choice to delist from the NYSE after failing to comply with certain NYSEâ&#x20AC;&#x2122;s listing standards following an extension from the NYSE to May 18.

Trading in the common shares of Oilsands Quest remains halted on the NYSE.

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PIPELINE NEWS July 2012

Box 312 Carlyle, SK S0C 0R0 Office: 306.453.2506 Fax: 306.453.2508

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CanElson now operates a Àeet of 37 rigs (34 net).

With operations in Western Canada, West Texas, North Dakota and Mexico, CanElson Drilling Inc. is setting new standards for rig utilization.

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PIPELINE NEWS July 2012

C25

Lakeland, Onion Lake share award Regina â&#x20AC;&#x201C; Lakeland College and Onion Lake First Nation received the Program or Project Award at the 2012 Saskatchewan Literacy Awards of Merit ceremony held May 9 in Regina.

Lieutenant Governor Vaughn Solomon SchoďŹ eld presented the award to Tory Littlewolfe of Onion Lake First Nation and Margo Hines of Lakeland College in recognition of their organizationsâ&#x20AC;&#x2122; eďŹ&#x20AC;orts to spearhead the inclusion of literacy and essential skills programming in their workplace training.

Lakeland College received funding in 2011 from the government of Saskatchewan to partner with Onion Lake First Nation to develop and deliver an

adult basic education-essential skills for the Workplace project.

They initiated a vacuum truck operator program to help address the need for more qualiďŹ ed oilďŹ eld drivers in the Onion Lake First Nations region.

Students developed literacy skills, earned their Class 1A licence and industry speciďŹ c safety certiďŹ cates, and completed training in essential skills for the workplace to help them ďŹ nd and keep a job.

Of the 10 students enrolled in the 12-week program, nine graduated. One left the program early because he was oďŹ&#x20AC;ered employment. Six months after the program ended, eight people were still employed.

Husky Place Estevan Office: Phone: (306) 634-2681 Fax: (306) 636-7227

CEEI; @7M Darlene deWit, an HR service rep with Husky Energy, gets a welcoming hug from the Husky mascot at the grand opening of Husky Place in Lloydminster.

Photos by GeoÄŤ Lee

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C26

PIPELINE NEWS July 2012

Torquay Oil Corp. boosted output Torquay Oil Corp. substantially increased production and cash ďŹ&#x201A;ow while narrowing its net loss in the ďŹ rst quarter.

New volumes from the Queensdale area of southeast Saskatchewan area are the primary reason for the increase in output. Torquay is focused on oil in southeast Saskatchewan and southwest Manitoba.

In the ďŹ rst quarter, Torquay drilled a (one net) well at Queensdale â&#x20AC;&#x201C; the companyâ&#x20AC;&#x2122;s third well drilled into the pool -- which averaged 150 boepd in the ďŹ rst two months of production.

The company shot a four-square-kilometre seismic program at Queensdale to further delineate the pool and pinpoint additional drilling prospects.

Torquay continues to focus on expanding this core area.

Increased natural gas sales during the quarter came from associated gas at Queensdale where the company receives a below-market price for gas under an acquired third-party processing agreement.

Torquay exited the ďŹ rst quarter producing

575 boepd, and averaged about 561 boepd for the quarter â&#x20AC;&#x201C; about 52 per cent more than in the corresponding 2011 period.

Despite ďŹ&#x201A;uctuations in oil pricing throughout the quarter, Torquay's ďŹ eld netbacks averaged $58.30 per boe, up 13 per cent from the comparable 2011 quarter, while operating costs were reduced by 24 per cent to $9.34 per boe over the same period.

Torquay had $9.4 million of net debt on its $11.5 million credit facility as of March 31. It plans to exit the year with a debt level of about one times trailing cash ďŹ&#x201A;ow.

Also in southeast Saskatchewan, the company shot a 3D seismic program over about 25 square kilometres at Lake Alma where it holds 55,000 net acres. The seismic program was shot late in the quarter and was being interpreted at the end of May. Torquay holds about 86 net sections of contiguous land in the Lake Alma area. It said economic Bakken wells have now been drilled to within ďŹ ve kilometres south and six kilometres east of the land

block.

As well, Torquay said that Three Forks production in the United States has now moved to within 50 kilometres of its land at Lake Alma. The company has identiďŹ ed numerous Three Forks shows on its land base and continues to advance the Three Forks play alongside its Bakken play.

During the quarter, Torquay incurred expenses to drill and complete an exploratory well at Willmar and a re-completion at Lake Alma. Both of these southeast Saskatchewan wells proved to be uneconomic. Impairment of exploration and evaluation costs during the period totalled $1.05 million, down from $2.41 million a year earlier.

The Willmar well was completed and produced oil at uneconomic rates. It was later suspended and is slated for abandonment this month.

Torquay conducted a completion and cleanout operation on a Bakken horizontal well at Lake Alma but it yielded no material increase in oil production. The well is to be abandoned this month as it is uneconomic at current production levels.

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Weyburn 306.842.6060

Lloydminster 780.875.6130

Calgary 866.234.7599

Regina 800.667.3546

Medicine Hat 403.528.4215

Grande Prairie 780.532.6793

401 Hwy. #4 S. Biggar, Saskatchewan PO Box 879 S0K 0M0 Ph (306) 948-5262 Fax (306) 948-5263 Cell (306) 441-4402 Toll Free 1-800-746-6646 Email: jwappel@envirotank.com www.envirotank.com

Cordell Janssen District Manager Downhole

93 Panteluk Street, Kensington Avenue N Estevan, Saskatchewan PHONE: 306-634-8828 â&#x20AC;˘ FAX: 306-634-7747 cordell.janssen@nov.com â&#x20AC;˘ www.nov.com

RICK CORMIER Manager

Box 609 Carlyle, SK S0C 0R0 www.truetorq.ca

Bus: (306) 634-8084 Cell: (306) 577-8833 Fax: (306) 453-6075 ttorq@hotmail.com

PIPELINE NEWS July 2012

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Fax: (780) 872-5239

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We require the following:

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WELDER Required for New Tank Repair Shop

Brady Oilfield Services LP.

provides a broad range of services related to the production of oil and other Ă uids in SE Sask. We utilize specially designed tank trailers, pressure trucks, and vacuum trucks.

The successful candidate will have experience with Aluminum.

Competitive Wages & Generous BeneĂ&#x20AC;t Package Shift work available - not required

Send Resume and QualiĂ&#x20AC;cations P.O. Box 271 Midale, Sask. S0C 1S0 Fax: (306) 458-2768 resumes@brady.sk.ca

Matrix Well Servicing Slickline Division

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We are seeking dynamic and motivated Field Assistants for our Estevan location.

Do you possess? â&#x20AC;˘ A valid driverâ&#x20AC;&#x2122;s license (Class 3) and Air Brakes (A) Endorsement â&#x20AC;˘ Previous Slickline and E-Line experience (would be an asset but not required). We are willing to train the right candidate! **Competitive compensation and full beneďŹ ts** *Successful applicants must be willing to submit to and pass pre-employment testing*

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Please send cover letter and resume to

careers.account@pureenergyservices.com or fax to 403â&#x20AC;˘237â&#x20AC;˘9728 We thank all applicants for their interest; however, only those considered for an interview will be contacted.

Journeymen Electricians and Apprentices PowerTech Industries Ltd. in Estevan is seeking Journeymen Electricians and Apprentices for work in the Estevan and Carnduff areas.

Experience: Safety Certificates are needed.

1st Aid/CPR, H2S. Applicants must have a valid driverâ&#x20AC;&#x2122;s license. Full benefits packages and RSP plan.

Duties: Day to day electrical construction and maintenance in the oilfield.

Wage/Salary Info: Depending on experience & qualifications.

EARN UP TO $10,000/YEAR IN BONUS (PAID QUARTERLY)

To Apply: Fax: (306) 637-2181, e-mail sschoff.pti@sasktel.net or drop off resume to 62 Devonian Street, Estevan, SK.

One of the largest oilfield services companies, Weatherford operates in more than 100 countries and employs more than 50,000 people worldwide. With a product and service portfolio that spans the life cycle of a wellâ&#x20AC;&#x201D; drilling, evaluation, completion, production and interventionâ&#x20AC;&#x201D; and a robust research and development effort, we are well positioned to meet the ever-evolving needs of the oil and gas industry. Turn to Weatherford for attentive service and Tactical Technologyâ&#x201E;˘ designed to maximize the value of your oil and gas assets.

Weatherford Canada presently has openings for enthusiastic individuals to fill the position of Senior Well Testing Supervisor for our base in Weyburn, SK.

SENIOR WELL TESTING SUPERVISOR JOB# 14509 The Supervisor operates and maintains equipment in a safe manner to ensure job specifications are met. This position supervises field personnel and assists Senior Supervisors as required including the training of new Operators.

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Requirements: â&#x20AC;˘ High School Graduate â&#x20AC;˘ Familiarity with the oil and gas industry and all related production and or well testing equipment & operations â&#x20AC;˘ Familiarity with drilling rigs and or production platforms / land based production gathering stations â&#x20AC;˘ Ability to communicate with people at all levels â&#x20AC;˘ Maintain good Written and Spoken English Skills â&#x20AC;˘ Ability to work to tight deadlines and under pressure â&#x20AC;˘ Ability to work unsupervised â&#x20AC;˘ Flexible and adaptable to a changing environment â&#x20AC;˘ Prepared to travel and work on overseas assignments â&#x20AC;˘ Additional Related Certification / Training Courses â&#x20AC;˘ Minimum 2 years experience working in a well testing and or production operations environment would be a definate asset â&#x20AC;˘ Class 5 driver's license and a Driver's Abstract â&#x20AC;˘ Valid H2S Ticket and First Aid certification â&#x20AC;˘ Willing to be "ON-CALL" Weatherford offers a competitive compensation and benefits upon hire; including 3 weeksâ&#x20AC;&#x2122; vacation to start, RRSP matching, a health spending account and opportunities for on-going training and career development.

Please fax a resume and drivers abstract to: (306) 842-0676 or

Apply online at www.weatherford.jobs

DRILLING / EVALUATION / COMPLETION / PRODUCTION / INTERVENTION

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PIPELINE NEWS July 2012

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Canyon is the fastest growing fracturing company in North America. We deliver quality customized pressure pumping and service solutions to the oil and gas industry, improving our industry one job at a time. If youâ&#x20AC;&#x2122;re looking for a career with a leading organization that promotes Integrity, Relationships, Innovation and Success, then weâ&#x20AC;&#x2122;re looking for you.

Now hiring Canyon Champions for the following positions:

Operators: Fracturing, Nitrogen, Coil, Cement & Acid Class 1 or 3 Drivers Supervisors: Fracturing, Nitrogen, Coil, Cement & Acid Applicant Requirements: f Self-motivated f Willing to work flexible hours f Safety-focused

Why Canyon?

f f f f

Dynamic and rapidly growing company Premium compensation package New equipment 3 weeks vacation to start

f Team oriented f Oil & Gas related experience is preferred f Clean drivers abstract

f f f f

Paid technical and leadership training Career advancement opportunities Paid flights for rotational program (22/13) Seasonal work programs available

We thank all applicants; however only those selected for an initial interview will be contacted.

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How to apply: email: hr@canyontech.ca fax: (306) 637-3379 website: www.canyontech.ca

safety@jmlc.ca

Weâ&#x20AC;&#x2122;re currently looking for: â&#x20AC;˘ Lease Construction Supervisor â&#x20AC;˘ Dozer Operator â&#x20AC;˘ Grader Operator â&#x20AC;˘ 1A Operators (Bed & Winch Truck / Picker Truck) â&#x20AC;˘ Crew Foreman (Facility / Pumpjack / Pipeline) â&#x20AC;˘ Labourers

PIPELINE NEWS July 2012

C29

CAREER Gu×de Hydrovac Operators and Swampers • Offering excellent wages • Excellent beneÀt package available • Willing to train if necessary • Safety tickets an asset • Operators must possess class 3A driver’s license • Living accommodation available

For more information call: Trevor at: 306-483-7777 or Kim at: 306-483-7722 Email resumes to: extremeexcavating@hotmail.com or fax to: 306-483-2082

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/RRNLQJ IRU &DUHHU *URZWK" :H·YH *RW -XVW WKH )LHOG IRU <RX 4UNDRA /IL 'AS ,IMITED IS -ANITOBA S LARGEST OIL PRODUCER CURRENTLY EXCEEDING

BARRELS OF LIGHT SWEET CRUDE PER DAY /UR OIL AND GAS EXPLORATION COMPANY OPERATES OVER OF OUR PRODUCTION WITH CORE PROPERTIES LOCATED WITHIN THE 7ILLISTON "ASIN IN SOUTHWESTERN -ANITOBA AND SOUTHEASTERN 3ASKATCHEWAN 4HIS IS A VERY EXCITING TIME TO BE PART OF THE 4UNDRA TEAM !S CONTINUED GROWTH AND EXPANSION HAS CREATED NEW OPPORTUNITIES IN OUR VARIOUS OFlCE AND lELD LOCATIONS

WE ARE NOW ACTIVELY RECRUITING SKILLED PROFESSIONALS TO JOIN US IN THE FOLLOWING POSITIONS #ALGARY !LBERTA s !REA ,ANDMAN s $EVELOPMENT %XPLORATION 'EOLOGISTS s %XPLOITATION %NGINEER s %XPLOITATION 4ECHNOLOGIST s 'EOPHYSICIST s -IDSTREAM /PERATIONS &ACILITIES %NGINEER s 0ETROPHYSICIST s 3ENIOR %XPLOITATION %NGINEER s 3ENIOR 0RODUCTION %NGINEER s 3IMULATION 2ESERVOIR %NGINEER

7INNIPEG -ANITOBA s ,AND !DMINISTRATOR s 3TAFF !CCOUNTANT 6IRDEN -ANITOBA s #OMPLETIONS %NGINEER 4ECH s $RAFTING $ESIGN 4ECHNICAL 3UPPORT 4ECHNICIAN s $RILLING &IELD 3UPERINTENDENT s &IELD /PERATORS n ,EVEL )6 s &IELD 3AFETY #OORDINATORS /PERATIONS s (UMAN 2ESOURCES 'ENERALIST s )NSTRUMENTATION 4ECHNICIAN s 0RODUCTION %NGINEER

)F YOU ARE INTERESTED IN JOINING OUR RAPIDLY GROWING TEAM VISIT THE %MPLOYMENT SECTION OF OUR WEBSITE WWW TUNDRAOILANDGAS COM FOR DETAILS ON THESE AND OTHER POSITIONS 0LEASE SUBMIT YOUR COVER LETTER AND RESUME ALONG WITH YOUR SALARY EXPECTATIONS TO CAREERS TUNDRAOILANDGAS COM BY THE INDICATED APPLICATION DEADLINE 7E WISH TO THANK ALL CANDIDATES FOR THEIR INTEREST HOWEVER ONLY THOSE BEING CONSIDERED FOR INTERVIEWS WILL BE CONTACTED

!BOUT 4UNDRA /IL 'AS ,IMITED 4UNDRA /IL 'AS ,IMITED IS A WHOLLY OWNED SUBSIDIARY OF *AMES 2ICHARDSON 3ONS ,IMITED A PRIVATE FAMILY OWNED COMPANY ESTABLISHED IN WITH OPERATIONS IN AGRICULTURE FOOD PROCESSING lNANCIAL SERVICES PROPERTY MANAGEMENT AND ENERGY EXPLORATION 4UNDRA S CORPORATE HEAD OFlCE IS LOCATED IN 7INNIPEG -ANITOBA WHERE WE COMMENCED OPERATIONS IN /UR lELD OFlCE IN 6IRDEN -ANITOBA OVERSEES THE OPERATION OF WELLS WHILE OUR OFlCE IN #ALGARY !LBERTA PROVIDES OUR GEOLOGICAL GEOPHYSICAL AND RESERVOIR ENGINEERING SUPPORT 4HE 4UNDRA FAMILY OF COMPANIES ALSO INCLUDES 2ED "EDS 2ESOURCES ,IMITED AND 4UNDRA %NERGY -ARKETING ,IMITED 4O LEARN MORE ABOUT US WE INVITE YOU TO VISIT WWW TUNDRAOILANDGAS COM

C30

PIPELINE NEWS July 2012

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â&#x20AC;˘ Located about 10 miles out of Lloydminster.

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â&#x20AC;˘ Experience in Quickbooks an asset, however, willing to train. â&#x20AC;˘ Duties include payroll, data entry & Miscellaneous ofĂ&#x20AC;ce duties.

Please send resume to: Box 45 Lloydminster SK, S9V 0X9 or Fax: (780) 846-0005 Email: jobresumes@hotmail.ca

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NOW COME JOIN OUR TEAM!

â&#x20AC;˘ CONSTRUCTION MANAGER

Weâ&#x20AC;&#x2122;re hiring for various projects throughout Southern Saskatchewan

â&#x20AC;˘ FIELD SAFETY ADVISOR

Over 50 years strong, Arnett & Burgess Oilfield Construction Limited safely provides quality pipeline construction, facility installation, pipeline integrity, custom fabrication, maintenance and related construction services to the energy industry.

- Candidates must have previous leadership/managerial experience within the Pipeline Construction industry (mainly underground lines max 16â&#x20AC;?).

This positionâ&#x20AC;&#x2122;s home base is in Regina.

- The ideal candidate will have a CSO designation. This position will oversee pipeline construction projects in southern sk with a home base in Regina

â&#x20AC;˘ PIPELINE CONSTRUCTION LABOURERS â&#x20AC;˘ FOREMEN â&#x20AC;˘ HEAVY EQUIPMENT OPERATORS

-Employee & Owner Operators with Pipeline Construction Experience

All positions require previous experience in Pipeline Construction.

Previous experience on Pipeline Integrity projects is an asset.

Compensation: Competitive wages Overtime Daily Subsistence /Living allowance

Preferred Certifications H2S Alive Standard First Aid & CPR

Required Certifications Driverâ&#x20AC;&#x2122;s License Ground Disturbance â&#x20AC;&#x201C; (Heavy Equipment Operators only)

Please submit your resume to : For more details and other career opportunities please visit: email: hr@abpipeliners.com â&#x20AC;˘ Fax:403.265.0922 www.abpipeliners.com For Inquiries please call: 780.384.4050

PIPELINE NEWS July 2012

All Aspects of Electrical Construction • Oilfield, Industrial, Commercial, Residential, Agricultural • Fully Equipped Field Units • GPS Equipped for Faster Response Time • Knucklepickers • Excavation Equipment • Generators – 50-200 KW • Directional Boring • Trenchers, Skidsteers, Mini Hoes

Ph: 306.453.2021 Fax: 306.453.2022 Cell: 306.577.7880

Email: southeastelectric1@sasktel.net Box 1238 Carlyle, SK S0C 0R0

C31

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PIPELINE NEWS July 2012