Pipeline News November 2012

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PIPELINE NEWS Saskatchewan’s Petroleum Monthly

November 2012

Canada Post Publication No. 40069240

FREE

Volume 5 Issue 6

From leŌ: Jonathan Kmita, John Kmita and Tyler Kmita are the family behind John Kmita Ltd., a Weyburn-based service rig company that has been operaƟng for 40 years. See story page C6. Photo by Brian Zinchuk

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PIPELINE NEWS November 2012

INSIDE SECTION A 3

Millennium SƟmulaƟon to launch

7

Opinion

4

McMillan visits Panther 4

9

Cenovus buys Oilsands Quest assets

6

Editorial

10 Range One poised for growth

SECTION B 1

Matrix oī to phenomenal start

12 Steady growth for Rearden

3

Birds challenge pipeliners

8

ArneƩ & Burgess tackles Vantage Pipeline project

22 ShiŌing Gears: Key to business success

SECTION C 1

Sun Country Well Servicing

6

40 years for John Kmita Ltd.

3

Long Creek Railroad grand opening

11 Keeping downƟme to a minimum

PIPELINE NEWS Saskatchewan’s Petroleum Monthly

Dec. 2012 Focus

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PIPELINE NEWS November 2012

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TOP NEWS BOARD OF DIRECTORS

Millennium Stimulation Service to launch in Estevan

The experience level of Millennium Stimulation Services is deep, to say the least. Here’s their bios, taken from Millennium’s website. Paul Colborne Chairman - President, StarValley Oil and Gas Ltd. - Founder, director & former CEO, Crescent Point Energy Ltd. - Chairman, Legacy Oil & Gas Inc. - Chairman, Surge Energy Inc. Michael Heier - Chairman and founder, Trinidad Drilling Ltd., one of the largest and most successful Canadian drillers currently operating over 140 drilling rigs and employing over 3,000 people in three countries. E. Craig Lothian - CEO & president, LEX Capital Management Inc. - CEO & president, Keystone Royalty Corp. - Director, PetroBakken Energy Ltd. Kevin Bennett - Independent Businessman - Former chairman, Crescent Point Energy Ltd. - Former director, Trinidad Drilling Ltd. Ken Strickland - Chief legal and business development officer, TransAlta Corporation - Director, Trinidad Drilling Ltd. Ron Dahl - CEO & president, Smart Completions Ltd.

Mike Heier

Story and photo by Brian Zinchuk Pipeline News Estevan – Mike Heier is at it again. The founder of Trinidad Drilling Ltd. is now launching an Estevanbased frac company. The outfit will be known as Millennium Stimulation Service. I guess you would call me the founder,” Heier said while visiting their new yard where a shop is going up. “I’m on the board of directors, CEO and president.” CEO is a position Heier knows well. He

was founder and CEO of Trinidad, a company that now has over 3,000 employees and more than 135 drilling rigs. He stepped back from the chief executive position five years ago, but remains chairman of the board. Lyle Whitmarsh took over as CEO in January 2012. Heier founded Trinidad back in 1995. He ran it privately until 2000, then took it into a trust, and was one of the first to come out of the trust corporate structure. Along the way, he was chairman of AlterNRG, a company

that acquired a huge coal deposit and sought to use gasification technology to exploit it. However, he noted, “The markets were unwinding in front of our faces. “I would suggest the next economically viable energy forms would come through gasification of low-quality organic material – coal, biomass, municipal waste – converted to syngas and coverted to fuel.” Heier resigned from AlterNRG’s board in April this past year to pursue Millennium. “I still own a sizeable piece of it.”

Heier’s also involved with Smart Completion Technologies, a small, private oilfield services company. Originally a millwright, Heier’s experience includes a seismic company and running an oil company. As for the origins of Millennium, Heier said it was the people behind Smart that got him going. “Within a year of being on that board, the guys asked me, ‘Hey Mike, would you consider starting a frac company?’” That was May 2011. He started doing

research that summer, and spent the fall of 2011 putting together the management team. Heier sought out a team of which the majority had worked together before. “It’s a people gig. It’s all about the people,” he said. “Poor quality assets with good people will outperform. This always has been, always will be, a people business. “We work hard at creating an almost cultish environment within the fence.” One of the results is a low turnover of staff. ɸ Page A8

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PIPELINE NEWS November 2012

BRIEFS

Minister tours Panther’s new rig

Rig utilization rate remains stagnant

Close to 50 per cent of the rig fleet in Western Canada was busy as of Oct. 17, Rig Locator records show. For much of the late summer and fall, the active utilization rate has remained within a tight band between 47 and 50 per cent. In September 2011, active utilization rates approached 70 per cent during most of the month. At the nine-month mark, the average utilization rate for 2012 stands at 48 per cent, off from 54 per cent in the comparable period last year. Saskatchewan's rig utilization rate stood at 63 on Oct. 16. with 85 active rigs and 52 rigs down. Over the first nine months of the year, an average of 68 rigs have been busy in the province compared to 77 a year ago. British Columbia's rig utilization rate as of Oct. 17 of was 68 per cent – 34 rigs at work out of the total fleet of 50. An average 38 rigs have been active in the JanuarySeptember period versus 55 a year ago. In Alberta, 261 rigs were busy on that day (45 per cent utilization rate). To the end of September, an average of 265 rigs have been working compared to 293 a year ago. Rig utilization in Manitoba ran at 69 per cent with 18 active rigs and eight racked rigs. That 18 was a jump of seven rigs from two weeks earlier. To the end of September, an average of 12 rigs have been busy compared to 10 in the January-to-September period of last year. The most active driller on Oct. 17 was Husky Energy Inc., which had 28 rigs at work. Briefs courtesy Nickle’s Daily Oil Bulletin

Saskatchewan’s Minister of Energy and Resources, Tim McMillan got to tour Panther Drilling’s Rig 4 on Oct. 5. It was his Įrst Ɵme on a drilling rig. He was joined by Minister of Health DusƟn Duncan and MLA Doreen Eagles. McMillan represents Lloydminster, Duncan represents Weyburn, and Eagles takes care of Estevan. From leŌ: Dan Cugnet, Ken Cugnet, Corey Hicks, Doreen Eagles, Tim McMillan, DusƟn Duncan, Morgan Griĸn, MaƩ Cugnet and Bernie Bjorndalen.

Story and photo by Brian Zinchuk Weyburn – Although he worked on service rigs in his younger days, Minister of Energy and Resources Tim McMillan hadn’t stepped on a drilling rig until Oct. 5. He had his chance at Weyburn’s Panther Drilling on Oct. 4, where the company was putting the finishing touches on its brand new Rig 4. Driller and relief push Morgan Griffin led a tour that included McMillan, Weyburn MLA and Minister of Health Dustin Duncan, and Estevan MLA Doreen Eagles, as well as several shareholders in the company. McMillan asked how long it takes to clompete. Bernie Bjorndalen, salesman for Panther, responded that work had started in February, but planning began prior to that. In the generator room, Griffin said, “This is the heart of the rig.” Without electricity, nothing runs. The tour progressed through the pumphouse, where two pumps could be found side-by-side with an open wall between them. Eagles asked Griffin how he got into it the business. “I was working my way to an apprenticeship carpenter. I’m from Churchbridge. I came with some friends, and they wouldn’t take me home on Sunday.” The group progressed through the various parts of the rig,

eventually looking over the mud tank, blowout preventor system, substructure, drilling floor and doghouse. “This is the most amazing machine in the world. It’s a fascinating industry,” Matt Cugnet, a geologist who is part of the ownership group, told the politicians. They were given the opportunity to have their hand on the brake and run the hook up and down. “Look at the size of that hook,” Eagles said, wide-eyed, as she brought the brake down. After the tour McMillan said, “When I was young, my uncle owned a service rig, and I was called to duty from timeto-time when someone didn’t show up. But I never set foot on a drilling rig. It was extremely interesting. I’ve watched them from the side of the lease many times.” Asked about the three to five new drilling rigs that get launched each year in southeast Saskatchewan, McMillan commented, “I think the oil industry is an amazing one for entrepreneurship. The group that saw Panther as an opportunity, that started investing six, seven years ago, is just an amazing Saskatchewan story of entrepreneurs meeting the needs of the great industry here in the southeast.” “We talk so much about the price of oil and how many wells are being drilled. All those are very important, but they all help the others in the industry – the service side – rigs being built here in Saskatchewan. That’s as big a part as anything.”

PIPELINE NEWS November 2012

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BRIEFS Alberta Star dealing with crude oil glut

Minister of Energy and Resources Tim McMillan takes the controls of Panther Drilling Rig 4. Behind him is Minister of Health DusƟn Duncan. Between them, McMillan’s ministry is responsible for bringing in the most money to the province’s coīers, and Duncan’s spends by far the most. They, along with MLA Doreen Eagles, toured the new rig on Oct. 5 as it neared compleƟon.

McMillan talks pipelines and oilsands Pipeline News got some one-on-one time with Energy and Resources Minister Tim McMillan after he toured Panther Drilling’s Rig 4, asking his thoughts on some of the items in the news regarding energy policy and development. Here are his responses: Regarding Saskatchewan’s position on the proposed Northern Gateway pipeline, McMillan said, “We’ve been in favour, we have been very supportive of any new pipeline capacity. We think capacity is a constraint. We see the differentials between West Texas and Brent crude, and a large portion of that is capacity, not just here, but down around Cushing as well. We have publicly said we think Keystone XL is something that is good for industry, and a gateway to the west is good as well. If it meets all the environmental requirements, we will be in support of it. On B.C. Premier Christy Clark’s assertion her province won’t even hook up the Northern Gateway project to the electrical grid, McMillan said, “I think there’s a lot of things going on in the political sphere at this time in British Columbia. The reality is, interprovincial trade is governed by federal law. Resource responsibilities were transferred to the provinces back in the thirties. It’s constitutional. Saskatchewan has said we’re not interested in the constitutional issues around energy. We think those issues are established. For the good of Canada, they should remain established as they are.” As for how much this affects Saskatchewan, he said, “I think our oilfield is in the middle of a continent with markets we want to serve in other places, largely. We have 115,000 barrels per day refining capacity. We produce over 440,000 barrels per day. We know that finding those markets is going to be very important immediately and in the medium term. Very interesting things are going with oil by rail that is meeting demand of refineries on the East Coast. Potential pipeline reversals are helping. But as the oilsands continue to grow, as production in

Saskatchewan continues to grow, we need more export capacity, and we’re looking at all directions.” Asked if shipping crude-by-rail will have an impact on Saskatchewan’s royalties, McMillan responded, “I think, big picture, yes. Finding the most efficient way to transport our products increases the revenues in the pockets of our industry, and increases the revenues to government for the products they ship. “I had a chat with the Irving refinery manager from New Brunswick. They are importing a very large volume of their oil from Western Canada, some of it from Saskatchewan. Instead of paying a Brent price of $118 a barrel, going back a few weeks, they were sourcing prairie oil for the West Texas price. About an $18 differential at the time, they were paying $7 for the pipeline cost and still coming out $11 dollars ahead of what they could get Brent for, which was their lead supplier previous. “I think it’s a good part of the advantage we have. Entrepreneurs are always searching for the least cost to produce the products.” Oilsands Quest’s assets had recently been sold to Cenovus. McMillan commented, “We weren’t involved with the transfer. There was court-appointed officials that made those decisions. Now that it’s been stated who has made the purchase, it’s a company that has big financial capacity. We know the Saskatchewan side of the border has slightly different geological challenges to what is being produced in Alberta. But Cenovus has the adjoining property on the Alberta side of the line of what they just purchased, and they are working on bringing it into production. A company like Cenovus has the capacity to develop the technology and bring it into production. We think that’s very good for Saskatchewan. “We have a world that needs more energy, and we have 70,000 square-kilometres of potential. I think at some point yes (there will be production).”

Alberta Star Development Corp. reports an excess of oil in mid-continental North America. Due to increased production in North Dakota, Alberta and Texas, as well as insufficient pipeline capacity to transport this oil south to major markets, it has negatively impacted the company’s oil production revenue this summer. The company states this oil glut has resulted in Canadian product being sold at a discount to the West Texas Intermediate (WTI) benchmark crude oil price, as rising production cannot find pipeline capacity. This discount to WTI has been even greater for heavy oil such as Alberta Star’s. In spite of the reduction in netback from the sale of its heavy oil, Alberta Star made dramatic overhead reductions to enable the company to maintain a strong working capital position of approximately $5.5 million. Fixed general and administrative expenses were reduced to approximately $36,000 a month in September – a decrease of 62 per cent over the same month a year prior. In its Oct. 15 news release, which provides an update of corporate development activity since the implementation of management and board changes in July, the company states its management reviewed a number of advancedstage investment opportunities in the precious metals sector, taking advantage of new director Tom Ogryzlo’s extensive experience in the financing, engineering, construction and operation of mining projects on a worldwide basis.

Briefs courtesy Nickle’s Daily Oil Bulletin

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PIPELINE NEWS November 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. Subscribing to Pipeline News: Pipeline News is a free distribution newspaper, but is now available online at www.pipelinenews.ca Advertising in Pipeline News: Advertising in Pipeline News is a newer model created to make it as easy as possible for any business or individual. Pipeline News has a group of experienced staff working throughout Saskatchewan and parts of Manitoba, so please contact the sales representative for your area to assist you with your advertising needs. Special thanks to JuneWarren-Nickle’s Energy Group for their contributions and assistance with Pipeline News.

Published monthly by the Prairie Newspaper Group, a division of Glacier Ventures International Corporation, Central Office, Estevan, Saskatchewan. Advertising rates are available upon request and are subject to change without notice. Conditions of editorial and advertising content: Pipeline News attempts to be accurate, however, no guarantee is given or implied. Pipeline News reserves the right to revise or reject any or all editorial and advertising content as the newspapers’ principles see fit. Pipeline News will not be responsible for more than one incorrect insertion of an advertisement, and is not responsible for errors in advertisements except for the space occupied by such errors. Pipeline News will not be responsible for manuscripts, photographs, negatives and other material that may be submitted for possible publication. All of Pipeline News content is protected by Canadian Copyright laws. Reviews and similar mention of material in this newspaper is granted on the provision that Pipeline News receives credit. Otherwise, any reproduction without permission of the publisher is prohibited. Advertisers purchase space and circulation only. Rights to the advertisement produced by Pipeline News, including artwork, typography, and photos, etc., remain property of this newspaper. Advertisements or parts thereof may be not reproduced or assigned without the consent of the publisher. The Glacier group of companies collects personal information from our customers in the normal course of business transactions. We use that information to provide you with our products and services you request. On occasion we may contact you for purposes of research, surveys and other such matters. To provide you with better service we may share your information with our sister companies and also outside, selected third parties who perform work for us as suppliers, agents, service providers and information gatherers.

That “pipeline of oil from Canada” An interchange during the Oct. 16 U.S. presidential debate focused heavily on energy. More importantly for us, there was some important talk about Canada. Specifically, Republican candidate Governor Mitt Romney slammed Democratic President Barrack Obama on the “pipeline of oil from Canada.” Romney said, “Let's take advantage of the energy resources we have, as well as the energy sources for the future. And if we do that, if we do what I'm planning on doing, which is getting us energy independent, North America energy independence within eight years, you're going to see manufacturing jobs come back. Because our energy is low cost, they are already beginning to come back because of our abundant energy. I'll get America and North America energy independent. I'll do it by more drilling, more permits and licences. “We're going to bring that pipeline in from Canada. How in the world the president said no to that pipeline? I will never know.” He hit the point again a few minutes later, saying, “If the President's energy policies are working, you're going to see the cost of energy come down. I will fight to create more energy in this country, to get America energy secure. And part of that is bringing in a pipeline of oil from Canada, taking advantage of the oil and coal we have here, drilling offshore in Alaska, drilling offshore in Virginia where the people want it. Those things will get us the energy we need.” Obama’s answer on the pipeline issue was opaque. He’s all for pipelines, but he didn’t say much about

that pipeline from Canada. Obama said, “What I want to do is to create an economy that is strong, and at the same time produce energy. And with respect to this pipeline that Governor Romney keeps on talking about, we've – we've built enough pipeline to wrap around the entire Earth once. “So, I'm all for pipelines. I'm all for oil production. What I'm not for is us ignoring the other half of the equation. So, for example, on wind energy, when Governor Romney says ‘these are imaginary jobs.’ When you've got thousands of people right now in Iowa, right now in Colorado, who are working, creating wind power with good-paying manufacturing jobs, and the Republican senator in that – in Iowa is all for it, providing tax breaks to help this work and Governor Romney says I'm opposed. I'd get rid of it. “That's not an energy strategy for the future. And we need to win that future. And I intend to win it as President of the United States.” That says a lot to the Canadian oil industry. If Obama was all for pipelines, Keystone XL would have been built already. Enough pipelines have been built to circle the Earth, but apparently crossing the 49th south of Shaunavon is just a little too far. Some people think that that no matter who wins the election, that pipeline will get the go-ahead, and soon. But listening to Obama, can we really believe that? Canadians, at least those who realize that we still need fuel to put in our cars, have been scratching their heads at that. It seems President Obama is still more interested in importing oil from the Middle East, because Canadian oil isn’t good enough.

PIPELINE NEWS November 2012

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OPINION

From the Top of The Pile

By Brian Zinchuk

Environment trumps all when pipelining through wetlands The fall of 1998 stands out very clearly in my mind. I spent three months that year standing in swamps. When I came home, my then-girlfriend, now-wife noted I had a perfume of “eau-du-swamp” about me. It was so much fun, in fact, that by the time October came, standing in wet swamps with a howling wind and not getting enough sleep resulted in me getting pneumonia for a week. It was bad enough that my foreman said something along the lines of “Your mom lives 90 miles from here? Go home to mom.” That bout of pneumonia and one on the subsequent job has meant ever since then, when I get a chest infection, it lasts a month, not a week, so it’s something I don’t easily forget. During that 1998 job, I was an oiler on an excavator that was tasked with digging out all the swamps on the Enbridge mainline right-of-way between Regina and the Manitoba border. We were given swamp mats, large 12x12 timbers bolted together, to ensure the excavator wouldn’t sink into the ground. At times, my operator was digging with water up to the top of his tracks. The idea was to dig out the ditch, and instead of casting the spill to the far side of the right-of-way, we cast it onto the ramp side – the side of the rightof-way where you drive and weld the pipe. This made a bridge through the wetland for the other crews. We worked well ahead of them to ensure the spill

had time to dry. If the water was too deep, pumps were used to lower the water level, often pumping water from one slough to the neighbouring slough. This past month I spent time on two major projects, both National Energy Board-regulated. One is the new Vantage Pipeline, which runs about 600 km from south of Bengough to the Alberta border at Empress. The other is the Bakken expansion project for Enbridge. What struck me in particular while riding up and down these rights-of-way was the lack of “swamp ditch” similar to what I worked on. A very large number of these wetlands are being bored instead of open cut. That’s a huge change from just 14 years ago, and at tremendous expense. Senior management for both of the contractors I spoke to made competing claims that they were working on one of most technical pipeline projects in Canada, despite the fact that, compared to building pipelines in the Canadian Shield, muskeg, or mountains, the Saskatchewan prairie used to be considered fairly easy going. The technical aspect has everything to do with the much more stringent environmental regulations their NEB permits have stipulated. They are willing to work within those permits, I must stress, as both pointed out they must meet those requirements. So instead of sending a Cat 345B excavator wading into the swamp with swamp mats and simply

digging a ditch, now, especially on the Enbridge job, they are bringing in a boring crew, a much more expensive proposition. Then on each end of the wetland, they must do a tie-in weld, which necessitates a bell hole on each end (and much more dirt moved). Tie-ins and boring are generally much more expensive than simply digging open cut work. But that is the name of the game now. I should note that on the Enbridge job, almost all the “wetlands” I saw were shoughs dry enough to walk through without getting your boots wet, yet they are still boring. Back in the 1990s, we used to build pipelines in June, July and August – the driest, and warmest months. But due to concern over disturbing migratory birds, that doesn’t happen anymore. The best months for dirt work construction are now essentially off-limits. The NEB would prefer workers deal with ice and snow instead of working during the most amicable months to build, all because of environmental concerns over birds. This is the reality pipeline builders must live with today. So for all those who have been protesting against new pipelines, perhaps they should open their eyes to the current reality. Environment is first and foremost. Brian Zinchuk is editor of Pipeline News. He can be reached at brian.zinchuk@sasktel.net

Lee Side of Lloyd By Geoff Lee

Can wind energize Saskatchewan too?

The winds of change are blowing through Alberta’s energy sector with the upcoming completion of the province’s largest wind farm in the village of Halkirk, east of Red Deer. The $357 million project being developed by Edmonton-based Capital Power Corp. will produce 150 megawatts of electricity. That will come from 83 turbines over a 60 square kilometre area straddling Highway 12 between Halkirk and Castor upon completion in November. The project will produce enough power to supply 50,000 homes and raises Alberta’s electricity output from wind energy to approximately 1100 megawatts a year, third best in the country. By comparison, Saskatchewan has a total wind power capacity of 198 MW with plans to procure another 177 MW of wind power by 2017. SaskPower, Saskatchewan’s Crown electric utility, is targeting approximately 8.5 per cent of its future power supply to be provided by wind energy. Ontario leads the nation with 2000 MW in operation with another 3,600 MW being built including some projects by Capital Power through Ontario’s feed-in tariff. What makes the Capital Power Corp. remark-

able is that Alberta is the only deregulated energy system in Canada and doesn’t pay a higher price for renewable energy like most provinces do. Energy produced by the Halkirk project will be sold into the Alberta spot market for electricity. In addition, Capital Power will sell renewable energy credits (RECs) to the Pacific Gas and Electric Company (PG&E) under terms of a 20 year-fixed contract. The Halkirk project benefits from a California law that requires every power company to produce a certain amount of green energy, a condition that can be met by purchasing green credits. The power capacity of the Halkirk project is based on the wind blowing 30 per cent of the time as it surely must in the windy Estevan area of Saskatchewan which is near the site of $1.24 billion coal-fired carbon capture project at Boundary Dam. The Boundary Dam project includes plans to capture and store one million tonnes of carbon dioxide a year, but wind power is renewable and generates no air emissions. According to Environment Canada, 18 per cent of Canada’s greenhouse gas emissions are created by burning fossil fuels to generate electricity. The Canadian Wind Energy Association estimated using wind to produce enough power for over

200 homes of electricity instead of burning coal will leave 900,000 kilograms of coal in the ground and reduce annual greenhouse gas emissions by 2,000 tonnes. The association believes wind energy can satisfy 20 per cent of Canada’s electricity demand by 2025 with installed capacity currently at 5,511 MW – 2.3 per cent of Canada’s total electricity demand. Alberta’s Capital Power project will create 14 permanent jobs in Halkirk which has a population of 122. It will generate additional annual tax revenue for the county and the town. The project will also pay an annual lease fee to dozens of landowners who have been compensated for the use of their land for access roads and turbines. The Halkirk turbines need a minimum wind speed of just 11 kilometres per hour to produce electricity with the optimum wind speed of 60 km/h which puts a lot of the province in the running for wind farms. Major wind power projects would be well suited to southeastern Saskatchewan where there are strong reliable winds near available transmission lines. It’s only a matter of time before the winds of change blow a little stronger in Saskatchewan as the economies of scale make wind power profitable as it will for Capital Power in Halkirk, Alberta.

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

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PIPELINE NEWS November 2012

Rebuilding a pre-existing team ɺ Page A3 Heier goes with the “birds of a feather, stick together” concept, with high performing, high quality people. The culture is almost “quasi-military,” he said, which would be in keeping with the fact he noted, “I’m ex-army. I was a master corporal when I was done. I routinely go back to that.” “When you join me, you’re almost taking a blood oath. I have laid my career and future down for people. I stand by where the value is created, by the people.” He called it a brotherhood, or a sisterhood, if you will. Dean Hillenga is his No. 2, as chief operating officer. Many of the management staff were once part of the Century Oilfield Services (another frac company) team before it was acquired by Calfrac a number of years ago. “I sought out a pre-existing team, one that had worked at the same place. They jumped at the opportunity to do it over again.” “Probably 80 per cent of the money spent in the energy industry is spent creating the wellbore and completing it. These days, most of the wells are multistage frac horizontal wells. Not too long ago, two thirds of the money was spent on drilling. The drilling side has become much more efficient.” There are 20 different things that have made drilling more efficient, he said, including the use of polycrystalline diamond cutter bits. Trinidad set records in numerous basins, he noted.

But since drilling is now more efficient, completions are a larger portion of the spending pie. Financing The response to their financing drive was surprising, to say the least. “I expected to be on the road for six weeks,” Heier said, noting they were seeking $28 million. “We closed the book in a week with $45 million in deals. Basically, we went viral. The other deals on the street got pulled, ours went viral. “I was somewhat humbled.” The company is privately held with over 240 investors. Some are institutions. But the largest shareholder is two million of 28 million shares. Directors and management have the largest holdings. There is one minor fly in the ointment, however. There’s not as much Saskatchewan content as he would have liked. That was a result of being oversubscribed. Spreads “Currently we’re building two 5,500 horsepower frac spreads,” Heier said. Each will have two 2,750 horsepower pumps plus all the support units. “We have under construction a coil tubing support unit,” he added. The equipment is due to show up at the end of November or early December. “We’ll be operational by Q4, a bit early,” he said. “The coil tubing unit will show up early Q2.” An 18,500 square-foot shop is under construction. “We’ll be expand-

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ing it by another 7,000 square feet in a few years,” he said. The location is a 10-acre parcel on Shand Road, southeast of Estevan. “There will be more things we will bring to the table our competitors do not,” he promised. Estevan base “This Estevan facility is Millennium’s master service centre. This is where we’re going to go from. Any growth will be supported from here. Asked why Estevan was chosen, he said it was the centre of the Canadian side of the Williston Basin. He was also born and raised in Estevan. “We’re going to try to get as many people as possible to move here. We’ll recruit from this area. Everything below the executive level will be in Estevan. Headquarters will be in Calgary. “We’re here to build a local culture. This is the frac home for Millenium. This will never be a satellite.” By the end of the year, they expect to have a staff numbering in the low- to mid-60s. “They can’t wait to get here, in fact. We found a lot of personnel very eager to join our team, people who will buy into the culture we are trying to create. But not everybody fits our

culture.” Housing is an issue, something they are “still talking about.” “We don’t want to rent the community. This is our community,” Heier said, referring to the common practice of frac workers often being from somewhere else, and not setting down roots. Smaller fracs “We’re not going to chase after big gas. We will go after smaller, oilbased fracs, smaller tonnage jobs that are less controversial.” As CEO, Heier said he’s looking five to six years into the future, several years ahead of the team. He would eventually like to build “10ish” frac spreads, deployed in three areas, “as far south as the Permian Basin or as north as north-central Alberta.” “We’re going to go where we’re wanted, first. There’s always room for top performers.” Lesser performing companies are “scraped off the edge,” he said. While the booming North Dakota market is tempting, working across the border from Canada is not an easy challenge, according to Heier. However, Trinidad’s U.S. operations account for 60 per cent of its revenues, he pointed out.

Fracking centre of excellence Mike Heier, CEO and president of Millennium Stimulation Services and chairman of Trinidad Drilling Ltd. has put a lot of thought into the importance of the skills developed in stimulation in southeast Saskatchewan, and its future impact on the world. The centre of excellence for coil fracking, he said, is right here, in Estevan. “This is the centre of the world for coil fracking, just as it was for horizontal drilling. Some of the more finesseful skill sets for coil fracking were developed here.” He pointed out that shale oil at similar depths exist all over the world. “North America has seven per cent of the boe of global world production, yet we consume about 75 per cent of global land-based drilling and completion services chasing that seven per cent. “This is the centre of excellence. This is the centre of expertise. What do you think will happen when the other 93 per cent of the global boe want to do what we have been doing here for the last 20 years?” “Until someone either uses less fuel, ha! Or finds some miracle new fuel that’s not out there, we have no choice. All these eco-terrorists who want to shut everything down, sorry, our global consumption keeps going up. The peak oil theory is real. We’ve

already gone over the peak. The peak isn’t about one day oil shuts off. It’s about the peak stuff is gone. It’s way behind. We had that fundamental shift five, six years ago. The marginal barrel produced right now is $65 a barrel. That’s the replacement cost. A short time ago it was 30 bucks a barrel, and a short time before that, it was $15. “We’re in this hyperbolic curve now. It’s not a linear curve anymore. Those replacement numbers that come on are very expensive. That’s the kind of stuff we’re doing all around. People want cheap oil? Just be happy you’re going to get supply.” “Going back to that 93 per cent of the global boe, when they start doing the things we started doing 20 years ago, optimizing existing oilfields, they’ve been down that path. Now they have to start working on the tough stuff. The services that do that do not exist. The expertise does, but in small quantities. If you understand what we’re doing here, this is an exercise in building for the future. The kind of people train here today, ten years from now, are going to be a global expert.” “There’s nothing like a good ’ole Saskatchewan farm boy somewhere in the Middle East to get something done. Farm kids from Saskatchewan, Manitoba and Alberta built the industry,” he concluded.

PIPELINE NEWS November 2012

A9

Cenovus buys Oilsands Quest assets for $10M Calgary – Cenovus Energy Inc. purchased the remaining assets of bankrupt Oilsands Quest for $10 million with the approval of the Alberta Court of Queen’s bench on Oct. 2. The Calgary-based oilsands explorer had been operating under the Companies’ Creditors Arrangement Act since November 2011 and was actively seeking to sell o its assets in Saskatchewan and Alberta. The majority of the sale assets are located adjacent to Cenovus’s proposed Telephone Lake oilsands project in northern Alberta. “We are pleased to acquire these assets at such a reasonable price,â€? said John Brannan, Cenovus executive vice-president and chief operating oďŹƒcer in a news release. “This is a good bolt-on acquisition that has the potential to add value to one of Cenovus’s next big emerging oilsands projects.â€? The purchase and sale agreement for the company’s assets was signed with Ernst & Young, the court-appointed monitor overseeing Oilsands

Quest’s liquidation and closed on Oct. 12. Oilsands Quest ďŹ led for creditor protection in November 2011 after it failed to ďŹ nd a buyer for its Wallace Creek property in Alberta. The company had hoped to sell its Wallace Creek property in 2011 for $40 million cash at closing and an additional $20 million, “subject to certain future eventsâ€? and use the proceeds to develop its Axe Lake property in Saskatchewan toward commercial development. Oilsands Quest ďŹ rst became involved in Saskatchewan's oilsands industry in the fall of 2004 when it acquired oilsands exploration permits in the northwest region of the province. In early 2010, Oilsands Quest submitted an application to the government of Saskatchewan for a SAGD pilot project that would become the ďŹ rst stage of a 30,000 barrel per day commercial oilsands development at Axe Lake. The company prepared detailed

plans for that pilot project, but put the plans on hold late in 2010 while seeking a partner or other strategic alternative, given the signiďŹ cant capital expenditures associated with a commercial oilsands facility. The acquisition by Cenovus includes three oilsands leases covering approximately 59,000 hectares in Alberta and Saskatchewan that adjoin Cenovus’s Telephone Lake property. Cenovus submitted a joint regulatory application and environmental impact assessment late last year for an initial 90,000 barrel per day project at

Telephone Lake. The company expects Telephone Lake will become another cornerstone project like Foster Creek or Christina Lake, Cenovus’s two producing oilsands assets. The acquisition includes a 34,000 hectare oil shale lease (Pasquia Hills) in east-central Saskatchewan, as well as various surface assets, such as a work camp and assorted vehicles and equipment. It does not include any of Oilsands Quest’s corporate assets or shares.

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PIPELINE NEWS November 2012

Range One poised for growth „ By Geo Lee

Pipeline News Lloydminster – Range One OilďŹ eld Services is now equipped to provide its heavy well servicing customers with coil rod change-outs and installations. The Lloydminster-based company took delivery of a new truck mounted X-celerator in late October to diversify its core well services including completions, workovers, stimulations, recompletions and pump changes. “We just found that it would ďŹ t well with our service rigs,â€? said Gerry Nygren, CEO and majority owner. “There are times when we can’t get our hands on one, so the rig shuts down early or maybe has to start late the next day waiting for one.â€? The X-celator was purchased from C-Tech Design & Manufacturing in Edmonton and will put Range One in a more competitive position utilizing its

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current eet of three single double mobile service rigs. “We thought if we had one around, it would make it more available to the rigs,â€? said Nygren. “It would increase the rig utilization for us. It will cut down on downtime, and it should stand on its own too.â€? The decision to purchase the X-celator coincides with Range One’s plan to house its equipment and oďŹƒce in a new 10,000 sq.-ft. building that is under construction in the Hill Industrial Park. “We plan to move in the spring or summer of 2013,â€? said Nygren. “We may not utilize the whole thing to begin with.â€? Currently Range One has use of an oďŹƒce at L & L OilďŹ eld Construction Ltd., which owns a minority share in the company. “I think the new building will kick us ahead. We’re going to have to have a place to park our X-celerator unit anyway,â€? said Nygren. “That’s kind of a demand that we can’t get away with this time.â€? Without a building, the company has been basically parking its equipment wherever it ďŹ nishes for the day. Nygren started Range One 10 years ago and learned the importance of diversiďŹ cation and having a measured growth strategy when the demand for well servicing dropped o in the 2008 downturn. “It’s been a real slow climb back up. This year it’s okay – we’re doing good. I wouldn’t say we are doing great, but we are doing good,â€? said Nygren. Range One services heavy oil customers within a 100 mile radius of Lloydminster with workovers and recompletions topping the list of well services most in demand. “There’s also typical pump changes. We produce a lot of sand here, and that’s hard on the pumps,â€? said Nygren. “We do horizontal and vertical wells, but we are not geared toward direction or slant wells.â€? The decision by Range One to purchase the X-celerator and construct a new facility follows a trend for well servicing companies to position themselves for success as one-stop shops. “I think a lot of companies are going that way. The start-up companies obviously haven’t gotten into that,â€? said Nygren. ɸ Page A11

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A11

Gerry Nygren, CEO of Range One OilÄŽeld Services, stands near his Rig 3 that is ready for service aĹŒer a maintenance checkup. The company has just purchased a new truck mounted X-celerator and plans to move into a building by the summer of 2013. Photo by GeoÄŤ Lee

Éş Page A10 “We’re not that further along either yet. We’re not that large of a company, but we are moving that way.â€? Nygren got his start in the oil industry over 30 years ago as an entry level oorhand on service rigs and has lots of experience working for larger companies such as BP, Encana and Talisman. “I also did contract operating and consulting. I’ve kind of worked my way around the industry and I’m back full circle where I started on the rigs,â€? he said. Nygren oversees a sta of 16 employees including three ďŹ ve man crews and

a supervisor, and he thrives on the daily challenges of managing the business. “It keeps you awake every day. There’s always something new. DiversiďŹ cation is probably one of the biggest ones for me right now – which direction do I take?â€? he said. “I look at it as a lot of opportunity. I can see several dierent directions I can take. It’s trying to pick which one. “This year, it was getting a truck mounted X-celerator unit. That was the direction for this year. “Next year, it’s going to be the building. We’ve already taken that plan. What else next year brings I am not sure. It’s one step at a time,â€? Nygren said.

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PIPELINE NEWS November 2012

Reliance adds supply lines for service rigs Story and photos by Geoff Lee Lloydminster – Reliance Industrial Products Ltd. is gaining some unexpected publicity for its new service rig division with a client rig up taking place behind their Lloydminster shop in the Hill Industrial Park. Reliance won the contract to rig up the first service rig made for Onion Lake Energy by Kobes Welding Ltd. in Lloydminster.

“It’s really good for us because you can see that rig from anywhere on the truck route,” said Michelle Strassburger who manages the new rig division launched locally in January. “That tells everyone ‘oh my God, look, they’ve got well servicing there now!’” The service rig division sells everything from tube and rod elevators and power tongs to spiders, tubing bailers and rubber products and ac-

cessories. “The rig up is an opportunity to sell all the products we supply,” said Strassburger. “Our safety division sold them all

the safety equipment for the rig. We are making the hoses for them here too.” ɸ Page A13

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PIPELINE NEWS November 2012 ɺ Page A12 Reliance specializes in hose assemblies and services for all industries including high pressure hose testing. They also sell and service a complete line of Scott breathing apparatus and related safety supplies. Their niche is selling everything from the ground up in oilfield supplies and safety equipment, and Reliance has become a one-stop shop with the addition of the service rig division throughout its Western Canadian and U.S. locations. The company also started a drilling division at its Nisku location a

A13

couple of years ago to further diversify their oilfield supply and safety product offerings. “I think they want expand a little bit and make this a one-stop store where you can buy everything from rope, dope and soap to hoses and safety equipment,” said Strassburger. “We sell tongs, elevators and blocks and all that kind of stuff. Everything kind of goes together.” The service rig product catalogue reads like a phone book, covering every product for well servicing from pipes, valves and fittings to blowout prevention equipment and mud testing products. ɸ Page A14

Here Bernard overlooks the Reliance warehouse and shop for oilĮeld supply and safety products and services. The top Ňoor serves as a storehouse for the company’s new service rig division.

It was a snowy day when Mike Bernard posed for this photo by the site of this ongoing rig up of Onion Lake Energy’s Įrst service rig at the Reliance shop in Lloydminster.

A14

PIPELINE NEWS November 2012

Rigging up their Ă€rst service rig Éş Page A13 The Onion Lake service rig up is a sales coup for the new division that has led to the recent hire of Mike Bernard as a full-time outside sales representative. “It’s very exciting. I have 13 years of drilling experience and a little bit of well servicing experience,â€? said Bernard who sees the rig up as a training experience. “Working in supplies, you sell everything, but you don’t get the opportunity all the time to see where it gets put, and how it’s used. It’s a good learning tool.

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“I will be basically selling everything that’s out of this branch and working with Michelle to promote the well servicing side. That’s where Michelle’s expertise is. “I am probably going to be pushing the supply demand on the well servicing side with companies around town – not really a speciďŹ c product brand, but push the company and the service,â€? he said. The ongoing rig up at Reliance is a sales booster for Strassburger who came into the job with more than 15 years of experience selling oilďŹ eld supplies in the Lloydminster area. Her industry contacts helped Reliance to outbid the competition for Onion Lake Energy’s ďŹ rst single double service rig for heavy oil applications. “We’ve got that service rig in our backyard now. It’s set up there,â€? said Strassburger. “They are putting their equipment on it. They are bringing their doghouse in, and we are loading them up and giving them all of their supplies out there, so that they can set it up and get it out to the ďŹ eld. “We are supplying 90 per cent of the parts. They are buying everything from rope, soap, dope and BOPs to travelling blocks, all the hoses, all the safety supplies – everything.â€? Strassburger and branch manager Ken Pacula were at the Lloydminster Heavy Oil Show in September where they had an exhibit of products such as cam locks, hydraulic hoses and Cavins oil well tools. “We also carry a wide variety of anges, ďŹ ttings, pipe nipples, pipe – a wide gamut of industry speciďŹ c products for the well servicing and drilling industry,â€? said Pacula. The oil show was also a great opportunity for Strassburger to let her former clients know about her new ground oor opportunity with the Reliance service rig division. “The funny thing about the oil show is that it worked out well for me because people say ‘oh there you are, what are you doing here’ – oh, the same thing,’â€? said Strassburger with a smile.

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Job fair draws 150 job seekers Story and photos by Geo Lee Lloydminster – OilďŹ eld service companies were out in force at a Lloydminster and region fall job fair that drew more than 150 job seekers in the ďŹ rst two hours. More than 40 area companies including CWC Well Services, Precision Well Services and Matrix Well Servicing were eager to meet new employee prospects at the Lloydminster Exhibition Grounds on Oct. 11. The job fair was sponsored by AlbertaWorks in partnership with the Lloydminster Chamber of Commerce. The event was held with the purpose of helping a variety of local businesses ďŹ ll needed positions in a tight labour market. “We had employers with a large employment gaps needing to ďŹ ll positions getting desperate,â€? said Cosette Green, business and industry liaison with AlbertaWorks in Lloydminster. “Typical techniques were not working – radio ads – you name it were going out. “We were doing mini job fairs in our AlbertaWorks oďŹƒce and employers said ‘they were successful, let’s do a bigger one’ to draw people from further away. “People are willing to drive a greater distance if they know they can meet 50 employers rather than ďŹ ve.â€?

The fair was scheduled on the heels of a Statistics Canada labour report for September showing Alberta with the lowest unemployment rate in Canada at 4.4 per cent, followed by Saskatchewan at 4.7 per cent. “Our oil companies are feeling the need. Many are saying that they could use 50-plus employees,â€? said Cosette. “When we talk to them about hiring needs, their biggest challenge is to be able to get away to do the hiring. “Hopefully, today this will help suďŹƒce – they will do some hiring, attract some people and then they can get busy.â€? That was the goal of Jill Cooney, ďŹ eld employee development co-ordinator at Halliburton’s oilďŹ eld cementing operations in Lloydminster. “We are recruiting for ďŹ eld operators for cement trucks,â€? said Cooney. “We are looking for OAs which are operator assistants, heavy truck drivers and mechanics and pretty much everything to do with the ďŹ eld services.â€? ɸ Page A16 CoseĆŠe Green, business and industry liaison with AlbertaWorks, handed out a lot of these orange tote bags for job seekers at a Lloydminster and region fall job fair on Oct. 11. More than 40 employers were on hand for the event.

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PIPELINE NEWS November 2012

Lloyd job fair works as intended The AlbertaWorks employment crew of Darius Jensen, CoseƩe Green and Kelly Poitras welcomed visitors to the Lloydminster and region job fair at the Lloydminster ExhibiƟon Grounds on Oct. 11. The event was sponsored by AlbertaWorks in partnership with the Lloydminster Chamber of Commerce.

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ɺ Page A15 A Halliburton career bulletin explained cementing is the process of mixing and pumping cement with high pressure pumps to bond the casing to the formation. A field operator is responsible for mixing water and powder cement and pumping the mixing to the rig floor using a high pressure pump. “We’ve got quite a few good resumes – a lot of really good potentials, that’s for sure,” said Cooney at her booth. “It’s actually turned out better than we thought. We’ve talked to some really good folks, and we are quite impressed with the turnout that we’ve had so far.” Attending the job fair was a nobrainer for Katherine Hemsworth, human resources recruiter at Foremost Universal LP. The fast-growing company employs about 400 employees at its nine business units in Alberta including about 100 workers at its two tank manufacturing facilities in Lloydminster “Our company is looking for a wide variety of local positions – shipper/receiver welders – Level 2 and 3

journeymen and B pressure. We are also looking for a pipefitter,” she said during a break in the action. “The reaction has been pretty good. We’ve had quite a few resumes come in – lots of labourers looking to start apprenticeships. “We are still looking for more of the higher level guys – the journeymen and the B pressure.” Foremost Universal recently opened a new office at the Lloydminster shop to keep pace with increased activity in the region. “We’ve got that whole yard behind Universal that we’ve been expanding. We’ve got contracts that are extending into 2015 already,” added Hemsworth. “We are hoping to get a lot of guys coming out for this recruitment fair.” As one of the world’s largest oilfield service companies, it was no surprise Weatherford was in the market for regional employees. “We are looking for a variety of different positions. We have six facilities within the city of Lloydminster,” said Tanya Walker, human resources adviser. ɸ Page A17

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PIPELINE NEWS November 2012

Jill Cooney, Įeld employee development co-ordinator for Halliburton’s cemenƟng operaƟons in Lloydminster, answers quesƟons about local job openings.

ɺ Page A16 Walker was hoping for fill openings for wireline operators, PC pump manufacturing assemblers, pump technicians, rig assistants and shop hands at the local divisions. “We are looking for candidates with a positive work ethic and someone with a positive attitude that really wants to develop and grow with the company,” she said. “The response has been really overwhelming.

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Personnel recruiter Jennifer Miller from Precision Well Servicing in Lloydminster, provided informaƟon to job seekers about job openings.

We’ve got really good candidates. It’s only about 11:30, and I have about 20 resumes sitting with me already. It’s been really good today.” URS Flint Energy Services, National Oilwell Varco, Global Fusion Coating and Integrated Production Services, and Relay Distributing also had recruiters at the fair that was planned to allow employers to meet candidates in person. “It’s better that way because questions can be asked, and you can have a face to face with people which I think is always better,” said Pat Tenney,

executive director of the Lloydminster Chamber of Commerce. “We have employers and members of the chamber in our community who are desperately seeking employees” she said. “When AlbertaWorks said they had some funding we said ‘okay we will do the work and put the job fair on’. “We did the management and administration and AlbertaWorks promoted it to through their networks.”

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PIPELINE NEWS November 2012

Lakeland teaching boiler arrives in style

Lakeland power engineering instructor Greg Shalay is dwarfed by the new teaching boiler that was transported to the Lloydminster campus from Oklahoma and in a protecƟve plasƟc wrap. It took three carriers to deliver all of the parts from Oklahoma and Calgary.

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Lloydminster – It took three different carriers to deliver the new $750,000 teaching boiler and components for installation in the power engineering lab at Lakeland College in Lloydminster. The longest and most important drive was made by Daryl Mackai who parked his Peterbilt truck and trailer carrying the boiler in front of the campus the morning of Oct. 2 after a five day ride from Dallas, Texas. The trip was Mackai’s first visit to Canada as a driver for STS or Specialized Transport Service in San Antonio and Dallas, and he was eager to talk about his experiences and itinerary upon arrival. “I left Dallas Friday morning (Sept. 28), loaded in Oklahoma on Friday afternoon, and got up into Wichita, and pretty much ‘come up’ Friday afternoon, Saturday, Sunday and Monday, and here I am, and I believe it’s about 10 o’clock on Tuesday morning,” he said with a smile. “It’s just shy of 2,000 miles. I picked up the boiler in Collinsville, Oklahoma which is pretty much straight north of Tulsa. “I am came up to Canada through North Portal in North Dakota off Highway 52.” As for his route through Saskatchewan, Mackai said, “I came up 39 to 1 to 2, so I came up through Moose Jaw, and then I took 2 north up to 11 to 16. “I had to do a little detour here (Lloydminster) coming down 40th Street to 12 Avenue and then come back up north on 59 Ave. “It’s very easy to not get lost out here. The roads were pretty clearly marked, and it’s pretty simple.” Among the cheerleaders was Greg Shalay who teaches power engineering courses at the campus and was most thrilled to see the boiler finally arrive. “Today is a quite a milestone that it’s actually here,” he said. “We will be teaching more students to a higher standard of power engineering to fill the jobs that are all around Lloyd. The boiler will be installed and commissioned in November prior to the countdown to Lakeland’s centennial year celebrations in November 2013. “Our department centennial project is to upgrade the old lab and build a new lab so it’s important to us,” said Shalay. The official sod-turning ceremony for Lakeland’s new $17 million Petroleum Centre took place at the campus on Sept. 11. The new boiler was made by Victory Energy in Oklahoma and the controls were made by Process Combustion Systems in Calgary. “There’s going to be a couple of shipments. There’s another truck tomorrow following this truck,” said Shalay. “It’s coming from Oklahoma too. It’s got the piping and the stack and the platform. There are at least three different carriers.” Mackai said he has been long hauling for STS for nearly 12 years – since he was 21 – and never made it across the border until he got the call to drive to Lakeland College. “I am originally from Wisconsin, so I’ve been close, but never actually came across the border. “I was kind of shocked at how many hay haulers were coming south over the border. I know we’ve got enough down by us, that’s for sure. ɸ Page A19

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PIPELINE NEWS November 2012

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ɺ Page A18 He added that he might pick up a load to carry back across the border “I was shocked how much oil work is up here.” when the job was done. As for Canadian highways Mackai said, “They’re a little rough – a little “If we find one – I have no clue yet – most likely, but probably not, but we bouncy, but Texas and Oklahoma can pretty much beat you to death too.” will see what happens,” he said. Mackai did take notice of the Tim Hortons outlets along the way and The plan called for a Prairie Crane to unload the boiler and roll into the although he’s a self-confessed Coke drinker, he found the Canadians he met to power lab at the campus for assembly. be friendly and helpful without having to order a coffee. “We hope to have it running in about a month,” said Shalay. “I got messed up “It’s a D-type yesterday and I made industrial water tube a wrong turn and a boiler that can produce guy helped me out and 10,000 pounds an hour backed me right onto of steam. Mainly it’s a to the road and gave me training boiler. proper directions and “It’s brand new. everything,” he said. It’s the first one of this “It was wonderful. series and design in the You would never get province. There are oththat in the States, that’s er D-type boilers in the for sure.” province but this one is Mackai said he specifically designed for drove all the way by teaching. himself and likes it that “When we build way. the new lab then we “I always have. I’ve will expand the capacnever ran with anyity of the boiler to heat body.” the college and provide STS is a family-run electricity for the colbusiness that operates lege.” specialized transportaThe lab will be a tion of oversized and The stacks for Lakeland’s new boiler were trucked by Alberta contract driver Dean Nagy (leŌ, in ball cap) from Snowy construction zone with River TransportaƟon Inc. on behalf of Landstar Inway Inc. from Jacksonville, Florida. ForkliŌ driver Nolan Winder from restricted access during overweight equipment including oilfield equip- Strathcona Mechanical Ltd. helps crewmates Jeremy Peebles, an apprenƟce plumber, and supervisor Chris Havenor to the installation period, unload the shipment from the Ňat deck. ment in 42 states. but Shalay hopes to The company has schedule some student six trucks in Dallas and visits during breaks to three in San Antonio. monitor the progress of the hookup. “We’re a heavy-haul specialist company. We can haul regular small equip“I am sort of co-ordinating between the college and the engineers and the ment all the way up to – we have 13-axle trailers,” said Mackai. contractors that are putting it together,” he said. “We do a lot of equipment movement not specific to the oilfield, but we do “Students are quite interested in watching the process as it’s installed and a lot of construction and everything that’s affiliated with the oilfield. especially as it’s started up. “The trailer that I have has a Murray trunnion. Down in Texas, it’s good for “The students will be involved in the lab once it’s hooked up and we’re go60,000 (pounds) on the back. My truck is set up right now – I can do 20,000 ing through the commissioning process. on the steers and ‘60 on the drives’ and ‘60 on the trailer.’” “We are making arrangements for sneak peeks at the assembly process. We Mackai said he would probably sleep in the cab overnight in readiness for will arrange times when the job is a little bit quieter so we don’t have welders the unloading of the boiler and components the next morning. welding while students are in the room,” Shalay said.

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PIPELINE NEWS November 2012

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Energy powers enrolment at Lakeland Lloydminster – Enrolment gains for the current fall term at Lakeland College are being led by increases in energy and petroleum technology and trades and technology classes. Lakeland’s fall enrolment has increased for the third year in a row with 2,500 full-time and part-time credit students registered in classes at the Lloydminster and Vermilion campuses, an increase of 5.8 per cent from 2011 numbers. There are currently 834 full-time and 117 part-time students at the Vermilion campus, 705 full-time and 165 part-time students at the Lloydminster campus, and 100 full-time and 579 part-time students in online and o-campus programs. Energy and petroleum technology, trades and technology, sign language studies, and human services have gained the most new students this fall according to a 2012 enrolment report released on Oct. 5. The report was prepared by Phil Allen, vice-president of advancement and student services at Lakeland College who credited some of the growth to the introduction of a new heavy oil power engineering diploma program this fall.

He also noted there are increases in apprenticeship students, and a large jump in part-time enrolment in power engineering, educational assistant and early learning and child care courses. There are also 53 high school students taking dual credit courses at the college. This year’s class includes students from every province and territory in Canada but for Nunavut. There are also international students from United States, Finland, Barbados, Jamaica, Bahamas, Japan and Australia. These numbers are a snapshot of the college’s enrolment up to early October with additional intakes expected in apprenticeship technical training, ďŹ re and emergency services, practical nurse, university transfer, business throughout the year. Last year, Lakeland served 7,500 full-time and part-time students during the academic year.

Big wind Edmonton-based Capital Power celebrated the construcĆ&#x;on progress of its 150 megawaĆŠ Halkirk Wind project on Sept. 19 in the village of Halkirk in east Central Alberta with a public to tour of the 10,000 hectare site. Photo submiĆŠed

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PIPELINE NEWS November 2012

Dutch seek business pipeline to Alberta Henk ten Wolde, trade commissioner at the Alberta Netherlands Trade Oĸce, Consulate of the Netherlands in Edmonton, spoke to the Lloydminster Rotary Club in September on how Alberta and the Netherlands can do business in each other’s region. The Dutch have opportuniƟes in their downstream natural gas industry and their heavy oil acƟviƟes near the German border.

By Geoff Lee Lloydminster – The Lloydminster Rotary Club enjoyed a Dutch treat at their September lunch presentation by Henk ten Wolde, trade commissioner Alberta Netherlands Trade Office in the Consulate of the Netherlands. His topic covered opportunities for trade in both regions, and the success to date in areas such as bioenergy, agriculture, environment, food and infrastructure. Ten Wolde was invited to speak at the Lloydminster Exhibition Grounds by the rotary club and

the Lloydminster Economic Development Corporation. “The economic development group within the community has connections to Henk, and because of that we invited him to speak at rotary,” said Les Harper, rotary president following the talk and slide presentation at the Prairie Room. “You can tell by the things he said today, there are a lot of connections between what they do and potential opportunities in our community and vice versa.” New opportunities are opening up for Alberta and Dutch companies in energy, soil and water technology, education, construction and oilsands research. Ten Wolde said several Lloydminster oil service companies have already jumped at the chance to help the Netherlands unlock their heavy oil reserves in a shared reservoir near the border with Germany. “They are bringing in products for pumps and that kind of stuff. We hope we can pump faster with your pumps than the Germans can on their side of the border,” he said. The Dutch have a total of 34.3 billion cubic metres of oil reserves, he said the doors are open to heavy oil production expertise from Lloydminster through ANTO. “I have friends on a regular basis go to Holland to do service work in that oil patch,” said Harper who owns Elliott Petroleum that manufactures heavy duty lubricants in Maidstone. “Some of the pumping units and some of the continuous tubing trucks are out of this community and being used in the oilpatch in Holland.” Harper said his company doesn’t export to the Netherlands right now, but he noted “we do some things that other companies in the world don’t do, so I think maybe that’s a chance to reciprocate.” The Netherlands has one of the world’s largest natural gas industries and it is also generating opportunities for Albertan companies such as Vermilion Energy in Calgary. The trade office in Edmonton assists Dutch companies that desire to conduct business in Alberta by linking them to Alberta companies, government and organizations. For Alberta companies that want to conduct business in the Netherlands, ANTO will act as liaison between the Alberta companies and the Netherlands Foreign Investment Agency (NFIA). “We can help especially when you look at niche markets. In niche markets, we have raw commodities,” said ten Wolde. “For instance, it’s really strange and nobody knows, but the Netherlands is exporting kerosene out of the Port of Rotterdam to Canada for airplanes. ɸ Page A23

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Les Harper, president of the Lloydminster Rotary Club, thanks Henk ten Wolde, trade commissioner at the Consulate of the Netherlands in Edmonton, for speaking to a mixed business audience at the Prairie Room in the Lloydminster ExhibiĆ&#x;on Grounds on Sept. 24.

Éş Page A22 “That’s something we are specialize in – downstream we are strong – we are looking more to the market – where is the market – maybe we can be of good assistance there.â€? The country boasts two huge LNG facilities in Rotterdam with the capacity to store nine billion cubic metres and pipelines that connect to Europe’s hinterland. The Netherlands also has enough gas reserves for 25-50 years at current consumption levels. The Netherlands supports a substantial oil and gas infrastructure industry and there are 37 companies in the Association of Dutch Suppliers in the oil and gas industry. The Port of Rotterdam is the world’s second biggest importer and exporter of reďŹ ned oil products and is the primary gateway to the European market. “We are the biggest trading partner in Europe from Alberta and it’s very unique,â€? said ten Wolde. “Everybody thinks it’s Germany or France or the United Kingdom, but no, it’s the Netherlands because of our port in Rotterdam. “Out of Alberta through the port of Montreal go thousands and thousands of tons of goods every year to the Netherlands, and we distribute them all over Europe. We have a market for 500 million consumers.

“When you have a product here and you want to distribute to Europe, we are the country to work with.â€? Ten Wolde listed several new opportunities to stimulate more trade between the two regions in areas such as water, energy, food, environment, education, construction and oilsands technology. Dutch food companies for instance, are particularly interested in importing more Alberta beef while Alberta is keen to tap into Dutch expertise on value added products, logistics and food processing. The Netherlands is the second largest food exporter in the world. The country also has the expertise to share in related areas of bio-energy, converting manure to energy, and biomass fuel technology. Dutch oil and gas companies are also looking for help from some Alberta companies to help their own downstream facilities to lower the cost of maintenance to prevent shutdowns especially with reďŹ neries, and heat exchangers. “It’s very specialized stu they bring in, but they do a good business in Houston, Texas, so I think there will be some business opportunities here too,â€? said ten Wolde. “What I would like to see is a good partner in Alberta with a company from the Netherlands to team up, and there you go. “The company in Alberta knows the market; the technique is coming from the Netherlands, and there you have a winning couple.â€? Some of the major companies working in Alberta include Royal Dutch Shell with a $2 billion investment in the oilsands, Mammoet, Van Leeuwen Pipe and Tube Group and Damen. Dutch researchers are also working in the lab on new technology to separate bitumen from sand, applied water puriďŹ cation and treatment technology and soil remediation. Ten Wolde said his presentation in Lloydminster is in keeping with ANTO’s mission to increase awareness in both the Netherlands and Alberta on how to do business in each other’s regions. “It’s networking to see if people are interested in something,â€? he said. “When they have some interest in some issues, maybe I can help them. That’s what I am always interested in. The ďŹ rst thing I always bring is the lack of awareness. “What you saw in the video about the Netherlands, you never knew before. That’s the ďŹ rst thing I have to do because everyone thinks we live in windmills behind a dike, walk on wooden shoes and eat tulips and that’s not true anymore. “We are a very knowledgeable, research-oriented country at this moment,â€? ten Wolde said in conclusion.

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PIPELINE NEWS November 2012

PIPELINE NEWS November 2012

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FronƟer Power Products, Edmonton equipment sales manager, Rob Crosbie pictured here at the company’s exhibit at the Lloydminster Heavy Oil Show Sept. 12-13. Photo by Geoī Lee

John Deere engine to power service rigs Lloydminster – Frontier Power Products Ltd., based in Delta, British Columbia, hopes to make hay with a new service rig application for its 13.5 litre John Deere diesel engine used in farming and industrial equipment. Power Frontier is a Western Canada distributor of John Deere and Kubota engines and other makes and machinery. The company has branch locations in Calgary, Edmonton and Winnipeg. The Edmonton shop brought a 13.5 litre engine to the Lloydminster Heavy Oil Show Sept. 12-13 to generate interest among service rig manufacturers. “The reason the engine is in the show is that we want to talk about service rig applications,” said Rob Crosbie, territory manager for equipment sales. “We’ve developed a wet back end for an Allison 5000/6000 series transmission. “So we will move into the service rig business first, and after that, we want to go after other applications in the oilfield.” The engine is well suited as a service rig engine with an output from 350 to 600 h.p. and compliance with existing Tier 3 emission standards for diesel engines. “If people want to go to IT4 (interim Tier 4) we can move in that direction for them,” said Crosbie. John Deere has designed and manufactured more than 7 million off-highway diesel engines since 1949, including some 13.5 litre engines built in Nisku for farm, industrial and service rig applications. The iconic U.S. based company is continuously developing innovative technology solutions that meet the needs of off-highway applications and tough engine emission standards. “It’s just a natural progression of the product line for us, and the well servicing industry,” said Crosbie. “There is a lot of familiarity and similarity with farm engines, and it does make people sit back and take a look, especially when they see the size of this particular unit. The engine is used on some farm and industrial John Deere equipment. We are all familiar with off road hydraulic excavators. “We are all familiar with combines, so this is an engine that is used with similarities in all three product lines.” “The 13.5 has been around for a whole bunch of years and it’s moved in some very interesting directions for applications. We’re going one step further now.” ɸ Page A27

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PIPELINE NEWS November 2012

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Northern Gateway to face Ànal questions Calgary – The countdown to final hearings to review the proposed Enbridge Northern Gateway pipeline will begin following the conclusion of hearings in Prince George British Columbia from Oct. 29 to Nov. 9.

Entering service rig business ɺ Page A25 Frontier Power is also motivated to break into the service rig sector with some experience service rig employees on the payroll including Crosbie. “I’ve have been around with them quite a bit with a previous employer,” said Crosbie. “That was part of the reason we wanted to go forward with this engine is to capitalize on the experience of the individuals that are with our firm. “We have a good potential to do that with manufacturers and with customers.” The 13.5 litre service rig engine will include the Allison transmission that was not available for the Lloydminster show which affected early sales. “It’s a little bit slower than we’d like now. Unfortunately, we are still waiting for final pricing on the back end of the Allison application pieces,” said Crosbie. “We were at the Global Petroleum Show (Calgary) and again, this is another good venue for us to come to this particular show. “The only difference this time is we did have an Allison transmission on the back end in Calgary. Unfortunately, we had to give that back to another gentleman so he could put it there. “But, Lloydminster and the manufacturers of service rigs and in this community – there’s a ton of service rigs and people who are buying product that is manufactured throughout North America, specifically Nisku. “We’ve been in contact with some of the firms in the Edmonton and Nisku area and they are willing to move forward with this product line. “We just need to give them pricing so they can replace competitive engines with ours,” Crosbie said.

Enbridge is seeking approval from the National Energy Board to build a 36-inch diameter, 1,777-kilometre pipeline to transport bitumen from facilities near Edmonton, Alta. to Kitimat, B.C. The Joint Review Panel conducting the project hearings began to wind down the public review with two sets of hearings in Prince George. The first set ran from Oct. 9 to 19 with the second sessions running from Oct. 29 to Nov. 9. An additional set of final hearings for questioning will also be held in Prince Rupert, BC from Nov. 22 to 30 and from Dec. 10 to 18.

The panel previously held hearings on the pipeline project in Edmonton The issues subject to questioning include the environmental and socio-economic effects of the proposed pipelines and the potential impacts on landowners and land use of the pipelines. Discussions will also focus on routing, design and construction of the pipelines and marine terminal along with operations, safety, accident prevention and emergency preparedness and response related to the pipelines. The panel anticipates the final argument to take place from March to April 2013.

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PIPELINE NEWS November 2012

Northwind turns 25 with hip products Lloydminster – It can be a dirty, dusty and grimy world out there in the oilďŹ eld for you and your cellphone. A Defender series protective case made by OtterBox can protect you phone from hellish conditions and damage on the job, and save you hundreds of dollars in replacement costs. Northwind Radio Ltd. in Lloydminster sells a ton of them and hears a lot of feedback and stories from customers pushing the protective limits of their Defender products. “It’s really, really successful. We’ve had customers test them I guess you could say for up to three storeys of a drop,â€? said sales representative J Barr at Northwind’s exhibit at the Lloydminster Heavy Oil Show in September. “It’s pretty much made for the oilpatch. Anyone who is working with their phone and using it in a work environment where you know it’s going to be dusty or dirty or grimy – this case is going to protect your phone. “It’s a very popular product with a lot of guys. I’ve have gentlemen who come in from the oilpatch all the time and swear by it. “I’ve had guys that have run their phones over. Their phone survived – the cases not so much, but they went and bought another case, because a $50 investment over a $650 phone investment – it was well worth it.â€? The Defender cases come in large variety of styles and are designed to ďŹ t just about any make of phone on the market. OtterBox cases are “dedicated to all the klutzy, spontaneous, chaotic, graceless individuals who have broken a deviceâ€? according to the manufacturer’s web site. The Defender is billed as providing robust three layer protection that withstands drops, bumps and shocks. “It’s a hard plastic inner shell with a rubber outer shell so the rubber absorbs a lot of the impact and the plastic absorbs anything harder,â€? explained Barr. ɸ Page A29

Don’t try this at home. Brianna Kuntz generated a lot of ‘gee whiz’ reacĆ&#x;ons from her demonstraĆ&#x;on of the waterproof abiliĆ&#x;es of LifeProof cases to protect iPhones and iPads from water damage even aĹŒer being submerged for hours in this tank of water.

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“LifeProof also has accessories you can add to it that allow it to oat. If you happen to be out boating and you drop your phone in you don’t have to swim all the way to the bottom to ďŹ nd it again.â€? Northwind is celebrating their 25th anniversary in 2012 dating back to its launch in1987 as Lloydminster’s original Telus Mobility authorized dealer. Today, the company specializes in sales and service of personal communication services or PCS and mike phones, as well as two-way radios and asset tracking systems. “We install all of those. We do a large variety of installations,â€? said Barr. Northwind also sell boosters by Wilson Electronics that enhance PCS voice and data coverage in areas with spotty or weak signals in rural markets and remote areas through wireless Telus Mobility. Northwind provides a wide choice of communications products and services listed in detail on the web site. “Absolutely, 100 per cent anything in communications we’ve got going on for you need we can supply it for you,â€? said Barr.

J Barr from Northwind Radio Ltd. in Lloydminster holds a couple of cellphones clad in protecĆ&#x;ve Defender cases by OtterBox at the company’s booth at the Lloydminster Heavy Oil Show in September. Northwind is celebrating its 25th anniversary in 2012.

Éş Page A28 “It’s got raised edges so it protects your screen. It’s got covers for all the ports, so you don’t you don’t get dust or anything like that in the mike ports or the charge ports. “If you are out talking in the rain, you are not going to have to worry about the rain getting in and ‘bothering’ your phone.â€? The Northwind booth also drew a lot of traďŹƒc to a demonstration of the waterproof characteristics LifeProof cases for iPhone and iPads that were dropped into a tank of water. The demonstration helped to prove LifeProof ’s claim that their cases for iOS (Apple operating system) devices are waterproof, dirt proof, snow proof and shockproof. “Those ones are designed more for the casual people – out at the hot tub and playing around with their phone and ‘plunk – there it goes’ – but the LifeProof case will deďŹ nitely defend against that,â€? said Barr.

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PIPELINE NEWS November 2012

Northern Mat lays a path to Lloyd Lloydminster – Northern Mat & Bridge LP could be one of the few companies in Western Canada to consider the need for a sunny day fund when business is slower than expected. Rain or soggy ground is better for sales and rentals of their temporary access mats and bridges that have a variety of resource and construction applications including oil and gas and pipeline operations. The company has a manufacturing facility in Rycroft, just north of their head office in Grande Prairie, where they sell up to 20,000 access mats a year and up to 60,000 rental units to access wet, muddy terrain, muskeg or environmentally sensitive areas. “The last few years with all the rain have been very good for our side of the business,” said company sales representative Chad Holonics at the 2012 Lloydminster Heavy Oil Show in September. ɸ Page A31

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This was the Įrst foray at the Lloydminster Heavy Oil Show for Northern Mat & Bridge LP from Grande Prairie, Alberta. Sales rep Chad Holonics was keen on expanding their oak and Įr mats and bridges into the regional heavy oil market in Alberta and Saskatchewan. Photo by Geoī Lee

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PIPELINE NEWS November 2012 ɺ Page A30 “Too wet – that obviously hampers us because nobody can move, nor can we with road bans and stuff like that – the weather certainly helps us in that regard.” Northern Mat manufactures sells and rents a variety of access mats including traditional 8x14’ premium oak swamp mats. The company’s feature product is an 8x14’ oak and fir hybrid access mat called Fir-LITE. They also have an assortment of rig mats, camp mats, crane mats, pipeline mats and ATV mats in all sizes. “We also manufacture standard 8x40’ and 8x20’ steel frame rig mats,” said Holonics. “Mats are mainly used for lease sites, access roads and multiple operations in environmentally sensitive areas or any place that you need temporary access to.” Holonics said their niche is being the largest in terms of “geographic dispersion” which makes the company a supplier of choice for many of the large oil and gas operator based on volumes. The company offers 24/7 service supported by a staff of 20 to 30 employees in Grande Prairie and another 50 factory or field workers serving a huge geographic area. “We’ve sold mats as far north as Alaska and as far south as Colorado,” said Holonics. “We’ve got full install services, so we’ve got operations from Fort Nelson to Virden, Manitoba and basically every place in between. “We have full service with trucking and matting equipment – a one stop shop for all.” Northern Mat provides complete mat delivery, installation and removal service utilizing a fleet of mat installation equipment, including wheel loaders, excavators and trucks. The 2012 heavy oil show was new for Northern Mats which decided to skip the Fort McMurray show in September for an opportunity to make inroads in the Lloydminster area. “We’ve done the Fort McMurray show for years, and we just decided to come to Lloyd and show a presence here,” said Holonics. “We do some work north of here in Conklin and Fort McMurray and east of here to Saskatoon and ‘Kindersley type of thing’ and then south. “Around Lloyd is kind of a little empty area for us for the most part. We want to expand our market to this area.”

A31

The show was the perfect opportunity to sow the seeds for winter manufacturing orders and to promote their line of bridges for small and large creeks or river crossings and other applications for temporary access in the heavy oilfields. Northern Mat has a large inventory of L-100 engineered and certified portable bridges, low profile bridges, ATV bridges, pedestrian bridges and low profile Allsteel brand portables with a suite of sales, rental and leasing options for all of their products. The company sources most of its oak as precut lumber from the southern United States which is shipped to Rycroft by rail. “The fir all comes from the B.C. interior, but we do get some from Idaho and Washington because it’s something they can’t harvest in the wintertime up here,” said Holonics. “When we go a little further south, it expands our timeframe in which we can purchase the lumber. The oak is a hardwood and it’s a much stronger wood, but much more expensive. “The longevity of the mat life is the difference with oak.”

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PIPELINE NEWS November 2012

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Lloydminster – Techmation Electric & Controls Ltd. based in Airdrie, Alberta came to the Lloydminster Heavy Oil Show to y the ag and shake a few hands in a public relations blitz Sept. 12-13. The mission was accomplished early on with the company’s draw prize bin ďŹ lling up quickly with client business cards in the running to win a Taylor Hall Edmonton Oilers’ hockey sweater. “We are just basically in town to support the community. We’ve got a local branch in Lloydminster,â€? said Victor Witzke, vice-president of business development who is based in Airdrie. “We just wanted to get some brand recognition in town. We just wanted to basically thank the community for having us here, and to make people aware that we are in town providing electrical instrumentation services.â€? Techmation is a privately-owned Canadian company providing a complete range of electrical and instrumentation services to all facets of the commercial Email garrisonoilwellservicing@hotmail.com and heavy industrial sectors. Fax 306-825-5928 “We provide construction and maintenance services to the oil and gas industry,â€? said Witzke, who came to Lloydminster with a business development team. “Our company has over 1,000 employees and we have 23 locations, and in Lloydminster, we have 50 people working locally. “We build gas plants, oil batteries and then we like to support the facilities we build.â€? Their construction services range from initial plant construction to commissioning and start-up. On the maintenance side, Techmation provides everything from 24 hour on-call servicing, plant turnarounds and troubleshooting facilities, well sites and pumpjacks to servicing pneumatic and electronic controls. Witzke said the Lloydminster market is a very healthy one, adding that with the whole company is currently in a growth mode due to the strength of the energy sector in Western Canada. “The oil industry is focusing on oil and liquids rich products and there is a lot of oil in Lloydminster. A lot of our clients are actively drilling and building facilities,â€? he said. “Currently, heavy oil it’s very important. With the state of natural gas, it’s very important for us to focus on the producers that are actively constructing facilities. “We honestly believe that the future is very bright in Western Canada and we are not foreseeing any downturns in the economy at all,â€? Witzke said. Techmation is well known for developing and/ • Boom & Knuckle Pickers or adapting to existing preventative maintenance •15-50 Ton/165’ Reach programs that help reduce costs and improve oper• Winch Tractor c/w Lo-Boys ating eďŹƒciencies for clients. • Tandem & Tri-axle Trailers “The advantage of our company is that we have • Tank Cradles c/w Hydraulic Arm size and strength to support most of our clients, • Pilot Trucks and we have the manpower in place to execute the • Double Man Basket projects,â€? said Witzke. PICKER & OILFIELD HAULING SERVICE • ISN & Comply Works Member “We are one of the safest contractors in the Proudly serving Lloydminster Area for over 20 Years industry, and we provide a very top level of service • COR/IRP Certified to our clients. “We get a lot of repeat business because of the Lloydminster, SK/AB • Ph: 780-875-9250 • Fax: 780-875-4148 quality of service we provide.â€?

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PIPELINE NEWS November 2012

Dennis Thompson, a horizontal pumping system sales rep from Borets-Weatherford in Nisku, stands by a 100 h.p. electric driven HPS unit used for water injecĆ&#x;on, water transfer or waterŇoods by heavy oil companies in the Lloydminster area. The unit was part of the company’s display at the Lloydminster Heavy Oil Show in September

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Borets pumped for heavy oil apps Lloydminster – Borets-Weatherford generated its fair share of attention at the Lloydminster Heavy Oil Show with an exhibit of a multi-stage horizontal pumping system (HPS) for heavy oil applications. The HPS unit was trucked to the show held Sept. 12-13 from the company’s sales and service centre in Nisku. The unit was presented as a solution to positive displacement pumps for a wide range of high pressure applications. “We brought the multi-stage surface pumps for water injection, water disposal, pipeline boosters, wateroods and all those surface applications,â€? said Jerry Evans, HPS sales and service manager. The HPS units made in Nisku can also be used for boiler feed water, mine dewatering and for salt dome leaching. “There’s lot of dierent applications for them,â€? said Evans, who added they can also be used for condensate pumping. “They actually have condensate pumps where you run the condensate down to the main header for the heavy oil. With the condensate mixed, our pumps will move it up the pipeline, back to the facility.â€? One of the advantages of a horizontal pumping system, said Evans, is that it limits the pulsation concerns of a positive displacement pump. “They have constant ow, constant pressure; they are operator friendly and the maintenance level is zero,â€? he added. HPS units by Borets-Weatherford feature rigid skid construction, closer pump clamps and the industry’s largest thrust bearings that increase system run time and seal support. “The beauty of the system is the maintenance. The installation is easy and the maintenance is minimal,â€? said Evans on the ďŹ rst day of the show. “We have a huge presence here. We have a lot of units sold out here. We work on these every day. We have our service and maintenance agreements with most companies where we come out and actually do all the maintenance there is. “We do laser alignments for all these units and we do vibration analysis or trending.â€? ɸ Page A35

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PIPELINE NEWS November 2012 Mindy Harrison, an HPS supervisor, and Jerry Evans, an HPS sales and service manager for Borets-Weatherford, brought this low pro mine HPS (horizontal pumping system) to the Lloydminster Heavy Oil Show.

Borets-Weatherford is also making gains in the heavy oil market in Cold Lake and Bonnyville where horizontal pumping systems are mainly used for water injection. “We are starting to get into a few condensate jobs, and we are starting to get into a little bit of the SAGD world for the boiler feed water pumps,â€? said Evans. “We have a few applications at Devon’s SAGD project at JackďŹ sh and Suncor’s in-situ operations at Firebag.â€? The Borets-Weatherford HPS units in the Lloydminster area are mainly used for water injection, water transfer and wateroods, and they come in various drive options including electric motor, gas or diesel engine or steam turbine. The main HPS unit on display was powered by a 100 h.p. 460-volt electric motor. The units come with a standard front pullout or an optional back pullout thrust chamber to suit speciďŹ c client needs. “It depends on how much pressure you have to cut out to determine how many stages the pump will have,â€? said Evans. “Each stage is designed for a certain volume and it will give you so much pressure. It depends on the pressure of the reservoir or the well for how far you are pushing the uid to determine how many stages it will require. “We manufacture these from 15 to 1,500 h.p. We have done 120 cubes a day all the way up to 6,000 cubes a day on single units.â€? Borets-Weatherford is a subsidiary of Borets, a Russian company based in Moscow and a global provider of downhole electric submersible pumps (ESPs) and horizontal multi-stage centrifugal surface pumps. The same multi-stage stage pump is used in ESP and HPS applications. Borets-Weatherford also operates service centres in Medicine Hat and Estevan with a regional oďŹƒce in Calgary. Each centre is fully equipped with a complete stock of motors, pumps, motor seals, cable and surface equipment, as well as component parts for specialized manufacturing, repair and equipment maintenance. Evans said the Lloydminster oil show was the perfect opportunity for sales and service sta to meet new contacts and existing clients. “Some of the engineering companies are coming here to meet us to get a better understanding and get a hands-on experience,â€? said Evans. “We deal with a lot of engineering groups out of Lloydminster. There are going to bring their young guys down here and we are going to do a little training session with them.â€?

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A37

Mike’s OilÀeld on a 34-year roll Lloydminster – Like father, like sons. That’s the way it is for Shane and Lonny Baehl who have essentially taken over the role of managing Mike’s Oilfield Services Ltd. under the mentorship of their dad, Mike, who founded the company in Lloydminster in 1979 with one pressure truck. “We started to take over a couple of years ago on a five to seven year plan and continue the family business that’s been going for 34 years,” said Shane during a truck-side chat at the Lloydminster Heavy Oil Show in September. “Mike is a slowly retiring a little bit more each year. We don’t think he’ll ever be 100 per cent out of it, but he’s slowly winding down and letting the boys take over. “I am in charge of a little bit of management and sales and a little bit of dispatch roles and duties. It changes every day. “Whatever arises, that’s what we do right

Brothers (l-r) Lonny and Shane Baehl have essenƟally taken over the role of running Mike’s OilĮeld Services from their dad, Mike who founded the business in 1979. The company is a major supporter of hockey and recreaƟon at all levels in Lloydminster. Photo by Geoī Lee

from being in the units myself to being in meetings in the office. Whatever the day consists of and however how busy it is, we do whatever it takes. “Lonny’s been dispatching for eight years – between dispatch and managing over the last 10 years with manag-

ing the last two years. As Dad has been slowly wiggling out, he’s been experiencing more in that role.” The succession plan has the company planning to build a bigger shop next to its location in the Glenn E. Nielson Industrial in order to house its growing fleet

of pressure trucks, water trucks, tank trucks and air and foam equipment. “We are probably growing at a rate of two trucks a year right now. That’s just supply and demand,” said Shane. Mike’s Oilfield needs more room too, for its busy chemical division and delivery fleet

for de-icing fluid to the oil and gas industry. “We are building a bigger shop to put newer trucks in. That’s what we’re working on right now. We are buying more land right beside our shop and expanding that,” said Lonny. “Every year, we say we are not going to

expand because of manpower, but we always seem to find a way. “We’ve been fortunate enough to have long-term employees where we don’t have a big turnaround at our place. “It seems like once we get them, they usually stay, so that helps us out quite a bit.” Mike’s Oilfield usually has a staff of about 35 to 40 employees at any given time with all hands on deck since July when the demand for their services spiked after a wet spring. “It’s flat out. It was a slow start this spring due to the weather conditions, but we’ve been trying to keep up since the second week in July, and it’s been flat out,” said Shane. Mike’s Oilfield covers an area on both sides of the Alberta and Saskatchewan border as far north as Bonnyville and Elk Point, west to Vermilion, south to the Wainwright, Provost, Macklin and Unity areas and east to the Battlefords. ɸ Page A38

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PIPELINE NEWS November 2012

Mike’s OilĮeld Services Ltd. brought this new 2012 tridrive pressure truck to the Lloydminster Heavy Oil Show in September. The local family-owned business plans to expand its exisƟng shop in the Glenn E. Neilson Industrial Park. Photo by Geoī Lee

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Have trucks, will travel ɺ Page A37 “We’ve done business as far south as Estevan and as far east to Winnipeg and up in the northern B.C. region and Fort McMurray – have trucks, will travel,” said Shane. Coming to the oil show during a busy field season was especially important for Lonny who continues to quarterback the all important dispatch role at the shop. “I am in the office every day answering the phones with customers. It’s just great to actually meet the people face to face,” he said. “Some people I have known for five to 10 years, and I talk to them maybe once a week and to finally to actually get to shake a hand and give them some Mike’s Oilfield shirts and stuff like that

is good.” The new 2012 pressure truck on display was also a good opportunity for Lonny to give visitors a quick profile of their oilfield services that include air pressure and hydro testing. “We don’t have vacuum trucks. We’re mostly fresh water,” said Lonny. “We do a lot of pipeline testing when new pipelines go in the ground – air compressors to test pipelines and also fresh water and, of course, our stable foam which brings sand out of the wells for better inflow for oil companies.” With the company’s succession in full swing and the heavy oil industry demanding more of their services, Lonny said it’s an exciting business to be in. “Absolutely. It got

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more exciting once I finally got to hire my brother on and work side by side. It made everything feel kind of more complete. “It’s full circle and now we’re very busy.” Shane added that it’s not very common nowadays to have a family business that is growing after 34 years and he offered to share their formula for success with our readers. “Do whatever it takes, work hard and have good equipment and have good people – the people make the difference that are out in the field for you every day,” he said. Mike’s Oilfield is also a major hockey sponsor of the Lloydminster Bobcats, Border Kings and Mike’s Oilfield Oilers and a supporter of numerous recreation events. As a financial sponser, the company earned the right to put their name on one of the field houses at the Servus Sports Centre. “We do everything we can for the size of us. We do absolutely what we can, especially hockey and stuff like that that our family is interested in,” said Lonny. “We try to do a little bit for every team and whenever the community needs us to step up, we are definitely right up there doing that.”

PIPELINE NEWS November 2012

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PIPELINE NEWS November 2012

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PIPELINE SECTION B NEWS Matrix off to a phenomenal start November 2012

Story and photos by Geoff Lee Lloydminster – Matrix Well Servicing is turning heads in the Lloydminster heavy oil market for a number of good reasons as its marks its first year of operations based in the Glenn E. Nielson Industrial Park. The new local company is a wholly-owned subsidiary of Western Energy Services Corp. It began operating last November with just one internally guyed mobile single service rig and expects to have 10 of them by the end of 2012. In fact, crews were in Edmonton commissioning Rig 6 on Oct. 15 when operations manager Kevin Winters was asked to explain the company’s phenomenal growth. “We’ve got Western behind us – we’ve got a lot of backing. That’s the only reason we can do it and why we’ve got 10 rigs,” he said. “This is a new company. They want to be aggressive.” Calgary-based Western Energy also owns and operates Horizon Drilling Inc. in Western Canada and Stoneham Drilling Corporation in the United States. “They want to grow, but we need to get a good foothold in Lloyd, and then we can branch off and expand and see what we can build from there,” said Winters. “We do everything from completions and workovers to production work. We are busiest right now with production work – maintenance is what it basically comes down to – pump changes. “Getting 10 rigs for Lloyd has taken a little longer than we thought. It’s hard to find people. That’s the biggest challenge – getting experienced people to come over and work. “We started last November, and I came on in March. It’s a tight market here. It’s local and that’s the biggest challenge is getting local people. “You can bring outside people in, but you have to pay the subsistence and put them up. The rig rates don’t allow it up here. It’s very competitive.” The Matrix advantage lies in the

technological advancements on their light weight service rigs that are designed and manufactured by Courtney Berg Industries in Linden, Alta. to work in all four transport periods. “We’ve come out with all this new equipment,” said Winters. “With the lightweight design of the rigs, we carry more of our equipment on the rig. It makes it easier and quicker for rig up and more organized. We have less equipment moving around on location. “Our rigs are truck-mounted service rigs, which is new. People see one, and they figure it’s a flushby unit. That’s been our biggest battle. “We’ve got the new technology – the X-celerator mounted right on the derrick. “That’s one of the big selling features. We can pull continuous or conventional rod,” said Winters. “These are rigging up much quicker with the X-celerator in the derrick versus the truck mounted units. It makes us more efficient and safer.” The rig engine has an automatic transmission and is also quieter compared to a conventional rig engine and it meets new Tier 4 emission standards. The two man rig or truck cab also allows Matrix to provide new drivers with safer work conditions. “Having that rig cab or that truck cab there makes it better for driver training with the new hours of service laws that we have to abide by,” said Winters. Matrix also has plans to build a new slant rig in 2013 in response to customer demand. “We are putting it in the budget,” said Winters. “All the customers are asking when are we building a slant rig? “CNRL is one of our main clients – the big one with the slants. They’ve allotted about 9,000 wells in the next 10 years – that’s 900 wells per year. “We’ve talked with them. They figure they will add three to four slant rigs to their fleet per year to keep up with their completions, their workovers and their abandonments. ɸ Page B2

Matrix Well Servicing operaƟons manager Kevin Winters expects his company will have 10 of these new mobile single service rigs by the end of the year. The lightweight rigs can work in all four transport periods and are built on a truck chassis with a two person cab. Each rig is equipped with a truck mounted C-Tech X-celerator on the derrick which eliminates wait Ɵmes and third party costs. The unit can pull or run convenƟonal rod or conƟnuous rod with no outside source needed.

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PIPELINE NEWS November 2012

Three units instead of Ă€ve Éş Page B1 “A lot of that work is in Bonnyville for the slant work – between here and Bonnyville. Right now, we are focusing on Lloyd. We’re going to branch out – Bonnyville for sure. “Right now, I’ve got one rig at Mannville working for Perpetual Energy and those are all horizontal wells. “We’ve gone as far as Provost and as far as Mannville. It’s a pretty big area we’ve got here. “We are trying to get into Husky. We got under their procurement group, so hopefully, with equipment, we can get in the door there. That would really help us.â€? Winters said Western Energy chose Lloydminster to launch Matrix Well Servicing knowing heavy oil is the future for the service rig industry, especially in Alberta. “The gas market there really isn’t much of a market for service rigs anymore,â€? said Winters. “It’s all gone to specialized services, either standalone snubbing or coil tubing or wireline. They can do it without a service rig. “Heavy oil always needs maintenance with the

sand and the oil. There is always pump changes. The tubing wears out, the pumps wear out. “It’s where the future is for service rigs. We’ve got so many reserves for heavy oil. That’s what is pushing that SAGD stu with the low gas prices. “The lift costs are so much higher in heavy oil – maintenance is so much higher. That’s why it’s so competitive with rig rates in town. Everyone wants the best deal they can get.â€? Having truck-mounted X-celerators on all of their service rigs jumps Matrix near the head of the pack for cost-conscious oil companies looking to get the best return from their oil. “It cuts down a producer’s cost having to wait, because it’s hard to get a truck mounted unit,â€? said Winters. “Most of the companies do have them, but they are on separate units. It’s another unit that they have to have a driver bring out. It’s just much harder to move. “With ours, we are set up good with our rigs and our support truck. We don’t have to tow a trailer. With our crew truck – we have three units that we drive instead of having four or ďŹ ve units. It

OperaĆ&#x;ons manager Kevin Winters removes the cover from the hydraulic controls on this new service rig. Hydraulic controls also work the C-Tech X-celerator mounted on the mast. The Matrix rigs feature the latest technological advancements designed and manufactured by Courtney Berg Industries in Linden, Alberta.

helps. “It makes a big dierence. It’s cost savings.â€? Winters spends a lot of his time on the phone answering customer questions, recruiting new employees and working in the ďŹ eld himself when needed. “I’ve been out pushing the rigs and drilling and doing it all – roughnecking. We’ve got to do what we’ve got to do to get her going. “The biggest thing I ďŹ nd in Lloydminster is that it is such a busy area. The competition – I think there are 17 or 18 dierent rig companies here – 200 plus rigs. “There is such a turnaround in hands.â€? Winters said Matrix has a health, safety and environment (HSE) program that emphasizes communication, training and competency. “With our HSE, we do our own in-house conďŹ ned space training, and we send them out for anything they require. We do the best to educate them the best we can,â€? he said. Matrix had four full rig crews on the payroll in mid-October with new hires in the works to the crew the new rigs. “The busier it gets, it’s going to attract more people,â€? said Winters. “We are paying top wages and beneďŹ ts are second to none. We’re growing. There’s a great future here with Matrix. We are career based. “We want people to know that are here to stay. There’s lot of room for movement to grow with the company and move up.â€?

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PIPELINE NEWS November 2012

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Wrens, American coots and barn swallows challenge pipeliners

Sean Surerus is vice-president of Surerus Pipeline Inc., a 42-yearold ÄŽrm that was started by his father, Brian Surerus, with just one dump truck. Now it can tackle up to four spreads at a Ć&#x;me, and is currently working on 42-inch pipeline projects. Surerus Pipeline Inc. is the general contractor on the Bakken expansion project for Enbridge.

„ Story and photos by Brian Zinchuk Redvers – You would think that building pipelines on the Saskatchewan prairie would be easy. There’s no Canadian Shield that requires blasting. Excavators don’t have to be tied onto dozers to dig on mountains one can barely walk up. The terrain is at and generally soft enough to dig on, but not liquid enough to swallow men and equipment whole like muskeg. Despite all that, the senior management of Surerus Pipeline Inc. feel the Enbridge Bakken expansion project for which they are the general contractor is the most challenging job in Canada right now, particularly when it comes to environmental concerns. In early October, the 124-kilometre project was about two-thirds complete. The job is expected to be done in mid-November. Work started Aug. 1, with the project being run out of Redvers. This is the ďŹ rst foray on a major project this far east for the Fort St. John, B.C.-based business. “My father owns it so I was born into it,â€? said Sean Surerus, vice-president. He was in Redvers visiting the project when Pipeline News returned for a second visit on Oct. 4. “I started working in it since I was 20. I’ve been full-time since 2001,â€? Surerus said. Prior to that he obtained a commerce degree from Simon Fraser University and an economics degree from Carleton University. In his downtime from school, he worked with the family business. “I was in the ďŹ eld on the bending/ engineering crew, then I moved into more oďŹƒce positions on the project management side,â€? he said. Asked if it was a training regimen, he said, “It turned into that. It was the very best opportunity for me.â€? “I ran a hoe for a summer, poorly, in our yard in Fort St. John. I moved into project management right away. I was in camp for a few years.â€? Sean Surerus worked in northwest Alberta and northeast British Columbia, north of High Level at a place called Indian Cabins, and in the Tumbler Ridge area. ɸ Page B5

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PIPELINE NEWS November 2012

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Surerus Pipeline Inc. Ă€lls a rink for a safety meeting Éş Page B3 “We’ve done gas, oil and hydrogen,â€? he said. “We’ve installed HDPE. We’ve installed some Fiberspar, but it’s 99 per cent steel, up to 42 inch. The company currently has a spread working on a 25-kilometre project of 42-inch pipe at Hudson’s Hope, B.C. for Spectra Energy, and another 30 kilometres planned this winter for TransCanada north of Fort Nelson, B.C. “Currently we have three spreads going right now. We can handle two large and two small spreads at one time. This year we’re towards 700 people,â€? Surerus said. Heading up the Redvers spread is Telford Advent, superintendent for the project. On Oct. 4, they had 338 people working, plus about 40 subcontractors. Another 80 or so people were working directly for Enbridge. “We’re at peak. We had a general safety meeting in the rink yesterday. It looked like 500 people,â€? Surerus said. The company has monthly safety meetings where everyone is called in to attend. In this case, their numbers were equivalent of roughly half the census population of the town of Redvers. “We’re at over three million man-hours without a lost-time accident,â€? Surerus said, something he attributes in part to their “I Walk The Lineâ€? leadership challenge. Asked how a company two provinces over was able to secure the job, beating out much closer competition, Surerus said, “It’s not just on price. It’s a number of factors. We would consider ourselves the best for capacity, price, safety and personnel." This is the ďŹ rst venture for the company outside of British Columbia and Alberta, despite being in business for 42 years. The company was started by Brian Surerus. “He’s built it from a single dump truck to a contractor that can do signiďŹ cant projects for Canada’s largest energy producers,â€? Sean Surerus said. In the case of the Saskatchewan job, he noted, “It had to be the right ďŹ t. The economic expansion supported more out-of-province competition.â€? With a larger job, the move-in costs are more spread out, meaning contractors from further afar are more competitive. “The size of the project becomes more appealing,â€? Surerus said. Most challenging Advent said, “I think it’s a challenge with the terrain. This is the most challenging job in Canada right now.â€?

This is the most stringent environmental consideration we’ve been a part of.

�

-Sean Surerus, vice-president, Surerus Pipeline Inc.

He noted there were 195 wetlands to cross, with 186 to 190 bores, another 150 foreign crossings. “This is stop and go,â€? he said. Surerus added, “It’s the environmental consideration and the commitments.â€? “There was much more water when we got here,â€? Advent said. “You don’t even make a mark in a wetland. A track can’t touch water here.â€? Indeed, when travelling along the right-of-way, wetlands you can walk across without getting your boots wet are being bored. “It’s very stringent, Enbridge’s commitment,â€? Surerus said in reference to Enbridge’s commitments to the National Energy Board when the pipeline secured its permits for the project. For instance, before work can progress in an area, it has to be swept for migratory birds. A sweep opened a seven day window. If there’s a bird on the nest on the right-of-way, they have to move around it. “We had 27 on this job,â€? Advent said. “We had buer zones on a wren, American Coots, a barnswallow, American golden ďŹ nch, a dove, a grebe...â€? The Amercian coots required a 55 day window, as an example. “One (bird) just refused to leave,â€? Advent said. A barn swallow was o the right-of-way, but within 100 metres of it. ɸ Page B6

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PIPELINE NEWS November 2012

Three million man-hours without a LTA ɺ Page B5 Asked how much going around all these birds cost, Surerus smiled. “Priceless,” he said. In some cases they had to build shoeflies (temporary access roads) around. In other cases, mats would do. “This affected us mostly on the right-of-way (crew),” Advent said. If birds weren’t enough, there were also concerns around northern leopard frogs. Will this be the norm? Surerus said for wetlands, this sort of thing is now par for the course. “This is the most stringent environmental consideration we’ve been a part of,” Surerus said. Accommodations An accommodations strategy was important for Surerus Pipeline. Between their RV park, local rentals, rooms and hotels, the town of just under 1,000 was able to handle the massive influx. “We built a 98-unit RV park,” said Sean Surerus. “It’s temporary. We’re able to pull it out and move all the utilities.” “It’s really worked out well,” said Advent. “It’s so quiet at night, it’s amazing. “We put in a laundry. This piece of property had the right slope. We didn’t have to do much digging.” The temporary RV park had 30 and 50 amp electrical service and full hookups. A large water tank could be seen in the centre of it. “The RM of Antler was really helpful. You can’t say enough about this community. It’s been an amazing welcome,” Surerus said. There were approximately 40 local First Nations people from Saskatchewan and Manitoba working on the project. However, they noted there was not a lot of success in recruiting local people to work with them. The reason? They’re already working. “We weren’t anticipating the economy being so hot here,” said Surerus. “Locals who passed requirements were generally hired.” There simply weren’t that many available.

Telford Advent has been pipelining since 1966, and has been a superintendent since 1986. Here he makes a brief stop in the warehouse, where semi-trailers full of supplies keep the operaƟon in moƟon.

Working in Libya makes you happy to be Canadian Telford Advent may be the superintendent for a crew large enough to fill a hockey rink, but he got his start in pipelining as a labourer back in 1966. He was soon an operator. “I ran dozer, hoe, boom, just about anything that has tracks or wheels on it,” he said in the Surerus Pipeline Inc. main office shack in Redvers. “ “I’ve done some huge projects. The majority of the work I did was for TransCanada, Union Gas and Nova." He first became a foreman in 1981, looking after ditch crew. “I’ve done lots of cleanup and river crossings,” Advent added. By 1984 he was an assistant superintendent. Two years later he became a superintendent. Pipelining is often a family business, and Advent’s wife Peggy is office manager for the project. “A lot of people have family members on the same project,” he noted. “The interesting part of this business is the coating crew always comes from the East Coast,” he said. There are small centres of excellence all over. Drillers often come from Roblin, Manitoba. Ditcher operators frequently orginate from Wapella, Saskatchewan, he said. Advent personally hails from Stratton, Ontario. Advent worked as an inspector in Libya for a short time. “It really makes you happy to be a Canadian,” he said.

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Jennifer Bailas of Calder, Sk has been running her own welding truck for ÄŽve years now. She was seen here working with Surerus Pipeline Inc. on the Enbridge Bakken expansion project.

Stick ’em up! Redvers – Few women are found working in the ďŹ eld in the oilpatch, fewer still as qualiďŹ ed tradespeople. Pipelining, however, has more women working in the ďŹ eld than drilling rigs. Out on a wind-swept prairie east of Redvers, one could ďŹ nd Jennifer Bailas working for Surerus Pipeline. Bailas is a journeyman B-pressure welder who lives on an acreage near Calder, east of Yorkton near the Manitoba border. She went to SIAST in 2001, and worked in shops at ďŹ rst. Her past experience includes working on rail cars at Moose Jaw and with agricultural equipment manufacturer Dutch Industries in Regina. She rigged up in 2007, and has been a pipeline welder ever since. “I’ve had my truck for ďŹ ve years,â€? she said during a coee break. Bailas is a rare breed indeed. “I have yet to meet a woman welder with a truck,â€? she said. Her company is known as Bullzeye Welding. Her e-mail handle is ďŹ tting: welderchick83. Her ďŹ ancĂŠ, Riley Stacey, is an excavator operator who was working on one of the boring crews. With a six-days-on, one-day-o work week, they’re close enough to home to make it there each Sunday. Bailas has had a few challenges. For instance, she’s a lot smaller than your typical welder, making it tough to ďŹ nd work clothes. “Usually I have to order stu in,â€? she said. “I like being out here. I wouldn’t want to do anything else,â€? she said as the coee break ended and she got back to welding. Glancing at her business card, one ďŹ nds an appropriate tagline for a welder. At the bottom of the card she has printed, “Stick ’em up.â€?

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PIPELINE NEWS November 2012

Arnett & Burgess Pipeliners tackles Vantage Pipeline project By Brian Zinchuk Bengough – Working out of Bengough, Arnett & Burgess Pipeliners is working on the most eastern spread of the Vantage Pipeline project. The company, in business for 55 years, has been expanding its operations in Saskatchewan. This is a major project for them in this province, with 99 kilometres and approximately 149 employees on site, not counting subcontractors. The Vantage Pipeline is a greenfield project. The 10-inch line is meant to carry liquid ethane from Hess Corporation’s natural gas processing plant near Tioga, North Dakota through Saskatchewan to interconnect with the Alberta Ethane Gathering System (AEGS) near Empress, Alberta. Empress is right on the Saskatchewan/ Alberta border, where the South Saskatchewan River crosses into Saskatchewan. The pipeline is 700 kilometres in length, with a total distance in Canada of 578 kilometres. Arnett & Burgess Pipeliners (A&B Pipeliners) has the easternmost spread, with M&N Construction doing the middle spread and Kidd Construction handling the westernmost spread. Work started in mid-August for A&B with the setting up of their yard on the south side of Bengough. Dirt started turning on Sept. 10. Pipeline News visited the spread on Oct. 11, just as the ditch and lowering in crews were kicking off. They will have up to 200 people, depending on the day. David Schwab is a senior construction manager for A&B, but he won’t be the only Schwab you’ll see on the job. His brother Ken Schwab is the project superintendent. He mostly handles office work, while Ray Fontaine is the field superintendent. They split the role of superintendent, which is more commonly a one-person job. “I look after most of the major projects,” David said while inspecting the line in his truck. He was down for a visit from their Bashaw, Alta., field office.

Wetlands like this are typically bored now, whereas 10 years ago, they would have almost certainly been open cut.

“By mid-November, we should be wrapped up,” he said. The project very closely follows existing construction – roads and pipelines. Whereas some pipelines will cut across fields at an angle, this right-of-way has many 90 degree turns as it hugs the roadways. The ditch centreline is often within throwing distance of the roads. “Pretty much all the wetlands are bored,” said David. “Open cut wetlands doesn’t happen anymore.” The environmental rules that came with getting the National Energy Board permit have evolved over time. Dealing with wetlands is much more stringent than in the past. “Everybody’s become a lot more environmentally conscious,” he said. “There’s been a realization over the last ten years that different wetlands heal differently. “We have the rules, and have to follow them,” David said. “When they get the permit, that is law.” Bengough is roughly the halfway point of the project, with the right-of-way passing just a few miles to the south, heading in a west-by-northwest direction. The community opened up vacant lots for use by pipeliners as mini-RV parks. As you drive through town, here and there one comes across a handful of 5th wheel trailers, the preferred accommodations of most career pipeliners. “These local people have been awesome,” Ken said. He noted how the power has been upgraded for the facility they are renting, the home for the town’s spring festival. They used the money from the rent to upgrade the facility, meaning generators will no longer be needed during the festival. High school students even filled sandbags for the company as a fundraiser for next-year’s graduation. ɸ Page B9

PIPELINE NEWS November 2012

Bengough opens up lots for pipeliners and their RVs ɺ Page B8 “Bengough has been great. They welcomed the crews with open arms,” David said. “They’ve adjusted store hours. We’ve hired local guys, too.” People have come from across Canada to work on this job. Asked about attracting staff, David said. “It’s tough all over. It’s a challenge. It’s tough to attract good people. We try to hire good supervision that has good connections and know people.” That could be evidenced on crews like the main gang, the principle welding crew, where the welding foreman brought together his welders, and will be taking many of them on his next job, in British Columbia. A&B in recent years has set up shop in Regina. They were renting, now they have bought a location. “We’re putting down roots,” David said. The current Vantage Pipeline project is the company’s largest in Saskatchewan since it tied in 600 wells in the Fox Valley and Richmond area. They also have done extensive integrity work for TransCanada. Like much of the industry, they have seen a shift from gas to oil. David said, “We’re working where we get work. Pipelines aren’t any different from gas to oil. We’re hardly doing any HDPE (plastic) for shallow gas. We had done lots of it. In the last two years, it was pretty much nil.” David Schwab is a senior construcƟon manager with A&B Pipeliners.

B9

The pipelining Schwabs David and Ken Schwab, senior managers with A&B Pipeliners, come from a large family. Half of the 11 children ended up as pipeliners at one point or another. Five are still pipelining – Ellen, Wayne, David, Ken and Michael. “My sister Ellen got started in 1972,” Ken said. “She is inspecting for TransCanada now. She’s been a labourer, she ran a wrap machine for a while. I used to, too. Somebody came out with yellowjacket (coating) and put me out of work, so I went to sideboom.” David, Michael and Ken Schwab started with A&B during the 1985-86 season. Michael is now doing pipeline consulting. Wayne Schwab is a consultant. Doug Schwab pipelined a little, while Marilyn did it for one year. “And it’s all been pipelining, not rigs,” Ken said. Ken and David were both born in Estevan. The family ended up in Assiniboia and then Camrose by the time Ken was 10. “David’s been steady. I left for consulting for five years and then kind of fell back into it,” Ken said.

B10

PIPELINE NEWS November 2012

Working at a boring job for three years „ By Brian Zinchuk Bengough – After 20 years working with XL Foods, Tim Anderson found himself a boring job. Literally. Anderson is a boring operator working with Big Bore Directional drilling, a subcontractor for

Arnett & Burgess Pipeliners on the Vantage Pipeline project near Bengough. “I was a maintenance foreman in the slaughter industry – XL Foods, but not the one in Brooks, the one in Calgary.� Anderson calls Didsbury, Alta., home.

He wanted a change, so he has spent the last three years as a driller. “I enjoy it. I don’t mind being away. I was home for 20 years,â€? he said. “I’m a plumber/outďŹ tter by trade. I used to do residential and commercial plumbing and gas.â€?

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Tim Anderson went from working as a maintenance foreman at a meat packing plant to operaĆ&#x;ng a direcĆ&#x;onal boring machine on pipelines. Photo by Brian Zinchuk

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PIPELINE NEWS November 2012

B11

Bending machine operator Jordan Van Dorp bends the pipe to match the contours of the land. He follows marks indicated by the bending engineer.

Father and son on the same crew By Brian Zinchuk Bengough – It’s pretty common to run into family members on a pipeline. For the Van Dorps, they’re even working on the same crew. Henry Van Dorp could be found marking centrelines on joints of pipe, part of the measuring crew. His son, Jordan was running a bending machine just a few miles behind. Each joint is roughly 19.75 metres long, but not all. “You have to watch,” said Henry. In recent years he’s worked in Cold Lake, Whitecourt and Fort Nelson. Prior to that, home was Ontario, where frankly, there wasn’t a lot of work.

“I was in Ontario, doing nothing. My son Jordan got me the job,” he said. Henry worked on farms, and did maintenance work. “I started out as an autobody mechanic. I did maintenance on farm implements,” he said. He took a heavy equipment course in Ontario as well. “It was a depression out there, not a recession,” Henry said. “It’s good. It’s fresh air. The air in Ontario is polluted, especially in summer.” At the bending machine, Jordan said “There’s a lot of hills. It’s nice for bending – it’s not so boring.” At 25 years old, Jordan has been pipelining for five years. Prior to that, he played hockey at Colborne, Ont.

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B12

PIPELINE NEWS November 2012

Steady growth for Rearden Well Servicing Weyburn – Since coming to the area in 2007, Weyburn-based Rearden Well Servicing has grown steadily and added its fourth rig in June 2011, and built an office and shop this year. Rearden is privately held by a small group of local investors. Curtis Neiszner is vice-president of operations. He started working rigs at 22 years of age and has worked his way up the ladder to his current role. He’s been working on the rigs for 17 years, all on service rigs. His wife, Sherri Neiszner, joined the company in 2010 as the corporate administrator. Service rigs have

always been a part of her life. “My dad has a rig – Apex Well Servicing in Midale. That was my whole life.” As for her own experience Sherri said, “I worked at Newalta for 16 years in the office.” Curtis was born and raised in Weyburn. The two have been married 15 years. Describing Curtis’ initial involvement with Rearden, Sherri stated, “Curtis worked with some of the shareholders and they approached him. They wanted somebody here to look after things.” ɸ Page B13

CurƟs Neiszner is the vice president of operaƟons of Rearden Well Servicing. Yes, that is a whitetail deer European mount on the front of the rig, courtesy of toolpush MaƩ Halkyard.

The crew of Rearden Rig 1 prepare to run pipe down a well near Stoughton.

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PIPELINE NEWS November 2012 Éş Page B12 The company has been run out of the Neiszner home until this year, when the company’s growth required expansion to a purpose-built oďŹƒce and shop in the Weyburn Industrial Park. All four of their rigs are free-standing double-triples which allows them to service the deepest wells throughout southeast Saskatchewan. “We’ve been steady. Last year was quite slow due to the wet weather,â€? Sherri said. “Our rigs follow certain companies.â€? Two work for one of the larger companies in the area, the third works for another larger producer, and the fourth splits its time between two smaller junior producers. A total of 23 people work for Rearden, of which nearly all are local. “We did have some imports from Quebec, but they’ve moved on,â€? she said. “We have a few employees that have been here since the beginning,â€? Sherri added. One of the advantages of being in Weyburn is the high number of service rigs. That means there is a mobile workforce from which to draw employees. “Attracting good people is harder now than ďŹ ve years ago,â€? she said. “That’s true in all business. We do a lot of promotions from within and build on it. Of the ďŹ rst ďŹ ve guys who started with the company, four are still here.â€? All those four are now toolpushes or drillers. In a move that’s getting pretty common for southeast Saskatchewan oilďŹ eld service companies, the company has gotten into the accommodations game. “We have three suites we rent out to our guys.â€? Indeed, the upstairs of the shop was designed to be used as living quarters if necessary. “I believe what sets us apart from other service rig companies in the area is we’re very family-oriented,â€? Sherri said. Each year the company takes everyone – husbands, wives, kids, and they go skiing in the mountains for on Family Day weekend in February. “We believe we need to get back to our families,â€? she concluded.

MaĆŠ Halkyard is a toolpush on Rearden Rig 1.

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B14

PIPELINE NEWS November 2012

Combatting the wind

To block the wind, these welders are surrounded by plywood wind boards.

Redvers – If there’s one thing constant on the Saskatchewan prairie, it’s wind. The welders working for Surerus Pipeline on Enbridge’s Bakken expansion project have had more than their fair share this fall. Jeff Trout of Saskatoon is the pipe gang foreman on the job. The pipe gang, also called “main gang” is the crew of welders, welders’ helpers, spacers, sideboom operators, labourers and other workers that turn the individual joints of pipe into a pipeline line. On this job, there were 40 on Trout’s crew, with 11 welders including the repair welder. The welders move along in their trucks from joint to joint. These trucks typically have custom-built service bodies or truck bed inserts to house their welding machines, grinders, acetylene torches and other tools. In factories, parts move past welders on the assembly line. On pipelines, the welders move past the parts, in essence forming a rolling assembly line. ɸ Page B15

PIPELINE NEWS November 2012

B15

Wind has been a constant challenge for Jeī Trout’s main gang welding crew. Trout has been working on the main gang crew with various pipeline companies since 1986.

“They’re paying well. A lot of guys wanted to be on this job,” he said. At 124 kilometres long, it’s considered a good job, he noted. Trout grew up in Estevan. He started working for Prairie Pipelines at the age of 18. He has been working on the pipe gang since 1986, starting as a helper, then a labourer, operator, spacer and strawboss. “I’ve been a foreman ɺ Page B14 This job is too small to use mechanized welders, sometimes referred to as “bugs,” according to Trout. As a result, it’s a stick welding job. “We’re using internal clamps, though,” Trout said. Internal clamps are like a robot that travels inside the pipe. When it reaches the end, it locks the two joints into place so that the welders can establish a bead. The welding in this case was done externally.

Much of September was spent coping with the strong winds. “We got winded out yesterday. We can’t shut down every day,” Trout said. “It’s not just breezes, but 50-60-70 kilometre per hour winds.” How do they combat it? “Lots of lumber – wind boards, doughnut boards, umbrellas. It seems to be working,” was Trout’s response. His crew was a mixture of Saskatchewan and Alberta hands, all name-hired.

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B16

PIPELINE NEWS November 2012

Finding places to put the dirt Bengough – There’s something you soon learn as a pipeliner: no matter how much space you are given to put your dirt, somebody will eventually find a reason to want more. That’s one of the challenges Jeff Nowlan gets to deal with each day. Nowlan is one of two assistant superintendents for Arnett & Burgess Pipeliners, one of the contractors on the Vantage Pipeline project. Earl MacEachern is the other. Nowlan takes care of the front end of the job, while MacEachern handles the back end. If anyone knows about where to put dirt, Nowlan is probably one of them. He’s going on 19 years of pipelining, most of it spent doing dirt work. “I run hoe. I ran wheel ditcher until three years ago. I have my own wheel trencher, a 9200 Buckeye. There’s about six in Canada. It’s parked in the Hat,” he said in reference to Medicine Hat, where he’s based. His personal company is called Jbers Trenching Enterprises Ltd. However, on this job, he’s working in a management capacity, not in a dirtmover capacity. Wheel ditchers are the queen of the ditch crew. In good straight going with few rocks, they can fly past excavators. But a lot of rock results in picking up the wheel and walking it down the line. “The first 20 kilometres are mostly rocks and hills,” Nowlan said. “From (road) 214 west, it’s not bad,” he said. One feature of this job is the numerous changes in stripping, from full width to minimal disturbance. In some areas, they have triple lifts, meaning multiple layers of topsoil and subsoil must be stripped and kept separate by one metre, always a challenge given the amount of workspace available. Nowlan pulled out a map showing the variety of stripping techniques used in the first stretch. It’s a lot. The first few kilometres have many changes in terrain that would be considered quite hilly for southern Saskatchewan, and with plenty of rock. Where the ditch crew was working on Oct. 11, near the project kickoff, there was enough rock that the pipe had to be wrapped in yellow rock shield. It’s a rubber matting to protect it from being damaged by rocks when the trench is backfilled. Nowlan has been in Medicine Hat since 1999. He grew up in Miramichi, N.B. Upon completing high school, he moved to Calgary and started pipelining. He’s been married for 17 years and has two kids, eight and 15 years old.

Assistant superintendent Jeī Nowlan shows the variety of stripping techniques required on the Įrst part of the job which turned out to be hilly, rocky terrain.

This secƟon of right-of-way shows some of the diīerent stripping techniques used to minimize environmental damage. At the top of the hill, bucket width stripping has taken place, with the topsoil preserved on plasƟc tarps at the edge of the right of way. Photo by Brian Zinchuk

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PIPELINE NEWS November 2012

B17

Sheila Klym, holds a stake for Ed Fornal to line up on with his eye level.

A keen eye for the lay of the land Bengough – You might think Saskatchewan is pretty at. It’s not. For every slight rise or fall in the land, large pipelines need to be bent accordingly using a large bending machine. But before that can be done, the bending engineer, with his keen eye for subtle changes in the land, goes to work. Ed Fornal is the bending engineer on Vantage Pipeline’s Arnett & Burgess spread, near Bengough. “We’re making the pipe ďŹ t the contour of the land,â€? he said. “For roads, or bores, you go deeper." The sags and overbends and sidebends of the

pipe have to match the land exactly, otherwise it will create a stress point that could eventually lead to a failure, something no pipeline operator wants. A sag is a dip in the land, an overbend is a crest. A sidebend is a lateral curve, where the right-of-way curves to the left or right. And to throw something of a curveball into the equation, sometimes there will be a sag or overbend right at a sidebend. The result is a combination bend. It’s with this in mind Fornal pulls out his trusty eyelevel. It’s akin to a surveyors transit, but is handheld and ďŹ ts in your pocket. As you look through

it you line up the built-in spirit level’s bubble. A gauge then gives you the degrees up or down. From Bruce, Alta., Fornal’s been pipelining since 1971, starting at the age of 20. “We just came o a 42-inch job at Hudson Hope, B.C. with Surerus. We’re going back to Fort Nelson for more 42-inch. The current Vantage project has plenty of bores and native prairie to deal with “Excessively more,â€? Fornal said. “It does slow everything down.â€? Compared to working in B.C., he said, “It’s short and choppy instead of long and high.â€? ɸ Page B18

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B18

PIPELINE NEWS November 2012

Bending engineer Ed Fornal uses he eyelevel to measure exactly how much the pipe must be bent to match the landscape.

Every rise and fall in the landscape is matched by the pipe Éş Page B17 The progress was slow at ďŹ rst, with lots of short hills, but by Oct. 11 he said, “We got 6 clicks (kilometres) under our belt yesterday, and six today. We were lucky to get two in that bad stu.â€? Indeed, there were two bending machines following him, as opposed to the usual one. “We

geared up so we can get footage,â€? Fornall said. He had two helpers with him. Samantha Mohr is from the Quebec side of the Ottawa valley. Sheila Klym is from Laeche, Sask. For both it was their ďŹ rst pipeline job. “He’s a good boss. He trains you, puts you under his wing,â€? said Klym, whose prior job as a nursing assistant.

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“It’s great outdoors. You get lots of exercise, and it keeps you in shape, let me tell you.â€? Mohr said, “I just ďŹ nished school, four years of business college.â€? She’s not sure what she wants to do yet, notng she majored in marketing, but started in accounting. Her boyfriend is running a sideboom on the same crew, a few miles back.

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PIPELINE NEWS November 2012

B19

Sun Country Well Servicing Rig 8 manager Brad Markham records pipe measurements before his crew begins running pipe down the well.

A busy place, this service rig Estevan – Sun Country Well Servicing Rig 8 could be found working very close to the U.S. border. The site was a urry of activity as it was prepared for a frac. A toolhand from a downhole tool company was on the job, as was a power tong hand. On the far side of the lease, trucks buzzed around, bringing in and then spotting 400-bbl. tanks. And in the middle of all this was rig manager Brad Markham, a 28-yearold who grew up in Yorkton, but for the last seven years he called Estevan home. He has been a rig manager, also known as toolpush, for a year now. Markham has been with Sun Country for three years. “I started drilling in 2008 with Precision Well Servicing,â€? he said. He hired

on with Sun Country’s Rig 4 and was drilling full time. He started pushing with Rig 8 in September 2011. “We’re picking up four-and-a-half inch casing and running a tie-back string, latching onto a liner,� he explained as the hands started running pipe.

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B20

PIPELINE NEWS November 2012

PIPELINE NEWS November 2012

B21

Tie-ins can be quick, or not so quick The drag secĆ&#x;on, the piece of pipe that will be pulled under the road by the boring machine, is liĹŒed over the welded pipe.

Using tag lines, workers are careful to ensure the drag secĆ&#x;on does not damage the pipe that will go into the ground aĹŒer the drag secĆ&#x;on.

The excavator operator lowers the drag secĆ&#x;on into the large bell hole. A bell hole is an excavaĆ&#x;on designed to be safe for workers to enter. This is done by providing adequate slope to the sides and by digging stair cases along the side of the trench.

Once in posiĆ&#x;on in the bell hole, the pipe will be dragged by the direcĆ&#x;onal boring machine directly under the posiĆ&#x;on of the camera, under the road unĆ&#x;l it comes into the bellhole on the other side.

Dennis Lavallee is a Ć&#x;e-in foreman for A&B Pipeliners

„ Story and photos by Brian Zinchuk Bengough – Looking for a dierent life, Dennis Lavallee found himself coming out west, where he is now a pipeline tie-in foreman with Arnett & Burnett Pipeliners. The current job is the Vantage Pipeline project. Lavallee is originally from a little town called St. Charles, Ont., about an hour east of Sudbury and a little south. Calgary is now his home. Lavallee has spent roughly a decade pipelining. Prior to that he had a rather unique job in the family business.

“I worked for my dad doing erection and demolition of large factory equipment,� Lavallee said. “We once moved a large carpet dye cooker that was 500 feet long, 40 feet wide and 30 feet tall. “We did Uniroyal’s boiler room when I was young.� Lavallee is just turning 30. He’s worked on pipeline projects varying from one-inch to 52-inches in diameter. Most of his experience has been in big-inch projects. However, he decided he wanted to work for smaller companies. Lavallee was looking after a road bore crew in

early October until his tie-in crew ďŹ red up. There’s plenty of work for both, with about 190 crossings, and “way more tie-ins,â€? he said. “The right of way goes like this,â€? he said, waving his hands up and down. The project is a 10-inch line. The larger the pipe, the longer it takes to weld. This size is comparatively small compared to a 16, 24 or 36-inch line. “If everything goes good, you can do a tie-in in an hour. If it doesn’t go good, you can get one or two in a day,â€? Lavallee said. “It can be tricky on some jobs.â€?

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Foreman Dennis Lavallee, in the green hard hat, takes a look at the drag secĆ&#x;on in the ditch. Once the drag secĆ&#x;on is in place and the mainline pipe is in posiĆ&#x;on, Ć&#x;e-in welders will join the two roughly were Lavallee is standing.

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B22

PIPELINE NEWS November 2012

Shifting Gears

One Woman’s Perspective on Life, Liberty and the Pursuit of Land Locations By Nadine Elson It was a glorious day, the first day of the fall season, and I was on top of the world. Literally on top of the world! I was standing on the rig floor of Ensign’s ADR rig Big Sky 650 located at that time near Pierson, Man. The sun shone

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brightly and warmly after the cool night, and the wind was nearly non-existent, only slight breezes moving my hair peeking out from beneath my hard hat. I looked out beyond the railing and could see for miles in all directions, the

The key to business success land stretching out flat before me. Harvest was well underway, and the landscape was golden colored. I couldn’t believe my luck. The week before I had been on Panther Drilling’s new Rig 4, and now here I was on an ADR rig. Along with members and guests of our local Desk and Derrick Club, I was on a tour of this rig owned by Ensign Drilling. I had never even heard of an ADR rig prior to the spring when Desk and Derrick member Denise Taylor of Ensign Drilling

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began making arrangements for the tour. ADR stands for Automated Drilling Rig. It is a new technology. A mechanical pipe arm takes the place of two human roughneck positions on the drilling rig. Denise retired from her Human Resources position with Ensign in July but is still active with the club. Members met in Estevan on that Saturday morning and drove out to Pierson in a convoy of vehicles, picking up members along the way in Bienfait and Oxbow. We arrived at the Big Sky ADR rig mid-day, and outfitted in hard hats and safety boots, we completed the sign-in procedures and safety orientation. Denise introduced us to Curtis Hilstrom, rig manager, who would guide us around the rig. I wondered about his lineage briefly, but not for long. Denise told us he was from Estevan,

The Desk and Derrick Club visited Ensign 650 recently.

the son of Merv and Isla Hilstrom, whom I knew. I had curled with Isla for a few years in the Estevan ladies’ curling league, as had my mother, and had played badminton against Merv in a badminton club. Our Desk and Derrick membership spent several hours very enjoyably exploring the rig. Curtis was a knowledgeable tour guide and I know that I was not the only one who enjoyed the tour and the chance to see

up-close and personal the workings of the rig. Although my job often entails deliveries to drilling rigs, I do not often have any contact with anyone other than the loader operator assigned to unload my truck and trailer, and of course, the drilling company representative who signs the ticket. I have only occasionally been allowed on a drilling rig, so I relished this opportunity to ask questions. ɸ Page B23

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PIPELINE NEWS November 2012

B23

ɺ Page B22 Our Desk and Derrick membership spent several hours very enjoyably exploring the rig. Curtis was a knowledgeable tour guide and I know that I was not the only one who enjoyed the tour and the chance to see upclose and personal the workings of the rig. Although my job often entails deliveries to drilling rigs, I do not often have any contact with anyone other than the loader operator assigned to unload my truck and trailer, and of course, the drilling company representative who signs the ticket. I have only occasionally been allowed on a drilling rig, so I relished this opportunity to ask questions. Curtis may have been surprised by the number of questions that we all asked, but he was very patient with us, and unfailingly polite. His mother would have been proud. I know Denise was very proud of her HR work with Curtis. As I drove home from Pierson, I reflected on the last several hours. A phrase that Curtis had used popped into my head. At the time of introductions, Denise had indicated that Curtis, although relatively young, was well-qualified for the position of rig manager. One of our members had asked him how he progressed so quickly into the position of rig manager, and he had answered, “Never say no!” “Never say no!” That seemed simple enough. But simple concepts are often complex. At the core of that statement, was a man willing to say no to himself in order not to say no to the company. I have no doubt that his ability to delay gratification, the saying no to himself, was the real key to his success in being promoted to rig manager. I am not surprised. He most likely learned that as a child at the knee of his hard-working, farming parents. “The ability to delay gratification in the short term in order to enjoy greater reward in the long term is the indispensable prerequisite for success.” Brian Tracy - Entrepreneur, business coach and author. So you want to achieve business success? It’s simple to say. Not so easy to do, though. Be a yes man or woman. Never say no! Nadine lives in Estevan with her husband and family, and shifted gears a few years ago, becoming a hot shot driver for the oilpatch. Her people skills are put to good use in the patch as she delivers the goods quickly and eff iciently. Contact her at shifting.gears.hotshot@gmail.com with comments or questions.

Tack weld Welders with ArneƩ & Burgess Pipeliners make the iniƟal tack weld while the spacer, in orange, watches. Photo by Brian Zinchuk

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B24

PIPELINE NEWS November 2012

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Tents towed on trailers and hung over the pipe are one way to combat the strong winds on the Saskatchewan prairie. Wind and welding generally don’t mix well. Photo by Brian Zinchuk

Keep your crew together Bengough – It’s hard to ďŹ nd people, so it’s best to keep your crew together. That’s how Ross Fraser feels. Fraser is the welding foreman for both the main gang and poor boy crews working on the Vantage Pipeline project with Arnett & Burgess Pipeliners. He’s got 10 welders with those two crews, another handling repairs, and one more doing tie-ins. The welders can be seen towing trailers behind their trucks with tents constructed over them. They have been used to combat wind, which can play havoc with your welds. “In ’91 we used them. If you’re going to weld in Saskatchewan, it’s a good idea,â€? he said. This is Fraser’s ďŹ rst job with A&B. “We just came from Hudson Hope, B.C. This is pretty at,â€? he said. ɸ Page B25

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PIPELINE NEWS November 2012

B25

Éş Page B24 The project is using standard grade mild steel pipe. In other words, nothing out of the ordinary. Fraser has been pipelining for 35 years, primarily in Western Canada. “I’ve been to Russia in ’96 for a year. It was the most fun in my life,â€? he noted. Big-inch, small-inch, he’s done it all. Fraser’s taking his crew on a 42-inch job for their next project. “I like to keep my crew together, keep key guys working. It’s hard to ďŹ nd guys. It’s hard to ďŹ nd experienced pipeliners, and it’s only going to get worse,â€? he concluded.

The tack rig crew makes the iniĆ&#x;al weld, joining or “stabbing onâ€? a joint of pipe to the pipeline. Photos by Brian Zinchuk

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Internal clamps, seen here coming out of the end of the pipe, are used to secure the fresh joint of pipe to the pipeline.

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B26

PIPELINE NEWS November 2012

Flexpipe to open Lloyd service shop Lloydminster – It’s a no-brainer decision for Calgary-based Flexpipe Systems who plan on opening a new solutions centre in Lloydminster early in 2013. Flexpipe Systems has already established a growing market in the region for its line of high pressure, corrosion-resistant spooled continuous pipe for heavy oil and gas applications. “We’ve been selling pipe in Western Canada for 11 years,” said Steven Gouthro, sales manager Canada, at the company’s product booth at the Lloydminster Heavy Show in September. “Our first installation was with Husky in Carlyle, Saskatchewan in 2001. “Lloydminster is a great customer base for us. It’s getting busier and busier everyday from Lloyd itself through to Provost and into the Macklin/ Cactus Lake area and through to Kindersley and Kerrobert. “All those areas – it’s hopping for us for sure.” The company’s flagship products are FlexPipe line pipe, FlexPipe HT or high temperature line pipe and FlexCord line pipe all designed, tested and manufactured in Calgary. Flexpipe Systems is a division of ShawCor Ltd., a global energy services company specializing in technology-based products and services for the pipeline and petrochemical sectors and other industrial markets. The company was awarded its largest Australian contract to date in July with the sale of 175 kilometres of combined Flex pipeline pipe and FlexPipe HT line pipe. Similar success is anticipated in the Lloydminster area following the growth of solution centres in Estevan and Grande Prairie where staff provide

field installation and operational support for pipeline projects. “We are targeting early 2013 for Lloydminster,” said Gouthro. “Lloydminster is a big part of our customer base. We do great business with companies like Northern Blizzard, Husky, PennWest, Apache, CNRL, and we just need to be closer than Calgary to service these guys properly.”

Flexpipe Systems’ products are used for oil and gas gathering, including projects with hydrogen sulphide/carbon dioxide content, water transfer lines, salt water disposal systems, CBM (or CSG) applications and other applications in which a corrosion resistant pipeline is required. “Our line pipes are designed to handle the ugly stuff. Our customers like us for that,” said Gouthro. ɸ Page B27

Flexpipe Systems’ sales representaƟves Jason MapletoŌ, leŌ, and Steven Gouthro, pictured on the second day of the Lloydminster Heavy Oil Show, said the company has established a big presence in the regional heavy oil market with their high pressure, corrosion-resistant line pipe products.

PIPELINE NEWS November 2012 Éş Page B26 Flexpipe Systems’ pipeline products are supplied on long-length continuous reels up to 2,100 metres and can be installed by plowing, trenching and slip lining through existing failed pipelines. The pipeline products are an alternative to steel with their patented three-layer composite design and speciďŹ c corrosion-resistant high pressure properties. FlexPipe and FlexPipe HT come with a high density polyethylene (HDP) inner liner or blad-

der wrapped in a continuous high strength ďŹ bre and protected in a HDP jacket. “One of the main beneďŹ ts is that the HDP bladder is non-corrosive,â€? said Gouthro. “That’s deďŹ nitely one of the big selling features over your standard steel lined pipe.â€? FlexPipe is available in two, three and four inch inner diameter pipe with pressure rating choices of 300, 750 and 1,500 psi and temperature ratings up to 60 degrees Celsius. “We’ve got a high temp version

of that with similar sizes and pressure ratings able to operate up to 82 C and up to 90 C for hot oiling – anything that’s going to hammer on the pipes – it’s very durable,â€? said Gouthro. That’s the FlexPipe HT line pipe that can withstand harsh chemical environments. Jason Mapletoft, a ďŹ eld sales and services representative at the oil show, explained the FlexCord line pipe was ideal for handling high pressure ows and is capable of handling severe pressure cycles generated by piston pumps such as triplex and diaphragm pumps. “It’s the exact same as FlexPipe, but it’s got a braided steel liner over

B27

top of the bladder and that gives it more strength,â€? he said. “It’s a pretty awesome product.â€? Mapletoft and Gouthro took turns pitching product features and beneďŹ ts to a steady stream of visitors at the oil show and meeting new clients in the countdown to the launch of the Lloydminster shop. “Our goal here is just to get our product out there and make more people aware of what we have and in some cases maybe introduce it to another new oil company,â€? said Mapletoft. “I think it’s a phenomenal product and I’d sure love to get everybody using it.â€?

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Jason MapletoĹŒ, ÄŽeld sales and service rep with Flexpipe Systems, holds samples of the company’s patented FlexCord, leĹŒ, and FlexPipe high temperature line pipe products at the Lloydminster Heavy Oil Show. The Calgary-based company, with U.S. headquarters in Houston, Texas is opening a new locaĆ&#x;on in Lloydminster in early 2013. Photo by GeoÄŤ Lee

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B28

PIPELINE NEWS November 2012

Growing as quick as the weeds they control Lloydminster – Marksmen Vegetation Management continues to grow as quickly as the weeds and vegetation they have been controlling for the oil and gas industry in Western Canada for the past 20 years. The company is owned and operated by Lyle Froehlich in Lloydminster and has a growing eet of approximately 25 trucks, 10 ATVs and a new mulching unit. They also have seasonal operations in Manitoba, Saskatchewan and Alberta. Field operations usually wind down by September, giving the company the time to sta a booth at this year’s Lloydminster Heavy Oil Show where Alberta ďŹ eld manager Daryl Wright held the fort Sept. 12-13. “We do comprehensive weed spraying, total vegetation management, weed spraying on leases, oilďŹ eld pipelines, hydro seeding and mulching,â€? said Wright, who joined the company in January after moving from Estevan to Lloydminster. “We’re growing. We’re deďŹ nitely increasing in size. I am just new to the team here. There are three other managers across Western Canada in Saskatchewan and Alberta. We are planning on continuing to grow.â€? The company recently introduced a new mulching service to provide low environmental impact lease maintenance and construction, reclamation, ďŹ reguard,

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and roadside and fence line clearing work. Marksmen is best known for providing comprehensive vegetation management control programs with herbicides and pesticide treatments for annual programs, contact programs and broadleaf control programs. The yearly programs can be combined with additional services such as integrated pest management reports, weed inspection and identiďŹ cation, noxious weed selective programs and brush clearing and roadway spraying. “The main application is the oil and gas industry. We’ll do some gas sites, oil leases and oil batteries,â€? said Wright. “Usually noxious weed control is a requirement of the landowner – farmers and stu like that because they don’t want seeds going o in their crops. “It’s also a government regulation depending on where you are to control noxious weeds. There is the Alberta Weed Control Act that we fall under. You are required to control certain weeds on lease sites. “There is also safety behind it too. Sometimes there is pipe and stu sticking out of the ground. “We like to do a bare ground program so that you can see obstacles when you drive onto the site. “Our competitors would be weed whipping and mowing. The biggest concern with that is there is an ignition source close to the oil well, so that’s where weed spraying makes sense.â€? Marksmen is a member of the Industrial Vegetation Management Association (IVMAA) of Alberta and the IVMA for Manitoba/Saskatchewan. The company has several active members serving in IVMA presidential and board positions. Wright said the chemical spraying is environmentally friendly “in that the spread of noxious weeds would deďŹ nitely be worse for the environmentâ€? without the treatment. “We use chemicals that are on site. They are not long-term residual chemicals, so they have a microbial breakdown,â€? he said. Marksmen has a full-time health, safety and environment (HSE) manager, extensive employee training programs, and dedicated sta to follow safety trends and keep records. Marksmen serves multiple clients in a huge area from Fort McMurray to Red Deer in Alberta, all parts of Saskatchewan including Estevan and Regina, and clients south of Winnipeg, Manitoba for seasonal spray programs. ɸ Page B29

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www.hseintegrated.com

PIPELINE NEWS November 2012

B29

ɺ Page B28 “We hire summer students from colleges around Western Canada. We get started by April and we usually wrap everything up by September,” said Wright. “We are a seasonal company. We do a little bit of snow removal in the winter. “In fall and winter, we generate sales, and in the spring, we work on our recruitment hiring and conduct recruitment shows.” Wright graduated from the University of Regina and came on-board after taking an applicator’s course at SIAST. He currently holds an Alberta, Saskatchewan and Manitoba industrial applicator licence. “You can also take it from Lakeland College in town here. We provide that for all our employees but it’s actually a growing course at Lakeland College,” said Wright. “It’s an enjoyable job. Every day is different. There are always problems that occur that are never straightforward to fix. It’s definitely fun. You get out in the outdoors every day.”

Regina, Sask.

Custom Industrial Accommodation Skid shak office & Washroom units • 12’ x 60’ • 12’ x 40’ • 12’ x 28’ • 10’ x 24’ If it’s not hard, it’s just a shack! Alberta Įeld manager Daryl Wright from Marksmen VegetaƟon Management handed out a ton of business cards and Ňyers about Marksmen’s menu of vegetaƟon control services to the oil and gas industry in Western Canada during the Lloydminster Heavy Oil Show in September. Photo by Geoī Lee

Ph: (306)545-SHAK (7425) www.hardshak.com

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B30

PIPELINE NEWS November 2012

Quality control ensures welds meet spec Bengough – With all the media focus on pipeline failures, quality control is a key focus for all new pipelines. Vladimir Mairena is a quality control inspector working on the Vantage Pipeline. His job is to ensure the welds on the pipe are done within the proper specifications. Mairena is one of two inspectors doing

the weld QC work. They stagger their hours so that there’s someone covering the early morning meetings as well as staying with the job until later in the day. Three per cent of the daily wells are randomly tested. An induction ampmeter can be seen hanging from Mairena’s chest. That’s used for measur-

ing amperage during the welding, one of the parameters the quality control inspectors monitor. Other parameters include bead pass speed and voltage. “We calculate the heat input. If it’s too high, the customer can say, ‘Cut it out,’” he explained. The requirement to be a quality control inspector is having

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three years experience welding. “I’m going back to school. I’ll have my journeyman in the spring,” he said. He will be seeking his pressure ‘B’ certification as well while at NAIT. He put off his last stint of technical training to work on this job. Pipelining is a hard job when you have kids. Mairena has three with his wife of 10 years.

He hails from Camrose, where he moved as a child in 1988. “I started welding at the pipe mill in Camrose. That was only seasonal. I moved to mechanic work. I worked at Midas and stuff like that,” he said. “My brother got me into welding. “I did the odd jobs. I used to work for a GM dealer in Edmon-

ton. That was fun. We had a good crew. I was in sales. I was assistant manager my last two years, taking care of the leasing portfolio. I got out of it before the market crashed,” Mairena said. “I started welding for GLM tanks in Camrose until they shut the doors.” More recently he has been working as a pipeliner.

PIPELINE NEWS November 2012

B31

Southern PaciĂ€c steams on two fronts Calgary – Southern PaciďŹ c’s production numbers are headed upward as a result of operational improvements at its STP-McKay and STP-Senlac thermal projects in Alberta and Saskatchewan. The Calgary-based company released an upbeat operational update on Oct. 11 highlighted by the ďŹ rst production of bitumen at McKay from the ďŹ rst of 12 well pairs being converted from steam circulation to production. The company reported that additional well pairs will be converted to the production phase over the next several weeks at the steam assisted gravity drainage (SAGD) site north of Fort McMurray. Plans call for the SAGD well pairs to be gradually ramped up in both volume of steam injected and volume of produced uids recovered to surface. Each well pair is expected to take 12 to

18 months to reach peak rates. Southern PaciďŹ c also reported that its central process facility at McKay continues to run at “an impressive pace,â€? delivering steam to the well pairs at a 99 per cent on-time load factor. Bitumen returns during the warm-up phase have been successfully separated from the produced water. The produced water is being cleaned, treated and recycled into steam to feed back into the SAGD well pairs. All processes within the project have been successfully commissioned and the company expects the plant to continue running smoothly through the winter season. The ďŹ rst of six horizontal wells was being drilled in midOctober at the STPSenlac thermal project near Unity, Saskatchewan as part of Phase K that consists of three SAGD well pairs.

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Southern PaciďŹ c anticipates production will “increase materiallyâ€? as Phase K is brought on stream from volumes of approximately 3,000 barrels per day in August and September. Production from this pad is expected towards the end of February 2013 after the wells are drilled, completed, equipped and warmed up with steam. The company began to ship about one-third of its bitumen production from Senlac by rail in September utilizing a newly constructed rail loading terminal located at Unity. They are considering moving additional volumes by the rail. The greater use of rail follows a marketing arrangement the company announced in June to ship bitumen produced from STPMcKay by rail to the U.S. Gulf Coast. This arrangement includes dedicated loading and ooading capacity at two new

rail terminals, located in Lynton, Alberta and Natchez, Mississippi. Both terminals, as well as approximately 500 rail cars, are under construction, which is either on or ahead of schedule. Southern PaciďŹ c has been working with several U.S. Gulf Coast reďŹ neries to arrange the end markets for its production.

continue to be favourable in the current pricing environment, bolstered by the wide Brent/WTI dierential, lower Gulf Coast diluent costs, and the requirement for less diluent versus shipping bitumen by pipeline. Volumes of bitumen produced prior to Jan.1, 2013 will be delivered to intra-Alberta markets.

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B32

PIPELINE NEWS November 2012

Hobblestone molds to the market Lloydminster – "If it’s plastics, it’s Hobblestone. " That’s the motto of Hobblestone Enterprises Inc. that brought a tip-ofthe-iceberg display of its growing line of plastics products to the Lloydminster Heavy Oil Show in September. The assortment of plastic trays, liners and geotextiles, tanks and containers on exhibit helped to steer manager Thomas Hobbs into a conversation about the applications for the products starting with the oil and gas industry. “We make plastic liners and containment products,� said Hobbs, who oversees the manufacturing at the company’s shop in Blackfoot Alberta, just west of Lloydminster on Highway 16. “We make 40 mil poly liners and we have a few in textiles (geotextiles) and

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all sorts of guards, tanks and trays. It’s all heavy duty and ready to go. “Our most popular products are our 100 gallon, double wall tank and the containment trays for them and line trays. “The rig line trays are for 3-inch hammer unions and that kind of stu on the oil rigs. “Large line pipe trays are usually for some of the rig stu – when they have their connections between the pipe they need to keep it contained and that pretty much is what it does. It keeps it o the ground as well,â€? added Hobbs. Hobblestone also manufactures catch trays from small one gallon capacity to 12-foot length trays that can hold 1,100 gallons of uid. The company is the exclusive manufacturer of an all-in-one containment system with the tank, stand and containment in one unit designed to store chemicals and a pump in a weather-proof plastic shelter. The Hobblestone product catalogue includes a vast assortment of loaf tanks, horizontal round tanks, tank stands, rig products and specialty products. Some of their molded oilďŹ eld accessories such as a valve jacket and plastic polish rod were part of the oil show exhibit. “Polish rod guards are to help the guys so they don’t get hurt when they are working around the wellhead,â€? said Hobbs, who handed out a catalogue with competitive pricing of plastics. ɸ Page B33

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PIPELINE NEWS November 2012

B33

Manager Thomas Hobbs was all smiles holding up this popular plasƟc polish rod safety guard made by Hobblestone Enterprises Inc. in Blackfoot, Alberta, just west of Lloydminster. Hobbs brought an assortment of molded products for a variety of applicaƟons to the Lloydminster Heavy Oil Show in September.

The price is right for plastics ɺ Page B32 “The advantage of plastic is that the price is right. It’s easy to fix if it gets wrecked,” he said. The company has repair shops in Lloydminster and Cold Lake and can install, repair or prefabricate most types of liners including geo-membranes used by oil and gas companies for containment. Hobblestone also caters to the home and garden market with plastic products such as rain barrels and flower pots and the recreational field with dock floats, quad boxes and quad trailers. On display was a yellow plastic quad trailer with a weight capacity of 1,200 lbs. “It’s got good high speed tires and that kind of stuff for doing work for anybody from surveying to just on the farm,” said Hobbs. Hobblestone also makes products that comply with federal environmental farm plans in additional to custom made manufacturing on site to suit client needs. The company’s main and strongest line of products is made by rotational molding – a process for creating hollow items, such as anti-freeze reservoirs and stairs. “The majority of products are made in Hobblestone. I do have a couple of things I bring in, but that’s only because the price is right, and it’s like reinventing the wheel,” said Hobbs. “I have to make a mold for everything for that type of item and they already have it. If I can get if from them at the right price, and give it to you at the right price, why not?” Hobblestone is well known for its extensive television advertising as it continues on a growth mode and product diversification for a variety of applications. “Right now it’s been pretty good. We have an established business,” said Hobbs. “Everyone knows how we set up and knows the ideas – so we threw in the quad trailer and other stuff like that to give them some idea of some of the other stuff we handle.” His goal at the oil show he said was “to let everyone know that we stand behind on our products and we have good products. We are here to give you what you need.”

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PIPELINE NEWS November 2012

Swift Current lays a land sale goose egg Regina – The Swift Current area received no bids in the October sale of Crown petroleum and natural gas with most of the action focused on Viking Sand lease parcels in west-central Saskatchewan. That was the story of the October sale that generated $15.2 million in revenue for the province, bringing total land sale revenues for 2012 to date to $94.2 million. No bids were received on the ďŹ ve parcels oered in the Swift Current area. This compares to approximately $6 million or an average of $653.52 per hectare at the last sale in August. Since 2009, horizontal drilling in the Viking Sand has seen a signiďŹ cant increase in production from 1,250 barrels per day to 17,500 barrels per day with stronger interest in land sales. “These numbers reect the expanded use of the technology that originally unlocked the Bakken formation,â€? said Minister responsible for Energy and Resources Tim McMillan. “The beneďŹ t of this technology is helping drive production and land acquisition across the province.â€? October’s sale included 125 lease parcels that brought in $11.8 million in bonus bids and nine petroleum and natural gas exploration licences that sold for $3.4 million. Not surprisingly, the Kindersley-Kerrobert area where the Viking play is prevalent received the most bids with sales of $8.5 million. The Weyburn-Estevan area was next at $3.4 million, followed by the Lloydminster area at $3.3 million. The highest price for a single parcel was $1.6 million. Scott Land & Lease Ltd. acquired this 1,295-hectare exploration licence southwest of Kindersley. The highest price on a per-hectare basis was $8,532. Scott Land & Lease Ltd. bid $552,447 for a 64-hectare lease parcel north of Kisbey.

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The next and ďŹ nal land sale of the year will be held on Dec. 3. Kindersley-Kerrobert area (numbers rounded o ) The total bonus received in the area was $8.4 million, an average of $349/ hectare. This compares to $1.7 million, an average of $159/hectare at the last sale. The top purchaser of acreage in this area was Bristol Land & Leasing Ltd. who spent $3.4 million to acquire four lease parcels. The top price paid for a single lease was $1.3 million by Bristol Land & Leasing Ltd. for a 249.29 hectare parcel situated within the Coleville-Smiley Gas Pool, 20 kilometres northwest of Kindersley. This was the highest dollar per hectare in this area at $5,262/hectare. The top price paid for a single licence was $1.6 million, by Scott Land & Lease Ltd. for a 1,294 hectare block located ďŹ ve kilometres northeast of the Bayhurst West Viking Gas Pool, 40 kilometres southwest of Kindersley. Weyburn-Estevan area The total bonus received in the area was $3.4 million an average of $463.81/hectare. This compares to $10 million, an average of $622/hectare at the last sale. The top purchaser of acreage in this area was Scott Land & Lease Ltd., spending $1.1 million to acquire nine lease parcels. The top price paid for a single lease in this area was $552,447 by Scott Land & Lease Ltd. for a 64.75 hectare parcel situated within the ViewďŹ eld Bakken Sand and Star Valley Frobisher-Alida Beds Oil Pools, eight kilometres northeast of Kisbey. This was the highest dollar per hectare in this area at $8,532/hectare. The top price paid for a single licence in this area was $510,611, paid by Silver Hawk Resources Ltd. for a 1,100 hectare block situated 10 kilometres east of the Red Jacket South Red Jacket Sand Pool, three kilometres south of Moosomin. Lloydminster area The total bonus received in the area was $3,317,689.73, an average of $691/hectare. This compares to $5.5 million, an average of $529.66/hectare at the last sale. The top purchaser of acreage in this area was Scott Land & Lease Ltd., that spent $965,962 to acquire ďŹ ve lease parcels. The top price for a single lease in this area was $314,760, paid by Windfall Resources Ltd. for a 113.31 hectare parcel situated within the Tangleags North G.P. and Lloyd-CummingsSands Oil Pools, 27 kilometres northeast of Lloydminster. The highest dollar per hectare in this area was received from Prairie Land & Investment Services Ltd., that paid $8,041/hectare for a 4.80 hectare parcel located within the Silverdale Mannville Sands Oil Pools, seven kilometres south of Lloydminster. Swift Current area No bids were received on the ďŹ ve parcels oered in the Swift Current area. This compares to $6 million or an average of $653/hectare at the last sale.

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B35

PetroBakken keeping the drill bit busy in the second half of 2012 Calgary – PetroBakken Energy Ltd. executed an aggressive drilling program in the third quarter with 82 net wells drilled, representing a 17 per cent increase over the same period last year. Drilling activity focused primarily on the company’s Bakken and Cardium business units, where 40 and 32 net wells were drilled, respectively, with an additional 10 net wells drilled in its Saskatchewan conventional business unit. PetroBakken was also busy completing wells with 46 net wells completed during the quarter, including 30 net wells in the Bakken business unit and eight net wells in each of the Cardium and Saskatchewan conventional business units. After bringing 52 net wells on production in the third quarter, the company had 43 net wells (23 in the Cardium, 17 in the Bakken) either waiting on completion or completed and waiting to be brought on production. The second half of the year is always very active for PetroBakken, and the company expects its rate of drilling and bringing wells on production in the fourth quarter of 2012 to outpace the activity levels achieved last year. PetroBakken is forecasting that it will drill 82 net wells in the fourth quarter of this year, a 28 well increase from 54 wells during the same period last year. The company plans on having 105 net wells on production by the end of the fourth quarter compared to 85 the year prior. As of Oct. 12, the company had 20 drilling rigs operating, with nine drilling in the Cardium fairway of Alberta, eight in the Bakken fairway in southeast Saskatchewan, two on conventional prospects in southeast Saskatchewan and one in its new resource play area in central Alberta. The company plans to drill 25 net wells in the Cardium, 36 net wells in the Bakken and 21 net wells in its other areas in the fourth quarter, achieving the company’s current plan of 220 total net wells drilled in 2012.

Hawk drilling at Carruthers In an operational update on Oct. 15 on recent drilling activity in western Saskatchewan, Hawk Exploration Ltd. says it has completed and equipped its horizontal well at 09-1046-23W3 at Carruthers, west of Cut Knife. Placed on production in mid-September, the well has produced heavy oil at an average rate of 60 bpd with a 20 per cent water cut. The company recently submitted applications to drill an additional two horizontal wells in the north half of Section 10 at Carruthers, which are expected to be drilled in either late 2012 or early in 2013. Hawk has a 100 per cent working interest in the north half of Section 10. Hawk recently drilled a vertical well testing the Basal Mannville formation at Dankin, Sask. However, the well did not encounter enough pay thickness to warrant drilling of a horizontal well in its current location. The company is

reassessing its 3D seismic data to determine a better horizontal well path and expects to drill a horizontal well at Dankin in late 2012 or early 2013. Hawk has a 100 per cent working interest at Dankin. At Seagram Lake, Sask., Hawk recently began drilling a 50-percent working-interest horizontal well targeting the Leduc (Duperow) formation. In an effort to minimize water encroachment in this horizontal well, the company expects to initially complete the well without acid stimulation. Hawk's 2012 thirdquarter production, based on ďŹ eld estimates, was approximately 520 boepd, weighted 95 per cent to heavy oil. For the fourth quarter, the company plans to conduct two separate 2D seismic programs in western Saskatchewan and one 3D seismic program at Silverdale, in the same region, to delineate future vertical oil drilling opportunities. Hawk expects to

A delayed start in PetroBakken’s second half capital program has resulted in third quarter production levels being at compared to the second quarter of this year. However, the company noted that reduced industry activity has provided increased access to services that allows it to catch up on the planned program, positioning PetroBakken to achieve its exit rate production guidance of 52,000 to 56,000 bbl. of oil equivalent per day. The company’s third quarter average production was 38,400 boepd (84 per cent light oil and natural gas liquids), based on ďŹ eld estimates, comprised of over 15,800 boepd from the Bakken business unit, 14,700 boepd from the Cardium business unit, and the remainder from the Saskatchewan conventional and Alberta/B.C. business units. This production level is relatively at to the third quarter of 2011, primarily resulting from the disposition of producing assets in the ďŹ rst half of 2012 and the delayed start to the company’s second half 2012 capital program. Production for September 2012 was 39,200 boepd based on ďŹ eld estimates, a slight increase over second quarter 2012. Currently, as a result of routine maintenance of individual wells and facilities as well as restricted production, PetroBakken estimates that it has approximately 1,500 boepd of additional productive capacity that is expected to be brought on production in the fourth quarter.

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drill one (one net) vertical well targeting oil in the Sparky formation of western Saskatchewan in its fourth quarter. The company also expects to drill one (one net) horizontal well late in the fourth quarter at either Carruthers or Dankin.

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B36

PIPELINE NEWS November 2012

Measuring pipe LeĹŒ: Sherri Nesvold struts oÄŤ to the next joint of pipe, measuring each one. A crew of 3 people measure the length and mark the centre line of each joint. Right: The Vantage Pipeline right-of-way stretches oÄŤ to the horizon. Photos by Brian Zinchuk

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PIPELINE NEWS November 2012

B37

Baytex buying oilsands leases for $120 million Cold Lake, Alta. – Baytex Energy Corp. said Oct. 2 it has agreed to acquire a 100 per cent working interest in 46 sections of undeveloped oilsands leases in the Cold Lake area of northeast Alberta. The $120-million purchase (before closing adjustments and costs) will be funded from Baytex's revolving credit facility. The acquisition was expected to close in early October. Baytex said the leases are near core heavy oil assets at Cold Lake and are prospective for both thermal and cold development. Regulatory approval has been received for the construction and operation of a SAGD project. Baytex anticipates moving forward with a SAGD pilot in 2013. If the pilot is successful, construction of a commercial 5,000 bpd SAGD project would start in 2014 with initial production in 2016. Besides the currently approved SAGD project, Baytex has identiďŹ ed additional areas that are prospective for thermal development. The acquisition adds an approved SAGD project to Baytex's

asset portfolio, which currently includes thermal recovery projects at Seal in the Peace River oilsands region of Alberta and at Kerrobert in southwest Saskatchewan. Once developed, thermal recovery projects provide a source of longlife, low-decline production. Baytex said developing these projects will reduce its corporate decline rate and enhance its ability to continue to execute its growth and income model over the long term. Reserves associated with the identiďŹ ed SAGD project total about 43.7 million bbl. of bitumen on a proved plus probable basis, eective Aug. 31, 2012, as evaluated by Sproule Associates Limited. Baytex estimates the ďŹ nding, development and acquisition costs will be about $12.50 a bbl. over the life of the project. “The acquisition of these oilsands leases is consistent with Baytex's strategy to build upon our existing heavy oil and thermal expertise. These leases are adjacent to our existing Cold lake operations, and the SAGD project complements our existing thermal operations at Seal

and Kerrobert. Beyond the thermal potential, we have also identiďŹ ed opportunities for cold horizontal

development on the acquired lands,� Baytex president James Bowzer said in a press release.

Baxtex Energy Corp. added to its extensive holdings in northwest Saskatchewan and northeast Alberta by scooping up oilsands leases near Cold Lake, Alta.

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B38

PIPELINE NEWS November 2012

Enbridge beeĂ€ng up its oilsands system Fort McMurray – Enbridge Inc. is expanding its regional oil sands system with a new pipeline and terminal facilities to connect eight producing oil sands projects in the Fort McMurray area by 2014. Enbridge Pipelines (Woodland) Inc., an aďŹƒliate of Enbridge, received approval from the Alberta Energy Resources Conservation Board on Sept. 27 to construct the Woodland pipeline extension project that expected to cost up to $1.4 billion. The project will involve construction of a 36inch diameter line approximately 385 km from Enbridge’s Cheecham regional oil sands terminal to its mainline hub terminal at Edmonton. The Woodland pipeline will have an initial capacity of 400,000 barrels per day expandable to 800,000 bpd and will eectively twin Enbridge’s existing Waupisoo pipeline. The new line will accommodate anticipated growth in bitumen production from Imperial Oil’s Kearl oil sands project, and increasing volumes from other projects already connected to Enbridge’s regional oil sands system, or expected to be connected. Enbridge has not yet received ďŹ nal commercial approval to initiate ďŹ eld construction from shippers, but anticipates it will do so in time to achieve a 2015 in-service date. The pre-construction development costs are being supported by shippers pending ďŹ nal commercial approval.

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Enbridge has also entered into an agreement with Suncor Energy Oil Sands Limited Partnership to complete a $150 million expansion of the existing infrastructure at the Enbridge Athabasca Terminal. Construction actually began in July 2011 to meet Suncor’s in-service target date by the second quarter of 2013. The expansion agreement formally announced on Sept. 27 is needed to accommodate the incremental bitumen volumes from Suncor’s Firebag 3 and 4 developments. Enbridge will construct a new 350,000 barrel tank as well as additional infrastructure including new booster pumps, meters and modiďŹ cations to existing piping and manifolds. Suncor has agreed to backstop Enbridge’s investment in these facilities through a long-term services agreement, during which Enbridge will recoup all of its operating costs, a return on equity, and all of its invested capital. The new projects will maintain Enbridge’s position as the leading pipeline operator in the Fort McMurray to Edmonton/Hardisty corridor and well positioned to tie-in new oil sand developments to mainline pipelines and increase capacity for current customers. Enbridge’s regional oilsands infrastructure includes the existing Athabasca and Waupisoo pipeline systems, which currently connect six producing oil sands projects. The existing 540 kilometre Athabasca pipeline has an annual capacity to transport up to 570,000 barrels per day of crude oil from the Athabasca and Cold Lake regions of Alberta, south to Hardisty,

WHERE ENERGY MEETS SAFETY

Alberta. The company through its Athabasca Pipeline aďŹƒliate is currently twinning the Athabasca pipeline that will transport increased oil production in the Kirby Lake area of the oilsands. The existing Waupisoo pipeline has an annual capacity to move up to 600,000 bpd of crude oil from the Cheecham Terminal to Edmonton. Enbridge is the largest operator of contract storage facilities at the Hardisty hub with the 3.1 million barrel Hardisty Caverns storage facility, plus the 7.5 million barrel Hardisty Contract terminal surface storage facility. There are more than 4.4 million barrels of operational storage associated with the Waupisoo and Athabasca pipelines and laterals.

Blackbird buys Ruger Energy Blackbird Energy Inc. announced Sept. 25 that it has entered into a deďŹ nitive securities exchange agreement dated Sept. 24 in respect of its previously announced acquisition of all the issued and outstanding shares of Ruger Energy Inc., a junior oil and gas exploration and development company in Alberta. Ruger has a 100 per cent working interest in 680 acres in the Alsask area located on the Alberta/ Saskatchewan border and currently has cash and cash equivalents of approximately $3.6 million.

We support the people who keep our communities safe. Our Safe Community program provides ďŹ reďŹ ghters, police departments and other ďŹ rst responders with funding for everything from equipment to training. The program gives the men and women who protect us the support they need to ensure the safety and wellbeing of our communities, now and into the future. Enbridge delivers more than the energy you count on. We deliver on our promise to help make communities better places to live. It’s part of the reason we were named one of the Global 100 Most Sustainable Corporations in the World. Enbridge.com/InYourCommunity

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PIPELINE NEWS November 2012

EQUIPMENT DIVISION

Saskarc offers a broad range of heaters in Hydronic (Glycol) and Forced Air models. Glycol System: applications include wrapping BOP’s and gangplanks, thawing frozen ground and curing concrete. Forced Air: applications include heating structures and hoarding.

Saskarc carries light towers in 6, 8 and 20KW, allowing for light and power for nearly any application. Horizontal Mast/Lay-down Model: Mast and lights lay across body of unit. Vertical Mast: Mast and lights adjust vertically using hydraulics.

Saskarc carries a large range of generator sizes from 14KW right up to 240KW, allowing power for most applications.

Saskarc offers a complete range of pumps from dewatering, solids handling, high volume draining, sound attenuated and more.

Saskarc carries fuel transfer and storage tanks in 500 Litre to 4700 Litre sizing, ensuring that most requirements in fuel transfer and storage are resolved.

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Saskarc is an authorized Wacker and Allmand distributor.

B39

B40

PIPELINE NEWS November 2012

More camps, more beds, more meals than any other remote turnkey housing provider in the United States.

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Before you can get oil and gas out of the ground, you need the infrastructure to get workers into the ďŹ eld. And no one does it faster, or better, than Target Logistics. We understand that building a lodge takes more than bulldozers and modular units. It takes great food, truly comfortable beds, innovative amenities, strict security and the ability to do whatever it takes to deliver a customized solution on time and on budget. From the Eagle Ford, to the Bakken, and beyond — we deliver whatever you need, because we do whatever it takes. To learn more, or to check availability, call 800-832-4242 or visit www.TargetLogistics.net.

800.832.4242 | www.TargetLogistics.net

PIPELINE NEWS

SECTION C November 2012 CurƟs Kemp, in the white hard hat on the catwalk, intercepts a joint of pipe as it is raised. Behind him are, from leŌ, driller DusƟn Lafrentz, derrickhand Tom Steengaard and Mathew Warburton, a tonghand with Gilliss Power Tongs. It was lightly raining as the crew worked near the U.S. border.

Make ’em light, so they can work Story and photos by Brian Zinchuk Estevan – In 1942, when the United States sought to bomb Tokyo in response to the attack at Pearl Harbor, they had a problem. They were using heavy, land-based bombers from aircraft carriers that were never designed for such planes. As a result, they had to substantially reduce the weight of the bombers while still maintaining their operating ability, otherwise they would never get in the air. The result was the Doolittle Raid, which was portrayed at the end of the Hollywood blockbuster Pearl Harbor. When Estevan-based Sun Country Well Servicing went about designing its service rig fleet, they went through a similar exercise. They had to get the weight of their rigs under some very specific numbers, otherwise they, too, would be grounded at times – particularly during spring breakup. The man heading up Sun Country’s efforts on the ground is Brad Bennett, vice-president of operations. Phil Amosah is the company’s field supervisor, while Blake Mile is the equipment manager. Bennett is one of three partners who started and operate the business, the others being Tony Hodges, president, and Rob Wasylyniuk, vicepresident of finance. “We’ve got some investors as well,” he added. The company has an office in Cochrane, Alta., where Connie Nastiuk is responsible for invoicing and payables, among other tasks. Janice Christanson is responsible for payroll and benefits (human resources). “We started in October of 2009,” said Bennett. “I’ve been around since the ’70s.” The outfit started with three rigs right away, the first in October, the second in November and the third in December of that year. They had six by November 2010 and then added one each spring and fall in 2011 and 2012. That has grown to 10 rigs now. “Rig 10 just rolled in in September,” Bennett said. In building those rigs, they kept weight as a prime consideration. It factored in the choice of steel used. It means fibre grating (a plastic-aluminum composite) walkways instead of steel or aluminum. The engine choice was selected in part due to its weight factor. ɸ Page C2

C2

PIPELINE NEWS November 2012

You’re not a number with an independent

CurƟs Kemp deŌly snags a joint of tubing as it is being raised.

ɺ Page C1 “This derrick is much more like an aircraft or a ship,” Mile said, standing near one of the units. The load beam assembly is hydraulically driven. It’s light and “fast fast fast,” he described. “We have very light rigs,” Mile said. The steel chosen was QT100, a “very high tech steel,” he said. “Typical steel is 70,000 psi tensile strength. This is 100,000 psi tensile strength.” The greatest weight savings is in the derrick, but it applies to the whole chassis. “We’re also running all Cummins motors, which is lighter than Detroits or Cats. “We run a nine-litre engine,” Mile said. It has the same power as other engines, but is lighter and easier on fuel. “That makes our front axle weight 16,000 kilograms, which is light for a service rig.” Bennett pointed out, “We don’t need bridge clearance for them. The real axles are less than 25,000 kilograms.” “Those are magic numbers,” Mile said. The result is much fewer headaches getting permits. All 10 rigs are freestanding units with 105-foot

derricks, allowing for double tubing and triple rods. All are rated to 200,000 pounds. “All our rigs are Courtney Berg Industries of Linden, Alberta. They are designed by Sparta Engineering,” Bennett said. “All our rigs are the same so switching people around makes it easier to do. Doghouses are built by Demby Trailers out of Weyburn.” “After we first started, I brought our rig managers in and asked them what changes they wanted.” Some ergonomics have evolved over time, making them more user-friendly. “We can rig up in 20 minutes,” Mile said. Not all in one basket Sun Country doesn’t go into Manitoba much. “We prefer to stay in Saskatchewan if it works out,” Bennett said. Their service area is from Bengough in the west to the Manitoba border in the east, and from the U.S. border in the south to Rocanville in the north. “Our guys are home every night. That’s one of the great things of the Saskatchewan service rig lifestyle – being home every night,” Mile said. “Most of our rigs are working for certain companies. We have one rig that’s a floater.” They work with approximately seven regulars. “We don’t put all our eggs in one basket,” Amosah said. Mile picked up on that, noting that having a diverse clientele means at road ban time, they can look for dry land to work on. Independent operation “Independents seems to do better than the larger companies,” Bennett said. “Especially for employee retention,” Mile added. “We have an excellent benefits program with matching RRSPs.”

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“You’re not a number,” Bennett said. Amosah said, “It means a lot when Brad knows your name, and your family.” Being independent also means being nimble, with Bennett noting in larger operations one loses all control. “We make decisions in five minutes,” Mile noted. Backgrounds “I started on drilling rigs in ’70’s and went to service rigs in ’76,” Bennett said. He grew up on a farm near Gainsborough, eight miles from both the Manitoba and U.S. borders. At the age of 20, he started working on the rigs. “I worked for Flint, then went over to Cenalta in ’91. I was in Waskada in the ’80s, from ’81 to ’86. I got into the management side with Flint in Manitoba,” Bennett said. He worked as a field supervisor, and lived on an acreage near Melita, Man. Amosah lived in Weyburn for seven years, then he moved to Raymore, where he played six-man football. He lives in Oxbow, where he met his wife and they have raised their children. Amosah worked on service rigs based in Oxbow for Cenalta Well Servicing. “They were bought out by Precision in 2001,” he said. He remained with that company until 2010, when he came over to Sun Country. His final two years at Precision Drilling were as a field supervisor, the same position he holds today. Staff “We’re fairly fortunate to have the core of guys that we do. The first three rig managers, we worked on the same rig together out of Oxbow,” Amosah said. Corey Widenmaier trained him as a floorhand, derrickhand and driller, Amosah noted. Jared Maffenbeier and Les Logue also worked with him. “When I came here, I wanted a different demeanor,” said Amosah. “These guys are my friends. They are my family. All 10 rig managers, I consider my personal friends.” “We try to promote all our personnel from within.” Bennett noted, “You don’t want to weaken a rig to start another. Sometimes you have to go outside to bring someone in.” “Training remains on the job. Rig managers are best for that,” said Mile. “All our rig managers are good at training new guys,” Bennett said. “They take their time, show them the dangerous spots, where not to stick your fingers. “It’s all about people. If you don’t have people, the right people, you don’t have anything. If they’re not doing the job that’s expected, customers aren’t going to call back.”

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Tel: (306) 634-6768 Fax: (306) 634-6738

PIPELINE NEWS November 2012

C3

Minister of Highways and Infrastructure Don McMorris, in the orange vest, poses with the board members of Long Creek Railroad.

Long Creek Railroad holds grand opening Story and photos by Brian Zinchuk Bromhead – A toot of the train’s whistle, and Long Creek Railroad is on track, literally. The province’s newest short line – its thirteenth – held a grand opening and barbecue at its Southall loading facility, approximately two miles northwest of Bromhead, Sask., on Oct. 2 The site is roughly 40 miles west of Estevan. The railroad was initially planned to take care of local farmers’ grain shipment needs. However, the meteoric rise of crude oil shipments by rail in the region have come as a welcome development. Indeed, by the time its grand opening was held, it had only shipped crude, not canola. Approximately 70 people came out to the grand opening, with several dignitaries involved in the deal making short speeches. Tours were provided of the engine and crude oil transloading equipment. For many present, a good number of whom are investors in the venture, it was a relief. The launch of this railroad was seven years in the making. Wayne Carten negotiated the purchase of the line on behalf of Canadian Pacific Railway. He noted “Shortlines work well. They have a lower cost base and level off efficiency.” Crude-by-rail has grown sharply in promi-

nence over the last two years. Carten noted CP will do 17,000 carloads of oil out of North Dakota this year. Much of that is heading either to Albany, New York, or the U.S. Gulf Coast. Carten told those gathered, “It’s been a long time coming,” and that CP looks forward to working with the short line. “They’re off to a terrific start,” he said. He acknowledged the province’s role in supporting the short line. “There hasn’t been a revenue movement on these rails since 2002,” Carten said. At that time, 27 cars used the railroad. By the time this newspaper goes to press, that number will have been long exceeded by the new operation. After the formal ceremonies, Carten noted, “It’s amazing it wasn’t ripped up.” The line went through the usual threeyear discontinuance plan, which under federal legislation requires rail lines to be offered to various levels of government before being either sold off or abandoned and scrapped. “If people want to save the line, you have to get the interest,” he said. There was a difference in valuation of the line between CP and the new branch line, but that was eventually resolved, resulting in the successful sale. The net salvage value of the line was approximately $2.26 million. It

changed hands March 31, 2012. “Shortlines have flexibility and bring it to us,” Carten said. “Everybody wins.” Saskatchewan Minister of Highways and Infrastructure Don McMorris pointed out the province has put $2.2 billion into highways over the last five years, over $500 million a year. “Every ounce, or barrel, or whatever measure you use, is not on our highways,” he said regarding shifting freight from roads to rail. Using rail gets traffic off the roads. ɸ Page C4

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C4

PIPELINE NEWS November 2012

More crude than canola shipping on this line Éş Page C3 “What a great way to get the tracks back into use.â€? The province provided a 34 per cent loan guarantee of $800,000 to the short line. Glenn Pederson, president of Long Creek Railroad, noted the Estevan to Neptune line was started in 1909, and its ďŹ rst train ran 99 years ago, in 1913. The steel, at 85 pounds per yard, is stamped with “1905â€? and came from Algoma Steel. The original steel was lighter, but this steel was brought in when the line was rehabilitated in the 1980s. Communities ourished with the rail, he noted. Even the circus came by train. In 1926, Southall was built. The Southall to Minton line was abandoned in 2000, yet the distance to oceans hasn’t changed, he pointed out. There is still a need to ship grain, and oil. “Today is a pretty exciting day,â€? Pederson said after the ceremonies. “The last seven years of meetings and planning have come to fruition. “We’ve guaranteed them weekly train service. If we get enough cars, it will be twice a week,â€? he said of their deal with Torq Transloading, the company that is putting the crude on the rail cars. He farms with his father, Dallas, who is the reeve of the Rural Municipality of Souris Val-

ley, and had acted as master of ceremonies for the event. They farm 7,500 acres. “Our ďŹ rst grain cars have been ordered,â€? Glenn said. “As a rail line, I hope weekly. As a farmer, I hope once a month to load a car.â€? The Pedersons, themselves, intended on loading 14 cars with grain, with Tribune as the loading point. Dean Weinkauf is one of four partners in Torq Capital Partners, the parent company of Torq Transloading, which is loading the tanker rail cars with crude oil from trucks. His other role is president and CEO of Goulet Trucking of Shaunavon, which is providing the trucking. “Last month (September) there were four cars. This month (October) there will be close to 100. It should double every month for a while,â€? he said. “We can do up to 350 cars a month before we do Phase 2. Phase 2 can take us to approximately 30 cars per day. We could go up to 80 cars per day with investment in infrastructure.â€? That would involve building more road and using more track, but no tanks on site. “We don’t use tanks at all. We can load a car as quickly as toploading without the investment for tanks,â€? he said. ɸ Page C5

Glenn Pederson, president of Long Creek Railroad, explained the history of the line.

Minister of Highways and Infrastructure Don McMorris talked about keeping traĸc oč roads.

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PIPELINE NEWS November 2012 Éş Page C4 Torq is a straight fee-for-service operator, and not a marketer. As of the grand opening, they had three people working at Southall. “We’re looking for more. We need four or ďŹ ve more. We’re ďŹ nding manpower is an issue,â€? he said. The work is very similar to battery operator work, he noted. The railroad is working with Johnston’s Grain Marketing in Welwyn, Sask. as a grain broker. CWB farm business representative Patrick Weatherald was on hand for the event. He said, “The Canadian Grain Act gives the famer the right to ship his own grain by producer car.â€? Up to ďŹ ve farmers can use one car, but generally they load their own. Farmers apply for a producer car by making an application to the Canadian Grain Commission. They then elect an administrator, such as West Central Road and Rail, or the CWB. “The CWB’s role in all this is to be a promoter of producer cars and to oer farmers the ability to sell their grain to the CWB through its two pools, the early delivery pool, or the harvest pol. Under the old system, producer cars ensured competitive rates for freight, elevation and cleaning, he noted. “If you load a producer car on a track here, you will not pay elevation and cleaning, which is generally $15 to $20 per tonne.â€? Those are major cost savings, but also involve more risk, he noted. It also drives competition for the elevators. Approximately 10 per cent of wheat and durum has gone by producer cars. “It’s good for the community, communities, I should say,â€? said Hartley Halvorson just prior to the commencement of the ceremonies. His farm is south of Torquay, but it is now rented out. “We were in on this a few years ago. We had a train out and loaded about 20 cars, but it died o,â€? he said, referring to producer cars farmers ďŹ ll with grain.

That was about 10 years ago. “TraďŹƒc is good. That’s what will make it sustainable,â€? said Don Hurren, who farms about 2,700 acres in the Torquay and Tribune area. Hurren is also a shareholder in the railroad. He got involved because he wanted to reduce freight rates and elevation charges, or, as he put it, “To put more money in the pocket.â€? Hurren noted he should be able to deliver grain to the railroad without having to wait for space at elevators. It also takes grain-hauling traďŹƒc o the roads Doug Tallon is chairman of the board of Great Western Rail, and was present as a representative of the Saskatchewan Short Line Association. “It proves the viability of short lines. We have more coming on stream every years,â€? he said. The Ministry of Highways has recognized its signiďŹ cance, providing the shortline association with $700,000 each year. That’s not a lot, especially divided among the now 13 short lines, but it’s better than nothing, and they appreciate it. Great Western, based in Shaunavon, was purchased in 2004 from a B.C. salvage company. Now it, too, is hauling oil. Great Western also provides locomotive power for the Fife Lake Railway and Red Coat Road and Rail. Tallon oered congratulations to the new short line. Darwin Daae farms about 3,500 acres near Torquay. He’s vice-president of Long Creek. Last winter he drove for a hot shot outďŹ t in Estevan, in part because last year’s ooding meant he had almost no crop. Crop insurance and a government payout helped, he noted. “It goes right past my yard, about threequarters of a mile awayâ€? he said. He would like to load rail cars that close, but the more likely place will be Torquay, three miles to the east. That’s an awful lot closer than the 50 miles to Weyburn. Daae got involved right from the start of the initiative, which

Isaac Unger, right and Crystal Daae take a turn at driving spikes during Long Creek Railroad's grand opening.

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PIPELINE NEWS November 2012

40 years for John Kmita Ltd.

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„ By Brian Zinchuk Weyburn – It’s pretty rare for a company to last 40 years in the oilpatch, especially under the same ownership. But John Kmita Ltd., a service rig company based at Weyburn, has persevered. And persever-

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ance is deďŹ nitely the proper term. When founder John Kmita was honoured at the 2009 Saskatchewan Oil and Gas Show as one of two Southeast Saskatchewan Oilmen of the Year, it was noted that each time he added a new rig to the eet, the industry collapsed. In accepting the honour, he cracked, “I built a new shop last year, and oil plummeted $100 a barrel.â€? In recounting his experiences, John laughed as he explained how an oil company man phoned him in the 1980s and asked how it’s going. The phone call came in the summertime. “Terrible. The kids got frostbite from staring in an empty fridge,â€? Kmita told him. John, himself, has largely stepped back as his two sons, Jonathan and Tyler, have assumed the reigns. Beginnings “I started in 1960 working for Addison Leyen,â€? John said. “I was 19 years old. I was originally from Regina.â€? “A friend was building the ďŹ rst Dairy Queen. There was an old house there. I tore it down. Then I started working on the rigs.â€? While many rig hands have at some point worked drilling rigs and service rigs, for John it has always been service rigs. They needed men to work south of Weyburn. “There wasn’t a whole lot of wells out there then,â€? he noted. “We worked for Central Del Rio, Mobil Oil, Canadian

Superior.â€? Central Del Rio Oils drilled the discovery well that got the Weyburn ďŹ eld going. It was the forerunner to PanCanadian, EnCana and then Cenovus, the current operator of the ďŹ eld around Goodwater. He wasn’t a roughneck for long. “I wasn’t scared of heights,â€? John said. “The rig I worked on, nobody else wanted to work on the derrick.â€? Norm Mondor, now of Aldon Oils, was the driller at the time. John spent a couple of years on the derrick. “I got set up as toolpush, then I went and worked in Alberta for a year. Then I came back and started my own company.â€? John Kmita Ltd. was established in 1972. “I bought a used rig in Natchez, Mississippi. That’s where we found a single. We’ve still got it. We’re still running it. “We redo it every four years. We just got it recertiďŹ ed this spring,â€? Indeed, that rig could be found working in the Cenovus ďŹ eld near Goodwater, gleaming with a bright new coat of paint. Asked how many engines Rig 1 has gone through, he said, “A couple. You look after them, they’ll look after you.â€? Rig 1 came in by rail car. “It cost $1,000 more to unload it in Weyburn than Portal. So we unloaded it there. The air lines were all frozen,â€? John said, noting it was a challenge to get it ofoaded. ɸ Page C7

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PIPELINE NEWS November 2012

C7

John Kmita, centre, is presented with his plaque for Southeast Oilman of the Year in 2009. On the leĹŒ is then Minister of Energy and Resources Bill Boyd. File photo

Éş Page C6 The company started with Mel Kitzul and Russ Sedger as initial partners. “They held the mortgage on the ďŹ rst rig and the company paid them back,â€? John said. That took about ďŹ ve or six years. Long service When he started out, there were just three people working on the rig, with John being one of them. Garry Myers and Glen Nimegeers were the other two. Myers started in 1972 and still works with the Kmitas. He’s is John’s brother-in-law. “He does a lot of our farming now,â€? John said. He also ďŹ lls the role of ďŹ eld supervisor Nimegeers went overseas and is now a consultant. Clarence Guider, a cousin, worked part time from 1972 to 1978, then full-time for 32 years. He passed away this past summer. “You always had some farm guy who you would call in when someone needed a day o,â€? John said. Guider was often that man. Two of their toolpushes have been with the company since 1993-94. Darryl Mutrie pushes Rig 1, Troy Bell has Rig 2, Trent Latham takes care of Rig 3, and Mike Church handles Rig 4. Backbone Farm boys have been the backbone of the industry for years, but there aren’t many farm boys left these days. “The younger guys, if they’re good, they stay on the farm. Before, you hired 10 farm boys, and nine were good.â€? Being mechanically inclined was a key point with those farm boys. These days, a boy out of school “can’t change a tire,â€? John said. Whereas a crew typically has ďŹ ve men now, back then it was just three – one on the brake, one on the stick, and one roughneck. “If you had good men, you could do it,â€? John said. “It evolved to four and then ďŹ ve. Now you get four and then ďŹ ve, then someone counting noses on the edge of the lease.â€? Buy a rig, industry collapses The period when John started the company also turned out to be one of the most diďŹƒcult for the Saskatchewan oilpatch, when the NDP government under Allan Blakeney brought in the infamous Bill 42. That legislation brought the industry to a crawl. “The government started paying for repairs and replacement. There was still some work, but it was not as lucrative,â€? he said. The company added a second rig in 1980. “We started it, and then it went like that,â€? John said, making a downward motion with his hands in reference to the oil business. “You just had to live through it. You tried to keep your men around. When you run your company yourself, you get by with less. “In the 1980s, Trudeau brought in the National Energy Program, and guys were taking their rigs to the States to work. We never went.â€? “In 1985 oil went to $9 a barrel, just after we bought Rig 3.â€? ɸ Page C8

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PIPELINE NEWS November 2012

Working the same Àeld for four decades

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Éş Page C7 “It’s all my fault,â€? John joked. “You make do with less. It gets nicely going, and then you’re down to nothing again.â€? With Rig 3, they went to a double-triple layout. When it came time to add Rig 4 in 2010, Jonathan noted, “We waited this time for the crash to happen, then we bought the rig.â€? “Rig 4 was in the yard and I said, ‘Well boys, there’s your inheritance. All you have to do is pay for it,’â€? John said. Family aair John married Roseann, also known as “Sandy,â€? in 1966. She did all the accounting and books until three years ago. She passed away in January 2010. They had four children. The two sons are still involved. Shannon and Michelle helped with the books when they were home. Both are now in Alberta. Michelle and her husband have an endless tubing company in Medicine Hat, and Shannon is in Airdrie. Her husband is an engineer. “In later years we got some farmland. We started with 40 acres where the house is. I liked horses and wanted a place out of town.â€? Those 40 acres were purchased from Sandy’s father. That love of horses has been passed down, as he pointed to his sons and said “It turns out these guys are rodeo cowboys, ropin’ and ridin.’ Their current events are bareback riding and team roping for Jonathan, and team roping and calf roping for Tyler. Both have earned a large collection of buckles and saddles. “The three (saddles) I won are in my house as decoration,â€? Jonathan, 42, said. Tyler, 37, said, “Three are in my house, and I ride ďŹ ve.â€? Both of the boys have been with the company their whole lives. Jonathan said, “I started when I was 15. If anybody asked, I had to lie and say I was 16.â€? Tyler added, “I was a little later. I didn’t start until I was 19. I ďŹ lled in in every position and did most of the farm work and ranching.â€? They now have 2,700 acres of land, 180 head of cattle and 40 horses. Jonathan has shares in Rafter Anchor Rodeo, an amateur rodeo outďŹ t, and Outlaw Buckers, a pro rodeo company. “I have horses at the Canadian Finals Rodeo in Edmonton and the National Finals Rodeo in Las Vegas. Other rodeos include Estevan, Elbow and Wood Mountain. There were 10 horses at the Calgary Stampede and a number of bulls. One horse named Calling Card was in the ďŹ nal four of the $100,000 round of saddle bronc. To run a service rig company and still take part in all these rodeos calls for a lot of balancing and sharing duties, as well as a lot of planning. ɸ Page C9

PIPELINE NEWS November 2012

“Terrible. The kids got frostbite from staring in an empty fridge.�

C9

John, Jonathan and Tyler Kmita head up John Kmita Ltd.

- John Kmita’s response to an oil company man when asked how things were going in the mid-’80s. Éş Page C8 Good clients, safe workers In driving through the Cenovus Weyburn ďŹ eld, one ďŹ nds several Kmita rig signs along the road. Working for decades for PanCanadian, then Encana and Cenovus has its beneďŹ ts. Regular work meant a lot of it has been ďŹ ve days a week, with weekends o. That has allowed the Kmitas and their sta to do things with their families. “It was nice. It was a dierent kind of oilpatch,â€? Jonathan said. Currently two of their rigs regularly work with Crescent Point, the other two with Cenovus. Their rotations have typically been 12 and two, or ďŹ ve and two, except for when big jobs are underway. “To keep long-term employees and guys want to make it a career, you have to make it so they can have times with their family,â€? Jonathan said. “You need to keep guys from burning out. We usually work 10 hour days. The cost of incidents is very

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high.� “Our accident record is second to none.� Rig 1 has had 1,700 days without a lost-time accident. Rig 2 is at 1,300, and Rig 3 is in excess of 2,000. “If you’re careful and train properly, you don’t get too many (accidents),� John said. “You get a lot more done at a nice, even pace. “We’ve worked for a lot of nice people who are good to work for. Your company name speaks for itself because you’ve been there so long. He joked that someone almost has to die for a

toolpush position to open up. John Kmita Ltd. has 25 to 27 sta on any given day. Jonathan said, “A lot of it is the personal service. If you have an issue, you’re talking to one of us. We have a more vested interest.â€? Asked if they have had oers to buy the business, the response was quite a few. John said, “The boys want to be in the business, so we’ll leave them the company. Instead of selling it to them, I’ll give it to them when I die. They’re taking over now.â€? ɸ Page C10

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PIPELINE NEWS November 2012

Ridin,’ ropin,’ and roughneckin’

Driller Tyler Collins seen at the controls of John Kmita Ltd. Rig 1.

Éş Page C9 Generally speaking, the company doesn’t lay o sta at springtime. That means shop work during breakup, but it also means keeping your sta. “We invest in them, so they invest in us,â€? Jonathan said. Tyler started looking after the company’s safety program in 2010. They ďŹ rst obtained their CertiďŹ cate of Recognition (COR) in 2007. “It’s not as bad now that we’ve done it a couple of times. Once it’s all in place, it’s not as bad as ďŹ rst getting it into place. Jonathan handles the management role, but that doesn’t preclude either of them from putting on the coveralls and ďŹ lling in as needed. “I think I spend more time on the rig than in here (the oďŹƒce),â€? Jonathan said. “This summer I was out there roughnecking.â€? That surprises some of the younger guys, he noted, but it goes a long way to gain their respect. John still handles the invoicing

Day

and similar work, as well as baling on the farm. “I’m the hired hand, the lowest guy on the totem pole,â€? he smiled. At 72 years old, he’s spent 52 years in the oilďŹ eld. Asked about challenges, Tyler said housing is one. “We’ve got guys driving from Regina every day.â€? Some of the hands who have worked from Zama to Brooks in Alberta are not used to being able to be home every day. But having that ability means a closer-knit oilpatch, Jonathan said. Most of their work is in the Goodwater ďŹ eld, or between Carlyle and Weyburn. “For the longest time, we were the edge of the oilďŹ eld. Now it’s moved more west and south,â€? Jonathan said. John had knee replacement earlier this year that has prevented him from riding. But like any cowboy, if you fall o, you get back in the saddle. “I’ve got some fat old horses waiting for me to ride,â€? he concluded.

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few miles from the farm he grew up on, located between Goodwater and Weyburn. “I’ve been here pretty much all my life,� he said. He started as a roughneck, and progressed up to driller, which he did for six or seven years. The last seven years have been spent as a rig manager, also referred to as a toolpush. Mutrie, 36, has been steady with John Kmita Ltd. for 19 years now. “I’ve been with these guys the whole time,� he said. “Rig 3 push Trent Latham has been just as long as me. We worked together for I can’t remember how long.� Prior to pushing on Rig 1, Mutrie’s prior

experience was spent on Rig 2. “When I ďŹ rst started, It was ďŹ ve days a week and weekends o. It’s still pretty much ďŹ ve and two.â€? Mutrie noted he’s been working close to home, and that Cenovus, their client, has been good to them. It also means he can have a life. “We drive 20 minutes to go to work,â€? he said. The easiest part of his job is having experienced workers. That makes your job a lot easier, he explained. The hardest part is making sure everyone is up on their safety program. “But we have a good safety program,â€? he added.

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PIPELINE NEWS November 2012

C11

Keeping down time to a minimum Estevan –When you hear the background of people working with service rigs, usually you’ll hear they were farm boys, or worked in this industry or that. Rarely will you hear Blake Mile’s response. He’s a marine engineer. More specifically, he’s a marine engineer who now works on the Prairies. But in some ways, it’s a return to home. Now Mile looks after the fleet of 10 service rigs with Sun Country Well Servicing in Estevan. He joined the firm in February 2011. “I started as a journeyman welder 25 years ago,” he said. As a kid he grew up in the Kipling area, and went to high school in Regina. “About 15 years ago I became a licensed heavy duty mechanic. I went to Alberta in 1987. I worked in the Calgary area and then Fort McMurray. Originally I worked in fabrication of natural gas compression equipment.” Following that, Mile spent a great deal of time working with Cummins in the oilsands mines. Komatsu, he pointed out, uses Cummins engines, as do Hitachi and O & K. “I was the oil and gas field engineer for Cummins for Western Canada when I met Brad,” he said, referring to Brad Bennett, vice-president of operations for Sun Country Well Servicing. They met over “mechanical issues,” sorting out third party issues. “I spent seven or eight days straightening out issues with Brad and other customers.” As for what attracted Mile to Sun Country, he noted, “Brad’s rigs were some of the first service rigs that stuck their neck out.” The original engines were spec’d as fire truck engines, but approved for warranty in use on service rigs. Now they are using the same engine, but with more of a bulldozer configuration. ɸ Page C12

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PIPELINE NEWS November 2012

Marine engineer on the Prairies ɺ Page C11 In 2002, Mile finished his training with the British Columbia Institute of Technology and got his marine engineer designation from Transport Canada. A marine engineer handles everything from welding, mechanics and machining to thermodynamics and boilers. He took the training on leaves of absence between work stints with Cummins. He would do a semester, taking classes day and night from 8 a.m. to 10 p.m. “After my term was done, I went back to Cummins.” There was a certain motivation behind that training. He explained, “I got it to do humanitarian aid work.” “I was in South and Central America on a hospital ship doing work in Third World countries.” The ship was known as the Caribbean Mercy. Both he and his wife worked aboard for several years as full-time volunteers. “I held the position of first mechanic/fourth engineer. I was able to do many off-ship things like orphanage construction, this was the most rewarding work of my life. The ship was 54-years-old and expensive to keep operating – Mercy Ships decided to remove it and the 53-year-old Anastasis from service to better focus on the relative youngster 27-year-old 16,572 ton Africa Mercy – still at work.” “I was working in Fort McMurray and burned out and looking for sunshine.” ɸ Page C13

Blake Mile served as a marine engineer on the hospital ship Caribbean Mercy for several years. The Caribbean Mercy oīered an eye surgery unit, cargo capacity, conference and seminar faciliƟes for a variety of programs. Her fuel and water tanks provided a cruising range of 12 days, or 3600 miles. Photo submiƩed

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$138 b/w

$13,900

2008 FUSION SEL AWD LEATHER, V-6, 93,000KM

$144 b/w

$16,900

XTR PACKAGE. 54,000KM

$159 b/w

77,000KM

$212 b/w

$24,900

2010 EDGE SEL + AWD LEATHER, MOON, 105,000KM

$188 b/w

$24,900

2011 EXPLORER XLT 4X4 LEATHER, MOON, 26,000KM

$259 b/w

$34,900

2009 SUBURU IMPREZA AWD WRX-265, MOON, 38,000KM

$209 b/w

$24,900

$28,900

$187 b/w

$18,900

2010 ESCAPE XLT 4X4 85,000KM

$18,900

2009 FLEX LIMITED AWD LEATHER, NAV, DVD, MOON, 54,000KM

$217 b/w

2007 CHEV SILVERADO CREW L.S. 4X4

$18,900

2008 ESCAPE LIMITED 4X4 $169 b/w

2010 F-150 SUPERCREW XLT 4X4

$139 b/w

$18,900

2008 CHEV EQUINOX L.T. 4X4 MOON, 56,000KM

$159 b/w

2010 F-150 SUPERCREW PLATINUM 4X4 LEATHER, NAV, MOON, 28,000KM

$336 b/w

$44,900

2010 F-150 SUPERCREW XLT 4X4 XTR PACKAGE 56,000KM

$217 b/w

$28,900

2010 DODGE NITRO SXT 4X4 LEATHER, MOON, 47,000KM

$188 b/w

$99 b/w

$18,900

$9,900

2008 EXPEDITION LIMITED MAX 4X4

2009 EXPEDITION LIMITED MAX 4X4

LEATHER, NAV, DVD, MOON, 110,000KM

LEATHER, NAV, DVD, MOON, 104,000KM

$249 b/w

$29,900

$249 b/w

$29,900

2009 EXPLORER SPORT TRAC LIMITED 4X4

2005 GMC ENVOY SLE 4X4

ADRENALINE, LEATHER, MOON, 51,000KM

100,000KM

$228 b/w

$26,900

2010 TAURUS SEL AWD LEATHER, 43,000KM

$169 b/w

$22,900

$9,900

$339 b/w

$45,900

2007 F-150 SUPERCREW LARIAT 4X4 LEATHER, MOON

$197 b/w

LEATHER

$216 b/w

$21,900

2007 EDGE SEL + AWD LEATHER, COMMAND START, MOON

$21,900

$358

$52,900

2007 EXPLORER SPORT TRAC XLT 4X4 $129 b/w

$12,900

2010 JEEP LIBERTY SPORT 4X4 TRAIL RATED, 56,000KM

$139 b/w

$28,900

$18,900

2011 F-250 CREWCAB 4X4 25,000KM

$247 b/w

$32,900

2008 GMC ACADIA SLT AWD LEATEHR, MOON, DVD

$159 b/w

$21,900

REVERSE SENSING

$209 b/w

$24,900

$18,900

$399 b/w

$52,900

2008 LINCOLN MKZ AWD LEATHER, MOON, 37,000KM

$199 b/w

$23,900

2011 LINCOLN MKS AWD LEATHER, MOON, NAV, 18,000KM

2008 GMC SIERRA CREW DENALI 4X4 LEATHER, DVD

$199 b/w

$23,900

2008 GMC ACADIA LEATHER SEAT COVERS, 51,000KM

$159 b/w

$18,900

2005 LINCOLN AVIATOR 4X4 $187 b/w

2011 LINCOLN NAVIGATOR 4X4 LEATHER, NAV, MOON, 19,000KM

2010 F-150 SUPERCREW FX4 4X4

$217 b/w

2007 EDGE AWD

$216 b/w

2012 EXPEDITION MAX LIMITED 4X4 LEATHER, MOON, NAV, 23,000KM

2011 DODGE RAM 1500 CREW SLT 4X4 TONNEAU COVER, CHROME, 51,000KM

$19,900

2007 GMC ACADIA SLT AWD

$13,900

2003 HONDA CIVIC 114,000KM

LEATHER, NAV, MOON, 49,000KM

$24,900

2006 ESCAPE XLT 4X4 LEATHER

2011 F-150 SUPERCREW HARLEY 4X4

$269 b/w

$34,900

LEATHER, MOON, TV, 132,000KM

$15,900

2010 LINCOLN NAVIGATOR 4X4 LEATHER, NAV, DVD, MOON, COMMAND START, 35,000KM

$369 b/w

$47,900

2007 PONTIAC G-6 HARDTOP CONVERTIBLE G.T. LEATHER, 65,000KM

$158 b/w

$15,900

2006 DODGE MAGNUM SXT 3.5L HEMI HIGH OUTPUT, 134,000KM

$99 b/w

$9,900

PIPELINE NEWS November 2012 ɺ Page C12 Eventually that ship was retired, and Mile returned to Canada, and Cummins. A few years later, he found work with Sun Country. “It’s important to have someone like Blake who can troubleshoot,” Bennett said. “The idea is to get the right resources engaged, either their own (the rig’s crew) or third party,” according to Mile. “Our downtime is virtually nil due to our maintenance program,” said Bennett. That means mining every computer for fault codes on every rig, and watching items like fuel consumption. “It’s usually a week of follow-up,”

C13

Mile said when they go over a rig. Field supervisor Phil Amosah handles the rig inspections. Together they tear down and build up a rig, looking for issues. Most of the maintenance is handled by the field crews. They also call upon two private mechanics, Shane Kits of CMT Mechanical, and Dennis Sabourin of LRJ Mechanical. Both are out of Oxbow. “If we have equipment in the yard, you’re not making money.” Indeed, it’s a rare occasion when you will see one of their rigs in the yard. Usually the location, on the Shand Road, is empty except for the shop and a few vehicles. Kelly Schnell of Kelly Hydraulics of Frobisher is a key support person, they added.

Field supervisor Phil Amosah, leŌ, confers with Rig 8 manager Brad Markham on a site near the U.S. border.

Strength In Our Resources #6 - 461 King St. • Estevan, SK 637-3460 www.petrobakken.com

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C14

PIPELINE NEWS November 2012

Keeping the rigs manned ENGINEERED ENVIRONMENTAL SOLUTIONS

Serving the Southeast Saskatchewan oilďŹ eld industry since 1994.

An Excel spreadsheet is key for Shannon Leibel in keeping track of all of Sun Country’s safety qualiÄŽcaĆ&#x;ons for their staÄŤ.

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Estevan – Shannon Leibel gets some pretty high praise from the senior management at Sun Country Well Servicing. As the personnel co-ordinator for a company in a highly competitive market for workers, it’s a key position. “She’s pretty spectacular. I could never do her job. She has a memory you wouldn’t believe,� said Brad

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Bennett, vice-president of operations for Sun Country. “We’ve got roughly 56 people on the rigs,â€? said Bennett. Some rigs are running with six men, but the normal is ďŹ ve. Having additional people allows for training and some exibility in staďŹƒng. “We’ve got three out of Oxbow. The rest are out of Estevan,â€? Bennett said. “That’s where our rig managers are, and crews as well.â€? Leibel started in August 2011, after a three year stint with Precision Drilling and eight years with Ensign Rockwell. “I do all the crew co-ordination. Guys need time o,â€? Leibel said. Family functions like weddings are just one example. “For any time o for any reason, I will re-crew their spot on that rig so they can take it o. The hours the workers put in depend on

where they are working. “I’ve had guys work a three-hour day or a 13-hour day. Usually it’s between eight and 12, seven days a week. They don’t have a ďŹ xed rotation, but when they have six people on a rig, it makes it easier or someone to take time o. They do follow hours of service requirements, however. As for where they ďŹ nd people, she said, “I advertise through the human resources centre and local papers. I get a lot of referrals from employees. I have a gentleman today from an employee on Rig 5.â€? “We’ve got quite a few from Ontario, about 10,â€? Bennett said. “We also have two trailers at the trailer park and have short-term accommodation room for up to six people.â€? Housing, Bennett said, is a big issue. “It’s very expensive,â€? he noted. ɸ Page C15

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PIPELINE NEWS November 2012

C15

Éş Page C14 Is it hard to ďŹ nd people? “Yes, it’s a big challenge,â€? Leibel responded. Earlier in her career, there were only a few service rig companies around, she said. “Now there are many companies competing for the same people.â€? “Dean Sawyer from Sawyer Safety refers a lot of people from Ontario. Word must be getting back there,â€? Leibel said. “Five young gentlemen from Ontario went to Sawyer for training. He referred our name. We hired three of the ďŹ ve. “It’s a total blessing. I appreciate him sending them.â€? Very few women apply, however. Only one has applied in the past year, but she didn’t get hired because she didn’t have a driver’s licence. Since each crew of ďŹ ve takes out ďŹ ve vehicles, no licence equates no job. In addition to ďŹ nding sta for 10 rigs, Leibel also tracks all the training and certiďŹ cates for the roughly 60 employees including management. “I have an Excel spreadsheet I track all the tickets in,â€? Liebel said. Leibel is originally from Fisk, between Rosetown and Kindersley. She and her ex-husband moved to Estevan in 1997. “I was here before the boom hit. There were lots of places to live, and no work,â€? she said. “It’s totally opposite nowadays.â€?

Shannon Leibel, right, confers with oĸce administrator Jae Friess. Leibel handles the human resources funcĆ&#x;on for Sun Country Well Servicing

Land sale bonus bids down over Ă€rst nine months of 2012 Governments in Canada have raised a total of $1.07 billion in land sale revenue to the end of September, well o the pace set in 2011 thanks largely to a steep drop in Alberta. Over the ďŹ rst nine months of 2011, Canadian governments raised $3.41 billion from land sales, up from $3.04 billion in 2010, and the third highest tally in the last 10 years. A total of $4.12 billion was raised over the same period in 2008, with $3.71 billion spent in 2006. Average land prices over the ďŹ rst three quarters of 2012 plunged to $295.78 per hectare, down from $846.79 over the same stretch a year ago. The amount of Crown land sold totalled 3.61 million hectares, down from 4.02 million over the ďŹ rst nine months of 2011. Alberta led the way in bonus bid revenue in the ďŹ rst three quarters of 2012, but is well back of last year’s torrid record-setting pace. The province collected a total of $872.66 million in bonus bids from January to September on 2.43 million hectares at an average of $357.98. At the same point in 2011, $3.06 billion in bonus bids had rolled into provincial coers for 3.46 million hectares at an average of $884.50. The province ended up with a total of $3.64 billion in auction

revenue for the full year of 2011, an-all time record. The huge bonus haul and high per-hectare averages paid last year were in large part due to heavy producer spending to tie up land in the Duvernay shale play. Despite the drop in 2012, overall relatively strong spending at land sales in Alberta demonstrates that the Western Canadian Sedimentary Basin still has considerable unconventional prospectivity where explorers are willing to step out and apply modern drilling and completions technology to deeper and more remote areas, analysts say. Over in British Columbia – a mainly natural gas producing jurisdiction – the province brought in $97.39 million over the nine months ending Sept. 30 on 92,173 hectares at an average of $1,056.61. To the same point of 2011, a total of $123.19 million had rolled into provincial coers for 121,165 hectares at an average of $1,016.71. Saskatchewan also saw fewer land sale dollars come in over the ďŹ rst nine months of 2012. Bonus bids fell to $78.93 million on 146,073 hectares at an average of $540.38. Over the same period of 2011, industry spent $214.88 million acquiring 420,747 hectares of Crown land at an average of $510.70. On the other side of the coin, in Manitoba, land sale bonus revenue over the ďŹ rst nine months

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climbed to $11.13 million as 17,049 hectares exchanged hands at an average of $652.73. Over the same period last year, the province had collected $10.1 million on 17,798 hectares at an average of $567.60. The oil-prone province reached a record $13.14 million for all of 2011. Manitoba has one more sale left this year, scheduled on Nov. 14, to break last year’s watermark. In addition to this, producers acquired a further 1.58 million hectares in work commitment bids over the ďŹ rst nine months of the year. Total work commitment bids totalled $1.06 billion, mostly from Royal Dutch Shell plc.’s $970 million for work bids in Nova Scotia, announced in January, on a total of 1.38 million hectares.

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PIPELINE NEWS November 2012

Raging River Increases 2012 capital budget to $82 million Calgary – Based on continued exceptional well results and strong production volumes, the board of Raging River Exploration Inc. has approved a $15 million increase in its 2012 capital budget to $82 million from $67 million. According to its website, Raging River Exploration Inc. is a junior oil and gas producer currently focused in the Kindersley area of Saskatchewan. The management of RRX has had a successful track record of building four previously successful oil and gas production companies including Wild Stream Exploration and Wild River Resources which were both sold to Crescent Point Energy Corp. The company will add 10 to 12 net horizontal wells to its program for a

total of 41 to 43 net wells. The revised capital budget also contemplates predrilling a number of 2013 locations assuming that operating conditions remain favourable. The revised capital budget provides $44 million for drilling and completions, $4 million for land, seismic and facilities, and $34 million for acquisitions. Based upon ďŹ eld estimates, third quarter production exceeded expectations with average production of 2,100 boepd (97 per cent oil). Average daily production for the period from April through December 2012 is expected to be 2,150 boepd (97 per cent oil), a further 10 per cent increase from prior guidance of 1,950 boepd. The increased forecast, the third this year, represents a 26 per cent increase from initial guidance of 1,700 boepd without increased capital expenditures. The 10 to 12 incremental net wells are expected to have a material impact on exit production, which is now expected to be 2,800 to 2,900 boepd (97 per cent oil). This third increase in exit guidance represents a 30 per cent increase from initial guidance of 2,200 boepd without increased capital expenditures. Weather conditions improved during the quarter, which allowed for an aggressive drilling program. The company drilled a total of 37 (28.8 net) wells during the third quarter including 36 horizontal Viking oil wells at a 100 per cent success rate and one vertical stratigraphic test well. A total of 17 (16 net) wells were placed on production in the third quarter and 19 (11.8 net) wells were waiting to be brought on stream in October. The optimized drilling and completion techniques continue to provide consistent improved production results. Average 45-day production rates for the 17 new wells placed on stream during the third quarter have exceeded 50 bpd of oil. This is consistent with the results of the ďŹ rst 13 wells drilled with this technique earlier this year. Drilling and completion costs have continued to trend lower. The average D&C cost in the third quarter was $800,000, leading to total per well on stream costs of $925,000. Raging River’s rapidly increasing production and cash ow will allow the company’s balance sheet to remain “exceptionally strong,â€? according to the company. They forecast that net debt at year-end 2012 will be approximately $35 million, 55 per cent drawn on its $65 million credit facility, representing less than 0.7 times debt to trailing fourth quarter cash ow.

Saskatchewan tops in building permits

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Regina – Building permits in Saskatchewan kept pace with hot summer temperatures. The province led the country in new building permits for August 2012, according to a report issued by Statistics Canada on Oct. 5. Saskatchewan’s building permits rose 47.9 per cent over last August, the highest percentage increase among the provinces and more than double the national average of 22 per cent. “The construction industry is an important part of Saskatchewan's economy and these numbers highlight the high demand in the province for construction services,� said Economy Minister Bill Boyd. “These are stellar numbers, and clearly show Saskatchewan's economy continues outperforming other provinces.�

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Permits were up for both the residential and non-residential sectors on an annual basis. Residential permits rose by 49 per cent while non-resident permits were up by 46.4 per cent. Month-over-month, building permits in the province were up 31.7 per cent between August 2012 and July 2012. Saskatchewan ranked ďŹ rst among the provinces, well ahead of the 7.9 per cent recorded nationally. “Construction projects bring jobs, business opportunities and a legacy of infrastructure improvements to communities across Saskatchewan,â€? Boyd said. “The steady increases in our population will likely mean that this high-level of construction work will continue the future, building an even stronger Saskatchewan as we move forward.â€?

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PIPELINE NEWS November 2012

C17

Passport reports hardy resource assessment, updates activity A resource assessment of Passport Energy Ltd.’s land holdings in the Hardy area of southeastern Saskatchewan by independent evaluators, GLJ Petroleum Consultants, has a best estimate of original oil in place (OOIP) of 1.72 million bbl. The study, eective April 30, 2012, covers 1,774 net hectares of Passport’s interests in the Hardy area along with an additional 2,189 net hectares of lands subject to a farm-in agreement. The OOIP estimate is based on the Hardy S HZ 1A4-16-4B4-09-004-21W2 well performance along with existing well control over 259 (58 net) hectares of land in the Hardy North area. GLJ’s best estimate of 7.44 million bbl. of discovered petroleum initially in place (DPIIP) resources was based on the 1A4-16 well performance along with existing well control encompassing more than 1,490 (252 net) hectares of land in the Hardy North area. There is no certainty that it will be commercially viable to produce any portion of the resources. The undiscovered petroleum initially in place (UPIIP) resource (total best estimate of 75.62 million bbl.) is based on existing Bakken oil production and well control encompassing more than 9,327 gross hectares of land in which the company has earned a working interest in more than 1,522 net hectares of land in the greater Hardy area. All numbers are net to Passport. Subject to the terms of a farm-in agreement, Passport has the right to earn an additional 2,189 net hectares of land. There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources. All GLJ estimates of DPIIP are as at April 30, 2012, and have been prepared in accordance with the Canadian Oil and Gas Evaluation Handbook. The 1A4-16 well, Passport’s ďŹ rst development well in the Hardy Bakken pool, has cumulative

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production of more than 27,000 gross bbls of oil in its ďŹ rst year of production. The well continues to produce above expectations, averaging more than 60 (15 net) bpd of light sweet (38.5 degree API) oil for the month of August 2012. Passport recently completed and placed on production its ďŹ rst operated horizontal Bakken oil well, Passport Minton HZ 1C11-32-3A-16-333-21W2. The well was completed using a 32 stage multi-fracture stimulation program and is currently in its initial cleanup and optimization phase of production. The company plans to announce the well's performance once stabilized rates have been achieved. The 1C11-32 well represents the ďŹ rst of a two-well commitment program on the previously announced farm-in agreement with a large, independent, Canadian oil and gas producer that encompasses 32 contiguous sections of land. With this well, Passport has earned a 32.5 per cent working interest (APO) in ďŹ ve sections. The agreement calls for Passport, as the operator (along with its 50 per cent partner), to fund the drilling and completion of two horizontal Bakken commitment wells to earn 100 per cent (50 per cent net Passport) in the spacing unit until payout of the wells (subject to a convertible gross overriding royalty) and a 65 per cent (32.5 per cent net) work-

ing interest after payout of the wells and 10 sections of land. Passport plans to drill, complete and place on production the second horizontal commitment well on or before the end of the fourth quarter, surface conditions permitting. Following the two wells, the companies have the option to drill ďŹ ve additional wells under the same terms and conditions to earn the balance of the 32 section block.

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C18

PIPELINE NEWS November 2012

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PIPELINE NEWS November 2012

C19

No charges laid in October 2010 bird landings The Alberta government decided in early October not to lay charges in connection with an incident that saw several hundred migratory birds land on tailings ponds at Syncrude Canada Ltd. and Suncor Energy Inc. on Oct. 25 and 26, 2010, after an expert found the primary cause was adverse weather. The decision was made after a thorough investigation and was based on expert advice provided by the University of Alberta’s Colleen Cassady St. Clair, a leading expert in North America on humanwildlife encounters and the deterrence methods used to mitigate that conict. St. Clair concluded that both Syncrude and Suncor could not have prevented the bird landings. She also determined that there were many factors leading to the incident where 551 birds were killed or euthanized after coming in contact with bitumen. The most signiďŹ cant factor was adverse weather conditions, including strong and variable winds, freezing rain and poor visibility. These factors forced

migratory birds to land abruptly in large numbers in and around tailings ponds, as well as on roadways and parking lots. Based on the evidence gathered by provincial investigators and on St. Clair’s expert opinion, the Crown prosecutor has found that there is no reasonable expectation of conviction in this case. The investigation has, however, led to discoveries that may change the approach taken to bird deterrence in Alberta. In her report, St. Clair suggests that the position of deterrents and artiďŹ cial lights may have inuenced where the birds landed. Industry practice for bird deterrence had not previously accounted for the inuence of light during poor weather. This important new information has been shared with oilsands operators. A number of other improvements have also been implemented since the incident, including radarbased deterrent systems and standardized regional monitoring protocols. Industry and the University

of Alberta are working collaboratively to implement electronic, ďŹ eld-based data recording, develop new technologies for automating bird monitoring, and testing new methods for bird deterrence. These eorts, together with the court-ordered research project resulting from an April 2008 incident in which more than 1,600 ducks died after landing at Syncrude’s Aurora mine tailings pond, will identify best practices for preventing bird landings on tailings ponds in the oilsands and lead to innovation for other industrial developments. Syncrude was charged in connection with that incident. Syncrude was found guilty in court on two environmental charges in connection with the deaths of the ducks. The company was charged under the Alberta Environmental Protection and Enhancement Act and the federal Migratory Birds Convention Act with failing to protect migratory birds from a toxic tailings pond.

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EMPLOYMENT OPPORTUNITY Corner Pocket Publishing in Melita, MB is seeking an individual for ADVERTISING SALES The successful candidate will have strong written and communication skills. Computer skills are an asset, however, training is available. This is a permanent full-time position with benefit package. For more information or to apply, contact: Corner Pocket Publishing Box 820 Melita, MB R0M 1L0 Phone: (204)522-3491 Fax: (204)522-3648 Email: cpocket@mts.net ATTENTION: CHERYL RUSHING

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CAREER Gu×de

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THE FOLLOWING POSITIONS ARE AVAILABLE IMMEDIATELY MECHANIC SERVICE TECHNICIAN Interested applicants can fax to: 306-634-4258 or email: brenda.jensen@bbaxtertransport.ca

Some of the many benefits to consider when applying for a position at Bert Baxter Transport in Estevan: • Full time, permanent employment • Full benefits packages available • Clean, safe work environment

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CAREER Gu×de &$5((5 23325781,7<

Equal Opportunity Employer All applications are welcome

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Currently seeking • Cathodic Protection Technicians • General Labourers • Journeyman Electricians

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Experience an asset but willing to train Competitive wages

Apply today with resume at: 937 Henry Street, Estevan, SK S4A 1N5 Ph: 306-634-1917 Fax: 306-634-1918

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CAREER GuĂ—de 7,0%(5:2/) 0(&+$1,&$/ is looking for

Heavy Duty Truck & Transport Mechanics

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101 Supreme St. (Shand access road)

Sun Country Well Servicing Inc. is currently seeking experienced Service Rig Personnel. Preference will be given to Class 1A and 3A applicants. Interested individuals can submit a resume via email or fax to Shannon Leibel at:

to provide quality service in a team environment. Competitive wages, beneďŹ ts package. Mail, fax or email resume to: P.O. Box 1577, Estevan, SK S4A 2L7 Fax: 306-634-2789 Jtedford.twm@sasktel.net

Email: sleibel@suncountrywellservicing.ca Fax 306 634 1200 • Cell 306 421 3418

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We’re hiring for various projects throughout Southern Saskatchewan

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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 16�). This position’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

• PIPELINE CONSTRUCTION LABOURERS • FOREMEN • 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 Driver’s License Ground Disturbance – (Heavy Equipment Operators only)

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Please submit your resume to : For more details and other career opportunities please visit: email: hr@abpipeliners.com • Fax:403.265.0922 www.abpipeliners.com For Inquiries please call: 780.384.4050

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Supplementing m menting g both the Drilling g and Production sectors off the th Oilfield Oilfi ld IIndustry. d t T Tanker k U Units, it Pressure Batch Trucks, and a Fully Equipped Service Truck are available. We specialize in transporting Salt Water, Crude Oil, Completions, Contaminated Mud & Fresh Water!

Office 1-306-453-4470 Fax 1-306-453-4404

PO Box 1089, Carlyle, Saskatchewan S0C 0R0 Phone: (306) 453-4411 Fax: (306) 453-4404

Manager 1-306-577-9960 Dispatcher 1-306-577-9801

Specializing in Non Damaging Biodegradable Drilling Fluids Designed for Horizontal Drilling Division President 306-577-9900 (Carlyle) Field Supervisor 306-421-0344 (Estevan) Field Supervisor 306-452-8182 (Redvers)

“Serving The Oil and Gas Industry with 24 Hour Drillingg Fluid Service”

Warehouse Manager 306-577-3347(Carlyle)

Designing & Implementing Production Chemicals for Western Canada Cell: 306-575-7521 Of¿ce: 306-453-4414 Fax: 306-453-4415

C24

PIPELINE NEWS November 2012

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