Pipeline News April 2013

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PIPELINE NEWS Saskatchewan’s Petroleum Monthly

April 2013

Canada Post Publication No. 40069240

FREE

Volume Vo 5 Issue 11

Road Bans

&

Sun Tans am ey Grah s d in L r in Senato r John McCa o t a & Sen

Eric Cantor House Majority Lead er Congressman

Ed Markey

Mr. Wall goes to Washington

Kevin McC arthy House Ma jority Whip

kamp Heidi Heit ratic Senator oc

kota Dem North Da

Repr

Steve Daines an Montana Congressm

Ron W Dem Comm ocratic C yden h ittee on En air of Sen ergy a a nd Co te mmer ce

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en irma tative n o Fr on E f the H ed Upt nerg y an ouse C on o d Co mme mmittee rce

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Senator Tim Scott

Saskatchewan Premier Brad Wall spent March 5-9 lobbying Washington in support of the proposed Keystone XL pipeline. See story Page A3. Photos courtesy Government of Saskatchewan

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PIPELINE NEWS April 2013

INSIDE SECTION A

SECTION B

4

Where are the knives?

1

SEESS grows by nearly 50%

5

Where are the specialized programs at SETI?

6

Southeast Sask. gains new truck dealership

6

Editorial

8

New energy horizons at WBPC

7-8 Opinion

19 Petrobank zeros its Kerrobert THAI reserves

14 Drilling overview

20 Husky's ironman

16 Vantage Pipeline progress

27 Torq expanding Unity transloading facility

23 No lineups for Ňying charter 29 Unity Bonspiel

PIPELINE NEWS Saskatchewan’s Petroleum Monthly

May 2013 Focus

ALTERNATIVE ENERGY

Contact your Sales Rep to be a part of the focus edition

SE & NW SK and SW Manitoba • Phone: 306.634.2654

Cindy Beaulieu cbeaulieu@estevanmercury.ca

Candace Wheeler

Deanna Tarnes

Kristen O’Handley

Teresa Hrywkiw

cwheeler@estevanmercury.ca dtarnes@estevanmercury.ca kohandley@estevanmercury.ca thrywkiw@estevanmercury.ca

Carlyle Phone: 306.453.2525

SW SK Phone: 306.773.8260

Regina & Saskatoon Phone: 306.715.5078

Alison Dunning

Stacey Powell

Al Guthro

observer@sasktel.net

spowell@prairiepost.com

al@prairieng.com

PIPELINE NEWS April 2013

A3

TOP NEWS Wall lobbies hard for Keystone XL By Geoff Lee Pipeline News Saskatchewan Premier Brad Wall returned from his trip to Washington on March 8 confident that he accomplished his goal to lobby U.S. lawmakers to approve the Keystone XL pipeline for environmental reasons. Wall spoke with Republicans and Democrats, legislators and the media about green energy initiatives in Canada and Saskatchewan. Specifically, Wall said that the clean coal technology being developed for SaskPower’s $1.4 billion carbon capture and storage (CCS) project for coal generated electricity at Boundary Dam Power Station near Estevan, can help the U.S. lessen its reliance on coal-fired plants. Wall invited decision makers and some media in the U.S. to attend the CCS symposium in Regina May 21-23 and to tour the Boundary Dam project later this year. The visit to Washington by Wall coincided with the start of the State Department’s 45-day public comment period on the Draft Supplemental Environmental Impact Statement for the Keystone XL project. U.S. President Barack Obama is expected to make a decision on the pipeline in May or June. Pipeline News invited Wall to share his thoughts about his trip to Washington during a telephone interview from Regina on March 13. PN: The Keystone pipeline is being evaluated on many factors including energy security and environmental, cultural, and economic impacts. What made you play the environmental card in Washington? Wall: It’s one we haven’t presented particularly aggressively as Canadians – neither the companies nor various governments. I think we have made the economic argument in a compelling way; we’ve made the energy security argument in a compelling way. Obviously, not everyone is convinced, but you see 70 per cent support for it in the States. I think that point’s been made reasonably well. Now it’s the administration’s decision in the wake of the State Department’s report. They have quite a loud and vocal

group of environmental NGOs (nongovernmental organizations) that are lobbying against it, so it’s my idea that we should give the administration some environmental elbow room by talking about what we’re doing here about the environment in Canada. That was what we did on the trade mission. We focused on our very large and historic investment on clean coal to underscore that we are serious about CO2. We pointed out that Alberta has its own program with respect to CCS and that Alberta has a price on carbon, and that Canada has more aggressive coal regulations than the U.S. These are important parts to be presented in the context of Keystone. PN: Why did you specifically choose to promote the Boundary Dam carbon capture project to Keystone decision makers in Washington? Wall: To underscore this point: When it comes to CO2 emissions in the U.S., pipelines are not their problem. The oilsands are not even their problem. Coal is their problem. A high 30s to 40 per cent of their electricity comes from coal. We have some technological answers to that question where coal doesn’t have to be eliminated from the equation. You can actually capture over 90 per cent of the CO2, use it for enhanced oil recovery and then successfully and safely store it under ground. That is certainly part of our history here in the province. Forty per cent of the successfully stored CO2 on Earth is stored in southeastern Saskatchewan (Weyburn) so this is part of the story we were telling. It does relate to Keystone because they want to know Canada cares about the environment and maybe even has some answers for a country that is still relying heavily on coal. The Weyburn CO2 Monitoring and Storage Project uses CO2 from the Dakota Gasification Company’s Synfuels Plant in North Dakota, which is shipped by pipeline to the Weyburn field in Saskatchewan, where it is used for enhanced oil recovery. PN: What part of the Boundary Dam project were American leaders most interested in?

Wall: Well first of all, there is a lot of interest that we heard at the State Department. We are going to be following that up with invitations to come and look at it. I can also tell you that legislators were very interested. I wouldn’t be surprised if we have a delegation come to Boundary Dam. We’re going to be starting up the plant in the fall and go live on a full-time basis in 2014. We are on time, on budget, we’re capturing 90 per cent of the CO2 and we are going to be able to do it at a comparable price point to combinedcycle natural gas in the years ahead. This is important innovation, and I think there will be some trips up north and even the media that we talked to there, to see what’s happening with respect to clean coal – if we demonstrate that it’s not an oxymoron. PN: Do you think your efforts in Washington will have a favourable impact on the Keystone decision? Wall: I hope so. That’s why we did it. It means $300 million to the treasury of our province if we could close the oil price differential. If we can do that, it means $2.5 billion to the industry. The pipeline goes through southwest Saskatchewan, so there’s real direct impact there and it’s got 15 per cent Bakken oil – it’s the formation we share with North Dakota and Montana, grudgingly (he joked). It’s important for our province. It’s important for our province to make the case, and we tried to do that. We hope it helps. PN: Who else needs to go to Washington right away to help promote Canada’s interests in the Keystone pipeline? Wall: I think we should we be aggressive in this particular market. I would say we should see the federal government going. I understand there will be ministers from the federal government travelling to Washington. I think that is important. I think Premier Redford (Alison Redford in Alberta) has indicated she will be returning soon. I think that’s also important. I think we need to make sure we take nothing for granted. I would also suggest the Thomas Mulcair should not go to Washing-

ton anymore and that would also be helpful. Federal NDP leader Tom Mulcair suggested to reporters in Washington on March 12 he would rather see Canada build a pipeline to carry crude from the west to the east than expand the Keystone pipeline to the U.S. Gulf Coast. PN: Have oil and gas companies done their share to back Keystone XL? Wall: I think we can all do a better job. We’ve all been trying, but I’m not sure if we haven’t missed a few points especially around the environment, but that’s not just the companies – it’s governments too. So now, we have a comment period and an opportunity to hopefully, positively influence the politicians. PN: Is there a lot of interest in Washington about the CCS symposium May 21-23 in Regina? Wall: I think we are going to see a well attended event. PN: Are you surprised by the flood of comments about your visit on your Facebook page and other social media? Wall: We got some positive comments. On social media you get both, but I think overwhelmingly Canadians understand this is important to the country and important to us in the west, and they want to make sure we are not being complacent. We are trying to make the case for this. PN: What kind of environmental initiatives or regulations can we expect from your government to further reduce GHG emissions from the energy sector? Wall: We have our greenhouse gas legislation in place. We are working on the price in terms of the fee for those who emit and that’s around the corner, but the legislation is in place so we are well under way, and it was also something we could point to when we were in Washington.

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PIPELINE NEWS April 2013

BRIEFS Where are the knives? Twin Butte production improves at Primate

During the ďŹ rst two months of 2013, Twin Butte Energy Ltd. drilled 20 (20.0 net) wells, including two horizontal wells at Wildmere assets the company acquired late last year. Twin Butte stated it intends to drill another two to four horizontal wells on the property before the end of the ďŹ rst quarter on 2013, or early into the second quarter. On Jan. 31, Twin Butte reported it had encountered reservoir performance issues at its Primate property in Saskatchewan, noting the property’s production had declined during the month of January from a peak of approximately 3,400 bpd to 2,500 bpd due to increased water cuts and reduced inow on several of the company’s producing wells. However, since that time Twin Butte reports successful stabilization of the property’s production at about 2,600 bpd, and the company -- which continues to monitor and maximize production -- believes the decline will not continue and future performance will be more analogous to other properties in the area. Based on analogy work the company conducted in conjunction with McDaniel & Associates Consulting Ltd., Twin Butte believes its Primate property will continue to produce for several years at an annual production decline of about 35 per cent. Briefs courtesy Nickle’s Daily Oil Bulletin

„ By Brian Zinchuk Pipeline News Estevan – Before throwing around a mountain of numbers, David Yager, national leader for oilďŹ eld services with accounting ďŹ rm MNP did a quick check. “All the cutlery o the table? Good, because it’s not going to be upbeat.â€? Perhaps it was a gut check, too, because he implied people might want to hurt themselves after hearing his numbers. Yager, who has spent 25 years running public oilpatch companies, made his presentation to approximately 20 people in Estevan on March 5. He started by saying, “2004 to 2008 was a plain old boom. The bust was in 2009. It rebounded quite quickly in the second half of 2010, when there was a massive switch to oil. “Our company was HSE Integrated, with a great bias to H2S.â€? He deďŹ ned oilďŹ eld services as “everything an oil company doesn’t do itself.â€? That market was something in the range of $60 billion in 2000. By 2008, it had grown to $145 billion, what he characterized as extraordinary growth. But in 2009, that dropped to $90 billion (noted on his graph by an “OMGâ€?). “Knowledge is money. The number that bothers me is upstream cashow from operations. It’s the lowest since 2003. I’m alarmed by this,â€? Yager said. Looking at the re-investment ratio, he noted this year that 144 per cent of cashow is expected to be spent. “What this means is between the internally generated cashow of $37 billion, and the projected capital spending of $54 billion, there is a $17 billion delta. That’s even more than I have. That’s a lot of money. “Some of it is coming in from oshore,â€? he said, citing Petronas’ purchase of Progress Energy. “It has to come from somewhere, it’s probably not bank debt,â€? he said. “Some may come from share sales. Crescent Point continues to raise money. But I ďŹ nd that troubling. This high of a reinvestment rate over what we’re generating internally is a risk factor if you’re an oilďŹ eld services owner/manager. “One of the things you have to be really careful about in oilďŹ eld services is responding to artiďŹ cial or temporary signals,â€? Yager said. The example he gave was a big spike in drilling in the last half of 2010 and 2011 driven by Alberta royalty credits. For active drilling rigs, he noted the ďŹ rst quarter of this year has been strong, but added, “The signals I’m getting from the drillers in Calgary is the rest of the year doesn’t look that strong.â€? “This is not a dynamic or robust business environment.â€? In other areas, Yager pointed out oilsands spending is steady, but projects are being postponed. “Everybody is getting cautious on their plans.â€? The general feeling is natural gas prices have bottomed out. All but one shale gas players are in decline, he said. Natural gas liquids targeted drilling is resulting in a lot of associated gas that can no longer be ared. Bitumen prices are depressed. “Raw bitumen is $40 a barrel. Brent is $110. You cannot build an oilsands plant for $40 a barrel,â€? Yager said.

Western Canada Select, “the benchmark heavy oil price,â€? is a blend of bitumen, synthetic crude and condensate. A year ago it was $72 a barrel. Now (early March) it is $69.45, a year out it’s $67.60. “The actual bitumen component of that is $40. The average price Devon got for bitumen over 2012 was $56. They are strictly a bitumen producer,â€? he said. WTI and Brent crudes are both down about $10 each per barrel from last year each per barrel, and are forecast to be slightly lower a year out from now. On futures, he said, “Forward selling production, unless you think oil prices are going to collapse, is not the advantage it used to be.â€? “Ten years ago, we drilled 800 horizontal wells. Last year we drilled 5,000. What does that say? I’d like to be a directional driller.â€? ɸ Page A9

“I’m 59, in pretty good health. Actuary tables say I should live until 82. I don’t know if I’ll be alive when that pipeline is built.�

David Yager, naĆ&#x;onal leader for oilÄŽeld services with accounĆ&#x;ng ÄŽrm MNP, laid it all out for oilÄŽeld services companies when it comes to the state of the industry. Before he started, he asked if all the cutlery was put away, lest someone wanted to slit their wrists. Photo by Brian Zinchuk

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A5

Where are the specialized BRIEFS Pengrowth programs at SETI? completes sale of Weyburn asset

„ By Brian Zinchuk Weyburn – Dion McGrath took over as CEO of the Southeast Regional College last October. The school, the parent organization of Saskatchewan Energy Training Institute, has seen almost a complete change of leadership since the SETI project began. SETI has now been in operation for a full year. "I’m still in the learning and observing phase,â€? McGrath said in a phone interview with Pipeline News in February. “There are a lot of things going on in the college.â€? The board was very clear in setting out its priorities for McGrath: ďŹ rst it wasn’t a ďŹ ve year strategic plan, which includes SETI. “The other big item is better identiďŹ cation of the program array that makes sense for SETI,â€? he said. This will involve striking a SETI programming committee. “What are the various needs of the energy sector?â€? he said. This includes looking at the labour market, learner demand, and instructor capacity, as well as academic models. “To do that, we need to engage the sector in a very meaningful way,â€? he said. The third priority is establishing partnerships, reaching out to industry, business and other organizations. The new Weyburn complex, being built in partnership with the school division, is the fourth priority. As for McGrath’s background, he said, “I spent the last 15 years with the pro-

Dion McGrath is the new CEO of the Southeast Regional College, which is the parent organizaĆ&#x;on for the Saskatchewan Energy Training InsĆ&#x;tute. Photo submiĆŠed

vincial government in various rolls and ministries - economic development, rural and agricultural development. My most recent posting was with post-secondary education.� In that position was as an executive director within the ministry. The experience means he understands government and what needs to be done to work

with it. An example is due diligence. “Government is pretty clear in its priorities,â€? he said. But even when presenting a solid business case, “A lot of times, the answer is ‘No.’â€? With SETI having completed its ďŹ rst year, he said, “I think we’re pretty pleased with our ďŹ rst year under our belts,â€? but added that coming

in at such a late point, he’s not clear what the expectation was when it ďŹ rst opened. “The number of learners that have passed through the facilities, the number of courses, the number of stakeholders, all point to very positive things we can build on going forward.â€?

Pengrowth Energy Corporation has completed the previously announced divestiture of its non-core Weyburn asset, with proceeds of approximately $316 million, net of interim closing adjustments. Proceeds will be used to repay all outstanding bank debt and will partially fund Pengrowth's 2013 capital program. This leaves Pengrowth undrawn on its $1 billion credit facility and with approximately $1.6 billion of long-term debt outstanding, composed of long-term notes and convertible debentures. Pengrowth is in the process of divesting additional assets with up to $700 million of value. The company said it will update the market on the progress of its disposition program over the coming months. The company intends to use proceeds from this divesture program to fund the ďŹ rst commercial phase of the Lindbergh thermal project in 2014 and to reduce debt further, while protecting the sustainability of its dividend.

ɸ Page A11 Briefs courtesy Nickle’s Daily Oil Bulletin

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PIPELINE NEWS April 2013

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 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 & NORTHWEST • Estevan 1.306.634.2654 Cindy Beaulieu Candace Wheeler Kristen O’Handley Deanna Tarnes Teresa Hrywkiw • Carlyle 1.306.453.2525 Alison Dunning CENTRAL Al Guthro 1.306.715.5078 al@prairieng.com SOUTHWEST • Swift Current 1.306.773.8260 Stacey Powell MANITOBA • Virden - Dianne Hanson 1.204.748.3931 • Estevan - Cindy Beaulieu 1.306.634.2654 CONTRIBUTORS • Estevan - Nadine Elson • Saskatoon - Josh Schaefer • Virden - Harley McCormick To submit a stories or ideas: Pipelines News is always looking for stories or ideas from our readers. To contribute please contact your local contributing reporter. Subscribing to Pipeline News: Pipeline News is a free distribution newspaper, and 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.

With oil over $90/bbl., there’s still uncertainty When you see oil priced at over $90 a barrel, one would think it’s full steam ahead. The impression we’ve been getting from players in the field is that’s not the case. Indeed, there’s a fair bit of uncertainty. Each year, around this time, we talk to a number of business people and ask how the winter went and what the summer holds. There hasn’t been a lot of optimism for this summer in those discussions, and several didn’t feel comfortable talking about it at all. That’s a marked change in recent years. Part of this uncertainty in the industry may be from the ongoing Keystone XL fiasco. Let’s just get this thing built already. The constraints on pipeline capacity hurt the oil industry last year. Pipeline apportionments meant difficulties in shipping oil. To counter those constraints, increasingly Saskatchewan producers are turning to rail. In early March Tim McMillian, the minister responsible for Energy and Resources, told the Canadian Association of Oilwell Drilling Contractors' annual general meeting in Calgary that 11 per cent of Saskatchewan’s crude is being shipped by rail now, and soon 20 per cent of Saskatchewan's oil production will be transported by rail. Three years ago no oil went by rail. We also saw some producers seeking a re-adjustment in rates from their contractors last year. As a result, Saskatchewan’s drilling numbers in summer of 2012 were substantially lower. Indeed, since breakup 2012, the active drilling rig count was consistently lower than the previous year, at many points off 20 to 30 rigs. The winter season from Jan. 1 onward was initially off by 20 per cent. It got close to 2012 numbers at the end of January, but then dropped by the latter half of February. On the service rig side, there may be a little more optimism. Aaron Cugnet of Aaron Well Servicing in Weyburn told us there are indications of a busy sum-

mer. But, he added, that depends on the weather. On March 18, the province announced it was providing $264.4 million to the municipalities as part of its annual revenue sharing program. That’s up 11.4 per cent from the previous year. This number is tied to the province’s income from the provincial sales tax, roughly equal to one per cent of the PST. Coincidentally, that number is really close to the $300 million the Ministry of Energy and Resources estimates the province is currently losing over the course of a year due to the pipeline differential and WTI/Brent differential. When you’re leaving that much money on the table, maybe that’s why the level of optimism seems to be waning. If the province is losing $300 million, the industry is losing a lot more potential dollars. It wasn’t that long ago that $90 a barrel was considered astronomical. But the goalposts have moved. Back in October, Mike Heier, CEO and president of Millennium Stimulation Services and chairman of Trinidad Drilling Ltd., told us, “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. 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.” Indeed, his statements seem to be bearing fruit. If the marginal barrel is $65 now, no wonder the industry isn’t jumping up and down with enthusiasm at $95, especially since pipeline constraints mean lower returns than that. Perhaps when the snow has finally gone, everyone will be in a better mood.

PIPELINE NEWS April 2013

From the Top of The Pile

A7

OPINION

By Brian Zinchuk

Laying it on the line for the new pipeline It’s not often that you see a provincial premier make such a concerted effort to support one industry, but we saw that from Saskatchewan Premier Brad Wall in mid-March. He spent the better part of a week in Washington, knocking on doors, trying to get the Keystone XL pipeline finally approved. It’s been a full-court press, with Wall following on the heels of Alberta Premier Alison Redford. When I first hired on with this newspaper almost exactly five years ago, I made a list of every possible story I could think of at the time that I might want to pursue. Top of the list was Enbridge’s Alberta Clipper, and then TransCanada’s Keystone, to be followed by Keystone XL. Alberta Clipper has long been in the ground and the original XL turned TransCanada into an oil-shipping pipeline, but Keystone XL is still in the jawboning stage. We planned to focus an entire edition on Keystone XL no less than three times, only to cancel it because the project had been put off yet again. This was no small effort in Washington. Wall was in Washington right after the legislature opened for the spring session. Usually premiers stick close to home during the session. Sometimes it’s hard to get cabinet ministers out of the legislature for a luncheon, never mind out of the province, while the session is sitting. Instead of addressing the speaker in our legislature, Wall was talking to the speaker of the House of Representatives, Speaker John Boehner. Wall’s Facebook page chronicled his lobbying efforts. There was a meeting with Representative Fred

Upton, chairman of the House Committee on Energy and Commerce, where he talked Keystone XL Pipeline & the BD3 (Boundary Dam) Project in Estevan. Earlier he spoke to Senator Ron Wyden, Democratic chair of the Senate Committee on Energy and Commerce; Democratic Senator Jon Tester of Montana; House Majority Whip Kevin McCarthy; chair of Senate Energy Committee Senator Ron Wyden, House Majority Leader Eric Cantor; Congressman Ed Markey, sponsor of the “WaxmanMarkey climate bill”; Arizona Senator John McCain (the guy who ran for president against Obama); former ambassador to Canada David Wilkins; Republican Senator Lindsey Graham of South Carolina and North Dakota Democratic Senator Heidi Heitkamp. Another important person, but not elected, was Assistant Secretary of State Kerri-Ann Jones. Some of these, Wall noted, were very supportive of Keystone XL and want to learn more about our world-leading carbon capture and storage. Expect a lot of dignitaries to be coming through Estevan this year. It’s probably a good thing the term changed to carbon capture and storage from the previous carbon capture and sequestration. Sequestration has a whole new meaning on the Hill these day. Early in the trip Wall was delivered a keynote speech at the Woodrow Wilson International Center for Scholars, where he talked about Saskatchewan and Canada-U.S. trade relationship and Key-

stone XL. One of the people he spoke it is a former counterpart – Senator John Hoeven, former governor of North Dakota. I had my eyes opened a few years ago while attending the Williston Basin Petroleum Conference. When Hoeven, then governor, was being introduced, it was pointed out he was running for the Senate. Apparently that was a much more important posting then being a governor. In Canada, individual senators or members of Parliament have next to no power compared to that of a premier. At the time of writing, I haven’t heard of the prime minister heading down to Washington. The comments of his counterpart, leader of the Opposition Thomas Mulcair, sure didn’t help our cause. Maybe we need someone to counterbalance the damage, and not just a cabinet minister. This Keystone XL thing matters. If our industry can no longer build major pipelines, we’re up a creek without a paddle, or a canoe. The only way to grow production will be by rail. It’s not going to get any easier. If anything, pipeline debates have become 10 times harder. We lose this battle, we may lose the war. We need our politicians to put it on the line, no matter what their political stripe, otherwise there will be no more new pipelines. Brian Zinchuk is editor of Pipeline News. He can be reached at brian.zinchuk@sasktel.net.

Lee Side of Lloyd By Geoff Lee

Nixing Keystone XL could unite us If U.S. President Barack Obama rejects a permit application for TransCanada Corporation’s Keystone XL pipeline, then what? Since Obama has never even hinted that he might approve the project, let’s assume he won’t for the sake of this opinion column. Without the pipeline, the price differentials between Western Canadian crude oil and higher priced Brent oil, for example, are likely to persist. For how long is anyone’s guess. Some U.S. producers in North Dakota and Montana will suffer as well if Keystone is killed. Of the 830,000 barrels of crude per day that that the Keystone XL and Gulf Coast pipeline would carry, approximately 250,000 bpd is slated for U.S. oil. The transportation alternatives would be increased rail shipments in the near term and in the long term, construction of other proposed pipelines to our East and West Coasts. There is Enbridge’s Northern Gateway pipeline from the Edmonton area to Kitimat and Kinder Morgan’s Trans Mountain pipeline from Edmonton to Vancouver. Either of those pipelines would end the “one U.S. customer” dilemma that faces the oil and gas industry in Western Canada – but they won’t be built

overnight. Another solution is for TransCanada to go ahead with its proposal to repurpose portions of its mainline natural gas pipeline to ship Western Canadian oil to Eastern Canada. There, it could be refined into cheaper gasoline for Canadian consumers who might cheer “Bravo” to Saskatchewan and Alberta. If Obama rejects the Keystone, Canada should reject the U.S. as a reliable oil trading partner as well, and focus more on Asia, India and Europe. We can become a major exporter of oil and gas with pipelines to both coasts and get better prices. This would ensure our own energy security as much as the Keystone is touted to do for the U.S. Pipelines to both coasts could help to generate a sense of national unity, similar to the building of the Canadian Pacific Railroad across Canada, with most of Canada buying into a Maple Leaf energy policy. If Obama rejects the Keystone, he may inadvertently force us to become masters of our own energy future. If Keystone dies, then we should vow to sell oil at a premium to the U.S. when they need it, the same way they openly discount our oil from Western Canada. We also need to reduce the impact that oil production has on climate change in this country in order for countries with green policies to buy from us.

Environmental concern over the Keystone pipeline is the very reason that could lead Obama to reject the Keystone pipeline. The Keystone has become a poster boy for resolving climate change and is motivating Obama to talk more about a greener energy future. The Keystone pipeline may not be the pipeline that will rejuvenate the Alberta economy hard hit by reduced royalties from discounted oil. Saskatchewan is also taking a royalty hit. The solution could be the Northern Gateway or the Trans Mountain or the repurposed mainline gas pipeline – but time is not on our side. The lack of pipeline capacity could lead to more oilsands’ project cancellations and delays and that would also impact the economy in other provinces that manufacture a lot of equipment for the oilsands. The time is now for all stakeholders across the country to sit down and quickly figure out a solution – if Obama says no to Keystone. Personally, I like TransCanada’s idea to repurpose the mainline gas pipeline since it will service the entire country and bring the economic benefits of western oil to every province and territory. For the first time, oil from Western Canada would unite the entire country. Could the “Last Weld” be the next “Last Spike” in nation building? Ironically, that might be up to Obama.

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 April 2013

Shifting Gears

One Woman’s Perspective on Life, Liberty and the Pursuit of Land Locations By Nadine Elson “You don’t have much of a sense of humour, do you, Mom?” Dominic asked, out of the blue one day. My son was 10 at the time, and we were in my “office,” the family mini-van, on our way to one of our rental properties to deal with a problem. “What do you mean?” I asked, startled. We were in the residential rental business dealing with people. I had a daughter aged 13, and a son entering puberty. If my sense of humour appeared diminished at times, it was completely understandable. “Well,” he replied, “Daddy tells lots of jokes, and Monica and me tell jokes, but you don’t tell jokes.” I nodded. It was true. I rarely told jokes. My husband, Bruce, on the other hand, was a joke encyclopedia. By contrast, I could memorize the handbook for the truck driver written exam, yet could mess up the punch line of a joke I’d heard only an hour before. “That’s true,” I told my son. “Daddy does tell lots of jokes. But who do you think laughs at Daddy’s jokes?” I asked him. My son was silent for awhile as he mulled that

Laughing all the way over. “So Monica and me and Daddy have the telling sense of humour,” he summed up. “And you,” he paused, speaking deliberately, “you have the laughing sense of humour.” He was right. I have “the laughing sense of humour” but for a time, when I first started driving hot shot, I lost it. My laughing sense of humour, that is. I lost it because I was trying so hard to learn about the oilpatch. It was a new business to me, it was a serious business, and it was a man business. I had forgotten the obvious. The obvious is that men think differently than women. And what men think is funny is often very different than what women think is funny. My male boss would joke with me. But I didn’t know him very well, and I often didn’t get it. “Just kidding,” he’d say. That would confuse me. What part was he kidding about? Did he mean it or not? Was he kidding about the kidding? At the leases, the men would say things and I would respond, but later in the evening, I would repeat entire conversations and scenarios to my husband. “What does it mean when a guy said … after I had done … ?” I would ask. Bruce would translate. Then one day, I had an epiphany. Bruce would often tell me about the antics at his work. Many of the stories involved the release of gas, their personal gas, in confined spaces with other men. The men thought it was hilarious. I thought it was gross. Men think differently, I realized. I had just forgotten that. Gradually, I relaxed and started laughing again,

as I got used to working with the guys. Many months later, I was forced off the road near Bienfait when a fuel truck did not stop at a stop sign and pulled out in front of me. I had just left the town and was still in the reduced speed zone, but it was slippery. I was hauling a 30-foot trailer loaded with pallets of chemical for a drilling rig in Manitoba. My best option to avoid a serious accident with the fuel truck was to take the snow covered ditch, which I did gracefully, avoiding all signs and markers. The load had not shifted and so, once the truck and trailer were out of the ditch, the boss asked me if I was okay to continue. He had arrived at the scene and had supervised the recovery operation. He had assured himself and me that there was no damage. I said that I was okay to carry on. As I drove slowly by two men to get back to the turnoff to the highway, one man called out to me through the open window as I passed, “Try not to hit the ditch!” A woman would never have said that, but he was not a woman. He was a man. I smiled sweetly, eyes forward, and held up my middle finger through the open window as I passed. I was rewarded with belly laughter, deep male belly laughter. I laughed too. In fact, I was laughing all the way. I do have “the laughing sense of humour.” 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 efficiently. Contact her at shifting.gears.hotshot@ gmail.com with comments or questions.

Are You Covered? By Harley McCormick

Make sure your maintenance is up to date Now that breakup is here, business owners have the opportunity to take a look at things that get put to the side while running at full steam. Quite often one of these things is the maintenance of equipment. Whether this is simple maintenance, such as oil changes and grease jobs, or more in depth work, such as complete engine rebuilds, it is important to ensure that equipment is in top working condition. Well maintained equipment is a factor in the frequency of machinery claims. When you first set up your insurance, or if you have moved your insurance to a new broker, you will have been asked to provide a five year loss history for review. Insurance companies need to know this history to help determine the risk associated with providing insurance to you. Insurance companies will try to work with the broker and business owner to ensure proper coverage and rates satisfactory to all parties. In the event a business has an undesirable claims history, they will often find ways to limit claims. The companies do not penalize for one or two “bad luck” claims, but will review and suggest loss prevention measures to business owners who have a history of regularly claiming losses. Some of the prevention measures can include: higher rates on machinery,

higher deductibles on losses, restrictions on the coverage provided, and occasionally refusing to write the insurance. If regular markets do not wish to write insurance for you then a specialty insurer will be approached and the costs can be quite substantial. I’m not suggesting that a business owner not ever put in an insurance claim, but that they view risk management as an essential part of owning a business. Maintenance of equipment is one of these measures and will help lead to a strong business relationship with your insurer. If you wish to discuss measures to help mitigate risk and create risk management procedures, feel free to contact your broker while on break up. Brokers working with oil related companies understand that this is the best time of the year for you to do these things. You do not have to review your insurance policy at renewal. Lastly, I want to leave a few ongoing claims examples that have been provided to me by an insurance company heavily involved with the oil and gas industry: 1) The insured party’s employee was operating a BobCat. He was backfilling around a wellhead and struck a casing valve on the wellhead with the bucket of the BobCat. When the valve broke

it caused hot gas and then hot oil and salt water to spray out of the well. This affected the well site and the adjoining farmer's land and trees were damaged. Estimated loss: $600,000 to $1,200,000 2) The insured party was operating one of their excavators, backfilling a trench they had dug to install a pipeline. The excavator slid and came in contact with a natural gas well head causing damage to the wellhead. No operations were being performed on the wellhead. The pipeline construction was associated with an entirely different natural gas well. Estimated loss: $50,000 to $200,000 3) The insured was contracted to attend oil rig site to perform some minor welding. He welded a couple of brackets to the interior wall of the pump house and some other minor maintenance around the site. After completion he left the site about 45 minutes after the last weld. His helper checked the buildings before leaving and advised there were no indications of any problems. A half hour after they left the site, they got a call from the tool push that the pump house was on fire. Estimated loss: $540,000 plus potential loss of income. Harley McCormick is a Virden, Manitoba based insurance broker with 10 years in the industry. He can be reached at hmccormickfca@mymts.net.

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Big shifts, from vertical to horizontal, gas to oil ɺ Page A4 “If you’re in the trenches every day, you probably don’t understand how much we, as an industry, have had to adapt ourselves to the new realities. But when you take a five-year look at it, it’s really extraordinary, to change. The rosy picture of production in the Western Canadian Sedimentary Basin promoted by Prime Minister Stephen Harper says we’ll be producing six million barrels per day by 2030. He showed the same slide with growth, but with the top chopped off due to pipelines being full. “The cruel fact is, pipelines are full. We all know this. Pipelines have morphed into rail cars.” The odds are slightly in favour of Keystone XL going ahead, but not so good on Northern Gateway, according to Yager. “I’m 59, in pretty good health. Actuary tables say I should live until 82. I don’t know if I’ll be alive when that pipeline is actually built.” “The Kinder Morgan expansion is a little better,” he said. Eastern pipelines look good to get Western oil to Montreal. Getting it to St. John, New Brunswick would work, but the problem is not one of them can move a barrel before 2015. “We’re in a bit of a bind here for the foreseeable future. The term is apportionment. You can’t sell all your oil.” There are enough rail cars under construction to haul two million barrels a day around North America by 2014, he said he read in the Financial Post. The good news about that is it will allow companies like CNRL to get their bitumen to Louisiana from Fort Mac. The bad news is it will cost $25 a barrel. “If we don’t get these pipelines built, if we have to go to rail, these differentials we’re seeing today, because of shipping costs, are going to start looking somewhat permanent.” “Oil consumption in the United States in 2012 was the lowest since 1996. From the peak in 2008, consumption is down something like four million barrels a day. Consumption of oil in the United States declined 600,000 barrels a day last year, because of the recession. “You’ve got a decline in consumption and a rise in supply … those are not circumstances that cause prices to go up.” In 2012, land sales in Western Canada were down to one third of what they were in 2011. Land sales are a signal of MNP’s clients’ confidence in the basin. “If they’re not buying drilling rights, they’re not feeling that good about things. This is another signal,” Yager said. “That being said, staying in business will be big business. We still have a $106 billion industry.” “We’re not growing as a sector. Is this a pause or an end? Will shale oil do to oil prices what shale

gas did to gas? I don’t know. “There’s downward pricing pressure for services. It’s time for caution. Look internally for your gains. Don’t expect price increases. “Am I competitive? Will my clients pay, and when? Do I lien the well? What are my billings and receivables? Are you paying attention to your day tickets?” he said. “When business is good, you can always borrow more than you should. “When am I in trouble? You can go from hero to zero in 90 days if the client you are working for gets in trouble.” Yager drew from his own experience. “I’ve done it wrong. I’ve been so close to broke, twice. You’re Wile E. Coyote about to go splat and you get caught by a branch on your belt.” “Stable manpower should increase your margins. If you’ve got something that will save money, your clients want to hear it. “Safety is money.” A lot of money in the business has been eaten up in the cost of labour, he noted. “We’ve lost it to wages.”

MNP partner David Hammermeister introduces David Yager for a gut-check reality assessment of the oil industry. The presentaƟon took place on March 5 in Estevan.

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PIPELINE NEWS April 2013

There was a lot to take in for the listeners during MNP’s David Yager’s presentaƟon.

Decades running and growing companies His roots in the oilpatch run deep. David Yager, national leader for oilfield services with accounting firm MNP, said, “My dad was in the oil services business. He was in accounting. He retired as president of Weatherford Canada.” “I dropped out of university. I was a fisherman.” He then bought The Roughneck magazine and ran it for 13 years, ending in 1992. “I was the editor and part-owner,” Yager said. From 1994 to 2002, he served as president, founder, and director of a predecessor company of what became Integrated Production Services Ltd. (IPS) when two public companies merged in 2000. During that period they undertook and integrated 16 private company acquisitions. IPS traded on the Toronto Stock Exchange before it was taken private in July 2002. IPS became a division of Complete Production Services, which was sold to Superior Energy Services for $2.8 billion in February 2012. IPS offered cased hole services for completion and production including E-line, slickline and production testing, plus artificial lift

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equipment, production optimization and monitoring. “We did our first public company in 1987,” Yager said. In 1987 he founded the predecessor of Tesco, a top drive company. That company financed and marketed the development of the world’s first portable top drive drilling system. Top drive greatly enhanced the oil industry’s ability to drill extended reach horizontal wells. Tesco has a market value today of about $550 million a top drive drilling systems are widely employed worldwide. From 2003 to 2012 Yager was the CEO and chair of HSE Integrated Ltd. During that time they acquired and integrated 19 private companies from 2004 to 2011 creating HSE, Canada’s only national industrial health and safety services company which operates from 26 locations across North America. HSE has about 800 employees with annual revenues exceeding $100 million. HSE was listed on the TSX until it was sold for $85 million in July of 2012. Yager remains involved with HSE as a consulting strategic advisor.

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Winners and losers The big shift to horizontal drilling from vertical and from gas to oil has produced a number of winners and losers, according to David Yager, national leader for oilfield services with accounting firm MNP “Big drilling rigs work. Big rigs with ratings to 3,000 metres work. In Alberta they’re equipping some rigs with top drives. I see Precision just retired a whole bunch of conventional triples because they’re not worth it anymore. “Little rigs that used to pay the rent around shallow gas country around Medicine Hat when nothing else was working, they don’t move at all. If you can’t get any work in the oilsands for delineation, you don’t work at all. “Directional drillers won the lottery. “Companies that run slickline, primarily natural gas wells, head to the auctions in Nisku at Ritchie Bros. and get yourself a slickline truck. “Coil tubing is doing very well in wells that go around the corner. “Gas well testers that have not been able to reinvent themselves as frac flowback guys are doing poorly. Pumping services are one of the winners, he noted, but “Anything to do with H2S is dead. Basically hydrogen sulphide gas costs about $1.40 to process and $1.40 to ship and it only sells for $3.” “Multi-stage packers, there’s a lottery winner. In the old days, you would drill a well, if it had this much pay, it was worth the trouble and you sold a packer for $10,000. Now you can sell 10, 20, 30 stage packers for a quarter million bucks. If you’re in the packer business, the number of dollars on packers per well has just gone through the roof.” Plunger lift, an artificial lift for water in gas wells is a loser, he said. But artificial lift is not. “Everything is going on pump. Maybe they’ll flow a little bit, but everything’s going on pump.” Optimization is another winner Yager listed. Electrical line for cased hole and open hole logging is no longer what it was because logging is now done right in the bit. “Anything related to the total number of drilling days is staying steady. The rental equipment business is holding quite well.” Finally, the last loser he listed was “Anything related to gas wells. It’s just dead. I was in Medicine Hat towards the end of January, and there was a guy there that did pipeline tie-ins, and he hadn’t tied in a gas well in two years. He is making money tying in oil wells in Taber.”

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PIPELINE NEWS April 2013

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Need to know what to offer before a foundation can ask for money ɺ Page A5 Asked if that program committee work had already been done before the dirt was scratched, he said, “To my knowledge, no one here has indicated, when I’ve asked the question, if it was done. As a result, the board was very clear in saying we need to do this. I simply have concurred with the board in saying, ‘Yep, this is pretty important. We need to identify a longer term programming array that aligns with labour market demands in the sector and learner demands.’” Dave Harazny, who handles communications with the college, said, “For a number of years, we’ve had advisory groups that have helped us out and met on an annual basis to provide input for programming. That is ongoing.” McGrath said during the December advisory committee meetings, programs like instrument tech and petroleum engineering were suggested. As a result of that, they met with the University of Regina petroleum engineering program so see if there was an opportunity to bring petroleum engineering programming out into the region if there was sufficient industry demand and labour market need. “It was a positive meeting and interest from the U of R, but there are still a lot of questions. What’s the right academic model, financial model, demand?” The college is going to ask energy companies about their interest level. “It could be a combination of a credential, a diploma and a degee.”

As for blue-collar instruction, he said, “That may be how it plays out in the end.” “A lot of it is providing for employees to get more credentials. It piqued our interest and is worth exploring?” The programming team will be looking at defining what they are looking at. “It could be night classes. It could be Friday, Saturday. It depends on what the need is, and who we work with, the U of R, NAIT or SAIT. Most of the training offered currently at SETI is a carryover of the previous programming, before the school was built. Harazny said, “We have been running what we had before, but at a higher capacity because we have more space in the building. “The concept was always to have the next level of training, over and above the two day course.” McGrath pointed out there is demand for the programming that is there right. “What’s beyond that? That’s what our focus has been.” Offering training in the southeast, instead of having to go to Nisku for training, is a discussion McGrath said their board has had. “That’s something that we should be looking at, and ensuring, within reason. Nisku has a lot of programing that requires a lot of capital investment and a lot of liability with it that, as a college, we need to weigh. The opportunity going forward is what are those programs the energy sector needs we can realistically and comfortably put a business case and model together to meet their needs. Sometimes, we’re going to be hard-pressed to make the business case work. In those cases, we’ll be hard-

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pressed to put those programs forward if it’s going to create uncertainty for the college. “I’m not going to prejudge what that programming array could be or should be. I simply want a proper process and proper due diligence that identifies the opportunities, that sorts and prioritizes them, ones that industry demands.” This may mean adjusting suites of programs as needs change. The college needs to be flexible and nimble, he noted. Asked about the once much-talked about idea of having a rig on site and the fact that one was offered to the college, Harazny said there are issues with paying for the transportation, ongoing maintenance and certification. “It just wasn’t feasible.” “We’re governed by the ministry and the annual budget.” The foundation initially planned for SETI has fallen flat, with no activity essentially since construction started. “We need to have an engaging product to go out and be successful in fundraising,” McGrath said. “Once we understand the opportunities for programming, and how we prioritize them, we will be much more successful in engaging industry. Whether it’s putting in instrument tech, or bringing in a rig from Nisku, or someplace else, I think we’ll have much better success in having that concrete product. (We can) go to industry and say here’s what we can do. Here’s the barriers we need to overcome. Do you want to help us do it?” ɸ Page A12

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PIPELINE NEWS April 2013

No major new programs expected until 2014-15 year

Éş Page A11 At this point in time, he doesn’t feel they can conďŹ dently do that. Asked where is the specialized training that was promised with the building of SETI, McGrath responded, “That’s the question I am trying to tackle right now.â€? As for timelines, he said, the SETI program committee was supposed to deďŹ ne its focus in February. “I’m hoping in the summer or fall we’ll have a good sense what those programming opportunities will be. “I’m not focused on our '13-'14 (academic) year. We’re well past the point of doing new things in how we can program, unless it’s short term programming. My line of sight is our '14-'15 academic year. What can this committee work on that we can have in place for that academic year?â€? That timeline essentially puts the prospect of major new programming ďŹ ve years later town the sod-turning in late 2009. “I can’t speak to what was happening before I was here. I can only speak

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to what my line of sight is going, and how quickly we can achieve these things. At the end of the day I expect, and intend, to hold the college accountable and to be held accountable by my board, and our partners and our communities to deliver on some of this stu,â€? McGrath said. When asked about the academic world acting in the same sort of time scale as the oil industry (ďŹ ve years being a little less than the length of the Bakken boom) he said, “That’s where we have to ďŹ nd a balance in the world we’re living in. “The private sector moves pretty darn quick when they make decisions. The public realm isn’t as quick, sometimes, and requires a lot more approvals up and down authority grids to make approvals and decisions. We as a college need to be accountable to the ministry that provides us signiďŹ cant funding. That’s a huge element of our world. For us to recognize and balance the needs of the energy sector, I expect they are going to proactively engage with us, to make these programming opportunities come to fruition, and for me, that’s one of my accountabilities. “My approach to doing this is going to be very inclusive. Those who want to tell me what they think, or where the opportunities are, we will be deďŹ nitely listening. We will be taking those suggestions and running them through a decision matrix to ďŹ gure out how we can make it work. What are the shortfalls? If we need to go back to industry and say to make this work, we need this in terms of equipment, we know we can’t go to government. They’re going to say 'No.' That’s what I intend to do,â€? McGrath concluded.

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PIPELINE NEWS April 2013

A13

Breakup? What breakup? This photo was taken Mar 19, when the weather was a balmy -14 C in Bienfait.

The winter that refused to end Getting as much done as possible before breakup By Brian Zinchuk Regina – Depending on the spring thaw, highways road bans can begin on March 15. That’s because by that point, the road beds could be warm enough that they can handle only so much weight before becoming damaged. The road restrictions, combined with a little thing called mud, mean spring breakup has arrived. This year, Old Man Winter didn’t get the memo. Indeed, on St. Patty’s day, a storm warning for southeast Saskatchewan resulted in yet another 15 or so centimetres of snow, after an even larger dump two weeks before. On Mar. 18, temperatures in Estevan were running -15 C in the mid-afternoon. As a result, road bans were still a ways off. Steve Shaheen with the Ministry of Highways and Infrastructure told Pipeline News, “Typically, road bans start in the southwest and work their way northeast. They last six weeks from the time they go on, but there are cases where they aren’t consecutive. Some areas have been known to remove them if there’s a cold snap.” No road bans had come on anywhere in the province, and by that date, they were looking at the last week of March for them to start. “It’s all dependent on the weather. I guess we’re paying for last year,” Shaheen said. “This year is a lot later than previous years.” Roads can support more weight in the winter due to the freezing action making the roadbed stiffer. Thawing weakens the roadbeds, making them susceptible to damage. The service rig business, with its large, nondivisible loads, has to pay particular attention to road weights. But as of mid-March, things were still humming. Phil Amosah, field supervisor with 10-rig Sun Country Well Servicing in Estevan, said on March 18, “Everything’s rolling.” Usually they would be working on their maintenance program by that date. “We’ve been

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pretty fortunate. Some of the RMs we work in, we can get permits. Last year we had almost no road bans." Aaron Cugnet, president of Aaron Well Servicing, said on March 18, “Quite often we’re starting to shut down. I’ve got everything flying still. As long as the let us go, we’ll keep going." Weyburn based Aaron Well Servicing operates four rigs and is completing its fifth.

On the drilling side, some companies tried to squeeze in one more hole. Darwin Duncombe, dispatcher with rig-mover Fast Trucking, said, “We’ve got seven rig moves tomorrow (March 19). Some are to drill, some are to rack. We have 10 to 12 rigs to move this week. Most are to rack, but a few are to do another hole.” Of those last holes, some are along the highway, but not all.

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PIPELINE NEWS April 2013

Drillers expect this summer to be like that of 2012 The winter drilling season was busy for most operators. CanElson Drilling, seen here southwest of Stoughton on March 5, had all 14 rigs working.

By Brian Zinchuk Estevan – Saskatchewan’s drilling rig fleet’s 2013 winter drilling season was better than 2011’s, but not quite the level of 2012’s. According to Rig Locator, on March 1 the active drilling rig count hit 100 before beginning its inevitable breakup decline. In 2012, the months of January and February saw 100 to 110 rigs active for

most of that time. This year, that number struggled to top 100 for just a few days. The first half of January was spent in the 80 to 90 range, and then the following six weeks hovered in the 90s. That’s still more activity than was seen in January and February of 2011, when the rig count floated from the low-90s to mid-80s before spiking just before breakup.

Red Dog For Estevan-based Red Dog, president Wayne Zandee said, “The winter season was really busy from October 1. The summer (of 2012) was terrible. “This summer, I think we’re going to see a similar situation. It could be a long breakup, if the runoff is what they say it might be. ɸ Page A15

PIPELINE NEWS April 2013 Éş Page A14 This past winter saw a lot of snow in southeast Saskatchewan. On March 4, a storm socked in their crews at their rigs. “We have some guys who can’t get out of the rig,â€? he said. They would end up scattered among the trailers on site until their relief could make it. In talking to clients in Calgary, Zandee says there’s going to be activity, but not a lot. One of the reasons he cited was the dierential on crude prices that has discounted Canadian oil. In the meantime, Red Dog is building its fourth rig. In early March it was being prepared for painting in Estevan. Stampede Bill Devins with Stampede Drilling said the winter has been “Really good – 100 per cent utilization for us. “We’re happy with that, for sure.â€?

Investigators determine cause of Àre at Co-op ReÀnery Complex

Stampede launched its ďŹ rst rig on Nov. 27, 2012, and its second on Feb. 15. The summer is looking up, too. “One hundred per cent for us. We’ll be good for this summer. I ďŹ rmly believe we’ll be busy. Our problem may be not enough rigs, truthfully.â€? As for a third rig, he said, “We’ve considered it. We’d like to catch our breath.â€? CanElson Mike Smith with CanElson Drilling in Carlyle said, “The winter’s been good. We had all 14 rigs out running for the most part of Q1. As for the summer season, he said, “We’ve got most of ours lined up.â€? Asked if there was uncertainty in for the summer, he responded, “Yeah. We’re looking at the same type of summer as last year. Some of that was wet weather, some was market demand.â€?

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Regina – Fire investigators have determined that the Co-op ReďŹ nery Complex (CRC) ďŹ re on Feb. 11, 2013, was caused by a failed vent plug. That result was released by the Regina Fire Service on March 8. FireďŹ ghters were called to the CRC at 12:26 a.m. on Feb. 11 with reports of a ďŹ re at the location. Regina ďŹ re crews staged outside the complex and were eventually released by CRC sta. CRC ďŹ re crews contained the ďŹ re to an area in the central part of the plant. A carbon steel vent plug failed as a result of a chemical reaction known as sulďŹ dation. Over time, extreme pressure and extremely high temperatures caused the vent plug to fail, causing the ďŹ re. No one was injured in the event. Damage to buildings and equipment is estimated at $2,500,000.

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A16

PIPELINE NEWS April 2013

Vantage Pipeline continued work through the winter

The Vantage Pipeline is expected to begin ÄŽlling in October or November. This porĆ&#x;on, near Bengough, was completed before Christmas. File photo

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„ By Brian Zinchuk Calgary – They’re plugging away on the Vantage Pipeline, the largest project of its type currently underway in Saskatchewan. The Vantage Pipeline project is meant to carry liquid ethane from Hess Corporation’s natural gas processing plant near Tioga, N.D. through Saskatchewan to interconnect with the Alberta Ethane Gathering System (AEGS) near Empress. Empress is right on the Saskatchewan/Alberta border, where the South Saskatchewan River crosses into Saskatchewan. Vantage Pipeline ULC is based in Calgary and has the same management team as Mistral Energy. David Schmunk, chief operating oďŹƒcer of Vantage, told Pipeline News that just prior to Christmas, spread C was completed. That work was from east of Assiniboia to 80 kilometres from the U.S. border. On Spread B, they worked throughout the winter, and will ďŹ nish up the project this summer. “They’ll be done about August,â€? Schmunk said. Spread B runs from Highway 21 to east of Assiniboia, is almost 300 kilometres, almost half the length the 700 kilometre length of the project. Spread D, the last 80 kilometres in Saskatchewan remaining, was still in the bidding process in March. The contract is expected to be awarded in April. It runs from the U.S. border to the end of spread C.

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A17

PIPELINE NEWS April 2013 Éş Page A16 The 120 kilometres in the U.S. is expected to be awarded in April as well, with work beginning July 1. The pipeline is expected to be commissioned in October. “Pretty much everything is according to plan,â€? Schmunk told Pipeline News on March 1. “We’re hoping the end of October, or start of November will see the ďŹ rst ethane in the pipeline. We’re anticipating it will take about two weeks to ďŹ ll the pipeline. Migratory bird legislation means the Saskatchewan summer kicko will have to wait until the little birdies leave the nest. They’re hoping to start Aug. 1.

Vantage Pipeline facts

Compliance Solutions

The Vantage Pipeline is 700 kilometres in length, with a total distance in Canada of 578 kilometres. Of that, 504 kilometres is within or alongside existing pipeline and road rights-of-way. While the 10-inch line is not the largest diameter pipeline project underway this year in Saskatchewan, it is by far the longest of its type for the current year. The $300-million line runs northwest from Tioga, crossing the international border just east of the intersection of the Saskatchewan, North Dakota and Montana borders. The line enters Canada near Beaubier, and goes west-by-northwest along Highway 13, passing near Assiniboia and Shaunavon. Near Gardenhead, it makes a right turn and heads almost straight northwest to Empress on the other side of the Alberta border. Pumping stations are slated for Assiniboia and Empress. These 500 horsepower, electrically driven pumps will be located in buildings designed to minimize noise impacts during the operation of the pipeline. The steel pipeline will be in high vapour pressure service. The maximum operating pressure will be 9,930 kilopascals (1,440 pounds per square inch). The Vantage project will have the capacity to transport 6,300 cubic metres per day (40,000 bpd) and will be expandable to 9,500 cubic metres per day (60,000 bpd) by adding two additional pump stations.

The Vantage Pipeline saw construcĆ&#x;on conĆ&#x;nue through the fall and winter.

File photo

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PIPELINE NEWS April 2013

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PIPELINE NEWS April 2013

A19

There is a lot more room in Kash Anchors' new home.

Kash Anchors moves to larger location Estevan – They had been looking for a while now, and ďŹ nally Kash Anchors has a new home. But in a bit of irony, what’s old is new again. The shop where Tracy McCon-nell started his career is now the new home for his business. Kash Anchors moved a little further east, into the former Wilhelm Construction building. That building has been home to many businesses over the years, including Baker Oil Tools. “Tracy worked here. He’s come full circle,â€? said Kelly McConnell, the fairer half of the husband-and-wife ownership team. “Twenty years ago, this is where I started with Baker Oil Tools. It was full, then, too,â€? Tracy added. They moved into the new location at the end of December 2012. On Feb. 25, the local Desk and Derrick group toured the facility. That’s ďŹ tting, since Kelly is the president of the group.

In their former location, she noted, “We had three bays and a seacan. You had to go outside to go to bay three. We had a rack outside.â€? The new facility has roughly three times the space. Tracy noted, “We have the ability now to run two sandblasters. We have more storage for a larger selection of equipment and accessories. Everything is now indoors under one roof. In the old location, Tracy noted the sta was tripping over each other. Now they have their own work space. The ďŹ ve-year-old company has six full-time people and one part timer. A year-and-a-half ago they expanded into tubing rotators, a device designed to reduce wear on tubing and rods. The company is working on its SECOR certiďŹ cation now, and has ISNetworld in its sights. “We’re already in ComplyWorks,â€? Tracy said.

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A20

PIPELINE NEWS April 2013

New location, and making room for good people Estevan – When you ďŹ nd someone worth hiring, grab them. That’s the philosophy Estevan Meter Services Inc. takes when they come across good people, which can be hard to ďŹ nd. It’s important for a company that is growing in several ways. Their sta has increased. The shop in Estevan is expanding. Last year they added a new location in Virden, Man., called Virden Meter Services. Doug Martens, president and co-owner, said the company is in the middle of a substantial expansion. “We’re currently working on a shop expansion,â€? said Martens. “It’s going to be our repair shop. We’re going to move the repair shop to the new addition.â€? That will allow the warehouse space to expand to the east, into the newly vacated space that was formerly the repair area. “We’re thawing out the ground right now. We hope to pour concrete in a few weeks,â€? Martens said on Feb. 25. The new expansion will add 7,000 square feet, and have one bay door. They have about four to ďŹ ve acres on the site, including the lot to the south they currently lease out. They can deďŹ nitely use the additional warehouse space. There are row upon row of air compressors, for instance. They are used for instrument air, replacing the produced gas that used to be used for controls. “The middle will be more warehouse space,â€? he said. “We will be moving the repair shop for the third time since I’ve been here,â€? Martens noted, adding the company was founded in 1967. ɸ Page A21

This new addiĆ&#x;on to Estevan Meter Services will allow the company to stretch out its products within the building.

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PIPELINE NEWS April 2013

Rory Badley is an inside salesperson with Estevan Meter. They will soon have more room for their stock.

Éş Page A20 “We moved here in November 2008. We thought it would be more than ample. (We’ve had) good luck, I guess. We’ve been very fortunate. We’ve been busy. “Instrumentation is growing today,â€? Martens said. There’s more instrumentation on facilities such as batteries and test separators. They use more complex controls, and there’s more of a focus on measurement. “Twenty years ago, a lot of sites didn’t even have electricity.â€? That also meant operators didn’t have systems calling them out in cases where something was wrong. The increased automation has demanded more from Estevan Meter, too. “Our responses have had to improve. We have 24-hour on-call service because of how complex these devices are. It requires more specialized training. “Our instrumentation techs are continually upgrading their training. “We have expanded our sta. We’re always looking for good people.â€? “When we ďŹ nd a quality individual, we try to bring them in, whether we have a position or not.â€? It takes a few years to bring a technician fully up to speed. Their ďŹ eld technicians are ticketed instrumentation technicians. The shop technicians are primarily shop trained. Estevan Meter has three people at their main location, including owners. Virden “We hired a manager in July last year, and opened a building in September. We currently have three sta,â€? he said of the Virden location. “The shop is close to being fully operational. We’re slowly building inventory.â€?

A21

Virden Meter Services is independently owned. It is located at the north end of the town, north of the TransCanada Highway. “We had the opportunity to provide a lot of service for southwest Manitoba from Estevan. The decision to open in Virden was to remain competitive and provide better service. “We were doing a considerable amount of business in southwest Manitoba,â€?Martens said, but noted that it’s a two hour drive there, and two hours back from Estevan. That takes up a large portion of the day. Virden will provide much closer access. It’s 30 to 40 minutes to the Sinclair ďŹ eld, and 45 minutes to an hour to the dierent parts of the Waskada ďŹ eld. They also do work in the Goodlands and Deloraine area, too. “Out of the Estevan store, we do a Tuesday and Thursday delivery run. One truck goes north and west, to Stoughton and Weyburn. Another truck goes east to Oxbow, Carndu, Carievale and Alidea. We now have a truck that goes out of Virden that services Moosomin, Wapella, Sinclair, Waskada and Goodlands. “We are hoping to have an oďŹƒcial grand opening in the second quarter, probably in June,â€? Martens concluded.

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A22

PIPELINE NEWS April 2013

A23

PIPELINE NEWS April 2013

No lineups when Áying charter Yorkton – Ah yes, the joys of flying commercial. The whole experience can become exhausting. You have to drive to the large city airport. Then you cruise up and down the aisles, praying for a spot, any spot, to park in. If you find one, you then do a 12-point turn to back your crew cab 4x4 into a spot meant for a Chevy Cavalier. After 20 minutes in line at the baggage check-in, you curse the additional fees because your luggage is three pounds overweight. Then there’s the lineup for the security screening, the “no liquids rule,” and yet another wait in the boarding area for the plane to arrive. When you do eventually get on board, you end up sitting on the tarmac, waiting for who-knows-what. Thirty minutes later, you are finally in the air, in seats that are crammed so close together you couldn’t open your laptop if you wanted to. When you do land, it’s another wait for your luggage at the baggage claim (assuming your luggage made the connecting flight). Then, and only then, can you actually get the heck out of there and actually get to where you are going. You suffer all these indignities because the alternative is dodging sleepy truckers through blizzards on mountain passes during the two-day drive it would take to get to your destination on the other side of the continental divide. There is another alternative, however – charter air service. You drive to the airport’s private terminal, get on the plane, take off, fly to your destination and be on the golf course before the other guy’s legs cramp up halfway into his flight. ɸ Page A24

This King Air 200 is one of Good Spirit Air Service’s Ňeet of four business turboprop aircraŌ. Photo submiƩed

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A24

PIPELINE NEWS April 2013

When your time is valuable, charter is an option

These are two of Good Spirit Air Service’s four charter aircraĹŒ. Photo submiĆŠed

Éş Page A23 Good Spirit Air Service of Yorkton oers just that sort of alternative. The company is owned and operated by Michael and Carol Yaholnitsky of Yorkton. Good Spirit Air Service is a division of Miccar Aerial Its roots are in the other side of the company – aerial spraying. “The aerial application business has been going since 1996,â€? said Michael. “I’ve been in aviation since the late-’70s. I was a contract spray pilot for Yorkton Flying Services until 1995.â€? Miccar Aerial has in recent years established the second of only two schools in Canada that train pilots for aerial spraying. The ďŹ rst is in North Battleford. Miccar initially provided the aircraft and some of the instructors for another company to operate the school, which started at the same time as Battleford, but have since taken over the operation. This year will be the ďŹ rst operating as a full-edged training school for aerial spray pilots. Miccar Aerial oers initial ag pilot training and turbine conversion in agricultural aircraft. They have three turbine-powered spray planes and a smaller piston-engine powered spray plane for training purposes. There’s also a dualcontrolled plane for training purposes. While there are some common elements of the business between the charter and spray applications, including maintenance, customer service and administration, Yaholnitsky noted that otherwise the two are quite distinct, especially when it comes to pilots. He called them “Very separate and dierent ying regimens.â€? Charter When it comes to charter services, Good Spirit Air Service has four birds in the air. “We have three King Air 200s, and one King Air 350, all built by Beechcraft.â€? A King Air 350 is essentially a larger, faster, longer-ranged version of a 200. #6 - 461 King St. • Estevan, SK All are powered by two turboprop engines, meaning the engine itself is a jet 637-3460 www.petrobakken.com turbine, not pistons. That turbine, in turn, powers the propellers which drives the aircraft forward, thus the term turboprop. The 200s carry eight passengers, which includes one person sitting on the potty seat. Adding two ight crew brings its capacity to 10. All Good Spirit charter ights are operated with two pilots. The King Air 350 will handle eight passengers as well, all in fully-reclining seats, with an entertainment system and full GPS display of the ight. 3URGXFLQJ SXPS MDFN EHOW JXDUGV IRU Ň‹V DQG Ň‹V There is also a nose camera for a ight deck view 1HZ EHOW JXDUGV PDGH E\ of the ight or approach. The plane also has greater luggage capacity and longer range. For the extras it /LJKW 5HVLQ 7UDQVIHU 0ROGLQJ /570

provides, the KA 350 is higher priced compared to the 200. ɸ Page A25

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PIPELINE NEWS April 2013 Éş Page A24 “Recently we went from Yorkton, to Regina, Springbank (Calgary) then direct to Scottsdale (Arizona.) We can go from Yorkton or Estevan direct to Las Vegas,â€? Yaholnitsky said. It’s only 25 to 30 minutes longer than a small jet but much more comfortable, he said, estimating it takes about 3.2 hours to y from Estevan to Las Vegas in the King Air 350 and about 3.6 hours in the KA 200. For comparison, a direct ight from Minot, N.D., to Las Vegas takes two hours and 55 minutes, but requires a two hour drive to the airport for Minot, a border crossing, and all the above security clearances and airport hassles. “We have a U.S. Customs bond,â€? Yaholnitsky said. That means they take care of the security issues. Good Spirit Air Service still has to meet national and international security requirements. A great deal of that is done through pre-trip planning, providing customs with passport numbers beforehand. The result is much less hassle. They can y into any North American airport on an international ight as long as it has customs service. All ights are conducted under instrument ying rules and therefore the entire ight is monitored by air traďŹƒc controllers right up to and including the descent and landing at destination. He noted, “The ight crew is constantly in radio communication with air traďŹƒc controllers right up to when it’s your turn to arrive. You call up arrivals, they slot you in and you land when you have clearance. “The beauty of charter is you go direct. You still have to clear customs. (But) you can go when you want, and make stops as you want or go to several destinations on one trip. If your time is valuable, it will be a ďŹ rst class experience, with the foods and drinks you want. You depart and return when you want. That is the advantage of charter.â€? Yaholnitsky said charter is a tool for business or pleasure, “a limousine service in air travel.â€?

One example was taking eight men to Phoenix for a golf excursion. In another case, they went to Osoyoos, B.C. for golf, where in the summer it is “absolutely georgeous.â€? “And when you look outside today there are mountains of snow, but in Osoyoos, theirr golf courses are already open,â€? he added. “We left at 9 a.m., gained an hour, and at 10:30 they were on the ground enjoying the wineries. Or you can do a two day drive each way.â€? For people “depressed with all the white stu,â€? it’s possible to “jump in an airplane, and in twoand-a-half hours we’ll have you on a green golf course south or west.â€? They’ve also done ights to the Grey Cup. “We’ve been to Calgary, Edmonton and Winnipeg for hockey,â€? said Yaholnitsky. It’s usually up to the clients to obtain tickets for events like concerts. But Good Spirit Air Service will get them there. “Our bread-and-butter is business – mining, oil, and business. We do personal trips as well,â€? he said. One example was a recent trip do Houston for

A25

medical treatment. “Some folks use our service to go to a hockey game, a concert or even a family event, such as a funeral. They may bring a loved one who has diďŹƒculty travelling.â€? Yaholnitsky touched on the professionalism in ying – noting that ight crews, air traďŹƒc controllers and radio operators, airport maintenance sta and ight based operators are all professional. Every time a commercial ight is conducted, there are numerous unseen and and unkown things done by professionals who are all working together. This is to to ensure the safety of the ight is never jeopardized and the customer is ensured of the best possible service. The public sees the pilots but the unseen support the pilots have is also tremendous, unlike some of the people you might come across on the roads. They have advanced navigational equipment, and aircraft have maintenance schedules that are strictly adhered to. “Like eating at a good restaurant – once in awhile, it’s a nice treat, and it’s a lot safer than travelling in a vehicle,â€? Yaholnitsky concluded.

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A26

PIPELINE NEWS April 2013

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A27

Husky’s reserves growth outpaces production Increased heavy oil recovery and expansion at Husky’s thermal projects in the Lloydminster area including Pikes Peak South added 13 million barrels of oil equivalent to the company’s proved reserves in 2012. Pictured are steam generators at Pikes Peak South. Image submiƩed

Calgary – Husky Energy starts off the second quarter of 2013 buoyed by the news their annual proved reserves growth continues to outpace production. The company’s oil and gas reserves data for 2012 filed to securities regulators on March 8 reflected increased heavy oil recovery from thermal projects in the Lloydminster area and final regulatory approval of the Liwan gas project in China. Husky had total proved reserves before royalties of 1.2 billion barrels of oil equivalent, probable reserves of 1.7 billion boe and best estimate contingent resources of 13.1 billion boe for the year ending Dec. 31, 2012. Improved recovery and expansion of heavy oil thermal projects, including the new Pikes Peak South and Paradise Hill developments near Lloydminster added 13 million boe in proved reserves. Additional drilling locations at the liquids-rich gas Ansell project in Alberta resulted in the booking of an additional 27 million boe of natural gas and natural gas liquids in proved reserves. In total, proved reserves in Western Canada, including heavy oil but excluding oilsands, were 850 million boe. Reserves growth has consistently outpaced production, with an average proved reserves replacement ratio over the past two years of 175 per cent. Including economic revisions, the average proved two-year reserves replacement ratio was 149 percent, ahead of the five-year average target of 140 per cent per year. The company is adding to its reserves while continuing to advance a rich pipeline of projects as it targets an annual production growth rate of five to eight per cent through 2017. The initial booking of reserves for the deepwater Liwan Gas project added 51 million boe of natural gas and natural gas liquids in proved undeveloped reserves. The Sunrise Energy project in the Fort McMurray area has estimated reserves of 3.7 billion barrels of bitumen (.36 proved, 2.48 probable and .86 possible billion barrels). Husky has a 50 per cent working interest in those oilsands reserves.

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A28

PIPELINE NEWS April 2013

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A29

True Àles from the Unity bonspiel „ By Geo Lee

Warming up to entertain at the bonspiel dance are members of the group Touch of Grey from Biggar with some of the event prizes stacked in front of the stage at the Unity Curling Club. LeĹŒ to right are Bill Hammel, Tom Herbal, Lee Hart, and Rick Knapp with drummer Ron Chulack hidden from view in the back.

Unity – What makes the Unity Oilperson’s Bonspiel tick? That’s a question that led Pipeline News to send a reporter to the 12th annual event held Feb. 28 to March 3 in order to separate fact from ďŹ ction. For years, lead organizer Grant Huber has been telling the world that Unity supports one of the ďŹ nest bonspiels on the oilmen’s circuit and he proved it this year. “The ice conditions were excellent. All the out of town teams love it. That’s why they keep coming back. They say it’s one of the better bonspiels around,â€? said Huber with a told you so tone. “Everyone came out and had a very good time – good sponsorship,â€? he added. “The banquet was excellent – 142 came to the banquet. I think it is the most we’ve ever had. The dance was really good.â€? It’s all true and Huber wasn’t the only curler who came forward with the facts about the community appeal of the bonspiel. “I’ve been part of the bonspiel since it started,â€? said Terry Smith who sits on the organizing committee. ɸ Page A30

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A30

PIPELINE NEWS April 2013

The A-event winners from HeiƊ ’s Welding are lead Ross Neumeier, second Glenn HeiƊ, third Mark Neumeier and skip Brent HeiƊ. On the right is Torq sponsor rep Trevor DeBelser. Photo submiƊed

Curlers arrive Éş Page A29 “We work with Grant and everybody else on the committee since it started. We started it to try and help the community out. This bonspiel has done really well for the curling rink and the community. “We are one of the sponsors of the event as well. It’s a good bonspiel for our community.â€? Smith also entered a team sporting nifty looking Teron Consulting jackets but he admitted their curling needed a brush-up. “We’ve lost a couple and won a couple, so we’re kind of 50/50,â€? he laughed. “I’m not a real curler. I curl in this bonspiel once a year. We love to curl but being

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out on the road most of the time, you don’t have a chance to curl regularly.� Smith used to work for TransGas until he semi-retired to a consulting job for companies such as Enbridge. Another diehard Unity bonspieler is Aaron De Jong, who owns Signature Safety in Lloydminster. He spoke well about the event while holding a broom for Globaltech Locators in a game against Tervita-Tyler. “They put on a great tournament down here. It’s a lot of fun. It’s my fourth year here. I’ve had nothing but fun for the last four years,� said De Jong. “We’re losing, but we’re having fun doing it. Ice conditions are perfect. There’s lots of curl and nice keen ice,� he said. Tyler Fittes on the winning side named his team after himself to distinguish it from another Tervita rink in the bonspiel. Fittes is the facility manager in Unity who brought in some guys from out of town for two rinks to give everyone a weekend break from work. “Things have been

pretty busy for the ďŹ rst quarter,â€? he said. As for his curling he said: “That’s not so good. I got quite a few losses today. It’s been one of those days.â€? Fittes said this is his fourth or ďŹ fth year at the bonspiel, and he’ll be back for more next year. “I am from town and they put on a good event – a good banquet and it’s a good time,â€? he said. This year, Torq Transloading in Unity was the major event sponsor and was also the ďŹ rst team to be knocked out of the competition. That was no surprise to Torq manager Trevor DeBelser who admitted his own game needs some work, but he was pleased to take part and be a sponsor. “Our company is very family orientated and they like to put a little back into communities,â€? he said. “The oilmen’s is a really good opportunity to put back into the community and help out the local area.â€? This year’s event attracted 21 teams, two fewer than 2012 but that’s okay with organizer Huber. ɸ Page A31

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PIPELINE NEWS April 2013 Éş Page A30 “The more the better, but we go with what we’ve got. You gain some new ones, you lose some,â€? he said. “You never know. People have other commitments and they can’t make it.â€? Huber hopes to step down as lord of the rings after 12 years of being the main organizer. He named young committee member Dustin Brown as a possible candidate. Brown earned a round of applause as the master of ceremonies during a massive door prize draw. If Brown ďŹ lls Huber’s shoes, Huber could use the extra time to tweak his game as his Huber Machining team wound up fourth in the B-event with three wins and two losses. “You win some, you lose some,â€? he joked. This year’s A-event winner was the Heitt’s Welding squad of Ross Neumeier, Glenn Heitt, Mark Neumeier and Brent Heitt. Taking the B-event title was the Scared Hitless rink of Cass Brown, Shaun Bonogofski, Brad Delfrari and Dustin Brown. The bragging rights to the C-event title went to the Dash Tools rink of Lloyd Sloboda, Darren Bitz, Dereck Flasch and Dwayne Flasch. Precision Rentals went home as the D-event winners with Evan Loy, Chris Kuntz, Doug Zingel and Craig Watson onboard. Committee member Martin Boser will always remember the 2013 bonspiel as the year he won a 47-inch TV donated by Country Ford in Wilkie during the post-banquet carpet putting challenge. Candace Brownlee was another happy camper, winning a bar fridge while the North West Bio-Energy team collected $1,000 in a reverse draw contest.

The major sponsorship team from Torq Transloading got a prize for being the ÄŽrst team out of the compeĆ&#x;Ć&#x;on. Torq manager Trevor DeBelser, middle, and Kelly Kreimeir on the leĹŒ accept congratulaĆ&#x;ons and hoodies from MC DusĆ&#x;n Brown.

A31

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A32

PIPELINE NEWS April 2013

Diamond in the rough Estevan – With a new facility completed last year, Black Diamond Energy Services has settled into its new home near Estevan. Kim Greening handles ďŹ eld sales for the Estevan location. She came to the company in December 2011, right after they bought out Border Tank Rentals. Prior to that, the company had also purchased Paragon Energy Services. Greening noted it was a small operation until they bought out Border Tank. That’s changed now, with a new site just east of Estevan.

“We’re like a onestop shop for everything except centrifuges,â€? Greening said. “We’ve got everything for drilling, completions and production for service rental equipment. “We’ve got 400-bbl. tanks, oc tanks, shale bins, poly injection tanks, premix tanks, camp gen sets and light towers, matting, trash pumps and wheeled ďŹ re extinguishers,â€? she said. The list doesn’t end there. There’s also frac manifolds, berm containments for frac farms, pump manifolds, transfer pumps, horizontal skid-mounted

tanks; that still probably doesn’t cover the whole list. The horizontal skid-mounted tanks are 90 cubic metres in capacity. They’re much larger than the typical 400-bbl. tank, which comes in at about 64.6 cubic meters. It’s a new design, similar to what’s being seen in Alberta. There’s a staircase at one end. Greening said they are working on a manufacturer right now. “As soon as I line up client interest, we’ll be building them. We’re hoping to have at least 10 right away.� Their wellsite shacks include command

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centres and 50/50 splits. “We have a four-man executive sleeper with four bedrooms and two baths,� she said. “It’s roomy. Each bedroom has a double bed, fridge, microwave and closet space.� In a drilling setup, they will often provide a command centre. “The new things is usually there are two consultants on a drilling rig,� Greening said. That means 50/50 splits are often used if there are day- and night-shift consultants on site. “Single-enders are harder to sell. Super singles are used for individual consultant setups. Then there’s the sleeper units. “Usually they run 50/50 splits for the geologists, and either a 50/50 or fourman for the directional hands. The water hauler and toolpush will typically have their own shacks provided by their

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companies. “All our wellsites we have here are new except for the refurbished four-man,â€? Greening said. There are a total of nine wellsite shacks available at the Estevan location so far, with Greening adding, “and more on the way. It’s supply and demand. A new one showed up yesterday on a trial right now. It came from Texas.â€? Estevan is Black Diamond’s only Saskatchewan location. They also have energy services locations in Edmonton and Grande Prairie in Alberta as well as Fort Nelson and Fort St. John in British Columbia. The head ofďŹ ce is in Calgary. The company also has camps, logistics, BOXX Modular and international divisions. Tyler Humeniuk is the manager of the Estevan location. “I’ve been with Black Diamond for seven years now,â€? he said, having come to Estevan last September. “I’ve been in Grand Prairie for six years.â€? He started with DC Energy, then Paragon Energy Services, which was bought out by Black Diamond. In 2009 they bought out the Alberta Paragon operations, then in 2010 they added the Saskatchewan Paragon outďŹ t. In 2011, the company bought out Border Tank Rentals in Estevan. The consolidations resulted in the need for a larger facility. They initially rented out the location of the former Border Tank Rentals until moving into their new location last year. That site was a little low, so Humeniuk noted, “We put a heck of a lot of gravel in. We put rock, clay, geotextile, and gravel on top of

the geotec. It was done right.â€? The facility has ten acres at the corner of Shand Road and Jahn Street. There’s one building, with a 150 by 80 foot shop and two oors of oďŹƒce area. The shop has 20-foot doors allowing drive-through access. They needed all that space because the company has a lot of equipment in the southeast, running at approximately 825 pieces for southeast Saskatchewan and a satellite operation of surface equipment in North Dakota. There’s 20 pieces across the border which is rented and maintained by Portal Services. That includes tanks, mats, pipe racks and a high side. Humeniuk called it a “starter kit.â€? “We can get lots of stu in here yet,â€? he said. The Estevan location’s service area goes as far north as Saskatoon, to Shaunavon in the west and to southwest Manitoba in the east. For drilling and fracking, Humeniuk said, “Fluid containment is what we do, and anything on a wellsite they will need while drilling or fracking.â€? Two things they don’t carry are centrifuges and drill pipe. “If someone comes up with something new, if they’ll sign a long enough contract, we’ll build it for them,â€? Humeniuk said, citing an example of 14-foot wide wellsite accommodations. In Estevan they have some pickups for service work and one hotshot for setups, but otherwise trucking is done by other contractors. Nine people work out of Estevan, including two Filipinos.

PIPELINE NEWS April 2013

A33

Southeast Saskatchewan man returns home Tyler Humeniuk is home, or at least, pretty close to it. The 44-year-old manager of the Black Diamond Energy Services location in Estevan came back to Saskatchewan after seven years of work out west. “I grew up in MaryďŹ eld,â€? he said. MaryďŹ eld is a village between Redvers and Moosomin right beside the Manitoba border. It also lies along the Enbridge mainline right-of-way. “I was a journeyman mechanic. For 12 years I worked at Virden Nield Bros. Ford. I went to Country Plaza Motors in Fort Qu’Appelle. I worked at Celebration Ford n Moosomin. Then his dream job came up, and not one you’d expect from someone used to pulling wrenches. The local grocery store in MaryďŹ eld was up for sale. It became Ty’s Fine Foods. “I always wanted one. Everyone has to eat,â€? Humeniuk said. Being a mechanic had changed. “You’ve got to pull the whole cab o to change a motor now, I had to get out of it. I was getting mad.â€? The grocery store was purchased in November, 1998. They ran it for seven years. “We sold in in December 2005. I went to Alberta in 2006 going after

the big oil patch money and it wasn’t there. Well, it was. I just spent it,â€? Humeniuk said. “Small town MaryďŹ eld was dying,â€? he said of the time he sold the store. Things have since turned around, however. “There’s houses that were condemned before that people ďŹ xed up and are living in. It’s booming,â€? he said. “It’s still home to me here,â€? Humeniuk said, noting he brought his wife and two girls with him. “We couldn’t get a house in Estevan. I wasn’t paying what they wanted. I bought ten acres north of Bienfait. We bought a modular home and put it there. We didn’t have time to build.â€? The daughters are 11 and 16, and the elder one is already working. “It’s still home,â€? he said of Saskatchewan. “In two hours, we can see grandma and grandpa, instead of 15 hours driving. We still have friends here. In Grande Prairie, you had friends, but no time to see them. You were working, or they were working.â€? There are a lot of similarities between running a grocery and a rental business. “Now instead of eggs, it’s a oc tank. It’s the same thing,â€? Humeniuk said.

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A34

PIPELINE NEWS April 2013

Denise Taylor got to know every rock to look under to Įnd rig hands during 25 years as a human resources person with drilling companies. Photo by Brian Zinhuk

A career spent looking for hands Bienfait – Now a travel agent with her own TravelOnly outfit in Bienfait, Denise Taylor spent her career finding rig hands. “I retired from Ensign Big Sky Drilling last year,” Taylor said. “I was HR (human resources).” Taylor has long worked with Ensign’s Rick

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Mann, who heads up the Oxbow location. “Rick and I came over to Big Sky when Ensign bought it out. I started in 1987 when it was Simmons Drilling. Ensign bought out Simmons, then Ensign bought out Big Sky. “I started as a receptionist and one month later

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I became HR and a little bit of everything else. “It’s a very stressful, rewarding job,” Taylor said. “The people who do HR for a drilling company are dedicated and special. You have to have a thick skin. You get a lot of phoning and rejection.”

ɸ Page A35

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PIPELINE NEWS April 2013 Éş Page A34 That rejection goes both ways, she said. People phone looking for jobs, only to get rejected, or the company is phoning people seeking to hire them, and the oer is rejected. “At one time, you had a large group to phone. We didn’t have 100-some rigs in Saskatchewan. We had 20-some rigs. If your rig went to Waskada, you went with it. Now they like to stay close to home. Not everybody is like that, but a few. “It depends on the rig, the rig manager, the crew, how much work they’ll have in, say, Virden. “The younger generation didn’t have as much hardship. Jobs are plentiful. When things are not plentiful, things will be dierent. In her early years, there were far fewer rigs in Saskatchewan. Simmons had eight. Big Sky had another eight. Viper had four, while Precision Drilling would have two or three. Nabors had one or two. That was it. A decade ago, she saw the big shift. “It started about 2002-2003.â€? With more rigs, the length of time rig hands spend at each position has become dramatically compressed, according to Taylor. “At one time, everybody wanted to go to a triple, because it stays in one place for a long time. No one wanted to leave, so there were no promotions. Now, if a oorhand is not a driller in three years, there’s a reason why. It’s a very fast promotion track now.â€? Drillers, derrickhands and motor hands are in high demand. “They’ll move onto directional hands or consulting,â€? she said. “Everyone moves up. You have to work your way up. They make good money, but they make good money for a reason. It’s 24/7. You don’t know how much you’re going to work. The oilďŹ eld is a global market. It depends. “One time with Simmons we had one rig working. My work was 10 minutes. You had to make 10 minutes last all day. Other times eight hours weren’t enough. Old timers will tell you about the booms, and the busts. For oilďŹ eld workers, she noted spousal support is important. “It takes a special person on the other end. My husband, Mike, is a truck driver with L&C. We didn’t know when we would see each other. We’ve been married 28 years. Not many spouses can handle that. You had a lot of families broken up.

“I’ve met a lot of nice people through work, and got to know a lot of spouses,� she said. Communications have changed substantially. Taylor said, “You phone or text them. Now they’re texting everyone. Before, you got to know when to phone the guys at the bars. Texting is now very much part of the HR job. You don’t call anymore, you text.� In years past, the HR person would phone the driller, and they would phone the crew to tell them the rig was moving. “If they couldn’t get everyone, I was looking for people. That could mean working through the weekend.�

A35

As for drillers, she said, “his crew was from his hometown – a brother, a friend. You let the driller do their own hiring at that time. It’s totally dierent now,â€? she said, with central hiring being the case. Drug screening is a part of that. Crews have grown, too. “When I started, it was four guys to a crew. Now it’s ďŹ ve or six, with two oorhands and a leasehand. Rig hands from northern Saskatchewan often went to Alberta to ďŹ nd work, seeking 12-hour shifts. In southeast Saskatchewan the norm was eight hour shifts with 36 hours o, but everyone was close to home.

Reach out and touch someone This reach-boom excavator could be seen on a pipeline project east of Bowbells, N.D. Photo by Brian Zinchuk

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A36

PIPELINE NEWS April 2013

Edge Resources drills into new oil pools at Primate The yellow squares on the map represent heavy oil lands acquired by Edge Resources in 2012 near Primate, Sask. The company has gone on to idenĆ&#x;fy three new oil pools on its properĆ&#x;es and completed drilling its ÄŽrst two wells by March 13. One of the wells was drilled into a new formaĆ&#x;on. The company is undertaking a drilling program on its undeveloped lands to deÄŽne and delineate the new pools. Image submiĆŠed

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Calgary – Edge Resources Inc. has completed its second well into a new formation near Primate, Sask. with results that put company president Brad Nichol in a talkative mood. “We are very pleased that the drilling of our ďŹ rst horizontal well in a new horizon has gone so smoothly and quickly,â€? he said in a March 13 update. The well was successfully drilled and cased with a slotted liner, and is now being prepared for production. “With continuous oil shows throughout the 495 metres of horizontal leg, we are very keen to start producing this well,â€? said Nichol. “Given that breakup is almost upon us, we are taking the extra step of building a permanent road so that the well can produce without interruption throughout break-up.â€? Edge Resources plans to dips its toe into three new heavy oil pool discoveries on undeveloped land near Primate that the company acquired a year ago for $8.8 million. The Calgary-based company moved a drilling rig into the area in late February to begin to delineate the three new pools discovered through a combination of drilling and a recently shot 3D seismic program. ɸ Page A37

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PIPELINE NEWS April 2013 Éş Page A36 The initial drilling took place in 2012 in an area the company calls Asset East, where they expect to drill many development and delineation wells into the new pools. “We anticipate that successful production testing will support several additional horizontal drilling locations, speciďŹ cally targeting the new horizon,â€? said Nichol. “We certainly have the undeveloped landbase to support a large program and are eager to get started.â€? The drilling rig was released to an all-weather rack site as spring breakup conditions would not allow the rig to be moved to another drilling location. In February, Nichol reported the company was excited to build upon its initial drilling and seismic successes that resulted in the initial pool discoveries. The focus is now shifting to the longerterm development of Asset East at Primate. “Along those lines, we are also pleased to have received ďŹ nal approval for a water disposal program in Asset East, which ďŹ ts very nicely into the longterm development plan for these pools,â€? said Nichol in February. As a key component

to the full development plan for Asset East, Edge recently received approval to inject produced water, if required, into a nearby existing wellbore on its owned lands. If water disposal is required, this approval is anticipated to drastically reduce the cost of water handling as the ďŹ eld is more fully developed. Edge will ďŹ nance the Primate development through a strategic partnership it completed with a capital partner in the U.K. in December 2012. “We can grow the company three, ďŹ ve or 10,000 barrels a day, and we know we have the capital support we need in order to do that,â€? said Nichol on his website video. Edge has a 100 per cent working interest in their acquired Primate properties that now include 20 gross/net sections totaling 12,800 acres. Other companies including NuVista Energy Ltd, Penn West Petroleum Ltd. and Twin Butte Energy Inc. are actively drilling in the area. Production from existing wells acquired with the purchase was approximately 350 barrels of oil equivalent per day with a 65 per cent oil weighting. The purchase, which

closed on Feb. 1, 2012, immediately bumped their total production to over 900 boepd. Edge also has producing oil wells at its Grand Forks project in Alberta and gas producing wells at its Edmonton Sands project. The ďŹ rst of the three new pools being explored in Saskatchewan was discovered during summer 2013 drilling followed by two additional pools discovered by the 3D seismic program in the fall. The company believes these pools hold a signiďŹ cant amount of reserve value and net present value. The acquired assets came with an estimated 33 million barrels of oil in-place with only 1.6 million barrels produced or a recovery of just ďŹ ve per cent. Log information from the initial wells can be used to deďŹ ne a much larger developmental drilling program, which could require up to an additional 80 vertical locations to fully develop the pools. “We plan to start unlocking the potential value from these discoveries as we drill more wells and understand more about these new reservoirs,â€? said Nichol in his 2013 outlook which was issued on Jan. 31. “We are proactively

and constantly seeking growth opportunities through the drill bit and through acquisition.

“Our track record demonstrates that we are able to deliver shareholder value and we

A37

look forward to the year ahead with conďŹ dence and enthusiasm,â€? he added.

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A38

PIPELINE NEWS April 2013

Twilight at Crescent Point's viewÄŽeld terminal sees a truck unloading.

Photo by Brian Zinchuk

PIPELINE NEWS April 2013

A39

Low gas prices ends funding for Swan Hills

Swan Hills Synfuels planned to capture carbon dioxide from the gasiÄŽcaĆ&#x;on of coal (in-situ gasiÄŽcaĆ&#x;on) and sell it for use in enhanced oil recovery. However, the project is delayed indeÄŽnitely since it is cheaper today to purchase natural gas than it is to manufacture syntheĆ&#x;c gas. The Alberta government and the company have agreed to disconĆ&#x;nue their $285 million funding agreement. Image submiĆŠed

the province for the Swan Hills project and no decisions have been made with respect to reallocating the funding. “Persistent low prices for Alberta’s natural gas have driven this business decision,� said Energy Minister Ken Hughes. “CCS remains a key part of Alberta’s commitment to reducing greenhouse gas emissions and the responsible development of our energy resources.� Swan Hills is one of four CCS projects the province was backing with a $2-billion CCS fund. It was supported by additional fed-

eral funding to reduce greenhouse gas emissions. Last April, TransAlta Corp. along with partners Enbridge Inc. and Capital Power Corp., cancelled their $1.4-billion carbon capture and storage project. The province’s carbon capture target

for the four projects was ďŹ ve million tonnes annually by 2016, a target that is reduced to about 2.6 million tonnes with just two projects left. The two remaining projects supported by $1.3 billion in Alberta funding are the Alberta Carbon Trunk Line and Shell Quest.

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Sharing the Energy Edmonton – A decision by Swan Hills Synfuels to put its carbon capture and storage program (CCS) on the back burner due to low natural gas prices leaves the project with no funding from the Alberta government. The Alberta government and the Calgarybased company have agreed to discontinue their $285 million CCS funding agreement. In a joint announcement on Feb. 25, both parties said low natural gas prices undermined the business case for the plan to manufacture

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synthetic gas from coal to generate electricity as part of Alberta’s carbon capture and storage plan. For Swan Hills, it is cheaper to purchase natural gas than it is to manufacture synthetic gas, making the project uneconomic. Natural gas was priced lower than $3 per gigajoule at the end of February. “It’s a market reality that has led to signiďŹ cant delays on the CCS side of the project,â€? Swan Hills Synfuels CEO Martin Lambert.

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Lambert told the media the project would be revisited when the price of natural gas stabilizes at around $5 per gigajoule. In 2011, the province committed $285 million over 15 years to fund the Swan Hills project which would capture carbon dioxide from the gasiďŹ cation of coal and sell it for use in enhanced oil recovery. To date, no money has been advanced by

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A40

PIPELINE NEWS April 2013

Desk and Derrick The Desk & Derrick Club of Southeast Saskatchewan visited Kash Anchors’ new locaĆ&#x;on on Feb. 25. The company is named aĹŒer Kash, the liĆŠle guy in the Superman shirt. He is Ňanked by his father, Tracy McConnell, and his mother, Kelly McConnell. Photo submiĆŠed

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PIPELINE NEWS April 2013

A41

BlackPearl Resources could receive regulatory approval in 2013 for thermal projects at Blackrod in the Athabasca oilsands and Onion Lake, north of Lloydminster. Pictured is a crude hauler at Onion Lake where BlackPearl saw some natural producĆ&#x;on declines in 2012 from primary heavy oil producĆ&#x;on. File photo

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BlackPearl transitioning to thermal Calgary – BlackPearl Resources Inc. is hitching up its growth wagon and hopes on thermal oil developments in 2013 along with continued production from its conventional heavy oil properties in Western Canada. The stage is set for possible development approvals this year for BlackPearl’s ďŹ rst phase 20,000 barrels per day Blackrod steam assisted gravity drainage or SAGD project in the Athabasca oilsands. BlackPearl could also receive regulatory approval in 2013 for its planned 12,000 bpd SAGD project at Onion Lake north of Lloydminster. The company is expecting continued production gains this year from an Alkali Surfactant Polymer (ASP) ood at its conventional heavy oil property at Mooney in northern Alberta. All of these prospects were a source of optimism for company president John Festival when he released his company’s fourth quarter and year-end ďŹ nancial and operating results on Feb. 26. “Our long term sustainable growth will come from our two large thermal projects and we made good strides advancing both of these projects in 2012,â€? said Festival. “At Blackrod, we ďŹ led our development

application with regulatory authorities and we gained valuable knowledge from operating the pilot well pair during the last 12 months. “We will use what we learned from the ďŹ rst well pair to expand the pilot in 2013 and to assist in our commercial development design.â€? The Blackrod project in northern Alberta has the potential for an 80,000 bpd SAGD development. “At Onion Lake, we continued to advance our thermal development plans through the regulatory review process which should culminate in obtaining project approvals in 2013,â€? said Festival. “Potentially, we could have development approvals for both our Onion Lake and Blackrod thermal projects in 2013.â€? BlackPearl drilled 16 horizontal wells in 2012 on its Phase 2 and 3 developments at Mooney where more drilling is planned in 2013. These wells will be produced conventionally and then added to the ASP ood in the future. “We saw a very positive response from our ASP ood at Mooney late in the year and the initial drilling results on our expansion lands have been very good, which will allow us to expand the ood to these areas in the

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next 12 to 18 months,â€? said Festival. ɸ Page A42

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A42

PIPELINE NEWS April 2013

Onion Lake saw 43 vertical wells in 2012 Éş Page A41 At Onion Lake, the company drilled 43 vertical wells in 2012, bringing their drilling inventory to over 100 wells while experiencing natural production declines in some areas. The company plans to continue primary heavy oil development in 2013 while they transition to thermal. “In 2013, we look forward to securing development ďŹ nancing for one, or both, of our thermal projects. We are evaluating a number of ďŹ nancing alternatives,â€? said Festival. “Our aim is to balance minimizing dilution to our shareholders while not taking on excessive ďŹ nancial risk. We expect to provide our shareholders with our ďŹ nancing strategy over the next three or four months.â€? Meanwhile, BlackPearl has decreased its original capital expenditure budget of between $140 to $160 million to between $125 and $140 due to lower

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heavy oil prices in ďŹ rst quarter of 2013. More than 45 per cent of the revised budget will be allocated to the Blackrod SAGD project. “Our plans in 2013 for the Blackrod area remain unchanged,â€? said Festival. “We plan to expand the existing pilot with a second well pair, continue with detailed engineering design for the ďŹ rst phase of development and order long lead equipment items for the central processing facility. “At Mooney, we will continue development of the Phase 2 lands with 15 to 20 horizontal wells planned; a decrease from our original plan of drilling 20 to 25 wells. “At Onion Lake, we will continue primary development with 20 vertical wells planned. We have also reduced spending on some of our minor non-core assets.â€? Oil and gas production increased 23 per cent in 2012 to 9,366 barrels of oil equivalent per day while fourth quarter 2012 production was 9,067 boepd, up four per cent from the prior year. On the ďŹ nancial front, oil and gas revenues increased 14 per cent in 2012 to $205 million and cash ow from operations increased six per cent to $83 million. Fourth quarter revenues were down 18 per cent to $48 million compared to the fourth quarter of 2011 and cash ow from operations in the fourth quarter was $18 million, a decrease of 36 per cent from 2011. Net income decreased to $45,000 in 2012 compared with net income of $18.9 million in 2011. However, 2011 net income included a gain on disposition of certain oil and gas properties and a large deferred tax beneďŹ t. BlackPearl’s oil and gas proved plus probable reserves increased 496 per cent in 2012 to 213 million barrels of oil equivalent, before royalties as reported on Feb. 13. The best estimate contingent resources for BlackPearl’s three core properties were 582 million barrels of oil equivalent before royalties. Cash ow from operations in 2013 is expected to be between $50 and $60 million – lower than expected – reecting lower forecast oil prices in the ďŹ rst quarter of 2013 and reduced capital spending that aects production estimates. BlackPearl expects their revised capital program will be funded from anticipated cash ow from operations and the company’s credit facilities.

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PIPELINE NEWS April 2013

A43

Feds invest $948,450 for Lakeland simulators

Heavy oil energy students at Lakeland College in Lloydminster packed a stairwell for a photo opportunity with Minister of State for Western Economic DiversiÄŽcaĆ&#x;on Canada Lynne Yelich scene in the upper right deck holding a slogan sign for a “stronger west.â€?

Lloydminster – Heavy oil energy programming at Lakeland College in Lloydminster will continue to grow in the coming years despite looming job cuts this year to make up a $3 million budget shortfall. Western Economic DiversiďŹ cation Canada is investing more than $948,000 in new specialized simulators and equipment for Lakeland’s high-demand heavy oil operations

technician and heavy oil power engineering programs. The funding announcement in Lloydminster on March 14 by Lynne Yelich, minister of state for Western Economic DiversiďŹ cation came a week after the Alberta government cut $147 million in operational funding to colleges and universities in their 2013 provincial budget. Colleges and universities were expecting a two per cent increase for each of the next three years. “In light of what’s happening in Alberta right now with the budget cuts, we are pretty excited today,â€? said Kara Johnston, director of energy programming after the presentation. “We know that the future of Lakeland College at the Lloydminster campus is its energy programming. “We know we need to move that forward to meet industry’s needs and to train those workers. We know we have the student numbers wanting to come into our programming. “It’s an area for us to build and to have growth.â€? The federal government funding will be used to purchase a steamassisted gravity drainage (SAGD) simulator and an upgrader process simulator. The campus will also acquire a once-through steam generator, critical to the SAGD process, and a glass encased model of a distillate tower to

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allow students to view the reactions that are taking place. “The wonderful thing about this funding is that it is for that unique training component that Lakeland wants to use to set itself apart,� said Johnston. “The heavy oil training is unique to any other program. Now, we are going to have the equipment to take that curriculum to the next level. “Students are getting the handson knowledge before they go to industry.�

The need to equip Lakeland’s energy programming students for skilled industry jobs is one of the reasons for the funding from her federal department, Yelich said. “Our government recognizes that the Canadian petroleum industry is a major contributor to Canada’s current and future prosperity,â€? said Yelich. “The industry accounts for 100,000 jobs across the country and is expected to grow to more than 500,000 jobs over 25 years.â€? ɸ Page A44

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A44

PIPELINE NEWS April 2013

9,500 new workers needed by 2015 The announcement of a $948,450 investment from Western Economic DiversiĮcaƟon Canada to Lakeland College for the purchase of heavy oil simulaƟon equipment for the future expansion of its heavy oil lab was a cause for smiles at the Lloydminster campus. LeŌ to right, are Lakeland College president Glenn Charlesworth; Minister of State for Western Economic DiversiĮcaƟon Canada Lynne Yelich who announced the investment; director of energy, entrepreneurship and Saskatchewan programming Kara Johnston, and Milt WakeĮeld chair of the college board of governors.

ɺ Page A43 A recent labour market report by the Petroleum Human Resources Council of Canada indicates the industry needs to hire a minimum of 9,500 new workers by 2015 due to increased industry activity and retirements. Yelich noted that as the Lloydminster region continues to develop and see economic growth, oil and gas businesses are increasingly challenged with recruiting and retaining highly trained workers. Her comments were

interrupted by applause when she revealed the exact $948,450 investment in the new heavy oil equipment for Lakeland College. “This initiative helps to improve workforce productivity by reducing the amount of time required by companies to train new employees as new recruits will already possess these skills when they are hired,” she added. Lakeland president and CEO Glenn Charlesworth welcomed the funding news with open arms during Lake-

land’s ongoing centennial year celebrations in 2013. He said funds temporarily ease the pain of a 7.3 per cent cut in the basic government grant to colleges and universities made by Alberta Premier Alison Redford to help reduce the provincial deficit. “This is really much appreciated and the timing couldn’t be better. It really is helping us move forward on the whole energy training front,” said Charlesworth. Lakeland expects to

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start digging the foundation this summer for the $17.5 million Petroleum Centre expansion of its heavy oil lab that will house the new simulation equipment. “Once we have our new building completed and this kind of stateof-the-art equipment, we’re really going to be able to do stuff that nobody else can do,” said Charlesworth. “This is wonderful day, and I really appreciate what Western Diversification is bringing us.” In his formal comments directed at energy students in attendance, Charlesworth stressed the funding will enable future students to train on the latest equipment, making them job ready for the petroleum industry. “From Lakeland’s perspective, the demand for energy related training, which is one of our pillar programs, is evident in our enrolment numbers,” he said. “In November of last year, the heavy oil operations technology program and our heavy

oil power engineering programs both had lengthy wait lists of people wanting to start classes in the fall of 2013. Right now, there are also waits lists for the fall of 2014. “It’s why it’s so critical that we develop this new wing, this new lab, so that we can not only expand our capacity but teach on the most current equipment to give you an education like no other.” Charlesworth went on to tell students that energy graduates are in such high demand that a 2012 follow-up survey of graduates indicated 100 per cent of past energy grads were employed in the industry. “Thanks to today’s contribution from WEDC, we will be able to open more doors and fuel more dreams for our students,” he said. Johnston began her speech by noting Lakeland has a long history of being responsive to industry demand and partnering with industry to deliver programs with immediate relevance. “We have been willing to challenge conventional training mentality and focus on industry needs,” she said. “The message we’ve heard loud and clear is that the oil and gas industry needs more than just power engineers. They need a complete operator with advanced knowledge of heavy oil operations.” Lakeland recently expanded its power engineering program to include a two year diploma course in third class power engineering with training in SAGD, oil production, water recovery and industrial fire training.

The equipment funding from Western Economic Diversification follows on the heels of a $1.5 million donation from Cenovus earlier this year for energy program development. Cenovus helped to design the curriculum for the new two year diploma course for third class power engineers. “We partnered with Cenovus to create the first SAGD course offered at a post secondary institution,” Johnston told the audience. “We also partnered with Husky to create an upgrader program that mirrors their Lloydminster plant. “Heavy oil training is unique to Lakeland college and is crucially important to the region’s economic growth and development. “Now we have a dynamic partner in Western Economic Diversification.” Johnston said the new simulation equipment for the lab will help the college form the foundation of a research centre that would be focused on heavy oil extraction, upgrader training and any future innovation opportunities at the campus.” Johnston said the college is working on the tendering process to purchase the simulators, adding that some local companies are interested in building them for the new lab. “Industry is thrilled to see this kind of training because it helps them,” she said. “When they have new hires going into the workforce, they already have that base knowledge that maybe others don’t. Companies are excited.”

PIPELINE NEWS April 2013

A45

Legacy's organic program grows in 2012 „ By Paul Wells (Daily Oil Bulletin) – Calgary – Legacy Oil + Gas Inc. increased 2012 production 30 per cent from the prior year backed by a strong uptick in oil and natural gas liquids output. The company averaged 16,301 boepd versus 12,650 boepd in 2011, while fourth quarter 2012 output was 17,439 boepd compared to 14,880 boepd for the prior year period. Production increases for both the fourth quarter of 2012 and the year ended Dec. 31, 2012, compared to the prior year were primarily driven by Legacy's drilling program. Crude oil production of 12,591 boepd for the year ended Dec. 31, 2012, was 40 per cent higher than the 8,984 boepd in the prior year. As well, the company's natural gas liquids rose 20 per cent to 1,364 bpd in 2012 compared to 1,135 bpd in the equivalent period in 2011. Legacy met its 2012 production guidance, averaging 16,301 boepd, an increase of 29 per cent over 2011 average production of 12,650 boepd. During the company's year-end 2012 conference call Tuesday, president and chief executive oďŹƒcer Trent Yanko said Legacy has taken the path less travelled in increasing its production. “We [did] not do any material acquisitions last year. In fact we haven't raised money or done a material acquisition now for 25 months. I think that it's unheard of in the Canadian energy space to be able to grow so well and eectively in a light oil-weighted company basically on the strength of the organic program,â€? Yanko said. “All in all, I think we're very happy with where the company is positioned. The delineation drilling and some of the development drilling we did in 2012 has set us up nicely for a strong program going into 2013.â€? Operationally, Yanko noted that wateroods remain a “key partâ€? of the company's strategy going forward. “We've been trying to fast-track that recovery mechanism ... to increase the recovery and it does extend the producing life of the ďŹ eld [and] adds reserves and adds value,â€? he said. “But we also see this as actually a mechanism to potentially grow production -- we don't really have to wait until primary [production] is out.â€?

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At Taylorton, the company has continued to observe improved waterood response in both the original and expanded pilot areas. In the section 29 pilot, oil production rates have increased 2.6 times, with a corresponding increase in uid rate, uid level and reduction in water cut. The pilot was expanded into section 28 in July 2012 and this area has already demonstrated a 3.7 times increase in oil production rate. Legacy has moved forward with additional waterood pilot expansion into the section to the south. At Heward, the pilot waterood project initiated in December 2011 continues to demonstrate waterood response as the oil production rate in eight osetting wells has increased since the start of the pilot. The wells seeing response have exhibited a 3.6 times increase in oil production rate since the start of injection and the company is rapidly expanding the waterood pilot project into three additional sections in the ďŹ rst half of 2013. ɸ Page A46

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PIPELINE NEWS April 2013

Production up by 30 per cent Éş Page A45 At Frys/Antler, a pilot waterood initiated in early December 2012 has shown early signs of response. Application has already been made to expand the pilot to the osetting sections. Located immediately east of Frys/Antler, the analogous ďŹ eld at Sinclair now has 33 sections under waterood and has seen oil production rate increases ranging from 50 to 100 percent after waterood response. The company drilled 145 (110.4 net) oil wells in 2012, with a 100 per cent success rate. In the fourth quarter of 2012, Legacy drilled 32 (24.7 net) oil wells, with a 100 per cent success rate. Activity in the fourth quarter included the drilling of 13 (9.5 net) SpearďŹ sh horizontal wells in the company's Pierson, Manitoba, and Bottineau County, North Dakota, areas. At Pierson, the company said it continues to deliver excellent production

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results in the SpearďŹ sh compared to the previous operator's drilling and these results have signiďŹ cantly inuenced the type curve used in the 2012 year-end independent engineering report. Legacy has achieved these rates while constraining production to maximize ultimate recovery. Undeveloped locations included in the 2012 independent engineering report have been assigned reserves 25 per cent higher than in the 2011 independent engineering report. The company believes these achievements will lead to superior long-term performance, higher per well reserve bookings plus additional locations booked. Similarly, at Bottineau County, undeveloped locations included in the 2012 independent engineering report have been assigned reserves 25 per cent higher than in the 2011 independent engineering report. Legacy has achieved higher production rates while constraining production to maximize ultimate recovery. The total SpearďŹ sh play development drilling inventory of 440 net potential locations (84 per cent unbooked) is based on eight wells per section. Based on other operators' results in the play, Legacy's location count could increase by 50 per cent through downspacing. In addition, the company is evaluating the waterood potential in the play and anticipates recovery factors of up to 14 per cent, based on analogous pools. At Star Valley, the company said it has applied its leading fracture stimulation design developed in Heward to this area with good success. Legacy brought ďŹ ve (4.0 net) wells on production since the start of the fourth quarter of 2012 and these wells have average 30-day initial rates of 200 boepd per well and average 60-day initial rates of 170 boepd. As previously disclosed, the company believes the Bakken play boundaries have expanded and has increased its drilling location inventory to more than 50 net wells in Star Valley. Since early 2011, Legacy was the ďŹ rst-mover in applying unconventional drilling and completion techniques to its conventional assets in the Pinto area of southeast Saskatchewan. Since this time, 85 wells targeting light oil in the Midale formation have been licensed in the greater Pinto area by Legacy and others. The company-operated wells have demonstrated good production characteristics with four operated wells at Pinto having average 30-day initial rates and average 60-day initial rates of 131 bbls oil per day and 129 bbls oil per day, respectively. The company said it has identiďŹ ed a number of follow-up locations.

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PIPELINE NEWS

SECTION B April 2013

Mike HarneƩ, the woman on the right, leads the room in back stretches.

Walking faster is beƩer for your back, since it is not as jarring, according to ergonomics expert Mike HarneƩ.

SEESS grows by nearly 50 per cent Story and photos by Brian Zinchuk Estevan – The word must have gotten out that the South East Enviro & Safety Seminar (SEESS) is worth going to, because the parking lot was jam-packed at the Saskatchewan Energy Training Instituted on March 20. In the main auditorium, it was a packed house, with approximately 180 participants. That’s approaching 50 per cent better than last year, according to Doug McDavid, vice-chair of the committee. McDavid is the operations safety supervisor for SaskPower’s southern area. “We’re quite pleased,” he said. “It’s starting to be well-known in the southeast.” ɸ Page B2

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B2

PIPELINE NEWS April 2013

LeĹŒ: If you wanted to squeeze more people in the SETI auditorium, you probably would have had to remove the tables.

Doug McDavid said parĆ&#x;cipaĆ&#x;on was up almost 50 per cent at the South East Enviro & Safety Seminar.

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Éş Page B1 The event is in its 17th year. Next year it will be held in Weyburn, once the Triple C Centre is complete. Previous locations were limiting in size, but with SETI and the Triple C, they have more space. More people means they can attract higher-end speakers, McDavid pointed out. Sylvia Yaeger, who covered the entire afternoon on “the rules of engagement,â€? and “the price is life or the prize is life – you choose,â€? is highly regarded, he said. The number of booths has increased as well, with 11 this year. The event is put on entirely by volunteers. Wayne Irwin, co-chair of the event, said participants came from Alberta, Saskatchewan and Manitoba to attend. Kevin Cooke, who handles safety with Cenovus locally, was one of the participants. “They take safety to heart,â€? he said of his company. “I missed last year. I know most of the speakers personally. Terry (Gibson) is very motivated on the Southeast Sask Airshed Authority.â€? Asked about the ďŹ rst speaker, Mike Harnett, who discussed ergonomics, Cooke said, “I thought she was good. Ergonomics is one of the most under-used tools out there.â€? In her talk, Harnett touched upon the importance of buying the best boots you can buy. Cooke heartily agrees.

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B3

There was a lot of interest in the Prairie Western ReclamaƟon and ConstrucƟon dispersal sale in Bienfait on March 19.

Time for a holiday longer than two days: PWR winds down By Brian Zinchuk Bienfait – It’s been pretty hard for Ron Gibson to pass an auction sale without buying something over the years, so it’s fitting that when he and his wife Kathy decided it was time to wind down their business, Prairie Western Reclamation and Construction, Inc.(PWR), they would have a big sale. That event took place on March 19 in their yard on the east side of Bienfait. According to the auction company, Canadian Public Auction, there were 360 online bidders registered and over 800 in-person bidders registered. “We were into a lot of sand and gravel hauling, excavating. We did a lot at the mines, too, but it wasn’t a big part of the program,” Ron said. Asked if they had looked at selling the operation as a unit, Ron said, “We considered that. We don’t want to be tied down. I always liked auctions.” “If you sell to someone else, they want you to stay and run it. You’re really

not done,” Kathy said. She joked they were in the office during the sale to keep Ron from buying anything. The impetus for the sale was hitting the 25 years in business milestone last September. Ron’s worked a lot longer than that, however, going back to the 1960s when he was digging flare pits. They had a dry run in the fall, when they auctioned off their toy collection. “We decided in November, and discussed it beforehand. We called a couple auction of companies,” Ron said. “We’re going to have a summer holiday longer than a Saturday and Sunday,” said Ron. Kathy added, “Ron’s never had a summer vacation. We want to get out for a bit of a vacation. ɸ Page B4

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PIPELINE NEWS April 2013

Time to de-stress their lives

Ron and Kathy Gibson are going to take holidays in the summer longer than just Saturday and Sunday. The couple behind Prairie Western ReclamaĆ&#x;on and ConstrucĆ&#x;on, Inc. have wound up their business and held a dispersal sale on March 19.

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Éş Page B3 “We’re going to try to de-stress our lives, make it a bit easier.â€? “We’ve still got other things we have to look after,â€? Ron said, noting they will keep their rental company, Nortak Enterprises, which supplies oilďŹ eld equipment and trailers. The dispersal included a number of excavators, semis, trailers, pickups, skid steer loaders, backhoes, a grader, payloaders, and camp facilities. There were approximately 900 lots. The couple is excited about the new venture that will be leasing their land and shop. Winacott Group is establishing a Western Star and Hyundai heavy equipment dealership there. Jerrod Tedford is going to be heading up the operation, joining as a partner in the Bienfait location. Kathy said that development is exciting. “He’s young and energetic, and wants to go.â€? Ron said of Tedford, “There’s no holding (him) back. We had quite a few choices to lease it out. I always liked Jerrod. He worked for us at other places, taking care of our equipment. “We greatly appreciate all the business and friends,â€? Ron said in closing. Kathy added, “We would like to thank our customers and vendors for years of sticking by us.â€?

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PIPELINE NEWS April 2013

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Southeast Saskatchewan gains new truck dealership venture with the owners of Winacott. By Brian Zinchuk He used to work as a service manager Bienfait – A retirement by the with another truck dealer in town. ownership of one company has “They know I know this busihelped the launch of a new venture ness down here. It’s different than in southeast Saskatchewan, adding a Regina,” Tedford said, noting the new truck dealership to the area. oilpatch and indeed the entire area is Winacott Group will be estaba different type of customer base than lishing a dealership in Bienfait this the larger cities. spring. The new venture will come Timberwolf provides diagnosfrom a combination of Timberwolf tics and repair of heavy trucks and Mechanical Limited and Winacott. equipment, primarily working on Timberwolf has been in operation for engines and drivelines. Their expertise eight months under that name. It opincludes Cat, Cummins and Detroit erates in the former X-treme Towing engines. Tedford noted they are one location, and indeed, the two operaof very few outfits in the area that tions used to work together for a year works on Detroits. A lot of equipunder the same roof before Xtreme ment have Detroit engines, and moved to a new facility nearby. Regina was the closest service point Winacott carries Western Star trucks and Hyundai heavy equipment Jerrod Tedford will be merging his Timberwolf Mechanical Ltd. into the WinacoƩ Group for them. and launching a new truck dealership for southeast Saskatchewan in Bienfait. As of late February, they emas well as many other lines of equipployed three technicians and three ment and parts. It has locations in people in the front. They previously Saskatoon and Regina. The company employed fi ve techs, but Tedford noted, that’s part of the challenge of running was founded by George Winacott in 1974 and since 2001 has been owned by Trevor Winacott, his sister Laura Bubnick and brother-in-law, Corey Bubnick. this sort of business. The odd time he will find himself turning wrenches in the back. Trevor and Corey are the primary partners in the business. “It the last eight months, this business has been well received. We haven’t Jerrod Tedford is the owner of Timberwolf. He will be a partner in the new needed to advertise. “We’re taking two businesses and slamming them into one, and going three times the size.” The combination came about as a result of a customer. “It was a customer of mine that pointed me that way. He phoned, and Cory Bubnick is one of the we didn’t have enough room to put him in the shop. He said, ‘You need more partners in the WinacoƩ room.’ Group. “I said, ‘Of course we do, but you know how hard it is to find land and buildings already set up.’ “He said, ‘Call Ron Gibson at PWR.’ I called within five minutes. “We started discussing availability. I’ve known Ron for a few years.” This all began just after last Christmas.

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PIPELINE NEWS April 2013

Bienfait to be home to new Western Star location Jerrod Tedford keeps track of bids during the dispersal sale of Prairie Western ReclamaĆ&#x;on and ConstrucĆ&#x;on. He will be taking over the facility and establishing a new WinacoĆŠ Group dealership in Beinfait. The sale was Mar. 19.

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Asked why Beinfait instead of the much-larger Estevan, he said, “It’s already there. Most of our customers are from that area (east of Estevan) anyway. The majority are actually closer (than their current location). The land they will be occupying is secured by a lease with an option to purchase. One of its key advantage is being directly on a primary highway. Corey Bubnick said, "It's something we've been trying to do for the last ďŹ ve years. We've been talking to Jerrod since last summer. It's a win-win for both. He brings OEM to his business, and it sets our feet on the ground as well." What are Tedford's goals a year from now? He said, “Realistically, eight to 10 technicians, two to three full-time parts sta. A lot of customers would like more over-the-counter inventory to increase overall support, with parts and sales in the area for both trucks and heavy equipment.â€?

Parts and service, including diagnosĆ&#x;cs, will be the iniĆ&#x;al focus of the new WinacoĆŠ Group dealership in Bienfait.

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Éş Page B5 The new place will have 4.6 acres and two buildings. The main building will have four bays and two doors, and the newer shop is 80x120 . “I ďŹ gure we can ďŹ t about 10 trucks in the large shop, four to ďŹ ve in the main building and still have room to work. But how do you deďŹ ne a bay when one picker takes two-and-a-half bays? A truck isn’t a truck. It’s a hydrovac, a picker, a crane or a bed truck. We focus on a lot of specialized equipment.â€? As for their involvement with the Winacott Group, he said, “It started when their on-the-road parts supplier got my name from a previous customer. I used them as my primary parts supplier, and we built a relationship. “We had been batting this around for awhile,â€? Tedford said. Initially they won’t have sales of new equipment out of Bienfait. “Sales will still be out of Regina and Saskatoon,â€? he said, but added, “Some details could change.â€? The new location will allow for a lot more warehouse space for parts, allowing them to expand their parts and service capability.

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PIPELINE NEWS April 2013

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"What am I bid for ’em?"

Dwight Foley Ňew in from Calgary to aĆŠend the sale of a long-Ć&#x;me customer, Prairie Western ReclamaĆ&#x;on and ConstrucĆ&#x;on, in Bienfait. Behind him, a long line of trucks are parked, with hundreds aĆŠending the sale.

“We bid on it,â€? he said, to secure the auction. “We’ve got 25 fulltime sta and representatives in Grande Prairie, Edmonton, Calgary, an oďŹƒce in Vancouver and another in California,â€? Foley said. “Our main centre is Calgary. We cover from Manitoba west. Red Deer south is our primary focus. We have equipment from as far as Winnipeg to the interior of B.C.â€? Most of their sales are consignments. “South of Regina has been busiest for us, followed by Lloydminster,â€? he said of their Saskatchewan sales. They average about $10 to $15 million per year in gross sales from Saskatchewan. A lot

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troublesome. The three auctioneers present at the PWR sale were the “hired gun type,â€? Foley said. Auctioneers often work in that manner because it keeps them busy and allows them to keep their ďŹ nger on the pulse of the business. “It’s getting harder and harder to ďŹ nd good quality auctioneers,â€? he noted. CPA has two auctioneers in California being taped for an auctioneer reality show, Foley said.

Jim Horning holds a sĆ&#x;ck indicaĆ&#x;ng which lot is for sale.

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Bienfait – There was plenty of interest in the Prairie Western Reclamation and Construction dispersal auction on March 19, with approximately 1,200 people registered either in person or online. Canadian Public Auction was calling the bids. CPA Industrial Auctioneers & Appraisers is based in the foothills near Calgary. President and general manager Dwight Foley ew in tor the sale, arriving at 2:30 a.m. Ron and Kathy Gibson were selling their assets, and it’s no surprise Foley knew them personally. Kathy has joked about Ron’s penchant for auctions. “Ron’s been a very good customer,â€? Foley said.

of that iron is shipped to Calgary, and ends up being purchased by Saskatchewan buyers who ship it back. So the company will be taking a new tack and oering online sales for Saskatchewan and Manitoba. April will see the ďŹ rst sale of this type, with six sales a year planned. “We’re going to focus on that for Saskatchewan and Manitoba, with more descriptive pictures, and online bidding. One Manitoba sale in April will be 100 per cent online. Our sales guy will go out with his iPhone and input the data. You can still view it (in person), but buy online. Preview dates will be set, similar to what was done in Bienfait. For several days before the sale, potential bidders were able to come in and view the equipment “In the last three years, there’s been an inux of equipment and people going to Alberta to buy it. What helped auction companies are the Tier IV emissions (standards). People want used stu. Tier IV are

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PIPELINE NEWS April 2013

The trade show area this year will be full. This was the 2011 ediĆ&#x;on of the Williston Basin Petroleum Conference, the last Ć&#x;me it was held in Regina.

File photo

New energy horizons at the Williston Basin Petroleum Conference „ By Brian Zinchuk Regina – As of April 1, the early-bird registration discount is over, but it’s still worth your while to register before attending the Williston Basin Petroleum Conference on April 30 to May 2. That’s because registrants’ prior to the event will pay $400, but that price jumps to $500 at the door. The event will take

place at Evraz Place in Regina. “We’ve got over 1,000 registrants now,â€? said Erik Nickel, senior research petroleum geologist with the Saskatchewan Geological Survey, and one of the organizers. “We are expecting 1,500 to 2,500 people.â€? “The booths are sold out,â€? he said. A few have cancelled, and are being ďŹ lled with those on the

waiting list. There are 300 exhibition booth spaces, plus outdoor exhibits. The theme of this year’s event, the 21st annual, is “New Energy Horizons.â€? “The program is set,â€? he said. There have been a few changes, however. The luncheon keynote speaker was in ux as of mid-March, but they were hoping to secure a key player soon.

The United States’ government’s “sequestration,� a radical curtailing of expenses as part of budgetary quibbles of the Congress, means that one speaker in particular isn’t expected to attend. Stephanie Gaswirth of the United States Geological Survey had been scheduled to talk about the USGS reassessment of the Bakken and the Three Forks. “Her travel

was cancelled,� Nickel said. “We’re looking forward to Dean Potter of Elkhorn Resources, who will give a whirlwind tour of drilling activity in the Williston Basin. Elkhorn Resources has been particularly active in the Northgate area, just north of the U.S. border. Deb Westerman of the Ministry of the Economy will talk about

PRIME 2.0: What’s next for Saskatchewan Ministry of the Economy’s oil and gas business process and systems renewal project. ɸ Page B9

Southern PaciÂżc continues Senlac development Production at Southern PaciďŹ c Resource Corp.’s Senlac facility

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averaged approximately 2,500 bpd in February, holding stable for several months even though no additional well pairs were brought onstream. Pad K was started up in January with circulation steaming in the ďŹ rst well pair, and permanent surface facilities completed on March 4. The ďŹ rst of three well pairs was placed on production March 9. The next well pair is scheduled to start up in April and the ďŹ nal pair is to start in early May. The company expects Phase K will provide a signiďŹ cant increase to its base production.

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PIPELINE NEWS April 2013 Éş Page B8 In the series of presentations on enhanced oil recovery and stimulation, the conference was able to snag a speaker from one of the big players in the Saskatchewan Bakken. “We’re excited to have Ryan Axani from Petrobakken speak about the ViewďŹ eld,â€? Nickel said. His presentation is entitled, “Fracture avoidance in the

B9

ViewďŹ eld Crater Area: case study.â€? The ViewďŹ eld Crater is six miles south and two miles west of the intersection of Highways 13 and 47 at Stoughton. The 2.5 kilometre-wide crater was discovered in 1972 during oilďŹ eld drilling activity, according to the Encyclopedia of Saskatchewan. The impact event occurred in the Early Jurassic period, about 190 million years ago. None of the features of the structure is visible on the surface, as the crater is buried under 1,000 m of overburden. In the exploration and development stream of talks, Anatoly Melnik of WorleyParsons will discuss “Hydrogeology of Shaunavon Formation: regional evaluation of hydrodynamic system and hydrocarbon migration.â€? Nickel noted that Melnik is a former grad student of Dr. Ben Rostrom. Rostrom is a key researcher involved with the Aquistore project. Of the presentation, Nickel said it will discuss “interesting hydrogeological results from the Shaunavon that can open it up to new ideas for development.â€? In the emerging technologies talks on May 2, a number of speakers will address a theme of captured associated gas and its usage. Gary Hyer of CanGas Solutions will talk about lessons learned from are gas capture. Chad Wocken of the Energy & Environmental Research Centre will talk about utilization of associated gas to power drilling rigs – a demonstration in the Bakken.

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The 2013 Williston Basin Petroleum Conference in Regina will focus on new energy horizons. This ÄŽle photo is from its most recent Regina event, in 2011, when then-Energy and Resources minister Bill Boyd spoke on behalf of the province. File photo.

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PIPELINE NEWS April 2013

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PIPELINE NEWS April 2013

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Most clients are seeking an all-inclusive package when they head to a southern beach, according to Denise Taylor. Photos submiƩed

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A few days notice, and you can be on a beach Bienfait – Based in Bienfait, Denise Taylor is a full-time associate with TravelOnly. She works from her home. She recently retired from a human resources position with Ensign Drilling. “They come to me, or they phone me. I’m very flexible with my hours. A lot of clients are from the oilfield – friends, or people I worked with before. “With road bans, a client might come in mid-April. They want to go somewhere south. This is their budget. They have a place in mind. Probably 90 per cent of my clients have a place in mind,” Taylor said. Jamaica and Punta Cana, Dominican Republic, account for probably 85 per cent of her clients’ destinations. Bad press has impacted the desire to go to Mexico. Taylor has been to Mexico herself. She said, “It doesn’t matter where you go, you’re always in another country. Go by their rules. All-inclusive resort packages are usually seven or 14 days. Most clients seeking a resort go for an all-inclusive. “I do get a lot of Vegas, and a lot of Phoenix. They’re looking for golfing and more relaxation, not busy,

busy. They are going for hockey, golf, and to relax.” Las Vegas trips are usually three to four days. “You can always go back,” she noted. Approximately 60 per cent of Taylor’s clientele is from the oilpatch. “My calls start in September. It really doesn’t pick up until November.” Speaking in early March, she said, “The last two weeks, I’ve been busy. They look at the calendar and realize road bans are coming. ‘Can you keep an eye out for a deal?’ they ask.” She’s found such deals as close as a day or two before departure. The shortest notice where it is still economical is two to three days. Asked for some pointers on travelling, she said, Christmas is the most expensive time of the year. “You don’t want to stay at two star (hotels). You might as well stay at a camp. You might want to stay home,” Taylor said, usually recommending four and five star hotels. Most of her flights are booked out of Regina or Winnipeg, which she said are cheaper than Minot, N.D. for all inclusive destinations. Minot sees a lot of traffic for Phoenix and Las Vegas.

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PIPELINE NEWS April 2013

Can you watch for deals? Carnduff – When you’ve had a winter like we’ve endured, a lot of people want to head south for a break from it all. That’s especially true in the oilpatch, where the period from New Year’s Day to March 15 is usually the busiest of the year. There are a lot of tired oil workers looking for a break during breakup. Cheryl Young is one of the owners of Carnduff Agencies. “I just do the travel,” she said, noting her function is as a travel consultant. Carnduff Agencies is partnered with Brantford, Ontario-based TravelOnly. Asked about how busy they get with spring breakup she said, “We can be (busy). It’s seasonal, though. People don’t like to commit themselves until they know they have time to go. “The oilpatch is mostly (interested) when road bans come one. They like last minute deals. “People are starting to look,” she said in late February. “They want to get out of here. They’re tired of the long winter we had, lots of snow and bad roads.” “Sometimes when I’m out for coffee, people will ask for deals. People do like to stop in and look at brochures,” Young said. “Can you keep a watch for deals?” is a common refrain she hears. In other situations it will be two guys who come in, they have their information, and they want to go. “It can take only a few minutes if they have their information. We can book it right then.” “In this area, a lot of jobs are in the oilpatch,” Young said, but there are other clients as well – teachers, workers and families like to heat out during Easter and school breaks. In some cases, wives who haven’t seen their husbands much over the winter, like to get away with them for a holiday together. “When they take the kids, it’s February break or Christmas.” Sometimes she gets groups of “fellows going for a good time.” Where they want to go can vary. Mexico is the least expensive. There’s also Cuba and Jamaica. Punta Cana, on the eastern end of the Dominican Republic, is popular. “They’re looking for a direct flight, good price, and a one-week break.” “Our two main airports are Regina and Winnipeg. I also send some out of Saskatoon,” Young said. Minot, N.D., has direct flights to Las Vegas or Arizona. Direct flights are key, however. Some people will take connecting flights if the price is still good. Asked about Mexico’s reputation, Young said, “You have to be careful wherever you go. You are in a foreign country. I think Mexico gets a bad rap.” Cruises, she said, may not work out with the time available. They are more complex to book.

Cheryl Young is a travel consultant with Carnduī Agencies and one of the owners of the Įrm.

Varadaro, Cuba, is one desƟnaƟon that can be appeƟzing to those sick of snow. Photos by Cheryl Young

“Most want to go to a beach, a nice beach,“ said Young, adding, “It depends on who you are. “Anything you can find on the Internet, we can book. When you have a travel agency, you have someone you can call if you get into trouble, i.e. a missed flight.”

PIPELINE NEWS April 2013

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Going off the beaten path

Corey Forester of W.W. Smith Travel in SwiĹŒ Current focuses a lot on adventure tourism. Photo submiĆŠed

Swift Current – You can go to a beach or maybe play the tables in Vegas, but what if you want something else? Something entirely different? After all, there’s a whole world out there to explore during spring breakup. That sort of travel experience is something W.W. Smith Travel of Swift Current caters to, in addition to the usual beach and party destinations. “We’re the oldest independent travel

agency in Saskatchewan,â€? said Corey Forester, of W.W. Smith Travel. The company itself is now 100 years old. “The typical all-inclusive in a sun destination is always popular,â€? she said. But she is ďŹ nding some people want to break away from the norm and want to do something more adventuresome. There’s more interest in taking a trip o the beaten path, Forester said. That can include

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more remote islands, for instance. “People tire of the same-old. They want something dierent, more adventurous.â€? Roatan, Honduras is one destination she

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one did not need a powerful camera lens to take pictures. “We found a leopard and elephants 10 to 12 feet away. Just don’t stand up in the Rover, as you are (seen as) a threat to them. “I visited South Africa, Botswana, Zimbabwe and Zambia. Victoria Falls was part of it. We did riverboat safaris and went on elephant back in open bush. “It’s a contrast to your typical all-inclusive.â€? Price, she said, “depends on how much adventure you want.â€? In Peru, for instance, one can tour Manchu Picchu, the “lost city of the Incas.â€? Costa Rica can be similar to Mexico in price, but not quite as good. Belize and Honduras don’t see as many sales. ɸ Page B15

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Some items include hot air ballooning, ziplining, jungle tours, bird watching and diving. “A lot can be added at your destination,â€? Forester said. These items can be pre-arranged, or recommended by the tour guide. “We pride ourselves on selling all components of travel,â€? she said. “A lot in the age30 bracket want to the trips. They want a likeminded group. You’ll ďŹ nd a real mix of ages with that type of tour. “Top on my list was an African safari. It requires a minimum two weeks to do it justice. It may be the ultimate getaway to another world.â€? This is a trip she personally went on in 2010. Using open-topped Land Rovers, she found

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noted. Forester said 90 per cent of adventure-style trips are not all-inclusive, but in Costa Rica, there are all-inclusive options. “We’re steering them towards Central and South America,â€? Forester said. They work with Contiki Holidays. A trip to Thailand can be had for $799 plus ight, she noted. “You can stretch your dollar in some of these Asian holidays.â€? Contiki is geared for people under 35, she said. The company has been around for decades. “I honeymooned with these guys in Australia. It’s structured, yet has freedom. They’re worldwide.â€? “It’s been fairly successful. I was top salesperson in Canada with Contiki last year,â€? Forester said.

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B14

PIPELINE NEWS April 2013

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B15

Make sure you have your shots early Éş Page B13 “It’s a dierent style of holiday.â€? Assistance of an agent When you’re going on an adventure holiday, things are a lot more complex than an all-inclusive. This is where the assistance of a travel agent really stands out. For instance – did you consider getting your shots? “We always recommend you check with the public health oďŹƒce,â€? Forester said. “TwinRix for Hep A and B is recommended for almost any holiday out of North America. As for when to get them, she said, “The sooner the better.â€? Other places, like Central America, may require inoculations for yellow fever. “Some countries require malaria shots,â€? she added. “We get people planning way ahead, watching for deals. We do get a lower percentage who just wing it and want to travel next week.â€? “Some of these trips are trips of a lifetime, and require a little more savings. You need a little more time and money, but will have no regrets.â€? “Most people like to talk to someone who has been there. You want to get it right. Click, click, click on a website isn’t personal. It’s not cut and dry.â€? “We’re not charging for our service. We’re paid a commission from the tour company. A lot of these more adventuresome holidays will require a visitor’s visa. More and more countries are recognizing visa in destination, according to Forester. But there are some key points. It’s important to have a passport photo available and the designated amount in U.S. dollars. For instance, in Egypt, Forester had to pay US$20, and in Zambia it was US$75.

It’s getting easier to apply for visas, she noted. For many nations, this means sending your passport to their embassy in Canada before you travel. Visitors’ visas vary in cost and processing time. Generally it doesn’t take longer than two weeks if a passport is sent by courier to the embassy of the nation you want to visit. Like getting your shots, the sooner, the better. “They want the tourist dollar as much as we do,â€? she said. It’s generally a good idea to have a number of extra passport photos available, over and above the one actually in your passport. When travelling, Forester suggests having a variety of currency options. Most people want to use their credit card as much as possible for insurance purposes. That’s an important consideration, because sometimes companies can go belly up. A lot of countries will accept your debit card at ATMs. “Nobody recommends carrying a lot of cash,â€? Forester said. Travellers cheques are a thing of the past. The U.S. dollar is widely accepted. If travelling to Europe, you need euros. Oilpatch interest “We get some spin-o from the oilpatch for sure. It’s a real mix, with a lot of senior clientele. Patch workers, she said, are still purchasing typical all-inclusive packages, enjoying the beach. “There’s still a lot of Mexico, and Dominican Republic. I’ve sold a lot of St. Lucia this year, but via Toronto.â€? Other popular destinations include St. Martin, Antigua and Cuba. Mexico has seen substantial bad press in recent years, but tourists are still interested in it, especially

for the price. “Money talks. We ďŹ nd more value in Mexico due to the problems there.â€? The result has been a huge number of sales for Mexico. It’s possible to go there for under $1,000 per person, including the ight. “We sell a lot of Vegas as well,â€? she said, noting it was easily accessible, quick, and has direct ights.

VisiĆ&#x;ng places like Machu Picchu in the Peruvian Andes Mountains is a substanĆ&#x;ally diÄŤerent adventure than simply siĆŤng on a sun-soaked beach. Photo submiĆŠed

For all your travel needs Linda McAuley: 577-4491 (home) 577-7449 (cell) Janelle Garnier: 452-6420 (home) 452-7595 (cell)

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B16

PIPELINE NEWS April 2013

Rocks inà ict damage at Lloyd bonspiel „ Story and photos by Geo Lee

Oilman of the Year Jim Hunt congratulates the A-event champs from McAllister Drilling Inc. from Lloydminster. LeĹŒ to right are lead Ed Ehle, second George McAllister, third Mike Makowecki and skip Noel Bernard.

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Lloydminster – Hundreds of rocks were thrown at the house during the 46th annual Lloydminster Heavy Crude Open Bonspiel March 13-17 with a few well aimed stones causing most of the damage. A key steal for two in the fourth end of the A-event ďŹ nal helped McAllister Drilling Inc. undermine the comeback hopes of GLM OilďŹ eld Construction. The 7-3 win for McAllister was their second since 2011 and put skip Noel Bernard, who works for Kelro Pump and Mechanical, over the moon with relief and joy along with his teammates. “It was a tough game. We played hard and we got some breaks and we were able to capitalize on them,â€? said Bernard, who pointed to the fourth end as the turning point. GLM skip Brad Wuitchik somehow misďŹ red a shot in that end leaving the door wide open for the two rock steal. “He missed a shot for us and I was able to get us up and playing well, I guess,â€? recalled Bernard. Wuitchik may have seen the future during a pre-game interview when he revealed his match against McAllister would be his second Aevent championship opportunity since entering the bonspiel in 1998.

“We didn’t win that one either,â€? he said. “That’s just to be able to get back up after I throw a stone – just play it one rock at a time,â€? he joked, regarding having let one slip. “They’re a good bunch of guys to curl against, so we’re happy to be here.â€? One of those guys was George McAllister who played second on the winning A-event team that bears his name as the company owner and sponsor. “It’s always great to win a bonspiel, especially the Lloyd oilmen’s that has over 70 teams,â€? said McAllister. “It’s nice just to get out. The whole idea is to have fun out here, but it’s always a bonus to win a few games as well.â€? McAllister agreed with his skip Bernard that the game was tougher than the score would indicate. “We gave up a three-ender early in the game, and we were starting to wonder, but we chopped away at them and at the end, things were positive for us.â€? The McAllister rink may have also beneďŹ ted from a substitute ringer in the form of lead Ed Ehle who is a professional sweeper of sorts as the owner of a carpet cleaning business called Eco Dry. ɸ Page B17

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PIPELINE NEWS April 2013

One of the special guests introduced during the Lloydminster bonspiel banquet was Dean Hunt, the son of Jim Hunt, this year’s Oilman of the Year. Dean sits at a table full of family friends and relaĆ&#x;ves of Jim and his wife Diane at the Stockade ConvenĆ&#x;on Centre.

Éş Page B16 “For me, it’s the ďŹ rst time in the ďŹ nals,â€? said Ehle with a laugh. “I just got picked up. One of the players couldn’t make it, so they picked me up to ďŹ ll in. I just throw up the ďŹ rst two rocks, and try to sweep their rocks where they’re supposed to go.â€? This year’s tournament will also be remembered for an early seven-ender that the Monte Armstrong rink from Bandit Pipeline pulled o for a quick victory in what had been a close game against Platinum Energy Services 1 in the E-event ďŹ nal. “We got a little pressure put on the other team. They got a few misses and it ended up we snuck out a big end,â€? said Armstrong who played with Max Rivett, Dusty Makichuk and his son, Ryan Armstrong. “We’ve had a few sevens before but never and eight-ender. It was a good game other than that. They called it early.â€? Armstrong, who was also president of the bonspiel committee, was pleased by the turnout of 72 teams, the same number as last year – with some new teams in the mix. “We try to get new curlers to participate in it and if we can get new teams from out of town, that makes it even better,â€? he said during the bonspiel banquet. Event chairman John Stanyer stepped up to the podium to congratulate Jim Hunt for being Oilman of the Year and to express his amazement for the longevity of the tournament. “In this day and age of dwindling participation in events like this, it always amazes me that we will still draw an entry list of 72 teams while other bonspiels are having trouble ďŹ elding full entries,â€? said Stanyer.

Making a fashion statement with co-ordinated team jackets are members of the Eagle Well Servicing team of (l-r) DusĆ&#x;n Lavigne, Kent McCallum, Ed Gilroyed and Neil Conlon. The jackets didn’t help them in the C-event ÄŽnal as they lost to BPC Services Group.

“So thanks to all the participants in this year’s event for continuing to make this the success that it is.� Tom Fisher from Hurricane Industries Ltd. joins Ted Collins and Keith Collinge as the only three oilmen who have attended all 46 events, but he’s the only one still playing and beating the competition. His team was 2-0, including a win over last year’s A-event champs, but he was hedging his own chances for making it 50 bonspiels in just four years

time. “Oh you never know. It all depends on your health and what you’re doing,â€? he said. “I’m still active in the oilpatch so I guess I will make another year or two. It depends on your health – if you’ve got bad knees or something – I don’t want to use the stick.â€? Fisher also had the pleasure of working with Hunt back in 1963 with a company called Pat Operators located southeast of Lloydminster. ɸ Page B18

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PIPELINE NEWS April 2013

Mikes OilĂ€eld Services the best dressed team Éş Page B17 Hunt’s work history and accomplishments were read to the audience by Stanyer who let Hunt take over the mike for his Oilman of Year address. “This event is one of the biggest and the best in the country and I’m proud to be a part of it,â€? said Hunt during his remarks to the crowed that included his wife Diane, as well as family and friends. Next year’s banquet will serve up a new master of ceremonies as the popular Don Tarasuik is stepping down in favour of spending some

time with his wife, Doreen, in sunny vacation climes. “I just returned from where it’s warmer and ran into a six foot snowbank, and we decide we’re going to spend a little more time where it’s warm,� said Tarasuik. “We may be back in time for the bonspiel, but we’re not going to try too terribly hard.� One curler who will be back for sure is Blaine Jezowski, the skipper of Hess Fishing & Rentals, whose dad, Frank was Oilman of the Year in 2009. “I’ve been curling in this tourna-

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ment for about 23 years now. I started as a young lad and I’ve been participating in it ever since,â€? he said. “It’s a nice getaway to meet some new people and have some good camaraderie.â€? The best dressed team goes to Mike’s OilďŹ eld Services, wearing stylish vintage sweaters and caps that put players such as lead Brett Graham in a party mood. He said he came out, “just to get out and throw a few rocks and hang out and have a good time.â€? His team was 1-1 on Saturday but was cranked to go big. “We had a tough one yesterday afternoon, but hopefully, we can get another win today. This is my second year. If they have me back, I’ll be back,â€? he said. The Pyramid Corporation 2 squad of Jason Topp, Neil Maier, Kevin Hegseth and Curtis Thompson will be back next to defend their B-event championship. They defeated Foremost Hammers in their ďŹ nal. The BPC Services Group four-

some of Mickey Armstrong, Bill Armstrong, Darryl Ranger and Brad Simonar swept their way to C-event title over Eagle Well Servicing. Armstrong, by the way, works for BPC not Carson Energy, as the program guide incorrectly stated. MRC Global was this year’s D-event winner with Ken Fleck, Ryan Wortman, Greg Nohnychuk and Dave Mackenzie on board. They fought o a challenge from Kudu Killers. The F-event was won by the Bidell Gas Compression foursome of Jerry McCarty, Brian Findlay, George Kobsar and Derek Bertoia in a game against Topco Oilsite Products. The RBC Investments sponsored squad of Kirk Brost, Daryl Brost, Dustin Falscheer and Matt Brost took home the G-event title over Heavy Crude Hauling. The bragging rights for the Hevent title holder went to the mixed group of Ernie Ludwig, Donald Jameson, Sheila Ludwig and Tyler Smith who defeated Kudu Krunch.

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B19

Petrobank’s 2P reserves reset to zero at Kerrobert

InstrumentaĆ&#x;on technologist, Chris Kennedy is pictured in this August 2012 ÄŽle photo opening a sample tray to check the quality of upgraded THAI oil at Kerrobert. The THAI process upgrades naĆ&#x;ve heavy oil with an API of 10 to a lighter API of 14. Work conĆ&#x;nues at the site despite a reducĆ&#x;on in proved plus probable reserves to zero at the end of 2012 from 3.6 million barrels at the end of 2011.

„ By Goe Lee Kerrobert – Petrobank Energy and Resources Ltd. has taken a $185.9 million accounting charge on its toe-to-heel air injection or THAI project at Kerrobert. However, the company is well ďŹ nanced and began 2013 with no debt and $103 million in cash and marketable securities. The non-cash accounting impairment for Kerrobert follows a decision by reserves evaluators McDaniel and Associates Consultants Ltd. to reduce Petrobank’s 2012 proved plus probable reserves to zero from 3.6 million barrels at the end of 2011. The company has debooked all of the proved plus probable (2P) reserves pertaining to the THAI process at Kerrobert. The setback follows the spino of Petrobank’s 57 per cent stake in PetroBakken Energy Ltd.,

a light oil focused company on Jan. 1 in a major reorganization. The reserves revision announced on March 7 means that McDaniel eectively decided the THAI technology was not good enough to become a commercial technology in Kerrobert during 2012. The company had tried for a few years to commercialize the THAI in-situ combustion process at Conklin in northern Alberta before abandoning that location in favour of Kerrobert. Petrobank said the reserve revisions are due to their inability to sustain economic production rates assumed by McDaniel in its year-end 2011 reserves report. Production at Kerrobert averaged 307 barrels of oil per day in the fourth quarter, an increase of just four bpd over the previous quarter. Production in January 2013 was 236 bpd based on ďŹ eld estimates. Production at Kerrobert averaged 261 bpd in 2012. The company anticipates that 1P (proved reserves) and 2P (proved plus probable) will be assignable to the project when sustainable commercial production rates are achieved. Petrobank is committed to commercializing the Kerrobert THAI project according to the March 7 news release covering year-end reserves, resources and ďŹ nancial and operating results and outlooks. “At our Kerrobert THAI project, our operating focus is to continue to reduce costs and to signiďŹ cantly increase air injection,â€? said the company. “With increased injection, we will generate more heat in the reservoir and therefore mobilize more oil.â€? Petrobank also said its proved plus possible, plus possible (3P) reserves at Kerrobert have been cut to 5.4 million barrels at the end of 2012 from 8.5 million at year-end 2011. Possible reserves are reserves with a 10 percent probability of being produced. “Stand-alone possible reserves have been assigned to our Kerrobert THAI project as a result of current uneconomic production rates associ-

ated with the project,â€? said the company. “It is our intention to develop such reserves by continuing to operate the project with a view to increasing production to commercial rates.â€? The Kerrobert THAI project built to a design capacity of 7,000 bpd became operational in September 2011 with 12 production wells capable of producing heavy oil. One of the 12 wells was shut down in the ďŹ rst quarter of 2013 to determine how to remediate a buildup of ďŹ nes that aected downhole pump performance. Meanwhile, the company continues to evaluate its Kerrobert trend properties where they have completed three vertical stratiographic wells and a large 3D seismic project. Petrobank has ďŹ ve conventional cold production wells operating on its Kerrobert trend lands but none of them is currently producing at “materialâ€? oil rates. The company also purchased 46 sections of land in Saskatchewan in early 2013 for approximately $2 million for new potential THAI projects and exploring conventional heavy oil resources. Petrobank currently owns approximately 81 sections of land in Saskatchewan and 31 sections at Dawson Alberta, the site of a THAI demonstration project. The company commenced cold production operations from two horizontal THAI production wells late in 2012 that produced at a combined rate of 20 bpd in the ďŹ rst two months of 2013. “These wells will continue to produce conventional heavy oil, and assist in pre-conditioning the reservoir until such time as we commence the startup of the approved THAI demonstration project,â€? said the company. In other news, Chris Bloomer, senior vice president and chief operating oďŹƒcer for heavy oil, will be resigning from the company eective April 11 and joining Connacher Oil and Gas Ltd. as CEO.

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PIPELINE NEWS April 2013

Husky’s Ironman spins wheels on vacation

Lloydminster Husky Upgrader maintenance manager, Ross Thompson, leĹŒ, leads a group of triathletes in a training session at the Servus Sports Centre. To the right is Randy Biver from Pyramid CorporaĆ&#x;on. Thompson is sporĆ&#x;ng a tan having just returned from Cayo Coco in Cuba where he took his bike to train for the 2013 Ironman Canada triathlon in Whistler B.C. that will be his seventh Ironman. Photo by GeoÄŤ Lee

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Lloydminster – Ross Thompson didn’t collect any beach shells during his two week February vacation with his wife Shirley in Cayo Coco, Cuba. That’s way too sedentary for Thompson who is a lifestyle triathlete training for the 2013 Ironman Canada triathlon which will be held for the ďŹ rst time in Whistler, British Columbia on Aug. 25. The 54 year-old maintenance manager at the Lloydminster Husky Upgrader checked into the 5-star Memories Flamenco Beach Resort with his bike in tow. He’s done this before in readiness for his six previous Ironman Canada events in Penticton, B.C. including last year when he completed the 2.4 mile swim, 112 mile bike and 26.2 mile run in a fast time of 12 hours, six minutes and nine seconds. “I do have a tendency to take holidays and ride my bike and do a bit of extra running just to make sure my calorie count is balanced out,â€? he said with a laugh. As for Shirley, Ross said she likes to spend her time “a little bit more leisurelyâ€? than he does. “She’s my cheering section,â€? said Thompson who also turns his competitions into mini-vacations for the two of them. The next big trip for two will be to Whistler. They will also travel to the usual 70.3 half ironman triathlons in Stony Plain and Sylvan Lake, Alberta this summer to test his ďŹ tness. “My wife enjoys the warmer weather of Penticton. Unfortunately, this year, it’s in Whistler,â€? said Thompson with a chuckle. “I’m hoping the weather is a little bit cooler for my own selďŹ sh reasons. We generally go out and do a week vacation – three days out and three days back and kind of relax one day before the race.â€? Thompson timed his recent holiday in Cuba to escape what has been a long cold winter. “Typically, we try to get away in February. Hopefully, it’s the end of the winter,â€? he said. “By the time we get back our ‘roll up the rim’ is on at Tim’s so it’s the ofďŹ cial sign spring is coming type of thing.â€? The exercise under the sun also helps Thompson to recharge his batteries to plan ahead for the fall maintenance turnaround at the upgrader. Thompson is a power engineer, responsible for day-to-day maintenance, repairs and turnarounds. “Right now, we are more in the planning phases for the turnaround we have coming up in the fall,â€? said Thompson who noted it was too early to tell how many workers would be involved. “We are still working on our plans and aren’t yet ďŹ nalizing those numbers.â€? ɸ Page B21

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PIPELINE NEWS April 2013

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This is what you would see while riding a bike along the 27-kilometre causeway linking Cuba to Cayo Coco island where Husky’s Ross Thompson got in a few triathlon training rides during his February vacaƟon with his wife Shirley. Photo submiƩed

ɺ Page B20 The Husky asphalt refinery is undergoing a major 25-day turnaround in April, but Thompson is not involved in that. The fall turnaround at the upgrader will begin shortly after Thompson returns from Ironman Canada in Whistler, an event that sold out months ago. Thompson has already paid the $625 registration fee plus tax and is training hard to beat last year’s splits of 1:19:57 in the swim, 6:02:06 in the bike and 4:33:01 in the run. “It all depends on the weather,” he said. “Last year, I had one of my best times. It was just over 12 hours. Other years, when the ambient temperature is above what I like to race in, it’s a little slower.” In 2011 in brutally hot conditions that the Okanagan is known for, his time was 13:44:01. At the Servus Sports Centre in Lloydminster, Thompson leads an open group in workout sessions that focused on running and core training six days a week. “There’s a variety of different guys from the design guys to people that are working hands-on in the oilfield – vac truck operators and electrician and instrumentation guys. There’s quite a cross section,” said Thompson. Tuesday, Thursday and Sunday, Thompson and others ride their own bikes on indoor trainers working on skills and endurance. “I really enjoy it. I wish I had got into a little earlier in my days. Now I just do it year by year,” said Thompson who owns a pricey lightweight bike. “It’s an expensive hobby,” he said. “As my wife says, fortunately, I don’t have any other bad habits. This is one is rather cheap. “The Ironman has gotten expensive over the years. There are lots of local races in and around Edmonton and Saskatoon that are a little bit more reasonably priced, then you don’t have to stay overnight.” Thompson said it was a good question when asked what his co-workers think about his Ironman accomplishments. “They’ve learned to accept it. I have co-workers who join me at the Servus Centre. It’s all positive,” he said. Thompson gets four weeks vacation a year and like all Husky employees, he benefits from a corporate fitness allowance to subsidize membership in a fitness activity of his choice. His preference is an indoor training membership at the Servus Sports Centre that includes swimming at the Lloydminster Leisure Centre. “That’s my stress burner for most of the year. I have been involved in triathlon events going back for almost 10 years,” he said. In May, he, with a group of local runners, will run the hilly half-marathon in Vermilion that he says is a lot of fun. At Husky, Thompson looks after a group of up to 80 or so employees at the Lloydminster upgrader that undergoes regular maintenance turnarounds each fall. “It will be a busy September and October this year. Hopefully, by Novem-

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ber we’ve got everything all ironed out and be ready for another vacation,” he said in reference to completion of the regular fall maintenance turnaround. “Right after my triathlon season, we go away for two weeks again in November. We just try to do some more relaxing and prepare for the winter.” The destination can’t be decided until the turnaround at work is complete. “Typically, we don’t decide until it’s two weeks before. All we know, it’s going to be some place warm and sunny,” he promised. There might even go back to Cayo Coco where Thompson found the cycling to his liking. “Cayo is an island. It’s flat – very similar terrain to around here, so it’s flat, hot and windy, “he said. “I didn’t do any really long rides. My longest ride was about 60 kilometres. “Fortunately, in Cuba not everyone owns vehicles, so the road traffic is less than it is in Canada, but they do travel at speeds that are slightly over the posted levels. It is rather interesting at times. “The roads are pretty good. They don’t have to worry about the thaw and freezing like we do here,” he added. Thompson said his rides in Cuba were solo excursions as he pointed out the obvious. “Typically, there aren’t many people who take their bikes on vacation,” he said. “It’s good to be outside for two weeks instead of riding inside.” Cayo Coco is warmer than Whistler too, so it could be Shirley’s pick. Time will tell.

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PIPELINE NEWS April 2013

PIPELINE NEWS April 2013

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PIPELINE NEWS April 2013

Lloyd Redhead service shop in overdrive Story and photos by Geoff Lee Lloydminster – The Redhead Equipment service shop in Lloydminster is shifting from crazy busy to insanely busy as potholes and frost heaves signal a fresh rush of business. New and used Mack trucks, Case and Volvo construction equipment and Case IH agricultural equipment sold at the local dealership are all being serviced at once during spring breakup. That’s the way it is at all six Redhead locations in Saskatchewan when service and repair appointments for equipment in all three divisions tend to converge with the shift in seasons. “At this time of the year, it’s all oilfield related servicing,” said service manager Sterling Gaudaur in Lloydminster, where heavy oil is king. “A lot of what we do is relevant to oilfield. Almost all the graders that we service, if they are not used by RMs, they are servicing lease sites. “A lot of the construction equipment that we sell is for servicing and maintaining lease sites and a lot of the big farm tractors that we sell – a lot of farmers look after their own lease sites. “We’ve got big 500 and 600 horsepower quadtrac tractors that we put big blades on front of so they maintain their own lease sites during the winter time.” Vacations are on hold for most shop staff until things being to slow down a notch – whenever that happens. “I won’t be taking a vacation now until probably July,” Gaudaur said on March 12. “It has been tremendously busy. We’ve been full bore working crazy ever since probably a year and a bit now.”

Truck technician Alan Apo Ňashes a smile before slipping underneath this Mack truck with his tools at the ready.

The insanely busy time is the month of April, when farmers begin to turn their attention to purchasing or servicing their seeding equipment. “Once the ag season starts, things change because that is such a time-sensitive industry,” said Gaudaur. “Oil is too, but if a truck goes, down there is always another truck somewhere to replace it. “If a piece of seeding equipment goes down – if we don’t give that customer a piece of seeding equipment, then he doesn’t get his seed in the ground. “There is only a short window of time for that to happen.

“Oilfield is 24/7. It doesn’t stop. The slowest I’ve seen my shop in a year is probably today, but that can change in an hour.” Susan Butt, acting construction shop foreperson, is also resigned to a summer vacation, but she might never get away they way things have been hopping at her shop. “It’s been a crazy winter. It hasn’t really slowed down a whole lot yet. We’re hoping that it keeps going full bore,” she said with a grin. “Our sales have increased so we have been doing a whole bunch of set-ups – backhoes, wheel loaders, rock trucks, graders – you name it. ɸ Page B25

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PIPELINE NEWS April 2013 Truck shop foreman Jon Taylor stands in front of some construcĆ&#x;on and oilÄŽeld trucks parked outside the service shop. The units are scheduled for spring servicing. Redhead has expanded its ag division service shop to accommodate growth in all three of its truck, construcĆ&#x;on and ag equipment divisions. The dealership has also expanded its parts department.

B25

snow and ice on the roads – once you get o the main roads – is so thick that the potholing is really starting to pound the trucks pretty good.â€? Shocks, springs and suspension components can also take a beating out there, but Macks are known to handle rough road conditions better than most. “We have an excellent record in the oilďŹ eld. I think it speaks for itself when you look at a company like Husky,â€? said Gaudaur. ɸ Page B26

Éş Page B24 “A lot of it is road construction for oil leases. We also have a whole line of equipment that works up north in Fort McMurray – the mulching stu has been new to us for the past ďŹ ve years so we’ve been pretty busy in that line as well.â€? The construction shop is really busy, maintaining a line of Volvo graders after the snow clearing season to get them ready for spring construction work. “We also do a whole bunch of wheel loaders, skid steers – just basic maintenance with oil changes and a check over to see if there are any issues that need to be addressed before they get them out in the ďŹ eld running again,â€? said Butt. About 95 per cent of the year-round service work at the dealership is driven by oilďŹ eld trucks, led by Redhead’s agship line of Mack trucks with more of them on the road each year. Redhead in Lloyd sells and services a complete line of Mack trucks designed for heavy haul applications in tough terrain and climates, and a full-line of vocational Mack trucks from dumpers to tri-

drive tractors. “We’re doing a lot of regular scheduled routine maintenance plus any breakdown repairs. Those trucks lead an awfully hard life, so they need to be maintained regularly,â€? said Gaudaur. “This past winter has been pretty hard on them. We had some good cold – we had some good snow – so the roads haven’t been the best. “As the weather starts to warm, the level of 5IF $PNNJUNFOU $POUJOVFT Caltech Surveys is fully equipped to take on your well site and pipeline projects, large or small, anywhere in Alberta or Saskatchewan. You can count on us to respond quickly and get your projects completed on time and on budget. From project planning and digital mapping to Ă„eld scouting, surveying and plan preparation, Caltech’s commitment to quality, service and value continues...

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B26

PIPELINE NEWS April 2013

More room was needed at Redhead’s Lloydminster site ɺ Page B25 “When they decided to buy trucks, they went and looked at everybody’s trucks through their own operators. “They did a time maintenance study for how much downtime there was for each truck. When they decided to buy Mack trucks, I think that spoke volumes. So far they have about 15 trucks.” The new Mack Titan promises be a best seller for heavy oilfield hauling with its standard 16-litre MP10 engine with up to 605 horsepower. The MP10 engine series has a torque rating of 2,060 ft.-lb. at 1,200 r.p.m., suited for oilfield driving environments. “Our product stands up very well to challenges thrown at it in the oilpatch,” said truck foreman Jon Taylor. “We are very pleased with how they are performing out there.” The Titan features 50,000-kilometre oil drain intervals and convenient access points for hasslefree servicing. Taylor said spring potholes and flying rocks play a part in truck maintenance and component repairs at this time of the year, along with mud and snow as road bans take effect. “We get driveshaft complaints on the rough roads. We get windshields obviously, cracked or broken – mud flap hangers and that kind of thing – just part and parcel of the terrain these vehicles run on,” said Taylor. “We are pretty busy. We’ve got a lot of trucks

out there working. The more we’ve got working, the more we are going to see. A lot of stuff is predelivery inspections for the new equipment we are selling.” The Lloydminster dealership is an expansion mode with a recent addition to its parts department and a new 90 by 120 ft. addition to the service shop for the ag division. “We started last summer and we’ve just about done everything now,” said Gaudaur. “We’ve got the two buildings. We added a whole bunch of new things. We added a fire alarm system. We’re going to be paving outside and fencing all the properties.” In order to park its growing inventory of equipment, the dealership has also purchased a five acre parcel of land from the City of Lloydminster adjacent to its site at the east end of Highway 16. To keep up with the demand for servicing and repairs in the three divisions, during the past 12 months Redhead has hired five new mechanics from several countries including the United States, Ireland and the U.K. The service department currently has 24 technicians and three dedicated divisional foremen. “Things are looking fantastic for us right now. We’ve had tremendous growth in 2011,” said Gaudaur. “We had good growth again last year. We are exceeding budgets this year which is forecast for growth. “Everything is predicated by the price of oil.”

Susan BuƩ, acƟng construcƟon equipment foreperson, has a full slate of work orders during the transiƟon from winter to spring to early summer. The shop is conducting a lot of maintenance checks, especially on equipment like Volvo graders used for oil lease snowplowing and construcƟon work.

PIPELINE NEWS April 2013

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Torq to expand Unity transloading „ Geo Lee

Operator Darrel Haider, leĹŒ, punches some numbers into the metering computer while lead operator Chris Horner keeps an eye on the truck-to-rail car transloading process. Oil is transferred from the truck with a hose into a metering system and then into the rail car with another hose connecĆ&#x;on. The maximum water cut allowed is just .5 per cent. An actuator inside the metering shack removes air from the oil before being loaded onto rail cars.

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Unity – Torq Transloading is set to begin an approximate $5 million expansion of its transloading facility in Unity for truck to rail shipments of light and heavy oil produced in the region. The facility is currently shipping approximately 1,200 cubic metres of oil per day by CN rail with more tracks to be laid this summer including a possible tie-in to a CP Rail line just north of town. “We are starting as soon as the snow melts. We are putting in three more tracks so we should have room for at least 150 cars on site,â€? said facility manager Trevor DeBelser. The work could include a tie-in to the CP line about a kilometre and a half north of the terminal. “At this time, we are not 100 per cent sure, but we are not very far from the CP track. We are looking at that as an option. “We are looking hard at tying CP in this summer and getting access from both railroads.â€? The expansion comes just one year ago after Torq opened its facility in Unity on land leased from North West Terminal and North West Bio Energy Ltd. that produces about 25 million litres of ethanol a year from wheat. “We work hand in hand with North West Terminal – the bio-ethanol side of it,â€? said DeBelser who notes that North West has plenty of land for Torq to expand. “We are looking at other options – probably unloading here as well as shipping out,â€? said DeBelser. “North West has about 40 to 60 acres. We’ve got tons and tons of room for growth. It works for everybody.â€? DeBelser notes that Torq doesn’t ship any North West products from its transloading terminal. Torq is an independent fee-for-service transload operator with oilďŹ eld uids and materials transloading and logistics terminals throughout Western Canada. The Calgary-based company provides truck-to-rail and rail to truck transloading in Bromhead, Lloydminster, and Instow in Saskatchewan and Whitecourt and Tilley in Alberta. “We’re doubling the size of our company this year and we’re expecting to bring more locations on site by this fall, said DeBelser. Last October, company president Jarret Zielinski reported Torq had the capacity to move 180,000 barrels of oil per day at full build out of their existing facilities at that time. Altex Energy Ltd. also has a new transloading facility in Unity with storage facilities, a feature that Torq is not currently interested in duplicating. ɸ Page B28

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The Torq Transloading terminal in Unity opened last spring and is set for a $5 million expansion this spring with the addiĆ&#x;onal of new tracks for their truck-to-rail transfer of light oil and heavy oil from the region by CN rail. The company may Ć&#x;e-into a CP Rail line about a kilometre and a half to the north. The facility is located on leased land next to the North West Terminal Ltd.

“Right now, we don’ see any advantage to it,â€? said DeBelser. “In the future – there are a few companies that would like to go in partnership with us and put in some tanks, but at this time we are not looking at any tanks.â€? These new transloading stations enable producers to ship their oil or bitumen by rail directly to reďŹ neries primarily in Eastern Canada as well as the U.S. Gulf Coast in Texas and northeastern states. DeBelser said producers in the region can do that economically from the Torq rail terminal in Unity while pipeline constraints continue to be an issue in Western Canada. “Pipeline capacity is an issue that they’ve had in the past, but producers are saving a lot of money with diluents,â€? he said by rail. “It’s 100 per cent oil with absolutely no diluents in it at all, so they are not paying freight on diluents. “They are paying freight on pure oil so they don’t have to deal with any of the byproducts before they reďŹ ne it. “The pipeline taris are really high because there is a big demand. This is going directly to the reďŹ ner. It’s not

going to a dierent area then loaded onto rail cars and going to the reďŹ nery,â€? added DeBelser. The Unity transloading station is a hub for crude to rail shipments of light oil mainly from the Kerrobert and Kindsersley areas south of Unity and heavy oil from Tangleags in the Lloydminster region to the north. “Right now, the busiest day we’ve had, we’ve unloaded about 60 trucks and our slowest days about 20 or so,â€? said DeBelser. The Unity transloading terminal can transfer oil from up to ďŹ ve crude trucks at time to rail cars under the watchful eye of lead operator Chris Horner who provided a guided tour of the facility. “Basically, we meter the oil that is going from the trucks into the cars,â€? said Horner. “Companies bring oil from certain locations and big batteries around the area and bring it here in their trucks and we transfer it in a nice, clean, safe manner into the rail cars.â€? Incoming trucks are directed to pull up beside one of ďŹ ve portable metering stations that can be moved quickly to the next available rail car. ɸ Page B29

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PIPELINE NEWS April 2013

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Truck driver, Jim ChrisƟson from R.E. Line Trucking, uncouples the hose feeding oil from his truck into the metering system with the transloading complete.

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ɺ Page B28 “We’re mobile so we can move them from car to car and do a few different producers throughout the day. We can handle multiple producers,” said Horner. It takes just under 40 minutes to complete each transfer. Oil is transloading from a truck to a rail car by separate hoses that feed oil in and out of the metering systems that monitor and control the hydrocarbon transfer process. “We have it parked about 10 feet from the rail car,” said Horner. At the heart of each metering system is a Corealis digital flow meter which regulates the oil flow. Horner said an actuator takes the air out of the oil to create “a nice constant flow” so it can be metered electronically into the rail car. “The truck is paid by metre – everything gets paid by the volume,” said Horner who noted the water cut has to be less than .5 per cent. “Companies are expecting that their oil is clean and not full of a bunch of water.” The Torq facility operates 14 to 16 hours a day with a current staff of 18 transloaders and four administrative staff who work out of a trailer onsite. Horner was hired by Torq last June after spending most of the past 13 years working in the oilpatch in Alberta. “My main background was in drilling, but I decided to try this out and be around home a bit more. I am not regretting it,” he said with a smile. “It’s actually very exciting. It keeps a person physically and mentally fit. Things have been going really well. It’s a new company. The sky’s the limit.” DeBelser was born and raised in Unity and spent the first 22 years of his oilfield career in the trucking end of the business. “I have primarily been dealing with oil, condensate and water,” he said. DeBelser said the town of Unity is on the edge of the oilpatch and is very open to every new idea they have. “They are willing to work with us and are more than happy to have us here,” he said.

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PIPELINE NEWS April 2013

Bonnyville up for oil show, down on housing Geoff Lee Bonnyville – The 2013 Bonnyville & District Oil and Gas Show will shine the spotlight on heavy oil companies and mega developments in the area along with a housing crunch that wasn’t in the limelight during the first show in 2011. Exhibitors URS Flint and Clean Harbors could be well on their way developing two work camps on a parcel of land in town by the time the oil show takes place June 19-20 at the Bonnyville & District Centennial

Centre. The camp proposals presented to town council in mid February are typical of the economic growth the town is experiencing since the Bonnyville & District Chamber of Commerce bought the show to town two years ago. “I think there are all kinds of analysis done on spinoff effects of having the people in the community and the companies here presenting at the show,” said Bonnyville’s chief administrative officer Mark Power. “In terms of investment in the

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Bonnyville CAO Mark Power stands outside a townsite work camp that has been operated for the past six years by Clean Harbors in the Northpoint Industrial Park. Town council approved an expansion in 2012 to accommodate up to 200 workers. Clean Harbors and URS Flint recently presented council with plans for two new work camps in an area that has also been idenƟĮed as future locaƟon of an RV campground.

community, there was lots of interest last time with new businesses and opportunities to work with any of the large oil companies that are active in the area. “I suspect the same spinoff this year. It’s really hard to put your finger on the dollar value.” Power said most of the inquiries about the show itself go to the chamber that puts on the show with the town in a supporting role. “We are hoping all the booths get sold again like they did with the first one. There’s lots of interest in the community about going,” he said. “You don’t know what to expect with the first one. Now, we know what’s going to be there and we are looking forward to the second one. “Right now, most of the inquiries are in relation to housing and accommodating workers and I think that’s probably going to happen after this show as well. “It’s like ‘if we come, how are we going to accommodate the workers?’” URS Flint presented council with a plan to set up a 100-man camp in Phase 1 of the project as early as May, with plans to accommodate another 100 workers for their own area projects. Clean Harbors, which has operated a 100-man camp at 55 Avenue in town for a variety of oilfield workers for the past six years, received approval from town last year to expand to 200 workers.

Their second proposed camp will accommodate up to 272 workers in the first phase with the provision to expand to 500 workers. Both new camp proposals are in the same area as an RV campground planned for the town. “The number one issue right now for most of the employers in the oilfield is their employees finding accommodation,” said Power. “That’s why they are looking at work camps.” ATCO Electric also has a work camp north located of town in the Municipal District of Bonnyville. The company is expected to hold public hearings this spring on its proposed 240-kilovolt transmission line between Bonnyville and Bourque Lake. Enbridge is also expected to begin construction this summer on its Athabasca Pipeline twinning project east of Bonnyville. The strong regional oil and gas economy is being driven by companies such as Cenovus Energy that is expanding its Foster Creek SAGD project near Cold Lake to a future optimum capacity of 310,000 barrels per day of bitumen. Imperial Oil is on schedule to complete its $2 billion Cold Lake thermal expansion at Nayibe that will produce 40,000 barrels per day of bitumen by the end of 2014 by using cyclic steam stimulation. ɸ Page B31

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PIPELINE NEWS April 2013 we are working with developers to create more industrial commercial lots by providing installation of water and sewer in on a local improvement basis,â€? said Power. “The town provides this backing by ďŹ nancing through the Alberta Capital Finance Authority. We debenture the money and charge it back as a local improvement, annually to their taxes.â€? The Municipal District of Bonnyville has secured a $3-million resource road grant from the province on a shared basis to complete upgrading 54th Avenue which also fronts the ďŹ nal phase of the Hammons Industrial Park. The local improvement arrangement is also working to attract new businesses such as BFL Energy Services Ltd. and Gateway Truck Wash at the Gateway Industrial Park that fronts Highway 28. “We are looking at doing the same things for commercial development in the East Gate commercial development, directly north of Beau Vista,â€? said Power. “The developer has an agreement for $5-million worth of infrastructure with the town. “At the present time, we are doing the engineering to run the water and sewer from Beau Vista up to East Gate. We are hoping to see some major commercial development up in that area this summer.â€? Bonnyville has about 200 acres of industrial land available in town that is serviced by developers who like to operate on a build to suit basis. “What we are noticing is developers hold o on subdividing and actually creating the lots until a buyer comes forward and says, ‘I need this many acres,’ then they create a lot that size for them,â€? said Power. Power is realistic about the fortunes of Bonnyville which are closely tied to the oil and gas industry, for better or worse, with a couple of months to go before the oil show. “I don’t want to be pessimistic, but the reality is this community has been up and down, and up and down. We are in the middle of an up, and it will go down,â€? he said. “We are just hoping it’s sustained in the up that it has been at, because it’s a pretty good community to be part of right now.â€?

Bonnyville Mayor Ernie Isley stands in front of the new École des Beaux-Lacs K-12 school in town. Isley was a former high school principal in town and an Alberta MLA for 14 years. He plans to reĆ&#x;re as mayor this fall aĹŒer being acclaimed in a series of elecĆ&#x;ons daĆ&#x;ng back to a byelecĆ&#x;on in 2006.

This new 108-room Holiday Inn Express & Suites opened in November 2012 close to the Bonnyville & District Centennial Centre where the 2013 oil and gas show will take place.

Crews work on the construcĆ&#x;on of new homes in the Beau Vista subdivision. Bonnyville is experiencing a major shortage of rental housing for the inŇux of new oil and gas workers in the region.

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Éş Page B30 Osum Oil Sands Corp. is also gearing up to begin Phase 1 construction of its planned 35,000 barrel per day SAGD and CSS Taiga projects near Cold Lake. All three companies have signed on again as event sponsors of the 2013 oil show and hopefully have booked hotel rooms in advance. “All the hotels seem to be running no vacancy signs on a regular basis,â€? said Power. “The hotels are pretty full.â€? Bonnyville has added four new hotels in the past six years, including the Holiday Inn Express & Suites that opened last November across the street from the Centennial Centre. “Some more apartments are sorely needed, but developers seem to be moving more to the condos, said Mayor Ernie Isley. “The biggest demand is for rentals.â€? Construction will be begin this spring on a new 18-unit and a 36-unit condo in town. “There is a lack of housing and, in particular, a lack of rentals,â€? said Isley. “I think we are out of single family lots at this point in time.â€? A developer is already building on the remaining 18 available serviced lots in the Beau Vista subdivision. The bulk of upscale residential housing in the region is taking place on acreage property in the MD where oilďŹ eld workers can aord larger lots to park their recreational vehicles. “If you were to throw a three mile loop around this town, you would double the population,â€? said Isley. “We’ve got approximately 7,000 in town, and I would say that loop would capture close to another 7,000.â€? A lot of oil and gas companies are also setting up shop in the MD, but Bonnyville will generate close to $300,000 in tax revenue this year from new industrial, commercial and residential developments in 2012. Some of that money will be spent on the long-term ongoing replacement of old cast iron water and sewer lines in town. “Our tax assessment rose more than $39 million in 2012,â€? said Power. “This is physical growth.â€? Of that total, $23 million in commercial assessment is attributed to new oilďŹ eld service businesses and related commercial developments. “The town has a program where

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PIPELINE NEWS April 2013

Three jobs, three spins on vacation Unity – With a little help from Grant Huber, the lead organizer of the Unity Oilperson's Bonspiel, a few chilled out oilďŹ eld guests at the banquet volunteered to talk about vacations. The subjects are Dustin Brown with an upcoming plane ticket to Toronto, Jim Powell and his wife Shannon sporting fresh Jamaican tans, and Ryan Zunti, who hopes to jet away for his ďŹ rst vacation in years – if only he can. Brown is on the bonspiel organizing committee and wore a Blue Jays cap throughout his master of ceremonies duties on March 2 which tipped o his travel plans. “I’m headed to Toronto for the opening weekend for the Blue Jays – the opening series against Boston,â€? he said. The Jays play three games against the Red Sox on the opening weekend of the season.

+RXUV Shannon and Jim Powell showed up at the banquet during the Unity Oilperson’s Bonspiel on March 2 wearing Jamaica-made suntans and surfer smiles. Jim runs Unity SepĆ&#x;c Service for oilÄŽeld companies and is growing the business in pace with drilling acĆ&#x;vity. The couple’s next tropical vacaĆ&#x;on could be in Mexico in December.

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“We y out April 5 – big Jays fan. We’re going to go for all three games. We leave Friday, April 5 and y home Monday,â€? he said. “I’m going with just one of my buddies from back home.â€? Why not? Brown is a young single guy who lives in Unity and can aord it, working as an operator for Northern Blizzard in the oilďŹ elds at Senlac. “It’s a 50-kilometre drive to work every day. It’s the Senlac ďŹ eld. We’ve been drilling wells now for the last year-and-a-half trying to grow the ďŹ eld and make more production,â€? he said. It’s Brown job to check wells and troubleshoot problems at the site. “We make sure there are no spills and we keep everything in high maintenance,â€? he said. “Also, I work in the battery treating the oil, so it’s clean when we ship it to the pipeline.â€? ɸ Page B33

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PIPELINE NEWS April 2013 Ryan ZunƟ, owner of Road Hawk Hauling Ltd. near Unity has stepped up to be the main event sponsor for the 2014 Unity Oilperson’s Bonspiel. This year, he was one of several gold sponsors at the Unity Curling Club. He launched Road Hawk a year ago and hopes to squeeze in his Įrst vacaƟon in over a decade of oilĮeld work this November or December – if he has Ɵme.

ɺ Page B32 Brown has been on the job for a year a half and he managed to pinch some time off to catch a taste of the 2012 National Finals Rodeo held Dec. 5 to 15 in Las Vegas. “About nine of us went down there,” he said, not to participate but to watch. “I grew up on a farm – had cattle as a kid so I grew up around it. It’s always enjoyable anyway,” he said with a grin. Brown curled on a team called Scared Hitless that went on to win the B-event title. He donned the Jays cap while handing out an endless supply of draw prizes at the banquet. “It’s a good turnout and good to see a lot of people get prizes. We’ve got great sponsorship around here,” he said. The Powells probably won a prize too, but their real reward for another year of hard work running Unity Septic Service was a two week trip to Jamaica from Feb. 12 to 26. “We went there for a wedding. A friend’s daughter got married there and we made a vacation out of it,” said Jim. They stayed at the Grand Palladium Resort and Spa on Montego Bay, with thoughts of oilfield septic systems far from their minds. “It was really, really good – very nice people. We made friends there. We just had a fun, awesome time,” said Shannon. “We sat by the pool and drank and ate all day and played volleyball. It was really good.” Back in Unity, Jim is on the road a lot hauling septic waste and grey water from a growing number of drilling rig sites and batteries in the region. “It’s busy – there’s lots of drilling activity and lots of everything going on,” he said. “I rent out portable septic tanks for drilling rigs, and I empty septic tanks at oil batteries. I rent out porta-potties and all that kind of stuff.” “I go down to Coleville up north of Marwayne, out to Macklin so it’s a fair area. There are a lot of areas, lots of drilling.” He joked that his unofficial motto is “Back off, we’re not hauling milk here,” but ironically he used to – sort of. “I’ve been doing this for close to 10 years. I was a farmer before I did this,” he said. “I got into this part-time and it just boomed, so now I rent the farm out and I do this full time.” He laughed that septic waste is something that’s not going to go away! Neither will memories of their trip to Jamaica, which already had Jim thinking out loud about their next vacation destination under the sun.

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“We have another wedding coming up, a family wedding this December in Mexico, so we might just go there too,” he said. Shannon said the wedding in Jamaica was a far cry from the climate during their own wedding in North Battleford 18 years ago. “We were in the cold,” she laughed and agrees Jamaica is where to go to escape the long winter. “Oh, you bet, I recommend it.” Sunny Mexico is on the mind of Ryan Zunti, owner of Road Hawk Hauling Ltd. in the Unity area, if, and when, he and his wife Jennifer can ever get away. “It’s been 10 years now – 12 years trucking and 10 owning my own and never had a holiday,” said Zunti. “Hopefully, we can make it happen and get out.” Zunti may need a break after starting up his own business, hauling crude oil and water trailers in the Kindersley to Unity area. “Basically, I just started up a year ago and we’re gaining ground and going forward,” he said. “I have crude oil and water trailers. I have lease operators out there pulling my trailers. “Before that, I had just been driving my own trucks for 10 years in the oilpatch. I decided to jump out and do trailers over trucks. “I saw the need. I took all the opportunity when I could jump on trailers. I saw an opportunity and had a go.” Zunti said if he does finally take a vacation he could spare a week off work but not two – and forget about going anywhere during spring breakup or this summer too. “I think we’ve put in a lot of time and effort and hopefully we can get away. We would probably try for the fall, in November or into December,” he said. “It would nice to go someplace warm, but I would like to go to Alaska, too on a cruise. “The first one will be an easy one – Mexico where it’s all inclusive – and see where it goes from there.” Those plans could be further delayed unless Zunti can find someone to help run the business and his shop at his acreage while he’s away. “Hopefully, I’ve got somebody or the plans may not going work out,” he said. “We’re growing. We’re looking at some more trailers. We’re looking at maybe doubling by the end of summer. We can hire on some more staff and hopefully get away.”

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PIPELINE NEWS April 2013

Artic Therm heats up forced air market Lloydminster – Artic Therm International Ltd., based in Morinville, Alta. is hoping to ignite the Lloydminster oil and gas and construction market with their ameless heating technology after expanding to Slave Lake. Flameless heat technology is ideal in cold weather conditions for pipeline thermal expansions, wellhead thawing, and concrete curing along with yearround applications such as vessel and tank coat curing. The company delivered six of its portable rental ameless units to A-Plus Machining Welding & Industrial Supplies Rentals in Lloydminster on consignment in January to gain a foothold for its rentals, projects and climate control divisions. “We’ve got units out in Lloydminster today. We are renting out the portable units, doing anything from emergency thawing to wellhead thawing to construction site thawing,â€? said Troy Simoneau, general manager. “The advantage of our heat for wellhead thawing is that it’s dry heat. It doesn’t create moisture to heat it. With wellhead steaming, moisture spreads and freezes, moving forward as well. “I refer to moisture from steam as a spreading agent.â€? Simoneau teamed up with Stacey Norton, corporate development manager, to introduce and demonstrate the technology at the February technical lunch meeting of the Lloydminster Society of Petroleum Engineers. “Our goal is to let everyone know we are in town and to present some technical information on the project division doing thermal expansions,â€? said Simoneau. Artic Therm has been on a growth tear since it was acquired by Enterprise Group Inc. for $6.5 million in September 2012 when Simoneau came on board to help grow and diversify the divisions. “Since the acquisition, the rentals division grew 42 per cent in the fourth quarter of 2012,â€? he said. “We are going to grow about 125 per cent in 2013 on the projects division.â€? “We will grow rentals this year by about 30 per cent, but our main focus will be our projects and climate control divisions.â€? “One of our key revenue generators in the winter months for our projects divisions would be pipeline thermal expansions,â€? said Simoneau. “Preheating the pipeline prior to introducing hot uids and gas to it will

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Stacey Norton, corporate development manager for ArĆ&#x;c Therm, a company her parents founded in 1997, answered quesĆ&#x;ons following a presentaĆ&#x;on on Ňameless heaĆ&#x;ng technology at the February SPE technical lunch in Lloydminster.

ArĆ&#x;c Therm general manager Troy Simoneau braved the elements to demonstrate the workings of this ATI 500 portable Ňameless heater during the February meeĆ&#x;ng of the Lloydminster Society of Petroleum Engineers. The rental units, including the “Cadillacâ€? 900TA model, are now available from A-Plus Machining Welding & Industrial Supplies Rentals in Lloydminster for a variety of applicaĆ&#x;ons including wellhead thawing and ground thawing with dry, breathable heated air.

eliminate buckling at the welds or joints and reduce you expansion joint requirements. It will also reduce large rights-of-way required to lay pipelines.â€? Other beneďŹ ts of ameless heat include pipeline integrity, reduced operating costs and timelines as well as the ability to work in extreme cold conditions. The use of ameless heating technology can increase the performance of hydraulic equipment in coil tubing, perforating, ushby and swabbing applications. The outdoor demo products included a portable ATI 500 ameless heater rental unit rated at 600,000 BTUs and pump out 5,000 cubic feet per minute of green, breathable air heated up to 77 C. The rental units are approved for work up to seven metres from the wellhead and are powered by a diesel engine that consumes up to 19 litres of fuel per hour. The double containment units can be towed by a pickup truck to the job site and are equipped with user friendly operating and safety features including operating beacon lights, Murphy gauges and positive air shutdowns. “The rental units just open everybody’s eyes as to the technology and what it can do,â€? said Norton whose parents founded the company in 1998 as a specialized equipment rental company. “We’ve seen the ameless heat technology and what it can do and we believe in it. We knew it could beneďŹ t the industry. ɸ Page B35

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PIPELINE NEWS April 2013

division with applications for dehumidifying, drying, and conďŹ ned space work to reduce the lower explosive limit (LEL). The primary risk associated with combustible gases and vapors is the possibility of explosions. “In the summer, we focus on climate control, so we do internal tank coatings,â€? said Norton. “We help cure LEL removals to the atmosphere – sandblasting dust, welding fumes, etc. when the workers are in a conďŹ ned space to create a cleaner environment for them.â€? Other climate division applications include pest control and ood restoration. Artic Therm has done some project work in southern Saskatchewan, but Norton said right now their main focus is penetrating the Alberta market. “We are looking at expanding into B.C. and Saskatchewan eventually,â€? she added. Norton said the last time she checked, the employee head count was up to 28.

2

Éş Page B34 “Now with the acquisition, it’s given us the resources to take it to the next level. We are all very impressed with the growth and expansion.â€? The sky’s the limit for their projects division, led by oil and gas pipeline thermal expansion applications for ameless heating combined with blower technology. The company demonstrated the heating capability of a truck-mounted ATI 1200 ameless heater for pipeline thermal expansion that generates 1.2 million BTUs and generates 8,000 CFM of breathable air heated up to 92 C. For pipeline thermal expansions, the heat pre-expands the pipeline to eliminate buckling at the bends in the welds and the risers. “We are reducing the stress in the construction phase versus in the operation phase,â€? explained Norton. “Typically, we are heating 1,000 metre sections, and we are seeing a metre growth on them – that will be cut and tied into the next section of the pipeline.â€? By utilizing forced air, the Artic Therm ameless heating system can heat a pipeline up to 100 metres in length. “The advantage to the pipeline builder is a turnkey pipeline,â€? said Norton. “The engineers won’t have to compensate for as much growth, because it’s getting removed.â€? “You can avoid using thicker pipe, expansion loops, or foam in bends; as the pipe movement during operation is reduced by pre-heating.â€? “It saves time and money on the materials.â€? Norton said the key factor in running the equipment eďŹƒciently is to know what the ambient air temperature. “The ambient temperature will decide what RPM you are running the unit at and you adjust the heat according to the ambient temperatureâ€? she explained. “We are utilizing that fresh air coming into our unit, so we have adjusted the RPM and the louvres of the air ow to regulate the heat and output from the back of the machine. “You can adjust the louvres on the inlet as well as the outlet.â€? Heated blown air is applied with an insulated tubing ex duct attachment. Artic Therm also has an ATI 3000 unit rated at three million BTUs that can blow 12,000 CFM of breathable air at 110 C for applications such as concrete curing, plant turnarounds and fresh air circulation of buildings. Simoneau wouldn’t disclose trade secrets, but he explained that ameless technology is based on friction heating with features such as ameless, brushless alternators to produce 100 per cent breathable air. That makes the ameless technology perfect for their new climate control

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PIPELINE NEWS April 2013

Husky charity cheque day rolls around

The cheques are in hand. Back row (l-r) are Bill Till, Lloydminster Handivan Society; Kim Bridge, SalvaĆ&#x;on Army; Al MacLauchlan, Husky vice-president of Canadian Downstream; Garold Danyluk, Husky manager of Lloydminster ReÄŽnery; Sherri Harty, Lloydminster and District SPCA; Georgina Altman, Lloydminster Region Health FoundaĆ&#x;on; Sharon SwiĹŒ, Lloydminster and District United Way; Leanne Wildeman, Kinsmen Telemiracle and Melissa Nasby, KidSport. Front row (l-r) are Linda Ferguson, Canadian Cancer Society; Jenny Dodman, SPCA; Brenda Robinson, Big Brothers Big Sisters of Lloydminster and Lyndsey Parkinson, KidSport. The rep from the Canadian Diabetes AssociaĆ&#x;on was not present. Photo submiĆŠed

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Lloydminster – The cheques and the smiles seem to be getting bigger every year. That was the case again during the wrap-up of the 2012-13 Husky Energy Lloydminster Charitable Campaign that raised approximately $201,500 for 10 local charitable organizations. Each year, Husky employees and contract sta contribute money to the program by cash donations or payroll deductions with Husky Energy matching a large portion of the contributions. Last year, Husky distributed more than $178,000 to local charities. The annual campaign committee, chaired by Husky’s David Oliver, superintendent of pipeline operations, chooses the recipient agencies in the campaign. Al MacLauchlan, vice-president of Canadian downstream, presented the cheques in Oliver’s absence to agency representatives at Husky Place in Lloydminster on Feb. 26. The Lloydminster and District United Way received the largest cheque made out for $88,518 to fund approved projects for 15 local agencies. A cheque for $18,459 went to the Lloydminster Region Health Foundation. The Lloydminster and District SPCA was presented with a donation of $19,581. The Lloydminster Handivan Society was happy to receive a cheque for $14,160 from the charitable campaign. MacLauchlan presented the Canadian Cancer Society with a donation of $11,227. Big Brothers Big Sisters of Lloydminster was funded $8,020 while Canadian Diabetes Association received $9,892. The local Salvation Army marched o with a cheque for $14,734, and KidSport was delighted to receive $9,644. The last cheque for $7,261 went to the Kinsmen Telemiracle.

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Lloydminster and District SPCA reps Sherri Harty and Jenny Dodman stand behind their charity cheque for $19,581 that was presented by Al MacLaughlan, vice-president of Canadian downstream with Husky commiĆŠee member Garold Danyluk on the right. Photo submiĆŠed

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PIPELINE NEWS April 2013

B37

Lloyd airport cleared for takeoff Lloydminster – The Lloydminster Municipal Airport will purchase its next generation of runway snow clearing equipment with $538,406 from Transport Canada’s Airports Capital Assistance Program. The ACAP investment will allow the Lloydminster airport to purchase a new towed runway sweeper, a front-end loader and a loader-mounted snow blower to replace outdated equipment from the 1980s. The funding was announced at the airport by Leon Benoit, member of Parliament for VegrevilleWainwright on Feb. 22 on behalf of Transport Canada. Several planes landed and took off during the announcement at the airport, which has been experiencing a rise in traffic. “This airport is just a little different than the airport that I used to visit on occasion when I was growing up just south of Lloydminster,” said Benoit. “That was a gravel strip and mostly used for small recreational planes and some oilfield business even at that time, but things have changed and the changes look good.” In 2012, there was a total of 15,814 landings and takeoffs at the Lloydminster airport that serves approximately 90 passengers a day Monday to Friday. “We recognize that Lloydminster and Lloydminster’s municipal airport is an important gateway for local residents and businesses in this region,” said Benoit. “The new equipment will help the airport move passengers and cargo safely and efficiently during all seasons. “This investment will go beyond the airport. It will support long-term growth and strengthen the local economy by helping to connect workers and jobs in this area.” The new safety equipment is welcome news to frequent flyers such Tim McMillan, Saskatchewan’s minister responsible for Energy and Resources, who flew in from Regina on a King Air flight as the presentation was coming to a close. “It’s essential to both serve the constituents of Lloydminster and to do the work as a minster having an airport that’s functional is an absolute necessity,” said McMillan who was heading to his constituency office. “There are times in the winter that being able to fly in is very important. “I think a city like Lloydminster is having more air traffic all the time – our family flies recreationally, and we use the airport. “We see the business travel increasing all the time. The investment by the federal government here will certainly be appreciated in our community.” ɸ Page B38

Vegreville-Wainwright MP Leon Benoit was peppered with quesƟons by the media about airport safety improvements at the Lloydminster Municipal Airport where he announced $538,406 in federal funding to replace aging runway snow removal equipment.

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PIPELINE NEWS April 2013

Healthy airport key to local economy ɺ Page B37 It’s estimated the new equipment will cut the time it takes crews to remove snow, slush and ice from the 5,579-foot runway and taxiways from one-and-ahalf hours to between 30 and 40 minutes. “This would be one of the best airports in Saskatchewan. It’s a great facility,” added McMillan. “The investments in new equipment will certainly build upon that. “We are seeing more commercial flights in and out and more charters from industry. The safer we can make it, the better. “It’s amazing when you do come through the airport, the number of planes that are parked here for any number of reasons – for a city this size, it’s impressive to see the number of jets and planes that are coming in and out.” Benoit uses Edmonton International Airport to commute back and forth from Ottawa as an MP but he knows the economic impact that regional airports can have on building strong communities. “By enhancing our regional airports, we are enhancing safety and convenience for Canadians and helping to keep the economy moving in the right direction,” he said. “Regional airports also play an integral part in Canada’s transportation system and in helping our communities grow.” ACAP has invested approximately $590 million to date on 734 projects at 173 airports. The Lloydminster airport has received more than $2.6 million for four projects including the funds for snow clearing equipment.

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“Airports will continue to play an important role in supporting growth creating jobs and building long-term prosperity,” said Benoit. Building stronger communities through safer and better serviced airports was also the theme of comments by Lloydminster Mayor Jeff Mulligan. “You can’t grow your economy; you cannot be a hub for business if you have anything but a healthy airport,” he said. “This equipment allows us to take another step in our evolution as that regional airport that people can ‘satellite’ in and out of. “When we talk about the distance that snow can be thrown with the old equipment – 30 feet – with the new equipment – it’s 150 feet.” Mulligan used to fly in and out of the airport on a company jet frequently when he was the CEO of Common Wealth Credit Union. He knows that the less time spent on airport snow clearing, the better it is for business. “We have a lot of private and commercial oil flights that are in and out of here. It’s imperative to get engineers, executives and geologists in and out effectively so they can do their job,” he said. “You have to be able to clear that runway.” Mulligan said the Lloydminster airport is better positioned today to attract Edmonton area aviation businesses as a result of the closure of Edmonton’s City Centre airport. “We are only, by any count on most airplanes, somewhere between 20 and 35 minutes away,” he said. “If we can move some businesses and create a healthy economy that used to exist there, right here, we’ll have another win. “Without support from the federal government and their commitment to a national transportation strategy that involves locations like ours, we couldn’t do these kinds of things.” The latest ACAP funding commitment follows last fall’s completion of a new runway lighting system by Integrated Airport Systems Ltd. The new lighting system is integrated to the NAV Canada Flight Service Station and allows pilots to activate runway lights at night through the use of their radio switch. “We are talking about other upgrades in terms of our navigation and some of those systems that we going to put in as well,” said Mulligan. “We will be going back to the federal well for that – hopefully, not in the too distant future.”

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PIPELINE NEWS April 2013

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PIPELINE NEWS April 2013

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ELECTRICIANS & INSTRUMENT TECHNICIANS Carlyle and Estevan, SK

South East Electric LTD. is looking for trade certified Electricians and Instrument Technicians to provide a complete range of electrical services to our oilfield, commercial and agricultural cutomers. Strong troubleshooting skills, excellent communication, customer service skills and the ability to work independently and well under pressure are essential. We offer competitive wages and benefits. Valid drivers license is required. Interested candidates should submit their resume via email to the attention of info@southeastelectricltd.com no later than April 26, 2013

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Candidates should possess: • Undergraduate degree in Engineering or a diploma in Petroleum Technology. • Previous oil field experience, specifically drilling rig experience would be a definite asset. • A desire to learn all aspects of drilling operations, strong attention to detail and a committed team work ethic. If you are interested in joining our rapidly growing team, visit the Employment section at www.tundraoilandgas.com for further details and to apply online. We wish to thank all candidates for their interest; however only those being considered for interviews will be contacted.

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PIPELINE NEWS April 2013

CAREER Gu×de NOW HIRING Spartan Trucking is now hiring

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Lease Operators with a minimum of 2 years experience hauling crude in the SE Sask Oilpatch.

Please e-mail your resume to spartan.dispatch@hotmail.com or fax it to 306.453.4495.

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EMPLOYMENT OPPORTUNITY

Equal Transport Carlyle REQUIRED IMMEDIATELY

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Equal Transport is located in Carlyle, SK. We oīer our employees a compeƟƟve salary and beneĮts package commensurate with experience. Please send your resume and cover leƩer in conĮdence to: ainfo@ceslp.ca or fax to 306-453-4404 aƩenƟon Dallas.

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PIPELINE NEWS April 2013

B43

Phone: 780.614.2113 Fax: 780.614.2115 Luc Cell: 780.210.0635 email: nlwelding@mcsnet.ca Box 1789, St. Paul, Alberta T0A 3A0

• Winch Tractors Available

Step Deck Scissor Deck

B-Pressure Steel Sales Portable Rigs Structural Steel Shale Tanks Flock Tanks Silos 400 BBL Tanks Mud Tanks 12’ Brake & Shear 200 Ton Iron Worker Custom Sandblasting & Painting • Internal Tank Coating • • • • • • • • • • • •

www.northernlightswelding.com

B44

PIPELINE NEWS April 2013

PUMPING UNITS

1280 912 640 456 320 228 160 114 80

FULL INSTALLATION SERVICE AVAILABLE!

Large inventory in-stock Call today for a quote!

PLATINUM Phone 403.264.6688 Toll Free 1.888.745.4647

Lloydminster

Provost

Kindersley

Drayton Valley Medicine Hat

PIPELINE NEWS

SECTION C April 2013

Pipeline News is two sections this month Stay tuned next month for Alternative Energy

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