Pipeline News July 2014

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July 2014

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FREE

A3 Estevan Energy Expo

Volume 7 Issue 2

A4 Geothermal Electrical Generation

B1 Lakeland Boiler Arrives

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PIPELINE NEWS July 2014

INSIDE SECTION A Ď°

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5

Northern Gateway approved

6

Editorial

7

Opinion

9

H2S suspected in fatality

10 PetroBakken, Eagle Well Servicing, Ć?ĆľĆ‰ÄžĆŒÇ€Ĺ?Ć?Ĺ˝ĆŒ ÄŽ ŜĞĚ Ĺ?Ĺś ĎŽĎŹĎŹĎľ ĨĂƚĂůĹ?ƚLJ 13 Torquay the next big thing 14 $150 million stacks of pancakes 17 The Gauntlet 22 Saskatchewan producing half million barrels per day

SECTION B 1

Lakeland College boiler arrives

13 Heavy oil impacts RM of Mervin

3

McMillan out, Boyd back in

16 RM of Wilton motor grader school

4

RM of Wilton driven by road repairs

18 PWM Steel Petroleum Golf Classic

8

Husky to double thermal output by 2019

20 MTM secret sauce 26 Lloyd. Oilmen's golf

PIPELINE NEWS :HZRH[JOL^HUÂťZ 7L[YVSL\T 4VU[OS`

Aug. 2014 Focus

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TOP NEWS

Max Ball, SaskPower’s manager of clean coal technologies. The Estevan Energy Expo had 40 booths for exhibitors.

First time out for Estevan Energy Expo „ By Brian Zinchuk Pipeline News Estevan – The first Estevan Energy Expo was held June 11-13. It is hoped this will be the first of many, on a bi-annual basis. The event was organized by the Estevan Chamber of Commerce. Michel Cyrenne, executive director of the Estevan Chamber of Commerce, said, “Our numbers weren’t what we wanted. Approximately 300 people went through the trade show.� He reported a lot of good feedback. Attendees were happy with the speakers and tours, and made good connections. Exhibitors also reported good contacts between exhibitors. “For a first time event, we’re happy with the feedback,� he said. “We would like to see better attendance. Most exhibitors would like to come back.� The Expo took place over three days. On June 11 there was a supper meetand-greet for participating businesses and attendees and featured a speech by Hal Sanders, assistant deputy minister of Saskatchewan’s Ministry of the Economy. This took place at the Saskatchewan Energy Training Institute. The primary event was held in the arena of Affinity Place. Half of the rink was used for speakers in the mornings, while the other half had 40 booths. All were sold, but a few didn’t show up.

The event had to deal with many hiccups. Tim McMillan, who had, until recently, been minister responsible for Energy and Resources, was unable to attend and speak. The timing unfortunately coincided with the Calgary Global Petroleum Show. When the event was planned, the Boundary Dam Carbon Capture Project was expected to be completed prior to it taking place. However, that project has been delayed, and a hoped for tour of the Boundary Dam Carbon Capture Project was kyboshed. A tour of the Shand Power Station took its place. While those on the tour could see construction on Shand’s carbon capture test facility from a distance, it is still far from completion. It took until almost the very end to fill the booths. Those were overcome, however. The mornings included speakers on topics as divers and geothermal energy and the emerging Torquay play. Keith Schaefer is editor and publisher of the Oil & Gas Investments Bulletin, spoke of the excitement of the Torquay along the U.S. border and its potential impact. Aleana Young of the Petroleum Technology Research Centre provided an updated on the Aquistore project. Max Ball of SaskPower talked about clean coal strategies. Kirsten Marcia of DEEP Earth Energy Production Corporation outlined their geothermal electrical power generation project. Mike Crabtree of SaskEnergy discussed natural gas strategies. Melinda Yurkowski of the Saskatchewan Ministry of the Economy gave an update on Saskatchewan oil production.

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PIPELINE NEWS JULY 2014

BRIEFS DEEP seeks geothermal energy Sask. hits 9-year high

Operators licensed 1,116 new wells last month, with operators in Saskatchewan hitting a nine-year high for well authorizations during the month of May. The 1,116 permits represent an increase of 5.4 per cent from 1,059 wells granted authorization in May 2013. Saskatchewan licensed 456 wells during the month, up from 261 last year and the highest level for the month of May since 2005, when 544 wells were permitted. To the end of May, Saskatchewan’s licence count is up 29.6 per cent from a year ago to 1,986 from 1,532 in the comparable five-month period in 2013. This year’s five-month tally is the third highest on record (behind 2011 and 2012). British Columbia assigned 59 new licences during May, while 115 were approved (input) during the month. Over the first five months of 2014, B.C. has assigned 446 new licences (an increase of 21.5 per cent from 367 in the JanuaryMay 2013 period), Manitoba granted 62 well authorizations in May, up from last year’s 18. The licence count is up 24.1 per cent in the January-May 2014 period to 201 compared to 162 a year ago. In Alberta, 537 licences were issued last month compared to 695 in the year-prior period, while the province has granted 3,796 well permits in the first five months of the year (off 10.3 per cent from 4,232 to the end of May 2013). Briefs courtesy Nickle’s Daily Oil Bulletin

for electrical generation „ By Brian Zinchuk Estevan – As long at the centre of the earth is hot, there is potential to extract energy from it. That’s the goal behind Saskatchewan’s first major geothermal project in the works for southeast Saskatchewan. Geothermal has been around for a long time, and is becoming more common in rural areas for home heating. In places like Iceland, geothermal is a major energy source. But this project goes far beyond that, seeking to use deep water wells to generate electricity. DEEP Earth Energy Production Corp. was founded in 2010. Kirsten Marcia (Muir), president, and CEO and cofounder, was one of the speakers at the first Estevan Energy Expo held June 11-13. Marcia was born and raised in Estevan. She studied at the University of Regina and University of Saskatchewan, where she obtained her bachelor of science degree in Geology. Marcia is now a professional geoscientist. Marcia’s work has included working up north in gold and base metals. “I spent most of my career in diamonds with Shore Gold at Fort a la Corne,� she said. Her last project was in coal in northeast Saskatchewan. She was vice president of exploration. That project, Marcia noted, had many challenges. She was discussing those challenges over a beer with Steve Halabura, a highly regarded geologist in Saskatchewan. The result of that discussion and the back-ofthe-napkin notes is DEEP, of which Halabura is chairman

Kirsten Marcia (Muir) spoke at the Estevan Energy Expo on June 13. Photo by Brian Zinchuk

and co-founder. “He said to me, ‘What if there’s a resource we could develop in southeast Saskatchewan that, as quick as we harvest it, it would automatically resupply itself ? The ultimate, sustainable, renewable resource?’ “He caught me right there. This wasn’t mining gold, or diamonds, or gravel. There was a potential for a hot water resource that can provide a revenue stream. As long as the centre of the earth is hot, this resource will continue to replenish itself. Unlike coal, where we dig it up and have to go for more, this is sustainable. It got my geological mojo going. “I didn’t come at this project, to be honest, looking for a just a green energy project. I was looking at this project as another great Saskatchewan resource. But anyone involved in this project would be blind to overlook that green coupon,� said Marcia.

Clean energy The concept is relatively simple: drill very deep wells into the lowest saline aquifer in the province in areas that have very high temperatures and flow rates. Bring that water to the surface, extract the heat, and turn it into electricity. Pumping the water into ground into a shallower formation means there are no byproducts, no emissions, just clean, never-ending energy. When asked about intellectual property, Marcia’s response is that in reality, this project is nearly entirely off the shelf, or “Me-too� technology. The areas they are seeking to drill have been identified through public records of drill stem tests, finding areas with very high flow rates coming out of the Deadwood formation. That’s the deepest formation in the sedimentary column before hitting the Precambrian “basement.� The recent $30 million Aquistore

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project, whose intention is to inject carbon dioxide into Deadwood using a 3,400 metre injection well and an adjacent observation well, confirmed much of the geological science. However, Aquistore does not have a high flow rate, so they have identified two areas, both very close to the U.S. border, that do. “There’s nowhere else in the world you don’t have to go exploring for geothermal. The last 50 years of exploring for oil and gas has demonstrated the resource is there. We have drill stem tests in the Deadwood that show permeabilities equivalent to oceans. We don’t have to go out into the Nevada desert with a seismic map and say, ‘Geez, are we going to hit something out there?’â€? Marcia said. The oil and gas industry has by accident done the exploration they need to find the energy resource they are looking for, that resource being hot water. ɸ Page A8

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Northern Gateway BRIEFS okayed with red tape Bayshore announces So far only one has been met – the successful completion of By Geoff Lee the federal environmental review process. Pipeline News “Our government has consistently stated that all new and Calgary – As expected, the federal government approved Enbridge’s Northern Gateway pipeline on the recommendation expanded heavy oil pipeline proposals must meet these five from the Joint Review Panel subject to 209 conditions the com- conditions before British Columbia will consider supporting them,” said B.C. environment minister Mary Polak in a June 17 pany must meet prior to construction. Enbridge estimates it would take 12 to 15 months to work media conference. “While meeting the five conditions requires work from all through the approval conditions before it could make the call to those involved, we have seen sanction the $7.9 billion projincreasing recognition and ect. acceptance of them, from all The decision announced levels of government and the in Ottawa on June 17 would proponents behind heavy oil allow for the construction of pipeline proposals. a twin 1,177 kilometre twin “Northern Gateway must pipeline between Bruderheim also meet the 209 conditions Alberta and Kitimat British set by the Joint Review Panel. Columbia. “Sixty five of those condiNorthern Gateway would tions require public consultatransport 525,000 barrels per tion, including with First Naday of crude oil for export and tions, and more than 100 must import 193,000 bpd of conbe met before construction can densate. It would open new even begin. markets for Western Canadian “We need to ensure that oil. B.C.’s concerns around the en“Enbridge and our partvironment, First Nations’ parners in the Northern Gateway ticipation and overall economProject welcome today’s deciic benefit are taken seriously.” sion,” said Enbridge president “We understand the ecoand chief executive officer, Al nomic benefits that the NorthMonaco in a statement. ern Gateway project may bring, “However, we have more but it will not be at the cost of work ahead of us. The decision our environment,” said Polak. is one more step in the proAl Monaco, Enbridge president With Northern Gateway, cess; a process that requires a DQG FKLHI H[HFXWLYH RIÀFHU Canadian producers will have considered and respectful apgreater access to the fastest proach with our stakeholders.” growing markets in the Asia “Going forward, we will Pacific Rim. focus on three priorities: meet“Today’s decision by the federal government to accept ing the JRP’s conditions, working with the province of B.C. on its five conditions for supporting oil pipelines; and continuing the National Energy Board’s recommendations on Enbridge’s to engage Aboriginal communities to build further trust and Northern Gateway Pipeline proposal is a step forward in acseek additional input that would make the project even better,” cessing new markets for Canada’s energy resources,” said Alberta Premier Dave Hancock. said Monaco. “New markets for our products will create and support more Monaco emphasized the company’s commitment to achieving world class standards for safety and environmental protec- jobs, and generate increased revenue to help pay for vital public services like quality health care and education for all Canadians. tion. The pipeline will also create jobs and result in tax revenues Environmental activists in B.C. are relying on their Premier Christy Clark to support them in their fight to stop the project. for communities and governments to support social program There are about 60 permits that B.C. can grant or withhold and infrastructure. “Importantly, Northern Gateway will involve Aboriginal in connection with the pipeline. Enbridge must also meet all five of B.C. conditions for safe- communities as owners and partners in the project, and it proty and environmental protection before the province gives the vides meaningful training, job and business opportunities in communities along the right-of-way,” said Monaco. green light to construction.

“Importantly, Northern Gateway will involve Aboriginal communities as owners and partners in the project, and it provides meaningful training, job and business opportunities in communities along the right-of-way”

successful heavy oil upgrading pilot test Bayshore Petroleum Corp. announces that a pilot test of heavy oil upgrading using the cold catalytic cracking process has been successfully implemented in Beijing’s Laboratory Centre. The pilot plant, which has a capacity of more than 2,000 tons annually, has been operated continuously and completed all the necessary tests using the extra heavy oil (10 degree API) imported from the Meota oilfield in Saskatchewan by Bayshore. The test was witnessed by Li Yongwu, the chairman of China Petroleum and Chemical Industry Association, and the results were consistent with the laboratory test and product recovery, said Calgary-based Bayshore said. The pilot test demonstrated scale up of the CCC technology is viable and that an industrial test can be achieved, it added. Bayshore is now working to implement a similar pilot scale demo plant in Canada.

Briefs courtesy Nickle’s Daily Oil Bulletin

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PIPELINE NEWS July 2014

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 SASK. & MANITOBA R5 -. 0 (5g8ifl8lij8hlkj Cindy Beaulieu Candace Wheeler Kristen O’Handley Deanna Tarnes Teresa Hrywkiw R5 ,&3& 5g8ifl8jki8hkhk Alison Dunning NORTHWEST SASK. & ALBERTA R5 &)3 '#(-. ,5g8mnf8nfn8imfl Krista Thiessen CENTRAL Al Guthro 1.306.715.5078 SOUTHWEST R5 1# .5 /,, (.5g8ifl8mmi8nhlf Stacey Powell

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.

How long does it take? On Dec. 14, 2009, Eagle Well Servicing Rig 16 fell over near Kisbey, killing a man working on it. That man from Estevan, whose name we have not published, left behind a wife, son and daughter. Now, four-and-a-half years later, we are finally seeing some resolution to the case. It has been extremely difficult to find out exactly what has been happening with the case, in large part due to a stone wall on pertinent information from Occupational Health and Safety. What we have eventually found out is this: In recent months, two corporations, PetroBakken Energy (Now Lighstream Resources) and Iroc Energy Services (now Western Energy Corp, and operating as Eagle Well Servicing), have both pleaded guilty to charges under the Occupational Health and Safety Regulations. One individual, the well-site supervisor, Jim Dung Hong Huynh, 34, of Redvers, also pleaded guilty to similar charges in July 2013. The field supervisor for Eagle Well Servicing saw their charges stayed this past April. There are still matters pending against CARE Industries, of Balkfalds, Alta., regarding the rig’s baseplate design and welding. This will be before the courts again in July. The resultant fines and surcharges are $28,000 for Lightstream, $18,200 for Eagle, and $2,800 for Huynh. Thankfully, recent changes in legislation have dramatically increased fines for such instances. Occupational Health and Safety has been unhelpful at best and obstructionist at worst when we asked them about this file. They would not provide any details regarding proceedings, including those which had been concluded and even had press releases issued. They would not provide the names of the individuals and corporations accused. They told us to ask the courts, thus, we had to get this from court proceedings. That’s quite difficult to determine when you don’t have a name to ask for. On another file, a fatality, all they would tell us

was they were investigating. No location, no companies involved, nothing else was forthcoming. It took them a day to get back to us with the date of the incident, and that was as much as we were going to get. Why the secrecy? With this taking four-and-a-half years to start seeing a conclusion, obviously OH&S did some sort of report on it. However, they would not release it to us without filling a Freedom of Information request, which can be quite costly. It is questionable if, even then, we would get it. Reports like this should be freely available to the public and media, so that, if nothing else, other operators can learn from it and never let it happen on their watch. It is our understanding that reports on such incidents do eventually filter through to members of the Canadian Association of Oilwell Drilling Contractors, or CAODC. So why can’t we get them? Regardless if the case is before the courts, the findings of OH&S should be made public upon request. If you want to take the “it is before the courts� argument, OH&S’ less than helpful behaviour makes it next to impossible to determine who is before the courts in the first place, let alone if it ever gets resolved. Every service rig company in Saskatchewan should be going over that report with a fine toothed comb to ensure something similar doesn’t happen on their watch. Every oil company should be discussing it at their safety meetings. They probably should have been doing that years ago. Should others be endangered because it is “before the courts?� Why did it take four-and-a-half years to get to this point? A typical murder charge in Canada is concluded in a year to 18 months. It is our determination that when matters go to Occupational Health and Safety, they go into a black hole. What goes in rarely, if ever, comes out. When people’s lives are at stake, or have been lost, our safety enforcement should be enlightening, not what we are seeing today.

PIPELINE NEWS July 2014

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OPINION

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$ FOHDQ HQHUJ\ VRXUFH XVLQJ RLOÀHOG H[SHUWLVH I had heard about it for a while now, this up and coming geothermal project for southeast Saskatchewan. I held off on reporting on it until the Estevan Energy Expo, where the CEO and cofounder of Deep Earth Energy Production Corp., Kirsten Marcia, would be speaking. She didn’t disappoint. I had a chance to sit down with Marcia (formerly Muir, who grew up in Estevan) after the initial meet-and-greet that kicked off the Expo. I also saw her presentation the following day. The idea is simple, really. The centre of the earth is hot, so let’s get some of the water it warms up and use it to create electricity. Indeed, my parents have a geothermal heating system on their acreage, and they love it. The nitty gritty is of course a little more detailed than that, but the technology is not complex. The underlying message I got from Marcia is that we have done this all before. It’s just a matter of putting the pieces of the puzzle together. For instance, the resource is hot water, found in the Deadwood formation. That’s the deepest formation you can get in southeast Saskatchewan before you hit the Precambrian “basement.” Down there, it’s 120 C. So you drill a simple, deep vertical well,

and you have your steaming hot water. When you bring it to the surface, you run it through a heat exchanger, and then through a system that puts that heat to work. The actual process is known as the organic Rankine cycle, and the Alliance Pipeline has been using this process to create electricity from waste heat for several years now. Finally, you pump the water back into the Mannville formation, just like you would with any other disposal well. Easy peasy. Put five wells together, three producers and two injectors, and voila, you have a five megawatt geothermal power plant. This is not rocket science by any stretch. All of this is easily doable. That’s not a lot of power, but that’s okay. The key thing is it’s baseload power. That’s that rare bird that everyone needs, but so-called green solutions rarely provide (I’m talking about you, Ontario). Wind is intermittent, at best. Solar is a daytime venture that isn’t very useful in an area of the world where the sun barely comes up before 8 a.m. and is down before 5 p.m. in the winter. Baseload is the power folks way of saying “it just works.” It will be there pretty much all the time, except for maintenance. The Deadwood is not exactly a rare beast,

either. It’s all over the place. Assuming this will work, and I can’t see why it won’t, it is repeatable many times over, as long as you have the money to build them. Imagine geothermal plants as plentiful as Bakken pumpjacks, stretching to the horizon. It really is that simple. Oil and gas folks might get a little concerned about a clean, emission free energy solution. Don’t be. To do this, nearly all the physical plant – wells, piping, etc – will use commonplace oilpatch solutions. It is an opportunity to eventually drill and equip hundreds of wells. And I’ve never seen anyone put a geothermal plant in the tank of a truck, yet. Indeed, the need for power in Saskatchewan is growing, and one of the sources of that increased demand is the oilpatch. All those pumpjacks don’t run on air, you know. Right now DEEP is trying to backfill $3.5 million in funding that fell through, so Marcia is hitting the ground running. I hope she makes it, because this is one idea whose time has come. Brian Zinchuk is editor of Pipeline News. He can be reached at brian.zinchuk@sasktel.net.

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+XVN\ WKH HSLFHQWHU RI WKHUPDO ERRP Husky Energy is stepping up its thermal heavy oil production in the Lloydminster region with another micro steam-assisted gravity drainage or SAGD project called Edam West. The 3,500 barrel per day Edam West project was announced during the company’s first quarter conference call to analysts in May. The project will be modeled after the 3,500 barrel per day Sandall thermal project that began producing in the first quarter of 2014 at rates over 4,500 bpd, exceeding its design capacity. Edam West is the fourth such small scale SAGD project announced by Husky in the past few years based on their proven cost efficiencies and high recovery rates among the economic metrics. “The nice things about these projects – they provide attract returns,” said CEO Asim Ghosh to analysts. “ “We can build the modules quickly and we can run them cost efficiently for a long life to create sustained production and value over the long term.” More of these projects are likely to be developed with construction typically taking less than two years to complete with a maximum workforce of 200 at peak. In addition, the startup to peak production period takes less than six months with a low steam to oil ration of 2.0 for the first two years and an

average of 3.0 over the project life. Steam to oil ratio is the amount of steam needed to produce a barrel of oil. Husky also says the lower finding and development and operating costs for thermal are reflected in increasing netbacks giving the company added value per barrel and improving the quality of their earnings. Actual heavy oil recovery rates for Husky’s new line of producing thermal facilities are over 50 per cent. There are enough thermal projects in place to accelerate Husky’s target to produce 55,000 bpd by 2016, with current thermal production over 41,000 bpd per day. The 10,000 bpd Rush Lake thermal will produce first oil in late 2015 followed by the two 10,000 bpd Edam East and Vawn projects in 2016 and the new Edam West facility Husky is also drilling 177 CHOPS wells (cold heavy oil produced with sand) and 140 horizontal heavy oil wells in 2014. The high pace of thermal and heavy oil activity in the region led by Husky has helped to spike growth of new oilfield commercial and industrial construction especially in Lloydminster. New and existing oilfield service companies are scrambling to build new facilities in industrial parks combining office space with storage for oilfield trucks used for hauling oil or servicing wells.

Some of the credit for Husky’s growth should go their leadership team that identified pillars for growth in their existing five year plan. These targets include stepped up thermal in the Lloydminster region and the pursuit of liquids- rich natural gas and oil resources in Western Canada. In addition, the company is laying the foundation for growth from the now producing Liwan natural gas project in the Asia Pacific region and from its developing Sunrise oilsands project near Fort McMurray. It seems like the construction of Husky’s new office complex in Lloydminster called Husky Place in 2012 signaled the long term growth potential for the company and the heavy oil industry in the Lloydminster region. No doubt new heavy oil technology driving the economy of the industry and area will be front and centre during the 2014 Lloydminster Heavy Oil Show and Technical Symposium Sept 10-11. The upcoming show is expected to be the biggest and best ever exposition and showcase of innovation in heavy oil. Fortunately, the growth created by the rise of thermal production has spurred the development of several new hotels to accommodate the hundreds of visitors and exhibitors coming to the show They will discover what Husky and companies already know – the Lloydminster region is the heavy oil thermal capital of the world.

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

A8

PIPELINE NEWS July 2014

Using off-the-shelf tech for new, clean energy Éş Page A4 They are looking at 3,000 metre deep production wells from the Deadwood formation, somewhat shallower than Aquistore, since Aquistore is in the deepest area of the Williston Basin in Saskatchewan. These can be drilled with the telescopic double rigs that are common in the area, without having to resort to a triple rig. When the water is returned to the ground, it will go into the Mannville formation, an under-pressured formation that will essentially suck in whatever they send it. It is often used for disposal wells in the oil and potash industries. The

differential in pressure between the formations and the depths it comes from and will go to makes up some of the thermodynamic efficiencies in the project. If they had to dispose of the cooled water back into the Deadwood formation, the parasitic energy loss from pumping would defeat a lot of the economics. Three production wells and two injection wells are planned, offset by about 200 metres each. The water will come out of the ground at approximately 120 C. It goes into a heat exchanger where it is cooled to 70 C. Geo-

thermal power generation is feasible with source water over 95 C, and they are well above that. The system uses a refrigerant to recover the heat from the water, using a closed loop known at the organic Rankine cycle (ORC). Marcia pointed out that there are already four ORC units at Alliance Pipeline sites in Saskatchewan, generating electricity from waste engine heat created in the pipeline compression process. The above-ground facility is about the size of a Quonset. The resultant net electrical output for a project of this scale would be five megawatts,

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the equivalent power needed for 5,000 households. That’s not very big compared to a coal or natural gas plant, but it is extremely repeatable throughout the region. Marcia likens it to when Saskatchewan was first homesteaded. The choice pieces were taken up first, but in the end, all of it was farmed in some manner. She noted that unlike conflicting interests between oil and gas versus potash, for instance, where oil and gas wells cannot be developed in potash areas, this resource can be developed without interfering with other developments. And if they find oil on the way down to the Deadwood, an oil well could be drilled nearby to take advantage of it.

DEEP geothermal development wells could discover or de-risk shallower oil reservoirs and subsequently be twinned for development by the mineral rights holder. There is potential to do similar work south of the U.S. border, where the Williston Basin is deeper and hotter, but would also mean deeper, more expensive, production wells if pursued. Because of this opportunity, DEEP has attracted the United States Department of Energy through partnership on its Geothermal Program’s Low Temperature and Coproduced Subprogram. It aims to provide the geothermal community with the means to achieve development

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and widespread deployment of economically viable, innovative, and scalable technologies. These technologies will capture all geothermal resources less than 150 C, as well as those that are coproduced with hydrocarbons to include geopressured systems over the next two decades. SaskPower would be the customer for the final electrical product. The Crown Corporation has already invested $1million into the project. What’s key for Marcia is this is not intermittent power, like wind or solar, but baseload power. “We’re more baseload than hydro operating at the same capacity 24 hours a day, 365 days a year,â€? she said. She also points out that the capital cost per megawatt, at rough $8 million, is substantially less than the new clean coal technologies. It can’t compete with natural gas plants, but its close, and this does not burn any fossil fuel whose price will vary over time. ɸ Page A9

PIPELINE NEWS July 2014 Éş Page A8 The project has the backing of Natural Resources Canada. They have already contributed $1 million and can fund DEEP for up to 50 per cent of total development costs in matching money through the Eco Energy Innovation Fund. Total development costs for the project are $40 Million, typical for deep sedimentary geother-

mal. Right now they are progressing from a pre-feasibility study to an $8 million proof of concept study, that will include seismic and the drilling of a production well and injection well. These costs will be captured in the total project capital “We’re very grateful for the tailwind from the federal government on

H2S believed to be behind fatality at battery site Second suspected H2S fatality in recent months in southeast Sask „ By Brian Zinchuk Kennedy – A 38-year-old Wawota man died following an H2S exposure at an oilfield battery near Kennedy in the RM of Hazelwood on May 22. He is believed to have been overcome by hydrogen sulfide gas (H2s), also known as sour gas. The incident occurred on a Harvest Energy Lease within Moose Mountain Provincial Park, on the north end of the park, according the Staff Sergeant Tom Vanderzwan of the Carlyle RCMP. The location was NE9-11-4-W2. The call came in at approximately 11 a.m. on May 22, according to Sgt. Craig Cleary, RCMP spokesman. “He was exposed to (H2S). I’m not saying it’s the cause of death,� Cleary said, adding an autopsy was performed. “The RCMP is not considering it to be suspicious.� Cleary said company personnel came to the site to check on the man, who was working alone at the time. He was found unconscious. Cleary said, “They went and check on him for a reason. A hazmat (hazardous materials) team attended.� Saskatchewan Occupational Health and Safety is investigating, but would not release any further details. Hydrogen sulfide, or H2S, is a colourless, toxic gas that is heavier than air and will pool in low areas. It is formed by the natural decomposition of organic material in the absence of oxygen. At low concentrations, it can be

smelled, with the scent of rotten eggs. But at higher concentrations, which are also lethal, the sense of smell is overcome. H2S safety training is a commonplace requirement for people working in the field in the oilpatch. The man, whose name has not been released, left behind a wife and daughters, according to an obituary published in the Leader Post. The man worked for Nalco Champion. In an e-mail statement, Roman Blahoski, director of global communications for Nalco Champion, said, “On May 22, a Nalco Champion employee was found unresponsive while working at a customer site southwest of Kennedy, Sask. Emergency responders were notified, and the employee was pronounced dead at the scene. â€œNalco Champion representatives have been in contact with the employee’s family and are providing support during this difficult time. Employee assistance is being provided to colleagues. “We are deeply saddened by the loss of our colleague. Our thoughts are with his family and friends. “We continue to cooperate fully with Saskatchewan Occupational Health and Safety officials as they complete their investigation of this incident.â€? This was the second incident of its type in recent months in the region. On March 11, a 40-year-old man was believed to have been overcome with H2S at a sewage lift station at Torquay, dying as a result.

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experience.� DEEP has now launched a $4 million flow through financing that has a 115 per cent tax deductions by transferring “renouncing� CEE Canadian Exploration Expenses to individual investors or companies Entrepreneurs want to make money, and she argues that the risk is low and the opportunity is huge. Marcia sees this as an opportunity to foster an entirely new industry, but one that’s built on off the shelf technology. If only 25 facilities are built, it would represent a new billion dollar energy industry for southeast Saskatchewan, according to Marcia. The goal is to see first power generated in January 2017, but Marcia is optimistic they can beat that date.

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this,� she said. On June 9, Just prior to the Estevan Energy Expo DEEP found out they lost $3.5 million in funding that had been pledged, but could not be carried through with as a result of a policy stipulation. Marcia hit the ground running, seeking to replace the $4 million needed for their half of the budget. “That twist has presented a really wonderful upside. Here we are in southern Saskatchewan with world-class drilling technology and world class entrepreneurs,� she said. “Now that we have this opportunity for funding, I’m really excited about creating a shareholder base and, for lack of a better word, mining the knowledge and boots-to-the-ground

A9

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PIPELINE NEWS July 2014

PetroBakken, Eagle Well Servicing „ By Brian Zinchuk Regina – Fourand-a-half years after it happened, there has been something approaching a conclusion to the workplace incident which took the life of 39-year-old Estevan man. He left behind a wife, son and daughter. Three corporations and two individuals have been charged in relation to the death. Two corporations have pleaded guilty to charges under occupational health and safety legislation. A third is awaiting its next court date in July. One individual pleaded guilty and was fined, and another had their charges stayed. The charges relate to a workplace fatality

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near Kisbey, Saskatchewan on Dec.14, 2009. On that bitterly cold day, an Eagle Well Servicing rig collapsed. A worker was crushed beneath a drilling platform as a result of being unable to escape from the tubing board before the platform fell. The rig had been working on a PetroBakken lease approximately four kilometres northwest of Kisbey. PetroBakken Energy Ltd. (now known as Lightstream Resources) of Calgary pleaded guilty to two counts under occupational health and safety legislation and was fined $28,000 in Regina Provincial Court on May 27, 2014, according to a Labour Relations and

Workplace Safety press release. The company pleaded guilty to failing to ensure that a rig was inspected by a competent person before commencing operations, and at least every 30 working days after that and was fined $10,000 with a $4,000 surcharge. It also pleaded guilty to failing to ensure that where a defect or unsafe condition was identified it took immediate steps to protect the health and safety of workers who might be at risk and correct this unsafe condition as soon as was reasonably practicable and was fined $10,000 with a $4,000 surcharge. Three additional charges against Petro-

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“I’ve always said we’re not at war. People shouldn’t lose limbs or be hurt or killed on an oil ĂŜĚ Ĺ?Ä‚Ć? ĹŻĹ˝Ä?Ä‚Ć&#x; ŽŜ͘ We want to be sure this never happens again.â€? - Rene LaPrade COO Lightstream Resources Bakken were stayed. Iroc Energy Services Corp., operating as Eagle Well Servicing, of Calgary pleaded guilty to two charges under occupational health and safety legislation and was fined $18,200 in Regina Provincial Court on March 18, 2014. (Iroc is now known as Western Energy Services Corp.) The company pleaded guilty to failing

to ensure that a guy line was installed from the tubing board to the outrigger on the driller side of the derrick and was fined $6,500 with a $2,600 surcharge. Three additional charges against the company were stayed. The second charge was for failing to ensure that the daily tour book for the rig was reviewed and signed by its supervisor, each day, resulting in a $6,500 fine with a $2,600 surcharge. Other parties While both the oil company and the service rig company have had their charges concluded, Saskatchewan Occupational Health and Safety indicated to Pipeline News there are still legal proceedings underway. Who those would be against, they would not say. They also would not

reveal who else, if anyone, had been charged, despite the fact that matters in four of the five parties have now been concluded. OH&S was not forthcoming on information regarding those concluded matters, neither revealing that matters had been concluded, or who they were against. Information on the other parties charged was obtained from court records. Through a series of several phone calls, essentially all OH&S would disclose is that there were still matters before the courts, and that a Freedom of Information request would be required to request OH&S’ report on the fatality. Charges were stayed against the field supervisor for Eagle Well Servicing. ɸ Page A11

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A11

DQG VXSHUYLVRU Ă€ QHG LQ IDWDOLW\ occurrence, a fatality on our watch, that we took very, very seriously. We never had something like that occur before on our watch. We do take it as a serious incident.â€? He continued, “Since then, we have changed. Our entire safety department has been staffed up. We have audits that are done on our services rigs, audits that are done on our drilling rigs, all of our operations. We have EH&S health and safety individuals working in the field working with our field staff and contractors. “We made some marked changes in the way we do business as a result of this fatality. We have a much larger staff in place. Again, if you read the report, we’re not the cause of the fatality, but obviously EH&S’s investigation indicated we were deficit on siteâ€? said LaPrade. Occupational Health and Safety would not release this report when asked on June 13, citing ongoing legal proceedings. Asked if weather had an impact on this happening, LaPrade said, “Not from our perspective. I can only comment on the investigation that was done. From what I understand, there was a failure of the rig due to structural integrity. I can’t go into the details because it’s not my report, but that was the major cause. I can only speak to our portion where we were charged under the act. Basically, it was resulting from two deficiencies, one being proper rig inspections and the other being the proper setting of the rig as far as guy lines.â€? Asked about changes going forward, he said, “We’ve always had policies in place to ensure that we set up rigs properly, we inspect them properly. What we’ve done now is to have more people on the ground that are reinforcing that. We’re staffed to the point where we’re actually having people do impromptu rig inspections, audits. We actually do health and safety audits on our rigs and on our contractors and on our employees to make sure we’re making health and safety standards. “We also have a no-fault policy on reporting incidents. If somebody has an incident that happens, we’re not going to blame you, we just need to know. “We changed a number of initiatives. Not that we were running by the seat of our pants, that’s not the case. We did have a good safety policy. The issue happened to be we’ve beefed it up on the basis of having these type of things happen,â€? said LaPrade. “I’ve always said we’re not at war. People shouldn’t lose limbs or be hurt or killed on an oil and gas location. We want to be sure this never happens again.â€? Asked why it took 4.5 years to resolve this, LaPrade deferred to Occupational Health and Safety, noting they had brought in metallurgical

experts. He said they co-operated with the investigation, responding to demand letters (similar to a subpoena). When asked if Eagle Well Servicing has worked for Lightstream since then, LaPrade said, “No they have not, not on any of our operations to date.� “I can’t tell you how it affected me personally, how it affected the company personally, to have somebody on our site with kids and a wife, be affected by this. It certainly struck everybody in our company. It was a very sad state for us at the company at the time. We’ve taken it to heart. It wasn’t sloughed off as business as usual. It struck a chord with our company very deeply to have a loss of someone on one of our locations.� Calls to Eagle Well Servicing were not returned by press time.

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Éş Page A10 From court records, we were able to determine that on April 16, 2014, charges were stayed against Olanda Dean Jacobsen, 55, of Lake Alma. Jacobsen had been charged with failing, as field supervisor for Eagle Well Servicing, to ensure that all the work with respect to Rig # 16, a place of employment, was sufficiently and competently supervised, as required by Section 17 (1)(a) of the Occupational Health and Safety Regulations and sections 57(b) and 58 of the Occupational Health and Safety Act. The consultant, however, was convicted. On July 16, 2013, Jim Dung Hong Huynh, 34, of Redvers, pleaded guilty to failing, as a well-site supervisor, to ensure that all the work with respect to Rig # 16, a place of employment, was sufficiently and competently supervised as required by Section 17 (1)(a) of the Occupational Health and Safety Regulations and sections 57(b) and 58 of the Occupational Health and Safety Act. Huynh paid a $2,000 fine and $800 surcharge. The one unresolved matter appears to be that of CARE Industries Ltd. The company, founded in Red Deer, Alta, is now based in Blackfalds, Alta. CARE is charged with failing to ensure, insofar as is reasonably practicable, that the base plate leveling structure it provided to Eagle Well Servicing Rig # 16 was safe to use, in that the design of, and welds for, the structure were not in conformity with Canadian standards. This charge is in contravention of sections 8, 57(a) and 58 of the Occupational Health and Safety Act. This charge has not been proven in court at this time. CARE is schedule to appear in Weyburn Provincial Court on July 16 for their matter to be spoken to. CARE Industries’ website states, “CARE Industries specializes in the manufacturing of drilling and workover rig packages. Serving national and international markets, CARE is committed to delivering technical and customizable solutions on time and on budget.â€? Lightstream reaction Rene LaPrade, chief operating officer with Lightstream Resources, spoke to Pipeline News on June 13 via telephone. “First and foremost, this is a tragic accident on our watch. From our perspective, we take accountability for the things we are responsible. We obviously are not the major cause of why this occurred, but from our perspective, we have culpability and culpability was improper inspection (and) deficiencies in how we did our inspections,â€? LaPrade said. “At that time we were in a bit of transition from TriStar to PetroBakken. We had just bought TriStar Oil and Gas, and we had a number of transitions with employees, contractors. That doesn’t make it any better or lessen the accountabilities in our portion of this. Again, this is a really unfortunate

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A13

Torquay play the next big thing: Schaefer which is an important point, because companies said. need to get their money out fast. Schaefer noted that U.S. wells are much bigger The Bakken runs three to six metres thick, but because they are deeper and have more pressure. the Torquay is as thick as 75 metres, said Schaefer, Continental Resources is now saying there is over 900 billion barrels in place, of which 32 billion is with three to four different benches oil can come from. recoverable, a number a lot higher than the U.S. Geological Survey is forecasting. “Right now, the initial indicators are ‘Wow! This thing could be even bigger,’â€? he said. “They are getting pretty much the same flow Most of the Torquay potential is right on the levels as the Bakken, which is just fantastic,â€? he said. Keith Schaefer, editor and publisher of Oil and Gas Inves- U.S. border. A week after it announced its Flat Lake play, ĆšĹ˝ĆŒĆ? ƾůůÄžĆ&#x; Ŝ͕ ƚŚĹ?ŜŏĆ? Ç€ÄžĆŒÇ‡ ĹšĹ?Ĺ?ŚůLJ ŽĨ ƚŚĞ ÄžĹľÄžĆŒĹ?Ĺ?ĹśĹ? dĹ˝ĆŒĆ‹ĆľÄ‚Ç‡ Schaefer said the Torquay has been known Crescent Point bought out CanEra, Schaefer said. ƉůĂLJ Legacy Oil and Gas bought a private company, and about for many years, but how do you frack these things properly he asks. Vermillion Energy purchased Elkhorn Resources. „ By Brian Zinchuk Why do it when they already know how to “You’ve seen very well-regarded financial teams Estevan – When Oil and Gas Investors Bulletin validate this play in Canada, come in and make do the Bakken, he suggested. Crescent Point says editor and publisher Keith Schaefer arranged for a they’ve cracked the code. huge, huge acquisitions. You know they’re going to rental car to take him from Regina to the Estevan spend a lot of money down there developing this,â€? Wells can pay out in seven months, or less, said Energy Expo, he found a few indicators of our hot Schaefer. “That’s incredible.â€? he said. economy. Some of that economic heat, he expects, Schaefer’s threshold is a payout in a year. Schaefer expects a lot of activity in the Torquay will come from the emerging Torquay play along this year. “Th is is a great, great discovery,â€? he said. the U.S. border in southeast Saskatchewan. “Southeast Saskatchewan will see a boom for “It’s going to be in the headlines a lot more,â€? he First off, flying from Vancouver to Calgary, his said. oil and gas for the next 10, 15 years, absolutely,â€? he flight was half empty, but from Calgary to Regina, it was jam packed. He neglected to book a car until two days before. He asked his secretary to phone around and find him anything with four wheels. “The only rental car left in Regina was from an ‡ 6DIHW\ VXSHUYLVLRQ IRU ZHOO VLWHV SODQWV DQG EDWWHULHV auto wrecker,â€? he said, describing it as a rusted out 2002 Ford Escort with a cracked windshield and ‡ &RQĂ€QHG VSDFH HQWULHV bird droppings on the side. ‡ )LOO DQG VHUYLFH DOO “That’s what’s going on in Regina, in southern Saskatchewan. This boom that’s happening, most of EUHDWKLQJ DLU HTXLSPHQW it from oil and gas, is putting that much strain on ‡ $LU WUDLOHUV DYDLODEOH the economy,â€? Schaefer said. “The biggest oil discovery in Canada so far this ‡ 3RVL FKHFNLQJ year is right here, which is unusual,â€? he said, refer‡ )LW 7HVWLQJ ring to Crescent Point Energy Corp.’s Torquay play at Flat Lake, near Lake Alma. ‡ 3LFN XS GURS RII VHUYLFH “What we’re going to see here the next 10, 15 RI DLU HTXLSPHQW DYDLODEOH years is a continuation of the last five.â€? He picked up on Crescent Point’s statement that, “It could be as big as the Bakken.â€? “The Bakken is the big granddaddy of shale plays in North Dakota.â€? He noted the Torquay is referred to as the 1HZ WRS RI WKH OLQH SURIHVVLRQDO Three Forks formation in North Dakota, where it is expected to produce 3.5 billion more barrels of JUDGH HTXLSPHQW recoverable oil. )LW WHVWLQJ DQG 3RVL FKHFNV IRU 6&%$ “(Crescent Point CEO) Scott Saxberg says the Torquay has a chance at being as big as their Bakken. That’s a very heady statement. This is the number one shale oil play in Canada right now. ORFDWHG EHVLGH 5HG +DZN :HOO 6HUYLFLQJ

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A14

PIPELINE NEWS July 2014

Call it a $150 million stack of pancakes „ By Brian Zinchuk Bismarck, N.D. – If Saskatchewan’s Bakken play could be considered a pancake – flat and thin, then North Dakota’s could be considered a stack of pancakes. This was evident in the presentation by Oasis Petroleum CEO Tommy Nusz, one of three CEOs who closed off the 22nd annual Williston Basin Conference in Bismarck. Speaking on May 22, Nusz described how they are developing their land, and the big bucks involved. It takes $150 million to fully develop a spacing unit – in this case, 1,280 acres. Several years ago, in interests of greatly simplifying mineral rights nego-

tiations, the state unitized all undeveloped parcels into “standup 1,280s,� that is, two sections of land, two miles north/south and one mile east/west. On one of those parcels, Oasis will drill into four layers, in two formations. The highest one is the Bakken, which may see one or two wells. Below that is the Three Forks, which has four layers, or benches, will get two wells into each of the first three benches. Three pads and a central tank battery are part of the design. Eventually, they intend to drill out 15 to 20 wells in that block. Drilled from pads, fracked, pipelined for oil and gas, and equipped with a central battery, the total investment comes to $150 million – and that’s just one two sections of land.

Oasis Petroleum CEO Tommy Nusz walked the audience through how his company is in the process of spending up to $150 million developing 1,280 acre spacing units.

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“As you start thinking about it, you drill 15 or 20 wells, you spend $150 million or so on one 1,280 acre drill block, planning becomes extremely important. We’ve had to revise our planning horizons from 12 months to 24 to 36 months,â€? Nusz said. While the majority of these wells are in the Three Forks formation, in North Dakota, the Bakken and Three Forks are broadly lumped together as the Bakken for discussion purposes. Nusz indicated Oasis’ drilling inventory continues to increase through tighter spacing and use of the lower Three Forks benches. “(Continental Resources CEO) Harold (Hamm) mentioned we’re approaching a million barrels a day out of the Williston Basin at this point. Depending on whose projections you look at, in the next three to five years, that could be 1.5 to 1.8 million barrels a day. It’s a tremendous resource,â€? said Nusz. “If you look at the USGS number of technically recoverable oil, it’s about 7.5 billion barrels. Depending on which company you look at up here, our estimates range from 24 to 32 billion barrels. Of course, we have a little bit better data than they do. “Activity continues to increase from a wells drilled standpoint, but we’ve gotten so efficient now and continue to improve our efficiency to where the rig count has been relatively flat over the last 18 months or so. But more wells are completed per year with flat rig count,â€? he added. ɸ Page A15

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PIPELINE NEWS July 2014 Éş Page A14 Oasis has gone from six drilling rigs in 2010 to 16 in 2014. “We drilled 10 wells per rig, per year. In four short years, we will drill just under 14 wells per year, per rig,â€? said Nusz. Well costs went from US$7 million in 2010 to a peak of $9.7 million in 2012 before declining to $8 million in 2013 and then $7.2 million in the first quarter of 2014. It will range from $6.5 to $8.5 million, depending on where they are in the basin. Not only are they drilling more wells, but doing it at a lower cost. Their spud to release time has dropped to 19.2 days per well, with frac time coming in at 2.6 days per well, followed by 3.2 days per well for cleanout. Ninety per cent of their 2014 drilling will be on multi-well pads with increasing pad sizes. By doing this, they reduce per well capital costs by five to 10 per cent. Oasis has about half a million acres, with over 3,500 drilling locations. That gives them a drilling inventory of 17 years. They produce approximately 43,000 bpd, and that’s all in the Bakken area. “That’s from zero in 2007, when Taylor

Reid and I started the company,� said Nusz Oasis has 450 employees, of which 250 work in their Williston office. They are expanding their own midstream and in-house frac business, adding their own second frac spread recently. This year’s capital program is just over $1.4 billion in the Williston Basin. “This is all we do. All we have is Williston Basin and execution in the Bakken Three Forks,� Nusz said. The play has evolved. In 2010 and 2011, companies were scrambling to get a well drilled on each of their drill blocks so they would not lose their acreage. By the end of 2012, they had it locked up. In 2012 and 3013 they were doing infill testing and testing different benches of the Three Forks. “The second half of this year and into 2015 we will move into full drilling spacing unit development,� said Nusz “We’ll get on these things and just drill them out.� They have 403 drill blocks, and count 10 potential wells per drilling spacing unit, with room for that to increase. Montana wells are coming in with returns in the 50 to 60 per cent

range at a $90 WTI price. Slickwater fracs have seen a 25+ per cent uplift in production. Seven slickwater wells drilled in that spacing unit. “As we go into the second half of the year, on our completions, about 60 per cent of our wells will have something other than our base design, which is 36 stages and about four million pounds of sand. In some cases, we’re going to double the amount of sand. In some cases, we cut our sand volumes back to three million to optimize recovery,� said Nusz. Coil tubing fracs are also promising. In regards to connections, he said pipeline development has meant 75 per cent of their production never gets on a truck. Over 90 per cent of their wells are connected to gas gathering infrastructure. Salt water disposal is

1

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A15

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PIPELINE NEWS July 2014

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A17

They call it ‘The Gauntlet’ It was bumper to winch to beavertails to ƉƾĆ?ĹšÄ?Ä‚ĆŒ ĆšĆŒÄ‚ĸ Ä? ŽŜ h͘^͘ ZŽƾƚĞ Ď´Ďą ĆšĹšĆŒŽƾĹ?Ĺš tĹ?ĹŻĹŻĹ?Ć?ĆšŽŜÍ• E͘ ͘ dĹšĹ?Ć? Ç Ä‚Ć? Ć?ĞĞŜ ĨĆŒŽž ƚŚĞ tÄ‚ĹŻĹľÄ‚ĆŒĆš Ć‰Ä‚ĆŒĹŹĹ?ĹśĹ? ĹŻĹ˝ĆšÍ˜

„ By Brian Zinchuk Williston, N. D. – They call it “The Gauntlet.� I was sitting at the conference, talking to someone who had worked in the North Dakota oilpatch for several decades. I told him that it was my intention to drive up through Williston on my way home in the same manner I did two years ago, soaking in all the activity and seeing just what all the fuss was about. He strongly tried to dissuade me from taking US Route 85 from Dickenson, to Watford City and then Williston, instead suggesting I take the somewhat more circuitous route through Minot that would be four lanes. “Maybe you might want to go through Minot, and come over from Minot,� he strongly suggested. That wasn’t my intention, because I wanted to see what was happening. His reason for suggesting this alternate route was due to what U.S. Route 85 was known as, “The Gauntlet.� Driving it, I can now see why. This route is a substantial part of the fairway of the Bakken play in North Dakota, with Williston not only being the epicentre, literally and figuratively, but also the service centre in much the way Lloydminster or Estevan are. However, if you took all the oilfield businesses (and the activity that goes with it) in Lloydminster, Estevan, Weyburn, Carlyle, Carnduff and Swift Current and threw them into one town, I doubt you would equal what is going on around Williston. Whereas Saskatchewan in 2011 hit an active drilling rig count of 122 rigs, North Dakota has been running around 190 rigs almost continuously for over two years, dropping from a high of over 200. And unlike Saskatchewan, they don’t really shut down for spring breakup, either. So imagine not only the number of rigs, but the support services like lease building, battery construction, flowline pipelines, fracking, everything, concentrated primarily out of Williston, Watford City, Newtown and Stanley. The vast majority of it is in Williston. Now take a very large chunk of that traffic and put

it on one road. That’s driving the gauntlet. I’ve never seen anything like it. It was like Deerfoot Trail in Calgary, except over half of the vehicles were semis, many carrying wide loads, and the road is only two lanes. It was bumper to winch to beavertails to

pushbar traffic. Every so often you’d get someone who thought they could fight their way through it, weaving and passing. This is not flat terrain, either. It’s rolling hills, with the occasional curve thrown in. ɸ Page A18

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A18

PIPELINE NEWS July 2014

Imagine the Deerfoot with frackers, tankers and wide loads

Bumper-to-bumper on the Williston truck route means being bumper-to-bumper with a lot of trucks.

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Éş Page A17 Now add to this mix the fact a very large portion of it is currently under construction, making it a four lane road. This is not, however, the “twinningâ€? exercise we see in Saskatchewan, where a second highway is built adjacent to the existing roadway, with a grass median between. That form of construction allows the regular existing two-lane construction to continue relatively unabated. It also means that the finished product will have a median providing a safety gap in case someone jackknifes their semi. They aren’t likely to end up in oncoming traffic. No, twinning is most definitely not the case with what is happening along The Gauntlet. They are making it four-lane alright, but doing so by building up an additional lane on each side where the shoulder would be on a two lane road. I couldn’t tell if the end result will have a divider, perhaps concrete jersey barriers, or a centre turning lane, or just a painted line. This was a big concern with the man from Williston I spoke with at the conference. He was afraid a semi going sideways would end up taking out all four lanes of traffic, and all the consequences that would result.

I’m not sure if it was for expediency, or expense, or an inability to quickly add an additional right-of-way that resulted in this choice of highway design. As we’ve seen with the Estevan bypass, land assembly can be a large stumbling block and result in years of delay. In the U.S., property rights are entrenched in the constitution, and thus it is likely more difficult to push these things through than in Canada. Perhaps with the death toll already happening, they simply couldn’t wait to do it right. Four lanes, any four lanes, may be seen as better than nothing. I asked him if it was like the “Highway of Death,â€? Highway 63, south of Fort McMurray. He agreed to the affirmative. The lack of a median also will mean it will be incredibly difficult to turn left both onto the highway and off of it. I stopped a few times to pull off and get photos, only to find it next to impossible to turn back onto the highway. I passed up several opportunities for great pictures simply because I would have had to try to make a left turn to get back onto the highway. I can’t imagine what it would be like pulling a fracking pumping unit behind your semi and trying to make it onto the road. ɸ Page A19

PIPELINE NEWS July 2014 Éş Page A18 Much of the highway under construction has work happening concurrently on both sides. Speed is limited to 45 miles per hour. The signs are quite a contrast to those you now see in Saskatchewan or Alberta, warning of fines tripling if caught speeding passing workers. Here the signs say the minimum fine is $80, a laughable amount compared to Canada. Our recent increase in fines was, of course, prompted by the death of a pregnant highway worker near Midale in recent years. No matter what the signs say, the reality is this: you keep up with traffic. You keep both hands on the steering wheel, because at any given time, someone could weaver into your lane, or someone could try to pass you. I saw a semi pass a pickup which was pulling a trailer at the end of a passing lane at the top of a hill. He had to get in there, no matter what. That

A19

unfortunately was right in front of me. Getting closer to the south side Williston, traffic remarkably lightened. One man could be seen running shirtless along the shoulder. He was clearly taking his life in his hands to go for a jog. He looked quite buff, perhaps indicating former military service. That seems to be quite common, from the people I’ve met. In that case, maybe The Gauntlet isn’t is as scary as a run in Afghanistan. Arriving in Williston it became apparent why southbound traffic had lessened. The main intersection southwest of Williston was also under construction. I sat waiting four minutes for one cycle of a traffic light. The traffic backed up behind me went as far as I could see in my mirror. Two years ago driving through Williston I was amazed at the amount of construction. It continues to this day, with ever more hotels, shops and what not. What one did not find, however, were many restaurants. The main route around the northwest corner of Williston is punctuated by trucks, trucks and more trucks. It was just slightly less bumper-to-bumper. All this traffic must make a left turn at the centre of the city to proceed north. To say it’s a busy intersection would be an understatement. Proceeding north of Williston the traffic is still intense, but the road is much, much better. That’s because this is now the road I had been advised to take. It’s four lane, twinned, with a median. About 13 miles north of the city the highway takes a turn to the east. Continuing north on a two lane road which is also undergoing shoulder widening, it is almost a relief. Traffic now feels like Saskatchewan, A further 20 miles, and you would think you were driving south of Arcola. The Gauntlet, it seems, comes to an end 13 miles north of Williston, and you can breathe again.

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PIPELINE NEWS July 2014

PIPELINE NEWS July 2014

A21

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$8&7,21 7KXUVGD\ -XQH S P Williston Basin Petroleum Conference biggest yet Bismarck, N.D. – On the cusp of announcing a million barrels a day production, North Dakota had a lot to talk about at the Williston Basin Petroleum Conference May 20-22 in Bismarck, N.D. The conference, which alternates between Regina and Bismarck each year, has grown substantially. This year over 4,250 attended, setting yet another record in a string of records. CEOs from the largest oil companies in the states walked the trade show floor with security personnel contingents in tow. Harold Hamm of Continental Resources, Jim Volker of Whiting Petroleum, and Tommy Nusz of Oasis Petroleum spoke on the final day of the conference.

They followed Fox News’ Sean Hannity, by far the biggest draw. The trade show floorspace was doubled, yet still sold out in seven minutes. The addition wasn’t anywhere near complete, with plywood for outer doors, but it was finished enough to hold the 530 exhibitors. The theme for this year’s show was “Bakken Strong,� and it was an apt description. The state is running around 190 rigs. Just under a month after the conference, the state was able to announce it has reached one million barrels per day of oil production. The state is predicting it will soon hit 1.5 million bpd, but industry estimates are higher yet.

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PIPELINE NEWS July 2014

Now producing half a million barrels per day „ By Brian Zinchuk Estevan – Four years ago, officials with the Ministry of Energy and Resources told Pipeline News that Saskatchewan was running around 425,000 barrels per day of oil production, and had been for roughly 10 years. That was quite an accomplishment in and of itself, because oilfields naturally decline. Things have changed since then, as we are now at the half-million barrel per day mark. That was one

of the nuggets from the speech of Assistant Deputy Minister of the Economy Hal Sanders during the Estevan Energy Expo. Sanders was the supper speaker for the opening meet and greet, held at the Saskatchewan Energy Training Institute on June 11. “I don’t think there’s another Canadian jurisdiction or even another country in the world that can match the diversity of mineral resources in our province.

The energy resources are no different,� he said. Saskatchewan accounts for 37 per cent of primary energy production in Canada, if you include uranium, according to Sanders. We also account for 17 per cent of Canadian oil production. “Our oil sector is one of the biggest drivers of the economy,� Sanders said. Saskatchewan produced an average of 487,000 barrels per day. “I was looking at

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more recent statistics, and I believe we are achieving half a million barrels a day,� he said. Of that, 65 to 70 per cent of our crude oil goes to the U. S. In 2013, the value of our oil and gas sales was $15 billion, of which most of that was oil. He touched on uranium, saying we supply about four per cent of U.S electrical production for the country. Between oil, uranium and potash, there can be fluctuation in prices. “The hope is, when one us down, the other is up,� he said, noting uranium and potash prices are down right now. However, when it comes to royalties, “Oil is king. It generates billions for government coffers.� The province is trying to encourage gas production, but we are now a net importer of gas. The province’s strategic plan includes having a competitive fiscal regime. Sanders noted there has been a lot of investment in Saskatchewan.

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Hal Sanders, assistant deputy minister of the economy, spoke to the Estevan Energy Expo supper on June 11. Photo by Brian Zinchuk

Unemployment in Estevan is around one per cent, and province-wide, that number is around three per cent. “Those are almost no-unemployment numbers – just fantastic,� Sanders said. The province is trying to bring in value-added activities, he noted, which builds population. In 2013 we set a new record for horizontal wells drilled, and saw the third best year for overall wells. The three Crown land sales to date this year have brought in $110 million, more than all of 2013. A recent change has been the implementation of a levy for regulatory oversight which brings in about $10 million per year. Sanders noted the plus side was that it eliminated 10 different fees and 20,000 transactions per year. “We did consult with industry and industry supported that change,� Sanders said.

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There is still quite a gap in our recoverable oil compared to initial oil in place. To that end, the province invests in the Saskatchewan Research Council, Petroleum Technology Research Centre and individual companies’ projects on items like enhanced oil recovery testing. Of 48.3 billion barrels of initial oil in place, only 13 per cent is currently recoverable with technology we have today. That number does not include Saskatchewan oilsands. On carbon capture and enhanced oil recovery efforts, he touched on the Aquistore project and SaskPower’s Boundary Dam Carbon Capture Project. “We’re not just applying old technology to new wells, but applying new technology to old wells,� Sanders said. Boundary Dam is one of the largest investments the provincial government has made in a decade, he pointed out.

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PIPELINE NEWS July 2014 per cent year over year, Volker said. Whiting’s budget is $2.7 billion, and just less than 90 per cent of that is going to the Williston Basin and eastern Colorado. Between those two states, they have over a 20 year drilling inventory. Half is in North

New coil tubing design results in 70 per cent increase in production for Whiting

million cubic feet of gas per day, and will eventually process 120,000 cubic feet per day. Whiting has infrastructure to capture 95 of the gas it produces. That’s markedly more than the rest of the play. “We like North Dakota,� Volker said, adding it and parts of Colorado give Whiting its highest rates of return. The recently sold a $247 million parcel in Texas and put that money to work in North Dakota. A brand new coil tubing design for fracking has “achieved a 70 per cent increase in production over the old completion techniques we were using up here,� noted Volker. The new cemented liner design for fracking allows for four times as many entry points compared to the previous 30-stage sliding sleeve design. This design has three perforation clusters per stage, and there are 40 stages, allowing for 120 entry points. The result is significantly higher initial production and overall production rates. “We’re doing a good job, a better job,

Dakota. In North Dakota, they are approaching 800,000 net acres, and continuing to expand. With an Oklahoma partner, they have a gas plant in the centre of their Sanish field, and another in the Pronghorn field.

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Bismarck, N.D. – Whiting Petroleum Corp. has taken technology used in North Dakota, and put it to good use in other areas, with similar success, according to CEO Jim Volker. Volker was one of three CEOs addressing the final day of the Williston Basin Petroleum Conference, which wrapped up on May 22 in Bismarck, N.D. “Whiting, in large part due to the kind of growth we’ve been able to achieve here in North Dakota, is a rapidly growing company. Last year production was up markedly, and in the first quarter this year, was up 20 per cent year over year,�said Volker. In the first quarter Whiting set a discretionary cash flow record, and they hit a production record in the Williston Basin, up 27 per cent year over year to 73,000 bpd. In Colorado they’ve achieved their first gas sale at their Redtail gas plant, which is modelled on a plant near Stanley, N.D. which is currently processing 90

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a more efficient job of breaking up the rock near the wellbore. Thus, at least in our opinion, in the Bakken, you will see many areas with companies represented today, you’ll achieve a 20 per cent recovery factor, which is very high with the type of rock we’re drilling and completing in,� Volker said. Showing a graphic of six different well plans for their six primary producing areas in the Bakken, Volker said, “We’re drilling 15, 16 wells per spacing unit. That will be responsible for that 20 per cent recovery.� The Williston Basin has been growing at a compound rate of 30

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PIPELINE NEWS July 2014

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A25

26 hour drive results in a job the moment she walked in Williston, N.D. – Her boyfriend went from Oregon to North Dakota to find work. If he found a good job, she would follow. Now Courtney Hausam, 22, can make $300 to $400 a night in tips. “I came over a year ago,� said the server who works at Doc Holliday’s, a roadhouse bar and grill adjacent to the Walmart parking lot on the north end of Williston, N.D. “I drove into town, stopped at this restaurant, and had a job on the spot. Now I’m one of the best servers around here,� she said, with some time to spare before the supper rush hit this particular Friday evening. She drove 26 hours to get there, and had a job as soon as she walked in the door. The restaurant was just in the process of reopening after a format change, and she walked in at the right time. Hausam’s path to North Dakota was not how she initially envisioned her life. “I’m a certified veterinary assistant, waiting to finish my vet tech in Albany,� Hausam said. Her job as a vet assistant often meant putting dogs down, and that was just too hard on her soul. “I love every dog too much. I ended up bawling every time,� she said. Thus she started looking for other work. “In Oregon, one position has 25 people competing for it, especially for restaurants,� she said. It doesn’t hurt that as a server she is blonde and attractive, a point she uses to her favour. “I’m in a guy’s town,� she said matter-of-factly. “It helps me make money. All the guys say there’s a pretty girl behind every tree. “There are no trees.� As a result, in a town where young men are flush with cash, the tips are good. “I work 4 to 9 p.m. I can go home with $300 to $400 on a Friday night,� she said. That may seem like a lot until you realize the other reality of the service industry in North Dakota. Her hourly salary as a server is in the $4 to $5 range. That’s less than Saskatchewan’s minimum wage in the early 1990s, yet Williston is rapidly becoming one of the most expensive places in America to live. She wasn’t even sure exactly what her hourly rate was, because it’s inconsequential to

the daily total. The flipside of that is, if you don’t tip, she essentially works for next to nothing. Williston may have a lot of oilfield companies now, but not so much when it comes to dining establishments. The restaurant, which serves a mean rack of ribs, is filled every evening. The owner of this restaurant, Marcus Jundt, was an unsuccessful candidate for mayor of Williston in the June 10 election. He owns several restaurants in Williston. Hausam’s boyfriend started working with a major electrical firm in a shop and has worked his way up to the point where he’s now on two weeks, and off two weeks, and has a company truck. The pair has no thoughts of settling down in Williston. They have a five year plan, which includes buying new trucks, toys, and a home elsewhere. Back home, in Oregon, Hausam noted a three-bedroom home can be rented for $500 a month. In Williston, a three-bedroom apartment will rent for $3,000 per month, and requires a damage deposit for $500 for each of her two dogs. As a result, the couple is staying at the Fox Run RV Park north of Williston. That enormous campground charges $800 per month, and includes water and garbage pickup. However, their water lines froze over the winter, and they went for months without water in their camper. “It got to -60 F in the winter. The pipes froze underground. There was no running water,� said Hausan. She added that many people’s vehicles wouldn’t work, due to the lack of a device no Canadian would consider going without. “You need a block heater. A lot of people don’t have one,� Hausan said. Thus the couple is looking for a mobile home. Hausan recently saw some advertised for $41,000, and noted the price had come down. It turns out her story is not unique. The hostess, who had only been at Doc Holliiday’s for two weeks, came from New Jersey to work in Williston. With one coming from each of the east and west coasts, it appears they met in the middle.

WHERE ENERGY MEETS SAFETY

A year ago, Courtney Hausam drove 26 hours to get to Williston, and was hired on the spot.

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A26

PIPELINE NEWS July 2014

Drill, frac everywhere: Hannity

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Bismarck, N.D. – When people call his show in desperate need of work, Sean Hannity tells them to go to North Dakota. Many have, and have since reported back they found jobs immediately and that they are making much, much more than they had been before. Radio and Fox News host Sean Hannity was one of the big draws for the 22nd Annual Williston Basin Petroleum Conference in Bismarck, N.D. May 20-22, and he didn’t disappoint. His presentation drew by far the highest attendance in a conference that included CEOs from three of the largest Bakken producers in the state. Jim Arthaud of MBI Energy Services introduced Hannity. Not long ago, he appeared on Hannity’s show. “When I was on Sean’s show, and he highlighted my business, I told him we were looking for about 300 jobs,â€? said Arthaud. When Hannity asked how people could apply, he panicked, and instead of giving out their website, he gave out their main phone number. “For six hours straight, our phone lines were jammed. We had to get a hold of the phone company and get a new phone system routed in. Our HR people were not very happy with me. Since that time, we have got 5,000 people to apply at MBI Energy Service, and hired over 300,â€? said Arthaud. This was just one example Hannity gave of the prospects in North Dakota, part of his Get America Back to Work radio campaign. ɸ Page A27

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PIPELINE NEWS July 2014

Radio and Fox News host Sean Hannity thinks energy is the key to America’s future, if only the government would get out of the way. Photo by Brian Zinchuk

Éş Page A26 “The rest of America wishes they could join you, but apparently they can’t. Barrack Obama is our president,â€? Hannity started out. “We’ve implemented liberalism, socialism, redistribution, stimulus plans, another stimulus plan, and no one’s working,â€? he said. “What you’re doing here is phenomenal. Energy is the lifeblood of America’s economy, no ifs, ands or buts about it.â€? Left blames Bush Hannity hit on many right-wing American political punching bags, such as the left-wing blaming George Bush for everything. He noted the New Orleans Times-Picayune newspaper pointed out almost precisely what would happen if a hurricane struck the city, and did so 35 years before the event, yet Bush was blamed. Five days of warning weren’t enough, he noted,

as there were buses that could have been used by the Democratic mayor and governor to pick people up, but they sat idle. “That’s government incompetence,� he said. George Bush had been blamed for everything from dog bites to bee stings, according to Hannity. Getting serious, he said 50 million Americans today live in poverty, and are on food stamps. There is the lowest labour participation rate since 1978, since the Carter administration. One and five children live in poverty, while one in six adults do the same. The nation is $17 trillion in debt, and has $90 trillion in unfunded liabilities. “We are taking a sledgehammer to our kids’ piggy banks,� he said. Hannity talked about the failure of the healthcare.gov website, the attack on American diplomats in Libya and other items as govern-

ment incompetence. In the meantime, America has become the largest debtor nation in the world. The current administration will have contributed more to the nation’s debt than all other presidents combined. Magic All this brought Hannity to the state of affairs in North Dakota. “Something magical happened, organically, on its own, and you all made it happen,� he said. “I’ve been watching what’s happened here, and in Midland, Texas, for a long time. You have Walmart trainees getting $17 an hour. People with high school diplomas or GEDs and they’re working hard, and can start out making $75,000 a year with overtime. In an economy where 50 million Americans need food stamps, I’m interested,� he said. Hannity also alluded to his own blue-collar background, growing up washing dishes in a restaurant. His grandparents were immigrants, coming to America with $20 in their pockets and no safety nets. He said, “I was brought up with the mentality

that in life you work, and you work hard.â€? He worked construction before he was blessed in his radio and television careers. Much of that time in construction was hand-to-mouth. “What I saw in North Dakota is you’re really leading the way. In reality, you pretty much have a zero unemployment rate,â€? he said. “When I think back to my days when I only had $200 in the bank, when I was struggling. I know how it was like for those 50 million people in poverty, on food stamps, chronically unemployed – those millions we talk about, those statistics; those are real people, real lives, troubles they’re experiencing. “Then I hear about of this miracle, and it’s happening in spite of government. Think about this: this is happening here because it’s on private land. Barrack Obama has reduced oil leasing on federal lands 50 per cent since he became president of the United States. Then he goes into the debates with Mitt Romney (saying), ‘We’ve increased oil production.’ ɸ Page A28

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PIPELINE NEWS July 2014

Desperate radio listeners pack bags Éş Page A27 “Yeah, with no help from you; in spite of you,â€? Hannity said. He spoke of the former CEO of Shell Oil, John Hofmeister, a mentor to him. Hannity attributed Hofmeister saying, “We have more oil resources, we have more energy than we can ever possibly use as a country.â€? Hannity said, “He predicts seven, eight, 10 per cent, massive GDP growth, if America would just stop being a stupid country and a stubborn country. That radical environmentalists that have this grip on Democratic politicians – if we could just get them out of the way, we could duplicate the success of North Dakota. Instead of reading about Saudi billionaires flying their 777s with their harems and their girlfriends over to Disney, or buying out expensive stores in New York, that’s an opportunity for every man woman and child in this country so they could have jobs. If only we could get government out of the way. “Do you realize, just from the job perspective alone, there’s oil in 48 states? With new technology and hydraulic fracking, we could do it in Ohio, in Pennsylvania. New York has one of the biggest areas where hydro-fracking can be used. We are the Saudi Arabia of natural gas. We have coal mining. You can have clean coal. “Think about this: you create jobs. You pull people out of poverty. With more jobs, there’s higher wages. That means more purchasing power. They’re

going to buy homes and cars. If they buy cars, that means the oil industry is doing well again. If they buy homes, it means the electricians and plumbers, the contractors, they’re doing well again. With more people working, that’s more money to the federal government, which they seem to like a lot. That means fewer people on government dependency and more people paying taxes,� said Hannity. “With the increased supply of energy, that means this artificially reduced supply we have worldwide will reduce the cost of production for business. Once you have increased supply of oil, the price will go down – supply and demand criss-cross equals price. That means more money and businesses. “It will have a snowball effect,� Hannity said. “With all of those savings, energy is going to become the core economic product. We’re talking an economic boom, not just for Bismarck and North Dakota, but for the entire country. But the question is why don’t they do it? “Why didn’t they move the busses? Why, with social security, did they steal and squander our money? Why are they breaking open our kid’s piggy banks? “A rising tide lifts all boats,� he said. “For those that say we need green energy, I say to our liberal friends, you go out and produce energy, you find a way that’s cheaper, greener, and you master that technology, and you are going to be a billionaire 50 times over. But in the meantime, don’t take my hard-earned money and squander it

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with these corrupt people, between politicians and Solyndra. I work too hard for my money.â€? He then hit on a sensitive point, saying, “Did you ever think there’s one big added bonus as America moves towards energy independence? The people we buy oil from; this may shock you, Saudi Arabia does not like us. Iran and Iraq and the people in the Middle East, except for Israel, they don’t like us.â€? If companies do well, and pay like they are in North Dakota, they can duplicate that success, according to Hannity. He recalled how he said on the radio that if he was out of work, he would go to North Dakota and knock on oil companies doors, looking for work. “People listened to me. They packed their bags and moved to North Dakota. They were that desperate,â€? he said, adding, “By the way, no offense, but the weather here sucks.â€? He played five minutes of real calls to his radio show. One caller from Seattle moved to North Dakota and found a job on the railroad hauling oil. His income tripled. When he was in Seattle, the former marine “couldn’t find work that would pay worth a damn.â€? That marine’s family would be following him shortly noted Hannity. Another caller was 23 years old. He had his own house, had paid off two cars and was paying off a third. His wife let him buy a Harley. He worked moving drilling rigs. A caller from Fort Worth Texas had lost his job. He had a degree in economics and nine years of experience in oil and gas. He went to Midland, Texas and in four hours had two job interviews by the following day. Within two days, he had two job offers and another interview in the works. ɸ Page A29

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A29

and move to North Dakota Éş Page A28 Bringing his message home, Hannity said, “Our reserves: every problem has today, our debt, our deficit security issues, dependency, everything can be solved. You are showing America the way.â€? Saying America should tap into its energy resources, he said, “ I have a five point plan, and energy is the lynchpin of the plan.â€? First, stop deficit spending, he said, adding the budget could be balanced win six years. Second, energy is the lynchpin. Hannity said, “I want to drill, I want to frack, I want to expand coal mining, I want to do it in all 48 states. I want to do it in Alaska. I want do it off the coast of California. I want

Sean Hannity drew by far ƚŚĞ ĹšĹ?Ĺ?ŚĞĆ?Ćš ĂƊĞŜĚĂŜÄ?Äž ĨŽĆŒ ĹšĹ?Ć? Ć‰ĆŒÄžĆ?ĞŜƚĂĆ&#x;ŽŜ͘ Photo by Brian Zinchuk

to do it off the East Coast. I want to do it in the Gulf. I want to do it in ANWR – anywhere we can. We do that, and every problem in America goes away. Thirdly, he wanted an alternative to Obamacare. Fourthly, the education system needs to be addressed. Finally, he wanted to secure American borders and American jobs. “Thank you for providing the lifeblood. In spite of government, you have been able to show the entire country there’s an answer out there. The answer is oil. The answer is energy, it is the lifeblood of our economy. I’m here to say thank you,� Hannity concluded.

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Hannity on Keystone In the media availability after his presentation to the Williston Basin Petroleum Conference, Pipeline News asked Fox News host Sean Hannity to comment on the Keystone XL pipeline delays and the sense of betrayal felt by the Canadian people and government. Hannity replied, “I don’t know what to tell you. It’s the most environmentally researched project ever. Another delay means Americans aren’t getting jobs, we

aren’t getting the energy we desperately need. It was a no-brainer from day one. “It’s unfortunate. The whole point of my speech today is; look, you know all know oil better than I do. I know this: I know we need it. I know it’s the lifeblood of our economy. In my opinion, oil is the next great American boom. There’s a mysterious reluctance and resistance. These unholy alliances get in the way of it. Keystone is just one

example. All I can say is it’s really stupid. As a country, sometimes we make stupid decisions. “The great story here is North Dakota is an economic miracle. This miracle can be duplicated around the country,� Hannity said.

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A30

PIPELINE NEWS July 2014

“Someone asked, ‘What keeps you up at night?’ We do have challenges. Sean Hannity is right. We have about one more big event, a safety event on rails; we have a spill; we have anything, and they’re going to try to shut us down.� - Continental Resources CEO Harold Hamm

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Harold Hamm, CEO of ConĆ&#x;ŜĞŜƚĂů ZÄžĆ?ŽƾĆŒÄ?ÄžĆ?Í• Ć?ĂLJĆ? ĹŠĆľĆ?Ćš ŽŜÄž žŽĆŒÄž Ä?Ĺ?Ĺ? Ć?Ä‚ĨĞƚLJ ĞǀĞŜƚ Ĺ?Ć? Ä‚ĹŻĹŻ ŽƉƉŽŜĞŜƚĆ? ŜĞĞĚ ƚŽ Ć?ĞĞŏ ƚŽ Ć?Śƾƚ ÄšĹ˝Ç Ĺś ƚŚĞ Ĺ˝Ĺ?ĹŻ Ĺ?ŜĚƾĆ?ĆšĆŒÇ‡Í˜ Photo by Brian Zinchuk

We’re in the crosshairs „ By Brian Zinchuk Bismarck, N.D. – Harold Hamm, CEO of Continental Resources, is never a shrinking violet when it comes to energy policy, and he was back at it again when it came to his bi-annual presentation to the Williston Basin Petroleum Conference on May 22. Noting that the Bakken field has now produced one billion barrels of cumulative light, sweet crude oil, Hamm said, “There’s only 10 fields, worldwide, that have reached this mark. There’s only three fields in North America. “This is just the beginning. Twothirds of the Bakken’s oil had been produced in the last three years. Now we’re producing a million barrels a day. The million barrel point is a heck

of a milestone, but I still predict we’ll reach two million barrels per day. I don’t think that’s over the top folks,â€? he said to applause. He pointed out that other plays have a lot of gas, but the Bakken is 85 per cent oil, a pure play oil play. “North Dakota’s oil and gas industry should all be proud of what you’re doing – creating jobs, growing the economy, and securing America’s energy futureâ€? said Hamm. “I would like to say one thing about this oil and gas brotherhood. There’s just nothing like it in the world, anywhere. That’s why I got into this industry. The generosity is tremendous – the resolve, the resilience, to come at it again and again, and the courage. ɸ Page A31

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PIPELINE NEWS July 2014 ɺ Page A30 I’m certainly glad, with some of the adversity we’ve seen, I’m still around to see this happen. We’ve changed the world.� Continental is the number one producer in the Rockies, number one leaseholder, producer and driller in the Bakken as well as SCOOP (south central Oklahoma oil play). The company produced 88,250 barrels per day in the Bakken area in 2013. In SCOOP, they hit 18,933 bpd. Continental’s Hawkinson project completed an industry first: a 1,320 foot well spacing, four-formation density test. Wells drilled in the same formation are 1,320 feet apart, but in the next formation, they are offset by half, or 660 feet. This was a 14 well test into the Middle Bakken and first three of four Three Forks benches. Those wells are on a spacing unit two miles

long and a mile across. “We had good results with that,� Hamm said, noting six other tests are underway. Their five year plan sees production and reserves tripling. Their last five-year goal was accomplished in 3.5 years. Hamm spoke of America’s energy renaissance and energy independence. “A lot of our people didn’t make it through some of the bad times. We’ve seen this industry pared down about 50 per cent in a couple different places. We all saw it here in 1981, and certainly in 1998, when the price fell for about a year. We lost a lot of people then. It took a lot to come back to make what happened happen. It’s been a great thing. Only in America. “I just came back from conference in London. We’re the envy of the world. Everybody in the world is envious of our position here – all of

Europe, everywhere you go – is envious of what we’ve done in America. But they can’t do what we’ve done in America,� said Hamm. “One reason is fee lands, being able to lease from the mineral holders, lease holders, on an individual basis. It certainly hasn’t happened abroad. It’s going to be slow to happen, even though we have similar rocks around the world. “This thing which has been brought about by small, independent innovators, is the single greatest thing since the Internet,� Hamm said. He noted it has been accumulative effort across companies, accomplished through hard work. “Someone asked, ‘What keeps you up at night?’ We do have challenges. Sean Hannity is right. We have about one more big event, a safety event on rails; we have a spill; we have anything, and they’re going to try

A31

Hawkinson Project Completed industry first 1,320’, 4-formation density test Hawkinson ‡ 14-well, 4-formation test

Other tests currently drilling or in completion stage ‡ Wahpeton, Mack, Lawrence, Hartman ‡ Recently announced Rollefstad and Tangsrud

1,320’ vs. 660’ dĹšĹ?Ć? ĹšĹ?Ĺ?ĹšͲĚĞŜĆ?Ĺ?ƚLJ ĨŽƾĆŒͲĨŽĆŒĹľÄ‚Ć&#x; ŽŜ ƚĞĆ?Ćš Ć?ĹšĹ˝Ç Ć? ĹŠĆľĆ?Ćš ĹšĹ˝Ç ĹľÄ‚ĹśÇ‡ Ç ÄžĹŻĹŻĆ? ŽŜĆ&#x; ŜĞŜƚĂů ZÄžĆ?ŽƾĆŒÄ?ÄžĆ? Ĺ?Ć? ůŽŽŏĹ?ĹśĹ? ƚŽ ÄšĆŒĹ?ĹŻĹŻ Ĺ?ŜƚŽ ƚŚĞ ĂŏŏĞŜ ĂŜĚ dĹšĆŒÄžÄž &Ĺ˝ĆŒĹŹĆ? ĨŽĆŒĹľÄ‚Ć&#x; ŽŜ͘ /ƚ͛Ć? Ä‚ ĹŻĹ˝ĆšÍ˜ 'ĆŒÄ‚Ć‰ĹšĹ?Ä? Ä?ŽƾĆŒĆšÄžĆ?LJ ŽŜĆ&#x; ŜĞŜƚĂů ZÄžĆ?ŽƾĆŒÄ?ÄžĆ?

to shut us down. You can bet on it. “So I depend on all the operators up here. I depend on all of our people. I depend on rail I depend on everybody around me people in our industry,� said Hamm. “So many people

want to stop all fossil fuel use and production. They want to stop it. They don’t know what else is there, they don’t have anything to take its place, but they want to stop it. We’re in the crosshairs. See what’s happened to coal? We’re

next. “We’ve got to make sure we do everything right. Regardless of what else has happened. Solar has failed. It doesn’t matter. They still want to shut us down, and we’re in the crosshairs,� he concluded.

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A32

PIPELINE NEWS July 2014

Estevan OTS golf By David Willberg Estevan Lifestyles Publications Estevan – Anthony Melle rallied from a sizable deficit to capture the 36hole division of the Estevan Oilfield Technical Society’s (OTS) Oilmen’s Golf Tournament for the first time. Melle was trailing four-time champion Scott Dutton by six strokes with nine holes to play in the final round on June 1. But Melle birded holes 11, 12, 13, 17 and 18 to shoot a 33 on the back nine. Dutton had a 40 on his final nine holes. Melle finished with a 1-over-par 73 to beat Dutton and Mike Ross by a stroke. Les Geisel was fourth with a 77. “On 17, I was lined up to hit, and I heard a ball come across the water, and I stepped back,” said Melle. “I went to hit again, put the ball to within two feet … and then birdied 17. “I knew Mike had me by one going into 18, and I was over (the water) in two, and so was Mike. He chipped on and three-putted; I hit a bad chip to

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within 25 feet, and drained the birdie putt.” Melle estimated that he was likely 11-over-par for his two rounds on the front nine, and 7-under on the back. “I drove the ball really well on the back nine,” said Melle. “I had short wedges to the green, and made my putts.” The tournament features 18-hole and 36-hole tournaments. Golfers in the 18-hole tournament played their round on May 30 or 31. Those in the 36-hole tournament played a round on the 30th or 31st to determine their flight. ɸ Page A33

PIPELINE NEWS July 2014

A33

>ÄžĹŒ Í— ZŽŜ ĆŒĹ?Ć?ĆšĹ˝Ç Í• ŚĞĂĚ ŽĨ ĆŒĹ?Ć?ĆšĹ˝Ç WĆŒŽŊÄžÄ?ĆšĆ?Í• Ä?ĹšĹ?ƉĆ? ŽŜƚŽ ƚŚĞ Ĺ?ĆŒÄžÄžĹśÍ˜

Kelly Day lines up his next shot.

Your Home Away From Home

ZĹ?Ĺ?Śƚ͗ :Ä‚ĆŒÄžĆŠ DĹ˝Ć?ůĞLJ žĂŏĞĆ? ĹšĹ?Ć? ÄšĆŒĹ?ǀĞ Žč ƚŚĞ ƚŚĹ?ĆŒÄš ĹšŽůÄž ĆšÄžÄžÍ˜

Éş Page A32 Their score on June 1 determined the 36-hole winner and the other results. Conditions for the first two days of the tournament were ideal. But a steady rain on June 1 led to many higher scores. “It was tricky conditions,â€? said Melle. “I couldn’t square up the club face on the ball, and I was hitting a lot of balls right. On the back nine, actually on 11, I took my gloves off and started drying my grips up, and since then, I felt like I was playing pretty well.â€? Flight winners in the 36-hole tournament were: Pat Murphy won

the first flight with a 74; Kreston Martindale took the second flight with a 76; Dennis Gonas, third flight, 73; Wilson McKinnon, fourth, 83; Cole Dunville, fifth, 87; Don Cowan, sixth, 83; Albert Arndt, seventh, 91; Kohlan Fedyk, eighth, 88; Derek Ross, ninth, 96; Tom Blondeau, 10th, 97; and Bert Coleman, 11th, 95. Gonas’ score was as good as Melle’s, but the 36-hole victor comes from the championship flight. In the 18-hole tournament, Matt Lamb won the championship flight with a 72, beating Oscar Alverez by one stroke and Rob Peloquin by two.

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The 18-hole flight winners were: Rob Sasylyniuk won the first flight with an 81; Dustin Stepp won the second with an 84; Jack Soloshy, third flight, 88; Jim Howard, fourth, 90; Dale Rinas, fifth, 91; Kirk Gies, sixth, 94; Gordon Mag, seventh, 96; Darcy Ward, eighth, 98; Steve Smith, ninth, 99; Keegan Schindel, 10th, 102; Cullen Trail, 11th, 103; Kelly Lydiard, 12th, 105; Trevor Goetz, 13th, 108; Glen English, 14th, 112; and Kevin Patton, 15th, 121. A total of 339 golfers were entered in this year’s tournament.

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A34

PIPELINE NEWS July 2014

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PIPELINE NEWS July 2014

A35

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Keith Lowdon reported that Manitoba’s oil proĚƾÄ?Ć&#x; ŽŜ ŚĂĆ? Ä?ĞĞŜ Ň Ä‚Ćš over the last year.

Bismarck, N.D. – Manitoba is expecting more of the same. Keith Lowdon, director of the Petroleum Branch of Manitoba Innovation, Energy and Mines, presented the Manitoba update to the Williston Basin Petroleum Conference on May 21. “What happened in 2013 in Manitoba is a continuation of what has been happening since 2006,� Lowdon said. Manitoba’s daily production for 2013 was 51,600 bpd, which was slightly down from 2012. “The reason that is slightly down is we’re still trying to balance production,� he said. The province typically has 16 to 20 drilling rigs active, and has 4,069 producing wells. The top producing formation is the Lower Amaranth (also known as the Spearfish) in the Waskada area. “Our land sales are way down. There’s a reason for that. In Manitoba, most of our minerals are owned by private individuals. It’s different than some of the other provinces. In the oil producing areas, we have 20 per cent of the land. Essentially what’s happening is we’re running out of Crown minerals, at least in the producing areas,� Lowdon said.

He noted extensive work is being done in in their office the Hudson Bay area. “That may be our future,� he said. Last year 530 wells were drilled, and 463 have been put on pro-

duction. The main producing formations are the Spearfish/Lower Amaranth, then Three Forks and then Mississippian. Wells in Manitoba run from 430 to 1,050

metres deep. Average recovery is 5 to 15 per cent of initial oil in place. Manitoba doesn’t have any gas production per se beyond solution gas. Gas production totals 107 million cubic feet per day, with 24.8 per cent captured. There are two relatively new gas plants near Waskada, and a pilot cogen project at Sinclair. The problem is the province is the lack of gathering infrastructure. “When production started to increase, we

had nowhere for that gas to go,� Lowdon said. There are plans for a line to connect to TransGas near Pierson, but that hasn’t gone through yet. Manitoba recently reviewed its long-standing drilling incentive program, meeting with industry to determine

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A36

PIPELINE NEWS July 2014

$18,000 a year in health insurance premiums Josh Ray came to Williston because his drywalling business in Iowa had slowed down. The high expenses in Williston soon ate up the high wages. A triple rig can be seen in the background, just a short distance away from the campground. Photo by Brian Zinchuk

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Williston, N.D. – When asked where he calls home, Josh Ray replied, “Williston, nowadays.� That hasn’t always been the case, and likely won’t be home for too much longer. You see, Ray has pretty much has his fill of the Bakken boom that has hit Williston. He came there to get ahead, but found that the very high cost of living has eaten away at most of the progress he’s made. Now 38, Ray is originally from Waukee, Iowa, where he still has ties. “Me and my partners back home run a drywalling business. Like all gold rushes, you heard you were going to get rich. We took the last of our savings and threw them into old trucks and came here. “We drew straws to come to North Dakota. Guess who lost,� Ray said. “There were three of us and it was slow. There’s no point sitting. We put our money to work before burning through it.� “I think we’ll pay off our loans and go back home. Things are looking better back home. “We’re going to give it another year or two. We’re paying bills, but not getting ahead. In Williston Ray runs a water hauling trucking business. Pipeline News encountered him in one of the massive campgrounds north of the city, rewiring a gooseneck trailer. He doesn’t

live in the campground, but rather rents 10 spaces for parking for their trucks and trailers. Each parking spot goes for $850 a month, and utilities are not included. “A year ago we rented a threebedroom duplex for $4,000 a month. That’s all we worked for, was to pay the rent,� Ray said. Unlike a lot of the other people who have come to Williston to seek their fortune, Ray brought his large family along. That means a $4,000 rent isn’t shared among roommates, but rather just covers one family. His wife doesn’t work, but rather looks after the five kids, ages two to 14. “She has her hands full with five kids,� he said. “I have to say, the schools are good,� Ray commented. “We lived in Bismarck for two years.� During that time, his family was in Bismarck and Ray would come home to them on weekends. “Back home, you make half as much, but it takes a quarter as much to live.� Being an entrepreneur also means bearing the burden of your own health insurance. Ray said he pays $18,000 a year in health premiums for his family of seven, and that isn’t comprehensive coverage. That’s only for catastrophic coverage, with a $15,000 deductible. “You only go in when you have to,� he said regarding medical care.

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Sask. sees shift from Bakken to Viking drilling „ By Brian Zinchuk Bismarck, N.D. – In presenting the Saskatchewan update to the Williston Basin Petroleum Conference in Bismarck, N.D., Melinda Yurkowski, assistant chief geologist for the Saskatchewan Geological Survey, noted some interesting trends. Bakken drilling and production was down last year and the Viking play saw three times as many wells drilled as the Bakken. Last year was another all-time high for Saskatchewan oil production, noted Yurkowski. She noted that light oil has been increasing in the Viking play. “Bakken production in 2013 was just over 65,000 barrels per day. This was a little bit less than it was the year before,� she said, but Viking production made up for it. Heavy oil production increased slightly while medium oil production stayed the same in 2013. “Saskatchewan is firing on all cylinders when it comes to oil production,� she said. Gas production is down to 93 billion cubic feet from 109 bcf the year before, primarily because Saskatchewan gas wells are low pressure. Gas from oil wells increased quite dramati-

A37

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cally, by 12 bcf from last year. “This is the first year gas from oil wells has outpaced gas wells since 1966,� she said. “We flare roughly 20 per cent of the gas, slightly less than what is happening in North Dakota.� Active plays in Saskatchewan include the “workhorses� of the Mannville heavy oil near Lloydminster and the Mississippian play in southeast Saskatchewan, which work quietly in the background, according to Yurkowski. “They may not be as sexy as the Bakken, but they are capable of producing a lot of oil,� she said. A total of 760 wells were drilled in the Mannville, and 400 in the Mississippian last year, while the Bakken quieted down from the previous year, with about 300 wells drilled and put on production. The Shaunavon play had

Saskatchewan saw over ĆšĹšĆŒÄžÄž Ć&#x; žĞĆ? Ä‚Ć? žĂŜLJ Ç ÄžĹŻĹŻĆ? dĹ˝ĆŒĆ‹ĆľÄ‚Ç‡ ÄšĆŒĹ?ůůĞĚ Ĺ?Ĺś ƚŚĞ sĹ?ĹŹĹ?ĹśĹ? ƚŚĂŜ Ĺ?Ĺś ƚŚĞ ĂŏŏĞŜ ƉůĂLJ ĹŻÄ‚Ć?Ćš Ç‡ÄžÄ‚ĆŒÍ˜ Graphic courtesy Saskatchewan Ministry of the Economy

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about 130 wells drilled. “Where we saw our largest increases was in the Viking. There was over a thousand wells drilled and put on production in the Viking. We saw a shift from the southeast corner of the province to the west side last year. Based on recent land sale activity and drilling that’s going on, I suspect this might swing back to southeast Saskatchewan in the next couple of years,� said Yurkowski. Land sales have been focussed on the southeast corner. Of interest was a major parcel picked up in south central Saskatchewan. Finally, work in the Torquay area along the U.S. border in southeast Saskatchewan is picking up interest.

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PIPELINE NEWS July 2014

Aquistore awaits CO2 from Boundary Dam

Aleana Young spoke to the Estevan Energy Expo about progress on the Aquistore project.

Estevan – The $30 million Aquistore project is awaiting completion of the Boundary Dam Unit 3 Carbon Capture Project, but once it is ready, Aquistore will be an integral part of the carbon capture and storage strategy. Aleana Young, communications and project officer with the Petroleum Technology Research Centre, spoke about it at the Estevan

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Energy Expo on June 12. The $30 million project is essentially a large industrial laboratory, Young explained. It has public and industry support. “Our main goal is to demonstrate CO2 can be stored deep underground safely, securely and permanently. Our goal is this is a hopefully safe, cost efficient and effective solution to reduce greenhouse gases, not just from post-combustion sources like Boundary dam, but this also has potential applications for natural gas, the oil sector and large sources like factories and kilns.� There are two wells, the injection and observation wells, which are the deepest in Saskatchewan. The deeper of the two reaches 3,400 metres below the surface, which is where it hit the Precambrian “basement,� below the sedimentary column. It will inject carbon dioxide into the

Deadwood formation, the same formation targeted by Deep Earth Energy Production for geothermal power generation. The wells are located 2.8 kilometres west of the Boundary Dam Power Station. Most of the carbon dioxide is destined to go to the Cenovusoperated Weyburn Unit for enhanced oil recovery. “We’re basically a buffer storage option,� Young said, explaining that Aquistore will take CO2 when Cenovus is unable to, such as times when maintenance is done. They have already done public outreach, site selection, drilled the wells, risk assessment, site installation, and baseline monitoring. A water injection test has been performed, as has an electromagnetic survey. “Anything you can think of monitoring, we have monitoring,� Young

said, noting it is important to have a baseline established first. The pipeline leading to the well has been installed, and now the project is waiting for its first carbon dioxide. The Boundary Dam project is still in its final stages, having missed its expected April completion. Injection is expected to begin late summer or early fall. “Once injection starts, Aquistore moves into the commercial and monitoring phase,� Young said. Estevan has been an interesting place to do engagement, according to Young, nothing there has been tremendous support. That differs from Europe, where carbon capture and storage has become a subject of controversy, with some projects being stopped due to “not in my backyard.� Another open house is planned for August.

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PIPELINE NEWS July 2014

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SECTION B July 2014

A crew from Prairie ĆŒÄ‚ĹśÄž ĹŻĹ?ĹŒ ĞĚ ƚŚĹ?Ć? ĹśÄžÇ ^ ' ƚĞĂÄ?ĹšĹ?ĹśĹ? Ä?Ĺ˝Ĺ?ĹŻÄžĆŒ Ĺ?ĹśĆ?Ĺ?ĚĞ Ä‚ ÄšŽŽĆŒ ŽĨ ƚŚĞ ĹśÄžÇ ĹśÄžĆŒĹ?LJ ÄžĹśĆšĆŒÄž ĞdžƉĂŜĆ?Ĺ?ŽŜ ƚĂŏĹ?ĹśĹ? ƉůĂÄ?Äž Ä‚Ćš ƚŚĞ >ůŽLJĚͲ ĹľĹ?ĹśĆ?ĆšÄžĆŒ Ä?ĂžƉƾĆ? ŽĨ >Ä‚ĹŹÄžͲ ůĂŜĚ ŽůůÄžĹ?Ğ͘ WŚŽƚŽĆ? Ä?LJ 'ÄžŽč >ĞĞ

(QHUJ\ &HQWUH FKHHUV Ă€ UVW ERLOHU WXUELQH „ By Geoff Lee Lloydminster – Lakeland College will hold the grand opening of its new Energy Centre at the Lloydminster campus on Nov. 14. Meanwhile, the beat of summer construction at the facility picks up with final cost estimates expected to be between $21 and $23 million. News of the official opening came on June 10 during the arrival of the first of four teaching boilers for the new steam lab and a turbine generator that will provide power for the campus. All hands were on deck with the boiler being the first piece of the day ready to be hoisted from a truck bed into a 16 by16 ft. opening in the steam lab by Prairie Crane. “It’s an exciting day. We’re getting two of the major pieces of equipment in that are part of the training facility,â€? said Jeff Dustow, manager of capital projects. “By the end of the day, they should be on their pads and ready for connection. “In about three weeks, we will be receiving three more boilers, large size ones that produce about 10,000 lbs. of steam an hour which is large to us, not large to industry. “They say they need three months to do all the piping connections. We’re looking for October or November for startup and commissioning.â€? The first teaching boiler, driven from Kansas by Stone Trucking based in Kiefer Oklahoma, is a once-though boiler used in steam assisted gravity drainage (SAGD) projects in the oilfield. “It looks like it, it acts like it and it’s here for training of the heavy oil power engineering

(HOPE) students,� said Greg Shalay who also instructs the heavy oil operations technician or HOOT steam lab. “We want to give them hands-on experience with the real feel of what they’re actually going to see in the field.� All of the boilers are made by BYIS Manufacturing in Arkansas, Kansas with consultant and former Lloydminster oilfield worker Randy Bauer on hand to oversee the installation and answer questions. He explained BYIS was chosen to build them being they are one of the few boiler manufacturers that make the smaller units.� “This is a teaching unit. There’s not much use for this in the oilfield itself, so they’re basically just used for instruction,� he said. “This in an OTSG – they call it a once through steam generator. It’s a watertube fired steam generator they use in the oilfield to inject steam into the ground. It mimics SAGD operations. “This little boiler will put out about 80 cubic metres of cold water equivalent steam a day.� Bauer worked in the oilfield on steam generators in the Lloydminster region for 30 years for a former company called Petro Therm Enterprises. He came to Lakeland on a 30 day leave from Madagascar where he is working on a pilot steam project for Madagascar Oil. In fact, he has worked oversees for that past eight to nine years in eight countries including Syria and Egypt while maintaining a home in Calmar, Alta., near Leduc. His business connections with BYIS bought

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him to Lloydminster when he also lived for 12 years. He’ll be back in town to oversee the commissioning and startup of the BYIS boilers in the fall. The arrival of the boiler and turbine was a milestone event for Lakeland College that held its sod turning ceremony for the new energy centre in the fall of 2012. “It’s been a lot of work up to here to know that we’ve been on this project for a couple of years now. It’s a big thing for the college for growth,â€? said Shalay. Fillmore Construction, the general contractor began work last summer. The end is now in sight to the relief of Kara Johnston, director of energy programming. “Our building is taking shape and now we have some equipment move in and so it would be nice to see the lab unfold as all our equipment gets moved in,â€? said Johnston. “We’re excited to get going and to be in that new facility. Our students that are coming this fall are really excited as well. “We are going to have some pretty phenomenal numbers this fall.â€? The energy program will triple its intake to 108 students this fall with one class of first year HOOT students. There will also be two first year classes of 4th class HOPE students. In addition there will also be a second year class of HOPE students going for their 3rd class power engineering ticket, bringing the total energy enrolment to 140 with a waiting list. ɸ Page B2

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PIPELINE NEWS July 2014

Boiler mimics SAGD Éş Page B1 The pending completion of the energy centre is well-timed given the labour demand, especially for power engineers. “We just had a labour forecast something like 32,000 power engineers are required for the Syncrude area alone in the next 10 years,â€? said Dustow. “There’s a huge amount required in the province. We’re bragging, this is a state-of-the-art facility, come here.â€? VIP invitations to the grand opening in November have been sent out with excitement beginning to build. “The plans are underway. We’ve made sure that we can have all of the appropriate government officials here on that day,â€? said Johnston. “They’ll be public tours that afternoon. We’ll be inviting all our industry partners and advisor committee members. “That will be a special day for us. We’ve had tons of industry support and community support as well.â€? Lakeland is also looking for someone to step forward and purchase the naming rights of the facility previously referred to as the Petroleum Centre and WĆŒÄ‚Ĺ?ĆŒĹ?Äž ĆŒÄ‚ĹśÄž ŚĂŜĚůĞĚ ƚŚĞ ƚĂĆ?ĹŹ ŽĨ ĹŻĹ?ĹŒĹ?ĹśĹ? ĂŜĚ ƉŽĆ?Ĺ?Ć&#x;ŽŜĹ?ĹśĹ? Ä‚ ĹśÄžÇ ĆšÄžÄ‚Ä?ĹšĹ?ĹśĹ? Ä?Ĺ˝Ĺ?ĹŻÄžĆŒ ĂŜĚ Ä‚ now as the Energy Centre. The grand opening will also be an opportunity for Lakeland officials to ĹśÄžÇ ĆšĆľĆŒÄ?Ĺ?ŜĞ Ć?ƚĞĂž Ĺ?ÄžĹśÄžĆŒÄ‚ĆšĹ˝ĆŒ Ĺ?ĹśĆ?Ĺ?ĚĞ ƚŚĹ?Ć? ŽƉĞŜĹ?ĹśĹ? ŽĨ ƚŚĞ ĹśÄžĆŒĹ?LJ ÄžĹśĆšĆŒÄž ĞdžƉĂŜĆ?Ĺ?ŽŜ Ä‚Ćš >ĂŏĞůĂŜĚ ŽůůÄžĹ?Äž Ĺ?Ĺś >ůŽLJĚžĹ?ĹśĆ?ĆšÄžĆŒÍ˜ dĹšĆŒÄžÄž žŽĆŒÄž ƚĞĂÄ?ĹšĹ?ĹśĹ? Ä?Ĺ˝Ĺ?ĹŻÄžĆŒĆ? Ç Ĺ?ĹŻĹŻ Ä?Äž Ĺ?ĹśĆ?ƚĂůůĞĚ ƚŚĹ?Ć? Ç Ä‚Ç‡ give credit for the facility to where it’s due internally and externally. Ä‚Ćš ƚŚĞ ĞŜĚ ŽĨ :ƾŜĞ͘ “The Lakeland board of governors really had vision and they saw where we can go when they supported it expanding this facility,â€? said Johnston. “The Alberta government has been onboard as well. They’ve supported us with funding for this facility. “They gave us funding in the spring to increase our enrolment numbers and increase our programming.â€? “We’re responding to industry. Industry has a need for these skilled workers not only in power engineering but in heavy oil. “Lakeland College has stepped up to the plate. We’re responding. We’re going to have the numbers and we’re going to have the facility.â€? Lakeland is also putting out a call to hire and retain more qualified instructors to keep up with the expanding energy offerings at Lakeland. “We have a phenomenal faculty that really provides a wealth of knowledge and experience to those students,â€? said Johnston. “The energy department is booming right now.â€? With student enrolment up in energy and other programs in Lloydminster, officials are already talking about building a new campus residence. ‡ 7RQ 3LFNHUV ‡ 7H[DV %HGV ‡ :LQFK 7UXFNV “Lloydminster is a really busy place. The vacancy rate is less than one per ‡ +LJKZD\ 7UDFWRUV ‡ +LJKER\V ‡ 6WHSGHFNV cent. When we’re bringing students in we need somewhere for them to live,â€? said Johnston. ‡ 'RXEOH 'URS 7UDLOHUV ‡ 3LORW 7UXFNV ‡ 5LJ 0DWWLQJ “Lakeland is really looking at that opportunity very closely and the feasi&HOO %XV ‡ )D[ bility of it and what it means for use financially and what it means at the end /DPSPDQ 6. (PDLO KXWWKROGLQJV#VDVNWHO QHW of the day for our students.â€?

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PIPELINE NEWS July 2014

B3

Tim McMillan, right, is out, and Bill Boyd is back in, when it comes to being minister responsible for Energy and Resources. Boyd was never really out, since Energy and Resources was a ministry within the Ministry of the Economy. McMillan has moved on to become minister responsible for Remote and Rural Health. File photos

0F0LOODQ VKXIà HV IURP HQHUJ\ WR UXUDO KHDOWK „ By Geoff Lee Regina – Lloydminster MLA Tim McMillan is out as the Minister Responsible for Energy and Resources in the Ministry of Economy following a cabinet shuffle by Saskatchewan Premier Brad Wall on June 5. McMillan is now Minister Responsible for Rural and Remote Health leaving the energy and resources portfolio to Bill Boyd, who remains as the Minister of Economy. Boyd is also Minister responsible for SaskPower and the Global Transportation Hub. McMillan was appointed to the energy and resources portfolio in Wall’s May 25, 2012 cabinet shuffle that created the super-size Ministry of Economy, led by Boyd.

In a statement Wall said the latest cabinet shuffle provides “a balance of continuity and fresh perspectives that will keep Saskatchewan on the path of steady growth� for foreseeable future. “Our province’s economy remains strong and as a government, we are working to ensure all Saskatchewan people share in the benefits of a growing economy,� said Wall.  “I believe this new cabinet strikes the right balance and will keep our growth agenda on track.� Wall’s June cabinet shuffle has changed the responsibilities of about half of his ministers and provides McMillan with a new challenge in heath that the premier highlighted in the reorganization of his cabinet. “Shortly after taking office, our government conducted a “patient first� review to ensure our

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priority in the health system was on the patient and front-line services,� Wall said. “I have asked Minister McMillan to do a patient first update to make sure we continue to focus on patients and that health care dollars are getting to the front lines of care as they should. Specifically, I am asking him to look at the balance of resources going to administration versus front-line staff, services and care.� Former minister Jeremy Harrison is back in cabinet as the Associate Minister of the Economy responsible for trade, tourism, innovation and immigration. Jim Reiter remains Minister of Government Relations and Minister responsible for First Nations, Metis and Northern Affairs and adds responsibility for SaskEnergy.

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PIPELINE NEWS July 2014

RM of Wilton driven by road repairs „ By Geoff Lee RM of Wilton – Heavy haul road maintenance tops the daily work agenda at the Rural Municipality of Wilton that is experiencing unprecedented oilfield growth and truck traffic. Truck traffic on RM roads is driven by more

than 6,200 well sites and over 3,000 active wells with oil transportation generated by 32 oil producing companies. Heavy hauling takes places over 180 kilometres of primary corridor roads and 760 kilometres of active roads putting the grid in a

constant cycle of repair. “We’re into it right up to our eyeballs,� said CAO Darren Elder who led a tour of roads under repair on May 20, the day hot mix paving began for the season. “We are going as flat out as we can because our window is pretty shallow.�

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A scrolling list of scheduled road repair activities or closures is posted on the RM website with seasonal maintenance in overdrive mode. “For this year, we are going to be doing

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some paving. We’re going to be doing some cemented fly ash to do more corridor roads so we can maintain them properly,� said Elder. “We are also doing some chip seal and maintenance as well as dust control. We do a lot of dust control with calcium chloride. It’s a big issue for safety.� Safety is the leading factor behind RM road maintenance with yearly traffic counts at multiple locations revealing a 30 per cent annual overall jump in traffic volumes from heavy haul trucking, light trucks and cars. “The growth of the oilfield has been exponential. It’s amazing the amount of activity that has developed since 2005, since I’ve been here,� said Elder. “The oil wells that aren’t pipelined need to be hauled by trucks. The number of wells we have in this municipality – it’s enormous the amount of truck traffic

we field.â€? “It’s everywhere. We did a study last year and there are only two miles of roads that don’t have an oil well on them.â€? Trucks head to major oil loading facilities operated by Husky Energy, Altex Energy, Canadian Natural Resources, Crew Energy, Rife Resources, Secure Energy Services and Twin Butte Energy in the RM. There is also the Wilton Regional Landfill site and four new industrial parks that generate some additional truck traffic. “What we are seeing in Saskatchewan that we haven’t seen before is a lot more commercial development to service the oil companies,â€? said Elder. There are now four multi-lot industrial parks in various stages of development in the RM. “The desert is getting populated,â€? said Elder. ɸ Page B5

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PIPELINE NEWS July 2014 ceived $315,622 for road preservation purposes from its share of $72.6 million in municipal revenue sharing grants from the Ministry of Government Relations. This year, 95 per cent of taxation in the RM is derived from oil and commercial properties, three per cent from agriculture and two per cent from residents. “So the people using the roads participate

the most,� said Elder referring to user pay levies. “The levy is based on oil well production. An oil well (company) uses a road so much so they pay the most amount of taxes rather a farmer that only uses it twice a year.� The RM also negotiates some road improvement agreements with companies to recover some of the cost of road maintenance

B5

and for loss of road life. “We try to do the best we can. Sometimes a little help from the companies is good if they are exclusive to that road. It’s case by case,â€? said Elder. The RM’s new official community plan stresses the need to develop more oilfield traffic corridors with an eye to get the most value for their road building dollars. ɸ Page B6

This reclaimer owned and operated by the RM of Wilton mixes and compacts road Ć?ĆľĆŒĨÄ‚Ä?ÄžĆ? ƾƉ ƚŽ ĎŽĎŽ Ĺ?ĹśÄ?ŚĞĆ? ĚĞĞƉ Ĺ?Ĺś Ć‰ĆŒÄžĆ‰Ä‚ĆŒÄ‚Ć&#x;ŽŜ ĨŽĆŒ Ä‚ Ä?ĹšĹ?Ɖ Ć?ĞĂů ĆšĹ˝Ć‰Í˜

Éş Page B4 The Wilton Energy Park next to Highway 16 in Lashburn, for example, is home to the expanding oil transloading facility operated by Altex Energy Ltd. with new truck hauling patterns evolving. “Altex brings a new perspective to it by oil on rail so we will see where they pull traffic from. If it’s coming from outside or inside the RM, time will tell,â€? said Elder. “I think they are up to about 60 cars a day.â€? The facility is expanding to load up to 100 rail cars a day. Wilton Energy Park is also home to two trucking companies, engineering services, a fuel station, and a seed plant. Horizon Energy Park on Highway 303 and Range Road 3273 is already into Phase 2 expansion. “They situated those industrial parks in such a way that hopefully the impact on our infrastructure is less.â€? said HR coordinator Krista Bondy. “They are neighbouring to highway corridors.â€? The fast pace of development and heavy haul traffic led the RM

to drop their primary roads down to secondary weight status. “Even with a paved surface, we are having a tough time keeping them primary,� said Elder. “We are just running them as a normal RM with secondary weights. It saves our infrastructure. “Our main issue is to maintain roads that are safe for oil traffic and safe for ratepayers’ traffic as well. There’s got to be a happy medium there. We don’t compromise safety. “I can’t say enough good things about our team. We are very proactive in mitigating problems. “We do some calcium chloride for dust control; we do chip sealing, and some hot mix or paving as we can afford it.� This year, the RM is spending $21 million of its $25 million in revenue on roads including $10 million for road maintenance and $11 million on road improvements. “It seems like a lot, but actually we could use a little bit more,� said Elder. “That’s why we pulled back from primary to secondary

weights to mitigate some of those costs because it’s just increasing.� The RM’s share of $25.5 million in rural road grants from the provincial Municipal Roads for Economy Program for 2014 is $750,000, the maximum amount. Wilton also re-

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PIPELINE NEWS July 2014

12-metre wide road tops Éş Page B5 “We’ve been experimenting with ways to get the most bang for our buck over the last number of years,â€? said Elder. “Cost is number

one. Gravel is a tough resource and purchasing right of ways is another struggle for us because people don’t want to give up land that easily.� The goal is to build roads with a 12 metre

wide top. “Normal roads allowances are 66 feet and we go to 150 feet, so that we can get our 12 metre top,� explained Elder. “The reason why

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we go to a 12 metre top is that we strengthen it and pave it.� The road strengthening and upgrading cycle is based on traffic loads in keeping with an asset management process the RM went through about four years ago. “We take a look at all our roads and infrastructure and we say ‘this road here with this much traffic is going to last five years. This road over here is going to last 10 years’ and then we start doing a maintenance cycle on it,� said Elder. The cost to build a one kilometre stretch of road with a 12 metre top of cement and fly ash is about $180,000, rising to $200,000 for hot mix paving. “We would like to

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run chip seal for three to five years in between to see how the road wears. That’s about $60,000,� said Elder. The RM has purchased two gravel pits for $2.6 million with the remaining gravel currently worth more than that with road and lease building in high demand. The RM also uses in-house equipment such as graders, track hoes and reclaimers and its own personnel for cost effective and timely road maintenance with paving contracted. Currently, the RM has a staff of 34 full time employees with fluctuating seasonal

hires. “We’ve got a smaller project season this year, so my top number is 58,� said Bondy who heads the hiring team. “We can fluctuate anywhere from 60 to 80 in a summer season.� The rapid growth of the RM in pace with oilfield development never ceases to amaze Elder. “If you would have asked me in 2005 if we’d be at this size right now, I would have a hard time understanding it because of the growth,� he said. “I think at that time we had a staff of 12 people in 2005 and a lot less equipment.�

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PIPELINE NEWS July 2014

B7

TransCanada mulls crude-by-rail Calgary – Canadian exports of crude-byrail continue to boom as approvals for some pipeline projects such as TransCanada’s Corp.’s Keystone XL pipeline are mired in regulatory delays. The National Energy Board reports crude-by-rail shipments out of the country reached a new high of 160,000 barrels per day in the first quarter of 2014. That’s an increase of more than 50 per cent over the same period a year ago. The NEB data published on April 23 indicates the volume of crude-by-rail exports totaled 160,164 bpd between January and March compared to 149,479 bpd in the last quarter of 2013. The 7 per cent quarter over quarter increase comes as TransCanada Corp. has confirmed it is talking with customers about shipping crude-by-rail to the United States. Reuters reported on May 23 that the Calgary based company sees crude-by-rail as an alternative to its

Keystone XL pipeline that is facing regulatory delays. “We are absolutely considering a rail option,� Girling told Reuters on the sidelines of a conference in New York on May 23. “Our customers have needed to wait for several years, so we’re in discussions now with them over the rail option.� Girling told Reuters that TransCanada was exploring shipping crude-by-rail from its pipeline and oil storage facilities at Hardisty Alberta, to Steele City, Nebraska on the Keystone system to Gulf refineries. It’s been over five years since TransCanada first filed for approval of the $5.4 billion Keystone XL project that would carry over 830,000 of Canadian crude to the U.S. Gulf Coast. A recent legal dispute over the pipeline’s route through Nebraska has pushed back a decision by the Obama administration until the U.S. mid-term elections in November. The State Depart-

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ment issued a favourable environmental impact report on the project earlier this year. The pipeline, however; continues to face opposition from environmental groups that claim it will promote the expansion of Alberta’s oilsands and lead to more greenhouse gas emissions. As the oil and gas industry faces increased hardship to get approval for new pipelines some companies including TransCanada are turning to crude-by-rail to ship their oil to markets. Annual crude-byrail export shipments have grown from 18,907 bpd in 2012 to 512,322 in 2013 according to NEB data. Meanwhile, the safety of shipping crude-by-rail continues to be an issue since the deadly explosion from derailed oil cars in LacMÊgantic, Quebec last summer that killed 47 people. TransCanada would ship crude-by-rail five kilometers from Hardisty, where Gibson Energy plans to start operating its Hardisty Rail Terminal this year, with an initial capacity of 140,000 bpd. The terminal will

handle two trains per day up to 120 rail cars each on Canadian Pacific tracks. The terminal is being built in partnership with U.S. Development Group LLC based in

Houston Texas. Gibson Energy is also building pipeline infrastructure for Statoil at its Edmonton Terminal including storage capacity and a 22 car loading facility.

Another 400,000 bpd Alberta Crude Terminal in Edmonton being built by Keyera Corp. and Kinder Morgan is expected to begin rail loading service to Irving Oil by the fall.

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Summer and winter Olympic medalist Clara Hughes rolled through oil country in late May and June as part of Clara’s Big Ride to promote discussion about mental health. Clara is pictured east of Lashburn on Highway 16 ŽŜ :ƾŜÄž ϲ Ä‚ĹŒ ÄžĆŒ Ä‚ ĆšĹšĆŒÄžÄž ĹśĹ?Ĺ?Śƚ Ć?ƚĂLJ Ĺ?Ĺś >ůŽLJĚžĹ?ĹśĆ?ĆšÄžĆŒÍ˜ ,ÄžĆŒ ride will cover over 12,000 kilometres to speak about žĞŜƚĂů ŚĞĂůƚŚ Ĺ?Ĺś Ä?ŽžžƾŜĹ?Ć&#x; ÄžĆ? Ä‚ĹŻĹŻ Ä‚Ä?ĆŒĹ˝Ć?Ć? ĂŜĂĚĂ ƚŚĹ?Ć? summer. WŚŽƚŽ Ä?LJ 'ÄžŽč >ĞĞ

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PIPELINE NEWS July 2014

Husky to double Lloyd thermal output by 2019 „ By Geoff Lee Calgary – Husky Energy plans to double thermal heavy oil production focused in the Lloydminster region to 80,000 barrels per day by 2019 from the current level of more than

40,000 bpd. The goal will be achieved by developing a balanced and revised portfolio of near term, mid term and new long life thermal projects unveiled during Husky’s investor day in Toronto on June 4.

“As a company we are focusing on making big projects small with a modular development approach,� said CEO Asim Ghosh. “Heavy oil thermals are a good example of it. These are cookie cutter projects. They are based

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on previous successful projects that we keep replicating.� Husky’s updated list of thermal projects on the drawing board for 2017 to 2019 includes Pikes Peak North, Rush Lake 2, Lloyd 1 and Lloyd 2. The list also names McMullen 1 near Fort McMurray where Husky’s oilsands group has identified an opportunity to develop the lease with a series of 10, 000 bpd thermal projects. McMullen is currently producing about 6,000 bpd with the first 10,000 bpd thermal project scheduled between 2017 and 2019. “We’ve moved these projects to heavy oil so that the same project teams developing our heavy oil thermals are also going to be the same teams that are going to develop those

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projects on McMullen,� said Rob Peabody, chief operations officer. The long term list of thermal projects for 2020 and beyond includes Lloyd 3, and McMullen 2. “In the short term, we are focused on executing our Rush Lake project – 10,000 bpd – and we are on track for first production in the second half of 2015,� said Ed Connolly, senior vice president of heavy oil. “We are also building the 3,500 bpd Edam West project and it’s on pace to come on production in the first half of 2016. “We recently sanctioned two more 10,000 barrel a projects Edam East and Vawn and both of these are targeted for completion in the second half of 2016.� Husky has been producing heavy oil in the Lloydminster region for over 70 years with more decades of production to come according to Peabody. “What continues to surprise us is just how much potential it continues to hold,� he said. “Not only are we growing production volumes, as we grow our thermal production volumes we are lengthening the stride of the business with longer life projects and improving earnings per barrel of production. “We are raising our production target for heavy thermals to 80,000 barrels per day by 2019. “Secondly, embedded in the heavy oil business is more than a million acres of freehold land where we do not pay royalties on our production.� Today, Husky has more than 4,000 producing wells on that single million acre freehold lease. The royalty benefit of the lease adds about $4 a barrel netback to the total production in Lloydminster. “Thirdly, beyond thermal which has mas-

sive potential in itself, we have further technologies being tested today in the field that will keep this business producing for many decades to come,â€? said Peabody. Corporately, Husky’s list of growth projects has grown from five in 2010 to more than 50 designed to generate steady predictable earnings and production growth. Total production is expected to increase from 301,500 barrels of oil equivalent per day in 2012 to between 385,000 to 440,000 boepd in 2017 with no end in sight to the growth curve. Production is on pace to increase from 312,000 boepd in 2013 to between 330,000 to 355,000 boepd for 2014 with thermal production the focus in Lloydminster. “In the near and the mid-term, we’re focused on developing out thermal opportunities,â€? said Connolly. “As we increase the share of our production of thermal we improve the overall quality of our returns. “It’s important to note that all our production has a home. It’s either the refinery or the Lloydminster upgrader. “Husky infrastructure handles the oil all the way from the wellhead all the way through to the end market. “That allows us to capture more of the value and better ride out the ups and downs oil price and differentials. “Certainly thermal production is the headline story within the heavy oil business unit. Thermals deliver long life with low decline and they are high return projects.â€? Thermal projects typically have recovery rates that are over 50 per cent compared to CHOPS or cold production with recovery rates from eight to 10 per cent. ɸ Page B9

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The Pikes Peak thermal project has been producing for over 30 years with current recovery rates over 60 per cent and a new target of 70 per cent. “This leads to low F & D (finding and development costs) and allows us to exploit smaller targets,� said Connolly. “That opens up a huge opportunity in the Lloyd block. “Thermal operating costs are also more favourable than cold production and we are realizing higher quality of returns. “Last year, 30 per cent of the heavy oil business unit production came from thermals, but they generated 80 per cent of our operating earnings.� “Husky set out a more focused strategy in 2010. Since that time, we’ve doubled our thermal production.� Connolly told analysts there are over 1 billion barrels of heavy oil in place suited for horizontal well development in the 20,000 sq. km Lloydminster block. “We use horizontal wells where the reservoir characteristics don’t support CHOPS or thermals,� he explained. “We’ve grown our production to 13,000 bpd and we have a target of 15,000 bpd over the next year. Husky plans to drill 120 horizontal wells in the Lloydminster region in 2014 at an operating cost of about $13 per barrel. “We are now using multi-laterals to reduce our capital costs,� said Connolly. “We implemented a waterflood over the last year, and we expect waterflood to increase recovery rates from eight per cent to 15 per cent.� Husky is also making progress with its cold solvent pilot project in the Lloydminster area using carbon dioxide to thin the oil and re-energize the reservoir. “This allows us to extend the life of old CHOPS wells,� said Connolly. The cyclic method uses a three to six month injection phase followed by a nine to 12 month production cycle. “In 2014 this year we will produce our one millionth incremental barrel of oil using cold solvent. It’s early days, but the results look encouraging,� said Connolly. “To sum up, after being on the treadmill for the last decade heavy oil is in rejuvenation.�

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Near-Term

PIPELINE NEWS July 2014

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PIPELINE NEWS July 2014

PIPELINE NEWS July 2014

B11

Five generations will be affected Bismarck, N.D. – The number was so close, you could tell officials wanted to announce it to the world. But as of late May, when the Williston Basin Petroleum Conference was held in Bismarck, N.D. , North Dakota had not yet officially crossed the million-barrel per day mark. A week before the conference, number for March 2014 showed 977,051 bpd, a new all-time high. But it just wasn’t the big number they were hoping for, one that had been forecast, to some astonishment, four years ago at that very same conference by respected analyst David Hobbs. It would not be until a month later, on June 17, when numbers were released showing the state had reached 1,001,149 bpd production, based on preliminary numbers. Even so, Lynn Helms, director of the Department of Mineral Resources, had a lot to say. “There is a ton of construction ahead of us,� he said. “We’re seeing a construction boom in this state like we have not seen in 100 years, when our ancestors came and homesteaded this great state and turned it into an ag power in the United States and the world.� To show how long the state’s oil boom is expected to last, his presentation slide didn’t just lay out years, but generations. It will take five generations, to 2100, for oil production to return to its level of just a few years ago. “There will be five generations of North Dakotans and people

around the world affected by the Bakken and Three Forks,� Helms said. “What we are doing today is going to affect our grandchildren’s grandchildren.� Current projections are to hit 1.5 million barrels per day in the next few years, then slowly dropping off. “We need to think long-term, but act short term,� he said. “We need to act, today, using the best practices we can come up with, so that outcome, four generations from now, is the best possible outcome, for the citizens of North Dakota in the future.� The state’s Spearfish play, just across the border from Manitoba’s Spearfish play near Waskada, is “quietly going about its business,� he said. It is past the exploratory phase and is now in the “homestead� phase as Helms called it. That will take up to seven years, after which there be a significant increase in rig count. “The ultimate plan for development is a waterflood with 24 wells per square mile,� he said, adding the U.S. side is not as good as the Manitoba side. The Tyler play has been quietly leased and is now in the discovery phase. It is in very early stages yet. The Bakken-Three Forks is now in the “harvest phase� with a focus on optimization noted Helms. “We’re fully moving into Bakken-Three Forks optimization. That means we’ve got a harvest phase in full swing now, working on inter-well distances, completions and gas capture.� Ninety per cent of

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the Bakken-Three Forks play has been “homesteaded� and de-risked. Companies have figured out that instead of trying to avoid water production, with today’s oil prices, they simply need to produce the water and deal with it. “There’s still a huge amount of work trying to figure out well density,� he said. “We don’t know how many wells it will take to achieve ultimate primary recovery,� said Helms “It’s a matter of how many wells do we put in five layers of rock.� Some of the tests indicate plans for up to 34 wells in two square miles. “The Bakken is the tip of the spear in terms of liquid, unconventional resource plays,� he said, noting that the Barnett shale was a gas play, not oil. As for completions, there’s has been a lot of work on moving the decline curve on production, but not much has changed. They have raised the curve, but not changed the shape of it. A typical well will come on at 1321 bpd, and drop to 482 bpd in year one, 169 in year two, 118 in year three, and then flatten out beyond that In North Dakota,

99 per cent of their gas production is associated with oil. There are substantial efforts to improve capture and processing of natural gas, and now companies must have a gas capture plan before they submit a permit to drill. Those plans must be shared with the midstream gathering companies, too. The state’s geological survey is looking at six source rock unconventional resource potentials below the Bakken and Three Forks. They are now looking at exploring temperature surveys in the coming years to interest industry in exploring those areas.

Lynn Helms, director, North Dakota Department of Mineral Resources, says the Bakken-Three Forks play will exƚĞŜĚ ĎǀĞ Ĺ?ÄžĹśÄžĆŒÄ‚Ć&#x;ŽŜĆ?͘ Photo by Brian Zinchuk

Finally,Helms said, “Enhanced oil recovery is bigger than anyone can imagine.�

Every additional percentage of recovery is two to three billion barrels.

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PIPELINE NEWS July 2014

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Heavy oil impacts RM of Mervin „ By Geoff Lee Turtleford – The heavy oil industry is reshaping the economic profile of the Rural Municipality of Mervin with production activities focused around the communities of Turtleford and Mervin. Heavy oil is slowly becoming the dominant economic driver over farming and resort recreation, with Bright Sand Lake north of Thunderchild First Nation and fishing at Turtle Lake to the east. The pace of oil and gas development is accelerating with over 300 active oil wells today compared to 20 years ago when “there was no much for oil� in the words RM administrator Ryan Domotor. “We’ve been new to oil and gas because we really never saw it start here until about 1997. “When I first started here, which was back in 1994, I think our commercial revenue made up about 1.2 per cent of our tax base, and now it’s around 60. “So it’s a big change over 20 years,� he said. “In this RM, it happens to be the southwest, south central part of the RM – is kind of where the development is concentrated at this time.� Road maintenance has been a big ticket item for the RM especially along heavy haul corridor roads in the Turtleford and Mervin areas. “Road transportation is definitely a big part of the budget,� said Domotor. “A lot of rural roads in the southwest and south central area is where the oil concentration is – they were

never built to the standard for the equipment that’s been travelling on it now, and the truck traffic.â€? More than 300 oilfield trucks a day travel the so-called Battery Road south of Turtleford to the Husky Mervin Battery. There is also heavy traffic along West Hazel Road from the RM of Frenchman Butte to the battery along with heavy haul trucks to a new waste sand disposal facility operated by 3K Oil Services Ltd. Truck traffic is also steady on Highways 303 and 3 on the east-west route through Turtleford and Highway 26 running north south through Turtleford and Mervin. “Have you ever driven down 26? You can see where it’s just rutted compared to what it was back in the day,â€? said Domotor. Heavy haul oil traffic is also being generated from a new oil play being developed by Husky Energy and Canadian Natural Resources south of the Thunderchild First Nation. “All of a sudden there’s just been a string of wells out there between Husky and CNRL,â€? said Domotor. The RM has signed a road improvement agreement with the two companies for the reconstruction this year of five kilometers of Marshall Road. “We have other road improvement agreements including one with Baytex out of Spruce Lake,â€? said Domotor. A 1.6 kilometre stretch of Conacher Road, another well travelled oilfield route northeast of Mervin will be reconstructed this year. ɸ Page B14

B13

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PIPELINE NEWS July 2014

Where will the next RM foreman live? Éş Page B13 Truck travel in the area is also being generated by a spate of new oil and gas related businesses including RPM Industries on Highway 303 near Turtleford that recently held their grand opening. RPM Industries owned by a local businessman is a semi truck repair and maintenance shop with a two bay truck and car wash.

“With the heavy oil patch, you have a lot of heavy oil trucks that are carrying water, sand and oil and that break down,� said Domotor. “Now there’s employment for him as a heavy duty mechanic to be looking after and servicing and repairing those trucks.� RPM is flanked by the Turtleford & District Co-op Agro Centre and Cardlock where

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fuel sales are reportedly skyrocketing and by the Riverside Health Complex hospital. Oil ’n Ag a company that services wells is one of the established oil-related businesses in town as is Ken’s Oilfield Construction Ltd. Turtleford is close to Dickens Investment that maintains roads and leases located next to the Lloydminster & District Co-op that sells propane. The RM also just approved an application for a new welding shop with storage space for lease called Crawford Creek Welding on the way to Mervin on Highway 26. “That’s a new business and I’m sure the only reason for it is

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because of the oil,� said Domotor who noted Flint Energy is also located in Turtleford. Domotor noted that if you drive south of Mervin to Edam outside of the RM there is a commercial park there with several oil driven businesses.

Edam is near Husky’s Edam East and Vawn 10,000 barrel per day thermal oil projects under construction that could have some economic impact on the RM of Mervin in terms of employment and housing. A third smaller

3,500 bpd Edam West project in the area has just been sanctioned. Domotor figures the first two projects could each generate up to 400 construction jobs with 40 permanent positions at each site upon completion. ɸ Page B15

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B15

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Éş Page B14 “If you think of it this way – that’s maybe 80 new families in the area. It depends if they are commuting from North Battleford,â€? he said, noting the Vawn site is a lot closer to that community than Turtleford is. “I could see housing in Vawn, Edam and Turtleford.â€? Turtleford has run out of housing lots with one multi-unit housing project currently under construction. A new house is also being built in Mervin on the site of an old school yard. “I think they subdivided those lots. I think someone is even looking at developing some lots in Mervin if I remember right,â€? said Domotor. “You have people who want to buy lots and build their residence here to move here. Pricing in housing has gone up over the last couple of years as well.â€? The town of Turtleford celebrated its 100th anniversary on June 14, one year after the RM did as both march forward to the beat of progress led by heavy oil. Domotor said there used to be a sign outside that said Turtleford’s population was 505, but when he moved there “it was down to 464 or something. “Now they are back up to 510 or 515,â€? he said. “I’ve seen more subdivisions in this RM in the last seven years than I did in the previous 13 all together. There’s been acreages. Some people want to be on acreages. There is definitely a housing shortage.â€? Domotor wonders where the RM will house their next foreman given the shortage of available housing along with a tight labour market that comes with an oil boom. “Labour has definitely been challenging in the last several years,â€? he said including for the RM which has grown to a full time staff of 14 outside employees and five office staff. “There is such an influx of jobs – I don’t think the RM ranks up high in the priority list. The competiveness with respect to pay is challenging as well.â€? Oilfield wages are also behind the rapid growth of lake resort communities and a record number of 16 resort hamlets in the RM mostly at Bright Sand Lake and Turtle Lake along with two residential hamlets. “If you see the price sales of some of the properties, oil and gas has definitely been a driving factor in terms of those who can afford it,â€? said Domotor. The RM’s permanent population of 1,225 residents leaps to up to between 6.000 and 7,000 during the peak summer tourism months. “It’s a very unique RM. It’s very challenging sometimes because you have developers at the lake that want to subdivide and you have all these cottage issues,â€? said Domotor. “Then down in the south central you have all these road issues because you have oil and gas development and new businesses that are starting up.â€?

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B16

PIPELINE NEWS July 2014

Motor grader Michelangelos wanted Lone Rock – The RM of Wilton, hopes to train motor grader operators who can sculpt a dirt road like a fine piece of art at its new school for advanced motor grader operator training. The first six week class will be held in September at a 21-person camp set up in Lone Rock to accommodate out of town students. The RM, southeast of Lloydminster is appealing to motor grader operators with at least 1,000 hours of experience for the first class with most of the initial response coming from other RMs. “They are faced with the exact same thing we are. We’ve got at least seven municipalities that are looking at spots for our very first course,� said Wil-

ton’s human resources coordinator Krista Bondy. The RM of Wilton is a member of the Northwest Heavy Oil Municipalities, a group of seven like-minded heavy oil municipalities impacted by heavy haul oil traffic and growth. “The first course is set to run for September then our thoughts hopefully, moving forward, we will be able to offer that twice a year, so May and September is our intention,� said Bondy at the RM office. The course will provide students with 240 hours of machine time and 80 hours of class time to learn the art of motor grading. Some of the techniques to be learned are shoul-

Lloydminster 6203 - 56th Street, Lloydminster, AB T9V 3C1 Direct Line: 780-875-6211 Toll Free: 800-661-3926

der pulls and leveling, windrowing, ditching operations and stripping top soil or sod. “They will be doing everything right back to understanding road grades and staking by engineers and some of the science of engineering and understanding that a little bit,â€? said Bondy. “They will spend some time in the simulators as well so we’ve partnered with Kramer Ltd. to offer the course. They will be doing a lot of simulator training and applying it in the machine itself. “They’ve been one of our big suppliers over a number of years. When we first mentioned we were thinking about it, they showed a keen interest.â€? Student will also get to hone their skills by working on sections of road in need of repair. “Our mechanics will also do some stuff with them as well in terms of basic maintenance and what to be looking for safety and maintenance wise on their machines,â€? said Bondy. “We have some local engineers that will come in to the grade safe piece.â€? The need for the six week course is a no-brainer for the RM of Wilton that has some of the busiest heavy haul oilfield roads in the province. “We’re a little bit different than a typical RM in Saskatchewan,â€? Bondy told Pipeline News during the Lloydminster Try-A-Trade Career Expo in early May. “We have about 600 miles of roads that we are responsible for – anything from dirt cow pasture trails right up to hot paved surfaces. “What sets us apart is the demand for that maintenance with the oilfield industry. We’ve got about just under 1,600 rate payers – we have 6,000 wells. “We’re looking at some of our main corridor roads – anywhere from 400 to 800 oil related service or heavy trucks per day on those roads.â€? The RM is spending $21 million of its $25 million budget this year on road maintenance and improvements, putting the need to train and hire motor graders at the top of the list. ɸ Page B17

Darren Elder, CAO for the RM of Wilton, stands at the site of new camp and school set up in Lone Rock to provide ĂĚǀĂŜÄ?ĞĚ žŽĆšĹ˝ĆŒ Ĺ?ĆŒÄ‚ÄšÄžĆŒ ĆšĆŒÄ‚Ĺ?ĹśĹ?ĹśĹ?͘ dŚĞ ÄŽ ĆŒĆ?Ćš Ć?Ĺ?dž Ç ÄžÄžĹŹ Ä?ĹŻÄ‚Ć?Ć? will be held this September with the goal to run classes in May and September based on the response. The RM has Ä‚ Ć?ĆšĆŒŽŜĹ? ĚĞžĂŜĚ ĨŽĆŒ ÄžÇ†Ć‰ÄžĆŒĹ?ĞŜÄ?ĞĚ žŽĆšĹ˝ĆŒ Ĺ?ĆŒÄ‚ÄšÄžĆŒĆ? ƚŽ ŚĞůƉ it maintain a 940 kilometre network of roads. WŚŽƚŽĆ? Ä?LJ 'ÄžŽč >ĞĞ

PIPELINE NEWS July 2014 Éş Page B16 “It’s the demand. It’s just like all of the other trades out there that are losing the seasonal veterans and the art of it out there,â€? said Bondy. “In our area, what we find is a lot of people think they have the grader experience because of the oil industry, but they are building lease pads – lease pads which are far different than the infrastructure that we are trying to maintain.â€? Operating a motor grader for spreading, fine grading and earth moving on kilometers of rural roads requires a different skillset and specialized training the new school will provide. “If you look across Canada, there are very few and far between advanced motor grader courses,â€? said Bondy. “It’s usually lumped in with a heavy equipment course, so they getting maybe 50 hours on the piece of equipment. They are just not getting the time to define a skill. “There are other institutes that do one or two day workshops, but to get into some of the very specific techniques that these individuals need to maintain rural infrastructure – it’s just not there.â€? The school however, is open to anyone interested in getting into the trade or advancing their skills with a standing job offer from the RM to the two top students in the class. “Some of the contractors we’ve used in the past have some of their own staff that they have shown interest in sending to the school as well. That might be something we look at as we grow,â€? said Bondy. “Right now, we’ve circulated it that they’ve got a minimum of about 1,000 hours as a grader operator already. “The first offering is just making sure the program design and all of that is concrete before we open it up and make it too big.â€? The training facility was purchased by the RM for $110,000 from Ritchie Bros. Auctioneers and is set up on the site of a former school in Lone Rock with water, sewer and power hooked up. Each student will pay about $600 for room and board with restaurant meals available for purchase from the new Four Season’s Tea House in Lone Rock that opened in April.

DĹ˝ĆšĹ˝ĆŒ Ĺ?ĆŒÄ‚ÄšÄžĆŒ Ĺ˝Ć‰ÄžĆŒÄ‚ĆšĹ˝ĆŒ ZĞŜĂ ĆľĆŒĹśÄ‚ĆŒÄš ŚĂĆ? žĂĆ?ĆšÄžĆŒÄžÄš ƚŚĞ Ä‚ĆŒĆš ŽĨ Ć?Ä?ƾůƉĆ&#x;ĹśĹ? ÄšĹ?ĆŒĆš ĆŒĹ˝Ä‚ÄšĆ? Ĺ?Ĺś ƚŚĞ ZD ŽĨ tĹ?ĹŻĆšŽŜ͘ dŚĞ ZD Ĺ?Ć? ŽƉĞŜĹ?ĹśĹ? Ä‚ Ć?Ä?ĹšŽŽů ĨŽĆŒ žŽĆšĹ˝ĆŒ Ĺ?ĆŒÄ‚ÄšÄžĆŒ ĆšĆŒÄ‚Ĺ?ĹśĹ?ĹśĹ? Ĺ?Ĺś ^ĞƉƚĞžÄ?ÄžĆŒ ƚŽ ĆšĆŒÄ‚Ĺ?Ĺś Ä‚ ĹľĹ?dž ŽĨ ĹśÄžÇ Ä‚ĹśÄš ÄžÇ†Ć‰ÄžĆŒĹ?ĞŜÄ?ĞĚ Ĺ˝Ć‰ÄžĆŒÄ‚ĆšĹ˝ĆŒĆ? ŽŜ ƚŚĞ Ć?ĹŹĹ?ĹŻĹŻĆ? ŜĞĞĚĆ? ƚŽ Ĺ?ĆŒÄ‚ÄšÄž ĆŒĹ˝Ä‚ÄšĆ?͘

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PIPELINE NEWS July 2014

PIPELINE NEWS July 2014

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Heaven on earth for patch golfers

ĆŒÄžĆ?Ć?ĞĚ ĨŽĆŒ ƚŚĞ Ć?Ć‰Ĺ˝ĆŒĆ&#x; ĹśĹ? ĹŻĹ?ĨÄž Ä‚ĆŒÄž ͞ĨĆŒŽž ĹŻÄžĹŒ Íż D & ŽŜĆšĆŒÄ‚Ä?Ć&#x; ĹśĹ? Ĺ?ŽůĨÄžĆŒĆ? ŚĂŜƚĞů ƾƊ Í• dÄžŜͲ ĹśĹ?ĹŻĹŻÄž dĹ?ĞĚĞžĂŜ ĂŜĚ ,ÄžÄ‚ĆšĹšÄžĆŒ Ĺ˝Ç ĹśÄžÇ‡ Ä‚Ćš ƚŚĞ Ć?ĆšÄ‚ĆŒĆš ŽĨ ƚŚĞ ĎŽĎŹĎ­Ď° WtD ^ƚĞĞů WÄžĆšĆŒŽůÄžƾž 'ŽůĨ ĹŻÄ‚Ć?Ć?Ĺ?Ä? ĆšŽƾĆŒĹśÄ‚ĹľÄžĹśĆš Ä‚Ćš ZŽůůĹ?ĹśĹ? 'ĆŒÄžÄžĹś &Ä‚Ĺ?ĆŒÇ Ä‚Ç‡Ć? 'ŽůĨ ŽƾĆŒĆ?Äž Ĺ?Ĺś >ůŽLJĚžĹ?ĹśĆ?ĆšÄžĆŒÍ˜ WŚŽƚŽĆ? Ä?LJ 'ÄžŽč >ĞĞ

dĹšĹ?Ć? Ä?ĹšÄžÄžĆŒÇ‡ ĨŽƾĆŒĆ?ŽžÄž Ĺ?Ć? žĂĚĞ ƾƉ ŽĨ ͞ĨĆŒŽž ĹŻÄžĹŒ Íż sĂŜĚĂ ^Ä?ŚĞĆ?ŜƾŏÍ• ,ÄžÄ‚ĆšĹšÄžĆŒ dĞĂĆ?ĚĂůĞ͕ :ÄžŜͲ ĹśĹ?ĨÄžĆŒ ^ĹľĹ?ƚŚ ĂŜĚ DÄ‚ĆŒĆšÇ‡ DÄ? ĹŻĆľĆŒÄžÍ˜

DĆľĆŒĹ?Ğů ZÄ‚ĹŻĆ?ĆšŽŜÍ• ĞdžĞÄ?ĆľĆ&#x; ǀĞ ÄšĹ?ĆŒÄžÄ?ĆšĹ˝ĆŒ ŽĨ ƚŚĞ >ůŽLJĚžĹ?ĹśĆ?ĆšÄžĆŒ ^ĞdžƾĂů Ć?Ć?Ä‚ƾůĆš ĂŜĚ /ŜĨŽĆŒĹľÄ‚Ć&#x; ŽŜ ÄžĹśĆšĆŒÄž ÍžÄ?ÄžĹśĆšĆŒÄžÍż Ĺ?Ć? Ň Ä‚ŜŏĞĚ ŽŜ ƚŚĞ ĹŻÄžĹŒ Ä?LJ Ĺ?ŽůĨ ĆšŽƾĆŒĹśÄ‚ĹľÄžĹśĆš Ä?ŽžžĹ?ĆŠ ĞĞ žĞžÄ?ÄžĆŒĆ? dĆŒĹ?Ć?ƚĂ ĆŒÄžÇ ÄžĆŒÍ• ĞĂŜŜÄ‚ ZÄžĆ?Ä?ŚŜLJ͕ :ŽĚĹ? ÄžĆŒĆšĆŒÄ‚ĹśÄšÍ• žĂŜĚĂ 'ĹŻĆľÄ?ĹŹĹ?Äž ĂŜĚ DĹ?Ä?ŚĞůůĞ ZĹ˝Ä?Ĺ?ĹśĆ?ŽŜ ĂŜĚ ƚŚĞ ĆŒĹ?Ĺ?Śƚ Ä?LJ ZÄ‚Ä?ŚĞů ,Ĺ˝ĆŒÄ?Ä‚Ä?Ś͕ ĹšÄžĆŒÇ‡ĹŻ DÄ?<ÄžÄ?ŚŜĹ?Ğ͕ :Ä‚Ä?ĹŹĹ?Äž DĹ˝ĹšĆŒÄ?ƾƊ ÄžĆŒ ĂŜĚ dĆŒÄ‚Ä?ĞLJ tĹ?ĹŻĆšÄžĆŒžƾĆšĹšÍ˜ dŚĞ Ä?ŽžžĹ?ĆŠ ĞĞ Ç ÄžÄ‚ĆŒĹ?ĹśĹ? žĂƚÄ?ĹšĹ?ĹśĹ? ĹŠÄ‚Ä?ŏĞƚĆ? Ć‰ĆŒÄžĆ?ĞŜƚĞĚ ZÄ‚ĹŻĆ?ĆšŽŜ Ç Ĺ?ƚŚ Ä‚ Ä?ŚĞƋƾĞ ĨŽĆŒ ΨώϲÍ•ϾϏϏ͘

Lloydminster –The golf gods took a shine this year to the 256 ladies of the patch golfers at the Rolling Green Fairways Golf Course in Lloydminster. Weather and course conditions for the 9th annual PWM Steel Petroleum Golf Classic on May 23 were the best ever in keeping with the Birdies in Paradise slogan. “It’s a great day. It’s one of our best tournaments of the year. We’ve got 256 women today for a fun day of golf,� said head pro Marty Wheaton as play just got underway. “The course is in great condition for this early in the year. Everything greened up with the rain that we had. The greens came through really nice through the winter. The course is in great shape.� As for the rare blue sky and no wind or rain forecast, Wheaton said, “It’s a relief for us for sure. The weather hasn’t been the best the best the last couple of years, but it’s looking like a great day today.� Sunny skies and the promise of tropical 28 C midday temperatures led to a lot of happy chirping including from remarks from Tennille Tiedeman and her flock of golfers dressed as pink flamingos. “The conditions are amazing. Compared to last year, this is just glorious. You couldn’t ask for anything better,� she said at the start. Two years ago, Tiedeman was photographed by Pipeline News wearing a bright flower power outfit, prompting speculation her new flamingo garb is all about making it into the paper annually. “Well, not every year,� she joked. “I think last year I missed, but beggars can’t be choosers and you can’t hog the limelight every year.� What brings her back every year in reality is the fun and the chance to raise funds for the Lloydminster Sexual Assault and Information Centre.

“There’s tons of support and the ladies do such a wonderful job that you can’t help but want to come back,� said Tiedeman. “There’s also the fact that the ladies do so much for this cause – and the just all around good time that you have. They encourage you to go out and have fun.� This year’s event raised $26,900 for the sexual assault centre including $6,900 from a new silent auction of four fabulous prizes. Each golfer also had a shot to win a maximum of one pair of diamond earrings awarded on all 18 closest to the pin drives. In addition, there were three hole-in-one contests including a $1,500 travel voucher from Carlson Wagonlite and $10,000 in cash from Western Financial Group. The showstopper though was a new hole-in- one for a car from Boundary Ford sponsored by Musgrave Agencies at the 10th hole. “The hole-in-one is a 2014 Ford Focus, so some lucky golfer if they get a hole in one will be driving away with a Ford Focus today,� said committee lead Debbie Horbach at the start of the day. Target Safety Services sponsored the 10th tee hospitality tent where employees were “pushing souvlaki skewers and Target triple teas,� in the words of general manager Clint McKinlay in case a hole- inone party broke out. “I would imagine there would be a big celebration if somebody manages to pop one. That would be amazing,� he said. Target also ran its usual chip for charity event to raise additional funds for the sexual assault centre “We’ve happy to be here to support a good cause. Mainly, it’s to support the event,� said McKinlay

about his company’s sponsorship role. “I like the fact it always donates to a local charity. In the last few years they’ve donated a lot of money to the sexual assault centre. Anything we can do to contribute to that, why not?� said McKinlay. Winning a car would have made the day of any patch golfer who gave it a shot including Wendy Chanski representing her brother’s company, Grannum Welding in Drayton Valley. She stepped up to tee full of hope. “Of course, come on. Momma needs a new car,� she told her ball and the media. Her final telling words, “I didn’t do it, dammit it,� spoken in jest, signaled her luck ran out. “Hole-in-one? I’m going to win that,� said Jessica Kelly when she got wind of the contest early on, but made her chances of winning clear. “I like to think I’m a golfer, but I’m not really a golfer,� she said. The lucky part is her new employer, Titanium Tubing gave her the day off to golf after mentioning on her first day at work that she was booked to play. “They are really good to work for,� she said. “The good weather made me want to come back this year. And it’s just really fun. “It‘s something to do – get all the ladies together. Ladies don’t have enough fun things do to. It’s always for the guys,� said Kelly. Kelly no doubt was one of dozens of golfers who bought a raffle ticket knowing their odds of winning a car were off the charts. Raffle tickets sold like hotcakes for an Okanagan holiday at Sunscape Resort Homes, a one year golf corporate membership for two at Lashburn Golf and Country Club, and a new set of Callaway golf clubs with a bag.

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PIPELINE NEWS July 2014

MTM reveals secret growth sauce „ By Geoff Lee Lloydminster – Many of the business cards at MTM Energy Services are collectors’ items today as the busy retailer of oilfield and industrial supplies continues to grow and promote from within. Business is good at company’s stores in Provost and Lloydminster where former manager and owner Tom Dennehy is the new corporate CEO and former purchaser, Brett Fisher is now managing the outlet. Dennehy, Fisher and long-term Provost manager, Doug Bosch attribute the growth of the Lloydminster store that opened in 2010 following Provost in 2007 to their secret human resources sauce. “It’s the personnel we have right within the store,â€? said Dennehy about MTM Energy’s success Meet the gang. All available employees at MTM Energy Services posed for a group photo at the Lloydminster shop in ÄžÄ‚ĆŒĹŻÇ‡ :ƾŜĞ͘ Ä‚Ä?ĹŹ ĆŒĹ˝Ç Ä¨ĆŒŽž ĹŻÄžĹŒ Ä‚ĆŒÄžÍ— :Ĺ˝Ć?Ĺš WÄ‚ĆŒĹŹÄžĆŒÍ• dŽž ÄžŜŜĞŚLJ͕ Ĺ˝Ä?Ä?LJ <ĹŻĹ?žĂ͕ Ä‚ĹŻÄž >ĆľÄ? ĂŜĚ ĆŒÄžĆŠ &Ĺ?Ć?ĹšÄžĆŒÍ˜ &ĆŒŽŜĆš ĆŒĹ˝Ç Ä¨ĆŒŽž during a June 3 interview at the Lloydminster store. “We are customer based which means we can ĹŻÄžĹŒ Ä‚ĆŒÄž dĹ?ŜĂ ĆľĆ?ŚĂLJ͕ ŽƾĹ? Ĺ˝Ć?Ä?Ĺš ĂŜĚ ^ŚĞĹ?ĹŻÄ‚ 'ÄžĆ?Ć?ĹśÄžĆŒÍ˜ WŚŽƚŽĆ? Ä?LJ 'ÄžŽč >ĞĞ have customers come in here and all of sales staff get involved with what the customer wants. We are really able to give him what he needs.â€? That service creed has led to a doubling of the Lloydminster store from 4,000 sq. ft. in 2010 to 8,000 sq. ft. today “We started with two employees out here, and now we’ve got 12 people and some on contract too,â€? added Dennehy. Four employees work out of a 5,000 sq. ft. store in Provost selling a full range of oilfield supplies, lubricants, hoses, industrial supplies and rig supplies with customer needs in mind. Competition is stiff in Provost with rival suppliers such as National Oilwell Varco, Apex Distribution and MRC Midfield in town, but Bosch says MTM’s customer service approach gives them an edge. “A lot of our business is based on our service and getting what our customers need,â€? said Bosch. “Guys come in and whatever they are looking for to do their job, we’ll clear it with them and get t #PPN ,OVDLMF 1JDLFST them what they need to get the job done.â€? t 5PO 3FBDI Drilling and oilfield service activity south t 8JODI 5SBDUPS D X -P #PZT of Provost and into Saskatchewan is driving the t 5BOEFN 5SJ BYMF 5SBJMFST demand for parts in that area along with oilfield t 5BOL $SBEMFT D X )ZESBVMJD "SN trucking and some agriculture. t 1JMPU 5SVDLT Customers in Provost and at the growing t %PVCMF .BO #BTLFU Lloydminster market have come to rely on MTM’s 1*$,&3 0*-'*&-% )"6-*/( 4&37*$& t *4/ $PNQMZ 8PSLT .FNCFS ability to provide them with the best solutions for Proudly serving Lloydminster Area for over 20 Years their application. t $03 *31 $FSUJGJFE “We look at what problems they are having and we provide solutions for them,â€? explained Dennehy. -MPZENJOTUFS 4, "# t 1I t 'BY ɸ Page B21

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“We are a smaller store so we can’t really keep a around the oil show too and see the part that we’ve had on what’s out in the oil show on display because huge inventory,â€? he said. “We deal with well over 300 vendors on a we’ve sold a lot of stuff that’s on the equipment,â€? he weekly basis going through the quoting process and said. The oil show, to be held at the Lloydminster finding the best price for the customers to make sure their needs are met. Exhibition Grounds on Sept. 10-11, is also a great “We want to supply the product, supply the opportunity for Dennehy to pitch his growth story service and just keep things moving forward.â€? since the Lloydminster store startup in 2010. “We are very broad based. We’ve spread out our Fisher says he is still getting used to being the manager and anticipated being able to hand out his customer base. We have a wide footprint, so we are always looking to make sure there is stability with new business card bearing his new role. “It’s something that takes some getting used to, our sales,â€? he said. “We are actually selling into Manitoba and but I’m excited about it and feel I am ready for it,â€? northern Alberta and wherever there’s a market. he said. “There are always expansion plans. If there’s a So far, he says the nice part of the job compared market, we’ll expand. to just purchasing is that every day is different. “You don’t physically need a store to service a “Some days you are ordering parts. Some days lot of communities in a lot of areas too. it’s mainly delivering those parts that come in. “You just have to have a good staff. You have Every day is unique in its own way and each week to have good personnel You have to have depth of brings its own challenges,â€? said Fisher with a smile. personnel too.â€? “We always try to strive for more. That’s one of All of those ingredients go into the MTM Enthe things that drives MTM is always wanting to ergy secret sauce, but the key one is what Dennehy improve and keep going forward.â€? ĆŒÄžĆŠ &Ĺ?Ć?ĹšÄžĆŒ ŚĂĆ? ĆŒÄžÄ?ĞŜƚůLJ Ä?ĞĞŜ Ć‰ĆŒŽžŽĆšÄžÄš Ä‚Ć? ƚŚĞ žĂŜĂĹ?ÄžĆŒ calls MTM’s culture of self starters and initiators MTM Energy will have a product booth of ŽĨ DdD ĹśÄžĆŒĹ?LJ ^ÄžĆŒÇ€Ĺ?Ä?ÄžĆ? Ĺ?Ĺś >ůŽLJĚžĹ?ĹśĆ?ĆšÄžĆŒÍ˜ dŽž ÄžŜŜŜĞŚLJ͕ that few companies can copy. ƚŚĞ ĨŽĆŒĹľÄžĆŒ Ć?ĆšĹ˝ĆŒÄž žĂŜĂĹ?ÄžĆŒ ĂŜĚ Ä‚Ĺś Ĺ˝Ç ĹśÄžĆŒ ŽĨ ƚŚĞ Ä?ŽžĆ‰Ä‚ŜLJ some sort at the upcoming Lloydminster Heavy ĨŽƾŜĚĞĚ Ĺ?Ĺś WĆŒĹ˝Ç€Ĺ˝Ć?Ćš Ĺ?Ĺś ώϏϏϳ͕ Ĺ?Ć? ƚŚĞ ĹśÄžÇ Ä?Ĺ˝ĆŒĆ‰Ĺ˝ĆŒÄ‚ĆšÄž K͘ “When I get feedback from customers, it’s when Oil Show where Dennehy expects his staff will they walk in the door. It feels like home because reacquaint themselves with customers touring the they are treated well. They are treated with respect exhibits. Éş Page B20 and we get involved with what their needs are.â€? “It’s really nice to see all the equipment that’s “Also, we make sure if they are looking specifically for an application or something they need to make their business better or make them more efficient, that we don’t stop – that we keep going until $*, we get it. “We are just like a dog on a bone. We just don’t stop. “That’s what really moves our business is the personalized service that we have. That’s the secret of any business is to have experts in that field and on the front lines.â€? Dennehy spoke highly of both of his store managers noting Fisher was recently promoted to his new post having been a store purchaser for nearly two years. â€œâ€ŚHe’s been a wonderful asset to the business,â€? said Dennehy. “Again, it’s because of his knowledge and background of being a purchaser and providing great customer service and his knowledge in industrial sales in the hose industry.â€? Under Fisher’s management, the Lloydminster store will continue to supply the heavy oil industry with all of the products they need to build their facilities. MTM has access to over 300,000 products sold to customers throughout Western Canada. Pipes, valves, fittings, cam locks, truck packages including hoses and hydraulics along with rig supplies are among the best sellers in Lloydminster. “If we don’t have it, we will ensure that our cus +Z\ 6RXWK 32 %R[ %LJJDU 6. 6 . 0 tomers get the products that they need,â€? said Fisher who noted his MTM Energy store stocks parts on “as neededâ€? basis.

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PIPELINE NEWS July 2014

CWC reborn following acquisition Calgary – CWC Energy Services Corp. is the new parent company of CWC Well Services and CWC Ironhand Drilling and their respective divisions. The renaming and business reorganization follows the closing of the acquisition of Ironhand Drilling Inc. by CWC Well Services and the release of first quarter results on May 15. CWC Ironhand will be comprised of its contract drilling division with eight telescopic double drilling rigs and a ninth currently under construction. CWC Well Services’ production division boasts 71 service rigs and one new slant service rig under construction; seven coil tubing units, six snubbing units and 10 well testing packages. The new CWC Energy parent company describes itself as a premier contract drilling and well service company operating in Western Canada.

CWC’s board of directors has hiked capital spending for the year by $7.5 million to $17.8 million. Some of the funds will be spent to complete drilling Rig 9, build a new slant service rig, two new pump trucks and acquire well servicing to support the company’s growth in SAGD wells. The remainder of increased capital will be dedicated to maintenance, recertification of equipment and information technology infrastructure. CWC reported a steady Q1 with revenue unchanged year over year but with a reduced profit of $3.2 million compared $4.9 million in Q1 2013 due to higher costs of labour and fuel. The company’s service utilization of 61 per cent in the quarter was higher than the industry average of 54 per cent. Coil tubing utilization rise to 64 per cent in Q1 compared to 46 per cent in Q1 2013 due to more

sales and operational focus on shallower SAGD wells. Looking ahead, CWC anticipates a continued steady demand for their service rigs and higher demand for their coil tubing units. Strong crude oil prices and higher natural gas prices are expected to increase client demand for their services in the latter part of the year. CWC also believes that the capital markets have become more favourable in 2014 for their exploration and production customers to raise financing for their capital expenditure programs. The favourable Canadian/U.S. dollar exchange rate at approximately $0.91 in mid May is expected to result in higher cash flow and profitability for CWC’s E&P customers. CWC says the rate would enable them to spend more on capital expenditures for the type of drilling and well services that they provide.

Raise ups the horizontal pump bar Calgary – It’s early days, but Raise Production Inc. is confident its Horizontal Wellbore Production System will raise the bar on horizontal well pumping optimization. Raise’s commercially designed system, undergoing field trials, is configured with pumping units that are aligned across the entire length of the horizontal section of the test wellbore. The Calgary-based oilfield service company is working to deploy a second system into a new Viking reservoir in Alberta while continuing to field test its first system on a reservoir in the Kindersley area with a partner. “This diversification of geography will lead to more insight into how the formation responds to our system in a different area,� said the company in an April 24 update. “We are also continuing to perform suitability testing on an oil sample from a third client in the Slave Point formation.� The innovative company is focused on sustaining flow rates that increased by as much as 400 per cent at the Kindersley test site over certain short term intervals. Dynamic flow changes in oil, water and gas along with the production of segregated water indicate the

system is “sweeping� the wellbore as predicted,� said the company in a previous update. “This sweeping effect is important as it reduces the frictional effects of the fluids in the wellbore and in turn, allows for a more efficient production path along the entire horizontal length.� The system also shows increased flow rates and access to less depleted areas of the wellbore from tests performed over short periods. Once Raise sustains or optimizes the flow rates they will determine a suitable time period for monitoring sustainability and decline rate profiles with their partner. “Results to date are encouraging. but no assurances can be given about system performance or commercial viability,� advised the company. “We are cautiously optimistic regarding the outcome of our initial well deployment, but we remain realistic and pragmatic regarding the applications, performance, timeline to build and expected results from our technology.: So far, Raise has performed repeated retrievals and deployment of the system in close tolerance wellbores. Early testing has proven the

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system will allow for more efficient completion design that will reduce existing rod and tubing wear. The system has also shown to provide better control of pumpjack strokes per minute while increasing vertical pump efficiency and production rates. Raise is beginning its strategic

planning for commercial operations and is recruiting staff to ramp up manufacturing of the system. Research and developing is continuous to adapt the system to more demanding applications such as deeper, higher temperature and higher volume wellbores.

Spartan to drill 44 wells Calgary – Spartan Energy Corp. plans to continue to grow by acquisition and the drill bit during the remainder of 2014 with the focus on light oil development in southeast Saskatchewan. Their secondary focus will be on their Viking light oil prospects near Dodsland. Calgary-based Spartan expects to drill 44 (40 net) horizontal wells in southeast Saskatchewan including 35 wells targeting the Frobisher and Alida formations and nine wells targeting the Midale. The company also expects to spend an additional $8 million over its original $66 million 2014 capital program, on land, seismic and facility expenditures. The operational outlook is in keeping with the release of Spartan’s first quarter results on May 15 in advance of the resumption of drilling and completions in late May and the end of spring break up. The first quarter was the company’s

first full quarter since it recapitalized, consolidated shares and renamed itself. The company also acquired Renegade Petroleum Ltd. in the quarter and went to drill 19 (17.5 net) wells out of a planned 58 (53 net) well program for 2014. Of the 19 wells drilled in the quarter, three (2.7 net) vertical wells were drilled in central Alberta targeting Detrital oil and 10 (9.5 net) horizontal wells were drilled in West Central Saskatchewan for Viking oil. Six (5.3 net) other horizontal wells were drilled in southeast Saskatchewan targeting Mississippian oil prospects. “Production volumes have exceeded our budgeted expectations on the strength of a successful first quarter development drilling program,� said the company in a statement. Buoyed by these results, Spartan is raising its expected 2014 exit rate to 7,500 barrels of oil equivalent per day (94 per cent oil and liquids) and its 2014 average production rate to 5,200 boepd.

PIPELINE NEWS July 2014

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Running among rigs and pipe yards Watford City, N.D. – Between Watford City and Williston, N.D. are numerous large triple drilling rigs at work adjacent to U.S. Route 85, a.k.a. “The Gauntlet.� Near one of these rigs one can find Blaine Restad, from the Grand Forks area, going for a run along the dusty gravel road. He’s taking a bit of a chance, as the road is frequently

dusted out by the numerous trucks going by. Some are servicing the road building crew along the highway, the others are heading to the large pipeline pipe yard a mile or two away from the highway. He’s been trying to run every day to stay in shape but there’s heavy traffic. As soon as he can, he turns onto a less-travelled road.

Restad grew up in a small town of about 200 people. He’s spent three years working on the rigs. “I work for Neset Consulting as a geologist,� said the 27-year-old. He’s a graduate of the University of North Dakota in Grand Forks, however, his degree is not actually in geology. Rather, it’s in industrial technology, which he described as “engineering without the math.� His geology expertise comes from on- the job training. “It’s a lot more than geology,� he said, noting it in-

cludes interpreting gamma readings. Most of the wells Restad sees are double laterals. It took him six months to get into this line of work, starting in 2011. Now he’s working the night shift. “I’m single. I have a girlfriend back home. She’s pretty good about me being away weeks at a time. She owns her own hair-cutting business in Grand Forks. Will they get married? “Maybe,� he replied.

Blaine Restad goes for a run with his rig’s derrick in the background. Photo by Brian Zinchuk

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PIPELINE NEWS July 2014

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The grand opening at the Microtel Inn & Suites by Wyndam in Lloydminster on June 11 took place inside the hotel and water slide. The Žĸ Ä?Ĺ?Ä‚ĹŻ ĆŒĹ?Ä?Ä?ŽŜ Ä?ƾƍ ĹśĹ? Ć‰Ä‚ĆŒĆšÇ‡ žĂĚĞ ƾƉ žŽĆ?ƚůLJ ŽĨ ŚŽƚĞů Žĸ Ä?Ĺ?Ä‚ĹŻĆ? Ä‚ĆŒÄž ͞ĨĆŒŽž ĹŻÄžĹŒ ŽĨ Ç Ä‚ĆšÄžĆŒĆ?ĹŻĹ?ĚĞͿ ZĹ?Ä? ĂŜĚ Penni Petersen, Lorna Knoll, Deb ^ƚĂŜĹ?ůŽč Í• <Ä‚ĆŒÄžĹś tÄžĆ?ƚžĂŜ͕ ZĹ˝Ä? Van Wielingen and Lloydminster ĹľÄ‚Ç‡Ĺ˝ĆŒ ZĹ˝Ä? ^Ä‚ƾŜÄšÄžĆŒĆ? ĂŜĚ ͞ŽŜ ƚŚĞ ĆŒĹ?Ĺ?Śƚ Ć?Ĺ?ĚĞ ŽĨ ƚŚĞ Ć?ĹŻĹ?ĚĞͿ DÄ‚ĆŒÄ? ^ƚĂŜĹ?ůͲ Žč Í• :ĂLJ tÄžĆ?ƚžĂŜ͕ ĆŒĹ?Ä? tÄ‚ĆšĆ?ŽŜ ĂŜĚ Gerry Woznow.

Lloyd Microtel hotel opens with a splash Lloydminster –– MasterBUILT Hotels, a joint venture between Superior Lodging Corp. and Jayman MasterBUILT, a major Canadian residential builder, made a splash during the grand opening of Microtel’s new hotel in Lloydminster. The celebration at the Microtel Inn & Suites by Wyndam on June 11 featured tours, a reception and speeches from key business persons and Lloydminster Mayor Rob Saunders before a mixed audience of city officials, investors and hotel representatives. “When my partner, Jay Westman and I came to Lloydminster a few years ago to get a sense of the community, we really liked what we saw and knew that this new brand in Canada would be very successful here,� said Marc Steinhoff, co-chairman of MasterBUILT Hotels. “The city has been very accommodating and a real pleasure to work with in getting this project completed on time bringing highly needed accommodations to this booming community.� Staniloff is the president and CEO of Superior Lodging one of Canada’s largest hotel developers renowned for establishing the Super 8 and Wingate by Wyndham brands in Canada. His partner Westman, co-chairman of MasterBUILT Hotels and the owner of Jayman MasterBUILT, led a media tour of hotel rooms and spoke about the quality of the new Microtel hotel in Lloydminster before a ribbon cutting. “With the knowledge gained by building thousands of homes and condominiums and understanding building science, we carefully selected materials and finishes that would last longer, reduce overall operating costs and result in a lower environmental footprint,� said Westman. The Microtel hotel is located on Highway 16 one block east of the new Husky Place office on the Saskatchewan side of the Border City.

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PIPELINE NEWS July 2014 ŽžžĹ?ĆŠ ĞĞ žĞžÄ?ÄžĆŒ Ä‚ĹŻÄž ÄžŜŜĞLJ Ä?ĹŻÄ‚Ć?ĆšĆ? ŽƾĆš ŽĨ Ä‚ Ć?ĂŜĚ ĆšĆŒÄ‚Ć‰ ÄšĆľĆŒĹ?ĹśĹ? ƚŚĞ ŽƉĞŜĹ?ĹśĹ? ĆŒŽƾŜÄš ŽĨ Ĺ?ŽůĨ Ä‚Ćš ƚŚĞ ϯϲƚŚ ŜŜƾÄ‚ĹŻ KĹ?ůžĞŜ͛Ć? 'ŽůĨ dŽƾĆŒĹśÄ‚ĹľÄžĹśĆš Ä‚Ćš ƚŚĞ >ůŽLJĚžĹ?ĹśĆ?ĆšÄžĆŒ 'ŽůĨ Θ ĆľĆŒĹŻĹ?ĹśĹ? ĹŻĆľÄ? ŽŜ :ƾŜÄž Ď­ĎŻÍ˜ WŚŽƚŽĆ? Ä?LJ 'ÄžŽč >ĞĞ

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Ideal conditions surprise Lloyd golfers Lloydminster – The 2014 Lloydminster Oilmen’s Golf Tournament lucked out with near perfect course and weather conditions that left players and officials pinching themselves with disbelief. This year’s tournament held June 12-14 at the Lloydminster Golf & Curling Centre was played under rare sunny skies despite rain earlier in the week. “It’s been fantastic this year. We’ve been praying for some sunshine and we got ’er and hopefully everybody’s going to enjoy the weekend,� said committee member Shaun Reschny on the first day of play. There would be no repeat of the downpour that rain washed out the final afternoon of golf last year or the 2011 fiasco when rain cancelled the final day. Head pro Kyle Duffin said the new drainage system installed on the course last fall works great to quickly drain excess rain water from the course. “The course is really good, It’s not too wet at

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all,� he said at the start of play. Duffin noted when it comes to golf, weather is the biggest factor and he forecast sun all weekend for the oilmen’s. “The best way to get everyone happy – sun out,� he said. Ironically, next year’s tournament will be shifted to July 9-11 to avoid the wet weather that has prevailed the past few years. “June is the wettest month of the year so we moved it to July,� said lead organizer Kevin Simard. The tournament used to be played in July but switched to June before summer holidays start, but Simard said the return to July will work out great. “I am sure we will get some golfers back,� he said. This year, 192 golfers took part with 208 eligible spots, but Simard the event couldn’t have been any better despite the loss of a few players. “It’s been excellent. Good weather, good participation, and I think everyone’s having a great time – no rain and we got really lucky with the weather. “We were down about 10 golfers, but the tournament went

without hitches so that’s a plus. The course is in great shape,â€? he said. Ditto those sentiments by John Higgins who emerged as the 2014 championship flight winner with a two day score of 146 and a country wide smile. “Conditions were great really nice – I mean it’s the best year we’ve had in three or four years,â€? said the Wild Rows golfer and club member who tried to explain how he won. “Good luck I guess. I don’t know. The driver kept it in play. I missed a lot of putts, but overall it was pretty good.â€? As for the tournament itself Higgins said, “It’s great fun. It’s always fun. I love this tournament.â€? Higgins edged Ryan DenBrader who finished with a total score of 149 while defending champ Shawn Loney who also finished first in 2012, wound up third at 152 for the weekend. Carson Malka, a cement supervisor with Penny Holdings won his flight three years ago, but that was then and this is now by his own reckoning on the opening day of play. “Not as good but not too bad,â€? he said comparing his past and present game. ɸ Page B27

PIPELINE NEWS July 2014

B27

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ɺ Page B26 Malka has been in the oilmen’s before and he said what makes it a success is “it’s just a good crowd and everybody has a good time.” Morley Sebree referred to his game as ‘flog’. “It’s not golf, it’s flog,” he said after barely thrashing his ball out of a bunker. Despite Sebree’s self-proclaimed game of flogging, he too, was smiling. “Everyday you’re vertical, it’s good,” he laughed. “The conditions are good, everything’s nice, it’s a good year. It’s a lot nicer than it has been the last few years. There’s no rain.” Another happy camper was Doug Gilby who might have won the most tanned golfer award had there been one. “I’ve played lot of golf this year,” he explained. “I am completely retired and able to play.” Gilby is a tournament fixture having played for more than 30 years with more tournaments to come given his liking for it. “There’s lot of friends that you meet that you haven’t seen for a year or so. The organization is perfect. It’s probably the best run tournament I’ve ever been in,” he said. One of this year’s many sponsors was Investors Group that was flying a corporate flag at a $10,000 hole- in-one contest overseen by company rep Bill Carr. “It’s a great opportunity to meet with a lot of guys in the oilpatch and support what they’ve got going on,” said Carr about the sponsorship. “We have a hole sponsorship today – a closest to the pin and a $10,000 hole - in-one and also an opportunity to win a trip to Augusta. “Many of our clients are oilpatch guys. They are great people to work with.” No one won the Investors’ cash or the $1 million dollar hole-in-one sponsored by Europump but eight guys who won spots in a hat auction tried their best to get rich quick. When the dust settled, the ball of Thomas Weikle was the closest to the pin giving the Weatherford chipper a 60 per cent cut of the Calcutta worth about $2,500. “I’m sure yet,” was Weikle’s comment about what he plans to do with the money. Weikle used an eight iron and was only one of two players to land a ball on the green including Jeff Rivett who claimed some runnerup cash. The 36th annual tournament will be a memorable one for Dwayne Keichinger who held the winning raffle ticket for a new Yamaha golf cart sponsored by Crude Master Transport Inc, Rocksolid Industries Ltd. and the oilmen’s committee. The other winner is the junior golf program that receives the proceeds from the sale of the raffle tickets. “Every year we get the junior program to help out and take care of all the divots and raking the bunkers and the flags for the guys,” said Duffin. “It gets the junior program involved and the oilmen’s makes a donation to junior golf.” Junior golfer Gage Renton who was working a green with his pal Jaxon Kaluski took a lull in the action to explain his duties. “I just gotta help the guys out – rake the sand and stuff and clean golf balls and fix divots and stuff,” said Renton who attends Bishop Lloyd school with Kaluski. As for raking in the tips, Renton said, “Yep, we’re making lots. It’s a good experience and we get to miss school.” Junior golfers have been part of the tournament for years. “They enjoy getting out of school for a day and we enjoy having them here helping us out,” said Reschny. Check the new lloydoilmensgolf.ca website for information on the 23 flight winners.

Kelly O’Donnell from Wrangler Well Servicing checks the alignment of his upĐŽŵŝŶŐ ƉƵƩ͘

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PIPELINE NEWS July 2014

Lone Rock loves its tea house Lone Rock – If you like homemade food served in a homey atmosphere, order a meal at the new Four Season’s Tea House in Lone Rock, south of Marshall, Saskatchewan. The new family eatery reopened in April on the site of the former Four Season’s Craft and Tea House under the same friendly ownership of Randy and Bernice Parkyn. Fire destroyed the original 100 year-old house in April 2013 and stoked the demand for the Parkyn’s brand of hospitality and home style

cooking to rise from the ashes. “We got it going in August last year and finished up in the middle of March. We opened April 13,� said Randy. “It’s been unreal. Man, it’s been busy. We’ve had a couple of Sundays over 200 people.� The former oil well operator described his role as “the gopher, the fixer and the whatever. I am the go get this and go get that. Do this, do that. “I was doing doors on the dishwasher and fixing them this morning.

Randy Parkyn, a former oil well operator and his wife Bernice are the proud and friendly owners of the new Four Season’s Tea House in Lone Rock.

I do everything under the sun from cooking to washing dishes.� Randy said this business was Bernice’s brainchild to start with. “Twelve years ago we moved into an old house and rebuilt it. It was crafts and a tea house and it turned into a booming restaurant,� he said. After it burned to the ground Randy recalled, “Everybody said you gotta rebuild.� The new restaurant can seat 60

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people, double the space of the old one, but with the same welcoming charm that Bernice and customers are familiar with. “We wanted to make it homey again,â€? said Bernice who no longer sells giftware and crafts. Her goal for the design of the new restaurant was to make it like a house from the exterior with a front veranda for outdoor seasonal dining. ɸ Page B29

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PIPELINE NEWS July 2014

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The new Four Season’s Tea House has homey look and feel and great food made and served by owners Randy and Bernice Parkyn.

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Bernice said she and Randy knew for certain they had to rebuild when customers kept dropping by their house for coffee every week following the blaze. The Parkyns won’t argue that the rebuilding turned into an old fashioned community barn raiser at times, with lot of people chipping in their time to help out as the old tea house was under insured. “The whole community was very supportive. When we were building there was always somebody here helping build and stuff,� she said. “When we put the walls up, there had to be a group of 20 people coming to help stand the walls. We had lots of help. Everybody was awesome.� Bernice was buoyed by news the RM of Wilton has opened a camp for workers in Lone Rock that will serve as a six week school for advanced motor grader operators in September. “Hopefully, we’ll be busy with that. They are just getting gone there. When the school comes in I guess we will have more business from that,� said Bernice. “I always have a few things on special every day. They can order whatever they want. We’re not sure how it’s all exactly going to be yet. “We do get some of the guys come in now and staff for supper and that.� Word of good food travels fast and more and more customers are enjoying tea house meals that are served six days a week except Saturdays in the licensed premises. “We do homemade soups and bread and buns and homemade desserts. Crepes are a big hit around here all the time and cabbage roll perogies,� said Bernice. Bernice and Randy served fully loaded bacon burgers to Darren Elder, CAO of RM of Wilton, who bought one for Pipeline News during a tour of the new camp and school. The hearty meal prompted a tip and an inquiry to Bernice about who their customers are. “A lot are from the oilfield, but we get customers from a huge area. They come from Lashburn, Neilburg, Marsden, Lloydminster, Cut Knife – all over the place,� she said. “We do smorgs the first and third Sundays of the month from 4:30 to 8 (p.m.) and they’re a huge hit. People come from everywhere for that.� She credits some advertising and local people telling others for growing their customer base. “We get new people all the time,� she said. “We’re doubled in size and there’s lots more room to move around.�

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PIPELINE NEWS July 2014

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,ĆľĆ?ŏLJ͛Ć? 'ĹŻÄžŜŜ >ÄžĆŒĹ˝Ç‡ ĨŽƾŜÄš ĹšĹ?ĹľĆ?ÄžůĨ Ć‰ĆŒĹ˝Ç ĹŻĹ?ĹśĹ? ƚŚĞ Ç Ĺ˝Ĺ˝ÄšĆ? ĨŽĆŒ Ä‚ ĹľĹ?Ć?ƉůĂÄ?ĞĚ Ć?ĹšĹ˝ĆšÍ˜ tĹ?ƚŚ ĹšĹ?Ć? Ä?Ä‚ĹŻĹŻ ĆŒÄžÄ?Ĺ˝Ç€ÄžĆŒÄžÄš >ÄžĆŒĹ˝Ç‡ ÄŽĆŒÄžÄš ĹšĹ?Ć? ŜĞdžƚ Ć?ŚŽƚ ĹŠĆľĆ?Ćš Ď­Ďą Ç‡Ä‚ĆŒÄšĆ? Ç ĹšĹ?ĹŻÄž ĹŻÄ‚ĆľĹ?ĹšĹ?ĹśĹ? ĂŜĚ žƾƊÄžĆŒĹ?ĹśĹ? Ä‚ĹŻĹŻ ƚŚĞ Ç ĹšĹ?ĹŻÄžÍ˜ /Ćš ĞŜĚĞĚ ŽŜ Ä‚ Ĺ?ŽŽÄš ŜŽĆšÄž Ç Ĺ?ƚŚ >ÄžĆŒĹ˝Ç‡ Ç Ĺ?ŜŜĹ?ĹśĹ? ƚŚĞ ĎŜĂů ϭϲth ŇĹ?Ĺ?ĹšĆšÍ˜

Silver linings at Maidstone 25th Maidstone – It was a time to shout “Hi Ho Silver� at this year’s 25th silver anniversary Maidstone Heavy Crude Men’s Golf Tournament played under cool and cloudy conditions. The special event started under blue skies however, at the aptly named Silver Lake Regional Golf Course on June 6. All of the players received silver anniversary golf shirts and caps in their goody bags sponsored by Gremur Industries, Keranda Industrial Supplies and TWB Construction. The only thing missing from the silver theme of the day was the Lone Ranger’s horse Silver. Silver, the word was on the tip of Jeff Watt’s tongue as the lead organizer who set the silvery theme of the day with his first statement to the media. “This year we pushed a little bit more with our sponsorship with it being our 25th anniversary,� said Watt who works for TWB Construction in Maidstone. “It’s a little more important – especially more money-wise than prize-wise, but we ended up with an abundance of everything.� Watt tipped his hat to Hurricane Industries for sponsoring the beverage hole at the nine hole course “Our sponsorship was great once again this year, and the generosity of the entire oilfield community is greatly appreciated,� he said.

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“We got a silver cart for our silver anniversary.� Willerton Ski-Doo & Golf Cart Ltd. in Wainwright, Peelers Sandblasting & Refinishing in Maidstone, Adrian Hume from Canwest Propane and the Maidstone Oilmen’s Committee sponsored the silver E-Z-GO cart for a draw prize. “We’ve actually got quite a few great prizes, fishing trips and golf trips, but the golf cart is our top prize,� said Watt who parked it at the sign-up shack for arriving players to see. The chance to win it at the barbecue finale caught Redhead Equipment service manager Stirling Gaudaur off guard until news about it sunk in. “No, where do I do that? I will be for sure,� said Gaudaur who liked his draw prize chances better than his game coming into the event green. “This will be the first time I’ve hit a ball this year,� he with a grin. “It was the same last year and I came out pretty good, and the year before the same thing. I am hoping for the same results.� Gaudaur wound up off the prize list, but he joined in the applause for Brent Loney from Wild Rows who won the silver golf cart in a progressive draw after Doug Wichman from TWB was the second last name picked. Wichman won the runner-up set of TaylorMade irons donated by

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“I don’t know. I’m sure my wife will find something to do with it,â€? he joked. This was Redhead’s third time at the Maidstone and his first in the chip off. Redhead also went on to win the first flight. “It’s a great event. “It’s an awesome day here,â€? he said. No doubt, those are the sentiments of Nathan Blanchette from Baker Hughes who hit a contest sign 200 yards from the 5th hole tee to win a Texas Mickey of Grey Goose sponsored by Apex Advanced Solutions. ɸ Page B32

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Aurora and also finished first in the 5th flight of golfers. Loney, by the way, wound up second in the fourth flight. The draw prizes were picked at the steak barbecue catered by the Silver Lake Parks Board. The first lucky golfer of the day was Dan Redhead from Baker Hughes who won the opening $500 chip off event with the closest to the pin shot of just 33 inches. “It was a lucky shot; hit it, hope it gets close,� he said about his shot before turning to the next question about his plans for the money.

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PIPELINE NEWS July 2014

Maidstone Heavy Crude Golf ɺ Page B31 Blanchette later doubled as with winner of the second flight. This year’s winner of the Ernold Priest Memory Trophy for most sportsmanlike golfer, sponsored by Hardy Services, was awarded to Dean Grosenick from Baytex Energy. The tournament began with a nip in the air under clear blue skies that put everyone in a

good mood unaware of the prevailing clouds and hail sprinkles to come by mid-morning. “It’s a beautiful today so far. Hopefully, the sun will stay out all day,� said Kelly Esquirol from Canadian Natural Resource a first timer at the event who was asked what brought him out. “Just friends and golf in general,� he said while letting on that he golfs once or twice a

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week. Esquirol will likely be back next year as he went on to win second place in the first flight in his very first appearance. Les Gagnon, president of Hydrodig a in Lashburn, had his 25th silver anniversary cap on when asked what brought him out – for the 10th time. “She’s a good event to come to rain or shine,� he said. Gagnon said his son Kevin who was also golfing, runs the company now allowing him to spend more time fishing and golfing.

“I have to play my own game and we’ll see what happens,� was his stated strategy. The elder Gagnon used it to reel in second place in the 13th flight. The champion flight was won by Jared Rutley with Jaylen Epp as the runner-up. The top two winners of the first five flights are: Flight 1: Dan Redhead, Kelly Esquirol; Flight 2: Nathan Blanchette, Dean Grosenick; Flight 3: Byron Lott, Cory Bourassa; Flight 4: Werner Schmitt, Brent Loney; Flight 5: Doug Wichman, Sean

Dan Redhead from Baker Hughes holds the ball that won him $500 in a closest to the pin chip Žč ƚŽ Ć?ĆšÄ‚ĆŒĆš ƚŚĞ Maidstone oilmen’s golf tournament.

Blanchette. The leading finishers in the next five

flights are: Flight 6: Quintin Blanchette, Ryan Hamelin; Flight 7: Dave Powers, Blaine Haugen; Flight 8: Morris Donovan, Kent Sayers; Flight 9: Justin Clark, Darryl Graham; Flight 10: Doug Tuplin, Darren Schmitt. The top finishers in the rest of the flights are: Flight 11: Terry Anderson, Derren Weimer; Flight 12 Jim Krepps, Wes Young; Flight 13: Chad Payne, Les Gagnon; Flight 14: Doug Irwin, Rick McMahon; Flight 15: Drake Lockhart, Barry Taylor; Flight16: Glenn WĹ˝Ć?Ĺ?ĹśĹ? ĨŽĆŒ ƚŚĞ Ć‰Ä‚Ć‰Ć‰Ĺ˝ĆŒÄ‚ÇŒĹ? Ä‚ĆŒÄž ĹŻ Η ĆľÄ?Ä?ĂΗ <ŽůLJÄ?Ä‚Ä?Ä‚ ŽŜ ƚŚĞ ĹŻÄžĹŒ ĂŜĚ ĆŒÇ‡Ä‚Ĺś Ădž͕ Ä?ŽƚŚ ĨĆŒŽž Leroy. Peterbilt in Lloydminster.

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Join our award winning team and grow with us! Our Frac Flowback , E-Line and Slickline divisions in Estevan, SK are seeking dynamic and motivated individuals for the following positions: Operators 1 ( %( .& ( $ ) $ )) * +* $%* $ )) (/ Day and Night Supervisors 1 ( %( .& ( $ ) ( '+ ( We Offer: 1 %#& * * , *%* " %#& $) * %$ - $ "+ ) (%+& $)+( $ and retirement savings plans 1 "" $ )) (/ *( $ $ *% )+ )) +" 1 &&%(*+$ * ) %( ( ( &(% ( )) %$ You Possess: 1 , " " )) " $) " )) %( ) $ )) * 1 +(( $* ()* $ (* 0 * %$ 1 " */ *% & )) &( #&"%/# $* * )* $ Please apply online at: www.cs.fmcti.com Fax: 306.634.1071 $%"% ) $ * ) %(# ("/ !$%-$ ) +( $ ( / (, ) *

B34

PIPELINE NEWS July 2014

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Pipeline News

SECTION C July 2014

Pipeline News was 2 sections this month. Stay tuned for next month focus: Surveying

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