Pipeline News December 2014

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December 2014

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Volume 7 Issue 7

Rollin' In

Light Trucks

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Sun Country Well Servicing of Estevan relies on its beefy Ford F-350s from Senchuk Ford day in and day out. Sun Country equipment manager Blake Mile said he once pulled a ƉƾžĆ‰ ĆšĆŒĆľÄ?ĹŹ ŽƾĆš ŽĨ Ä‚ ÄšĹ?ĆšÄ?Ĺš Ç Ĺ?ƚŚ ƚŚĹ?Ć? ĆšĆŒĆľÄ?ĹŹÍ• ĂŜĚ Ä‚ŜŽĆšĹšÄžĆŒ Ć&#x; žĞ ŚĞ ƉƾůůĞĚ Ä‚ ϾϏÍ•ĎŹĎŹĎŹ Ć?ÄžĆŒÇ€Ĺ?Ä?Äž ĆŒĹ?Ĺ? ƚŚĂƚ ŚĂĚ Ä‚ Ä?ĆŒŽŏĞŜ Ĺ?ÄžÄ‚ĆŒÄ?Ĺ˝Ç†Í˜ ^ĞĞ Ć?ĆšĹ˝ĆŒÇ‡ ŽŜ WÄ‚Ĺ?Äž ώϲ͘ Photo by Brian Zinchuk

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PIPELINE NEWS December 2014

INSIDE SECTION A ϰ

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PIPELINE NEWS December 2014

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TOP NEWS $100 million a day impact By Brian Zinchuk Pipeline News Calgary – The equations is pretty simple, really, when it comes to growing nervousness about falling oil prices. David Yager, national leader for oilfield services from the accounting firm MNP, put it like this: Since Canada produces about four million barrels per day,“if we lost $25 per barrel, that equals $100 million per day. “That’s a lot of money, even in Estevan!” he said. “That is how much the pie will shrink.” He noted that last year the oilpatch saw $150 billion in revenue. If you extrapolate a $100 million loss of revenue per day over a year, that equates $36.5 billion. “A 25 per cent reduction in the size of the pie, that’s got to hit everyone,” Yager said. “These are big numbers. It’s nowhere like 2008-2009, when oil went from $147 to $38. It’s not as pronounced as six years ago.” Will we see a bottom to declining prices? That depends on OPEC’s meeting on Nov. 27 (after press time), according to Yager. He noted the signals from Saudi Arabia have been hard to understand. Additionally only one country, Saudi Arabia, has swing capacity to affect world prices. “They lost market share to the Americans,” Yager said, pointing to a four million bpd increase in North American production. North Dakota alone has gone from 100,000 bpd to over a million in just a few years. Additionally, the last four year have seen “really steady oil prices. “The decline rates on shale wells is quite high. You do have to keep drilling,” he said. How much tolerance there will be for low prices is yet to be determined. “They’ve got bills to pay, all the producing countries. The bottom really depends on what OPEC does. “If they want an $80 floor, they’ll get it. If they don’t do anything, who knows where the floor is? It’s called the basement.” So how does that affect the Canadian oil sector? “There’s going to be a contraction in the industry. If the pie for oil industry as a whole shrinks by $36 billion, there will be less wells drilled, less people employed. “We’re going into tough times. It’s not as tough as it was, but overall, people should manage their companies carefully.” “Call it a correction, not a depression,” he said. “It’s been quite a run for the last little while.”

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PIPELINE NEWS DECEMBER 2014

of small drones an opportunity BRIEFS Deregulation for Swift Current manufacturer Manitoba land sales are the pits

The Manitoba government attracted $470,201 in bonus bids in early November at its final land sale of the year, and its annual haul of $1.55 million was the lowest total since 2007. The government sold 896 hectares this week at an average price of $525. Prairie Land & Investment Services Ltd. paid the bonus high bid of $165,000 for a parcel located in the Pierson area. The lease, which included the southwest quarter of section 29 at 02-28W1, generated an average price of $2,578, also the land sale high. The firm also acquired an adjacent parcel for $130,000 at an average price of $2,031. It included the southeast quarter of section 29 at 02-28W1. For the full year, Manitoba collected $1.55 million in bonus bids on 6,765.26 hectares at an average of $229. This was the lowest annual bonus total since 2007 when the province attracted just $325,852. For 2013, the industry paid $2.03 million for 4,078.97 hectares at an average of $498.90. The next sale will be held on Feb. 11, 2015. The deadline for posting requests is Nov. 7, 2014.

Briefs courtesy Nickle’s Daily Oil Bulletin

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„ By Brian Zinchuk Swift Current – The skies are opening up for would-be drone operators, with the federal government announcing a substantial change in the regulations governing the operation of small unmanned aerial vehicles, also known as UAVs or drones. The technology, which has its roots in military applications, has exploded in recent years with ever more capable and less expensive drones, with GPS-guidance systems making them much easier to operate. There are numerous possible applications in the oilpatch, including environmental assessment, pipeline inspection, flare stack inspection, and mapping, just to name a few. Literally, the sky is the limit. Transport Canada today announced on Nov. 5 at the Unmanned Systems Canada conference in MontrĂŠal two exemptions that simplify small unmanned air vehicle (UAV) operations and safely integrate UAVs into Canadian airspace. Under the new exemptions, a Special Flight Operations Certificate will not be required for UAVs under 2 kilograms and certain operations involving UAVs under 25 kilograms. The new approach will apply to commercial operations and contribute to “a strong safety regime for those on the ground and in the skies,â€? according to a Government of Canada news release. Once the changes come into effect later in November, op-

erators must check on Transport Canada’s website if the exemptions apply to them and respect specific safety conditions, including requirements to operate within visual line-of-sight, maximum altitudes and away from built-up areas and aerodromes. In addition, Transport Canada is simplifying the application process and reducing the time it takes to issue Special Flight Operations Certificates for larger UAV operators. When Pipeline News spoke to Transport Canada in March 2014, the wait time for obtaining a SFOC had grown to five months, despite the fact the their website currently says the goal was to grant them within 20 working days. When we spoke to Transport Canada in March, if you wanted to fly over a site and put in your application that day, the earliest they could expect to get clearance, at that time, would have been September. In October, Minister of Transport Lisa Raitt launched the Government of Canada’s national safety awareness campaign for UAVs, which aims to help Canadians better understand the risks and responsibilities of flying UAVs. Last March Pipeline News also spoke to Monty Allan, a high-end drone manufacturer who designs and builds the Chaos Choppers Squad line of drones. They have seen widespread use in law-enforcement applications, particularly with the RCMP, but also some interest in the oilfield. ɸ Page A8

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PIPELINE NEWS December 2014 dŚĞ Ä?Ĺ˝Ć?Ćš ŽĨ Ä?ŽŜĆ?ĆšĆŒĆľÄ?Ć&#x;ŽŜ has gone up for Keystone XL. File photo

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BRIEFS Prentice sworn in on day of Throne speech

Keystone XL price tag rises to $8B „ By Geoff Lee Pipeline News Calgary – TransCanada Corp. has marked up the estimated cost to build the Keystone Xl pipeline by about $2.6 billion to $8 billion due to delays in U.S. regulatory approvals. The Calgary-based company previously put the cost at about $5.4 billion, a number virtually unchanged since filing their application to U.S. regulators in September 2008. Company president Russ Girling released the new estimate during a third quarter conference call on Nov. 4 with the U.S. regulatory process now in its seventh year Girling reported approximately $2.4 billion had been spent on the project by Sept. 30 advising the delays will result in higher tolls. “Our shippers both U.S. and Canadian producers and refiners remain solidly behind Keystone XL and their support has not waivered over the past six years,� he said. If approved, the Keystone XL would transport 830,000 barrels per day of oil, mostly produced from the oilsands to an existing Keystone pipeline system and processed by U.S. Gulf Coast refineries. “An expected decision on our presidential permit is on hold as the U.S. State Department has stated it wants to better understand the legal proceedings in Nebraska,� said Girling. A state court decision on who has the right to approve the Keystone XL route, the governor or the Public Service Commission, is expected in late 2104 or early 2015. Girling told the media that he didn’t think that an elected Republican majority in Congress during U.S. midterm elections that same night would have much sway on the approval of Keystone. “Since 2008, the Keystone project has enjoyed support from a majority of Americans,� he said. “From a Congressional perspective, I think that we enjoy a majority of support in both the House (Representatives) and the Senate.

“We are supportive of any process that can advance a decision on the project given that the environmental review is completed. “At this point in time, we’re just waiting for someone to say go.â€? The increased cost of the Keystone XL project has triggered a 50/50 cost sharing threshold between shippers and TransCanada. “With this new cost estimate for Keystone XL, we have rebased our tolls at the new cost estimate and the 50/50 sharing begins at this point,â€? said Paul Miller, president of liquids pipelines. Miller told investors that the company has yet to reveal its toll price, but he went on to say, “This Keystone XL toll at this capital cost remains competitive‌â€? TransCanada’s quarterly call was also an opportunity for the company to account for the cost estimate difference for Keystone XL from $5.4 billion to $8 billion. Alex Pourbaix, president of development, told investors the company said two or three years ago that it was going to hold off updating costs estimates. “We just didn’t see the value in updating it quarter to quarter. We think now it is probably worthwhile to give some ‘colour’ on that, hence we came out with the $8 billion. “Just to give you an idea, I would say the difference those numbers is really overwhelmingly the presidential permit delays.â€? He said TransCanada anticipated a two-year regulatory process when they filed their application with the State Department in line with the speedy approval of their base Keystone system. “We’re now in the sixth to seventh year,â€? said Pourbaix. “So you can imagine the costs that are associated with that.â€? “At the time that we proposed this project, it was a pretty good market for constructing pipeline projects. “It’s a lot tighter market now in North America and we’ve had six or seven years of inflation,â€? he added.

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Alberta Premier Jim Prentice was officially sworn in as a member of Alberta’s Legislative Assembly on Nov. 17 with his first two bills in mind to pass. The first bill he previously vowed will hit the reset button on property rights in Alberta by taking immediate steps to address concerns raised by landowners. The second bill will deliver on the commitment made by Prentice to end entitlements and hold government to account by enforcing the highest ethical standards. As for his swearing in Prentice said, “It was a great honour to be sworn in as a member of Alberta’s Legislative Assembly this morning along with my trusted colleagues Gordon Dirks, the Minister of Education, Stephen Mandel, the Minister of Health, and Mike Ellis, the new MLA for Calgary West. “I’m proud of these individuals and my entire team. But we know we have a lot of work ahead of us starting today with the new Legislative session and the Speech from the Throne. “Albertans will see today in the speech from the Throne how we are going to focus on their priorities, with our commitment to sound fiscal principles, ending entitlements and restoring public trust, maximizing the value of our natural resources, establishing our province as an environmental leader, respecting property rights and enhancing Albertans’ quality of life."

Briefs courtesy Nickle’s Daily Oil Bulletin

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PIPELINE NEWS December 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: SASKATCHEWAN & 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 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.

Welcome to truck country In one of those forehead-slapping, why-didn’twe-do-this-before moments, we realized it was time to focus on light trucks. Almost every single person in the oilpatch either works in one, or goes to work in one. This would prove to be a challenge, in that we spoke to multiple dealers in four different communities, almost all of which were selling the same product – Ford, GM or Chrysler. There was one Toyota dealer in the mix, too. While their product was the same, the dealerships were not. We tried to mix it up as much as possible in telling their stories. Here are some interesting numbers we found out: Of the dealers we talked to, pretty much everyone said light trucks made up three-quarters or more of their overall sales. A few were a little lower, and several were higher. Those who were lower wanted it to be higher. One dealer in Lloydminster reported a nine-to-one truck-to-car ratio. That’s huge. Indeed, while the Chrysler dealers tend to have “Dodge� figured prominently in their name, Chrysler’s recent move to rebrand its trucks from “Dodge Ram Trucks� to “Ram Trucks� places them in a bit of a conundrum. Since the vast majority of their sales are Ram Trucks, shouldn’t they call themselves (dealer name) Ram? In most cases, half-tons made up about half of their truck sales. Of the heavier trucks, three-quarter-tons and one-tons, Ford dealers reported significantly higher one-ton sales while Ram (Dodge) dealers reported higher three-quarter ton sales.

Chassis cabs were available from Chrysler and Ford, but not GM. The dealers tend to wish they could get their hands on more of them, but availability is often tight. These units are often used for welding or crew trucks. They also account for just a small sliver of the sales pie. We only saw a precious few unicorns out there – rare beasts that some people would say don’t exist anymore. That unicorn would be the two-door truck. The old-fashioned regular cab is not longer “regular� in the sense of “regular� being “normal.� One dealer couldn’t remember the last time they sold one. Another reported they only sell a handful a year. Indeed, while one of the best things about a truck is the ability to customize it as your own, the reality is there are several common denominators in the oilfield. Base trucks are few and far between. Almost all are four-doors. Almost every truck is a 4x4. If it’s a fleet truck, there’s a good bet it will be white, silver or black. There’s another reality out there: not only do oilfield workers go to work in their trucks, in many cases, particularly the young, single types, they go to work FOR their trucks. For many a young, red-blooded man, a girl and a shiny truck are high on the agenda, and not necessarily in that order. That lift kit and some big, matte-black rims mounting monster tires are a big motivating factor when stepping out of the doghouse to trip pipe in minus 35 Celsius weather plus a wind chill to boot. Some are buying brand new, kitted out trucks, as young as 18. So welcome to truck country. Wimpy cars need not apply.

PIPELINE NEWS December 2014

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A7

OPINION

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2LOÀHOG &KULVWPDV FDUROV In the spirit of Christmas, it’s time for the Pipeline News oilfield Christmas carols. They’re so bad, no apology will suffice, but I’ll offer one anyway. I’m sorry, they suck. Here goes:

RUDOLF Rudolf, the red-nosed roughneck Had a very shiny nose And if the driller saw it He would even say it glows

OTANNNENBAMA Otannenbama, Otannenbama When will you approve the Keystone? Otannenbama, Otannenbama, When will you approve the Keystone? The crude-by-rail is rolling now You didn’t stop it, anyhow Otannenbama, Otannenbama, When will you approve the Keystone?

All of the other roughnecks Used to laugh and call him names They never allowed the roughnecks To play any horseplay games. Then one foggy Christmas Eve The toolpush came to say Rudolf with your nose so bright, Won’t you light my derrick tonight?

12 PIPELINE DAYS OF CHRISTMAS On the twelfth day of Christmas, the spreadboss gave to me, Twelve inspectors sleeping, Eleven busies bussing Ten testheads testing Nine foremen fighting Eight ditchers digging Seven coaters coating Six month breakup Five sur-vey-ors Four door crew cab Three labourers leaning Two welders whining And a catskinner on a low boy

WHAT CHILD IS THIS? What child is this, who laid to rest, On the doghouse bench, is sleeping? Whom drillers screech and motors freak When he’s not cleaning something? This, this, is the new guy thing Whom drillers screech and motors freak This, this is the new guy thing The babe, too tired to clean things

HUNDRED DOLLAR OIL (TO THE TUNE OF WHITE CHRISTMAS)

Then all the righands loved him And they shouted out with glee Rudolf the red nosed derrickhand You shouldn’t be wearing your hoodie!

I’m dreaming of hundred dollar oil Just like the price we used to know. When the snowmobiles glisten And righands listen To the BRRRAP! they made in the snow

JOY TO THE WORLD Joy to the World! The Saudis caved And now we can have our crude One hundred dollars a bar-ar-ar-ar-el Just like it was before Just like it was before Just like, just like it was before.

I’m dreaming of hundred dollar oil With every rubber cheque I write May your toys be yours tonight Because the repo man’s coming in sight MERRY CHRISTMAS! Brian Zinchuk is editor of Pipeline News. He can be reached at brian.zinchuk@sasktel.net.

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,V WKH RLO DQG JDV VHFWRU VHFXUH" The killing of two Canadian soldiers by homegrown terrorists in one week in October including a breach in security on Parliament Hill in Ottawa have everyone asking if they are safe. The answer in Western Canada is just as safe as the day these tragic events occurred since most of these senseless acts of violence by a so-called lone wolf are not predictable. Criminals and terrorists particularly those with extremist viewpoints don’t announce when and where their crimes or acts of violence will take place. In the case of the gunmen who killed two soldiers, one of them had his passport taken, but no one thought to take him away to de-radicalize him. That’s why our security forces need to spend a lot more time and money on the prevention side of security including threats to the oil and gas industry. The global oil and gas security market was estimated to be $23.23 billion in 2013 and is expected to grow to $29.98 billion in 2018 according to industry sources on the Internet. Increasing terrorist attacks, a rise in cyber and network security threats and increasing government pressure for regulatory policies and security compliances are playing a major role in shaping the future of the oil and gas security market. The industry evens faces security threats from violent acts of nature such as floods, landslides and

strong winds. The oil and gas industry is also faced with the threat from individuals or groups who might harm critical oil and gas infrastructure based on religious, political or ideological beliefs. What is being done to prevent attacks by potentially radicalized individuals or groups on oil and gas facilities? In 2012, the federal government set up an integrated 32-person counter-terrorism unit in Alberta in response to labeling certain environmental and first nations groups as extremists and radicals. The province started to develop its own counter-terrorism management plans in 2002 that require companies that operate facilities such as oil pipelines and refineries to enact policies to respond to threats. In 2008 and 2009, there were several bombings of Encana natural gas wells near Tomslake in northeastern B.C. that police cited as examples of domestic terrorism. There were six separate explosions during that period. RCMP arrested Alberta environmental activist Wiebo Ludwig in connection with those bombings but he was eventually freed without charges. He died in 2012 from cancer. Ludwig was convicted in 2000 of bombing a Suncor well site near his home in Hythe Alta. and was found guilty of other charges and sentenced to

19 months in jail. These examples of domestic violence point to how vulnerable oil and gas wells, pipelines, rail and electrical facilities are to assault and how tough they are to prevent given the volume of infrastructure. They are hundreds of thousands of kilometres of provincially-regulated pipelines in Alberta and thousands of operating oil and gas wells and countless other facilities in remote locations that are tough to secure. Police crime reports are often linked to environmental extremism and crimes ranging from unlawful protests, break and enters, sabotage, arson and homemade explosives devices. The job of the counter terrorism unit is to gather intelligence to prevent attacks before they happen, but what do oil and gas companies do to prevent attacks or even vandalism? Some of these measure range from assessing security risks to facilities and personnel and installing wireless security cameras at oil and gas sites to managing cyber network vulnerabilities. The need for security is driving the creation and growth of security companies offering complete physical and cyber security solutions in a growing market. In the wake of what happened in October, security might be top of mind for many oil and gas companies in the coming months.

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

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PIPELINE NEWS December 2014

Pilots need to pay attention to NOTAMs Éş Page A4 On Nov. 7 he noted that the new regulations will make it easier for the low-end of the market, those flying small units like the DJI Phantom, which fall under the 2 kilogram weight restriction for not requiring a SFOC. “Right now the oilfield gets other companies to do the work for them. They get third parties. I think now it will allow them to purchase their own systems,â€? he said, noting that a relaxed regulatory environment might allow small scale drone operations to be brought in-house. The ubiquitous DJI Phantom, a one-foot-

wide X-shaped drone, has in many ways been to drones what the iPhone was to smartphones – simple, easy to operate and understand. It’s inexpensive, with a second generation Phantom, equipped with a camera, priced at approximately $1,650. It also falls within the 2 kg weight distinction in the new regulations. Their capabilities are substantially limited compared to a fully spec’d out Chaos Squad. A Squad, with a thermal imager, can cost as much as $25,000. But for many people, what the Phantom offers is good enough, and that’s why inexpensive drones are taking off. Chaos is in the

process of launching its new Squad. Instead of being individually handmade in Swift Current, these will be assembled in southeast Asia, and sold at a dramatically reduced price. “We’ll have turnkey systems for about $5,000. It will be available in December,� said Allan. The new Squad will have similar capabilities to the previous design. At 6.8 kilograms, it’s lighter than the previous 8.6 kilogram Squad, but both models still are above the 2 kilogram, no-SFOCrequired threshold. Still,

A Chaos Squad folded up for transport. WŚŽƚŽ Ć?ĆľÄ?ĹľĹ?ĆŠ ĞĚ

the promised simplified regulations should make the Squad an attractive platform for aerial work. The Nov. 5 announcement was unexpected for Allan. “I’m surprised to see that,

actually. I think they realized you can’t beat the market.� He noted that much of his client base will not be directly affected. “Most of my pilots are not hobby guys, but law enforcement, or doing some sort of investigative work.�

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Allan stressed the importance of issuing a NOTAM – notice to airmen – prior to operations. This can be done instantly, online, he noted. He added it will be important for pilots to pay much closer attention to NOTAMs in the future, so that if they are doing a low-flying flight, they don’t have conflicts with drones. “It’s up to the pilots that are flying. Commercial pilots have to get better at checking for NOTAMs. They have to realize there’s more stuff going on,� he said. On the web: www. tc.gc.ca/SafetyFirst.

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Not everyone is thrilled about drone deregulation By Brian Zinchuk Estevan – Transport Canada introduced regulation changes on Nov. 5 that will make it dramatically easier to legally operate small unmanned aerial vehicles (UAVs), more commonly known as drones, for commercial usage. Come the end of November, there will be a substantial reduction of the arduous paperwork that used to be required. The result will likely be many more drones in the air in the coming years. But not everyone is thrilled with the idea of a sky full of drones. Scott Piper, owner and operator of Estevan-based Blue Sky Air, is one pilot in particular who is not looking forward to the development. Blue Sky Air was the front page story in Pipeline News’ March 2014 edition entitled “Up in the Air.” The company specializes in low-level pipeline and facility patrols, criss-crossing the southeast Saskatchewan and southwest Manitoba oilpatch at very low altitudes looking for leaks and other abnormalities. “We had two close calls with them near a terminal,” said Piper, when asked about drones. That’s in addition to a run-in with an old-fashioned remote control aircraft about a decade ago. “A guy was doing aerial mapping. The first time, the (Blue Sky Air) pilot didn’t see the drone, but the guy on the ground called him on a radio and said, ‘You just about hit my drone!’” To make matters worse, the Blue Sky Air pilot was a new one in training. “It ruined his day,” Piper recalled. Then later the same day it happened again. “Same guy, later the same day,” Piper said. Blue Sky was patrolling another pipeline, and low and behold, “There he was. That time the pilot saw him.” It’s incredibly difficult to see a small drone while flying in an airplane. That drone, like the one in question here, might be only two feet across, and spindly like a flying spider. Many are just one foot across. The ironic thing in this case was the pipeline patrol company and drone aerial mapping company were working for the same client. “We had had no idea who he was or how to find out,” he said, noting there’s no easy way to identify a drone. In this case, the client let them know. Airplanes and helicopters have large lettering approximately two feet tall, or larger, identifying every aircraft much in the way a licence plate is on the back of every car. But you can’t do that on a tiny drone. Piper started to pursue regulatory action, but gave up. “I didn’t want to reopen it,” he said. The conflict arises from the overlapping flight envelopes. Drone operation, prior to the regulator changes, as well as after, are to be conducted below 400 feet. Most manned aircraft generally doesn’t operate below 500 feet. But there are exceptions. Pipeline patrols are one. So are crop sprayers and helicopters operating in support of seismic surveys. Piper said over a terminal they would fly around 300 feet high, but over a pipeline, that drops to between 150 and 200 feet. That’s right within the optimal operating altitude of many drone operations. He gave a hypothetical example of a small drone operating close to a drill-

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ing rig. Pipeline patrols will frequently fly near drilling rigs, since rigs often drill along established flowline corridors. If a two-foot drone is flying near a rig, and the airplane pilot diverts around it, they could hit each other. “A plane comes by to go around the drilling rig. The drone operator can’t hear the plane due to the noise of the rig. All of a sudden, the pilot comes around the corner and boom, there’s a drone there,” said Piper as a possible scenario. That’s no small matter for a small plane. Or a big one. Depending on the size of the drone, it could be like hitting a goose. When planes hit birds, an event called a “bird strike,” bad things can happen. In 2009, an Airbus 320, having just taken off from New York’s LaGuardia stuck a number of birds, likely geese, resulting in both engines failing. The pilot was forced to ditch the airliner, carrying 155 people, in the Hudson River, an event which soon became known as the “Miracle on the Hudson.” ɸ Page A10

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PIPELINE NEWS December 2014

Hitting a drone is a scary prospect for pipeline patrol

ůƵĞ ^ŬLJ ŝƌ Ň ŝĞƐ ůŽǁ͕ ͞ŝŶ ƚŚĞ ǁĞĞĚƐ͕͟ ĂƐ ŝƚ ǁĞƌĞ͕ ƚŽ ŝŶƐƉĞĐƚ ƉŝƉĞůŝŶĞƐ ĂŶĚ ĨĂĐŝůŝƟ ĞƐ ĨƌŽŵ ƚŚĞ Ăŝƌ͘ dŚĞLJ͛ǀĞ ĂůƌĞĂĚLJ ŚĂĚ ƚǁŽ ĐůŽƐĞ ĐĂůůƐ ǁŝƚŚ ĂŶ ƵŶŵĂŶŶĞĚ ĂĞƌŝĂů ǀĞŚŝĐůĞ͕ Žƌ ĚƌŽŶĞ͘ File photo

ɺ Page A9 If a drone hit one of his aircraft, Piper said hitting a wing would leave a big dent. If it hit the propeller, it would chop up the drone. But some of that drone could end up coming through the windshield. “If you hit my windshield, it will probably come through,” he said. Then there’s the fire hazard of a compromised lithium polymer battery which powers the drone. “I don’t want to be an alarmist and say these things will kill me. But it is another hazard,” Piper said. It’s also a distraction, as pilots may find their

eyes scanning more for drones than pipeline leaks. He added that a pilot in a plane has a vested interest in their own safety while operating that aircraft, implying that a drone operator’s life isn’t on the line when they take off their aircraft. “A helicopter has a person in it, looking where he’s going,” he noted. That helicopter also has a radio to talk to others in the air. Piper noted the importance of drone operators filing a NOTAM – notice to airmen – when doing operations, so that other pilots in the area can be on the lookout for low-flying drones. That can go a long way in addressing potential conflicts.

PIPELINE NEWS December 2014

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Halliburton swallows Baker Hughes By Paul Wells (with files from Pipeline News) (Daily Oil Bulletin) Calgary – The blockbuster deal announced Nov. 17 under which Halliburton Company will acquire all the outstanding shares of Baker Hughes Incorporated in a stock and cash transaction valued at US34.6 billion will create Canada’s largest pressure pumping entity, says a service sector analyst. While BMO Nesbitt Burns Inc.’s North American oilfield services analyst, Michael Mazar, thinks the deal has more international impacts than domestically in North America, there will be some ramifications here. “It does have some impact in Canada as well as for the Canadian service providers operating in the United States. The deal will actually create the largest pressure pumper in Canada with about 25 per cent market share. So bigger than Calfrac (Well Services Ltd.) and Trican (Well Services Ltd.),” Mazar told the Bulletin. “The top three pumpers would now control about 65 per cent of horse power. So that may help pricing long-term but it remains to be seen how disciplined they will be on pricing. Halliburton has never been a great operator in Canada and often offers discounted pricing in pumping. That can be hard to turn around culturally even if they are bigger.” Jason Sawatzky, an oilfield services analyst with AltaCorp Capital Inc., agreed that the combined entity would have a strong Canadian presence. “If you combine the two companies they would be of similar size to Calfrac and Trican in Canada. If you add up their horsepower, Baker has about

220,000 and Halliburton has about 175,000 in Canada, based on our estimates,” he said. “If you look at Calfrac and Trican, they’re both in that 420,000 to 430,000 range. So (Halliburton) will be very similar in terms of horsepower in Canada.” TD Securities Inc. analyst Scott Treadwell said the deal, in his view, does not have a significant direct impact on the Canadian oilfield services space, but there are a number of potential implications. “With the U.S. pressure pumping market potentially being consolidated through this transaction, the landscape and market dynamics, in our view, will shift as well,” he said in a note. Sawatzky agreed, saying the deal is really all about fracturing. “Basically with the two companies combining, it’s consolidating the fracking market … because Halliburton was the largest global fracker and Baker Hughes was number three. So when you combine the two of them you’ve got more scale to expand margins and you’ve got more pricing power now with that company — it’s just more of a fully integrated player,” he said. “What it does for the space in general, the North American fracking market, is it’s really all about consolidating that market and creating more pricing power and stability in that market. That would be some of the offshoot benefit to some of the Canadian frackers that have U.S. operations like Trican and Calfrac — you’ll probably see more stabilized pricing, Sawatzky added. “Between the two companies you have 4.3 million horsepower, so that represents 23 per cent of the total U.S. market. In terms of this consolidation theme, that represents a large part of that market.”

Mazar noted that there could also be some Canadian assets for sale. “Not in pumping but in other service lines as the U.S. government requests dispositions to meet anti-trust requirements — potentially directional drilling, wireline maybe and drillbits possibly. So that could mean opportunities to add strategically to asset bases for smaller players,” he said. “Otherwise it makes the biggest difference internationally where there are really only three IPM (integrated project management) bidders (now two). So it may make that market better from a pricing perspective and the like.” Added Treadwell: “In our view, potential asset sales in Canada are difficult to anticipate as there are geographic and service line considerations involved.” From a North American perspective, Mazar said the deal speaks to a desire for both scale and logistics. “Wells are getting bigger and bigger and more complex. Logistics is challenging and scale and breadth of services is important. This makes it much, much harder for small pumpers to compete across all of North America,” he said. “Halliburton had that scale already but Baker Hughes wasn’t a great executor. I think Halliburton figures they can fix Baker Hughes from an operational standpoint in the United States while adding even more to scale and logistics capabilities.” The transaction represents an equity value of $34.6 billion and an enterprise value of $38 billion, based on Halliburton’s closing price on Nov. 12, 2014, the day prior to public confirmation by Baker Hughes that it was in talks with Halliburton regarding a transaction. ɸ Page A12

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PIPELINE NEWS December 2014

6XEVWDQWLDO LPSOLFDWLRQV IRU &DQDGLDQ IUDFNLQJ à HHWV ɺ Page A11 Within Saskatchewan, in the past year Baker Hughes had abandoned construction of its partially complete supercentre at Estevan and withdrew its pressure services from there but maintained other services in the region. In the meantime, it recently opened a new supercentre at Lloydminster on Sept. 18. (see Pipeline News Oct. 2014 B 26). Halliburton pulled much of its frack fleet from Estevan and relocated it to Regina. More about the deal Upon the completion of the transaction, Baker Hughes stockholders will own approximately 36 per cent of the combined company. The agreement has been unanimously approved by both companies’ boards of directors. The transaction combines two highly complementary suites of products and services into a comprehensive

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offering to oil and natural gas customers. On a pro-forma basis the combined company had 2013 revenues of

$51.8 billion, more than 136,000 employees and operations in more than 80 countries around the world.

“We are pleased to announce this combination with Baker Hughes, which will create a bellwether global oilfield

services company and offer compelling benefits for the stockholders, customers and other stakeholders of Baker

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Hughes and Halliburton,â€? said Dave Lesar, chairman and CEO of Halliburton. ɸ Page A13

PIPELINE NEWS December 2014 ɺ Page A12 “The transaction will combine the companies’ product and service capabilities to deliver an unsurpassed depth and breadth of solutions to our customers, creating a Houston-based global oilfield services champion, manufacturing and exporting technologies, and creating jobs and serving customers around the globe.” Lesar said the stockholders of Baker Hughes will immediately receive a substantial premium and have the opportunity to participate in the significant upside potential of the combined company. “Our stockholders know our management team and know we live up to our commitments. We know how to create value, how to execute, and how to integrate in order to make this combination successful. We expect the combination to yield annual cost synergies of nearly $2 billion,” Lesar added. “As such, we expect that the acquisition will be accretive to Halliburton’s cash flow by the end of the first year after closing and to earnings per share by the end of the second year. We anticipate that the combined company will also generate significant free cash flow, allowing for the return of substantial capital to stockholders.” Martin Craighead, chairman and CEO of Baker Hughes said the deal gives his company’s stockholders a significant premium and the opportunity to own a meaningful share in a larger, more competitive global company.

“By combining two great companies that have delivered cutting-edge solutions to customers in the worldwide oil and gas industry for more than a century, we will create a new world of opportunities to advance the

2014, the day prior to Halliburton’s initial offer to Baker Hughes. And over longer time periods, based on the consideration, this represents a one year, three year and five year premium of 36.3 per cent, 34.5 per cent, and

“We envision a combined company capable of achieving opportunities that neither company would have realized as well — or as quickly — on its own, all while creating exciting new opportunities for employees.” - Martin Craighead, chairman and CEO of Baker Hughes development of technologies for our customers,” he said. “We envision a combined company capable of achieving opportunities that neither company would have realized as well — or as quickly — on its own, all while creating exciting new opportunities for employees.” Transaction terms and approvals Under the terms of the agreement, stockholders of Baker Hughes will receive, for each Baker Hughes share, a fixed exchange ratio of 1.12 Halliburton shares plus $19 in cash. The value of the merger consideration as of Nov. 12, 2014, represents 8.1 times current consensus 2014 EBITDA estimates and 7.2 times current consensus 2015 EBITDA estimates. The transaction value represents a premium of 40.8 per cent to the stock price of Baker Hughes on Oct. 10,

25.9 per cent, respectively. Halliburton intends to finance the cash portion of the acquisition through a combination of cash on hand and fully committed debt financing. The transaction is subject to approvals from each company’s stockholders, regulatory approvals and customary closing conditions. Halliburton’s and Baker Hughes’ internationally recognized advisors have evaluated the likely actions needed to obtain regulatory approval, and Halliburton and Baker Hughes are committed to completing this combination. Halliburton has agreed to divest businesses that generate up to $7.5 billion in revenues, if required by regulators, although Halliburton believes that the divestitures required

will be significantly less. Halliburton has agreed to pay a fee of $3.5 billion if the transaction terminates due to a failure to obtain required antitrust approvals. Halliburton is confident that a combination is achievable from a regulatory standpoint. “We have carefully evaluated the likely divestitures needed to obtain regulatory approval and are willing to divest assets if required at the appropriate time,” Halliburton’s CFO Mark McCollum told a conference call Nov. 17. “We’ve identified a number of potential buyers that we believe will be very interested in the businesses that may need to be divested and expect that those businesses should all obtain excellent prices and expedited sales.” The transaction is expected to close in the second half of 2015. The combined company will maintain the Halliburton name and continue to be traded on the New York Stock Exchange under the ticker symbol “HAL.” The company will be headquartered in Houston, Texas. Lesar will continue as chairman and CEO of the combined company. Following the completion of the transaction, the combined company’s board of directors is expected to expand to 15 members, three of whom will come from the board of Baker Hughes. Concurrently with the execution of the merger agreement, Halliburton withdrew its slate of directors nominated for the board of directors of Baker Hughes.

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7UDQV&DQDGD Ă€ OHV (QHUJ\ (DVW DSSOLFDWLRQ „ By Elsie Ross (Daily Oil Bulletin) Calgary – Shippers on the proposed Energy East crude oil pipeline will contribute $500 million to ensure there will be no increase in the cost of gas transmission for consumers in Ontario and Quebec when a segment of the Canadian Mainline is converted to oil service, says the chief executive of TransCanada Corporation. The company estimates that the contribution along with the transfer of $1 billion of rate-based assets to Energy East and the reduced operating and maintenance costs associated with that will result in savings of more than $900 million over the next 15 years, Russ Girling said in a conference call to announce the Oct. 30 filing of the Energy East application with the National Energy Board.

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More than half the savings will be to customers in the far eastern part of the TransCanada system, he said. TransCanada will ensure there is sufficient natural gas capacity to meet the current and future needs of Ontario and Quebec. It will not transfer any capacity to Energy East until it has confirmed that the capacity available to meet those needs of the market is contracted with TransCanada and is in place, said Girling. As part of that commitment, Trans Canada today also filed the Eastern Mainline project in southern Ontario. The proposed $1.5 billion project will provide an additional 250 kilometres of natural gas pipeline in an area of continuing growth in demand. The project will increase the capacity of the Toronto-Montreal corridor by about 600 mmcf per day, providing greater access to affordable new natural gas supplies from the northeastern United States. The $12 billion Energy East Pipeline Project involves converting approximately 3,000 kilometres (1,864 miles) of TransCanada’s existing Canadian Mainline system to crude oil transmission service and constructing approximately 1,600 kilometres (990 miles) of new pipeline. The pipeline will transport crude oil from receipt points in Alberta and Saskatchewan to refineries in Montreal and Levis, Que., and to a proposed new marine terminal in Cacouna, Que. Energy East will terminate in Saint John, N.B., at the Irving Oil Company, Limited oil refining complex, which is the largest in Canada and one of the 10 largest refineries in North America. In addition, TransCanada and Irving have formed a joint venture to build, own and operate a new deep water marine terminal. TransCanada anticipates the pipeline will be in service for deliveries in Quebec and New Brunswick by late 2018, subject to receiving the necessary regulatory approvals and permits. The 1.1 million bbl-per-day pipeline is underpinned by 20-year firm commitments for more than 900,000 bbls per day from domestic producers, Canadian refiners and international markets. “These contracts indicated the desire of eastern Canadian refineries to access growing supplies from domestic crude oil and for Canadian producers to potentially reach both domestic markets and international markets in the safest and most efficient means possible and that is in a pipeline,â€? said Girling. TransCanada anticipates that about half the crude shipped on Energy East will go to domestic refineries with about half exported to markets mainly in the northeastern United States, Europe and potentially India, he said. The purpose of the application is to provide the NEB with the scientific evidence that not only demonstrates the need for the pipeline but also TransCanada’s ability to design, construct, and operate the pipeline in a safe and environmentally respectful way and the company is confident it does exactly that, Girling told reporters. At more than 30,000 pages, the application is one of the most extensive regulatory applications in TransCanada’s history, said Girling. The 70 printed binders filed with the NEB provide specific details on environmental planning measures, design and construction methods for safe operations, findings from an independent environmental and socio-economic assessment, and details on discussions with more than 7,000 individuals, 5,500 landowners, and 158 First Nation and Metis communities across six provinces. “The final result is a body of work that I believe sets out what we set out to do many months ago and that was to listen,â€? he said. “We listened to communities, businesses, landowners, First Nations and other stakeholders across this country and they share the comments, questions and concerns about the proposed pipeline.â€? ɸ Page A15

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PIPELINE NEWS December 2014 Éş Page A14 That information provided valuable feedback in the development of the pipeline, which included making changes to the pipeline route and the facilities where it made the most sense from both an environmental and a health and safety perspective, said Girling. TransCanada also has filed environmental assessment studies with the Ministere du Developpement durable, de l’Environnement et de la Lutte aux changements climatiques du Quebec (MDDELCC) for the marine terminal and storage facility planned for Cacouna. The company has agreed to voluntarily engage the BAPE process and will, as part of that collaboration, address environmental issues related to the pipeline facilities planned for Quebec, based on the environmental and socio-economic assessment prepared for the NEB. The application contains a breakdown of the latest job and economic benefits for the full scope of both the Energy East Pipeline Project and the proposed Eastern Mainline Pipeline Project based on new studies by the Conference Board of Canada and IHS, said Alex Pourbaix, executive vicepresident and president, development The studies conclude that Energy East will generate more than $7 billion in additional tax revenues after the first 20 years of operation for local, provincial and federal governments, along with billions of dollars in economic activity across the country, he said. In addition, it will generate an additional $36 billion in gross domestic product by 2020 in Canada. In Ontario, the project is expected to have the largest impact at $15 billion in GDP — equivalent to the entire auto industry for one year, he said.

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In the past year, Energy East has spent $60 million on local suppliers in Quebec and Ontario alone, Pourbaix noted.  The project will support an average of approximately 14,000 direct and indirect full-time jobs across Canada during development and construction, according to the studies. The studies also found that the project will make eastern Canadian refineries more competitive by allowing them to eliminate their reliance on more expensive crude oil imported from outside Canada. On the safety side, TransCanada prides itself on the safe and reliable delivery of energy products to markets where they are needed, Girling said. “I can tell you without a doubt, that no one has a stronger interest than we do in ensuring the safe operation of our systems. It is something where we simply will not compromise.â€? In addition to emergency response plans developed with local emergency response agencies along the pipeline’s entire route, safety measures planned for Energy East include conducting thorough inspection and upgrade work to existing pipe to ensure its safe conversion to crude oil transportation and placing automatic shut-off valves and using

A15

thicker-walled pipe near major water bodies. All of TransCanada’s oil pipelines are monitored 24/7 by a state-of-the-art control system, allowing highlytrained operators to stop the flow of oil within minutes if necessary. Alberta Premier Jim Prentice also welcomed the filing describing Energy East as representing a “true nation-building project.â€? The application for approval is a significant step towards getting full market value for Canada’s resources, and will help the country realize its economic potential, he said. “Not only will it connect the oil resources of Western Canada with refineries in Eastern Canada and to global markets, it will connect Canadians by creating jobs and supporting businesses from coastto-coast. Energy East will also improve Canada’s self-reliance by significantly reducing the amount of oil that we import.â€? For Canada to prosper, energy needs to get to markets and Alberta supports all safe and viable options to diversify and expand market access for Canada’s resources, said Prentice. “We respect the National Energy Board hearing process and have full confidence that the panel will make its decisions based on science and factual evidence.â€?

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A16

PIPELINE NEWS December 2014

Knight Dodge is a recent ownership change in an area where dealerships can stay in the same hands for decades Weyburn – Dealerships do change hands on occasion, but in southeast Saskatchewan, it doesn’t happen a lot. Some of the dealerships have roots going back as far as the 1930s within the same family. Knight Weyburn Chrysler Dodge Jeep Ram is the most recent ownership change in the region. Brad Pierson is the dealer principal for Knight Dodge Weyburn, which is part of a larger group of dealers. Knight has locations in Swift Current, Moose Jaw, Regina, Medicine Hat, Alta, Winnipeg, Man., and Kelowna, B.C. Pierson is originally from Estevan, where he was general manager of Power Dodge until the end of January 2014, when he joined the Knight group. The dealership transitioned to the new name and ownership in early 2014. “I’m a partner with Kevin Knight and a

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growth. “I feel we do a substantial amount of fleet sales,â€? he said. Three of the largest oil companies in the region are regular customers, for instance. In addition, a number of smaller companies also operate fleets. “I feel we have a lot of solid fleet customers who are private,â€? he said. “When people think of fleet, they think of national fleets. Oil companies buy more like a retail sale. They typically lease through national companies. Smaller fleets are usually purchased, not leased.â€? Pierson said, “There’s benefits to companies looking at yearly and five-year plans. If they do their own factory orders through us, they get exactly what they want, as opposed to getting something off our lot or others that hopefully ĎŽĎ°ÍŹĎł ĹśĆšÄžĆŒĆ‰ĆŒĹ?Ć?ÄžĆ? ŽĨ DĹ?ĚĂůĞ Ĺ˝Ć‰ÄžĆŒÄ‚ĆšÄžĆ? Ä‚ Ć?žĂůů Ň ĞĞƚ ŽĨ ZÄ‚Ĺľ ĆšĆŒĆľÄ?ĹŹĆ?Í• Ć‰ĆľĆŒÄ?ŚĂĆ?ĞĚ ĨĆŒŽž <ĹśĹ?Ĺ?Śƚ ŽĚĹ?Äž ĹšĆŒÇ‡Ć?ĹŻÄžĆŒ :ĞĞƉ ZÄ‚Ĺľ Ĺ?Ĺś meet their specs.â€? tĞLJÄ?ĆľĆŒĹśÍ˜ dŚĞ Ä?ŽžĆ‰Ä‚ŜLJ Ć?ƉĞÄ?Ĺ?Ä‚ĹŻĹ?njĞĆ? Ĺ?Ĺś Ç ÄžĹŻĹŻ ŽƉĆ&#x; ĹľĹ?njĂĆ&#x; ŽŜ͘ Photo by Brian Zinchuk ɸ Page A17

number of partners,� he said. The Weyburn dealership used to be known as Redcoat Chrysler, owned and operated by Brad Spencer. Pierson noted different partners had come and gone, and Spencer had wanted to move on. That meant it was time for Pierson to jump on the opportunity. “For someone in my position, I felt my time was running out. So many dealerships were being bought by larger groups. There are less and less dealer changes. Estevan and Weyburn are a

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bit of a unique situation in that it isn’t largely owned by big groups. We’re the only groupowned store here,� said Pierson. His history in automotive goes back quite a ways. “I started washing cars in a dealership when I was 18. My early years it was in the back, washing cars, or in the parts department,� he said. “In 1998, I

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would have been 23, I moved out of automotive and into auto sports to get into sales.� That lasted for five years before he returned to the automotive world. He went from being a salesman in 2005 to a sales manager, when he made the switch to Power Dodge. Two years later he became business manager. Pierson’s wife Colette looks after the social media side of the business. Their 16-year-old

son works in the lot, and their 14-year-old daughter sweeps floors. A few years ago Chrysler re-branded their truck line from Dodge Ram trucks to Ram trucks. The irony is that many dealerships, like Knight Dodge, refer to the short form of their name as “Dodge,� yet most of their sales are in fact Ram trucks. When you count everything other than a car, Knight’s Weyburn location sells approximately 80 per of its units as trucks. Trucks are an area they want to focus on for future

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PIPELINE NEWS December 2014 Éş Page A16 That includes the option of ordering company colours for the trucks. Fleet sales are all crew cabs these days, and mostly three-quarter-tons. One oil company, for example has an operator spec, which has cloth seats but is nicely equipped. A lead hand would have bucket, but still cloth, seats. A manager would rate a fully loaded truck. Some companies will run a lot more base trucks for junior workers. Custom orders from the factory can take three

months. But sometimes the timeline is much shorter and requires a different approach. In one case, an oil company bought another, and all of a sudden they needed a bunch of new trucks, in a hurry. “They couldn’t wait to order them. We had a month to outfit them. Colour wasn’t important,� said Pierson Pierson likes to be proactive, having a number of trucks on hand just in case some of the local fleet buyers need one right away. “I like to stock a lot of trucks that are fleet spec

in the event they need one,� he said.� Those units are made available to the public, but they come in handy if a leasing company or local company needs one quickly. When it comes to working out a life cycle, he said, “We can sit down with a customer and come up with a plan.� That includes planning for the best return for a trade. Companies may plan to have a high trade value, or plan to run it into the ground to the point where the next step is the crusher. Different companies have different plans. National fleets will often run their trucks to a certain number of kilometres, say 120,000, as an example. Private fleets will often run as long as it’s safe. “I know there are rules out there,� he said with regards to maximum age or kilometres allowed by the oil or pipeline companies that these service firms work for. “For personal trucks for company use, there’s definitely parameters for years and mileage.� While Knight Dodge does handle a number of fleet sales, Pierson concluded by saying, “We are a retail location and we stock full line-ups, from a Dodge Dart to a Dodge Viper.� Indeed, there was a shiny Viper sitting in the showroom, right beside, you guessed it, a truck.

Have Merry Brad Pierson’s showroom includes not only trucks, but a very shiny Viper. Pierson took over as the dealer principal of the Weyburn Chrysler dealership in early 2014. It was renamed Knight Dodge Chrysler Jeep Ram. Photo by Brian Zinchuk

A17

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A18

PIPELINE NEWS December 2014

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A19

Keystone XL prepped in the west „ By Geoff Lee Calgary – TransCanada Corp. is poised to start constructing its Keystone XL pipeline through Alberta and Saskatchewan without delays once the go button is pushed. The company held a media teleconference on the proposed $8 billion pipeline on Nov. 19, the day after the U.S. Senate came within one vote of passing a bill to fast-track the construction of the pipeline. The proposed $8 billion pipeline would carry 830,000 barrels per day of crude oil from Western Canada to refineries in the Texas Gulf Coast. Construction will start as soon as U.S. President Barack Obama issues a permit to build the international pipeline to link with the main Keystone system in Steele City Nebraska. The U.S. State Department has stated it wants to better understand legal proceedings going on in Nebraska. A state court decision on who has the right to approve the Keystone XL route, the governor or the Public Service Commission, is expected in late 2104 or early 2015. Meanwhile, TransCanada’s president and CEO Girling told Pipeline News the company has done all it can to prepare for construction of the pipeline in Canada. “With respect to preparation in Alberta and Saskatchewan, we’ve completed our major river crossings, for example, the pipe itself is staged and ready to move on to site� said Girling. “And other preparatory work that we thought was reasonable, given the delays we wanted to get ourselves into a place that things that could be normally bottlenecked in a two year construction

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window – we’ve taken care of those. “Usually those things are like river crossings that we’ve tried to address – any of those things that could be critical path items if you will,� added Girling. “Because once the go button is pressed we want to be able to move as quickly as we can to get this pipeline in place and get those folks working and get crude oil moving through the pipeline on a safe basis.� The Keystone XL is also designed to ship up to 100,000 barrels of oil per day of U.S. light Bakken oil which Girling has said counters recent comments that Keystone is an export pipeline for Canada. “We have dedicated 100,000 barrels a day of capacity at Baker, Montana to be available to move Bakken crude to market,� Girling told Pipeline News. “Currently we have about 65,000 barrels per day at that capacity reserved. “My expectation would be if we got a Presidential Permit we would see that number go to 100,000 barrels a day very very quickly.� The Senate vote count in favour was 59-41 with 60 votes needs to pass the bill. There were 14 Democrats who voted for the bill with all 45 Republicans who vote for the bill. If the bill had passed Obama likely would have vetoed the bill for short circuiting the government’s

ongoing environmental review process. The Senate vote followed the passage of a similar bill by the House of Representatives on Nov. 14. “The majority of the U.S. Congress, in keeping with public opinion surveys, wants to see the Keystone gridlock come to an end so thousands of Americans can go to work building the final stage of one of the largest infrastructure projects on the books right now in the U.S.� said Girling in a statement about the House vote the morning of the Senate vote. The Senate vote was one of the last acts of the current Senate controlled by the Democrats. This Senate is expected to complete its work by midDecember. Republicans are expected to introduce their own Keystone authorization bill in January when the assume control of both houses of Congress.

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2IÀ FH &HOO The Safety Association for Candada’s Upstream Oil and Gas Industry

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A20

PIPELINE NEWS December 2014

WCB holds regional workshop in Estevan Injury rates in oil and gas decline sharply from 2012 to 2013

'ŽƌĚ ŽďƌŽǁŽůƐŬLJ ƐƉŽŬĞ ƚŽ ϳϰ ƉĞŽƉůĞ ǁŚŽ ĂƩ ĞŶĚĞĚ Ă tŽƌŬ^ĂĨĞ ƌĞŐŝŽŶĂů ǁŽƌŬƐŚŽƉ Ăƚ ^ d/ ŽŶ EŽǀ͘ ϰ͘ tĂƚĐŚ ĨŽƌ ŵŽƌĞ ĐŽǀĞƌĂŐĞ ŝŶ ŽƵƌ :ĂŶƵĂƌLJ ĞĚŝƟ ŽŶ͘ Photo by Brian Zinchuk

Estevan – The Workers Compensation Board held a full-day WorkSafe regional workshop at the Saskatchewan Energy Training Institute in Estevan on Nov. 4 Gord Dobrowolsky, chairman of the Workers Compensation Board, kicked off the seminar, which featured presentations on WCB claims, online interaction with the WCB, modified duties and youth strategies. Chris Coles, vice president of health and safety operations with Cenovus, did a presentation on the “safety diamond,” a concept in distilling safety statistics beyond the classic

safety triangle. A total of 74 people took part in the event, in addition to WCB staff. Dobrowolsky showed off the WCB’s video that has aired as a commercial on everything from local television to the CNN.com website. In it, a construction worker is being egged on by his boss via text messages to deliver some parcels. In another vehicle, a mother with two young children in the back seat are heading the other way. Both are distracted, one by the texting, the other by the children. The worker pulls out to pass a semi just as the mother approaches the other direction. The video ends just as the two collide. The implication is that the result is a head-on collision, quite possibly fatal for all involved. “That ad caught world-wide attention,” Dobrowolsky said, noting distracted driving now kills more people than drunk driving. The seminar is a new initiative for the WCB, he explained to Pipeline News. “There’s only been three in the province. There’s going to be a lot more. The whole idea is for we as an organization to come to the employers instead of them coming to us. People are busy, right? Estevan is certainly on the list of busy places. That’s why we come to see the employers. They’re busy. Do they have time to come to Regina or Saskatoon where these events are normally held? No. “So we’re coming to the smaller areas. Last year we were in Prince Albert. This year, Estevan. There’s going to be more of these held as we go forward.” “We’re looking at going anywhere in the province where there’s a demand.” The seminars lets employers know what the WCB does. It also informs those employers what to do if a worker is injured. “A lot of employers, I’ve found, quite frankly, don’t know what to do,” Dobrowolsky said. “Mission Zero,” is a partnership between the WCB and the Ministry of Labour and Workplace Safety, is all about workplace safety. Injury prevention is a major theme of the seminars. In the oil and gas sector, he said injury rates are dropping, which is really good to see. Dobrowolsky said, “From 2012 to 2013, there was a 23 per cent drop in time loss injury rate, and a 9.6 per cent drop in the total injury rate, which is incredible, incredibly good news.” He cited Westmoreland coal, Enform and others as making an impact.

For the best deals all day, shop Knight Dodge.

1627- 1ST Ave. NE, Weyburn

Phone: 306-842-7333

BRAD PEIRSON DEALER PRINCIPAL

TYSON CALLADINE SALES MANAGER

CHRISTY SANDERSON FINANCE MANAGER

KEVIN SMITH SALES ASSOCIATE

KEN LARSON SALES ASSOCIATE

WAYNE MARTIN SALES ASSOCIATE

BLAIR STREELER SALES ASSOCIATE

Morgan Grainger Sales Associate

www.knightdodgeofweyburn.ca

ROGER HILL FIXED OPERATIONS MANAGER

PIPELINE NEWS December 2014

A21

Kenney Cugnet remembered

„ By Brian Zinchuk Weyburn – “Did you increase shareholder value today?� So began Danny Cugnet, quoting his late father, Kenney Cugnet, in a eulogy that brought laughter and tears to hundreds in attendance. Kenney had passed away on Oct. 30 from a struggle with cancer, a little over a week shy of his 69th birthday. Kenney Cugnet was a giant of the southeast Saskatchewan oilfield, not only in his business acumen, but his philanthropy. With no small irony, Danny noted that the high school which he dropped out of in Grade 10 now has his name on the side. That sign is in recognition of the $1 million donation Kenney and his wife JoAnne made to the Triple C Centre, now known as the Cugnet Centre. “Philanthropic graffiti,� JoAnne once noted, according to Danny. The funeral on Nov. 6 was held at a larger venue, St. Vincent de Paul Roman Catholic Church, than originally planned. Even then, the church filled to standing room capacity as hundreds came out to pay their respects. Everyone from the local barber to the board of Crescent Point Energy Corp., of which Kenney had been a member since 2003, attended. Cugnet had been part of that company’s growth from its infancy as a small junior producer to a $20 billion company and one of the largest producers and most active drillers in Canada. Indeed, he was integral in the company’s donation, just a month before his death, of $4.5 million to the Weyburn and District Hospital Foundation. That donation put the community over the top in its efforts to trigger provincial funding for a new hospital in the coming years. It also came in the wake of a $1 million donation from Kenney and JoAnne on behalf of their family for the same initiative. Kenney was the president of Valleyview Petroleum and Six Bits Resources Inc., both private oil and gas companies, and has worked in the oil and gas industry since 1962. He has been on the board of Crescent Point Energy and its predecessor since 2003. Cugnet also served as a director of Elkhorn Resources Inc. Formerly, he served as director of Tappit Resources Ltd., Starpoint Energy Inc., Mission Oil and Gas Inc., Medora Resources Inc. and Cypress Petroleum Corp. Also, from 1987 to 1992, Cugnet was a member of the Saskatchewan Surface Rights Arbitration Board. Danny noted Kenney took particular pride in having served under both New Democratic Party and Progressive Conservative administrations, meaning the appointment was one of competence, not patronage. In 2007 he was named Southeast Saskatchewan Oilman of the Year, along with Jim Boettcher. Beyond corporate Calgary, he was also involved in numerous local oilfield business, such as Panther Drilling, Petrotherm and Aaron Well Servicing but he generally shied away from public attention in that regard. His history in the Weyburn oilfield goes back to its very beginning. Sixty years ago, the discovery well of what would

eventually become known as the Weyburn field was drilled near Ralph by Central Leduc Oils Ltd., a company which became Central Del Rio Oils Ltd. in 1957 with the merger of Del Rio Oils. The discovery well at 14-7-7-13-W2 came in during the fall of 1954. Kenney Cugnet had a very unique perspective on this development, as their family farm was very close to the discovery well. It all started when he was eight years old. From negotiating the price of chicken eggs with rig hands as a child, he grew to love “the deal,â€? as Danny put it. Many such deals were done at the kitchen table, which was in many ways Kenney’s board room table. Ken was predeceased by his parents, George Antoine and Irene Francis Cugnet and father-in-law, David Albert Bannatyne. Ken will be lovingly remembered by his wife of 39 years, JoAnne Bannatyne-Cugnet; son, Daniel (Tana) and children, David and Isabelle; son, Craig; son, Tim (Leyna) and children, Kingston, Kensington and George; son, Matt ( Jennifer) and daughter, Josephine all of Weyburn; twin brother, Dick (Pat) of Weyburn, SK and children, Andrea & Leah and families; sister, Beverly (Vic) Locken of Moose Jaw, and children, Lori, Wendy & Michael and families; brother, Bobo (Marilyn) of Weyburn and children, Teresa, Wes and Dale and families; brother, Doug (Marga) of Weyburn and children, Nicole, Aaron & Luke and families; sister, Janie (Paul) Samletski of Langley, B.C. and children, Kristie and Kenney and families; mother-in-law, Gertrude “Babeâ€? Bannatyne of Weyburn; brothers-in-law, David Bannatyne and Nairn (Donalda) Bannatyne and children, Nairn Jr. and Robbie and families as well as numerous cousins, relatives & families. Danny’s stirring eulogy was incredibly touching and funny. “Did we increase shareholder value today?â€? he quoted his dad in both opening and closing. We can say this: surely in heaven, we did. Here is that eulogy, reproduced in its entirety: Did you increase shareholder value today? My Dad always used to say that to us. Tamara MacDonald wrote last week so eloquently to my mother. We will miss him dearly, but remember him fondly always. Thank you everyone for being here today and for those who have travelled. We are here to celebrate and remember the life of my father. It has meant the world to my mother and our family to have so much love and support from everyone who has reached out to us throughout my father’s illness and now in his passing. A sorrow shared, is a sorrow diminished. It is truly no small thing when you have a whole community and an entire industry praying for you and rooting for you to get better. I can’t tell you how many times a day someone would ask me, and many times it was people I didn’t know. They would say, “I know you are probably tired of getting asked this, but how’s your dad?â€? And I want you to all know we didn’t get tired of it. We knew you all cared. What an incredible gift to him and to us. Thank you for that. The words I share are a collection of thoughts and memories from myself and the entire family. As Reverend Barnabas said to us a few days ago, my father was a very down to earth man with a larger-than-

life personality. My dad’s life began with his birth on November 9, 1945 at Mount St. Mary’s Hospital on the Hill here in Weyburn when he and his twin bother Dick were born. My entire life he has referred to Uncle Dicky as his womb-mate. That same sense of humour and wit that we have always known in him, I imagine was much the same as a cheeky farm kid from Ralph growing up. I would quote dads words from an excerpt in a speech he gave when accepting the Southeast Sask Oilmen of the Year Award in 2007, “My love affair with the oilpatch started when I was eight years old with the drilling of the Weyburn Unit discovery well in 1954 on a neighbour’s farm. For my twin brother and I, it was the beginning of our careers in the oil service industry. “With the arrival of rig personnel and their families, our farmyard became a camp for these “oilpatch gypsiesâ€? who were happy to be able to plug into the farm power pole. As many as ten trailers were parked on our doorstep. We were the first episode of “Trailer Park Boys.â€? “Dick and I learned the art of negotiation, selling eggs and milk. We babysat their children. We picked their beer bottles. Our piggy banks quickly filled with this newfound wealth. And these temporary neighbours were a great source of gossip and stories. “And we also learned an early valuable lesson about how quickly the oil business can go south in a hurry. We never know when someone in power will pull the plug. “I remember we asked our mother, Irene, how come the water hauler, whose wife was in the hospital, was spending the night in the driller’s trailer when the driller was at work? The next morning my mom unplugged the water hauler’s power and he was sent on his way. Dick and I experienced an immediate 20 per cent drop in cash flow. Eventually the rigs and trailers moved on. Our service industry was reduced to the discarded pipe, threads, and collars which Dick and I sold to the scrap dealer. Life was not as exciting and we were left with memories and a lifetime addiction to oilpatch stories. And this, I suspect, was the reason we both chose careers in the oilpatch.â€? End of quote. Dad was of the generation that still got to school riding a horse across the prairie. His early education took place in a one room school house at Ralph. They then went on to Queen Elizabeth and the Weyburn Collegiate where dad left in Grade 10, not with a diploma but an attitude. He went to work in the patch and on the farm. Many years were spent as a young man with no particular direction other than work, time with friends and family, and one of his favorite winter hobbies. As a young man Dad loved to race snowmobiles. He used to race sleds all winter and even against guys like Gilles Villeneuve. He gave it up as he climbed the ranks because it became increasingly dangerous and he was going to be a father and wanted to be there to raise me. My father’s life took on different meaning and direction actually when he met my mother. His partnership with my mother was one of love, hard work and loyalty. They always both felt like they had met and found their equal and parents on both sides were relieved because my grandparents thought neither were going to get married. ɸ Page A22

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Increasing shareholder value, in heaven: Kenney Cugnet, 1945-2014 Éş Pagr A21 They made an incredible team over the years, and they truly were a team in every sense of the word. Their achievements in business and their philanthropy would not have existed without each other. Mom mentioned the other day that she would have never started to write if she hadn’t married the farmer. It was the result of Dad sharing his love of the land and “growing food to feed families farawayâ€? that inspired A Prairie Alphabet. My parents loved to travel and have done a lot of it over the years. I am so happy that they had so many adventures together and were able to see the world. No matter where they were they always made sure there were fresh flowers in the room. My dad didn’t like holidays as a kid because then it meant work, like picking rocks by hand. It wasn’t until he met mom that he started to travel and see the world. And once he saw a bit of it, he wanted to see all of it. They shared a love of music which started with country western and grew into operas in Vienna, musicals in New York, Gaither Gospel cruises or at home here the Variations group or the High School Stars Choir. One of their favourite things to do was to simply go for a drive. They would drive around and admire crops, a neighbours or their own. They both loved to check the cows and see their wells and what else was being drilled. And they shared the same love and adoration with my brothers and I, as often we were with them on those dates. People would say to my mother, “Wow...he has really changed since he met you.â€? Mom would reply, “Hopefully you mean for the better.â€? They met when my mother moved to Weyburn as a public health nurse. She was actually being introduced to dads cousin and ended up seated beside Kenney and thus began a 40 year long conversation. Mom’s dream was to work in South America, Peru. Falling in love with this farmer was the last thing she wanted or expected. Mom’s plans to save the world weren’t going to happen, being married to some broke farmer in Weyburn, Saskatchewan. One night when mom was in Paraguay she received a phone call in the middle of the night. Dad had decided enough was enough, he couldn’t live without her, so he proposed. Luckily for him she decided she no longer wanted to live in the jungle and the world was going to be a lot harder to save than she thought so marrying a farmer wasn’t such a bad option. My mother said, “This call must be costing you a fortune.â€? Dad replied, “I’m actually in your apartment watering your plants. It’s your phone.â€? Dad had used her phone to call and propose because he couldn’t afford the long distance. My mother says that my dad is a tribute to the upbringing of his parents but she put on the final touches. Our upbringing was an interesting one filled with the normal things kids do like play sports and take music lessons and family trips and things like that. The standard type of stuff. But there were so many other things that seemed strange and exciting and were stark contrasts to what would be normal. They were our normal but I knew then and more so now how unique it was. Many nights our kitchen table had these amazing characters seated around it as my father planned a well

or tried to close a deal or secure a lease. A tradition that started in my grandparents home. I can remember much the same thing as a child, with my uncles present, oilfield personnel and whoever else stopped in. It was always a hub of activity. Our kitchen table was and always has been a boardroom table. When we were kids sitting there listening in our pyjamas just like it is now with our kids sitting and listening in their pyjamas. What an education I tell ya! Most times it was friendly conversations and visits with partners and occasionally it could be a heated exchange with a land man or some other competitor or adversary. Most of these men, were true characters in their own right...with stories that would have me and my brothers listening and enthralled with harrowing tales of survival or wild nights of rebellion or old oil patch loves and matches made, fortunes won and lost and lives of victory and defeat, the men and women and stories going back to the birth of the Western Canadian oilpatch and the pioneers of Western Canada. Stories and people that didn’t seem real. They seemed like fish stories and legends. But they were real. Because the men who lived those stories and told them sat many nights at our kitchen table. Many are alive still, many are now gone. Guys like Blake Kokeritz who would sit and pick a guitar, which stunned us as kids when we realized he could actually sit and pick a guitar and tell us all kinds of stories like surviving a helicopter crash In the St. Lawrence River, which to us was unbelievable. Who had been in a helicopter, let alone 50 years ago, let alone survive a crash into a giant river? Or K.T. , Ken Trueman, who would call the house it seemed like daily and when I would answer would always say to me in that rough gravelly voice that some here would know, “Hey little girl is your daddy home....� Now, did he think I was a little girl? Of course not. But that’s what he always said, Day in and day out to whichever one of us answered the phone. Or nights when my mother was working at the hospital we might be at a rig on location with my dad well into the night. This was still the old way. The patch was such a different place when we were kids. Safety standards and practices are much different and better now. But at that time as kids we were wandering and climbing around on a working rig in the daylight or dark. It was always, “Don’t get in the way of the men, don’t get hurt and watch out for each other.� I can remember smelling open pails of ammonia for the first time and wondering what it was or standing for hours on the edge of a sump throwing rocks and clumps of dirt at it watching them slowly sink out of sight as if they hadn’t been thrown or ever existed. Sitting In a dog house or geologists shack supposed to be doing our homework but distracted with everything going on. When he was done he’d load us up..three, then four of us. Usually we would then drive in and pick mom up KFC and deliver it to Souris Valley as she was one of the nursing supervisors at that time. It seemed like another world. But it was our world and we were with our dad. As a kid growing up on the farm our water source was a dugout. But our drinking water came from a neighbours farm with a hand pump well where we would replenish our large orange water coolers every week. Summer, fall, winter, spring, it didn’t matter. That’s where it came from.

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Kenney Cugnet At the same time, my father had a bag phone in his vehicles. JS2 6498 was his number. I will never forget it. Now in the early 80s to a kid the only two people that I thought had ever had a phone in their car was Elvis Presley and my father. It always struck me as so strange that here he had a phone in his car and we got our water every week from a hand pump on a neighbour’s farm. One foot in the old world...and one in the new. My father loved to farm and he loved the oil patch. There was a satisfaction in working the land and putting in a crop each year. An optimism in the possibilities each spring held of unknown potential in the seeds yet to be sown. That same unknown potential existed In the oilfield with a new play or moving onto location for a new well. The exciting possibilities of either always held the dream and the allure, but it was the process, the people and the work where the satisfaction and joy could be found for him. That was striking gold. My brother Tim relayed a story to me. He has a friend who works in the patch and it was a May long weekend. Its Saturday morning at 8 am and this friend and his wife are driving out to Nickle Lake Park. Their conversation was about him working late the night before and lamenting why weren’t they out with their friends at the lake on the Friday night. As this discussion is occurring driving down the road, they observe a tractor with a rock picker driving around in circles beside the park. The guy points to the tractor and says to his wife, “You know who that guy is? That’s Kenney Cugnet. He could be anywhere on the planet right now doing whatever he wanted...but there he is....picking rocks on a Saturday morning because it needs to be done.â€? I don’t know what it is about this but there is so much of that image of him on a Saturday morning picking rocks that just captures dad. He loved the camaraderie and the work, whether it be standing on the floor of a rig yelling over the motors visiting with a roughneck a few days into his oil patch career or if ringing the bell at the New York Stock

Exchange with his fellow directors or it could be sitting around the kitchen table with his sons talking about what to seed and where. He revelled in all of these relationships and always had time and a story for everyone. It always amazed me for someone who seemed to me to talk so much, that he knew everyone else’s story, but that’s because he was also a very good listener. My brothers and I loved the opportunity to be in business and to work with him on so many things. He loved the action. He loved to negotiate. And he especially loved that we did too. So many of the things he taught us were relayed in farm analogies. We are all deal junkies and I remember one day he said to us when we had a lot of deals in the works, “Be careful...you can get to be just like an old tomcat in the barn. You have a mouse under each paw and you let them both go to chase after another one you see running across the floor.â€? So much wisdom in such simple statements. Matt told me a story when he was a kid in Like Grade 1 or 2. Now Matt’s memory is a vault like dad’s, with details like this and he is completely clear on who it was but I’m saying Grade 1 or 2 to protect the teachers anonymity. The teacher asked him, “What does your father do for a living?â€? Matt quickly replied,â€?He talks to people.â€? The teacher replied, “That’s not a job!â€? To which Matt said matter-of-factly, “Actually it is and it’s turning out pretty good. We’re going to Disneyworld.â€? And another one I love from just a few weeks ago at the official opening of the Triple C Center and the auditorium that bears his and my mother’s name, the Cugnet Centre, he commented to my mom how much he got a kick out of the fact that the high school he left as a dropout in Grade 10 now bears his name on the side of it forever. My mother refers to it as philanthropic graffiti. He was so proud of being a member of the Nickle Lake Regional Park Board for over 40 years and proud of all his board families... Tappit Resources as Chairman with Chuck and Lawrence, Mission Oil & Gas, StarPoint, Medora, Elkhorn, Panther, Aaron’s, Petrotherm, Alchem, Cugnet Petroleums, Weyburn Security, Grace United Church Board, Queen Elizabeth School, Saskatchewan Surface Rights Board and his particular pride was that he served under two political masters, the Progressive Conservatives and the NDP which meant he was asked to do the job because they respected his ability to do it. Perhaps his greatest pride and joys were Valleyview and Crescent Point. His affection for Crescent Point and the entire team was clear to us. He would come back from meetings in Calgary or after an announcement was public, and always very respectful of the confidentiality, so you could tell he was glad to be able to say something. He would just shake his head when my brothers and I would be meeting about other matters and say something like, “These guys are so many steps ahead.â€? Or “Can you pinch me because I’m sitting with the dream team out there every day.â€? Or “Wait until, you see what’s next. It is amazing how far ahead of the curve the management is on everything there.â€? He absolutely loved it and the stimulation of being in all of their midst. The last 12 years has been an

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incredible gift and blessing for him to be a part of such an amazing story and team and how proud he was to be a part of something that is now such an integral part of this community and its people. An organization whose leadership and generosity in this community has really been above and beyond. A few months ago, when he was having a particularly rough day, he said to my mother “All I care about anymore are two things....you and the kids and Crescent Point.â€? To which my mother replied, “Well at least you’ve still got the order right Ken.â€? He was very much of a generation that was encouraged to leave home and to go out in the world and achieve greatness elsewhere. Dad always felt he lived in the best place in the world and that he could be a success by his definition here. And he was right. When it came to investing and business, he would often say, “If I can’t see it from my window or drive there in half an hour, I’m not interested.â€? He was so generous of his time. Precious time of which we all only have so much of....he was always more than willing to share his time with everyone. Often, much to my consternation as we would be late for something or need to get to the next appointment someone would come along and he would give up minutes or hours to anyone who wanted to visit. I would look at him and say or give him that look like, “We are late...dad...we gotta go,â€? to which he would say back to me or give me that look, “They can wait a bit...we won’t be long....â€? But that was him. We would always kid about being on ‘Kenney Time’ which basically meant...â€?We will get there, when we get there.â€? Which Dale, Dennis, Mal and the list goes on can all attest to. My mother relates a story when they missed a train in India. She contented herself looking at trinkets and when she looked for dad, there he was, standing on the train platform. Surrounded, by young men who turned out to be Mumbai University agriculture students, attracted to a conversation by his cowboy hat. They were comparing agriculture in Canada and India and they marvelled at how much land he farmed and he marvelled at their dreams and desire to grow food and to feed India. When it was time to go he was sad to leave the conversation as were they. The mentorship program had gone international. Whether a hot day in India on the other side of the world or in a board room with friends and fellow board members discussing the merits of the next deal, the patch and the farm were simply his two loves. He knew to enjoy what you are doing, where you are doing it and who you are doing it with. That was dad. He was able to love people without ever feeling the need to change them. Dad absolutely loved rodeo, western books and history. He was a voracious reader. The cowboy in him still cherished an old set of metal toy six shooters with beautiful leather tooled holsters and belt given to him by his sister Bev when he was a kid. He was the cowboy in the white hat in the Roy Rogers and Gene Autry tv shows. That is what he strove to be. At some point today if you haven’t yet seen or read, “The Code of the Westâ€? it is printed on the back of the cards. Dad and Craig were at cowboy Christmas in Vegas at the NFR wandering around separately. Both spotted it hanging in different stalls and bought it for the other without knowing to give to each other as a gift.Â

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We all find it so touching and independently of each other wanted it to be a part of today. It was what my father believed and wanted for all of us. For his family and for everyone in this room. I would read it to you now but I actually choke up every time I do.  So please read it today and take it with you in life. Mom talks about “the Daddy locatorâ€?....Dad’s cell phone. There is that wonderful moment in the Ritchie Rich movie where we see Ritchie Rich’s father in a very important meeting and his “Daddy locatorâ€? starts ringing and the father reaches for it saying, “Excuse me, Mr. President, it’s a call from my son.â€? That was my father and all his friends and family and business associates can attest that he took every call. We have mentioned that my father was a deal junkie, but he has said, the best deals we ever made was to marry our wives. I would agree with him. He loved having his ‘girls’ which he never had. His grandchildren were an absolute joy to him and welcomed each new addition, most recently baby George and he was looking forward to the tiebreaker coming in February as he had three grandsons and three granddaughters. He loved to shop and pick out Christmas dresses for his granddaughters each year. And I have to say that no one loves it more than my daughter Isabelle. Tana, Leyna and Jennifer all said, he was their fairy god father... In Leynas words, “I could of never imagined growing up how lucky I was going to be to have Ken Cugnet as my father in law. My fondest memories will be of our holidays we took with him. Because of him I got to go to Disney world, Hawaii and Canmore for the first time with him. I rode my first Disney ride with him. The train around the Magic Kingdom. A tradition I have to do with my kids still. We have to ride the train first.â€? End quote. The girls all marvelled at ‘Vacation Kenney’ how content he was on vacations to sit in the minivan at the mall parking lot with a cowboy novel while they all shopped. How many men would do that? He was extremely proud of his grandchildren. Even when he was down they could make him laugh or smile. He got such a kick out of all our new personalities in the family. Josie called him ‘Pa’ and grandpa loved that she already shared his love of the cattle. If Kingston sees a train go by, he always yells at the black train cars “There’s grandpa’s oilâ€? with no hesitation. And Kensington points to the moving pump jacks and says “Makin’ grandpa money!â€? The operative word is the ‘moving’ pump jacks, because she knows the difference. Kids have such a wonderful perspective and really are so wise in their innocence, helping us find gratitude in our loss and pain. I was driving away from hockey last Saturday morning with my 6 year old son David and he said to me from the back, “I’m sorry about your dad. I’m sad about grandpa...â€? I sighed and said,â€?I know buddy...but life is about trying to do your best and you love your family....like grandpa did. That’s what counts. He had a good life.â€? Too which he replied without skipping a beat, “Well then ... he had a GREAT life!â€? Did you increase shareholder value today? My father did. In business, in the community and most certainly in his family. Thank you so much for being with us here today.

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PIPELINE NEWS December 2014

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Welding lab in place at SETI Estevan – On Nov. 18 the Saskatchewan Energy Training Institute held an open house for its new welding applied certificate program, a Saskatchewan Polytechnic course. The trailers are all set up and ready to go the planned February 2015 startup of the program. The college will be offering $1,000 entrance scholarships for our upcoming welding program. The new program will use a mobile training lab supplied by Saskatchewan Polytechnic (formerly SIAST). It will involve two semi trailers set up in a L-shape on the south side of the building. The mobile lab includes a lab and supplies, while classroom space will be accommodated within the

main building. The lab itself is reminiscent of a camper with multiple slide-outs. Along each side are multiple work spaces. The middle of the trailer has a small overhead crane running the length of the lab. It’s brightly lit, with curtains allowing each workspace to be separated. Jim Marcia, continuing education consultant with Saskatchewan Polytechnic Regina Campus was on hand for the open house, which had the welding class from the Estevan Comprehensive School come over. All the local welding shops were invited. He said, “My role is to facilitate the partner-

ship between the regional college and Saskatchewan Polytechnic, in this case, for the welding applied certificate program. The program will run for 20 weeks, he explained, adding he wanted to thank Southeast College for putting together “a great training package.� “Job prospects in welding are hot, hot, hot,� he said. The lab is booked for all of 2015. A second program is in the works for the second half of the year, but details have not yet been announced. Applications will be taken through the college.

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A26

PIPELINE NEWS December 2014

Fleet purchases can vary widely: Senchuk Ford

Estevan – Depending on the community and dealership, fleet purchases can be a small or substantial part of a truck dealer’s sales. For Senchuk Ford, fleet sales and support is a big part of their business. Senchuk Ford is owned and operated by brothers Randy and Rick Senchuk. Previously, the dealership was run by their father, Walter Senchuk, who passed away a few years ago. “We’ve had the dealership since 1980. It’s been around since the 1940s,” Randy Senchuk said. Senchuk does a lot of fleet work, as much as 10-20 per cent of their overall sales. Light trucks make up probably 75 per cent of their sales, and SUVs make up another chunk. In comparison, few cars pass through Senchuk Ford. Even so, Senchuk said, “Our share of the car market is very high. There’s not a lot of cars sold in this area.” Of that 75 per cent, probably half are likely going directly to the oilpatch. Indirectly, a large

number of sales are also oilpatch related. “Certainly the oilpatch is huge here. There are still farmers, but a lot work in the oilpatch,” he said, nothing there aren’t as many “true farmers” as there once was. Coal mines and SaskPower are also important truck customers. Regarding the mines, he noted Fords are all they run right now, but with a recent change in ownership, that could change things. Asked what makes up a “fleet,” Senchuk said, “Ford considers five vehicles registered as a fleet.” They might be picked up one or two at a time, or sometimes 40 or 50 at a time. Major national fleets will often purchase more than 50 units a year. There are essentially two types of fleets – large national fleets, and local fleets. “A lot of that (national fleets) is out of our hands. It’s handled by Ford Motor Co. They’ll drop-ship through our dealership. “The local fleets deal here,” he said, listing some of the larger oilfield businesses in the region.

“We have a lot to do with it, but we deal with the guys on a local level. A lot of the pricing is with Ford,” according to Senchuk. Some fleets are leased, some purchased. “As far as we’re concerned, it’s mostly purchases,” he said. “A lot take advantage of financing or leasing depends on what works for you. There can be tax advantages and different things.” Asked about a typical fleet sale, Senchuk replied that it can be as varied as the company. “Whatever their needs are,” he said. “A battery operator will have a different need than a construction crew. “There isn’t a typical. I’ve seen fleet trucks go out with everything, full Platinum editions. And I’ve seen some pretty basic ones, too.” Truck sales are an even split between half-tons (F-150) and what Ford refers to as Super Duty trucks – three-quarter-ton (F-250) and one-ton (f350 trucks). They also make larger trucks, the F-450 and F-550. ɸ Page A27

PIPELINE NEWS December 2014 However, once they’re loaded up, a one ton can soon been maxed out for allowable gross vehicle weight. Thus, the heavier-duty F-450 and F-550 are increasingly popular for applications like oilfield crew trucks. “They can add a picker or a deck or whatever,� he said. “They start to get pretty heavy.� “Old-timers� who have always used steel

decks like steel decks. Aluminum service bodies and decks can save a lot of weight, however, but that’s up to the buyer. “We leave that to the experts,� he said. “We supply the truck and refer them to the outfitter. “ Most truck sales are normal trucks. But Senchuk does like to keep a cab and chassis unit available if they can. “Everyone has their

A27

own idea of what they want. There are so many options. Often (the customer) will move a service body from one chassis to another,� he said. Outfitters will sometimes put a truck “on show� from timeto-time, he added. “Most of the guys have been in the patch for a long time. They already have a deck or something they know works.�

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Randy Senchuk, who owns and operates Senchuk Ford in Estevan with his brother Rick, says, “There’s not a lot of cars sold in this area.� What does sell? Lots of trucks.

ɺ Page A26 If you divided up Senchuk’s truck pie, about half would be F-150s. Another 30 per cent would be F-350s. Another 15 per cent or so would be F-250s, and a small sliver of five

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or six per cent would be F-450s and F-550s combined. “Fifteen, 20 years ago, virtually none were larger than 350s,� Senchuk said. “The 350 was common for cab and chassis for the oilpatch,� said Senchuk.

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A28

PIPELINE NEWS December 2014

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PIPELINE NEWS December 2014

A29

Revolutionary pickup Ever since pickups were first made, the primary material has been steel. Much lighter aluminum has crept in, to the point where most engines are now made of aluminum. Other components, like hoods, have also morphed into aluminum. But with the 2015 F-150, the best-selling truck in Canada for decades, there are no more half-measures. Much of the body, including the box, will now be made out of aluminum. The new units will be showing up in showrooms shortly. It’s a bet-the-company sort of move, making a revolutionary transition by changing something as fundamental as the very metal their trucks are made of. Randy Senchuk of Senchuk Ford explained the difference between the military-grade aluminum and steel is 700 pounds – a huge difference in weight. The new truck is still built on a high-strength steel boxed frame. The reduction in weight has a huge, permanent improvement in performance over previous models. Think of a person who losses a lot of weight: they can move faster, are more nimble, and don’t take as much energy to move around. Senchuk thinks it will change the industry, noting, “Pretty much everyone’s got it on their drawing board.� There’s a new 2.7 litre EcoBoost engine with 325 horsepower and 375 pound-feet of torque. Senchuk noted the EcoBoost line of engines is usually a little smaller in displacement, but usually has more torque and horsepower than the engine line they replace. “Towing capacity is way, way up,� he added. The 3.5 litre EcoBoost has 12,200 pounds of towing capacity. There’s more to the new model than the body and engine. There will be quite a few changes, according to Senchuk. There will be rear inflatable seat belts, a blind spot information system, and 360 degree camera with a split view design. There’s also an active parking assist. “This is the first mass-produced vehicle made with aluminum. It’s going to be interesting,� he said. “I think it’s just a progression we’re going into. From what I’m told, it’s just a start.�

This Tonka Truck could be found in the Senchuk Ford showroom. The new 2015's are expected shortly.

V \ D G L O R + \ +DSS Deck the halls and trim the tree, bake the cookies and delight in their glee. As we celebrate this special time with traditions both old and new, we’d like to share our very best wishes with each and every one of you.

Thanks for giving us so much to celebrate in 2014. We truly appreciate your support. Merry Christmas! &RWHDX $YHQXH ‡ +DOEULWH 6. ‡ SDU#VDVNWHO QHW

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A30

PIPELINE NEWS December 2014

Crew cabs and 4x4s are what people want: Great Plains Ford „ By Brian Zinchuk

Weyburn – Jeff Tosczak is not only the owner, but the sales manager of Great Plains Ford Sales in Weyburn. He’s been the owner for about 10 years. The dealership has been owned within the Tosczak family since 1978. Prior to that he used to be an auto auctioneer, and it’s easy to see that auctioneering is in his blood. So it should come as no surprise that, in early 2014 he opened Tosczak Auctions, a new venture in addition to the dealership. “It’s been

interesting. We’ve had some cool stuff,� he said. But auctions are the side dish. The meat and potatoes are the sale of vehicles through Great Plains Ford, and most of those vehicles are light trucks. “I would say about 80 per cent, including SUVs,� Tosczak said of their truck numbers as a proportion of overall sales. About sixty-per cent are half-tons, with the remainder being Super Duties. Most of those Super Duties are one-tons as opposed to three-quarter-tons. Asked why, Tosczak responded that there’s not a lot of difference

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munity, but it’s pretty hard to keep up with the oil companies. With the growth of farms and the reduction in the number of farmers, oilpatch sales have grown in significance. “Let’s put it this way. Farmers are major for everybody. Twenty years ago, there were 10 farmers where now there is one. The oil was good around here because there’s so much service industry. So many wells have been drilled, there’s a huge service industry to keep them going,â€? Tosczak said. It’s a big change from when he first sold cars 20 years ago. ɸ Page A31

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between an F-250 and F-350, nor is there a big difference in price. The vast majority of their Super Duties are equipped with diesel engines, about 80 per cent, although some fleet units use gasoline instead. Fleet sales are important, but he noted they’re not as significant as one might see in Estevan. “Fleet sales are up for sure,� he said, noting oil companies with local field offices have been great. Indeed, Great Plains has prided itself over the years as being one of the top charitable contributors in the com-

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PIPELINE NEWS December 2014

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:Ğč dĹ˝Ć?Ä?ÇŒÄ‚ĹŹ ĚŽĞĆ?Ŝ͛ƚ ĞǀĞŜ Ä?Ĺ˝ĆšĹšÄžĆŒ Ĺ˝ĆŒÄšÄžĆŒĹ?ĹśĹ? ĆŒÄžĹ?ƾůÄ‚ĆŒ Ä?Ä‚Ä?Ć? Ĺ˝ĆŒ ĆšÇ Ĺ˝Í˛Ç ĹšÄžÄžůͲÄšĆŒĹ?ǀĞ ƉĹ?Ä?ŏƾƉĆ? ĂŜLJžŽĆŒÄžÍ˜ Ç€ÄžĆŒÇ‡ŽŜÄž Ç Ä‚ĹśĆšĆ? Ä‚ Ä?ĆŒÄžÇ Ä?Ä‚Ä? ĂŜĚ Ď°Ç†Ď°Í˜ Photo by Brian Zinchuk

of the Detroit Three automakers, there’s a lot of comparable product. “We all make good products, and get close to the same fuel economy.� What differentiates them is service, according to Tosczak. “Most people want good service. They want to know when they buy from us, they’ll get good service. It’s all about the services. When an oil truck is down, that’s his tool. Overall, I think we

do have one of the best service departments in town.� They have about 17 service bays, with approximately 10 technicians and another five people in the body shop. He added that buying local matters. “If you buy locally from me, you’ll get priority,� he said, as opposed to buying from a larger centre. Concluding, Tosczak said, “We appreciate the oil business, that’s for sure.�

With Best Wishes at the Holidays customer asked. Fuel economy keeps improving with newer models, he noted. The window stickers adver-

tising fuel economy are in flux right now as they are being revised to be more realistic. He noted that

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“Weyburn’s a pretty even keel. I wouldn’t want to imagine it without the oilfield,� he said. Great Plains built onto its service department in recent years because of demand. One thing that is not in demand these days is a regular body two-door pickup. “No interest. We don’t stock, order or sell them,� he said. “It’s been years since we sold a regular cab.� Even Super Cabs, which are four-door trucks but with less legroom than other crew cab designs, aren’t that popular. The dealership has to take a certain percentage of its allotment in that cab design, but they really push for the larger ones. “Crew cabs are the main choice,� Tosczak said of truck sales. “The pickup is the family vehicle.� Along the same lines, you can have your truck any way you like, as long as it’s a 4x4.

“We don’t even order two-wheel-drive anymore,� he said, although they would factory order one if a

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A32

PIPELINE NEWS December 2014

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Spearing’s new Carlyle shop

This year Spearing Service LP moved into its new shop in Carlyle. There’s a lot more ĆŒŽŽž ƚŚĂŜ ƚŚĞĹ?ĆŒ ŽůÄšÄžĆŒ ĹŻĹ˝Ä?Ä‚Ć&#x; ŽŜ Ä‚Ä?ĆŒĹ˝Ć?Ć? ƚŚĞ ĆŒĹ˝Ä‚ÄšÍ˜ Photos by Brian Zinchuk

SouthernRange Well Servicing Ltd. Wishing everyone a Merry Christmas and a Happy NewYear!

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A34

PIPELINE NEWS December 2014

Fleets receive special attention at Barber Motors Weyburn – Some auto dealerships in southeast Saskatchewan have been around for so long, they far predate the discovery of oil in the region. Barber Motors 1963 Ltd. is one of them. Andy Barber is the fourth generation of his family working at the dealership. “My daughter is

14, and she’s working part-time on Saturdays, cleaning cars.� he said. The other two children, two and seven-years-old, might need a few years yet. Andy is the general manager, while his father Mal Barber is the dealer principal and owner. Mal’s wife Delaine handles accounts receivables.

Wishing You All

THE BEST

Here’s hoping your holiday is the complete package, ďŹ lled with fun and excitement, faith and friendship, love and family, health and happiness‌and everything else on your wish list! We’re grateful for all of the fond memories you’ve given us this past year, and we look forward to seeing you again in 2015. Thanks for the gifts of your friendship and support!

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The company was founded by Cecil Barber, and then owned and operated by Ron Barber, Mal’s father. “We’ve been here since 1949,� Andy said. He’s been working “up front� at the dealership for the last 10 years. They have been good years, he noted. “2009 wasn’t the greatest, but the wells needed to be serviced,� he said. Speaking of service, Barber noted, “We pride ourselves on having the biggest services department in Weyburn. Service “We have 15 dedicated service bays. We have 19 full-time techs, of which 14 are journeymen,� he said. “We’ve got a pretty solid crew. “We’re fully equipped with a spray liner booth. “Our fleets always get front of the line services. We realize without their truck, they don’t go to work.� As for parts, Barber

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Andy Barber is the ĨŽƾĆŒĆšĹš Ĺ?ÄžĹśÄžĆŒÄ‚Ć&#x; ŽŜ of Barbers running Barber Motors. He’s the general manager. Photo by Brian Zinchuk

said, “We have a fairly high percentage of fill rate. If not, it’s overnight parts.� Rental fleet Barber Motors has its own fleet of rental vehicles, 18 in total. The fleet includes cars and pickups. They also have rental vans to pick up fleet customers at the airport. The dealership also has a fully accredited SGI collision centre. Deer, moose and other hazards are constant in

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the oilpatch. “There’re not exactly light-use vehicles,� he noted. “We’ve fixed quite a few moose claims.� Oilpatch importance The oilpatch figures very largely in Barber Motors business. Barber recalled how in one instance, someone suggested they weren’t part and parcel with the oilpatch. He countered by saying if they shut down their service department to oil customers, he wondered how long that

would last. “If people say we’re not in the oilpatch, I would argue that there is a direct correlation with the oil industry,â€? he said. “The oilpatch employs a lot of people. I wouldn’t even want to guess a percentage (of sales are oilpatch related). It’s such an oil-driven town, it’s 100 per cent. The guy at the electronics story gets his business from the oilpatch,â€? he said. ɸ Page A35

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PIPELINE NEWS December 2014 Éş Page A34 That guy then buys his vehicles from them. Light trucks make up probably 75 per cent of Barber Motors’ business. Of that, about 60 per cent are half-ton 1500 models, another 30 per cent are threequarter ton 2500s, and the remaining 10 per cent are one-ton 3500 models. Fleet Fleet sales account for quite a bit of the business. That includes oil companies, oilfield construction companies, battery and field operators, and the like. Field operators probably see some of the highest usage. “Some put 60,000 to 80,000 kilometres a year on them,â€? Barber said. About every 18 months, they’re typically looking for a new truck. Leasing had been largely abandoned by the big auto companies in the wake of the global financial crisis, but it’s on its way back now. It has its advantages. Barber noted that a person who gets paid

per kilometre can lease their kilometres at 10 cents each, and charge a lot more than that. When lease units do come back, they typically go for auction in Regina, Saskatoon or Calgary. Barber Motors has a good combination of large national fleets and local fleets. New fleet units will often see a spray-in box liner. They do so much of it that there’s a dedicated booth. Generally a new unit can be spec’ed out and turned around in less than 72 hours from the order to out the door, according to Barber. Certain companies have fleet specifications they want on their units. Does Barber have 15 trucks spec’d for a certain oil company on the lot? “Absolutely,� he said, adding at any given time they will have 25 to 30 units that meet fleet specifications, ready to go, since multiple companies have similar requirements. The public can buy them, of course.

An example would be a 2500 three-quarterton with a nice spray liner, mudflaps, work seat covers, heavy-duty floor mats, cloth interior and crew cab. Satellite radio is common, too. Like most of the dealers in the region, Barber Motors stocks few regular cabs, with two doors. But they appear to stock more than the rest. “I tend to stock three or four at any time,� he said. They tend to go to farmers, or local fleets like a plumbing business. Not many two-doors find their way into the oilpatch. Similarly, General Motors’ base model W/T (work truck) series isn’t that common, either. “For a few thousand more, people want nicer things. I do sell about a half dozen a year,� Barber said. Transition There’s been a big transition over the last 10 years, he noted. Instead of a car for normal use and a truck for work, many are going for one vehicle, and that vehicle is a truck. “People are buying

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just one nice vehicle. They drive it just like a car. There’s a DVD for the kids. It can do trailer towing,� he said. As truck sales have climbed, car sales have correspondingly declined. A lot of former car-buyers are now seeking all-wheel-drive crossovers. “It has a lot to do with product. Fifteen years ago, there was not a lot of selection in SUVs. Now, there is a lot of selection,� he said.

A35

Journeyman mechanic Ryan McLaren could be found programming a computer update for a new truck. Photo by Brian Zinchuk

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A36

PIPELINE NEWS December 2014

)RFXVHG RQ Ă HHWV 0XUUD\ *0 LQ (VWHYDQ Estevan – Fleet truck sales are so important to Murray GM in Estevan, they have one person whose primary job is to look after them. Ashley Schinck is the fleet and marketing manager at the Estevan Murray GM location. She’s been focusing on fleets for the last three years since she signed on with Murray. “There wasn’t as much of a focus (on fleets) before,â€? she noted. Murray is part of a large group of dealerships across the country, according to Brian Carlston, general manager and part of the ownership group. “We’re close to 30 across Canada,â€? he said. Murray has had the Estevan dealership for 13 years. About 70 per cent of their sales are light trucks. Schinck and Carlston estimate about 80 per cent of those sales are oilpatch related – either they are used in the patch, they

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work in the patch, or they have family members who work in the patch. “Bigger centres sell more cars and SUVs

than we would, as a percentage,� Carlston said. “Definitely trucks have a higher turn on them, and higher demand.� Fleet sales are a

growing part of their business. The levels of product have increased, as has the demand to go with it. “We have two dif-

ferent fleet categories, leasing companies and smaller businesses,� said Schinck. “Some companies will lease through leas-

ing companies. Smaller ones will come directly to us,â€? Carlston said, adding that larger fleets are mostly leased. ɸ Page A37

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With Our Thanks For Your Patronage To our customers, neighbors, and friends, we’d like to extend our best wishes for a holiday season that is satisfying until the end. It’s been a privilege and a pleasure serving you, and we look forward to your continued patronage.

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PIPELINE NEWS December 2014 Éş Page A36 The dealership might get a notification that there are 20 trucks coming for a client, for instance. Schinck said, “My job is to do the outfitting – mudflaps, boxliners, toolboxes, etc.â€? A lot of wooden box liners are still used, she noted. Every company has different requirements. Company A will get “normal stuff,â€? while Company B might require static strips. “We make sure it’s outfitted for the job it needs to do,â€? she said. Another example of outfitting would include a lift kit, box liner, seat covers, floor mats, push bar and side steps. GM has long had its W/T, or work truck series which were generally base models. But Murray doesn’t see a lot of them go through, with a low percentage of sales being the base models. Schinck said they only have a few companies go for W/T models. Most fleet trucks are middle of the road models. Leather seats are usually reserved for the higher-ups in the company. “Supervisors tend to have a nicer vehicle,â€? Most fleet trucks are middle of the road models. Leather seats are usually reserved for the higher-ups in the company,â€? said Carlston. Pretty much all their fleet sales are four-doors. Schinck doesn’t remember the last time they sold a regular cab twodoor. About 60 per cent of the trucks are double cabs, formerly known as extended cabs. The 2014 redesign has a lot more room than the previous version. The remaining 40 per cent are crew cabs. Similarly, while

they do carry some large SUVs like Yukons and Tahoes, they don’t end up in fleet sales. Nearly 80 per cent of their fleet sales are either white or silver in colour. One company allows their workers to pick their colours, they noted. About 50 to 60 per cent of Heavy Duty trucks are equipped with diesel engines. “After they’re outfitted, I license them as well,� Schinck said, including taking care of plating the trucks for their gross vehicle weight ratings. “Not every company does this, but I offer every drive a walk-through as if it was their own truck. For some local companies, I deliver to their door.� Business Choice A program Murray offers is the Business Choice, an outfitting program. Companies get financial assistance on outfitting their trucks, i.e. shelving in a van used for a plumber. Schinck said it’s a program “to help business owners get their vehicles business ready, from mudflaps to storage bins in a van. GM no longer has one-and-a-half ton and two-ton trucks. Leased trucks go back to their leasing companies, and generally don’t end up back

on Murray’s lot for used sale. “We do have a lot of lease returns here. The lease companies pick them up,� Schinck said. Business Elite Murray GM in Estevan is one of a select few number of dealers that carries General Motors’ Business Elite program. Carlston said, “It’s a GM program. We’re the only business elite dealer in southeast Saskatchewan.� The program includes a loaner program for trucks when they are in service. “The loaners are specifically for business customers,� he said. The number of trucks available for loaner usage will grow to a half dozen in the coming months. “It’s something we’re

starting to develop,� Schinck said. The Business Elite loaner fleet will mostly be half-tons, but that may change. She explained, “We’ll start with half-tons and see where the need takes us.� These aren’t beat up, several year-old units, either. “They’re brand spanking new,� Carlston said, adding, “We’ll also be offering a demo program for fleet companies.� This is more than a take-a-truck-forthe-weekend program. Demos can run as far as 2,500 to 5,000 kilometres. “Put gas in it,� Carlston said. “We’re just getting going on it. We’re just getting things lined up to start,� he said. To be eligible, it has

to be a company as a customer. There are no company size restrictions. “This is directed for the oilfield, but it could be any company,� Schinck said.

A37

“It gives them an opportunity to see what they (the trucks) have to offer,� Carlston added. He noted that Murray GM is the only dealership in Estevan with Saturday service.

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A39

Obama sloughs off Keystone discussion, again, post-election Washington – Many people thought the Nov. 4 U.S. mid-term elections was a referendum on the Keystone XL pipeline. Those elections overwhelmingly went in favour of Republicans, the party which has been supporting Keystone by-and-large, with only a few noted Democrats in favour. If approved, the 830,000 barrels per day Keystone XL will transport Western Canadian oil from Hardisty, Alberta and volumes of U.S. oil to refineries on the U.S. Gulf Coast. The proposed pipeline, which was initially projected to cost $5.4 billion, is now expected to cost $8 billion according to TransCanada Corporation due to the six years of delays. The final approval rests with a “presidential permit,� and thus the president. In a post-election press conference addressing election issues, President Barack Obama addressed the Keystone XL question. As has been the case for the last six years, he danced around the issue, making small critical comments but not speaking directly against it. He spoke derisively over the fact it was Canadian oil, despite the fact a portion of its capacity is to be dedicated for shipping North Dakota Bakken oil. Here’s what President Obama had to say (his

emphasis in italics): “On Keystone, there’s an independent process. It’s moving forward. I’m going to let that process play out. I’ve given some parameters about how I think of it. “Ultimately, is this going to be good for the American people? Is it going to be good for their pocket book? Is it actually going to create jobs? Is it going to reduce gas prices that have been coming down? And, is it going to be, on net, something that doesn’t increase climate change that we’re going to have to grapple with? “There’s a pending case before a Nebraska judge about some of the siting. The process is moving forward. I’m just going to gather up the facts. “I will note, while this debate about Canadian oil has been raging, keep in mind this is Canadian oil, not U.S. oil, while that debate has been raging, we’ve seen some of the biggest increases in American oil production and American natural gas production in our history. We are closer to energy independence than we’ve ever been before, or at least, as we’ve been in decades. “We are importing less foreign oil than we produce, for the first time in a very long time. We’ve got a hundred year supply of natural gas, that, if we respon-

sibly tap, puts us in the strongest position when it comes to energy of any industrialized country around the world. “When I travel to Asia, when I travel to Europe, their biggest envy is the incredible, home-grown, U.S. energy production that is producing jobs and attracting manufacturing because locating here mean’s you’ve got lower energy costs. “So our energy sector is booming, and I’m happy to engage Republicans with additional ideas on how we can enhance that. I should note that our clean energy is booming as well. “So Keystone, I just consider as one small aspect of a broader trend that’s really positive for the American people.� On Nov. 14, speaking on the day the House of Representatives passed its ninth bill in support of the pipeline, Obama said, “Understand what this project is. It is providing the ability of Canada, (to) pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else. “I have to constantly push back against this idea that somehow the Keystone is either this massive jobs bill for the United States, or is somehow lowering gas prices.�

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$190 B/W

$19,900

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$214 B/W

$29,900

Leather, Nav, 5.4L, 29,000 km

$373 B/W

$49,900

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$285 B/W

$39,900

206 Sim Ave. Weyburn

306-842-2645 ZZZ JUHDWSODLQVIRUG FRP

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$199 B/W

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$250 B/W

$34,900

A40

PIPELINE NEWS December 2014

Estevan Motors has been selling trucks since the ’30s Estevan – Estevan Motors Ltd. Dodge Chrysler Jeep Ram has some very deep roots in the community, having been established long before the oilfield came to southeast Saskatchewan. “Family-owned since 1936 – we’re on the fourth generation,â€? said Dustin Sands, sales and finance manager. Rod Sands, Dustin’s uncle, is the dealer principal. Doug Sands, Dustin’s father, is vice-president of sales, while Regan Sands, Rod’s son, is parts manager. “Great-grandpa started selling military surplus vehicles in 1936. We got the franchise in 1937,â€? Dustin said. He noted the oilfield is important overall for parts, service and sale. Farming, SaskPower and the local coal mines are also important parts of the mix dominated by trucks. “It’s a huge part of our business,â€? he said, noting truck sales are probably 80 per cent of their sales volume. Half tons are number one for Estevan Motors, with about 70 per cent of trucks sold being the Ram 1500 models. The remainder are Heavy Duty units – three-quarter-ton 2500s, one-ton 3500s, one-and-a-half-ton 4500s and two-ton 5500s. The largest two models are “cab-and-chassisâ€? models. “We sell a lot. We stock them. We probably have one of the largest inventories around for caband-chassis,â€? Dustin said. Those models are often used for crew trucks, equipped with decks, pickers and toolboxes. “We’ll bring in a couple a year that are equipped,â€? he said of ready-to-roll models, stock models of a standard design equipped as a crew truck. By-and-large, however, companies prefer to equip their larger units their own way. Many welders, for instance, will instead have a skid that can slide into the box of a one-ton. A big thing for the Ram 1500 model is the recent addition of a 3.0 litre diesel, the only one currently offered in a half-ton pickup. Its fuel economy has been the focus not only of national advertising campaigns, but buyers’ interest. “We’re selling lots of them,â€? Dustin said. “We had a customer drive from Edmonton to Torquay on one tank of fuel.â€? ɸ Page A41

Estevan Motors Ltd. had been a family-run business since 1936.

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306-457-7692

gary.goudytransport@sasktel.net www.goudytransport.sasktelwebhosting.com

PIPELINE NEWS December 2014 Éş Page A40 That engine has 240 horsepower and 420 foot-pounds of torque. Of the Heavy Duty models, about half sold are diesels, the other half run on gas. “A new 6.4 litre Hemi has lots of horsepower and torque. It’s as capable as the diesel without the maintenance expenses, to a point,â€? he said. “The gas engine this year has been really popular.â€? Oil operating companies tend to buy gas engines, he noted. When it comes to fleet purchases, Dustin said one needs a GST

number to qualify for a fleet, and five trucks or more within the fleet. “The retail and fleet programs are virtually the same for rebates,� he said. “Our customers are looked after for pricing and service. Without our customers, we wouldn’t have a business.� With a business going back to the 1930s, Estevan Motors has lived through all the ups and downs of the Saskatchewan oilpatch. “You have to be smart with it (your business),� Dustin said. “It’s a wealthy area, but something can happen

tomorrow, and you have to be able to weather it. “We never really see a big dip,� he said. Even in 2008-2009, he pointed out, “This part of the world didn’t get hit like out east.� The presence of SaskPower and the local mines are a stabilizing influence, and there’s a lot of business not tied to oil, according to Dustin. Oil prices have dropped approximately one quarter in recent months from a sustained level of around $100 to around $75 per barrel. Yet they have not seen a reduction in sales volumes in correlation

with that decline. “There are still parts of the oil industry that are busy. Drilling is down a little but we keep on selling. We’ve got the best customers in the world,� he said. “We’re a family business. We don’t have any high-pressure sales. We try to make the customer part of the family. “We sell the lowest interest rates the bank will allow us, and we have no hidden fees.� “We have a different way of doing business. You don’t have to deal with three people. You are with the salesperson from start to finish. They can complete the sale.� A few years ago Estevan Motors was able to pick up the old Beaver Lumber property adjacent to their sales lot. That was an important expansion for a business land-locked in the centre of Estevan. “It was a breath of fresh air to find land attached to our existing property,� he noted. “We were completely congested.�

A41

If you’re this close to the front end of a Ram Heavy Duty truck, you’re about to get run over.

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May this holiday deliver peace on earth, goodwill toward men and contentment in your heart.

PEACE It is with great joy that we welcome the spirit of the Christmas season here. We thank you for being such an important part of our happiness and our success as friends, neighbors and customers. God bless you and yours.

306-634-8001 www.sourisvalleypaving.ca

A42

PIPELINE NEWS December 2014

Saxberg says Crescent Point is in good position to weather lower crude prices „ By Paul Wells (Daily Oil Bulletin) Calgary – With an uptick in crude oil prices not likely any time soon, Crescent Point Energy Corp.’s president and chief executive officer Scott Saxberg says his company will take a more cautious budgetary approach entering 2015 while keeping a keen eye on potential acquisition opportunities. “Looking into next year, we are currently in the

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middle of our budget process. We haven’t finalized anything yet, but given the recent volatility in commodity prices, we expect the 2015 budget will be slightly lower than 2015, but not significantly,� Saxberg said during a third quarter conference call on Nov. 7. “Likely the lower spending will come from reduced spending in facilities and land and we’re expecting costs will be lower, which will help keep our planned activity levels similar to 2014,� he added. “I think a key point that I like to emphasize is that we’re well protected in these kinds of price environments and we can execute our business plan and thrive at these [price] levels.� Saxberg reminded analysts that low price environments can often offer opportunity on the acquisition front. “That was the case in 2009 when we consolidated the Shaunavon, which now has over five billion barrels of oil in place. Our industry-leading assets, strong balance sheet and hedging program allow us to be well positioned to capitalize on similar opportunities in the future,� he said. “We’re always looking for opportunities. We are strong believers that in this kind of environment, this is where the best opportunities present themselves — companies with weaker balance sheets are forced to sell in a down commodity price environment.� The cost side of the equation While oil-weighted Crescent Point is obviously not enamoured with slide in oil prices, Saxberg

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noted there could be some relief on the cost side, especially expenses related to service and supply. “In these environments, and we’ve been through several of these over the last 13, 14 years, ‌ we’ll see costs come down because of [lower] dayrates. We’re already talking to our service providers on that, so there’s an expectation I think into next year that we’ll see lower costs,â€? Saxberg said. “That allows us to maintain a relative balance of activity levels with those drops in dayrates.â€? In light of the current commodity price dynamic, Saxberg said there should also be some land cost reductions that come into play. “We may budget, for instance, $50 million for land. But obviously with lower commodity prices we may not spend $50 million because of the drop in land costs [resulting] from the drop in commodity prices — that naturally lowers our capital program.â€? Those things said, Saxberg said the key as 2014 draws to a close and 2015 beckons is for the company to be a little more conservative in its planning. “If we assume the strip price today and then set our budget and commodity prices drop another $20, we don’t want to be in a position where we’re building a significant amount of debt,â€? he said. “Naturally, we want to carve back our program on a risk basis to see how the year unfolds and we typically do that in the middle of the year in June and then we kind of make another call as to whether to add capital or to then even focus more so on our higher return projects.â€?

Turnbull Excavating offers full construction services

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PIPELINE NEWS December 2014

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PIPELINE NEWS

SECTION B December 2014

Site Energy signs up tribal company

ZÄžĆ‰ĆŒÄžĆ?ĞŜƚĂĆ&#x; ǀĞĆ? ĨĆŒŽž ƚŚĞ Ä‚ĆŠ ĹŻÄžĨŽĆŒÄšĆ? Ĺ?ĞŜÄ?LJ dĆŒĹ?Ä?Ä‚ĹŻ ĹšĹ?ÄžĨĆ? ƚĞĂžĞĚ ƾƉ Ç Ĺ?ƚŚ ^Ĺ?ƚĞ ĹśÄžĆŒĹ?LJ ^ÄžĆŒÇ€Ĺ?Ä?ÄžĆ? ĂŜĚ Ĺ˝ĆšĹšÄžĆŒ Ä?ŽžĆ‰Ä‚ĹśĹ?ÄžĆ? ƚŽ ƚĂŏĞ Ć‰Ä‚ĆŒĆš Ĺ?Ĺś Ä‚ ƉƾÄ?ĹŹ ÄšĆŒĹ˝Ć‰ Ä?ÄžĆŒÄžžŽŜLJ Ä?ÄžĆšÇ ÄžÄžĹś ƚŚĞ ĹšĹ?Ä?Ä‚Ĺ?Ĺ˝ ĹŻÄ‚Ä?ĹŹĹšÄ‚Ç ĹŹĆ? ĂŜĚ ÄšžŽŜĆšŽŜ KĹ?ĹŻÄžĆŒĆ? Ä‚Ćš ƚŚĞ ^Ä‚Ć?ŏƚĞů ÄžĹśĆšĆŒÄž Ĺ?Ĺś ^Ä‚Ć?ĹŹÄ‚ĆšŽŽŜ ŽŜ ^ÄžĆ‰ĆšÍ˜ ĎŽĎ´Í˜ ^Ĺ?ƚĞ ĂŜĚ d Ć?Ĺ?Ĺ?ŜĞĚ Ä‚Ĺś ÄžĹśÄžĆŒĹ?LJ Ć‰Ä‚ĆŒĆšĹśÄžĆŒĆ?ĹšĹ?Ɖ ĚĞĂů Ç Ĺ?ƚŚ Ć‰ĆŒĹ?Ĺ˝ĆŒ ƚŽ ƚŚĞ Ć?ĆšÄ‚ĆŒĆš ŽĨ ƚŚĞ Ĺ?ĂžĞ Ć?ƉŽŜĆ?Ĺ˝ĆŒÄžÄš Ä?LJ ƚŚĞ Ć‰Ä‚ĆŒĆ&#x; Ä?Ĺ?ƉĂŜƚĆ?͘ WŚŽƚŽ Ć?ĆľÄ?ĹľĹ?ĆŠ ĞĚ

„ By Geoff Lee Saskatoon – Site Energy Services and the Battlefords Agency Tribal Chiefs executed a business power play at an NHL pre-season game they helped to sponsor between the Chicago Blackhawks and the Edmonton Oilers at Sasktel Centre. The action took place in Saskatoon prior to the puck drop on Sept. 28 and involved signing a deal with BATC’s First Alliance Construction Solutions Inc. to provide oilfield services for Site’s operations in Saskatchewan. So far, more than 60 members from BATC’s six bands in west-central Saskatchewan are working for First Alliance at Site projects as operators, site managers and foremen. Site’s Todd Anderson, vice president of business development in Calgary calls the deal “the first ever agreement of its kind in Saskatchewan� and a great story for Site and BATC. “We agreed to be partners on projects in Saskatchewan. We agreed that they are going to help us secure some work and be business partners at the table while we are negotiating with our clients,� said Anderson in a phone interview. “We agreed to hire not only their people, but any of their own companies on reserve or off reserve that are Aboriginals and are members of BATC’s First Alliance.� Site also agreed to work with other partners of First Alliance and support them in their training efforts. More than 800 BATC members are training for jobs including positions at First Alliance at the Atoskewin Success Centre in North Battleford. First Alliance is also doing local construction work on the $40 million expansion of the Gold Eagle Casino operated by the Battlefords Tribal

Council. First Alliance president Bill Crowe sees nothing but blue sky ahead for Aboriginal oilfield jobs with Site. “Working with Site, there is no limit. Site is a very large company, but not large enough not to care either about community engagement. It’s very important for Site,� said Crowe, who splits his time between Saskatoon, North Battleford and Regina “I have a lot of support. I can make a phone call to vice-presidents of any region and they’ll take my call and hear me out. I get more and beyond what I was looking for at Site. “It’s been an excellent opportunity, and it’s something that we’re working hard together to grow. “We engage with many other First Nations as well. It’s not just BATC members getting work from this.� Site has First Alliance crews on a number of projects in keeping with its profile to provide fully-integrated environmental, infrastructure and access services for oil, gas and resource development companies. “We’re doing pipeline work, we’re doing construction work and we’ve got them doing labour stuff on other pipeline and facility construction work,� said Anderson about First Alliance. “We are doing some power work for ATCO down in southern Alberta. “We have a bunch of pipeline work we are just finished up near Saskatoon at Lanigan. We’ve being working up in Conklin in northern Alberta and down in Brooks in southern Alberta.� Site currently has a workforce of just under 1,000 that typically peaks at 1,700 to 1,800 in the winter when more Aboriginals are on the payroll. “Our legacy companies have been working with Aboriginal groups. Typically, about 20 per cent of

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our workforce is Aboriginal,â€? said Anderson. “So we have another agreement with Heart Lake First Nation in Conklin. That’s our longest running relationship. We do $40 to $50 million a year with them. “We signed another deal with the McKay Metis. So, we have a number of these and we’re working on a few more. “I think it’s the right strategy. It’s certainly not going to hurt us.â€? Site and BATC connected through an Aboriginal Business Match event in Saskatoon in June. That ABM and one in Penticton are annual tradeshows that connect Aboriginal communities with the private sector to create opportunities for business. At each ABM, delegates initiate new business deals worth over $30 million. â€œIt’s an excellent event for professionals to come together and explain what they do and sit down in person,â€? said Crowe who was hired by BATC to rebuild and re-launch First Alliance. He decided to leave his former job as manager of community engagement at Carson Energy in Regina when that company was bought out by Flint Energy. “So I was connected to a lot of First Nations,â€? he said noting he is an Ojibwa from Ontario with more than 17 years experience in the oil and gas industry including management. “I knew some people who work at Site Energy and people I’ve worked with in the past, so I have knowledge of Site Energy which I actually had in my sight before the ABM. “It just so happened they were at the ABM and we connected and both felt there was an excellent opportunity for us to sit down and talk some more. ɸ Page B2

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PIPELINE NEWS December 2014

BATC, Site Energy deal Éş Page B1 “We had a few meetings and then found that our goals were similar and we moved on from there.â€? First Alliance is assisted by a team that includes Ed Standinghorn, director of industry relations, at BATC. “We are actively seeking partnerships with organizations possessing a vision for future growth, resources to help achieve that growth, and clear management,â€? said Standinghorn on ABM’s website. “We recently signed our first joint venture within the energy sector.â€? He noted that deal with Site Energy Services and partnerships with other companies were facilitated through

the ABM. “We will continue to attend ABM to grow capacity building and learn about new economic development ventures,� added Standinghorn. Site’s goal for attending the ABM was to develop long-term working relationships with Aboriginal communities and companies. “We are looking for oil and gas partners – Aboriginal oil and gas companies that want to be partners that have something to contribute, that have a business savvy and a willingness and readiness to go to work and they understand the business environment,� said Anderson. Site’s motivation to work with Aboriginals is all about partnerships

and an opportunity to hire more workers for its projects in a tight labour market. “If you look at everything we hear in the media, it’s Aboriginals don’t participate; Aboriginals are left behind; Aboriginals aren’t getting their fair share,� said Anderson. “So we know based on the other relationships we have that’s not true. It’s part of our DNA to be involved with Aboriginal groups. “We thought that was a good opportunity and we know it differentiates us from our competitors when it comes time for putting our crews together, and we know the value that it adds to the community.� Site plans to attend

EÄžĹ?ĹŻ ĹšÄžĹśÄ‚ĹŹÄžÇ Í• Ä‚ žĞžÄ?ÄžĆŒ ŽĨ ƚŚĞ Ä‚ĆŠ ĹŻÄžĨŽĆŒÄšĆ? Ĺ?ĞŜÄ?LJ dĆŒĹ?Ä?Ä‚ĹŻ ĹšĹ?ÄžĨĆ? Ĺ?ŜǀĞĆ?ƚžĞŜƚ Ä?Ĺ˝Ä‚ĆŒÄšÍ• ĹŻÄžĹŒ Í• ĂŜĚ >ĞŽ Ä‚ĆŒĆŒÄžĆŠ Ğ͕ Ç€Ĺ?Ä?ÄžͲĆ‰ĆŒÄžĆ?Ĺ?ĚĞŜƚ ŽĨ ^Ä‚Ć?ĹŹÄ‚ĆšÄ?ĹšÄžÇ Ä‚Ĺś Ĺ˝Ć‰ÄžĆŒÄ‚Ć&#x; ŽŜĆ? ĨŽĆŒ ^Ĺ?ƚĞ ĹśÄžĆŒĹ?LJ ^ÄžĆŒͲ Ç€Ĺ?Ä?ÄžĆ?Í• Ä?ÄžĹśĆšĆŒÄžÍ• Ç Ä‚ĆšÄ?Ĺš ĹšĹ?ÄžĨ >Ĺ˝ĆŒĹ?Äž tĹšĹ?ƚĞÄ?Ä‚ůĨ ĨĆŒŽž ^Ç ÄžÄžĆšĹ?ĆŒÄ‚Ć?Ć? &Ĺ?ĆŒĆ?Ćš EÄ‚Ć&#x; ŽŜ Ć?Ĺ?Ĺ?Ĺś ĹšÄžĆŒ ŜĂžĞ ƚŽ Ä‚Ĺś Ĺ˝Ĺ?ĹŻÄŽ ĞůĚ Ć?ÄžĆŒÇ€Ĺ?Ä?ÄžĆ? ĚĞĂů Ç Ĺ?ƚŚ ^Ĺ?ƚĞ Ä‚Ćš ƚŚĞ ^Ä‚Ć?ŏƚĞů ÄžĹśĆšĆŒÄž Ĺ?Ĺś ^Ä‚Ć?ĹŹÄ‚ĆšŽŽŜ͘ WŚŽƚŽ Ć?ĆľÄ?ĹľĹ?ĆŠ ĞĚ

both ABMs in 2015 under their new name, ABM Prairies to include potential partners from Manitoba and Saskatchewan, and ABM West linking Alberta and B.C. for deals. Meanwhile, Crowe is gearing up for talks with Husky and En-

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bridge in Calgary and Edmonton on potential new oilfield work for First Alliance with those companies in Western Canada. “They too would like to engage with our communities. We like to support them in any way we can too,� said Crowe who hopes to get more young Aboriginal men and women interested in the oilfield. “The oil industry

has been good to me,� he tells youth. “You just get out what you put it. “You explain step by step – motivate. That’s the key thing is to motivate and educate at a grassroots level – get our people out there working and engage with them all the time. That’s what we do. “I have full support of BATC. That’s why we’re moving forward.�

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PIPELINE NEWS December 2014

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Tuscany sets record in Macklin area Calgary – Tuscany Energy Ltd. continues to set production records with an average rate of 940 barrels of oil equivalent in October, the highest yet for the Calgary-based company. That record is expected to be broken soon after Tuscany carries out plans to drill and produce two horizontal wells at its North Macklin property starting in mid November. Those new wells will offset a vertical stratigraphic test for the Dina heavy oil zone drilled in September according to a company operations update on Nov. 6. A stratigraphic test well is a hole drilled for the sole purpose of gaining structural information to aid in exploring for oil and gas. The test well encountered nine vertical metres of 33 percent porous sand in the Dina, with log characteristics identical to presently producing wells in the field. Based on this and subsequent geotechnical work, Tuscany has iden-

tified 14 new horizontal drill locations on this previously untested portion of its 100 percent owned Macklin property. Tuscany attributes its record October production to the drilling and tie-ins of new Dina horizontal wells at its core Macklin and Evesham Saskatchewan properties. Increased production is also resulting from existing wells due to enhanced water disposal capability added in September. The additional disposal capacity was added to address production constraints that led to restricting production rates on certain wells early in the third quarter. Restricted production rates contributed to production averaging approximately 660 boepd in the third quarter ending Sept. 30. The addition of a new Macklin vertical disposal well and the deepening of an existing Evesham disposal well alleviated the constraints.

dĆľĆ?Ä?ĂŜLJ ĹśÄžĆŒĹ?LJ Ä?ŽŜĆ&#x;ŜƾÄžĆ? ƚŽ Ĺ?ĹśÄ?ĆŒÄžÄ‚Ć?Äž ŚĞĂǀLJ Ĺ˝Ĺ?ĹŻ Ć‰ĆŒĹ˝ÄšĆľÄ?Ć&#x;ŽŜ Ä‚Ćš Ĺ?ĆšĆ? Ä?Ĺ˝ĆŒÄž DÄ‚Ä?ĹŹĹŻĹ?Ĺś ĂŜĚ ǀĞĆ?ŚĂž Ć‰ĆŒĹ˝Ć‰ÄžĆŒĆ&#x;ÄžĆ? Ĺ?Ĺś ^Ä‚Ć?ĹŹÄ‚ĆšÄ?ĹšÄžÇ Ä‚ĹśÍ˜ WĆŒĹ˝ÄšĆľÄ?Ć&#x;ŽŜ Ä?ĆľĆŒĆŒÄžĹśĆšĹŻÇ‡ Ć?ƚĂŜĚĆ? Ä‚Ćš ϾϰϏ Ä?ŽĞƉĚ ĂŜĚ Ĺ?Ć? ĞdžƉĞÄ?ƚĞĚ ƚŽ ĆŒĹ?Ć?Äž Ä‚Ĺ?Ä‚Ĺ?Ĺś ƉĞŜĚĹ?ĹśĹ? ƚŚĞ ĆŒÄžĆ?ƾůĆšĆ? ŽĨ ĆšÇ Ĺ˝ ĹśÄžÇ ĹšĹ˝ĆŒĹ?ÇŒŽŜƚĂů Ç ÄžĹŻĹŻĆ? ƚŽ Ä?Äž ÄšĆŒĹ?ůůĞĚ Ĺ?Ĺś EŽǀĞžÄ?ÄžĆŒ Ĺ?Ĺś Ĺ?ĆšĆ? EĹ˝ĆŒĆšĹš DÄ‚Ä?ĹŹĹŻĹ?Ĺś Ä?Ĺ˝ĆŒÄž Ć‰ĆŒĹ˝Ć‰ÄžĆŒĆšÇ‡Í˜ WĹ?Ä?ĆšĆľĆŒÄžÄš Ĺ?Ć? Ä‚ dĆľĆ?Ä?ĂŜLJ Ä?Ä‚ĆŠÄžĆŒÇ‡ ĹśÄžÄ‚ĆŒ DÄ‚Ä?ĹŹĹŻĹ?ĹśÍ˜ WŚŽƚŽ Ć?ĆľÄ?ĹľĹ?ƊĞĚ

The new Macklin disposal well and the deepening of the Evesham disposal well have increased the company’s water disposal capacity by 16,000 barrels per day. The increase disposal capacity allowed production to increase to average approximately 750 boepd in September and rise again in October to its new record rate of 940 boepd. In addition, Tuscany estimates that the tie-in of wells currently shutin will add 50 boepd of oil production to the total.

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PIPELINE NEWS December 2014

Metres matter in 2015 drill forecast ÄšĹ?Äž ZÄžĆ?ŽƾĆŒÄ?ÄžĆ? Ĺ?Ć? ŽŜÄž ŽĨ Ć?ÄžÇ€ÄžĆŒÄ‚ĹŻ ŚĞĂǀLJ Ĺ˝Ĺ?ĹŻ Ä?ŽžĆ‰Ä‚ĹśĹ?ÄžĆ? ƉŽĆ?Ĺ?Ć&#x;ŽŜĞĚ ƚŽ ÄšĆŒĹ?ĹŻĹŻ ĹśÄžÇ Ç ÄžĹŻĹŻĆ? Ĺ?Ĺś ^Ä‚Ć?ĹŹÄ‚ĆšÄ?ĹšÄžÇ Ä‚Ĺś ĂŜĚ ĹŻÄ?ÄžĆŒĆšÄ‚ Ĺ?Ĺś ĎŽĎŹĎ­Ďą ĚĞĆ?ƉĹ?ƚĞ ĹśÄžÇ ĹŻĹ˝Ç ÄžĆŒ Ć‰ĆŒĹ?Ä?ÄžĆ? ĨŽĆŒ Ĺ˝Ĺ?ĹŻÍ˜ ÄšĹ?Äž ÄšĆŒĹ?ůůĞĚ ƚŚĹ?Ć? ÄšĹ?Ć?Ä?Ĺ˝Ç€ÄžĆŒÇ‡ Ç ÄžĹŻĹŻ Ĺ?Ĺś ĎŽĎŹĎ­ĎŻ Ĺ?Ĺś ƚŚĞ LJĞ ,Ĺ?ĹŻĹŻ Ä‚ĆŒÄžÄ‚ ĹśÄžÄ‚ĆŒ DÄ‚Ä?ĹŹĹŻĹ?ĹśÍ˜ W^ ĞdžƉĞÄ?ĆšĆ? ƚŚĞ ÄŽĆŒĆ?Ćš Ć‹ĆľÄ‚ĆŒĆšÄžĆŒ ŽĨ ĎŽĎŹĎ­Ďą ƚŽ Ć?ĞĞ Ä‚ ƚLJƉĹ?Ä?Ä‚ĹŻ ĆŒÄ‚ĹľĆ‰ͲƾƉ ŽĨ ÄšĆŒĹ?ĹŻĹŻĹ?ĹśĹ? Ä‚Ä?Ć&#x;Ç€Ĺ?Ć&#x;ÄžĆ? Ĺ?Ĺś tÄžĆ?ĆšÄžĆŒĹś Ä‚ĹśÄ‚ÄšÄ‚Í˜ WŚŽƚŽ Ć?ĆľÄ?ĹľĹ?ƊĞĚ

„ By Geoff Lee Calgary – The importance of total metres drilled annually puts a new spin on the 2015 drilling activity forecast by the Petroleum Services Association of Canada. “Meterage is becoming a key

indicator of activity and the technological gains our industry continues to deliver,� said Mark Salkeld, president of Calgary-based PSAC. PSAC is the national trade association representing the service, supply and manufacturing sectors within

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the upstream petroleum industry. “We’re watching that really close because we’re drilling fewer well counts, but we’re drilling the equivalent number of metres,� said Salkeld. PSAC forecasts a total of 10,100 wells to be drilled in 2015, a slight decline from the expected 2014 year end tally of 10,830 wells – but the metre count changes the activity perspective. PSAC is forecasting total 2015 meterage at just over 24 million metres for its nearly 250 member companies in Canada. “In 2005, we drilled just under 25,000 wells and just under 24 mil-

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lion metres,â€? said Salkeld. “Now, we’re forecasting in 2015, 10,100 wells, but it’s going to be the same kind of meterage as if we drilled 25,000. “Our meterage has almost doubled in the last eight or nine years on depth from a 1,200 metre well to a 2,400 metre well on average. “We’ve got some wells that are up to 6,000 metres in some of the plays.â€? Salkeld said PSAC has no plans to adopt metres and drop well counts from its future drilling activity forecast citing both are important industry benchmarks. ɸ Page B5

PIPELINE NEWS December 2014 ɺ Page B4 “We’ll still count the wells drilled, but from a services’ perspective we’re going to look more on the meterage and the number of frac stages and that kind of stuff,” he said. “It’s five wells in one, or six wells in one and more, depending on what formation you compare it to. Salkeld said if you compare an old vertical well through a 500 metre formation versus a new horizontal through 4,000 metres, “you get a whole bunch more wells in one hole.” He added there are some multi-well pads with 20 to 25 wells. “Depending of the formation and the separation, there could eight wells or 20 wells from one location. “Those 20 wells could be 3,000 metres each. That’s a lot of formation exposure,” he noted. PSAC is basing its 2015 forecast on an average natural gas price of CDN$3.80/mcf (AECO) and crude oil price of US$85 barrel (WTI). Despite the fairly rapid decline in the price of oil recently, PSAC foresees just a “slight slump in drilling activity” with the main focus on oil over natural gas drilling. “We are forecasting that 2015 will see nearly 90 per cent of well completions in favour of oil which is being driven by commodity prices still,” said Salkeld. “There’s a general sense that prices won’t go down much. There’s just too many global factors and we’re coming into the heating season.” Salkeld says domestic consumption of oil and gas across Canada and the U.S. is going to go up so that means the reserves are going to be tapped into and the reserves will need to be filled up again. “Just the kind of cold weather activity is going to maintain prices. The differentials are at a decent spread,” he said

He told Pipeline News on Nov. 10 that “prices aren’t great, but they aren’t unreasonable so we’ll continue forward” into the winter season. “We are anticipating a cold winter again this year, so expect that we will see a typical ramp up of Q1 activity, and of course, slower activities in the spring with break up,” “However, we expect the last two quarters of 2015 to see an uptick to finish another year with strong performance.” “There is a lot at play out there, but commodity pricing and market access are two of the biggest drivers behind forecasted activity levels,” added Salkeld. PSAC expects more light will be shed on the progress of major pipelines to tidewater markets in 2015. The big three proposed pipelines include Energy East to the Maritimes, Keystone XL to the U.S. Gulf Coast and Northern Gateway to the west coast of B.C. “It would boost confidence on the part of producers “to develop our resources and maybe increase production of the resources if we had a firm date or timeline on when we could get better market access,” said Salkeld. “Right now, everything’s up in the air so that’s kind of effecting budgets and stuff. “But we are optimistic that 2015 will bring some resolve and positive movement on both those fronts.” On a provincial basis for 2015, PSAC estimates a decline in activity levels across the board in Western Canada. PSAC is forecasting 3,365 wells to be drilled in Saskatchewan and 430 wells in Manitoba, or a five per cent and four per cent decline respectively. PSAC attributes most of the expected slowdown in drilling in Saskatchewan to the Bakken that was hard hit earlier this spring and early summer by flooding.

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“More of that was in the south because of weather. It was wet down there,” said Salkeld. “We’re looking to see a bit of uptick next year, but it just came off a little bit slower than what we thought. “Heavy oil seems to be going fairly steady. You’ve got the big refinery right there (Lloydminster) so it’s not too far to get the product out of the ground and to the refinery.” In Alberta, PSAC is forecasting a total of 5,740 wells to be drilled or just over a six per cent decrease over 2014 activity levels. British Columbia is forecasted to have the largest decline of 20 per cent from 690 to 555 wells (rig releases) for next year. Salkeld said the lower number of rigs is largely due to a pullback in drilling by Progress Energy that he called the dominate player in the shale gas play in northeastern B.C. “They had 28 rigs working and I think they are down to about 20 or 22 rigs. They’ve shut down about eight rigs,” he said. “So they are still relatively busy. The percentage number looks big, but they are still not drilling a whole bunch of wells up there. “We just need to see what the price is globally. It just takes a couple of rigs to shut down to make it look like a big percentage, but it’s just a few wells.”

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PIPELINE NEWS December 2014

Bling, lifts, wheels: dressed up trucks are in demand „ By Brian Zinchuk Carlyle – Big and shiny – that’s often &ͲϯϹϏ ŽŜÄžͲĆšŽŜĆ? Ä‚ĆŒÄž Ç€ÄžĆŒÇ‡ ƉŽƉƾůÄ‚ĆŒ Ä‚Ćš DÄžĆŒĹ?Ćš &Ĺ˝ĆŒÄš Ĺ?Ĺś Ä‚ĆŒĹŻÇ‡ĹŻÄž Í´ ƚŚĞ Ä?Ĺ?Ĺ?Ĺ?ÄžĆŒÍ• ƚŚĞ Ä?ĞƊ ÄžĆŒÍ˜ dŚĞ what new truck buyers ÄšĆŒÄžĆ?Ć?ĞĚ ƾƉ ŽŜÄžĆ?Í• ĹŻĹ?ĹŹÄž ƚŚĹ?Ć? ŽŜÄž ĹšÄžĆŒÄžÍ• Ć?Ğůů Ć‹ĆľĹ?Ä?ĹŹĹŻÇ‡Í˜ are looking for. Merit Ford likes to keep several units in stock to meet that very desire. Merit Ford Sales (2003) Ltd. in Carlyle is one of two Merit (/2):/.4Ă˜, $)2%#4)/.Ă˜, $2),,).' locations, with the other D H being Esterhazy. The Carlyle location was a move of the dealership from Kipling. That re-established a Ford presence in Carlyle that had been lacking since 1UALITY $IRECTIONAL "ORING 3ERVING 7ESTERN #ANADA the late 1980s. ($$ 2)'3 Ă˜6Ă˜),Ă˜",% #Ă˜,, 4/ "//+ 9/52 Faron Biesenthal, &2/.%84 "/2% sales manager, started LBS /FĂžCE selling cars at that TO LBS previous dealership. He 2OB 3KUCE 7ATER 4RUCK SUPPLIED would go on to work in WITH ALL "ORE 5NITS Alberta and British Co-

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lumbia before returning to Carlyle. He started with Merit in 2005. Merit is owned by Hal Moffat and Garnet Goud. Goud also owns Carlyle Motor Products, across the highway and a little down the road. Asked how much of Merit’s business is oil related, directly and indirectly, Biesenthal said, “I would think pretty high – around 75 to 80 per cent. We still have some farming activity, too, and he’s probably got wells on his property.� Carlyle has seen tremendous growth in recent years. Much of that has been tied to the growth of Eagle Drilling, now CanElson Drilling; Moose Mountain Mud, Equal Transport and Element Technical Services, as well as numerous other

businesses. “It impacts the whole business. I was just moving back to the area, and I was surprised by the growth. It’s been excellentâ€? said Biesenthal. “The average age has dropped white a bit in the last 10 years,â€? he said of the community, noting the oilfield is predominantly a youngman’s game. Having 14 drilling rigs based in the community also means there’s a high number of younger rig workers. And most of them drive trucks. Indeed, trucks in general account for about three-quarters of Merit’s sales. “She’s a truck market,â€? he said. Biesenthal has had buyers for new trucks come in as young as 18 years old. ɸ Page B7

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PIPELINE NEWS December 2014 Éş Page B6 “He’s looking for as much truck as he can buy,â€? Biesenthal said about that age of buyer. That can include lifts, big tires and wheels. Thirty-five-inch tires on 20 inch aftermarket rims are the most popular. “More bling is what they’re after,â€? he said. “We do level kits and full suspension lift kits.â€? A level kit lifts the front end up so that it is level with the back. A full suspension lift gives a better ride and more clearance, and involves longer shocks and springs. Buyers will go for “whatever the budget will allow,â€? he said. As for popular pickups, Biesenthal said, “We sell mostly F-350s in the Super Duty. It’s more common than the F-250. We sell lots of F-150s too, and do some lifts.â€? An F-150 is considered a half-ton, while an F-250 is a three-quarter-ton, and an F-350 is a one-ton. When it comes to lifts, clients will often prefer to buy one already completed than having it done later. To that end, he said, “We usually have some (lifted trucks) on the lot, usually two or three. The ones that are done up, that’s the draw – the

lifted truck sitting on the lot.� Biesenthal said they have no problems selling lifted trucks. “Everybody’s looking for individuality, something unique.� Other accessories that can make a truck stand out in a sea of trucks include grill inserts. He noted “We’re doing a lot more matte black these days.� “Black wheels are definitely the in-thing.� It’s not just the young guys buying new trucks, nor just rig workers. Biesenthal said they come from all kinds of jobs. “We’ve got 40-year-old guys doing lifts, too, but maybe not as many.� A decked out F-350 Lariat with a leather interior, two-inch level kid, 35 inch tires, heated and cooled seats, navigation, remote start might go for around $75,000 as an example.

“The desire is to have the biggest, fastest, most powerful truck. A lot of our customers do ‘chip,’ but in a lot of cases that voids the warranty.� “Chipping� means to do a computer upgrade that changes the engine’s operation, typically changing the fuel mapping. Towing is an important consideration as well, especially if one has toys. “They come factoryprepped for a fifth wheel,� Biesenthal noted of one-tons. “He’s not buying a just a truck, but a camper, a toy hauler, boat, or enclosed sled trailer to go to the mountains to go sledding,� he said. Asked if buying a nice truck is a big motivating factor for a lot of workers, he responded, “Definitely. You have to have a reason to go to work.�

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PIPELINE NEWS December 2014

Most Oil hires Lloyd sales pro

Dale Luc loves to get out in ƚŚĞ ÄŽ ĞůĚ ƚŽ žĞĞƚ Ä?ĆľĆ?ĆšŽžͲ ÄžĆŒĆ? Ä‚Ć? ƚŚĞ ĹśÄžÇ >ůŽLJĚžĹ?ŜͲ ster sales rep for Most Oil ƚŚĂƚ ŽƉĞŜĞĚ Ä‚ Ć?Ä‚ĹŻÄžĆ? ŽŜůLJ Žĸ Ä?Äž Ĺ?Ĺś ƚŚĞ Ä?Ĺ?ƚLJ Ĺ?Ĺś KÄ?ĆšŽͲ Ä?ÄžĆŒÍ˜ dŚĞ Žĸ Ä?Äž Ć?Ĺ?Ĺ?Ĺś Ć?ĹšŽƾůÄš Ä?Äž Ĺ?ĹśĆ?ƚĂůůĞĚ Ä?LJ ÄžÄ?ÄžžͲ Ä?ÄžĆŒÍ˜ dŚĞ ÄšžŽŜĆšŽŜͲÄ?Ä‚Ć?ĞĚ Ä?ŽžĆ‰Ä‚ŜLJ žĂŜƾĨÄ‚Ä?ĆšĆľĆŒÄžĆ? ĂŜĚ Ć?ĞůůĆ? Ç ÄžĹŻĹŻĹšÄžÄ‚Äš ĞƋƾĹ?ƉͲ žĞŜƚ Ć?ĆľÄ?Ĺš Ä‚ žƾůĆ&#x; ͲĨƾŜÄ?Ć&#x; ŽŜ blowout preventers. WŚŽƚŽĆ? Ä?LJ 'ÄžŽč >ĞĞ

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„ By Geoff Lee Lloydminster – Dale Luc figured he’d driven about 700 kilometres a day in his first two weeks as the new Lloydminster sales representative for Most Oil Corporation. The Edmonton-based company manufactures and sells a variety of wellhead equipment primarily for the production of heavy oil by the artificial lift system to a growing global market. Luc’s first day on the job was Oct. 22 when Most opened a dedicated sales office in Lloydminster that replaces a previous warehouse and office that was no longer needed. Luc is tasked with growing the sales of Most’s product line that includes of down-hole tubing rotators, multi-function blowout preventers and multi function casing bowls. The company also produces sealing blow out preventers, surface tubing rotators, and tubing swivels for oilfield production. “I believe we have one of the better products out there,â€? said Luc after his first two weeks on the job and 8,000 kilometres on his truck covering Saskatchewan and Alberta. Luc has more than 40 years of experience in the oilfield with enough contacts to fill a phone book. “When I am going somewhere, I’m going there because I know the guy. I can get in his door and sit and talk to him,â€? he said. “He’ll ask me about the product and I explain to him about the product. “My personal customers talk highly about everything, so that makes me feel good about it. It’s easy to sell something when it’s wanted.â€? Most’s wellhead products have been designed and proven to increase productivity, extend tubing life and reduce workover and operating expenses while increasing safety in the field. Most recently launched a new permanent magnet motor drivehead that CEO Sami Mohammed describes as being a revolutionary and in demand. “There’s good feedback from our customers about the need for this product,â€? he said. “It was designed in China. We have the patent rights to it. We are introducing it around the world. ɸ Page B9

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PIPELINE NEWS December 2014 ɺ Page B8 “You reduce your power consumption with it by about 30 per cent. It’s a lot safer than what’s traditionally in the market today. “So it’s got a lot more benefits than the traditional driveheads you see today in the market.” The drivehead plugs into the rest of the drive system as opposed to being centered on the polished rod. It’s engineered to be intrinsically safe and secure without any external moving parts. There are no belts, sheaves or external braking. The engineering makes it a very quiet unit. “Farmers will love because it’s out in the fields, and you have a product that isn’t making a lot of noise,” said Mohammed. All wellhead equipment is manufactured at Most’s 50,000 sq. ft. plant in Edmonton that is also the centre for their engineering, design and quality control teams. The company was launched as a small manufacturer in 2001 under the full name Millennium Oilflow Systems & Technology and was acquired by Next Equities in 2011. It has been on an exponential growth curve ever since with substantial increases in product offerings, sales offices, manufacturing facilities and service personnel. The Western Canadian market has also benefited from the new ownership and from a strong oil and gas economy. “We have actually more than tripled our sales in the market,” said Mohammed. “I think it’s also a factor of our good sales team. We have a good product, and we have an overall good service to the customer which has made a difference. “Our products are so well designed they don’t need to be serviced in the field. Traditionally, our products seem to last between five or seven to 10 years in some cases.”

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“This gives Dale more time to spend on the road rather than in the office waiting for the customer to come and pick up his product which the customer is already stocking in their own yard,” said Mohammed. He noted sales in Lloydminster have been “pretty decent” the last couple of years, and he expects a lot of growth in both provinces in the coming months with the hire of Luc. “He comes with a lot of experience, and he’s already made his mark in the last two weeks that he’s been in the field,” said Mohammed on Nov. 13. Chances are Luc will be on the road or in the field promoting Most products when the office sign gets installed, but that’s why he was hired. “I like hands-on. I work lots with the end user then I send that end user to one of our distribution people,” said Luc. “That’s kind of the advantage of myself. That’s why Most took me.” Luc is also well known for his avocations as a DJ at oilfield parties and weddings and as an Most Oil CEO Sami Mohammed chats on the phone outinstaller of satellite systems. ƐŝĚĞ ƚŚĞ ŶĞǁ ƐĂůĞƐ ŽĸĐĞ ŝŶ >ůŽLJĚŵŝŶƐƚĞƌ͘ dŚĞ ƉŝĐŬƵƉ ƚƌƵĐŬ “My sideline business helps. I’ve been a DJ for ŝƐ ĚƌŝǀĞŶ ďLJ ƐĂůĞƐ ƌĞƉ ĂůĞ >ƵĐ ǁŚŽ ŝƐ ǁĞůů ĐŽŶŶĞĐƚĞĚ ŝŶ ƚŚĞ ŽŝůĮĞůĚ ŝŶ tĞƐƚĞƌŶ ĂŶĂĚĂ͘ DŽƐƚ ŝƐ Ă ϭϬϬ ƉĞƌ ĐĞŶƚ 35 years so I’ll be in front of 1,200 people especially now with Christmas coming up,” he said. ĂŶĂĚŝĂŶͲŽǁŶĞĚ ďƵƐŝŶĞƐƐ͘ “I do Christmas parties starting this weekend (Nov.14) to Dec. 20. I do Christmas parties steady. Most has grown internationally and has an That keeps me in front of people and that’s how office and sales in the Middle East. It also supplies they know me.” products all over Asia, the United States, South Luc lives in Lloydminster but most of his DJ America and Australia and Canada. gigs will be in Edmonton, Stony Plain or Drayton “Our strategy has been to sell to major disValley where he grew up. tributors. When I say distributors, they are more “I specifically do oilfield right now. I’ve got like service companies like Kudu, Europump, and 1,200 people at a Penn West party coming up, a Apex,” said Mohammed. 700 person Baytex party coming up, so I’ve been Others on their list are Cameron, Seaboard, Baker Hughes, Weatherford and Distribution Now. doing oil companies for about 15 years,” said Luc. He said oilfield clients see him at these events Because these distributors keep Most Oil and “the next time I go to their office, the secretary products on their shelves locally, Mohammed said that made it easy to close the former warehouse and just lets me by. It’s a big time, big time icebreaker,” as he puts it. open a sales-only office to avoid duplication.

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PIPELINE NEWS December 2014

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Lakeland headhunts new president Lloydminster – “Seeking my next adventure� read the heading on Tracy Edwards’ Linkedin Internet profile a week after Lakeland College Board of Governors accepted her resignation as college president. No official reason was given for the resignation that took effect Oct. 27 by her or the board just over 10 months after Edwards took over the helm from Glenn Charlesworth who retired. Edwards’ first day at work at the Vermilion campus was Jan. 6, 2014. “The board wishes Dr. Edwards all the best in her future endeavors,� said the Board in a news release on Oct. 28 to officially announce the resignation. Edwards who has a doctor of education degree from the University of Texas in Austin signed a two-and-ahalf year contract with Lakeland, the amount of time left on Charlesworth’s contract when he retired on Jan. 3. Edwards agreed to take the position after

being approached by the Board if she was interested in the position without the college conducting a national recruitment search. “She will finish Glenn’s term and at some point during her tenure we’ll assess the work she’s doing and see if both parties want to sign a new contract,� said former Board chair Milt Wakefield in a new release on Sept. 11, 2013 on Edwards’ appointment. “If not, we’ll launch an extensive search for a new president.� Prior to serving as Lakeland’s top executive, Edwards had served as the president and chief executive officer of Lethbridge College from 2005 to 2012. In the wake of her

resignation, the Board quickly named Alice Wainwright-Stewart as the interim president and chief executive officer of the college. Her appointment took effect Oct. 29. “We are pleased that Alice has agreed to serve as the interim president. She is a respected leader with extensive academic and administrative post-secondary experience,� said Gary Moses, vice-chair of the board of governors in news release on Oct. 30. Wainwright-Stewart has worked at Lakeland College since 1985 and has served as the vice-president, academic for the past nine years. The news release says as vice president, she has stressed the importance of student

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inclusion, diversification of programming and excellence in teaching. The Board has also directed the college’s human resources department to begin the search process for a permanent president and chief executive officer.Â

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PIPELINE NEWS December 2014

This 2014 Ram 2500 SLT at Power Dodge has a four-inch ĹŻĹ?ĹŒ Í• ĎŻĎŽ dž ĎŽĎŹ Ĺ?ĹśÄ?Ĺš Ć&#x; ĆŒÄžĆ? žŽƾŜƚĞĚ ŽŜ DŽŜĆ?ĆšÄžĆŒ ĆŒĹ?ĹľĆ?Í• ĆľĆ?ĹšͲ Ç Ä‚Ä?ĹŹÄžĆŒ ĨÄžĹśÄšÄžĆŒ Ň Ä‚ĆŒÄžĆ?͘ /ĹśĆ?Ĺ?ĚĞ ĆšĹšÄžĆŒÄžÍ›Ć? ŚĞĂƚĞĚ Ć?ĞĂƚĆ? ĂŜĚ Ć?ĆšÄžÄžĆŒĹ?ĹśĹ? Ç ĹšÄžÄžĹŻÍ• Ä‚ ĆšŽƾÄ?Ĺš Ć?Ä?ĆŒÄžÄžĹśÍ• ĂŜĚ ůƾĞƚŽŽĆšĹš Ĺ?ĹśĆšÄžĆŒĨÄ‚Ä?Äž ĨŽĆŒ Ć?ĹľÄ‚ĆŒĆšĆ‰ĹšŽŜÄžĆ?͘ WĹ˝Ç ÄžĆŒ ŽĚĹ?Äž Ç Ĺ?ĹŻĹŻ Ä?ŽžžŽŜůLJ Ĺ?ĹśĆ?ƚĂůů ƉŽĆ?Ĺ?Ć&#x; ǀĞ Ä‚Ĺ?ĆŒ Ć?ŚƾƚŽč Ć? ŽŜ ÄšĹ?ÄžĆ?ĞůĆ? Ä‚Ć? ĹśÄžÄžÄšÄžÄšÍ˜ Photos by Brian Zinchuk

One at a time for Power Dodge Estevan – Power Dodge of Estevan has sales that range far and wide. “Our market is pretty broad. We get customers as far as Regina and Saskatoon. We cover a broad area,â€? said Matthew McCormick, the recently installed sales manager with Power Dodge in Estevan. Power Dodge does not do a lot of fleet sales. “We do a lot of retail sales,â€? he said. “One at a time.â€? About 80 per cent of their sales are trucks. McCormick attributed it to where they are. “Everyone needs a truck, for leisure or work. It’s truck country.â€? About 60 per cent of their trucks are half-tons, and most of the rest are three-quarter-tons and one-tons. A small fraction are one-and-a-half-tons and two-tons. Those larger units often see usage as welding trucks or crew trucks with pickers. They’re ordered as cab-and-chassis models and customized as needed. “I would love to have 10 or 15 of them in stock, but they’re tough to come by,â€? he said. “They sell quickly.â€? The vast majority of Power Dodge’s truck sales end up in the oilpatch either directly or indirectly. A smaller percentage end up in agriculture. ɸ Page B13

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May every moment of your holiday be magical and bright. We hope the season ďŹ nds you surrounded by loved ones, laughter and all the makings of new memories you will cherish for a lifetime. We owe our success to the faith and support of our good friends and customers here in the community, and we are grateful to share another year with all of you.

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PIPELINE NEWS December 2014

B13

There are lots of trucks in this lineup at Power Dodge, but very few regular cabs.

Éş Page B12 As for what buyers are looking for, McCormick said, “I’d say we sell more loaded up than base models. The price difference from basic to nicely equipped, it’s not that much of a difference.â€? That will include things like leather seats and towing packages. Lifts are not as prevalent, but there is a demand for them. That demand is generally to have it done prior to purchase. “Most people want it taken care of,â€? he said. “When it comes to accessories, everyone’s different. No one wants a cookie-cutterâ€? Picking a truck can be a jumping off point. “A good portion of customization comes at the time of purchase,â€? he said. The new 3.0 litre diesel engine in the 1500 series half tons with some of the highest fuel economy numbers seen on a pickup has proven to be

really popular. “We can’t keep them on the lot,� McCormick said. “No one else has a half ton diesel.� Nearly all their trucks are sold with four doors, either the “Quad Cab� or “Mega Cab.� The difference is legroom, with the Mega Cab being the larger of the two. Regular cabs, the now-old-fashioned two-door, are quite rare in comparison. McCor-

mick said they had one on the lot. “You would sell a couple of those a year – a handful.� They’ve got buyers for new trucks as young as 18. “You get a job on the rigs, at $30 plus per hour, and there you go,� he said, adding other financial qualifications are at play, too. “They’re excited to have a new truck, to buy something new,� he said.

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PIPELINE NEWS December 2014

Thermal oil adds to Husky’s Q3 gains „ By Geoff Lee Calgary – Volatile pricing for heavy oil dampened Husky Energy’s enthusiasm reporting a positive 11.5 percent increase in quarterly profit backed by a 10 per cent jump in production. Net earnings in the third quarter ending were $571 million, compared to $512 million a year ago. Total production rose to 341,000 barrels of oil equivalent per day from 309,000 boepd for the same quarter a year ago. The increases came from higher volumes from the Liwan Gas project in the South China Sea, which began producing earlier this year, and continued growth from heavy oil thermal projects. CEO Asim Ghosh cautiously summarized the company’s performance as “another good quarter, not without challenges� referring to fluctuating oil prices. “In the third quarter our industry saw significant downward pressure on both WTI and Brent prices,� he said during a quarterly conference call in

Calgary. West Texas Intermediate prices averaged $97.17 US per barrel in the third quarter ending Sept. 30 compared to $105.83 a year ago. Average realized pricing for the Husky’s total upstream production was $68.35 per barrel, compared to $72.13 in the third quarter of 2013. “In such a volatile environment we are focusing on what we are able to control and that’s operational performance,� said Ghosh. “Our results this morning reflect a strong showing from our bedrock business, heavy oil.� He went on to address pricing again and stated, “Ultimately prices will go and down. We are carefully staging our business to provide dependable cash flow returns by continuing to fund a prudent balance of near mid and long term projects.� A growing list of thermal projects focused in the Lloydminster region continued to perform well during the quarter, averaging approximately 45,400 barrels per day compared to 38,800 bpd a year ago. “We are advancing a number of other modular

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thermal projects which ultimately will lower the amount of sustaining capital required to maintain and grow and our heavy oil production,â€? said Rob Peabody, chief operating officer. Peabody referenced the 10,000 bpd Rush Lake thermal development that is now more than 70 percent complete and on schedule for first production in the second half of 2015. The 10,000 bpd Edam East thermal project is also advancing towards first oil in the first half of 2016. “The 3,500 barrel per day Edam West thermal project and the 10,000 barrel per day Vawn thermal project are expected to see production in the second half of 2016,â€? said Peabody. Meanwhile, the Sandall thermal project, which came on stream in the first quarter of 2014, continues to produce well above its 3,500 bpd capacity, averaging about 5,300 bpd in the quarter. “To handle this production we are extending our Saskatchewan pipeline gathering system and anticipate that work will be finished in 2015,â€? added Peabody. “We have also made excellent progress with our cold horizontal heavy oil program. “Over the past three years production has increased from 3,700 bpd to more than 12,000 bpd now. “ Peabody noted the operating costs for this production were a low $14.42 per barrel over the past quarter. Another highlight of the quarter was increased production from Husky’s liquids-rich gas resource play at Ansell in northern Alberta. “Ansell produced approximately 17,500 barrels of oil equivalent per day in the quarter compared to about 13,700 a year ago and we still have lots of running room in this play,â€? said Peabody. Performance from test wells at the Duvernay liquids-rich gas play at Kaybob northwest of Edson Alberta continued to meet expectations. ɸ Page B15

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PIPELINE NEWS December 2014 ,ĆľĆ?ŏLJ Ä?ŽŜĆ&#x;ŜƾÄžĆ? ƚŽ Ĺ?ĹśÄ?ĆŒÄžÄ‚Ć?Äž ĆšĹšÄžĆŒĹľÄ‚ĹŻ ŚĞĂǀLJ Ĺ˝Ĺ?ĹŻ ĨĆŒŽž žŽÄšƾůÄ‚ĆŒ Ä?ŽŜĆ?ĆšĆŒĆľÄ?Ć&#x;ŽŜ ŽĨ ƉůĂŜƚĆ? ĹŻĹ?ĹŹÄž ƚŚĹ?Ć? ŽŜÄž Ä‚Ćš WĹ?ĹŹÄžĆ? WĞĂŏ ĨÄžÄ‚ĆšĆľĆŒĹ?ĹśĹ? Ä‚ ĆŒĹ˝Ç Ĺ˝Ä¨ ƉƾžĆ‰ĹŠÄ‚Ä?ĹŹĆ?͘ dĹšÄžĆŒĹľÄ‚ĹŻ ŽƾƚƉƾƚ Ĺ?Ĺś ƚŚĞ ƚŚĹ?ĆŒÄš Ć‹ĆľÄ‚ĆŒĆšÄžĆŒ ĆŒĹ˝Ć?Äž ƚŽ Ď°Ď°Í•ϹϏϏ Ä?Ä‚ĆŒĆŒÄžĹŻĆ? Ć‰ÄžĆŒ ĚĂLJ͘ WŚŽƚŽ Ć?ĆľÄ?ĹľĹ?ƊĞĚ

Éş Page B14 Husky 15 horizontal oil wells and completed 15 such wells in the third quarter, with activity primarily focused on the Viking and Bakken oil resource plays. In downstream operations, Husky completed the construction of two 300,000-barrel storage tanks at Hardisty, Alta. in the quarter to improve storage capacity. The tanks are expected to be in service in early 2015. “These tanks help position us to better meet our expanding needs as well as better serve our third party customers,â€? explained Peabody. Peabody also alluded to a flash fire

that broke out on Oct. 15 while a subcontractor was cleaning at an empty tank that Husky owns at the Hardisty terminal. The incident sent one worker to a hospital in Edmonton for treatment of injuries to his hands. “There has been no impact on our operations at Hardisty as a result of a tank fire that occurred during maintenance activities about a week ago,� he said.

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Downstream throughputs of 334,000 bpd take into account a 42-day turnaround at the Lloydminster upgrader that began in early September and strong performance from the company’s refineries. In other news, Husky’s Sunrise oilsands project is undergoing final commissioning, with the first 30,000 bps central processing plant scheduled to start steaming around the

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end of the year. The cost estimate of the first phase of Sunrise is now $3.2 billion, up from the previous estimate of $2.7 billion. “While we experi-

enced some cost pressure around the central plant facilities we have identified a number of opportunities to reduce sustaining costs which are typically more than two thirds of our overall project costs,� said Peabody. “We are using customized mobile drilling rigs. “It allows us for closer spacing of our wellheads and this results in a smaller footprint required – and that allows us to use less piping and facilities on the pad. “We are also using multiphase meters which eliminate the need for separators on the pads and allows us to further reduce the size of the pads’ facili-

B15

ties.� Husky also plans to use electric submersible pumps to enhance production while removing large amounts of surface facilities that are associated with gas lift. The use of vacuum insulation tubing will assist Husky in reducing heat loss and improve steam efficiency. “We are actually looking at more than 75 different technologies and design enhancements as we move forward with Sunrise,� said Peabody. “This will help us maintain solid full cycle returns for the projects. “We expect both plants 1A and 1B to be brought up to full speed over a ramp up period of about two years.�

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PIPELINE NEWS December 2014

Ford sales guy has truck DNA „ By Geoff Lee Lloydminster – He was born to truck in a Ford. The Ford F-150 pickup is the only vehicle Evan Nygren has ever owned or driven and a 2015 F-150 Lariat pickup is destined to become the next Ford on his key chain.

Nygren’s passion for Fords comes in part from the three years he drove an F-150 super cab checking wells for Trison Safetech Corp. in Lloydminster. This past year, he’s been driving his beloved 2012 F-150 crew cab to work as a truck sales consultant at Boundary Ford in Lloydminster.

Just like his own customers, he can’t wait for the 2015s to arrive. The new pickups will be much lighter than current model years thanks to the use of high strength, military grade aluminum alloy for the body and bed. “I very badly want to own a 2015 F-150 Lariat. I got to drive

Sharing the Energy

Evan Nygren, a sales consultant at Boundary Ford in Lloydminster has only ever owned and driven Ford F-150s including during his years as a well operator. This is his personal 2012 Ford F-150 FX4 crew cab that will soon be added to the used vehicle lot. Nygren plans to trade in for the 2015 F-150 Lariat with the aluminum body. WŚŽƚŽĆ? Ä?LJ 'ÄžŽč >ĞĞ

a few of them about a month ago and I am itching for them to get here. It’s pretty exciting,� said Nygren. The new F-150 is

Crescent Point is proud to be part of the community. crescentpointenergy.com

OUR NETWORK Equipped and strategically located to drive your project forward in

CALGARY 840 7th Avenue SW Suite 900 Calgary, Alberta T2P 3G2 Phone: 403.234.7599 Fax: 403.261.4712 EDMONTON 17327 106A Avenue Edmonton, Alberta T5S 1M7 Phone: 780.481.3399 Fax: 780.481.3841

19

HIGH LEVEL (FIELD OFFICE) High Level, Alberta Phone: 708.926.4123 Fax: 780.926.4550 REGINA 311 Albert Street Regina, Saskatchewan S4R 2N6 Phone: 306.522.5628 Fax: 306.359.0992

GRANDE PRAIRIE 11417 91st Avenue Grande Prairie, Alberta T8V 5Z3 Phone: 780.532.6793 Fax: 780.532.7694

SASKATOON 226 Cardinal Crescent Saskatoon, Saskatchewan S7L 6H8 Phone: 306.343.8187 Fax: 306.343.3325

LLOYDMINSTER 1812 50th Avenue Bay 10 Lloydminster, Alberta T9V 2W7 Phone: 780.875.6130 Fax: 780.875.1658

SWIFT CURRENT 300 Begg Street West Swift Current, Saskatchewan S9H 0K6 Phone: 306.773.7733 Fax: 306.778.3678

RED DEER 303A, 4406 50 Avenue Red Deer, Alberta T4N 3Z6 Phone: 780.236.1603

WEYBURN 615 Railway Avenue Weyburn, Saskatchewan S4H 0A9 Phone: 306.842.6060 Fax: 306.842.7872

MEDICINE HAT 1601 Dunmore Road S.E. Suite 202 Medicine Hat, Alberta T1A 1Z8 Phone: 403.528.4215 Fax: 403.528.4287

locations across Canada.

YORKTON 38 Smith Street Yorkton, Saskatchewan S3N 3X5 Phone: 306.783.4100 Fax: 306.782.4440

BRANDON * 100 - 158 11th Street Brandon, Manitoba R7A 4J4 Phone: 204.727.0651 Fax: 204.727.5247 VIRDEN * 280 Ashburton Street East Box 307 Virden, Manitoba R0M 2C0 Phone: 204.748.6860 Fax: 204.748.6165 WINNIPEG * 661 Century Street Winnipeg, Manitoba R3H 0L9 Phone: 204.272.2600 Fax: 204.272.2620 MONCTON 835 Champlain Street Suite 200 Dieppe, New Brunswick E1A 1P6 Phone: 506.858.2787 Fax: 506.858.2792

designed to deliver more towing and hauling capability than the previous generation. “In our 2014s, we are capable to do up to 11,300 lbs. of towing. That’s conventional bumper pulling. In the 2015s, it’s actually going to increase to 12,300 lbs.,� said Nygren. “Basically with changes to the body and everything like that, it’s going to be up to 700

pounds lighter in a half ton and it’s going to be able to tow 1,000 lbs. more. “The fuel economy is going to increase with that as well too.â€? In the meantime, Nygren has nothing but good things to say about his current F-150 truck before it becomes a reliable used vehicle on the lot with just 48,000 kilometres on it. ɸ Page B17

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306-634-3009 ESTEVAN

DARTMOUTH Atboro House, Suite 9 South 130 Eileen Stubbs Avenue Dartmouth, Nova Scotia B3B 2C4 Phone: 902.468.5798 Fax: 902.468.6919

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PIPELINE NEWS December 2014 Éş Page B16 “It’s the FX4 luxury package and I love everything about it. It’s got everything you want in a truck. It’s fully loaded,â€? he said. “My truck is my truck. I love it. I have only ever driven F150s.â€? At Trison Safetech, driving a pickup to operate wells at lease sites in the Lloydminster region was an everyday routine in all weather conditions.

“You drive to the same 20 to 40 wells depending on how many we were checking on a day-to -day basis. You drive to each one and make sure everything’s going good out there,� he said. “I was driving an F-150 super cab and they were fantastic for me.� He said you don’t always need the four wheel drive, “but it seems like when you need it, you need it very

B17

fastâ€? especially if the lease is wet or snow covered. “It will lock up on the posi on the back basically if you really start to get a little hairy in a muddy situation or snow,â€? he added about the 4x4 capability. “That is the one thing about operating wells. It doesn’t matter rain or shine, whether it’s snow or mud, you do have to get into your location. ɸ Page B18

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B18

PIPELINE NEWS December 2014

He drove F-150's checking wells, now he sells them Éş Page B17 “Whether that means shutting a well down or just checking it for your daily routine, you do have to get there for the day, and you need a vehicle to get there.â€? Nygren said his knowledge of the F-150 truck in all weather oilfield situations made it easier for him to accept the job offer at Boundary last year. “I do know the product more than any-

thing else. I am confident about the product,� he said. “I have had personal experience with the vehicles and I trusted one every day for those three years that I was working out there.� After finishing high school in 2008, Nygren worked as a tech for about a year and a half before switching to swamping for about another year setting tanks and driving a shuttle truck.

Friendship... Is The Best Gift Of All! With heartfelt gratitude, we thank you for the gift of yours, and wish you all a very merry and bright holiday season.

For more information phone 1-888-8PLAINS Or look us up at: www.plainsenvironmental.com

>ÄžĹŒ ƚŽ ĆŒĹ?Ĺ?Śƚ͗ ŽƾŜÄšÄ‚ĆŒÇ‡ &Ĺ˝ĆŒÄš Ć?Ä‚ĹŻÄžĆ? žĂŜĂĹ?ÄžĆŒ ^ĞĂŜ ĹŻÄ‚ĹśÄ?ŚĞƊ Äž Ć?Ä‚ĹŻÄžĆ?Í• Ň ĞĞƚ žĂŜĂĹ?ÄžĆŒ Ĺ˝Ä? dĆŒŽƾƉ ĂŜĚ ĹśÄžÇ Ĺ?ÄžĹśÄžĆŒÄ‚ĹŻ žĂŜĂĹ?ÄžĆŒ ĂŜĚ Ć‰Ä‚ĆŒĆšĹśÄžĆŒ : Ä?Ä?Ä‚Ć? ƉŽĆ?Äž ĨŽĆŒ ƉŚŽƚŽ Ç Ĺ?ƚŚ Ä‚ ĎŽĎŹĎ­Ď° &Ĺ˝ĆŒÄš &ͲϭϹϏ &yĎ° Ĺ?Ĺś ƚŚĞ Ć?ĹšĹ˝Ç ĆŒŽŽžÍ˜ WÄ‚Ćš WĆŒĹ?ÄžĆ?ĆšĹśÄžĆŒ Ĺ?Ć? ƚŚĞ ĹśÄžÇ ĹľÄ‚ĹŠĹ˝ĆŒĹ?ƚLJ Ĺ˝Ç ĹśÄžĆŒÍ˜

Making a living by selling the same Ford trucks he drove in the oilfield at Boundary Ford wasn’t something he planned on as a career. “Basically, the companies I was operating wells for – they were smaller companies and sold out to other companies that were ex-

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panding,� he explained. “I was looking to continue operating and trying to get work and I was having a hard time. In the meantime, I ended up getting an offer for a job here. “I wasn’t working at the time, and obviously needed to pay some bills, so I decided to take it and run.� He could work anytime for Range One Oilfield Services Ltd., a company his dad Gerry owns with service rigs and coiled tubing units, but it’s not always like father, like son. “It’s one of those things. You want to blaze your own trail.

I know the offer still stands if I want to go do it,� said Nygren who notes he doesn’t miss working outdoors compared to the showroom. “It’s very enjoyable here. It’s a lot warmer inside obviously. I don’t have to fight the elements as bad as those other guys anymore.� Asked how his sales were going after just over a year on the job, Nygren told Pipeline News on Nov. 10 that it’s been better than he expected. “I think part of that is just the volume of the customers that we have through here sometimes,� he said.

Spread Cheer All Around!

With thanks from our entire staff for your most generous support. Happy Holiday!

LECLAIR TRANSPORT General OilďŹ eld Hauling

Lyle Leclair - Cell: 306-421-7060

“There’s a lot to learn. There’s a lot I don’t know unfortunately. It’s forever changing. You try to keep up the best you can and just be honest. If you don’t know something, you find out.� Nygren said what makes the Ford F-150 such a good oilfield truck from his own experience is their reliability. “These trucks are built to withstand the beating you sometimes have to put on them. They withstand the temperatures as well too,� he said. “I never had one day when I couldn’t run out and start my truck in the morning especially when other guys were staying home for the day because it was -35. “Guys that did the same job as what I did, we were the ones running outside to start the truck in minus 35 and get into every location.

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...and to all a

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PIPELINE NEWS December 2014

B19

Pickups drive sales at Westridge Lloydminster – Josh Gramlich drives the same type of light pickup truck that he sells at Westridge Buick GMC in Lloydminster, making him the perfect product spokesperson. Gramlich is the new vehicle sales manager whose own ride is the 2014 Sierra 1500 SLT half ton, a 4 X 4 crew cab with the all-terrain package. “If I had to pick a favourite feature I’m not sure what it’s be,â€? he said. “It’s so quiet, great fuel economy, the ride is super nice. It’s my favourite truck to take on any kind of a trip because of those things.â€? The 2014 Sierra 1500 light duty truck features a new chassis, a redesigned interior, and an assortment of aluminum-block engines, including a 5.3-litre V-8. It was named the best new pickup of 2014 by Automobile Journalists Association of Canada. Gramlich’s passion for the Sierra is evident during a morning sales scrum with his staff as he goes over some of the main features on a further refined 2015 Sierra 1500 pickup in the showroom. Gramlich is also stoked to talk about sales of the all new Sierra Heavy Duty line up of trucks sought after in the oil and gas market. “It’s been very fantastic. Our HD model did change in the 2015 model year vehicle, and we started seeing them about six months ago or so and it’s been excellent for us,â€? he said. “They are definitely a head turner.â€? Most the rubberneckers and buyers happen to work in the oilfield where the good times in the industry are bringing consumers to Westridge to purchase new and used trucks. “The oilfield economy has certainly gone up in the last couple of years from where it was. You notice the trend just in volume of vehicle sales,â€? said Gramlich. “The oilfield is doing good in town when vehicles are flying off the shelves. I’ve noticed it’s got a lot better for sure.â€? It doesn’t hurt knowing that when Gramlich sat down for an interview in late October that Westridge was offering zero per cent financing on all 2014s and zero percent leases on 2015s. ɸ Page B20

tÄžĆ?ĆšĆŒĹ?ÄšĹ?Äž ĆľĹ?Ä?ĹŹ 'D Ĺ?Ĺś >ůŽLJĚžĹ?ĹśĆ?ĆšÄžĆŒ ŚĂĆ? ĹľĹ?dž ŽĨ ĹśÄžÇ Ä‚ĹśÄš ĆľĆ?ĞĚ ƉĹ?Ä?ŏƾƉĆ? ĨŽĆŒ ƚŚĞ Ĺ˝Ĺ?ůĎĞůĚ worker and consumer. New vehicle sales manager Josh Gramlich poses by a row of new Sierra light duty trucks for sale.

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PIPELINE NEWS December 2014

Redesigns prove popular with oilpatch customers Sierra HD trucks, sales go way up. “That’s one thing we are really excited about on staff is getting that new fresh look,â€? said Gramlich about both new truck styles. “They didn’t just touch the outside. Once you jump in to the inside, it’s totally different as well and guys (oilpatch customers) are really enjoying it.â€? He said he could talk for days about the new features of the Sierra HD that includes the top of the line Denali. “The Sierra HD has come a long way even from previous model years,â€? he said. “We have like inlaid doors, a brand new full interior – very exciting, the connectivity with smartphones has definitely come a long way.â€? The Heavy Duty models are notable for having one of the quietest cabins thank to a redesign that includes triple door seals and other refinements. Asked what oilfield workers look for a personal or work pickup, Gramlich said, “They are going to want a nice, strong, dependable truck which I believe we do provide. Josh Gramlich, new vehicle sales manager at Westridge Buick GMC dealer in Lloydminster leads a sale scrum with his “They do want a little more of the comfort feaĂǀĂĹ?ĹŻÄ‚Ä?ĹŻÄž Ć?ƚĂč ƚŽ ÄšĹ?Ć?Ä?ĆľĆ?Ć? ƚŚĞ Ć?ĞůůĹ?ĹśĹ? ƉŽĹ?ŜƚĆ? ŽĨ ƚŚĹ?Ć? ĎŽĎŹĎ­Ďą ^Ĺ?ÄžĆŒĆŒÄ‚ ĹŻĹ?Ĺ?Śƚ ƉĹ?Ä?ŏƾƉ Ĺ?Ĺś ƚŚĞ Ć?ĹšĹ˝Ç ĆŒŽŽžÍ˜ dŚĞ ÄšÄžÄ‚ĹŻÄžĆŒĆ?ĹšĹ?Ɖ ŚĂĆ? Ä‚ ƚŽƚĂů tures and that’s where I find GMs have come a long ŽĨ Ć?ĞǀĞŜ Ć?Ä‚ĹŻÄžĆ? Ć?ƚĂč Í• ĆšĹšĆŒÄžÄž ÄŽ ŜĂŜÄ?Äž žĂŜĂĹ?ÄžĆŒĆ? ĂŜĚ ĆšÇ Ĺ˝ Ć?Ä‚ĹŻÄžĆ? žĂŜĂĹ?ÄžĆŒĆ?͘ WŚŽƚŽĆ? Ä?LJ 'ÄžŽč >ĞĞ way as to even what they call our basic truck. ɸ Page B21 Éş Page B19 said Gramlich who is excited about sales prospects for next year too. The zero percent lease sign fronting their location on Highway 17 south was pulling in traffic. “I am very excited for 2015. Hopefully, things The flip side of the side promoted custom orjust keep rolling up. You never know what’s go*CRR[ JQNKFC[U dering of GM vehicles including aftermarket truck ing to happen, but it’s a great community,â€? he said CPF JGCTVHGNV VJCPMU HQT [QWT UWRRQTV accessories such as lift kits or leveling kits installed about the Lloyd market. CNN [GCT by pros in the service shop. “It’s a great economy here and we are on a conIt’s all adding up to 2014 being a banner year tinual growth and we’re going to just keep pushing at Westridge with new vehicle sales up about 20 for that.â€? percent from the previous year. Gramlich noted that anytime GM introduces 'HYRQLDQ 6WUHHW (VWHYDQ 6. “It’s very good this year. It’s a growing thing the new body or interior styling as they did for the cur3K KU ‡ )D[ ZZZ VDPVWUXFNLQJ FD last couple of years. I’ve noticed a trend that way,â€? rent crop 2014 Sierra 1500 light trucks and 2015 7UXFNLQJ (VWHYDQ /WG

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PIPELINE NEWS December 2014 Éş Page B20 “It’s still a very nicely equipped truck – very comfortable seats, a smooth ride, a very quiet ride, and all that stuff plays into the factors of how people make decisions to purchase trucks.â€? Gramlich said the best selling truck at Westridge is the Sierra half ton pickup that comes in a wide of range of equipment and trim levels. About 50 percent of Westridge’s truck sales are new and 50 percent used in a regional oil and gas economy where pickup trucks rule over cars. “I don’t know the exact ratio, but it’s probably somewhere close to about 70 to 80 percent trucks over cars. It’s a great place to be selling trucks,â€? said Gramlich. Despite being in sales for five years, Gramlich says he can’t pick out an oilfield worker by his or her truck. “In this town no, because everyone keeps them so clean,â€? he said

adding that he estimates about 40 percent of his customers work directly in the oilpatch. The rest are people who are impacted by the oilfield and he said that’s “got to be close to 90 to 100 per cent. It’s a big town and the oilfield definitely impacts the whole community.� When it comes to buying a truck for oilfield work, Gramlich said that’s where you see a lot of HD trucks on the road for activities like pulling trailers or hauling heavier loads. “The more guys you’ve got, you need a little bit bigger truck,� he said referring to crew cabs. “There’s a lot of light duty trucks out there for personal use in

the oilfield as well.� With cold weather ahead, Westridge is planning to hold another three week indoor vehicle sale in February at the Lloydminster Exhibition Grounds. Westridge is also planning to renovate the exterior of the dealership in 2015 about 13 years after Ross Ulmer and the Ulmer Auto Group started the business in 2002. “There’s a nice facelift coming to the store in 2015, so we are really excited for the new model,� said Gramlich. “There’s going to be a lot of exterior stuff and a little bit of touches on the inside for sure which will include a drive-through lube bay.�

B21

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PIPELINE NEWS December 2014

Replacing Line 3 would restore 370,000 bpd in capacity „ By Elsie Ross (Daily Oil Bulletin) Calgary – Enbridge Pipelines Inc. has filed an application on Nov. 14 with the National Energy Board for the replacement of the majority of its Line 3 crude oil pipeline between the company’s Hardisty terminal in Alberta and Gretna station in Manitoba. The United States segment of the line, which also will be replaced, runs from Neche, N.D., to Superior, Wis. The estimated capital cost of the Canadian leg of the Line 3 replacement

project (L3RP) is $4.83 billion, which includes an allowance of $220.5 million for funds used during construction and $160 million to decommission the replaced Line 3 once the replacement pipeline is in place. Line 3, which originally was built in 1968 as part of the Lakehead system, will continue to be part of the integrated Enbridge Mainline system. Subject to the receipt of all required regulatory approvals, construction of 18 new pump stations is expected to begin as early as the second quarter of 2016, with pipeline construction

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anticipated to start in the third quarter of 2016. The anticipated in-service date is the fourth quarter of 2017, with line fill extending into the second quarter of 2018. Once complete, the project would enable Line 3 to transport crude oil at throughput levels similar to those the existing line was capable shipping prior to Enbridge imposing significant pressure restrictions. The replacement line will operate at the line’s original design capacity of 760,000 bbls per day, says the company in its filing. The line currently operates at a capacity of 390,000 bbls per day. The overall Line 3 project includes the replacement of the existing 34-inch diameter pipeline with 36-inch pipe and the addition of remotely operated sectionalization valves along the replacement pipeline, along with 18 pump stations and as-

sociated infrastructure and equipment and tankage at the Hardisty terminal. The majority of the replacement program will be adjacent to Enbridge’s existing mainline corridor, typically offset from and adjacent to its existing Alberta Clipper expansion project. The proposed Line 3 replacement right-of-way will be alongside and contiguous to existing linear disturbances for approximately 94 per cent of its length. The Line 3 replacement cost will be recovered through surcharges applied to the Canadian local tolls and International Joint Tariff assessed on all volumes received at the Edmonton and Hardisty terminals. In 2013, as part of its system-wide preventive maintenance program, Enbridge identified seven Line 3 segments for replacement and that became the basis for the Line 3 segment replacement program. Following

consultation with landowners along the route, the segment replacement program transitioned into the line replacement program, which received shipper support earlier this year (DOB, March 4, 2014). In its filing, Enbridge says the L3RP is the most efficient way to maintain Line 3’s reliability while reducing the frequency, magnitude and cost of ongoing integrity maintenance work. Because the L3RP is a significant maintenance project, Enbridge says the alternatives it considered consisted of continuing to conduct ongoing integrity digs and repairs; replacing a number of segments on the existing Line 3 over the course of several years; or undertaking the L3RP, whereby the existing Line 3 pipeline between Hardisty and the Canada-United States border would be replaced except in locations where it has already been replaced as a result of separate projects.

“Replacing the existing Line 3 pipeline ‌ provides the best solution,â€? says Enbridge. “The L3RP would be less intrusive to landowners and the environment, both over the short and longterm; would result in the return of Line 3 to its design flow-rate; would address issues of operational reliability and underutilization; and has received commercial support.â€? Ongoing maintenance and integrity digs were not considered an acceptable alternative to the project, according to Enbridge. Although it could continue to safely operate the existing Line 3 with ongoing maintenance, this approach was considered the least attractive from a number of perspectives it says. Because the line is currently operating at a flow rate well below the level it was designed to operate at, this leads to system constraints and inefficiencies, says the company. ɸ Page B23

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PIPELINE NEWS December 2014 Muse Stancil based its analysis on the Canadian Association of Petroleum Producers’ 2014 supply forecast. CAPP expects western Canadian crude oil supply will be nearly 5.2 million bpd by 2020 and will exceed 7.4 million bpd by 2030. Oilsands supply including heavy oil and upgraded light synthetic is expected to ZĞƉůĂÄ?Ĺ?ĹśĹ? ĹśÄ?ĆŒĹ?ÄšĹ?Ğ͛Ć? >Ĺ?ŜĞ ĎŻÍ• Ç ĹšĹ?Ä?Ĺš ŚĂĆ? Ä?ĞĞŜ ĆŒƾŜŜĹ?ĹśĹ? Ä‚Ćš Ć?ĆľÄ?Ć?ƚĂŜĆ&#x; ĂůůLJ ĹŻÄžĆ?Ć? Ć‰ĆŒÄžĆ?Ć?ĆľĆŒÄž ĚƾĞ grow to 6.2 million bpd ƚŽ ĆŒÄžĆ?ĆšĆŒĹ?Ä?Ć&#x; ŽŜĆ?Í• Ç Ĺ˝ĆľĹŻÄš ĆŒÄžĆ?ĆšĹ˝ĆŒÄž ϯϳϏÍ•ĎŹĎŹĎŹ Ä?Ä‚ĆŒĆŒÄžĹŻĆ? Ć‰ÄžĆŒ ĚĂLJ Ĺ?Ĺś Ć?ĹšĹ?ƉƉĹ?ĹśĹ? Ä?ĂƉĂÄ?Ĺ?ĆšÇ‡Í˜ dĹšĹ?Ć? ÄŽ ĹŻÄž ƉŚŽͲ by 2030 from 2.5 milƚŽ Ć?ĹšĹ˝Ç Ć? Ä?ŽŜĆ?ĆšĆŒĆľÄ?Ć&#x; ŽŜ ŽĨ ƚŚĞ ĹśÄ?ĆŒĹ?ÄšĹ?Äž ĹŻÄ?ÄžĆŒĆšÄ‚ ĹŻĹ?Ć‰Ć‰ÄžĆŒ Ć‰ĆŒŽŊÄžÄ?Ćš Ĺ?Ĺś Ć?ŽƾƚŚĞĂĆ?Ćš ^Ä‚Ć?ĹŹÄ‚ĆšÄ?ĹšͲ lion bpd in 2014. Throughout the ÄžÇ Ä‚Ĺś Ĺ?Ĺś ĎŽĎŹĎŹĎľÍ˜ dŚĞ >Ĺ?ŜĞ ĎŻ ZĞƉůĂÄ?ĞžĞŜƚ Ç Ĺ˝ĆľĹŻÄš ÄžĆ?Ć?ĞŜĆ&#x; ĂůůLJ Ä?Äž Ä‚ ĆŒÄžĆ‰ÄžÄ‚Ćš ŽĨ ĹŻÄ?ÄžĆŒĆšÄ‚ ĹŻĹ?Ć‰Ć‰ÄžĆŒÍ• Ç Ĺ?ƚŚ Ć?Ĺ?ĹľĹ?ĹŻÄ‚ĆŒͲĆ?Ĺ?njĞ ϯϲ Ĺ?ĹśÄ?Ĺš ƉĹ?Ć‰ÄžÍ˜ forecast period, the total effective Enbridge Mainline capacity at Éş Page B22 demand for western downstream pipelines Cromer is 2.89 million provide connectivity Canadian crude oil bpd, which represents In addition, relyfrom the Mainline to in the markets served 95 per cent of the ing only on integrity important crude oil such that the Enbridge combined capacity of digs and repairs on the pipelines in the MidMainline generally will the individual Enbridge existing Line 3 would be operating at or near continent and lower Mainline pipelines. In not adequately address capacity throughout the Midwest regions, plus the initial year of service the issues of operational forecast period ending the Gulf Coast.â€? reliability and underin 2030. utilization (due to the “The project (Line imposition of pressure 3 replacement) will restrictions), it says. enhance the Enbridge “Continuing to conduct Mainline’s existing abilfrequent integrity digs is ity to transport crude oil not only costly, but also from Western Canada intrusive to landownto the crude oil markets ers along Enbridge’s in Ontario, Quebec 6HQGLQJ \RX DQG \RXUV D IOXUU\ RI ZHOO ROW whose property and the Midwest,â€? said ZLVKHV DW WKH KROLGD\V DQG DOO \HDU URXQG and agricultural operathe consultant. “Other 7KDQN \RX IRU \RXU SDWURQDJH tions may be affected by ongoing maintenance activities,â€? the company notes. In a market analysis prepared for Enbridge, Houston-based Muse, Stancil & Co. assessed (QYLURQPHQWDO 3URWHFWLRQ 3ODQV ,PSDFW $VVHVVPHQWV the demand for Cana 3UH 6LWH $VVHVVPHQWV (QYLURQPHQWDO $XGLWV $VVHVVPHQWV dian crude oil out of :HOO 6LWH %DWWHU\ $EDQGRQPHQWV 'ULOOLQJ :DVWH 0DQDJHPHQW Western Canada against 3UH 3RVW :DWHU :HOO 7HVWLQJ (0 6XUYH\LQJ *36 0DSSLQJ the oil supply out of Western Canada. It concluded that there is a demonstrable mar)$; ket need for the proj%2; &$5/</( 6$6. 6 & 5 ect. It also concluded ZZZ HYHUJUHHQHQYLUR FD that there is sufficient

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PIPELINE NEWS December 2014

Ulmer drafts off fast selling Silverado Lloydminster – Ice scrapers got their first workout of the new winter season at Ulmer Chevrolet in Lloydminster in early November. The early dusting of snow helps to sell light and heavy duty Silverado trucks to families and oilfield workers with winter driving worries. “People’s older vehicles break down or won’t start so they’ve got to get a new vehicle,” said sales manager Lance Herman about the arrival of winter weather. “When there’s snow on the ground they definitely think of a 4x4 truck to get around town and to get to the oil sites and the lease sites. It doesn’t hurt that’s for sure.” The Ulmer dealership heads into the start of winter on a roll from its best sales month ever in October. “New trucks are our number one selling vehicle. It’s been awesome,” said Herman referencing sales in sync with a strong regional heavy oil economy. “You drive around town and you see every other house has some kind of oilfield work truck there. “You drive downtown and see all these new buildings put up which tells me that people expect to be in business for the next several years which I think is going to be good for us.” Ulmer has a sales force of seven that is dedicated to moving trucks off the lot while Lloydminster continues to grow and be known as the heavy oil capital of the world. “You can tell, you can just feel it in the community that the heavy oil is strong here,” said Tyler

Zacharias, the general manager who is confident the good times will continue to roll. “I think 2015 will be easily our strongest year yet. As a dealership, we are excited about the product. “We’re riding off the year of the new truck for the light duty and our heavy duty. “We’re excited. We’re customizing a lot of vehicles and things like that. It’s an exciting time for us.” Ulmer Chev sales team is especially stoked about the Silverado 1500 light duty truck that was totally redesigned in 2014 along with the Silverado 2500 Heavy Duty models. The Silverado was named the North American Truck of the Year by a jury of 49 automotive journalists from Canada and the United States during the 2014 North American International Auto Show in Detroit. According to the automaker the truck is “new from hood to hitch” with a trio of powerful and efficient gasoline engines, added comfort and technology features and improved ride and handling. “It’s a phenomenal truck. People always say our truck is like driving a car because of the comfort of it,” said Zacharias. “My background is service. We’ve never had a truck that stands out better than the one we have now. “I know from a warranty perspective, our warranty traffic is way down because the trucks are just that much better.” ɸ Page B25

Lloydminster Ulmer Chevrolet is number one according to this hand gesture by sales manager Lance Herman. Herman is standing next to a 2015 Silverado LTZ 4x4 half ƚŽŶ ƚŚĂƚ ŝƐ ƉŽƉƵůĂƌ ǁŝƚŚ ŽŝůĮ ĞůĚ ǁŽƌŬĞƌƐ͘ WŚŽƚŽƐ ďLJ 'ĞŽī >ĞĞ

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PIPELINE NEWS December 2014 ɺ Page B24 Asked what oilfield workers look for when shopping for a pickup, Zacharias said number one is “clearance for appearance” of the vehicle. “A lot guys buying this year have seemed to move to the lifted half ton trucks, whereas in the past we’ve seen them buy a heavy duty,” said Zacharias “Our new trucks seem to stand up really well, so we’ve been putting lift kits on a lot of the half-ton models. “We do quite a bit of customizing in-house so we always have a few displayed on the lot for people to look at.” The most sought after custom products installed at Ulmer Chev include leveling kits, big tires, aftermarket rims and grills. It’s anything that can set their truck apart from someone else’s according to the sales guys. Herman, for example, made his own 2014 Silverado 1500 stand out with painted bowties, a tonneau cover for the cargo box and 20-inch rims. Not surprisingly, Ulmer’s ratio of trucks sales to cars is at least 4 to 1 most of the year in keeping with the truck town image that the heavy oil industry projects locally. October was also a record month at Ulmer for used trucks with 77 sold according to Kirby Laumbach, another sales manager who chalked it up to a number of factors.

“With everybody looking for the new style right now, there’s a lot of nice trade-ins – low mileage. We recondition them. That’s a huge factor as well,” he said. “We have zero percent for up to 84 months for lease and finance (November).” The record sales for new and used vehicles in October were helped by Ulmer’s annual indoor sale that month held at the Lloydminster Exhibition Grounds. “It was awesome. It brings all of our vehicles into one building. We advertise heavily so it brings people in,” said Herman. “We are open later hours so people can come after work. It got us pumped up.” Customers are now taking a liking to the updated 2015 Silverado trucks that are arriving at the dealership. The 2015 Silverado offers available built-in OnStar 4G LTE Wi-Fi allowing passengers the ability to seamlessly connect their smart devices and vehicles to the Internet. WiFi will be added to the HD models later in the 2015 model year according to industry news. “Everyone wants the new product and all the new technology. Besides that it’s a safe truck, and durable. Guys are having good luck with it in the patch,” said Laumbach about the Silverado. The Silverado half-ton is in fact the best-selling truck at Ulmer Chev this year. ɸ Page B26

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Clearance for appearance in demand

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Éş Page B25 Laumbach, however, bought himself a Silverado 2500 HD diesel for hauling around his recreational equipment. “For me, it’s the versatility. I have a camper trailer. So many people in the oilpatch do,â€? he said. “I need a little heavier truck to pull it. I’ve got a boat as well.â€? Herman’s Silverado half ton is a crew cab that he said is the more popular light truck model followed by the double cab and regular cab. “Next year you’ll see a shift from us carrying a lot more double cabs. We’re going to try that segment of the market as well next year,â€? said Herman. A double cab is the same as a crew cab, but the doors are a lot smaller and there is no more suicide door. They both open like a regular door. This creates a B-pillar in the truck for a lot more strength and safety. “A crew cab is better for hauling people and a double cab is better hauling stuff because you have that extra bigger cab to keep things dry or warm,â€? said Herman

“It also gives you a bigger size box for carrying all your other tools and gear.� Zacharias owns a car, but he gets to drive a demo 4 x4 truck during the winter that makes him feel safer. “For anyone in the oilpatch fourwheel drive is pretty much a necessity,� he said. He and Herman both have some oilfield experience to support their claims, but neither man has ever wanted to make a career of it especially when it’s cold outside. “The first job I had was with Shindle & Bazin Oilfield back home (Estevan) and we did oilfield construction and pumpjack servicing and stuff like that,� recalled Zacharias. “I have a definite appreciation when it’s minus 40 out and those guys are out working. I’ve been there.� Herman came back to his sales job several years ago after one year of working on a variety of jobs for a Lloydminster oilfield services company that did containment systems. “It just wasn’t for me. I got back into car sales. It was fun. If was different. I did some laboring, went and did some camp work for a bit,� he said.

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Silverwood to butt brand its Tundras “But the truck itself is just as tough and it is a work truck. “We are going to advertise our trucks and we are going to promote our trucks. We are also going to set up some unique packages with different accessories that can be purchased,” she said. Silverwood will be the only Toyota dealer with the Tundra Country brand and that puts a smile on the face of Jason Lazerte, used sales manager. “It will be great for business and great for setting ourselves apart from everyone else as far as selling Tundras go,” he said. There are plans to add the Tundra Country decals to used trucks as well. Lazerte won’t argue with a 2014 report by the National Automotive Dealers Association that the Tundra has the best retained value among full-size trucks. “They seem to last. We’ve got long-time clients who have been driving them for many years,” he said. ɸ Page B29

POWDER COATING Wendy Bulmer, the general sales manager at Silverwood Toyota in Lloydminster, is excited about a new Tundra Country decal branding campaign launched at the dealership ŝŶ EŽǀĞŵďĞƌ͘ ůů dƵŶĚƌĂƐ ůŝŬĞ ƚŚĞ ƌĞĚ WůĂƟŶƵŵ dƵŶĚƌĂ ďĞŚŝŶĚ ƵůŵĞƌ ǁŝůů ŐĞƚ ƚŚĞ ĚĞĐĂů treatment. WŚŽƚŽƐ ďLJ 'ĞŽī >ĞĞ

Lloydminster – If branding works to identify cattle ownership, it should work to single out dealership trucks too. That’s the thinking behind an active program by Silverwood Toyota in Lloydminster to identify all six grades of Tundra trucks with a cattle style brand decal on the rear side panel. The brand will bear the overlapping letters TC which stand for the words Tundra Country which will also be decaled to the side of each new truck. The goal is to make the Tundra stand out as a truck from Silverwood and connect with the western theme that dominates the new 1794 Edition Tundra that Wendy Bulmer, general sales manager drives. “Tundra brought out the 1794 Edition last year which is very much a western-themed truck. The interior is beautiful. It’s almost like a saddle leather interior,” said Bulmer. “We really like that model, and we’ve been very successful with it. The public has received it well. “We’re going to continue that theme and try to brand all of our trucks with a western theme.” The advertising campaign for the Tundra Country branding got underway in November and will kick into high gear when the decals are ready to apply. “It’s unique to Silverwood Toyota. We’ve bought two domains, tundracountry.com and tundracountry.ca, and we want to set ourselves apart from the competition,” said Bulmer. “When you drive our truck, everyone will know it came from Silverwood Toyota.” The branding will help give Tundra trucks an image makeover as a workhorse truck that can give Ford, Dodge and Chev a run for their money in oilpatch. Bulmer said any perception to the contrary is “due to the fact Toyota maybe isn’t as strong in fleet sales as the Ford, the Dodge and Chev programs.

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Consultants like Tundra's big interior our business for sure.� Bulmer expects there will be some great end of the year sales in December including Toyota nationally and Silverwood’s own dealership programs as well. “There will be good savings,� she said. Lazerte said a lot of oilfield workers are driving Tundras lately for checking wells and for getting in to service wells. It helps sales knowing the 2015s have a slightly softer suspension for a more comfortable ride over rough terrain. “I have some consultants that are in them. The reason the consultants are buying them is because of the big interior cab size. It’s one of the biggest on the market if not the biggest,� said Lazerte. “Getting a printer and a laptop and things like that into a vehicle where they are spending 12 to 14 hours a day in comfort is very important to them.� The Tundras are powered by either a powerful 4.6 litre V-8 or a 5.7litre V-8 engine both with excellent torque and hauling capabilities for their class. The trucks are available in regular cab, double

cab and CrewMax configurations. Lazerte knows what oilfield workers want in a truck since he used to do high pressure water blasting for industrial cleaning for a local oilfield company. “A lot of Fords were with that company, but since I’ve moved on selling Tundras, I’ve sold numerous Tundras to that company. They’ve been really impressed,� he said with a laugh. Lazerte works out Toyota’s satellite used vehicle depot on Highway 17 south. That’s also the home of Silverwood’s Automotive Addiction detailing and accessories side of the business. “They do all kinds of appearance packages and accessories and they also do lots of things that help protect your investment as well,� added Bulmer who will likely get a decal there for her 1794 Edition Tundra. “As soon as the decals are done, I will have my branded. I will be driving around town and putting some accessories on it,� she said. “I got beautiful bronze mica which is a lovely chocolaty brown colour with that nice saddle leather interior. It’s a beautiful truck.�

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Jason Lazerte has reason to smile. Sales of new and used dƾŜÄšĆŒÄ‚ ĆšĆŒĆľÄ?ĹŹĆ? Ä?ŽŜĆ&#x; ŜƾÄž ƚŽ Ĺ?ĆŒĹ˝Ç Ä‚ůŽŜĹ? Ç Ĺ?ƚŚ ƚŚĞ Ć?ĆšĆŒŽŜĹ? ĨÄ‚ĆŒĹľĹ?ĹśĹ? ĂŜĚ Ĺ˝Ĺ?ĹŻÄŽ ĞůĚ ÄžÄ?ŽŜŽžÇ‡ Ĺ?Ĺś ƚŚĞ >ůŽLJĚžĹ?ĹśĆ?ĆšÄžĆŒ ĆŒÄžĹ?Ĺ?ŽŜ͘

Éş Page B27 “A lot of what we see out in the patch is fleet stuff, and we are trying to work our way into that segment in this area because Tundra would be a very strong truck to have in that oilfield.â€? Most of the Tundras are half tons with the lighter Tacoma truck having its own growing band of followers in the strong local market. “Our truck sales are really good this year and we’re in truck season,â€? said Bulmer. “October and November are traditionally strong truck months for Toyota at Silverwood and they are again this year as well. “We are having a fantastic year this year. A lot of our business does come from companies that work in the oilfield or they work for the oilfield. “Most of the people coming in the door are either farmers or they are oilpatch. It certainly drives

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PIPELINE NEWS December 2014

EcoDiesel a slam dunk engine for Denham

Denham Chrysler in Lloydminster sells about nine trucks for every car on its lot according to Dave Voellmecke, new vehicle sales manager at Denham Chrysler. Fleet sales are also steadily growing at the dealership.

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„ By Geoff Lee Lloydminster – Welcome to truck town, Lloydminster, where a lower price for a barrel of oil this fall doesn’t seem to have much effect on sales to oilfield workers. At Denham Chrysler located on Highway 17 south, the ratio of truck sales to cars is about nine to one regardless of what a barrel of oil costs. New buyers keep coming in. “Anything that’s on the oilfield side is strictly truck sales. It’s been steady. It’s been what is has been over the last few years,â€? said new vehicle sales manager Dave Voellmecke. “Last year was our best year.â€? As for sales in 2014, Voellmecke said they are good for far. “We’re almost on pace with last year, and I guess how it finishes up in the last two months, it could even up or be very close anyway.â€? Gone are the days of the boom and bust sales cycles with oil prices as the dealership is benefiting from the shear population growth in the city. Voellmecke also believes there has been a higher degree of measured planning with the influx of new oil and gas companies. “The people that have been coming in have been planning for things. It’s less impulsive. It seems more organized and more planned I guess,â€? said Vollemecke who senses with monthly sales. “Over the years, we’ve noticed the business has become steady. It’s not rush and quiet anymore. I think that has to do with the growth of the city as well. “You don’t have those quiet times and you don’t have those panic times. It seems like everything is just moving right along.â€? Voellmecke has been with Denham Chrysler since shortly after its inception in 1988 and he knows his oilfield customers better than most in the business. “They really need to be taken care of when they are looking for something. More than anything else, time is money in that business,â€? he said. “They are loyal, but also very busy. They will deal with who’s taking care of them at the time.â€? Customer excitement is being generated by the 2014 Ram 1500 light duty half tons and the Heavy Duty series of three-quarter tons starting with the 2500s. “Probably the major change over the last year was the introduction in the 2014 models of the 3.0 litre V-6 EcoDiesel engine,â€? said Voelllmecke. “That’s made quite a difference on how we’re ordering vehicles. It’s been a really popular unit.â€? “It’s the fuel economy and the torque or the pulling power of that vehicle.â€? The EcoDiesel turbocharged engine available in the Ram 1500 pickup is mated to an 8-speed automatic transmission. ɸ Page B31

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2014 Year End Savings This head turner is a Ram 1500 sport truck powered by a 5.7 litre Hemi V-8 engine and equipped with 20-inch aluminum wheels. It’s for sale at Denham Chrysler in Lloydminster.

ɺ Page B30 It generates 240 hp at 3,600 rpm and produces 420 lb.-ft. of torque at 2,000 rpm capable of towing 9,200 lbs. Voellmecke drives a 1500 pickup with the new EcoDiesel engine with lots of highway driving and trailer towing time under his belt to attest to its capabilities. “For a small engine like that, it’s incredible the amount of torque that comes out of it pulling my trailer without a problem,” he said. “I’ve got some crazy fuel mileage with it just in normal driving situations. I’m really happy with it.” Other engine choices for the 1500 are the 3.6 litre V6 engine with an 8 speed transmission and the 5.7 litre Hemi V-8 with a 6- or 8-speed transmission. Asked if the fuel-saving EcoDiesel is popular in the oilfield, Voellmecke said it’s too early to tell due to availability. “We had a real battle with that,” he said about getting more of them on the lot. “It’s very possible it might be probably within another four to six weeks when we notice a big change in our inventory. “A lot of them are going to start to show up in the 2015 models with the EcoDiesel. It’ll be interesting to see how everything reacts to that.” Voellmecke said a lot of his oilfield customers put their trust in the powertrains of the Rams. The heavy duty 2500, 3500 and 5500 series trucks are powered by the Cummins 6.7 litre turbo diesel V-6 engine known to be workhorse in the oilpatch. ɸ Page B32

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PIPELINE NEWS December 2014

'HQKDP à HHW VDOHV XS ZLWK KLULQJ „ By Geoff Lee Lloydminster – Denham Chrysler in Lloydminster is expanding its fleet department to keep pace with the demand for light and heavy duty trucks by heavy oil companies, construction trades and businesses in the city. The task of expansion rests with Barry

MacKichan who was hired last year as a fleet sales manager with the sole purpose of boosting commercial truck sales in a city that continues to expand. Denham’s veteran new vehicle sales manager Dave Voellmecke said MacKichan’s hiring has “made a huge difference so far,� in sales.

“On the fleet side of things, we’ve probably never had this much request for our 5500 series trucks as well.� The Dodge Ram chassis cab as the 5500 is called can be turned into a picker truck or a service body for a variety of oilfield or industry purposes. “That’s been no-

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ticeably increased and I think that’s due to the fact that we have expanded and hired somebody that is strictly taking care of that,â€? said Voellmecke. Speaking for himself, MacKichan said, “We are a truck town and we are a business town. We see a lot of the 5500s, the big heavy duty chassis. We sell a lot of those. ɸ Page B33

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Éş Page B31 “They will buy the engine first and the truck that comes with it is what they’re buying,â€? said Voellmecke. The 6.7 litre Cummins in HD Rams offers a sick 30,000 lbs of towing power. Some of the heavy duty trucks are equipped with either a 5.7 litre Hemi V-8 or a 6.4 litre Hemi V-8 under the hood. “That combined with our 8-speed transmission has given us a really good fuel economy rating,â€? said Voellmecke. “Fuel economy has become a launching point for promotion.â€? The EcoDiesel is marketed as getting up to 40 mpg on highway driving. Aside from fuel economy and towing muscle, comfort has become a key reason why pickups outsell cars to oilfield customers with families in Lloydminster. “It’s taken the place of two vehicles now,â€? said Voellmecke. “First of all it’s a truck, and then it’s also a van or an SUV. They use it for hockey games; they use it for travelling, and even for family functions. “Our trucks haven’t always been as comfortable as they are right now. That’s where I’ve noticed a big change in that. “All manufactures have seen to have marketed a well-equipped lower priced vehicle in all their lines which has attracted attention. “But it seems when it comes right down to it, people are looking for a few more options maybe to stop them from buying another vehicle.â€? The most popular configuration in a Ram pickup is the crew cab or an available quad cab in select models. With a crew cab you can pack a lot of people and equipment in them for that all-in-one vehicle. “In our Heavy Duties, we have the crew cab and then we have the Mega Cab, but a crew cab is more suitable (for work crews and families) because it gives you lots of room,â€? said Voellmecke. “It’s very comfortable, but it doesn’t add an extra 18 inches to the length to the vehicle. “So it’s still convenient for getting in and out of situations – city travel – also getting it into your garage.â€?

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PIPELINE NEWS December 2014 Éş Page B32 “That’s a very necessary thing for the oil business and for the construction business. “We do sell a lot of 1500s and a lot of the heavy duties – basically anything that looks like a truck upfront is something we’ll sell.â€? MacKichan is a high energy guy

and a former vocalist in the Lloydminster-based Christian rock group Kiros that disbanded in 2013 after a farewell tour. “I’m originally from Calgary, but I’ve made Lloyd my home for the past five years. I was doing music for a few years and I was working at Future Shop as well,� he said. “I saw an opportunity here to do

something special,� he said about the offer to lead fleet sales at Denham. “I love it. It’s an amazing town to be a part of – a vibrant community. There’s a lot of local businesses we get to be involved with. “There’s a lot of oil companies and we also have a lot of contractors – a lot of construction going on here all the time. A lot of new businesses – there’s so much we get to be involved with here.� MacKichan is stoked about potential commercial sales of the new 2014 Promaster cargo van powered by the 3.6 litre V-6 engine or the new 3.0 L V-6 EcoDiesel engine with

B33

amazing fuel mileage. “This is a commercial van which we think has a lot of potential for the oilfield and a lot of potential for contractors,� said MacKichan. “The payload is amazing, there is a ton of storage space, and it’s covered storage space.� The Promaster can carry up to 4,430 lbs in over 460 cubic feet of cargo space and it comes in 14 configurations as a utility van. “Especially for anything in plumbing, in construction or electrical, we think we have a vehicle that is a phenomenal fit for them,� said MacKichan.

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PIPELINE NEWS December 2014

6,*1 À OOV UHJXODWHG QLFKH Lloydminster – Open for business is probably one of the first signs that 310-SIGN Inc. made for itself in 2014. The Bonnyville based company incorporated on Jan. 1 with a bigger North American market in mind after a learning period making safety signs for the Canadian market. “Now that we really have a good online presence our signs are shipped everywhere from California to Newfoundland to B.C.,” said Kelso Brennan, founder and CEO of 310-SIGN. Brennan came to the 2014 Lloydminster Heavy Oil Show in September to market his company as a leading manufacturer and online supplier of regulated traffic, safety and oilfield signs. “We’ve actually got a map in our office of all the places that we’ve shipped to and it’s literally across Canada to where the signs have gone,” he said at his company booth.

Their website helps customers to find industry safety signage using their search engine that includes the ability to customize products and check out online. “We make a variety of regulated signs, everything from traffic to pipeline oilfield signs, a lot of wellsite signs and of course, safety labels and signs,” said Brennan. The online catalogue takes orders for everything from wellsite signs, pipeline signs, facility safety signs, pipe and valve identification markings and electrical markings to lockout tags and traffic signs. Brennan said orange construction signs and wellsite signs are among their fastest moving sign products in Western Canada given the high level of economic activity. Within Canada, 310-SIGN is one of the first companies to make and sell safety signs online that conform to Canadian standards and regulations. “The oilfield signs are driven by regulations. There’s everything from Alberta Transportation to AER (Alberta Energy Regulator) and of course, depending on your regulatory body, it can go as high as the Transportation Act of Canada,” said Brennan. “It seems like depending on which line of signage that you are using there is a different type of regulating body for a sign type, for instance, safety signs – Occupational Health and Safety. “So for us, there is a lot of information to stay up to date on.” The company also provides a toll free number in Canada at 310-7446 to answer questions and provide customer support. The company also has a toll free information and order line for North American customers to call. “From a customer standpoint they are busy running businesses and doing the work that they need to do and it’s tough to stay up to date on all of the regulations. That’s why we take care of that for them,” said Brennan. There is a regulatory requirement for signs at every wellsite and wellhead as well as for posting other types of warnings and safety signs. “Even when someone’s putting in a new wellsite, you might have just your stop signs, and if there’s cattle inside of the lease, everything from ‘Keep Gate Closed’ to ‘Stock Crossing’ signs,” he added. “The regulations say what size, what type of warning graphics you have to have and everything down from the operator of the lease information to your emergency phone numbers.” The regulations restrict creativity, but 310-SIGN is not in the commercial or retail sign business. “The big thing about safety when it comes to safety signs is that conformity and repetitive messages are an essential part to making the safety message effective,” said Brennan. “If they all had a different style of look and size then everyone would tend to become confused.” He said try to imagine a purple stop sign. Just about all of the signs made for Canadian customers are made from an aluminum base finished with a 3M clear coat that is UV protected. “They are built for this environment and weather,” said Brennan. All of the signs are made in Bonnyville with a staff of just seven employees with the business focus on efficiency and automation. “We are running a real lean company with the amount of volume that we are doing,” said Brennan. The company’s Internet growth is directed by business development partner Grant Meadows, a veteran internet entrepreneur with over 20 years of e-commerce experience. Meadows built a company with over $12 million in annual sales operated by only 11 employees before investing in 310-SIGN. ɸ Page B35

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PIPELINE NEWS December 2014

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“We put some new machines in earlier this year, and we have plans to install new equipment next year as well.” Brennan said what sets 310-SIGN apart from the competition is their quick turnaround time from order to shipping within 24 hours. “We also we have an online presence where people can go and search the regulations and find the answers they are looking for,” said Brennan. The company’s knowledge of safety regulations is second to none which made the decision to incorporate a no brainer. “That was the first focus we did, ‘are we doing things right?’ and now that we are doing them right, ‘how can we get them out fast?” said Brennan. Getting more oil and gas customers to chose safety signs from 310-SIGNS was part of Brennan’s mission at the oil show along with meeting some online customers face to face. “I think there is great foundation in Lloydminster. It’s really close to home in Bonnyville where our signs ship overnight,” he said. “I’d really like to introduce ourselves to some of the existing customers that we already have here.”

310 SIGN from Bonnyville aims to become the leading online provider of regulated trafĮ Đ͕ ƐĂĨĞƚLJ ĂŶĚ ŽŝůĮ ĞůĚ ƐŝŐŶƐ͘ ŽŵƉĂŶLJ ĨŽƵŶĚĞƌ K <ĞůƐŽ ƌĞŶŶĂŶ ŵĞƚ ŶĞǁ ĂŶĚ ĞdžŝƐƟ ŶŐ ĐƵƐƚŽŵĞƌƐ Ăƚ ƚŚĞ ϮϬϭϰ >ůŽLJĚŵŝŶƐƚĞƌ ,ĞĂǀLJ Kŝů ^ŚŽǁ ŝŶ ^ĞƉƚĞŵďĞƌ͘ WŚŽƚŽ ďLJ 'ĞŽī >ĞĞ

ɺ Page B34 Efficiency has been a priority for management even before the partners launched the company. “We put a lot of good processes in place before we started the company. We are running a lot of automated equipment and cutting edge technology,” said Brennan.

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PIPELINE NEWS December 2014

Radio tuned to produce heavy oil minster Exhibition Grounds. The presenter was Pedro Vaca, a senior reservoir engineer from Acceleware with some opening remarks by Mike Tourigny, the chief marketing officer, who spoke to the media. “There are really vast possibilities for the technology. There are so many reservoirs and assets in place that can’t be produced right now,â€? said Tourigny. “There’s a lot of options where steam is not viable, the production technology or enhanced recovery methods aren’t viable. RF offers a new solution to get those assets out of the ground.â€? RF is touted as a cost-effective and environmentally-friendly alternative to existing extraction techniques because it requires less energy to operate and requires no water or solvent. The presentation noted RF heating is applicable to thin reservoirs Lloydminster SPE luncheon speaker Pedro Vaca, a senior reservoir engineer for Accele- where steam injection is not economic Ç Ä‚ĆŒÄž Ĺ?Ĺś Ä‚ĹŻĹ?Ä‚ĆŒÇ‡ ĚĞůĹ?Ç€ÄžĆŒÄžÄš Ä‚ Ć‰ĆŒÄžĆ?ĞŜƚĂĆ&#x; ŽŜ ŽŜ ĆŒÄ‚ÄšĹ?Ĺ˝ ĨĆŒÄžĆ‹ĆľÄžĹśÄ?LJ ŚĞĂĆ&#x; ĹśĹ? ĨŽĆŒ ŚĞĂǀLJ Ĺ˝Ĺ?ĹŻ Ä‚Ćš ƚŚĞ or for shallow reservoirs where high >ůŽLJĚžĹ?ĹśĆ?ĆšÄžĆŒ džŚĹ?Ä?Ĺ?Ć&#x; ŽŜ 'ĆŒŽƾŜÄšĆ? ŽŜ KÄ?ĆšÍ˜ ĎŽĎŽÍ˜ pressure is not allowed. It’s also ideal for heterogeneous reservoirs, carbonates or reservoirs Lloydminster – Imagine using an RF heating uses electromagnetic energy to mobilize bitumen and heavy with no cap rock and for fractured inside out microwave oven to heat reservoirs. and produce heavy oil or bitumen to oil for production. “It’s best for bitumen and oilsands surface. It differs from AC or DC heating That’s the vision of Acceleware, by relying on wave propagation rather and pretty much anything heavy. Also it’s good for wells with some mobility a software solutions company in than heat conduction. but might need some additional presCalgary that is testing a commercial RF heating was the topic of an application of radio frequency or RF Oct. 22 luncheon of the Lloydminster sure,â€? said Tourigny. “It’s a way to create pressure in a heating for different geologies and Society of Petroleum Engineers held reservoir by heating water and creatformations. at the Prairie Room inside the Lloyd-

ing steam and adding pressure to a reservoir without injecting it (with water).â€? RF heating works by radiating electromagnetic or EM power from a downhole antenna that primarily heats water in a formation and converts it to steam. The process heats the oil to lower its viscosity and increases pressure in the reservoir through the creation of a steam chamber to produce oil to surface. The RF system includes an RF generator, transmission lines and an antenna. The well conditions for RF heating call for a conventional well completion from the surface to the top of the formation. For the antenna to work effectively there should be no metal casing in front of the antenna in favour of ceramic, fibre glass and cement. If high temperatures are expected, a cooling fluid can be circulated through the coaxial cables to the antenna. RF heating has been tested since the 1970s with moderate early success due to lack of knowledge of how the antenna functions in a reservoir, and a lack of predictive or simulation tools. “They weren’t able to understand what would happen when you put heat dowhole,â€? said Tourigny. ɸ Page B37

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range of shallow or deep reservoirs and vertical or horizontal well geometries. “We specialize in putting an entire solution together. The modeling is part of it and looking at the reservoir and what’s possible to produce, how to heat it, what type of antenna and how much power,� said Tourigny. “We put together the whole solution including the generator, transmission lines and the antenna to get it all downhole.� Acceleware’s RF heating team can provide everything from antenna design, system design modeling and monitoring to comparative studies. The presentation included several examples of RF heating in vertical and horizontal wells and reservoirs. Tournigny said currently there up to 12 companies that are “testing and playing with it. “No one’s got it in production today, but there are a lot of companies that are very interested and looking at getting this working for them soon.� Accelerate hasn’t modeled any Lloydminster reservoirs but Tourigny said, “We hope to work with companies in the region soon to help them increase their production.�

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Éş Page B36 Acceleware is generating renewed interest by being able to provide a complete RF heating solution including simulation software to model the RF heating process within a reservoir. Their AxHeat software models all the key reservoir parameters such as fluid temperatures, viscosities and pressures to simulate the impact of applying FR heating to the reservoir. “That’s what we created to really bring some of the science together with the application of putting the heat downhole and figuring out what it’s going to do,â€? said Tourigny. He said AxHeat simulation “provides a better sense of what’s going to happen once you put the heat downhole.â€? RF heating solutions by Acceleware can be customized to meet a wide

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B38

PIPELINE NEWS December 2014

CanElson Cuts 2015 Capital Spending 37 Per Cent (Daily Oil Bulletin) Calgary – CanElson Drilling Inc. will cut 2015 capital spending to $63.9 million from an estimated $101.4 million this year, although about $11 million of next year’s budget will be carried forward from this year, the company said Nov. 12., noting year-to-date capital spending has thus-far reached about $75 million. CanElson saw third-quarter earnings rise to $12.75 million or 14 cents per share from about $11.50 million or 14 cents per share in last year’s period, while year-to-date earnings rose to $36.45 million or 39 cents per share from $29.65 million or 37 cents per share in the 2013 period (see table). In next year’s budget, about $34.3 million or 54 per cent of the total is slated for expansion capital, including the completion of new drilling rigs, components on selected drilling rigs, along with critical maintenance items and rig equipment upgrades, management said in a news release. In Canada, the contractor said its third-quarter drilling rig utilization (measured spud to rig release days) was 66 per cent, representing 1.44 times the industry average rate of 46 per cent and 1.20 times CanElson’s own third-quarter 2013 utilization of 55 per cent. In the nine months ended Sept. 30, 2014, Canadian utilization (measured spud to rig release days) was 60 per cent, or 1.37 times the average industry utilization of 44 per cent. CanElson said 93 per cent of its Canadian drilling rig fleet is committed through the winter drilling season. Saskatchewan and Manitoba Wet weather hurt third-quarter activity in Saskatchewan and Manitoba in September, although the company expects better utilization in the winter drilling season in Saskatchewan. Drilling rig rate pricing was also flat sequentially, and after the third quarter’s end,

pricing levels have risen modestly to accommodate higher wages, as in Alberta and Saskatchewan. Alberta and British Columbia In Alberta and B.C., base drilling rig pricing in the third quarter was flat sequentially, due to sustained demand for efficient drilling rigs, the company noted. After the end of the quarter, pricing rose “modestly” to accommodate higher labour rates, CanElson said. In this year’s fourth quarter, CanElson will deploy an AC tele-double drilling rig to B.C. under a long-term contract with an existing customer. U.S./international operations In the United States, CanElson said its drilling rig utilization was 85 per cent, up eight per cent year-over-year due to strong seasonal results in North Dakota and greater emphasis on cutting non-productive time. ɸ Page B39

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PIPELINE NEWS December 2014 Éş Page B38

B39

tres (or 20,000 feet).�

Operations in Mexico were “in transition� in the third quarter; one drilling rig remained inactive and the second rig was mobilized to the Miquetla block of Chicontepec and began operations early in this year’s fourth quarter. In the U.S., CanElson said year-to-date utilization was 82 per cent and flat, year-over-year. Management said 100 per cent of the company’s U.S. drilling rig fleet is committed, with 35 per cent under long-term contract. Texas and North Dakota CanElson has one quarter of its rig fleet on crude oil-directed drilling in the Permian Basin, a figure that will rise to 32 per cent upon completion of the contractor’s build program, including four new-build drilling rigs to be added in the next year, management said. In the third quarter, CanElson said one of its mechanical tele-doubles has “pushed the boundaries of what this rig design is capable of in the U.S. Bakken play, by consistently drilling to total measured depths of greater than 5,500 metres (about 18,000 feet), including one well greater than 6,000 me-

Mexico CanElson said its Mexican operations were in transition in the third quarter, as the rate of wells drilled in the Ebano block in this year’s first half “significantly outpaced� the budgeted number of wells. As well, associated production from the wells exceeded the local infrastructure’s capacity to handle it, management said. As a result, one drilling rig was temporarily inactive, while another was moved from the Ebano block to the Miquetla block of Chicontepec.

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PIPELINE NEWS December 2014

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B41

Spartan grows with Bakken targets Calgary – Spartan Energy has upwardly revised its expected 2014 year-end production rate to between 8,900 and 9,100 barrels of oil equivalent per day. The Calgary-based company reported they exceeded their previous rate estimate of 8,600 boepd with the release of their third quarter results on Nov. 12 along with an operational update. Most of their production growth is coming from southeastern Saskatchewan where they have indentified more than 500 open hole horizontal locations for drilling. Spartan noted they also have identified more than 74 locations in the emerging Midale

frac play. Spartan expects to drill 10 open hole horizontals and two fracture stimulated Midale wells before the end of the year. That will bring the total 2014 to 35 (30.7 net) open hole wells and six Midale frac wells. Overall, the average initial 30 day production rate for open hole wells drilled on Spartan’s lands in 2014, which have achieved at least 30 days of production, is 115 boepd. That’s 92 per cent above their internal budget type curve of 60 boepd. For the remainder of the year, Spartan will have one drilling rig operating primarily in

their greater Queensdale area, where initial 30 day production rates on wells drilled in 2014 have averaged over 150 boepd. In the Viking play, Spartan successfully completed their second half year drilling program which resulted in 20 (19.5 net) wells drilled Early results indicate that these wells are, on average, exceeding their budget type curve. Spartan has been active in the field since the completion of spring break-up and drilled a total of 52 (48.1 net) development wells up to Nov. 12. Forty one (37.8 net) of these wells are currently on production with 10 (9.3 net)

waiting to be completed and/or brought on production and one well suspended. Spartan expects to achieve its targeted annual production growth of 15 to 20 percent even if oil prices fall as low at $75US for WTI by spending within cash flow to grow organically through the drill bit

and acquisitions. “Spartan is well positioned to thrive in a lower oil price environment as a result of our leading capital efficiencies, a low base decline of approximately 23 percent and a strong balance sheet that will provide the opportunity to pursue additional growth through accre-

tive acquisitions,� said the company. “At US$70 WTI, we anticipate that we can meet our target growth rate while maintaining a debt to cash flow ratio below 1 times.� Spartan will provide its 2015 budget guidance in late December or early January.

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PIPELINE NEWS December 2014

CAREER *XĂ—GH FULL TIME STRUCTURAL & PRESSURE WELDERS REQUIRED Education: 8 8 8

Adding 11 service bays in Carlyle 14 20

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Welding Apprenticeship, RedSeal Journeyman, Pressure Welding Tickets 1 year minimum experience for Apprentice 3-5 year minimum experience for Pressure Welder

Requirements: 8 8 8 8 8

Applicants must pass drug & alcohol test Have a valid drivers license 1st aid/CPR and H2S safety tickets an asset Non Local applicants must be willing to relocate Must be able to work in a fast paced environment as a team and individually

We offer health beneďŹ ts and group RSP programs. Apply to Janelle by email: info@brentgedakwelding.com fax: 306-634-5148 or in person at 126 Lamoro Street, Estevan, SK.

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TECHNICIANS

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Carlyle – Carlyle Motor Products, a General Motors dealer, is doing something pretty common in that town these days – expanding. The company is in the process of adding a number of additional service bays on its east side. This GM store is in the process of adding a number of additional service bays on its east side.

Due to an increased work volume

currently requires Technicians at their Estevan location. Journeyman technician will be given preference but willing to train the right candidate. Competitive wages & benefits available. Interested individuals can drop off, email, or fax resume to

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Carlyle Motor Products has sold almost 20,000 vehicles since it was founded in 1986. From the looks of its lot, a very high proportion of that number has been trucks in recent years. “We are very thankful to all our customers for their ongoing support, as we could not have gotten to where we are without each one choosing to shop here repeatedly,� said Garnet Goud, owner and dealer principal. “’Here We Grow Again’ is our latest slogan, as we undertake a second expansion of our dealership in order to meet increasing demand for service, parts and sales. We’re adding approximately 5.300 square feet onto our existing facility to allow for 11 more service bays, larger parts/service areas, a new customer lounge and much more, all designed with our customers’ needs in mind,� he said. The expected completion is sometime this next summer.

PIPELINE NEWS December 2014

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PIPELINE NEWS December 2014

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780.875.7145

www.platinumpumpjacks.com

Lloydminster AB | Provost AB | Drayton Valley AB | Medicine Hat AB | Kindersley SK

A Schlumberger Company

Pipeline News

SECTION C December 2014

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

Finance

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