PIPELINE NEWS Saskatchewan’s Petroleum Monthly
June 2016
Canada Post Publication No. 40069240
FREE
Volume 9 Issue 1
Redvers & District Oil Showcase 2016
Focus on Land Agents: Land Solutions Page A6, Watson Land Services Page A8 The Redvers & District Oil Showcase took place May 12-13. Poor weather for most of the event hampered attendance, but the sky finally cleared by the afternoon of May 13. Top left: Redvers-based AKME Controls’ booth included, from left, Matt Axten, Eric Kesslering, Tyler Greenwald and Jordan Kawecki. Axten acted as chair for the showcase. Top right: Cervus Equipment Peterbilt displayed a new truck belonging to Curly’s Picker Service Ltd. Bottom right: Emma Dumaine, 5, holds a HUWE Wrench made by Magna Fab Inc., which has a shop in Redvers that her father, Trent, runs. Bottom left: Enbridge Pipelines Saskatchewan Inc. donated $10,000 to the Redvers Hospital Foundation, represented by several community members. From left are: Raechelle Chicoine, Ronita Trucking; Justin Pearce, Enbridge; Chantal Bourassa, Enbridge; Brian Lenouail, Poplar Services; Jeff Yanko, Enbridge; Devan Brisebois, Affinity Credity Union; Brodie McColl, Enbridge. Photos by Brian Zinchuk Agricultural Equipment Technician
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PIPELINE NEWS June 2016
New tools for well suspension Long-term suspension or maintenance work, they have a tool for each ■ By Brian Zinchuk Estevan – Well suspension is a big thing these days. Startup company Well Suspension Tools Ltd. is offering two product lines that assist in shutting wells in along with doing regular maintenance. Ken Gordey is the technical manager for Well Suspension Tools Ltd. One of the five people listed on the three patents pending, Gordey is originally from Estevan. He’s moved back now, and is working hard on this venture. Well Suspension Tools has two key products, the ‘C’ Tool and the ‘T’ Tool. Both appear something like their namesake letters. The tools are manufactured in Canada to ISO 9001 and API standards. They’re designed for high stress, high-pressure and hightemperature environments. They can also handle H2S and CO2 environments. Gordey is a certified engineering technologist. He’s concerned about the environmental impact of the oil industry, specifically well spills that can be avoided with the new tools. To suspend a well, you pull up on the polish rod to unseat the bottom hole pump. Inhibitors and fluid can be pumped down the tubing. He said, “You break your wellhead connection, pick it up and put your ‘C’ Tool on and set it down.” The ‘C’ Tool slips over the sucker rod, with the rod going into the centre of the ‘C.’ The cylindrical tool is chamfered such that it seats itself at the very edge of the top of the tubing, raising the entire rod string and pump several inches off the bottom. A wellhead assembly is installed over this, on top of a sub collar and sub nipple. Gordey said, “Here’s the thing about the stuffing box: the stuffing boxes and packing elements are a maintenance item. On a normal well, they get changed at least two times a year. When they shut them in, all they’re
doing is lowering the polish rod into the well so it doesn’t rust, and walk away.” Regulators have told him some wells sit like that for 15-20 years. “There’s nothing used right now,” he said. “They put the horse’s head down and walk away. That’s it.” “Today, all of our Bakken wells are starting to turn sour because of our fracking techniques with brackish water. Where the tools come from was my years with PanCanadian. “Back in 1986, when the price of oil crashed, we had to reduce our operating costs. The only way to do that was turn the power off on locations and put proper wellheads on. “ A “proper wellhead,” as he describes, has a full closing valve, which eliminates the stuffing box. They are shut in, secured, chained and locked with bull plugs on the outlets. He continued, “In ’86, we set the rods on the bottom of the well and backed the polish rods off. That was all good and fine to suspend the well. But to go and reactivate the well, the costs were crazy. The solids within the well – the paraffins, the waxes – the wells weren’t put to bed right. Once the rods sit down inside the well, the bottom hole pump is seated. The rods stay in, and you have no way to pump down to properly clean and flush the well. When we went back to reactivate, approximately three years later, we went to fish the rods and we couldn’t even pull them out of the well. The conditions had changed where there were waxes and asphaltenes inside the wells. Our reactivation costs were sometimes three to four times the value of the well. It got to be a really expensive process to do.” A service rig was needed, for instance. Indeed, it was often a full service operation. The ‘C’ Tool can be put in place with a picker or even the pumpjack, simply lifting the rod string. It’s the same
procedure as a polish rod change-out. With the well suspended and a ‘C’ Tool installed, you can pump inhibited fluids past the rod string to protect the assets. Gordey said, “With the rod string suspended like that, you have the ability to have that asset sitting there instead of being pulled out of the wellbore. That rod string and bottom hole pump have been designed for that well. When it comes to reactivating, your entire assembly is still there. You pick up your polish rod with the stuffing box, connect, set it, and you’re back on production, in less than an hour, with no service rig required.” Regarding well control, Gordey said, “When you unseat the pump and pump down the tubing, it’s dead. That’s your well control.” Each procedure, suspending and re-activating, take about an hour for an average 1,500 metre well. ‘T’ Tool Meeting with the oil companies led to the development of the second tool, the “T” Tool for well maintenance. It works in a similar manner, except that it threads onto the rod string. It has slots along the side allowing for fluid flow into the well. “It’s been designed for service rig operations, as well as offset fracking. When you’re pulling the rods out of the well with a service rig, the ’T’ Tool has crossovers which adapt to any size of rod string. They pull it up, and it sits wherever they need to seat it, and then they put the valve on and then shut it down for the night.” Instead of seating the rod collar, like the ‘C’ Tool, it threads into the rod collar. “With that, it enables well servicing when a rod string is stuck in a well. This is the first time ever that a tool like this have been available to put on a 3,000 or 5,000 pound wellhead valve, and pump through it at that pressure. Normal opera-
On the left is a ‘T’ Tool, on the right is a ‘C’ Tool, both made by Well Suspension Tools Ltd. Photo by Brian Zinchuk
tions right now, doing rod jobs, they stop, pick up the polish rod, the crossover, the stuffing box, and put it all back on the well. It’s the only means they have for hanging off rods.” In North Dakota and Texas, they’ve found that when nearby offset wells are being fracked, sometimes the pressure can blow the rods out of an existing well due to the stuffing box being, essentially, the weakest link in comparison to a wellhead. As a result, rods and pump are pulled out of those nearby wells and wellheads are put on. When fracking was completed, the rods and pump had to be put back. Using the ‘T’ Tool allows the rods to remain in the well, as the pump is unseated. “All they do now is unseat the pump. The ‘T’ Tool holds the string rigid inside the well. They put the valve on, it’s locked in place. The savings alone, down in Texas, is approximately a quarter
million dollars per pad. It’s a massive savings,” Gordey said. The package includes marker nipples and collars indicating the tool’s presence. In business for a year, the company is off and running, and making its big marketing push. The tools are sold through TS&M Supply and its parent DNOW (DistributionNow), which are distributors. TS&M highlighted the products at their Redvers and District Oil Showcase booth May 12-13. Gordey, who was there to showcase the products, said, “The response was very strong. Customers really liked what they saw and the simplicity of it. Everyone had applications for it, either suspending the well or well maintenance.” Shortly after the Redvers show, Well Suspension Tools was asked by DNOW to be part of their booth at the Willison Basin Petroleum Conference held in Bismarck, N.D., in late May.
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Be thankful for what you have ■ By Brian Zinchuk Redvers – A methanol spill in a small enclosed space nearly took Bernie Inman’s life in 1994. Now he and his wife Sheila are spreading their safety message throughout the industry. The pair were the speakers at the Redvers Oil and District Showcase banquet on May 12. “I’m a production operator, outdoorsman and farmer,” Bernie said from his electric wheelchair. He has no recollection of what happened that fateful day on Jan. 24, 1994, but through investigations and what others have told him, he’s pieced much of it together. For eight years, he tried to forget about the life-changing incident, but he was encouraged to do a presentation about it, and has continued to do so. Bernie, at age 27, was working at a wellsite in northeast British Columbia. He was newly married, and Sheila was six months pregnant. Bernie pointed out that people become complacent and comfortable in their work. “I don’t know why people choose to take the chance,” he said. He had always been encouraged to report near misses, he said. “Something that can seem so trivial can have huge implications,” Bernie said, pointing out he is now a quadriplegic. “The ripple effect of something like this reaches out, big time.” He got into the oilfield at 17 and worked primarily in commissioning gas plants. On the day of the incident, it was bitterly cold. The vent on the small shack was clogged with snow. Somehow, when he was in the shack, his left foot opened a bleed valve which caused the pump to discharge methanol on his foot an clothes. A plug also ended up missing from a ball valve. Embarrassingly, of the numerous complex facilities he’s worked in, one of the most simply equipped “took him out.” Disregarding a hard hat and ear protection, he wore a ball cap and normal eye glasses. Back then, his company did not have a workalone procedure ensuring regular check-ins. He had a new-fangled suitcase cellular phone. However, he didn’t answer at 9 p.m., long after he was expected home. His counterpart operator was called at 12:30 a.m., and he found Bernie at 3 a.m. Bernie’s truck was running, headlights off (indicating he arrived during the day, in a time before daytime running lights). The truck door was open. He either tripped or slipped while entering the building, or perhaps the plug could have hit him in the forehead and knocked him out. No matter how
Bernie Inman, seated, was dramatically impacted by methanol exposure at a well site. Now he and his wife Sheila spread a safety message. Photo by Brian Zinchuk
it happened, Bernie was lying in a pool of methanol for roughly 11-12 hours, having been overcome by methanol fumes. “Nobody’s ever survived this level of exposure to methanol before,” he said. Saturated and soaked in bone-chilling methyl alcohol, he sustained chemical burns to large portions of his body and overwhelming toxicity. He was “the sickest individual in Vancouver General Hospital.” “It went through my skin, my lungs, mucous membranes,” he said. The second and third degree burns spread from 45 to 70 per cent of his body. His kidneys shut down, his liver was essentially pickled, and the lining was burnt out of his lungs. His brain was covered in lesions. Bernie was comatose for an extended period. After a month, they began unplugging him from life support, not expecting him to live, but he started to rouse a few days later.
“They were happy to have me. I put them through hell. I’m lucky to be me, in the situation I’m in, a husband and father.” Despite subsequent brain damage, his body has slowly mended parts of his self. Bernie’s kidneys, liver and lungs have recovered. They have three active kids. Things most people take for granted are now important, like the ability to feed himself again. He’s been able to put on 660,000 safe-driving kilometres. Sheila said, “What was important became very clear. The most important thing I learned is that everyone is this room is a VIP and I guarantee someone is waiting for you to come home. “In a second, your life can change. Be thankful for what you have,” she said. They concluded by saying “Please take CARE – Communicate, Attitude, Responsibility and Educate.”
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PIPELINE NEWS JUNE 2016
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.
Editorial Contributions: PUBLISHER Jim Ambrose - Estevan 1.306.634.2654 EDITOR Brian Zinchuk - Estevan 1.306.461.5599 Associate Advertising Consultants: SASKATCHEWAN & MANITOBA • Estevan 1.306.634.2654 Cindy Beaulieu Candace Wheeler Deanna Tarnes Teresa Hrywkiw • Carlyle 1.306.453.2525 Alison Dunning NORTHWEST SASK. & ALBERTA • 1.306.460.7416 Harland Lesyk
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.
Vancouver needs to be reminded of why it exists On May 19, the National Energy Board granted approval for the Kinder Morgan Trans Mountain Expansion project. The next day, the mayors in British Columbia’s Lower Mainland were lining up against it. As the Financial Post put it on May 20, “‘There is nothing Kinder Morgan Canada can do to make its Trans Mountain pipeline expansion acceptable to B.C.’s Lower Mainland residents,’ Vancouver Mayor Gregor Robertson said Friday, as opposition groups said they would continue to fight the project okayed this week by the federal energy regulator. “‘We’ve got a solid economy here that is firmly grounded in our clean and green brand, from tourism to construction and development and the tech economy, and we can’t risk an oil spill damaging that and affecting hundreds of thousands of jobs,’ Robertson said Friday, a day after the National Energy Board recommended that Ottawa approve the $6.8 billion project, while attaching 157 conditions.” The mayor of Burnaby, terminus of the pipeline and home of its associate port, thought the benefits to the Lower Mainland economy would be “laughable,” according to the Financial Post. Well, isn’t that nice. Maybe they forgot why Lotusland exists in the first place. To quote the Port of Vancouver website: “The Port of Vancouver is the third largest port in North America in terms of total tonnage moved in and out of the port. We’re home to 27 major marine cargo terminals, three Class 1 railroads, and a full range of facilities and services to the international shipping community.” That includes oil. In other words, it is Canada’s largest port, and likely our most important. While Prince Rupert
and Kitimat are very minor players, Vancouver is our gateway to the Pacific, and indeed, much of the world. Vancouver (referring to the greater Vancouver area) exists for one primary reason: to be that gateway. Chinese labourers died in the multitudes building the railway connecting to it. The Canadian Pacific Railway bound a nation together, primarily because of the Port of Vancouver. We need it to ship out nearly all of our exports from Western Canada. Without it, half our country would wither on the vine. That is why the Trans Mountain Pipeline was built in the first place. And that is why its expansion is critical to the growth of our country. If it had been completed several years ago, the province of Alberta would not be in as dire straits, financially, as it is today. Literally billions of dollars are left on the table each year because Western Canada sells its oil almost exclusively to one customer, the United States, and at a steep discount. That discount means less money for schools, hospitals and every other service government provides. No matter what the price of oil is, Canada needs that pipeline to be built. We need Northern Gateway, too, but we need Trans Mountain Expansion more. It has greater capacity and runs along an existing pipeline corridor. The National Energy Board stated, “Taking into account all the evidence, considering all relevant factors, and given that there are considerable benefits nationally, regionally and to some degree, locally, the Board found that the benefits of the project would outweigh the residual burdens.” It’s time for Vancouver et al. to start thinking of others besides themselves.
PIPELINE NEWS June 2016
The oil industry just can’t catch a break The oil industry just can’t catch a break. The Fort McMurray fires have had the biggest impact on oil production in Canada probably in generations. While, as of the time of writing, none of the major oilsands projects had burned, a noticeable chunk of Fort McMurray went up in flames, as did one camp. The fire appeared to be circling back towards the Syncrude and Suncor facilities. Locally, Redvers once again hosted its Redvers Oil and District Showcase May 12-13. Held every second year, opposite of the Saskatchewan Oil and Gas Show in Weyburn, it’s a great little show that really highlights the local industry and the busi-
nesses that work in it. The businesses and community of Redvers pull together unbelievably well. While the inside displays seemed to be all used, the outdoor displays were substantially down from previous years. There were no service rigs, no coil tubing units, and a lot fewer trucks. This past spring has been one of the most beautiful I can recall. We had temperatures in the high-20s Celsius range the week before. The week after, it hit 29 C. But on the two days of the show, it was most miserable weather the region had had all season. The winds were so strong and biting that on the second day, after
I walked to the arena, I parked my camera bag, turned around and went back to my SUV to add on three more layers of clothes. Someone even noticed I pulled out my Red Baron -30 C work gloves, just in case. As a result of the cold, wind and a bit of moisture, very, very few people wandered the outdoor booths, at least whenever I ventured out. For those vendors, surely it must have been a disappointment. You can tell the strength of an industry by the swag it hands out at its trade shows. This year, I saw no Frisbees, T-shirts, golf shirts, jackets, stainless steel Contigo travel mugs or water bottles. Most booths, if they had any giveaways
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at all, handed out pens – and not the fancy, individually packaged ones, either. In other cases, it was just candy. A few had stress balls. Maybe a few hats were handed out, but I didn’t notice them. I talked to at least half the booths. What most people told me was that their staff was down by 50 per cent, or more. It is really tough. Obviously this is why the outdoor booth count was diminished compared to previous years. One person whose firm employed 30 people at a peak, two years ago,
By Brian Zinchuk
was down to five. He expects that the industry is going to lose 25 to 50 per cent of its labour force, and a lot of those people are not going to want to come back. This paper has always tried to focus on the positive in this industry. The nasty weather was an apt metaphor for the pervasive doom and gloom. Even though oil was around US$45 per barrel that week, no one had their hopes up for a substantial uptick in business any time soon. You would think that US$45 is better than US$26, and it is, but
there hasn’t been much activity to reflect it. It’s no surprise the Ritchie Bros. big spring auction at Nisku was truly massive – expanding from three days to five to accommodate all the lots. To top it all off, the Ontario Liberal government now figures new houses built there after 2030 should use electricity and not natural gas. Please, please, let this industry catch a break. Brian Zinchuk is editor of Pipeline News. He can be reached at brian. zinchuk@sasktel.net.
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PIPELINE NEWS June 2016
Slow times for land agents ■ By Brian Zinchuk Lampman – The boom times are over in the land agent business. “We’re not doing much. There’s very little going on,” said Randy Fleck, Land Solutions Land Manager for the Lampman location, on May 17. “A lot of yard work gets done right now,” he said wryly. “It’s the same with every company, waiting for the phone to ring.” Their company, like most others, has seen some layoffs. Locally, they’ve reduced hours. Whereas there used to be six land agents and one admin person working out of the Lampman office, there are now three land agents and one admin person. The others have left for other companies or other ventures in the past.
The land agent activity has been coming in in bits and pieces. “A spill here, a temporary workspace there,” he said. It’s been for smaller clients. Nothing major has been going on. “The Calgary office has been putting out a lot of proposals for a lot of projects, but nothing seems to be coming through,” he said. “It’s probably the worst I’ve ever seen. I’ve had 10 years as a land agent and 40 years in the patch.” Fleck worked with Imperial Oil and Gulf Oil on the production side in the 1970s along with several other companies throughout the years. While recent stories in Pipeline News noted that most of the junior producers we spoke to were in the hunt for deals,
that has not been evident on the land side, according to Fleck. “We’re not seeing a lot of activity from juniors,” he said. There’s some talk of drilling, but he noted, “You don’t get your hopes up anymore (on rumors). If oil drops five dollars a barrel, plans change.” As for lease expiries, some companies are allowing them to laps. “We’re doing some mineral (leases), but that is slow, too. Usually when surface is slow, minerals pick up. There isn’t much renewing of leases. It’s cheaper to drill on Crown land than freehold. There isn’t much going on in minerals.” He added, “A lot of expiries are coming due, but there isn’t a lot of interest to renew just bits and pieces, but not big blocks. “It’s just quiet.”
Randy Fleck heads up Land Solutions’ Lampman office. Photo by Brian Zinchuk
Fleck said Land Solutions is looking to broaden its work. “Our company is trying to be more diversified,” he added. That includes wind projects, which they have done for years, but also looking into solar and telecommunications. This would include rights-of-way
and cellular towers. Fleck is hoping to see major pipelines go ahead, because they have strong need for land agent services. There’s lot of potential work on these mainline projects when and if they occur. To that end, Land Solutions now has opened offices in Ontar-
io and New Brunswick so that they have all of Canada basically covered. He’s enjoyed working as a land agent for the last 10 years, meeting people, working in the business. “I’ve seen slowdowns before, and probably will again,” he said, noting he doesn’t plan to retire any time soon.
nese fellow wants out. We’re selling the inventory and equipment,” McLean said. “I am selling it through my new com-
pany on a commission basis. It will be a buysell company,” he said. “In these tough times, you can’t put money into inventory. You never know when you’re going to sell it.” The new company will still supply the pumpjack belt guards that have been the mainstay of McLean’s business, as well as truck loading boxes and skimmers. The belt guards are now made in Winnipeg by another company using original moulds. Estevan Plastics suffered a catastrophic fire at its Bienfait plant in 2011. By this point, it was under Chinese ownership. The building was rebuilt, but now the bank would not provide money for a sprinkler system. Thus, the build-
ing is obsolete for fibreglass manufacturing, according to McLean. There’s not much point in asking McLean if he plans on truly retiring. He won’t, at least for now. “I’ll be 78 Monday,” he said. “I enjoy what I’m doing. I like meeting people. If you enjoy it, keep doing it.” McLean is also trying to sell off eight condominiums build on Main Street in Bienfait. The “Shangri-La Place” was built in response to the need for more housing in the region. One has sold, three are rented, and four are available for sale or rent, he said. These, too, are owned by the Chinese investor. “All buildings are listed for sale, McLean said.
The fellow wants out Redvers – Vern “Butch” McLean has been to many a trade show over the years, but this time, the banner overhead was a little
different at the Redvers and District Oil Showcase May 12-13. Instead of saying “Estevan Plastics,” it now said McLean
Holdings Ltd. McLean sold Estevan Plastics to an investor from China, Jerry Zhonge, several years ago. “The Chi-
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Glacier Media, JuneWarren-Nickle’s contribute $50,000 to Red Cross for Fort Mac Parent company of Pipeline News supports Fort McMurray wildfire victims Vancouver, Calgary – The JuneWarrenNickle’s Energy Group ( JWN) and its parent company, Glacier Media, are donating $50,000 toward Red Cross efforts in Fort McMurray. The donation is also on behalf of other individual Glacier business units, which will undertake their own awareness and fundraising efforts to help the city and its residents rebuild their community and their lives, said Bill Whitelaw, JWN president and Glacier executive vice-president. Glacier, as one of Canada’s leading media and information services companies, has also created an integrated crowdfunding campaign, with all proceeds going the Red Cross efforts, at www.fundaid. ca/fortmac.
Glacier is deeply involved in communities across Western Canada with community newspapers and business information services, noted Tim Shoults, Glacier’s vice-president of content and audience development. “This way, we can rally our readers, our customers and our communities to get behind the Red Cross efforts in a way that allows contributions of all sizes,” explained Shoults. From an energy perspective, it’s important for Canadians from coast to coast to have a sense beyond the headlines of how important Fort McMurray is to the overall Canadian economy, Whitelaw said. “It’s just not an Alberta dynamic...all Canadians need to step up and help get this
engine running on all cylinders again, putting people, companies and their welfare front and centre,” said Whitelaw. “Canada’s oilsands sector is a key part of our energy practice at JWN...we know these companies and these communities well. Like all other organizations that have stepped up with support, we want these folks to know we have their back.” JWN produces the Oilsands Review and Oilsands Navigator as part of a broad portfolio of oilsands products and services. “As with our industry association partners such as the Canadian Association of Petroleum Producers and Petroleum Services Association of Canada, we’re putting our contribution toward the Red Cross, to ensure the dollars we
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A8
PIPELINE NEWS June 2016
Diversification during good times paying off now for Watson Land Services ■ By Brian Zinchuk Estevan – A diversification strategy when times were good has made a big difference for Watson Land Services (1994) Ltd., of Estevan. Garth Hoffort and his sister Sheila Guenther bought the firm six years ago. A year-and-a-half later, Hoffort bought out his sister’s share. She remains with the company, working on a casual basis as needed. “It’s definitely slowed up some, for a while, to nothing. It’s slowly coming back. We were fortunate we opened our Saskatoon office three-and-ahalf years ago. That location opened in October, at a time when the oilpatch was going full bore boom. “We were busy down here. We had scored some contracts with Crown corporations. A lot of work was SaskPower, SaskWater, Sask Energy, SaskTel.” Their coverage has been further spread out by the addition of land agents in
Yorkton and Swift Current. Watson Land Services is now, essentially, provincial in scope. They have seven people in Estevan, three in Saskatoon, and one each in Yorkton and Swift Current. “It was a deliberate choice; that we shouldn’t have all our eggs in one basket. We seized other opportunities,” Hoffort said. “I’m not sure what we would have had to do to survive if we just had the oilfield in the last one-and-a-half years.” They’ve been slow, he said. Two left – one on maternity, one for other reasons. They didn’t have to do any layoffs. As an indicator of the low level of activity for land acquisition was the April 12 Crown land sale, which brought in just $3.1 million. He added, “There are still people buying freehold minerals. We work with oil companies buying freehold minierals, and submit bids on behalf of customers for land
sales.” In some cases, oil companies need land for pipelines which allow them to eliminate rental tanks. “There are still some new leases, and some work on transfer of ownership,” Hoffort said. “There’s been some reductions in rates for what we’re charging customers, and what landowners get for surface and mineral rights.” There has been a shift downward, he noted. “They still have to make it attractive and make a profit.” Normally leases require drilling within three years to secure the lease. A year ago, three years out didn’t look promising. Now, there’s more optimism. “Maybe US$60, maybe US$80 (per barrel) in a few years,” Hoffort said of some people’s thoughts. “Nobody’s talking about when it will be US$100 a barrel again.” Watson is still spending half, or more, of its time on oil. “We still have a good bal-
Garth Hoffort, standing, is owner of Watson Land Services, while Jonathan Kowal is one of the company’s land agents. Photo by Brian Zinchuk
ance,” he said. The company is looking at other projects, and even outside the province. Some are fairly good in size, he noted. “There’s lots of potential. There’s going to be a recovery in the oilfield, and lots of infrastructure projects,
too.” For instance, he would like to get some work with Ministry of Highways projects. Junior producers are active first. “They’re the quickest to respond. There’s life again,” Hoffort concluded.
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PIPELINE NEWS June 2016
A9
Wellsite consultant expects large numbers to leave industry Canada out of a fleet of 810. The same date this year saw just 39 out of a much-reduced fleet of 671. “At a stable US$50 per barrel it will initiate some drilling. We need stable prices before we see more. Companies
■ By Brian Zinchuk
Redvers –If you’re a wellsite supervisor these days, there’s plenty of time to barbecue. Impact Oilfield Management Team of Carlyle had one in their booth as one of the outdoor exhibitors at the Redvers and District Oil Showcase May 12-13. “We do project management for drilling and completions,” said Steve Lobreau. He and Gregg Fisher are partners in the operation. “We do the program, licensing; the full meal deal for oil and potash,” Lobreau said. The amount of potash work they do depends on how the price of oil is doing. Right now potash accounts for about 80 per cent of their work, but usually it would be around 20 per cent as oil would be dominant. That’s a reflection on the very low rig count in oil drilling over the past year compared to the last several years. Impact has found work with two junior potash companies. “There’s a bit of activity
will grow through acquisition instead of the drill bit,” Lobreau said. While the potash industry seems to be weak as well right now, with Potash Corp having layoffs earlier this year, he noted it takes two to three years to get a proj-
ect up and running, and thus the activity in the mineral is ongoing. “With this downturn, we’re probably going to lose 25 to 50 per cent of our people in the oil industry. Some of our guys aren’t coming back,” he said matter-of-factly.
WE’RE STILL HERE Steve Lobreau is one of two partners in Impact Oilfield Management Team
in potash,” he said. Asked how many people work with Impact, Lobreau said, “At peak, there were 30 of us, i.e. in 2014. Today, there are five.” Those 30 had been working from Manitoba to Alberta. “I’ve been in the drilling part of things since 1985. I started as a roughneck, and worked up to toolpush and consultant,” he said. Lobreau and Fisher bought Impact from Don Rae in 2007. Rae currently heads up Crusader Drilling, based in Yorkton. Impact used to
be based in Carievale. The oil side is extremely slow for drilling right now, he explained. As for this year, he said it’s a carbon copy of 2015. “There’s just no work. They’re not drilling.” Current drilling stats confirm Lobreau’s statemenets. According to Rig Locator (Riglocator.ca), the first half of May usually sees the lowest number of active rigs in Saskathcewan, at less than ten. But other parts of the country are down substantially. On May 16, 2014, there were 165 rigs working in
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A10
PIPELINE NEWS June 2016
Catastrophes like Fort Mac highlight importance of insurance ■ By Brian Zinchuk Redvers – Probably the most recent pertinent example of the importance good insurance has been the Fort McMurray fires in May. Darren Grimes, of Andrew Agencies Ltd., was one of the exhibitors at the Redvers Oil and District Showcase May 12-13. He’s based in Carlyle, and looks after the Saskatchewan side of the business. Based in Virden, Man., Andrew Agencies has 11 Manitoba locations and seven in Saskatchewan. “We do property and casualty insurance,” he said. They also provide financial services like investments, life insurance, group insurance and health insurance. The oilfield is an important part of their business. “Probably 20 to 30 per cent is tied to the oilfield in Saskatchewan,”
Grimes said. “There has been some adjustment, but as far as insurance goes, people are still maintaining their policies.” “We’re kind of insulated in southeast Saskatchewan compared to some areas of Alberta. There’s still some active areas. The oil business is very adaptable,” he said. Regarding Fort McMurray, he pointed out, “Over the last five years, catastrophic events have increased tremendously in the insurance industry.” He noted the industry is looking for solutions. “The industry is focussing on catastrophe and how it will affect the market.” Fort McMurray had an emotional cost as well, Grimes pointed out. “We’re always in contact with our customers,” he said. New
From left: Tyler Treso, Carson Andrew and Darren Grimes represented Andrew Agencies at the Redvers and District Oil Showcase. Photo by Brian Zinchuk
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PIPELINE NEWS June 2016
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PIPELINE NEWS June 2016
Boost in prices means boost in Raging River’s budget Calgary – Since Raging River Exploration’s last guidance update in January 2016, oil prices both current and futures, have
strengthened, the company noted in its May 9 announcement of first quarter 2016 results. “Utilizing updated average strip pricing of
US$45.37/bbl WTI for the last three quarters of 2016 versus our prior forecast of US$34.15/ bbl WTI for the same period results in an ap-
proximate $40 million increase to our expected 2016 funds flow from operations. As a result of the improved outlook, the board of
directors has approved a $20 million increase to our capital budget to $175 million from $155 million,” the company said in a release. “Approximately $16 million of the increase will be allocated towards additional drilling opportunities with the balance being added to waterflood initiatives. With the expanded budget and lower current per well costs, we now anticipate drilling approximately 215 to 220 wells versus prior expectations of 180 to185 wells. The increased capital is expected to increase 2016 average production from 16,500 boepd to 16,750 boepd. More importantly, the company is positioned for strong growth into 2017 with an increase in the exit guidance to 18,000 boepd from the previous exit guidance of 17,000 boepd.” With first quar-
ter commodity prices averaging levels not seen since 2003, Raging River elected to shutin approximately 600 mcf/d of uneconomic non-associated gas production in addition to leaving approximately 30 wells drilled and uncompleted. With oil prices strengthening and with the favorable weather conditions, Raging River was able to restart completion activities in mid-April. To date, 28 wells have been completed in the second quarter. The wells are in various stages of equipping, with the first new oil production now onstream. If weather conditions remain favorable, drilling operations are expected to commence in early June with up to three drilling rigs. Capital expenditures in the second quarter are expected to be approximately $30 to $40 million.
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JK Jr. stops spills from packing leaks ■ By Brian Zinchuk Redvers – For several years now, JK Containments has been providing large-scale secondary containment solutions for production tanks on leases. Now the company has taken that concept and shrunk it, considerably. Last Sep-
tember they launched the JK Jr. Whereas the fullsize containment solution is a giant steel tub in which you can put two production tanks, the junior version is the size of a wash basin. It goes between the stuffing box and dust cap on a producing oil well.
The inside of the patent-pending JK Jr. shows the wicking element which lubricates the polish rod.
It prevents rainwater from coming in, and wipes the polish rod clean, keeping oil in, so it doesn’t ride up the rod string. This is done through a wicking element that goes around the polish rod. The box acts like a crankcase of an engine. With approximately four litres of normal lube oil, it will lubricate the polish rod and packing, keeping it clean and cool, according to inventor and owner Jayson King. “Any kind of lubrication oil will do. Some use chain oil, or car oil,” he said. Every seven to 10 days, about two litres of oil are added. The box has two sight glasses, one on the top, and one on the side. A key function of the JK Jr. is to prevent packing leaks. If the stuffing box leaks, the JK Jr. will hold up to four litres of fluid. At 3.5 litres its high-level switch, tied to the pump off controller, will shut
down the pumpjack. This prevents possible spills. So far 25 JK Jr. units have been deployed in
the field in Saskatchewan and Manitoba. King is looking to find a distributor for the product which is manu-
factured in Weyburn. “They’ve been tested through and through,” he said. “They’ve stopped spills.”
Jayson King shows off the JK Jr., a device designed to stop packing leaks in their tracks while providing lubrication for the polish rod on oil wells. Photo by Brian Zinchuk
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A14
PIPELINE NEWS June 2016
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Offering service with both barrels ■ By Brian Zinchuk
Redvers – Five years ago, Redvers-based Poplar Services Ltd. began offering a waste tank management solution. Today that has grown into Double Barrel Oilfield Service. “It started with a few small containment tanks,” said, Brian LeNouail, who owns and operates both ventures with his wife Marie-France. “In 2011, it was large
enough to create its own entity. It really took off, and grew from just sewer containment tanks. Now (we’re) selling peat moss by the one-ton bale, good for stabilizing drill waste.” Sawdust has been commonly used for that purpose, but it’s less available today. Peat moss, he added, grows back. It’s basically muskeg. “We’ve expanded to cover the needs of minimal
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disturbance and environmentally sensitive sites for drilling,” LeNouail said. “2015 was as big of a year for this division as 2014. We had a good year in 2015.” They also work with the agriculture industry, hauling grain bins and hoppers. “We diversified this year,” he added. Double Barrel also deals with cement containment and sewer containment. They have a mobile wash trailer for cleaning equipment. All put together, the idea is for Double Barrel to be able to offer package deals. Poplar is tied to the drilling side, providing services like testing drilling mud to see if it can be spread on land. LeNouail expects 2016 to see 30 per cent of the activ-
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ity level they had in years past. They are operating with half the staff now, or less. That means four fulltimers and one part-timer. LeNouail himself is out digging soil samples these days. That’s one of the upsides of the downturn, he noted. It puts managers and owners out in the field, reconnecting with clients. He said. “We learned some business lessons . We’ve been through some downturns before. Some of the younger generation didn’t see this coming. We knew there was going to be a market correction. It taught lessons on how to market themselves, grouping services together to be more beneficial to the client. “Guys who grew too big, too quickly in 20132014 are in trouble now.” LeNouail said con-
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Kinder Morgan’s Trans Mountain Expansion approved with 157 conditions Calgary – On May 19 the National Energy Board (NEB or the Board) has issued a 533-page report recommending Governor in Council approve the Trans Mountain Expansion Project, subject to 157 conditions. In a release Kinder Morgan said, “Trans Mountain is pleased the National Energy Board has recommended that our project be approved by Governor in Council because it is in the Canadian public interest.” The Board recommendation follows a public hearing process that included a thorough scientific and technical examination of all the evidence brought before the three-member NEB panel. The Board completed a comprehensive environmental assessment of the project in accordance with its authority under the National Energy Board Act (NEB Act) and the Canadian Environmental Assessment Act 2012 (CEAA 2012). Through the public hearing process, the Board considered all the evidence and arguments made for and against Trans Mountain’s application to construct and operate the project, including information regarding the consultation undertaken with
Indigenous groups, the potential impacts, and proposed mitigation measures. The Board then considered all of the benefits and burdens associated with the project, balancing various interests and factors (such as the need for the project), before determining whether, in its opinion, the project is in the Canadian public interest. Taking into account all the evidence, considering all relevant factors, and given that there are considerable benefits nationally, regionally and to some degree locally, the Board found that the benefits of the project would outweigh the residual burdens, the NEB said in a press release. The Board’s recommendation report is one of the factors that Governor in Council will consider when making the final decision on whether or not the Project should proceed. The Trans Mountain Expansion Project proposes to expand the existing Trans Mountain pipeline system between Edmonton, AB and Burnaby, B.C., increasing the capacity of the existing Trans Mountain Pipeline System from 300,000 barrels per day (bpd) to 890,000 bpd. Almost 90 per cent
With NEB approval, construction like this could be coming soon, as long as the federal cabinet approves the project. Photo courtesy Kinder Morgan
of the pipeline route for the Project parallels existing disturbance, which will reduce the need for new disturbance, and minimize the potential impacts of construction. The project includes approximately 987 kilometres of new pipeline, new and modified facilities such as pump sta-
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PIPELINE NEWS June 2016
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Edmonton Marriott at River Cree Resort 300 East Lapotac Blvd Enoch, AB T7X 3Y3 7
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