Canada Post Publication No. 40069240
June 2017
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Volume 10 Issue 1
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Saskatchewan Oil and Gas Show June 7-8
Sask. Oil and Gas Show preview
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PSAC ups its drilling forecast A7 Estevan Meter reaches 50 years
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These two rigs, Panther Drilling Rig 1, right, and Rig 3, are standing for the first time in over two years, a sign of hope for an industry that’s had a rough go of it. They can be found east of Weyburn, which is hosting the Saskatchewan Oil and Gas Show June 7-8. This edition focuses on Weyburn and how it is pulling through the downturn. Companies are hiring and activity is picking up. See related story on Panther Drilling on Page A10. Photo by Brian Zinchuk
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PIPELINE NEWS June 2017
Oil downturn impacts Williston Basin Petroleum Conference attendance By Brian Zinchuk Regina – The 25th Annual Williston Basin Petroleum Conference saw a definite impact from the oil downturn that has hit the industry since mid-2014. The May 2-4 event, which alternates between Regina and Bismarck, N.D., saw a substantial drop in attendance compared to previous years it has been held in Regina. In Regina, attendance peaked in 2013 at roughly 2,200 people. This year’s conference had 635 total registrations. Arden Marsh, of the Ministry of the Economy, said, “Based on the current economic situation, I think we can all agree it was fairly successful with the number of attendees we had.” Last year’s numbers in Bismarck were also impacted, with a substantial reduction in the number of booths. However, overall attendance
got a substantial boost when presidential candidate Donald Trump was announced as the keynote speaker at the end, and that those attending could be able to attend Trump’s speech. As it turned out, just before he arrived at the conference, Trump secured enough support to lock up the Republican presidential primaries and become the party’s candidate for president. The rest is, quite literally, history. Trump makes a pretty tough act to follow, as Mark Lenko of Canadian Discovery, pointed out in his, the final presentation of this year’s show. This year’s keynote speaker was Minister of Energy and Resources Dustin Duncan, who spoke about the importance of getting our oil to tidewater. The number of booths was down to around 50, compared to around 200 for the show
There were only about one-quarter of the exhibits at this year’s Williston Basin Petroleum Conference compared to previous years in Regina, but three years into a downturn of oil, organizers were okay with that. Photo by Brian Zinchuk
two and four years ago. Despite this, the attendance during technical sessions was strong, and appeared similar to previous years. Most of the technical sessions focused on geology, which has always been the core of the conference from
the beginning, when it started as an invitationonly event for a few dozen people. The presentations varied from presentations on the characteristics of the Great Plains polygonal fault system within the Williston Basin
to Bakken production optimization of surface facilities. Of particular interest was a presentation by Michael Nelson of the Saskatchewan Ministry of the Economy on evaluating production performance of horizontal well refracs
in Saskatchewan. That presentation showed that wells that were initially fracked, then fracked again several years later, would often, but not always show results that were nearly as good as when the well first went on initial production.
Quantum Energy, Inc. acquires 100 per cent of Quantum Native Processing Partners, LLC NEW CEO NAMED FOR REFINERY PROPONENT Tempe, Az. – Quantum Energy, Inc., the parent company of Dominion Energy Processing Group, Inc., which has proposed a light oil refinery at Stoughton, has made some corporate moves affecting both its North Dakota refinery venture and its corporate leadership. On May 11 Quantum announced via press release that it now owns 100 per cent of Quantum Native Processing Partners, LLC (QNPP), having acquired the 50 per cent ownership interest from Native Son Refinery, Inc. (NSR). QNPP was formed by Quantum and NSR as a 50/50 joint venture in 2015
and Quantum has now acquired the NSR 50 per cent interest to own 100 per cent of QNPP. This acquisition was accomplished by means of a share exchange agreement whereby Quantum acquired 100 per cent of the stock of Native Son Refinery, Inc. Quantum’s website notes, “Quantum Native Processing Partners, LLC, a joint venture formed with Native Son Refining, LLC, a Woodlands, Texas, subsidiary of Native Son Holdings, LLC, has been formed to develop a 40,000 bpd refinery in Berthold, North Dakota.” Quantum has also announced that NSR’s
Robert L. Monday has been named as the chief executive officer (CEO) of Quantum and has been appointed to the board of directors. Quantum’s chairman, Stanley F. Wilson, will remain on the board with Monday and will serve as president and COO. Monday has also been named as CEO of the Quantum fuel trading and petroleum marketing subsidiary, FTPM Resources, Inc. and will manage commodities trading transactions within an industry relationship structured with a Native Son Holdings, LLC. branded affiliate entity. “We are pleased
to have consolidated QNPP and welcome the strength and diversity of Mr. Monday’s background and experience to the Quantum team,” said Stan Wilson, Quantum Chairman. Bloomberg.com’s executive profile of Robert L. Monday states, “Mr. Robert L. Monday has been chief executive officer, president and chief operating officer of Quantum Energy, Inc. since May 11, 2017. Mr. Monday served as managing director of acquisitions at The Broe Group. Mr. Monday has over forty years of diverse real estate development, capital formation and acquisitions experience
to the Quantum team. He served for six years as a managing partner of the Occidental Equities Corporation that included management of Occidental Land Research partnership projects comprising mixed-use, office, industrial parks, retail, multi-family, town homes, condominiums and single family residential developments in California and Nevada. He served for eight years as a managing principal of the Eagle Companies in which he oversaw the development of two large master planned communities in Colorado Springs. “Mr. Monday has assembled a team of
engineers, developers and investors to form Native Son Holdings, LLC and its group of companies including Native Son Refining, LLC based in the Houston suburb of The Woodlands, Texas. He has been director of Quantum Energy, Inc. since May 11, 2017. He served as member of advisory board of Quantum Energy, Inc. since July 16, 2015. Mr. Monday is a very welcome addition to the Quantum team as Quantum works to develop its refinery sites under two year option agreements with landowners in Baker, MT, Fairview, MT, Stanley, ND and Berthold, ND.”
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PIPELINE NEWS June 2017
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TOP NEWS
Saskatchewan Oil and Gas Show June 7-8 GET IN YOUR TRUCK AND HEAD ON DOWN! By Brian Zinchuk Weyburn – On June 7 and 8, you’ve got just one thing to do: get in your truck and drive to Weyburn. It’s time for the Saskatchewan Oil and Gas Show, sometimes informally referred to as the Weyburn Oil Show. Held every two years, the Saskatchewan Oil and Gas Show is the premier event of its type in this province’s oilpatch. The Weyburn exhibition grounds are filled with indoor and outdoor exhibits showing everything from service rigs to secondary containment. Indoor booths are sold out, and as of early May, nearly all outdoor booths were sold out as well, according to Tanya Hulbert, show manager. It’s expected they will all sell out. “We’re just as pleased as can be,” said Del Mondor, chair of the oil show committee, and president, CEO and owner of Aldon Oils. He noted as of May 19, all hotels are sold out in Weyburn. Roughly 6,000 people attended the 2013 show, and about 5,000 in 2015, according to Hulbert. “We’re hoping for about the same,” she said. To coincide with the oil show, this edition of Pipeline News focuses on several Weyburn oilfield businesses. To save yourself time waiting in line to register, you can pre-register online at www.oilshow.ca. Tickets for meals can also
The 2017 Saskatchewan Oil and Gas Show is coming up soon. This was the 2015 edition. File photo.
be purchased online. The meals are hosted by local clubs. Meal prices have remained the same, an effort to recognize the tougher times the oilpatch has had in recent years. Schedule Tuesday, June 6, is exhibitor setup day. A golf tournament is held for exhibitors and platinum sponsors. The evening has a meet and greet dinner which highlights the steak or lobster supper. These events are closed to the general public. Wednesday, June 7, sees the show open at 10 a.m., and running until 7 p.m. There is a guest speaker at 12:30, followed by the Saskatchewan Oil and Gas Recognition Awards. This will include the Oilman of the Year and Hall of Fame inductions.
“We’re hopeful the premier will be speaking Wednesday at lunch,” Mondor said, noting that as of early May, he had not yet been confirmed. Mondor added that Minster of Energy and Resources Dustin Duncan, who is also Weyburn Big-Muddy MLA, has accepted his speaking engagement for Wednesday evening. That evening, at 7 p.m. is the prime rib dinner and opening ceremonies. At 8:30 the Southeast Saskatchewan Oilman of the Year and Southeast Saskatchewan Legends awards will be handed out. The grounds close at 11 p.m. Thursday, June 8, kicks off the barnstorming breakfast at 7:30 a.m. The show opens at 8 a.m. and runs until 3:30 p.m. There is an industry
luncheon at noon, followed by talk radio host John Gormley at the luncheon speaker. Gormley will host his radio show from the oil show on Thursday morning. Awards Prior to 2015, a person could be attending the show and not be aware a friend was going to be honoured. Two years ago, that changed. The oil show in recent years has announced the awards recipients ahead of time so that people know who will be honoured, for the Saskatchewan oilman of the year, Southeast Saskatchewan Oilman of the Year, Saskatchewan Oil and Gas Hall of Fame, and a new category, Southeast Saskatchewan Legends. “It allows those people who want to come, and be part of it all, to know ahead of time,” said
Mondor. On May 5, Byron Neiles, chair of the Saskatchewan Oil Industry Board of Governors, announced that the 2017 Saskatchewan Oil Patch Hall of Fame Awards. The 2017 Saskatchewan Oilman of the Year is Rick McHardy, president and CEO of Spartan Energy Corp. Three people will be inducted into the Saskatchewan Oil and Gas Hall of Fame. They are Grant Fagerheim, president and CEO of Whitecap Resources Inc.; Bud Bell (posthumous), former president of Schlumberger of Canada Ltd.; and Roger Soucy, founder of the Petroleum Services Association of Canada. The oil show committee announced Randall Smith, president of Spectrum Resource Group,
Inc., will receive the Southeast Saskatchewan Oilman of the Year award. A new category is the Southeast Saskatchewan Legends Awards. Three people will be honored with the Legends award this year. They are Ronald J Wanner, Viking Oilfield Surplus Ltd.; Ken Spearing, Spearing Service, and Melvyn Grimes (posthumous), Grimes Sales and Service Ltd. “We certainly have a great lineup of award recipients. The show is going to be full. We’re certainly excited about the show for Weyburn, for southeast Saskatchewan. We’re excited to provide that networking opportunity for the industry,” Mondor said. “We’re hoping for good weather, good times and lots of people,” Mondor said.
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PIPELINE NEWS June 2017
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.
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PUBLISHER Rick Sadick - Estevan 1.306.634.2654 EDITOR Brian Zinchuk - Estevan 1.306.461.5599 Associate Advertising Consultants:
SASKATCHEWAN & MANITOBA • Estevan 1.306.634.2654 Deanna Tarnes - Advertising Manager Candace Wheeler Teresa Hrywkiw • Carlyle 1.306.453.2525 Alison Dunning NORTHWEST SASK. & ALBERTA • 1.306.460.7416 Harland Lesyk Production:
• Estevan 1.306.634.2654 Jihyun Choi Ashley Taylor 68 Souris Avenue N, Estevan, SK S4A 2M3 1 (306) 634-2654 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.
Will refracs become common? Perhaps the most interesting, and applicable, presentation offered at the Williston Basin Petroleum Conference in Regina May 2-4 was one on refracs. That’s where you take an existing well that was initially fracked, but whose production has now largely petered out. You come in and frac it again, and voila, in most cases, the well responds and production is renewed. The presentation, by Michael Nelson of the Ministry of Environment, noted that in the Bakken, “The average refrac restores oil rate to 70 per cent of the initial oil rate, with a median value at 80 per cent of initial oil rate.” It makes old wells somewhat new again, breathing new life into them. The interesting thing about this is what potential it could have, especially in areas that were first developed in the Bakken play. Back when Petrobank morphed into Petrobakken, one of their senior executives made a presentation on how they had gone through several evolutions of a standard Bakken well, from just a few frac stages, to two legs and numerous frac stages. When developing an area,
oil companies will typically go for their best prospects first. But paradoxically, they are also doing so with less mature technology and techniques compared to what will eventually be developed and deployed in that field over time. Thus, the best prospects of the initial Bakken boom may have had only eight stages of fracking, where that same well, drilled today, 10 years later, would have dozens of frac stages. There are other benefits to refracking a well. It’s already drilled – which is obvious. Existing infrastructure can be used – like flowlines and batteries. With anything in the oilpatch, it’s probably not going to work all the time. Some companies report 100 per cent success rates in their drilling programs, but one producer once explained to us that could probably be taken with a grain of salt. So maybe not all refracs will be stellar. It also begs the question of why we haven’t seen refracs become much more common? If they do work well, why haven’t producers jumped at it? Del Mondor, president, CEO and owner of Weyburnbased Aldon Oils Ltd, attended
the conference. Asked if he would consider doing refracs, he replied, “Absolutely. “We would be very interested in that. I think there’s been enough of that that’s gone on in recent years that we can track the performance of refracking.” The fracking fleet in southeast Saskatchewan has greatly diminished with this downturn. Where there were once seven fracking operations, there are now three, and two of those are in the midst of a merger. If refracs caught on in a big way some day, maybe that number would grow again. Mondor added, “Those early fracs and early movements in the Bakken, we’ve just gotten better and better at this. It’s our responsibility, as producers, to produce this resource for this province, in the most effective manner possible. Refracking is part of that. Hopefully it not only continues, but may even accelerate.” Mondor think’s someone will come up with some technology to do it as successfully as possible, but, ironically, the later ones will probably be more successful than the earlier ones. It’s hard to argue with that.
PIPELINE NEWS June 2017
2017 is shaping up to be the year of the phoenix Two back-to-back calls setting up stories for this edition brought about a realization – 2017 is the year of the phoenix in the southeast Saskatchewan oilpatch. One of those stories is running this month – Bandit Energy Services. Another, Innovative Artificial Lift Solutions, is on the agenda. In recent months, so has Canadian Plains Energy Services and Quinn ALS also fit the bill. In each of these cases, the people running the show cashed out a few years ago, and now that their non-compete agreements are up, they are jumping back in. At Canadian Plains Energy Services, president Dale Ziegler, who has a long history with the former Carson Energy Services, got going as soon as he could. The company now has three locations, in Carlyle, Regina and Virden Manitoba, and has plans to grow. Quinn Artificial Lift Services is a re-entry of the Quinn name into the pump business. The Quinn family sold Quinn Pumps to Lufkin in December 2011, and then GE, and Quinn Pumps still maintains its own shop in Estevan. The Quinn ALS group is from the legacy Quinn, and have brought their experience and knowledge to this new venture. The Quinn family history in pumps goes back over 50 years. Now Lionel Pouliot, who also has a significant history with the former Carson Energy Services, is heading up Lloydminster-based
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OPINION
FROM THE TOP OF THE PILE
By Brian Zinchuk
Bandit’s new shop in Weyburn. While Bandit has been around for quite a while, it’s significant that Pouliot is back in the game. In this case, Pouliot is not an owner, but he’s setting up the operation. The most recent phoenix is Innovative Artificial Lift Solutions. Cary Wock and his compatriots had set up Independent Pump Co., and eventually sold it to Weatherford. Wock ended up in management with Weatherford, but most recently has been farming. The crop must be in, because by the May long weekend, he was setting up the Facebook page for Artificial Lift Solutions. Don’t read too much into the phoenix analogy, as this is not a case of rising up out of ashes. But it is a case of rebirth. These entrepreneurs are going back into what they know. Its significant these ventures are starting up at a time when things are slow. Indeed, they among the very few new ventures this paper has seen in the last two years. In comparison, almost every edition we had from 2008 to 2014 had several new ventures profiled. Their starting up now shows faith, not only in themselves and their ability to build and grow a business, but in the oilpatch as a whole. And this is where geopolitics fits in. As I type this, President Donald Trump is in Saudi Arabia. The OPEC leader is indicating that production cuts will remain another 9 months. WTI oil prices are now above US$50
again. These points are significant, as Saudi Arabia really needs oil prices to come up. Trump is there, in part, for the signing of over US$110 billion in arms deals to the Kingdom. That’s a lot of planes, missiles and ships. They’re going to need the money to pay for all those new toys. Hopefully that results in oil prices that will see US$50 for WTI as a floor, and hopefully much more than that. Those new frigates the Saudis ordered are going to be hard to pay for with US$30 oil. It’s doubtful any of these entrepreneurs based their business plans on Saudi arms purchases, but they will definitely see an impact from those – and hopefully to the positive, on the bottom line. That strength in the market should help float these new ventures, and, hopefully, many more. It would be nice to start seeing a lot more new companies pop up. Will we see more phoenixes? The Carson Energy Services sale was the largest in a series of sales about five to six years ago, when owners were cashing out while things were good. By now, surely, all the non-compete agreements are up. Who else might be waiting in the wings to fire up? Will it take sustained US$60 oil? If that’s the case, do we hope the Saudis buy more frigates? Brian Zinchuk is editor of Pipeline News. He can be reached at brian.zinchuk@sasktel.net.
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PIPELINE NEWS June 2017
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Drilling expected to come back with a vengeance PSAC RAISES ITS 2017 DRILLING ACTIVITY FORECAST BY 60 PER CENT
By Brian Zinchuk Calgary – The number of oil wells drilled is a leading indicator of the industry’s health as a whole, and on April 27, the Petroleum Services Association of Canada (PSAC) forecast a big improvement in the oil sector’s prognosis. PSAC released its in its second update to the 2017 Canadian drilling activity forecast, one that now sees a 60 per cent uptick in expected activity. The revised forecast of the number of wells drilled (rig released) across Canada for 2017 has shot up to 6,680 wells. This represents an increase of 2,505 wells and a 60 per cent increase from PSAC’s original 2017 drilling activity forecast released in early November 2016 of 4,175 wells rig released. PSAC based its updated 2017 forecast on average natural gas prices of $3.00 CDN/mcf (AECO), crude oil prices of US$52.50/barrel (WTI)
and the Canada-US exchange rate averaging $0.74. On a provincial basis for 2017, the revised forecast for Saskatchewan now sits at 2,670 wells compared to 1,940 wells in the original forecast, and Manitoba is forecasted to see 221 wells or a jump of 171 in well count for 2017. PSAC now estimates 3,320 wells to be drilled in Alberta, up from 1,900 wells in the original forecast. Approximately 60 per cent more wells are also expected to be drilled in British Columbia, with PSAC’s revised forecast now at 449 wells for the province up from 280 in the original forecast. On April 28, PSAC president and CEO Mark Salkeld spoke to Pipeline News about the expected increase. He said, “When we did our original forecast back in November, we were still in the grasp of ‘lower for longer.’ We were only just kind of coming around to
US$50 oil and realizing it might be here for a bit. We were reluctant to get too excited, so, based on the data we had for the first three quarters of 2016, that was where we were at – 4,000 (wells). “Then we got the data for the fourth quarter of 2016, and there was a good uptick in that fourth quarter. Saskatchewan is just rocking it; Crescent Point, and their cookie cutter wells and stuff like that. So we thought we’d give it a 24 per cent increase and then we got our first quarter stuff in, and holy cow! “What we saw was a couple of things driving it. There was confidence in US$50 oil. There were definite cost reductions on the part of the service sector, because they had no choice. Producers like Crescent Point and whatever sent form letters saying, ‘Reduce your cost by 30, 40, 50 per cent. “The other thing was, because there wasn’t this high level of drill-
ing activity, producers are looking to build their inventories again. It’s kind of an ideal situation where costs were down, they were reasonably confident in their prices, and they needed to get some production to service,” Salkeld said. “In my mind, Crescent Point was the star player in all of this. They just developed that formula for easy to drill and complete wells, and to get production to surface quickly for good return. They went ahead with it.” Their forecast does not look at specific company’s announced forecasts of their own work, but rather the broad spectrum. Some companies are moving money out of the oilsands into the conventional side. “The single biggest factor in all of this is the cost of services was reduced, significantly.” Asked if that translates to service companies working for nothing and going broke along the
There could be a lot more rigs working this year, according to PSAC. Photo by Brian Zinchuk
way, he replied, “That’s exactly right. That’s been my soapbox rant over the last couple of years. The cost savings for producers have not been sustainable. We’ve seen compa-
nies go broke. We’ve seen consolidations, we’ve seen mergers and acquisitions, and that’s just expanding. We’ve got fewer service companies, but the ones ► Page A8
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Companies are resorting to hiring green hands ▲
Page A7 that survived are bigger, some of them, but there’s lots gone.” He noted that PSAC has lost about 100 members. Salkeld estimates that about a third have been through mergers and acquisitions, another third have chosen to prioritize their spending on something other than membership dues (like paying their staff and preparing equipment for work), and the last third are simply gone out of businesses. “There are labour pressures. We started to see it right at the end of winter, here,” he noted. Some companies are now hiring green hands, having exhausted the labour
pool. “They put the people to work they kept on payroll, first off. They put the people to work, their ex-employees, laid off employees, they went back to work. And now they’re hiring. They’re hiring green, but there’s also a bit of scalping going on, encouraging crews from the competition to come across,” Salkeld said. He saw it the most in fracking and cementing, which are holding job fairs. “They’ve got ads out, trying to hire like crazy.” He noted those areas are seeing demand with respect to getting wells completed, and that those segments are starting to
see a bit of a rate increase. As for when oilfield services companies can start raising their rates, Salkeld noted some oil producers are willing to wait, or to tell an outfit that wants more an hour to go away and they’ll find someone they’re comfortable with. “The rate increase, across the board, is going to take a couple years, I would say. The in-demand, critically-needed services are going to get something,” he said. That includes top-rated companies with squeakyclean safety records. “We’ve still got member-companies operating at cost, or at a loss, or waiting. The wait► Page A9
Mark Salkeld, president and CEO of the Petroleum Services Association of Canada, said PSAC expects drilling to pick up substantially this year. File photo
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PIPELINE NEWS June 2017
A9
Dan Cugnet is going to need a rescue STARS RESCUE ON THE PRAIRIE RECRUITS WEYBURN OILMAN By Brian Zinchuk Weyburn – Weyburn’s Dan Cugnet better have his cellphone charged on Aug. 24. In fact, he better take one of those battery chargers along, too. That’s because Cugnet, along with hopefully four other people, will be deposited at a site somewhere on the prairie near Saskatoon as part of STARS air ambulance’s third annual Rescue on the Prairie.
The fundraiser is modelled on the “jail and bail” fundraiser, but much larger scale. Participants are taken out by one of STARS’ helicopters to a location on the prairie where they take part in challenges and make calls to people they know, trying to raise a minimum of $50,000 each for STARS, according to Mark Oddan, communications lead with STARS and its foundation. Once they
reach their goal, they can be “rescued,” again, by helicopter. “We fly them to an undisclosed location,” he said. The participants have their cellphones and address books. “We recruit influential community leaders,” Oddan said, adding they can start fundraising before the actual day. One person, for instance, did small fundraisers like bake sales for weeks before the actual event.
The challenges participants take part in are related to STARS’ work and include medical challenges. Oddan said it was a whirlwind of activity in a day. Ron Carson participated in 2015 and came up big, raising $217,000, around half the $440,000 total that year. Last year Rescue on the Prairie raised $525,000 in Saskatchewan. Similar events take place in Alberta and Manitoba
as well. Oddan said it’s nice to get a mix of people and backgrounds. “We’re very excited about this year,” he said. Cugnet, a part-owner in Valleyview Petroleum, is pretty pumped about participating. “It was something I was interested in doing, to help out a fantastic organization,” he said. “It has a direct impact on all of us, whether we know it or not.”
Weyburn’s Dan Cugnet will be making calls, trying to raise funds for STARS. File photo
Labour and equipment recertification pressures ▲
Page A8 ing period is when there’s enough critical mass, when there’s enough producers out there firing up rigs and crews to get commitments to have production going and wells spudded to qualify for permits, but we’re not there now. “We’ll coast along this spring and summer, and we’ll start to see some pressures build up
in the fourth quarter. The pressures will be labour and equipment recertifications. There’s lots of iron, rigs and frac spreads that are parked. The rigs need Level 4 (recertifications), the pumps and all the high-pressure equipment needs recertification. It all costs money. “When all the available equipment has gone to work, and all the equipment against the
fence has gone to work after some money is spent on it, that’s when the producers that need the services more and the services companies will get away with rate increased.” All told, Salkeld said, “It’s good!” about finally having some good news, but he added there’s cautious optimism. This country still needs access to markets other than
the United States, and that requires pipelines to tidewater. If the United States brings in a border adjustment tax on energy products, that will put even greater pressure on getting those export pipelines completed. PSAC will be part of the Saskatchewan Oil and Gas Show again, held June 7-8 this year. “We’re coming down full force to host the barn-
storming breakfast,” he said. They will also have roundtable discussions with members. Minister responds In response to the revised forecast, Energy and Resources Minister Dustin Duncan said in a release on April 28, “This announcement is a clear sign of renewed operations in Saskatchewan, in part because of
our province’s stable and competitive operating environment. “After an extended period of cost management and reductions, this industry is showing us once again the kind of resiliency and efficiency that makes it one of our most dynamic economic sectors and a major contributor to Saskatchewan’s economic growth.”
A10
PIPELINE NEWS June 2017
Getting ready: Panther Drilling By Brian Zinchuk Weyburn – Two drilling rigs, standing along Highway 39, east of Weyburn, signify a lot when it comes to the state of the oilpatch. In many ways, they signify hope. Those two drilling rigs, Panther Rig 1 and Rig 3, were parked early on in the downturn, which firmly took hold in January 2015. That was the last time Rig 3 work before being racked, and Rig 1 shut down in February 2015. Now, after two years idle, the owners of Panther Drilling are showing their faith in the industry by bringing them back into service, ready to go to work.
Cory Hicks is president of Panther Drilling and one of the owners. He spoke to Pipeline News on May 8 at their shop. “We were down to one rig, Rig 4. Rig 2 finished up a well in October 2015, for Caprice Resources, and it sat out at Macoun. They sat for a year,” Hicks said. “Basically, the reason we set these up was to obviously get them prepared to go to go again, but to shake off that stigma of a cold rig. I’m excited just to have them standing in the yard.” He stressed they don’t scrimp on their safety or maintenance. “We maintain things,”
Hicks said. “We haven’t gotten into the bowels of them yet, but we could probably have them up and running in a week. It’s going to take some time. I never like being caught. I would do a lot of preventative maintenance – run things, make sure they run right,” Hicks said. Ian Taylor, who handles sales with Panther, noted that it’s common in downturns to rob parts off one rig to keep another going. But that, in turn, means two rigs are now affected. That’s something they don’t do. Each rig is kept whole. As of early May, they didn’t have work lined
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up for Rigs 1 and 3, but Taylor noted, “We’ve got multiple bids out right now.” “But nobody’s pulled the trigger yet, so to speak,” Hicks added. “Honestly, having these things standing, a.) does give hope, and b.) for me, more than anything, it was getting the rigs stood so they can be looked at so I can run the pumps. I can pick up the Kelly. It allows us to see what we need to do. A drilling rig is not like a service rig, no disrespect to them, but a drilling rig needs a little more time to get ready to go out again, because I don’t like having surprises.” As of the time of
writing, it’s been a relatively dry spring, which means that, unlike many of years since 2011, the drilling rigs might be able to go out early. At their height, with four rigs working, Hicks said they had 106 employees, including office staff and swing crews. Most recently that number was reduced to 21 people in the field, on one rig, with four office staff. With two rigs going, the number adds up to 46. Should Rigs 1 and 3 go back to work, they’re going to have to have to find more staff. Much of that would be done by word of mouth, Hicks said. “The majority of our
Cory Hicks, president of Panther Drilling, is excited to see two of their rigs standing again. Photo by Brian Zinchuk
core people, we retained.” They’ve also maintained relations with a number of people who’ve been idled. ► Page A11
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PIPELINE NEWS June 2017
Rigs are more efficient now ◄ Page A10 As oil prices go up and down, that affects oil company’s plans. On the day of the interview, oil was around US$44 per barrel for WTI oil. “When oil was down below US$30, that was their line,” Hicks noted, saying each oil company has its own comfort level. Production does continually decline, and it has to be replenished, he noted. Hicks believes that the pent-up demand will drive some drilling. In addition to reactivating Rigs 1 and 3, Rig 4 has been undergoing a Level IV inspection with Irwin Machine Shop in Oxbow. Maple Leaf Consulting is doing the inspection. That rig spent much of 2016 working not far from Alameda and Oxbow. “Overall, it’s going well,” Hicks said. In recent years, drilling rig efficiency has increased to the point where the State of North Dakota notes they can now accomplish the same amount of productivity with half the drilling rigs that used to operate within the state just a few years ago. With advances in polycrystalline diamond cutter drill bits, mud motors and muds, the number of days to drill a well has continually dropped over the years. “The crews are what makes or break a rig,” Hicks said. “That’s not just on the rig, but your other services, too, your cementers, your directional drillers, your consultants – all that plays into it. There’s a human factor, too. “I believe the tech has helped im-
A11
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PIPELINE NEWS June 2017
Buying and drilling: Aldon Oils By Brian Zinchuk Weyburn – A year ago, Del Mondor, president, CEO and owner of Weyburn-based Aldon Oils Ltd., told Pipeline News, “We’re going to get good at this,” with reference to dealing with oil prices much lower that what we had seen during the boom. He said, “This industry is full of innovators and entrepreneurs and people that stand up to challenges, whether it’s B.C., Alberta, Saskatchewan or Manitoba, we will get good at this. Whether that’s getting good at $35 or $75 or whatever, we will get good at this.” Now, a year later have we gotten good at this? Mondor replied, “I think it’s still a work in progress. As soon as the tough times hit – I’ve been doing this for quite a few years now – it’s all about a cycle. We are getting, and we have gotten good at this. “We’re sometimes our own worst enemies. So that when we get to a price that everybody’s happy with, and we’re going to do a bunch of great things, then scarcity comes up again. We start losing the focus that we had that was necessary to be good at this, then the cycle starts again.
Openfield purchase “We’re constantly looking at acquisitions and trying to get the right assets in the company,” Mondor said. “We bought a company called Openfield Resources. We took over Feb. 1. We bought them and their working interest partners out.” It was a 210 bpd acquisition, a couple miles east of Manor. “It’s actually expanding our footprint. We typically have tried to concentrate our asset base, on the producing side, to west of Highway 47. We liked the asset. We went after it, even though it’s a little bit out of the ways.” It’s Mississippian conventional, which is what Aldon primarily concentrates on, keeping it simple, so to speak. “We do have Bakken wells that we’re actively drilling, but we’re more interested in conventional production.” He noted they are actively working on five or six deals at any one time, both buying and selling. “We recently sold a property, effective May 1, to Firesky Energy.” That property was north of Estevan. “My plan, for Aldon, is to put the right assets, in place. There’s going to be a rationalization. There’s going to be purchases, there’s going to be sales. We’re going to get to the point where we have the assets I have planned.” Over the last
year Husky sold much of its non-oilsands and heavy oil production throughout Western Canada, including southeast Saskatchewan. Aldon Oils tried to buy some of that, but was beaten out by a larger company. Drilling Aldon has had an active drilling program going this spring. Mondor said, “We finished one well before breakup. We’ve got two more, right after breakup here. Then we’re going to evaluate and hopefully get drilling again Aug. 1 for a more extended program. “Back in the good days, we used to drill every day. We’re certainly looking to get back into those days. “That would mean prosperity, and we’re doing well again.” The oil industry, as a whole, has cut back on drilling over the last 2.5 years, and with production declines, is that now an impetus for drilling? Mondor replied, “There’s a number of different factors. We’ve got (lease) expiries, a number of different commitments to meet. I think for some, the whole maintaining production at a certain level is key to getting back drilling again. “We’ve spent almost three years now evaluating our costs and really looking at all the processes we do, as an industry. I think ► Page A13
Panther Drilling Rig 2, working just west of Stoughton, was drilling for Aldon Oils on May 21. The company is in the midst of a spring drilling program, will evaluate the results, then plans to resume drilling later in the summer. Photo by Brian Zinchuk
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Blue skies and dry ground make for nice drilling weather. Aldon Oils has a spring drilling program on the go, and will resume drilling later this summer. This is Panther Drilling Rig 2, working for Aldon near Lampman. Photo by Brian Zinchuk
Rate increases will begin with scarcity ▲
Page A12 we’re at the point where US$55, US$50 actually looks pretty good again.” At what point can service companies start raising their rates? “That begins with scarcity. If you start getting to the point where us, as producers, have to wait for, or can’t get, services, the word scarcity started to get used. That’s
when you’ll see price escalation,” he said. “Part of getting good at this is maintaining your discipline, and maintaining your discipline to survive. As soon as you’ve got a whim that you’ve all of a sudden got to do all this work, and you do it without keeping a focus on cost, you’re not going to be successful. As a producer, we have to
stay disciplined. We have to realize that we are just not going to get US$60, US$70, US$80 a barrel. So we have to maintain our discipline. “If that means we can’t do it, that’s what it is.” Oil prices have fluctuated above and below US$50 per barrel in recent weeks, and at ► Page A14
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PIPELINE NEWS June 2017
Filtering out the noise of fluctuating prices ▲
Page A13 the time of this interview, they were near US$44 per barrel. Asked if that has impacted Aldon’s plans, Mondor said, “You have to weed out the noise. Whether its US$44 or US$55, to me, you’re going to have ebbs and flows of this industry that none of us that can predict. “To me, that’s noise. We have to get through it. You have to maintain your plans beyond a week, and maintain your plans, have your plans in place. Move forward, have your discipline. You’re going to have US$44s. You’re going to have US$55s. We might have US$34s. We might have US$65s. I don’t know this. So you have to maintain what your plan is and forget about what’s happening this week, and
what’s happening next week. Weed out the noise and execute your plans.” Asked how Weyburn has been doing recently, Mondor said, “I don’t think we’ve seen the boom and busting that’s so famous in the oil industry. We’ve of course got our bust. But I think we’ve seen a fairly steady amount of activity within Weyburn. Crescent Point has got a very big operation, and is very good to this community. They have maintained the work. Albeit it’s a slower time for many, many oil companies, and for Weyburn, we’re adjusting. Like, with anything, we’re getting good at this. “Nobody survived it unscathed. Producers, service companies, convenience stores, car dealerships – everything, from A-Z has felt the drop.”
Roughneck Tyler Roy of Panther Drilling Rig 2 checks on the driller’s station on May 21. The rig had two holes near Lampman this spring, since breakup, for Aldon Oils. Photo by Brian Zinchuk
Bluewave Energy at Weyburn By Brian Zinchuk Weyburn – A little east of Weyburn you come across a bulk fuel and cardlock operation known as Bluewave Energy. It’s part of a much larger company that has been on a growth trajectory for several years now. “We’re a division of Parkland Fuel Corporation,” said Chad Bresna-
han, who is regional sales manager for the Prairies with Bluewave, when he met with Pipeline News at the Weyburn site on May 8, 2017. Bresnahan said they are one of Canada’s largest distributors of fuel (gasoline and diesel), propane and lubricants. Parkland Fuel Corporation has been in the
headlines of late, with two large acquisitions of fuel marketing and distribution business. Most recently, on April 18, Parkland announced that it had entered into an agreement with Chevron Canada Limited to acquire all of the shares of Chevron Canada R&M ULC, which operates its Canadian integrated
downstream fuel business. The acquisition includes 129 Chevronbranded retail service stations principally located in Metro Vancouver, which complement Parkland’s existing 44 Chevron-branded sites in British Columbia, 37 commercial cardlock and three marine
fueling locations, the complementary refinery in Burnaby, terminals located in Burnaby, Hatch Point, and Port Hardy, British Columbia, and a wholesale business which includes aviation fuel sales to the Vancouver International Airport. Subject to satisfaction of customary closing conditions, Parkland
will pay approximately C$1,460 million, plus an estimated C$186 million in working capital for the acquired business. The 55,000 bpd refinery in Burnaby is of particular note, as it is the terminus of Kinder Morgan’s Trans Mountain pipeline and its proposed expansion. It’s ► Page A32
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A16
PIPELINE NEWS June 2017
Bandit Energy is now in Weyburn LIONEL POULIOT STARTS AGAIN WITH A HALF-DOZEN PEOPLE
By Brian Zinchuk Weyburn – Bandit Energy Services was looking for someone to head up their new operation in Weyburn, and Lionel Pouliot was coming off a five-year non-compete agreement. The result was a good match, according to Pouliot, who now heads up Bandit’s southeast Saskatchewan location. Pouliot has a long
history in oilfield construction and maintenance, having worked with Carson Energy Services and its successor companies from 1983 until last year. “Southeast Saskatchewan is showing a market opportunity, for sure, and an opportunity to get local people in the area,” Pouliot said on May 2. “I started at the end of the shovel, working
maintenance truck, crew truck. I started working on some bigger projects. When we expanded into Halbrite around 1997, I was managing that facility with six guys. “At peak, when it was busy, it was 120 people,” he said. That shop is now closed and listed for sale. In a way, Pouliot is starting over again. “This
situation is no different than Halbrite – start with six guys and try to build it up.” “We’re targeting the Bakken in the Stoughton area, and the Flat Lake play. We go as far east as Highway 9,” he said, noting the want to work relatively local. Pouliot was one of the senior managers of Carson Energy Services and was
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wright. Steve had Lampman, and I had Estevan, Carlyle, Alida, Virden, Halbrite, Kipling and Oxbow.” Dale Ziegler looked after the mainline division, at White City. In the fourth year after the purchase, and with the industry in a downturn, they downsized. “I went to Regina and looked after White City, Swift Current and Virden. Steve took the rest of southeast Saskatchewan,” Pouliot said. “I did that for nine months and they let me go March 2016.
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a part-owner. He, along with those others who were bought out, had a five-year non-compete agreement. That agreement expired Oct. 1, 2016. Pouliot had worked with the successor companies – Flint Energy Services, URS and AECOM which had each, in turn, owned and operated what was once Carson Energy Services. “When Flint took over, there were three of us just below Ron (Carson); myself, Steve Smith and Quinn Olson at Wain-
Page A17
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A17
There's a shortage of qualified people ▲
Page A16 “I spent time at Kenosee Lake relaxing and finished off some landscaping.” Bandit ran an advertisement in the paper looking for someone to run their Weyburn operation. “It was the perfect fit. It worked well for us both,” Pouliot said. He does not have ownership in Bandit, nor had he considered going out on his own, but some people suggested he should. In Weyburn they’re concentrating on maintenance and construction of facilities, single and multi-well batteries, as well as some small pipeline work. They’ll be working on steel and fibreglass, and in early May workers were segmenting the Weyburn shop to isolate carbon steel work from stainless steel work. “We’re a Canadian Welding Bureau shop. We can weld structural steel according to code,” he said, adding their quality control program is approved by the Saskatchewan boiler branch, now known as the Technical Safety Authority of Saskatchewan. “We’re going to do some welding and fabrication,” he said. Welders are typically subcontractors, and Pouliot has many contacts along those lines. “We have lots of support from Lloydminster if we need it,” Pouliot said. Bandit is long established in the Lloydminster area as a pipeline construction contractor. Their services also include general oilfield construction and maintenance and civil construction. Asked about the rates service companies can charge oil companies, and how those have been brought low by the
downturn now in its third year, Pouliot said, “It’ll be tough to slide those up again.” He noted the price of oil is a major factor. “Maybe if it hits US$75 again?” he noted. “The other thing is, if there’s going to be a shortage of people, we’re going to have to offer more money to people to keep them. If the oil companies won‘t let us up the rates, we won’t have the people to supply them. There’s a shortage of people, qualified people with experience.” “More importantly, it’s about people. Do they know what they’re doing? Are they experienced?” Pouliot said, noting the importance of paying more for good people. So far the Weyburn shop has three excavators, one D8 dozer, a motor grader, rubber-tire backhoe and skid steer loader. They have four crew trucks and a tridrive winch tractor. “If we need something, they’ll send it from Lloydminster.” He’s got growth on his mind. “It would be nice to have 30 to 40 people work here. We’d like to have to expand our shop, but we need some growth for that to happen. Guy Church, who has 39 years experience in the oilfield, has signed on, filling the roles as assistant manager, safety coordinator and business development. Pouliot said, “We’re focused on local. We want to hire local people as much as we can. We want to support local as much as we can. I insisted the license places (on vehicles) were green. “It’s important to be part of the community,” he concluded.
Lionel Pouliot, left, heads up Bandit Energy Service’s new Weyburn shop, assisted by Guy Church, right. Photo by Brian Zinchuk
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A18
PIPELINE NEWS June 2017
Jerry Mainil Ltd. is looking for skilled workers By Brian Zinchuk Weyburn – Two years ago, Pipeline News did an entire edition on looking for work in the midst of the early days of the oil downturn. As part of that focus, editor Brian Zinchuk presented his own resumé as a former pipeline excavator operator to various companies to see what the jobs search would be like. One of the companies profiled then was Jerry Mainil Ltd. of Weyburn. At the time, there was no work to be found. Now, general manager Dennis Mainil is looking for skilled people again, and conducting interviews. Pipeline News spoke to Dennis Mainil on May 6. The bulk of Jerry Mainil Ltd.’s current work in the Oungre area. They also expect to have some crews working in the Stoughton area. Lease construction is the number one activity for Jerry Mainil, followed by lease reclamation and cleanup. He said, “We’ve got pipeline crews firing Lease construction is a major line of business for Jerry Mainil Ltd. Several of their dozers could be seen working south of Torquay on ► Page A31 a lease preparation on January 19. File photo
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PIPELINE NEWS June 2017
50 th AN N
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Estevan Meter 50 Year Anniversary
IVERSARY
Estevan Meter reaches 50 years in business
50 A NN
The current active partners behind Estevan Meter Services Ltd. are, from left, Jarrad Skuce, Doug Martens and Dallas Fleck. Photo by Brian Zinchuk
“We moved from there in 1993 to 64 Devonian Street.” The move doubled the company’s floorspace to about 6,000 square feet. They moved to their current location at 321 Imperial Avenue in November 2008, a 12,000-square foot building. A further 7,000 square feet was added in 2013. Virden Meter Services Ltd. in
th
IVERSARY
www.estevanmeter.com (306) 634-5304
Virden, Manitoba, started in a 1,600 square foot shop. They built and opened a new 4,800 square foot shop in 2014. Hiring on Of the current ownership, Fleck was the first to join the company, in 1987. “I’ve been here 30 years, longer than Doc (Stephen) and Gail (Nelson) were.” Fleck came on as a labourer. “I
was in the repair shop, repairing valves, pumps and meters. When I started, there were three employees.” Reg Stephen, Keith and Scott Nelson were the owners at the time. Before Estevan Meter, Fleck had worked on a crew truck. He’s now at 34 years of experience in the oilpatch. Martens stared June 30, 1990, going Page A20 ▲
By Brian Zinchuk Estevan – Estevan Meter Services Ltd. hit the big 5-0 this year, reaching a milestone that has seen it weather the highs and lows of the tumultuous oilpatch, surviving and thriving. The company was founded in 1967 by “Doc” Stephen, Dick Sprecher and Gail Nelson. (See historical piece, Estevan Meter Services a specialized plant, Page A23, and The Stephen Era at Estevan Meter, Page A26) Since that time, the company has grown and diversified. The ownership has evolved but always remained local. At its heart, instrumentation has remained the core of its business. Pipeline News spoke with partners Doug Martens, Dallas Fleck and Jarrad Skuce on April 28 about how the company got to where it is today. Martens is president. Fleck is vice-president and looks after the warehouse and inside sales. Skuce is manager of field services. Reg Stephen, who used to head up the company, now is a non-active shareholder. Mark Kessler is partner in sister company Virden Meter Services Ltd, which was founded in 2011. Moves “We were on fifth Street,” Martens said, noting their previous location. That building is now Blackie’s Coring.
Hey! You know it’s Canada’s Birthday but did you know we are having a birthday too?
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Come visit our booth at the Weyburn Oil Show!
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PIPELINE NEWS June 2017
50 th AN N
Estevan Meter 50 Year Anniversary
IVERSARY
Continual string of local ownership ▲
Martens said, “When we saw these buyouts going on, we’d see some other local service companies would come out on the winning side, and some came on the losing side. We made an effort in the 1990s to diversify our customer base.” “Dallas and I took a lead role in about 1996,” Martens said. “We became shareholders in 2000.” At the time, Martens was a shareholder in 3D Maintenance, a pumpjack maintenance company, from 1993 to 1998. Fleck also farmed. He sold his land to buy into Estevan Meter in 2000, while Martens exited 3D Maintenance in anticipation of buying into Estevan Meter. The seeds for their buy-in had been planted several years before, as Fleck noted the previous owners came to him and said he would have a chance to buy in some day. So when Martens wanted to buy-in, Fleck was given the opportunity as well. They worked on building their client base. At that time, there were five to eight employees. Martens was in the field with a few others, and Fleck was in the shop. Martens said, “Once we became owners, we became motived to grow it
so we could pay our loan.” They did several rounds of buying more and more shares. Reg Stephen got out as an active partner around 2006. Third partner comes from producer side Jarrad Skuce, the third active partner now, came in from a different path, the oil company side. “In 1991, I started pipelining for a year. I went to school for instrumentation in Moose Jaw,” he said. Skuce spent one year on a co-op program with TransCanada. Next he worked with Sceptre Controls for 1 ½ years. Then he ended up working on the oil producer side for many years. “I was down here programming for Wascana Energy. I had the only Cutlass Supreme Brougham – my company car – the only car in the patch. I had my computer and tools in the big trunk,” Skuce said. He got his journeyman electrician papers in 2004. Skuce spent eight years with Wascana Energy. “Then I had a long history of buyouts. Doug and I tried to hire each other a number of times.” The companies included Wascana, Canadian Occidental Petroleum and
Nexen. Then he went to work on the new carbon dioxide flood Apache implemented in the Midale Unit in 2005. “It was really good,” Skuce said of that experience. “There was a lot of instrumentation. I was heavy into the SCADA work. I worked with all the engineering firms.” SCADA stands for supervisory control and data acquisition, and is used for remote monitoring and control of equipment like oil wells and batteries. From Apache he went to NAL for 1 ½ years, working on blended condensate, butane and blending skids. Altogether, Skuce was able to bring experience from the other side of the table, the oil producer’s side, when he joined Estevan Meter in 2009. he bought into the company in 2011. Around this time the company had ground to about 18 people. It’s also a little after the wild ride known as the Bakken boom began. Bust then Bakken boom Martens noted that around 2007 or 2008, CE Natco brought to their attention the U.S. Geological Survey’s recent assessment of the Bakken. They made an extremely high offer to buy Page A21 ▲
Page A19 out on a job with Reg on the Canada Day long weekend. “We went to Pinto and calibrated meters for Dome-Amoco,” he recalled. “I had graduated from SIAST in Moose Jaw with an instrumentation diploma,” Martens said. It had just become a two-year program. He was one of the first instrumentation techs to work for a service company in southeast Saskatchewan. “Esso had an instrumentation tech, and wanted someone with certification.” From majors to juniors He added, “When I started, our big clients were Gulf, Esso, Sceptre, and Encor. Upton was just getting going. CNRL took out Gulf, and Esso became SaskOil in the early 1990s.” “The assets and people have remained here, but the ownership has changed many times.” Doc had done work with PanCanadian properties not within the Weyburn Unit, Martens noted. In the 1990s, their clientele transitioned from large companies to midcap companies like Marathon, Wascana and Talisman. Then in the 2000s, the era of the energy trusts took over in southeast Saskatchewan.
Swagelok Central Canada Extends our heartiest
CONGRATULATIONS to
Estevan Meter
for completing 50 glorious years.
We wish you continued success for many more years to come!
Swag Swagelok S Sw wag agel gSwagelok elok el ok k Central Cen e tr tral a al Canada Can a ada ad dCanada a 1 1-800-256-7776 -8 800 0 1-800-256-7776 -256 -2 256 56-7 6-7 777 76 iinfo@winnipeg.swagelok.com nffo o@ @info@winnipeg.swagelok.com @wi wiin wi nnip nn ipeg eg..s swa wa age ge g ello ok k..c co om ce c centralcanada.swagelok.com ecentralcanada.swagelok.com ntra nt tra ralc lcan a na ad da. a.s sw wa ag gello ok k..c com o Central © 2017 Swagelok Central Canada © 2017 Swagelok Company
PIPELINE NEWS June 2017
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Estevan Meter 50 Year Anniversary
IVERSARY
Diversification in later years leads to growth ◄ Page A20 out Estevan Meter, and that caught the attention of the owners. “We looked at it and said, ‘Boy, if it’s that big, we’d be silly not to stick around,’” Martens said. Fleck added, “Doug and I thought, ‘No, we’re not selling.’ “It worked out pretty well.” There was a short-term crash in oil prices following the Great Recession of 2008. That downturn extended into 2009. Martens said, “We had bought this building and we thought we were screwed. We were putting big orders back on the shelf. We were fairly young business owners, with debt. “It was a sickening feeling, but fortunately, it was a short duration. If it had been like this (now), we would have been screwed.” Growth and diversification Things turned around and oil stayed around US$100 per barrel for the next five years. The development of the Bakken led the way in the region, but most oil plays blossomed.
Martens said, “In that period, we really diversified our service.” Fleck quipped, “We weren’t just fixing meters.” Combustion service was a big addition. They offered complete turnaround kits for things like treaters and separators. Instrumentation for vessels was another focus. Air compressors were also carried. “We did a lot of separator packages,” Fleck said. The company also got into some exclusive distribution agreements, such as the Level Pro gauge. Estevan Meter began offering the F500 encapsulating agent for firefighting and tank cleaning. Schlumberger measurement products and Tornado Combustion Technologies were also offered. The company’s original product lines – Barton and National Tank, were now Schlumberger products. Estevan Meter retained the relationship. “That’s what made Estevan Meter, those two products,” Fleck said. In 2011, a sister company, Virden Meter Services Ltd., was
established in Virden, Man. This allowed the company to better serve the southwest Manitoba market. (See related story, Virden Meter, Page A29). Mark Kessler became a partner in Virden Meter, and runs that shop. By 2015, the current downturn was gripping the oilpatch, but Estevan Meter was in the hunt, and they purchased Acutec of Lampman by October of that year. Regulatory changes Over the years, the implementation of numerous regulatory changes has meant opportunity for Estevan Meter. From the conversion from Imperial measurement to metric in the 1980s, to recent combustion, venting and flaring regulations, the company has been able to help out its clients meet the new rules. When flare pits went away in 1997, they started selling flare stacks, for example. “The biggest thing is we’re offering service to bring our customers into regulator ► Page A22
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Congratulations to Estevan Meter on 50 Years!
A22
PIPELINE NEWS June 2017
50 th AN N
Estevan Meter 50 Year Anniversary
IVERSARY
Regulatory changes improved efficiency ▲
Page A21 compliance,” Martens said, noting that has included recent Directives S-10 and S-20, and the new measurement standard coming into play, PNG-017. He noted their customers didn’t necessarily like the recent combustion regulatory changes, but it actually improved efficiency for them, and resulted in fewer fire tube and flame arrestor issues. “This measurement (change) will be the same thing,” he said. Skuce added, “We’ve had to adapt.” Employees and community “Our employees have been a key component,” Martens said. Numerous staff members have been with Estevan Meter for 10 to 20 years, and a few even longer. Curt Johnson has been with them since 1990, and Darlene Sens has been there since 1991, for instance. “Without good employees, this place wouldn’t be here,” Martens said. These days Estevan Meter has around 50 people, including seven with Virden Meter. While most oilfield services companies Pipeline News has spoken to in the last year had reduced their staff by about half compared to their 2014 peak, Estevan Meter was able to keep that reduction to about 15 per cent, and they’ve now reversed the
trend. Since last fall, they’ve hired seven people and have one co-op student. Fleck said, “I’m proud to employ 50 people.” If you spend any time in Estevan’s Affinity Place arena, you’ll notice a huge proportion of the sound baffles over the ice bear Estevan Meter’s logo. Over they years they’ve supported many rinks throughout the region. Skuce said he
hadn’t realized how much sponsorship the company actually did. With 50 years now behind them, they’re already planning long into the future. There’s a formal internal succession plan in place so the company will carry on for many more years to come. Fleck said, “We’re not going anywhere. We didn’t pack up and leave when things got slow.”
Skuce said, “We’re trying to position ourselves for our customers needs.” “Barring external factors out of our control, we’ve got a plan to operate for many years to come,” Martens added, concluding by saying, “We’ve contributed much back into southeast Saskatchewan and southwest Manitoba. We’re grateful our customers have given us the opportunity to do that.”
Air compressors were added in an effort to diversify. File photo.
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Estevan Meter 50 Year Anniversary
IVERSARY
Estevan Meter Services a specialized plant (from 1985) (Editor’s note: This story is reprinted from the April 9, 1985 edition of Pipeline, the predecessor publication to Pipeline News. The reference to Bill 42 was a 1970s piece of legislation by the thenNDP government that brought the Saskatchewan oilpatch to a near-standstill.)
in 1967 and immediately got involved with the sales and service of fluid and gas meters, the company’s only product. Keith joined the firm in 1976 after a few years of working with Dowell and Reg, the newest member, came aboard in 1984 after a two-year stint with Computalog. Gail explains that the company, which employs between seven and eight people, including owners, concerns itself mainly with wear outs, to gas
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shoot outs that can spit out the rotors which calls for quick repairs that are done right in the shop in Estevan. Gas meters suffer usually from calibration or ruptured bellows, Gail explains. At least these are the more common causes of breakdowns, but in his many years of business, he has seen practically everything that can happen to meters and gauges happen. The company represents Barton Meters Co. in
the southeast. The meters are assembled in Calgary with some of the parts required manufactured in the United States. The company services oil producers from Radville to Rocanville to the Manitoba border. Like most oil related companies, Estevan Meter services has noted a big increase in business since the oilpatch was revived in 1982. They have been able to keep up however, and the turn around time on most re-
pairs is about two days. A loss of a meter does not usually mean a pumping unit has to shut down. A bypass system is implemented and the oil can continue to flow. The company also does repairs on treater valves, viking pumps, gaskets for treaters, as well as the sale and repair of gauges. The company is housed in a grey sheet metal sided building that measures approximately Page A24 ▲
Estevan – Estevan Meter Services, located in Fifth Street in Estevan, offers a specialty service to the southeast
oilpatch. The firm, owned and operated by a trio of shareholders, serves a vital need of recording flow of gas and oil as it runs through the well pumps and into the general stream. The company, formerly owned by “Doc” Stephen, was sold last year to Gail Nelson, his son Keith Nelson and “Doc’s” son, Reg. Gail, the senior member of the firm, joined the company back
Congratulations! Estevan Meter on 50 years in business!
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PIPELINE NEWS June 2017
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Estevan Meter 50 Year Anniversary
IVERSARY
You can get oil up to your armpits Swing for Scholarships G O L F
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◄ Page A23 40 x 80 feet. “We’re busy and we know it,” smiled Gail when asked if the company keeps track of the number of units it “processes” a year. The company is also called on from time to time to perform emergency work for both big and small companies. “The majors, of course, are our big cus-
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tomers, but we certainly need the little fellows in between,” Nelson noted. Prior to joining up with “Doc” and Dick Sprecher, who were the original owners of Estevan Meter Services, Nelson had worked for over 12 years with National Tank in the Estevan area. Sprecher later left the company to operate
a Dairy Queen franchise in Brooks, Alberta, while “Doc” carried on in the business until his retirement last year. When asked to comment a bit on the trials and tribulations of meter servicing, Gail laughs. “There haven’t been too many major problems that can’t be handled through a
Congrats
normal procedure, but when a meter springs a leak while you’re working on it, you can get oil up to your armpits,” but they’re used to that and don’t consider that a major problem, just a bit uncomfortable. The three owners are joined by two floor employees and a secretary to handle the office duties. ► Page A25 Estevan, SK
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Estevan Meter 50 Year Anniversary
IVERSARY
Conversion to metric drove business in the 80s ◄ Page A24 The company keeps a small fleet of three halfton trucks fairly busy responding to field work and delivery. Any machining or welding that is required is contracted out. With the growth of the oil industry in this area, is Estevan Meter Services intending to expand? “The only growth we expect in that area,’’ said Nelson, “is in stock. We’ll be stocking more parts and pieces to handle the greater demand.” “Just like all the others,” he commented, “Bill 42 just about killed us, but we managed to hang on, now we’re really on the go.” Gail explained that not every pump requires a metering device. As many as 10 pumps can be hooked up to one meter. If the meter is recording a straight oil flow through, it can last for up
to 25 years, he adds, but once a well starts pumping salt water through, then the life expectancy can be reduced to more than 10 years. The dry flow meters range in price from $1,400 to $1,500 as a rule, but specialized parts, etc. can make that price fluctuate. Estevan Meter Services, when it started back in 1967, was located in the southeast area of the city in where the Aero Construction yard is now located. They moved to their present location on Fifth Street about 12 or 13 years ago. One of the busiest times the company noted in recent years was the 1980-81 season, when many major companies switch to the metric system under government pressure. This meant a lot of conversion work for Estevan Meter. Oil flow is now measured by many companies
Instrumentation technician Jared Stang gets ready to repair a Barton pressure recorder in the Estevan Meter Services shop. Barton recorders have long been a staple of the business. Photo by Brian Zinchuk
in cubic metres as opposed to the old system of gallons to barrels of oil. One barrel of oil measures 42 U.S. gallons, he explains. A cubic metre amounts to 6.2898 barrels. When the metric laws were rescinded, however, none of the ma-
jor companies switched back to the barrel system of measurement, although Gail admits he is from the “old school” and can more readily “measure” in the barrel system. Metric conversion was “slow going,” he adds. “No one wanted to stock up until they knew for
sure.” But once it was dictated by the Metric Commission, legally or illegally, the move was made. Now it has been determined that both systems are acceptable, Nelson notes that companies find it would be just too costly to revert to the Imperial system
again. So whether you want it in metric or Imperial, and whether you want your repair done in the field or at their shop, Estevan Meter Services is there to service. A vital quiet industry, which as become a partner in a revived southeast oilfield.
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PIPELINE NEWS June 2017
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IVERSARY
The Stephen era at Estevan Meter By Brian Zinchuk Estevan – The Stephen family has been involved with Estevan Meter Services from Day 1. James “Doc” Stephen was one of the founders, and in 1984 he sold out to his son, Reg Stephen. Reg is still an inactive shareholder in the company, having sold out his active interest over several years. This interview is probably Pipeline News’ longest-distance email interview, as both father and son reside in Mexico, where they play a little golf. As for how James Stephen came to be known as “Doc,” Reg said, “We have asked many times, and he has never told us.”
Pipeline News: Doc, you founded Estevan Meter in 1967. What was the oilpatch like in Estevan then, compared later years and today? How did the company start out? “Doc” Stephen: We purchased the company from Ed Moe and Ralph Sinclair in the summer of 1967. I was working for Surplus Oilfield Equipment, my partners were Dick Sprecher of Dominion Supply and Gail Nelson of National Tank Co. P.N.: What products and services did you offer?
Can you explain a bit about how the early years went? “Doc” Stephen: We went a few months without pay cheques and I was thrilled to be able to finally write us our first pay cheques in November of 1967. I was happy that my career choice was starting to work out.
how you survived? “Doc” Stephen: When the NDP passed Bill 42 in the early 1970s I remember local business owners, led by Royce Reichert of Badge Services, moved massive amounts of service rigs and oilfield equipment to the front of the Legislature building in protest of the bill. We were fortunate to survive the downturn and filled our days doing small personal projects at the shop to pass the time.
P.N.: In the mid1970s, the Allan Blakeney NDP government brought in Bill 42. Can you explain how that affected your business, and
P.N.: What were the best parts about running a business in the oilpatch? And the low points? ► Page A27
“Doc” Stephen: We sold and repaired Barton flow meters, pressure gauges and Guiberson tubing anchors.
Reg Stephen, left, and James “Doc” Stephen, can often be found in Mexico, on a golf course. Photo submitted
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Estevan Meter 50 Year Anniversary
IVERSARY
Clients played cribbage in their shop in '86 ► Page A26 “Doc” Stephen: The best business years for us was after the federal government legislated the change to metric. We were kept very busy changing all the flow meters and gauges over to metric. We used to joke that we hoped it didn’t work out and we would get paid to change them all back. As we know, that never happened, but it was a good time to be in the meter business.
friendships that were made with customers and business associates. We were able to contribute to many projects in various communities in southeast Saskatchewan. I was fortunate to have the time to volunteer coaching minor sports and various positions with the Estevan Bruins.
buy him some boots and gloves we will put him to work.” After a couple of years with Roger I moved over to Computalog working in the downhole completion department.
P.N. Reg, did you essentially grow up in the business?
P.N.: Is there anything you’d like to add? “Doc” Stephen: Back in my day we were very proud to be oilmen. I enjoyed the comaradarie of the oilmens association, also the great
Reg Stephen: I started my first job the day after my high school graduation at Schindle and Bazin Construction. Roger Bazin was a family friend and he told my mother, “Pack his lunch,
Reg Stephen: I purchased my father’s interest in March of 1984. I worked with Dad for two weeks for training and to meet his customers. After that time Dad retired and left me to fend for myself. That way, he thought, I would learn to be independent. He said I was welcome to call for
P.N.: You took over Doc’s ownership in the mid-1980s. What is like then?
advice but by no means was he coming back to work. P.N.: Most people I’ve spoken to who have been in the oilpatch for several decades said the 1986 downturn almost sunk them, and it was the worst downturn until the one we’ve seen in the last three years. That came a few years after you became a partner in Estevan Meter. How did you deal with that challenge? Reg Stephen: In 1986 we were suffered a large downturn in the industry. Our best clients spent their days playing cribbage in our shop as there was no work to be done. I was very fortunate to be involved in an established company with very low overhead ► Page A28
Congratulations
To Everyone at Estevan Meter on 50 Years of Service
Jim Harris
Owner/Operator
306-471-7322 73 Devonian St. | Estevan, SK cjoilfieldestevan@hotmail.com
Hwy. 39E • Estevan. SK • 306-634-3561
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PIPELINE NEWS June 2017
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IVERSARY
Bought out partners ◄ Page A27 expenses. I was also fortunate that my debt holder was related to me and flexible with the payment plan. P.N.: The historical piece from 1985 talks about Estevan Meter offering just meters. But now you do so much more than that. When did that occur, and what brought that on? Reg Stephen: After the downturn I felt there was a need to try to expand our services and customer base. That led to buying out my partners and building a new facility in the early 1990s.We needed to try and keep up with changing technologies and customer demands.
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P.N.: Over the years, the southeast Saskatchewan oilpatch used to have a lot of major oil companies, but that
eventually transitioned to mostly junior players until recently. How did that impact your business, if at all? Reg Stephen: The major producers in our area were the driving force behind workplace safety, work procedures and the bidding for services process. They were committed to helping the small independent service suppliers transform into compliance. I watched owners like Ron Carson grow exponentially because he was a leader in compliance with the major producers. The companies that fought the compliance usually failed. P.N.: What stands out for you during your time with the company where you were actively involved? Reg Stephen: I think ► Page A29
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PIPELINE NEWS June 2017
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Estevan Meter 50 Year Anniversary
IVERSARY
Virden Meter established a Manitoba presence Mark Kessler, president of Virden Meter, said, “It was very apparent we needed to be bricks and mortar in Virden. “We’ve been wellaccepted. They treated us very well.” Kessler had worked with Estevan Meter a few months before taking the plunge and becoming a partner, running the Manitoba location. “The whole
Page A28 what stands out in my mind the most is the transformation of our business. When I started we were three owners with one employee in a dingy rental shop. That progressed into sole ownership and a few employees in a new building with improved services
and then progressed to where we are today.
intent was to open the store in Virden,” he said on May 18. The company was incorporated under the Virden Meter name in May 2013, having originally operated under the Estevan Meter banner. They carry the same product lines, including items like treater packages and instrumentation. ▲
By Brian Zinchuk Virden, Man. – Virden Meter Services LP., a sister company of Estevan Meter Service Ltd., allowed the parent company to establish a presence in the southwest Manitoba oilpatch. It didn’t take long to outgrow its original home. Originally established in November 2012, by May 2014 they needed a new home.
Page A30
Mark Kessler is the partner who looks after Virden Meter Service LP. File photo
▲
Transformation of the business stands out I believe that being independently owned is a great driving force for the company. We pride ourselves in being part of southeast Saskatchewan and now also a part of southwest Manitoba with our Virden location.
P.N.: Eventually Estevan Meter’s ownership changed again, yet the company has stayed independent. Has that independence always been important?
P.N.: Is there anything you’d like to add?
Reg Stephen:
Reg Stephen: We are happy to be able to give back to our local communities we serve. We are proud to contribute to children’s
programs, town facilities and many other community projects. I would like to thank our ownership group, management and staff for their dedi-
cation. Our management and staff are a direct reflection of us and we are proud of their commitment to customer satisfaction.
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IVERSARY
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Turnaround season a busy time in summer ◄ Page A29 Including Kessler, they have seven people working in Virden. Three are field technicians, two are shop techs and one person workers in the warehouse. They also have a co-op student. “We do tank gauging now, with Estevan Meter’s purchase of Acutec and the Titan Logistics
tank gauging line,” Kessler said. During the downturn Virden Meter went through the same exercise most oilfield services have. Their staff went from six to four and is now up to seven. Kessler said, “The oilpatch has picked up a bit in Virden, but it’s not 2014 levels. The
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people who really weren’t invested in Virden are gone.” Turnaround season is a busy time for Virden Meter, as they provide packages of gaskets and basically everything you would need, right down to rags, to do a turnaround. One wall in the warehouse is lined with a variety of pressure vessel gaskets, for instance. When a treater package is sent out, it has everything they think might be needed so that crews
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aren’t held up by a missing item. Then when the project is done, whatever isn’t needed is brought back. The company keeps track of what’s needed with each vessel in the region, so that when it’s time to revisit a treater, for example, they can easily put together a package for the workers. “It looks like turnarounds will go from May into September,” Kessler said. “We’ll be fairly busy, I think.”
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PIPELINE NEWS June 2017
A31
The economics of equipment in a downturn ▲
Page A18 up. Our general maintenance has been fairly steady.” They’re following a number of service rigs in that regard. Compared to peak levels, Jerry Mainil’s staff level went from around 120 to around 90. They’ve started hiring again. How many? “Not enough,” he laughed. “We can’t find people. That’s the problem we’re having. “Skilled individuals have left the industry. “You would think, with the downturn, there would be an abundance of highly skilled people, looking for work,” he said. “We’re looking for three or four labourers right now, half a dozen operators. I’d take one truck driver.” Mainil said, the work sharing program helped bridge them to this point. “We’ve been on it for two years,” he said. They are on their last extension, which runs out in August. It helps out for rain
PST changes mean that clearing snow on a lease does not have PST charged, but doing the same thing with mud means PST applies, according to Dennis Mainil of Jerry Mainil Ltd. He would prefer if the province had simply mirrored the GST in its application. File photo
days and rain weeks, he noted. They met their required hours, and it kept revenue coming in for workers. “I think a lot of the industry has seen that good people have found other employment,” he said. “The house is paid for, I got a steady job, who cares? I’m not going to chase the hills and valleys. “The guys got burnt. If your rig fires up, and the toolpush says, ‘I’ve got two holes. I need you
back.’ “Are you going to leave a full-time, paying job, and guaranteed hours, to go for a two-hole operation, or are you going to say, ‘Go drill your two holes, I’m going to sit this one out,’” Mainil explained. Abandonments Jerry Mainil Ltd. did about 80 abandonments for one of their main customers last year, and that created a lot of employment, he noted. “That ties in not only
cut-and-capping the well, but the ground gas migration, and the reclamation work, putting the site back together after.” “They look for efficiencies. We used to do one a day. Now we do two to three a day, reinventing the wheel. “Traditionally you would have four people doing the job. We did employ people and did more of an assembly line, instead of one guy starts, one guy finished. So we had one guy dig-
ging them all up, and another crew coming along. You need a backhoe to lift all the stuff out of the hole.” The company found more efficient ways to use their staff. Once completed, there would typically be roughly two metres of cover. Economics of equipment Oilfield services companies have been working with lean margins for several years
now, and that has had an impact on capital purchases like equipment. “You can’t just go buy extra Cats, just in case,” Mainil said. “The exchange rate is hurting us bad. We’re still purchasing, but not new.” The exchange rate has helped oil companies, but hurting service companies. That’s because heavy equipment is greatly dependent on the Canada-U.S. currency exchange rate. ► Page A33
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A32
PIPELINE NEWS June 2017
Bluewave bought Girard Bulk's propane division a year ago ▲
Page A14 the company’s first entry into the refining business. Bresnahan explained that they are an independent fuel marketer, buying fuel from various refiners, and not being tied to any one in particular. Their retail division includes Fas Gas, Race Trac, Chevron (in British Columbia) and Pioneer (in Ontario) fuel stations. Upon closing, Parkland will acquire the majority of the Canadian assets of the CST Brands Inc. Esso is another one of their branded distributors under which Parkland sells fuel across Canada. Additionally, on March 8, 2016, Parkland entered into an agreement with Imperial Oil
to acquire Imperial Oil’s On the Run/Marché Express convenience store franchise system. Bluewave has 111 locations, including one approximately 13 kilometers east of Weyburn on Highway 13. The location has bulk fuel, cardlock and propane services. On May 25, 2016, Bluewave purchased Girard Bulk’s propane division. When it comes to supporting the oil and gas business, Bresnahan listed frackers, drillers and propane to power skid engines for pumpjacks as some of their clientele. Propane is also used to supplement flaring of gas that might be too lean, otherwise.
Chad Bresnahan, right, and Mike Hannan of Bluewave Energy pose before a cardlock fuel pump at the company’s Weyburn location. Photo by Brian Zinchuk
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▲
A new dozer costs a lot more today Page A31
For instance, a Caterpillar D8 dozer used to go for C$750,000, but now that same dozer costs C$1.1 million new. In the meantime, the amount oil companies are willing to pay out for equipment has dropped substantially, so service companies can’t charge as much as they used to. The net result is new heavy equipment simply isn’t being purchased. “The economics just aren’t there,” Mainil said. “We’ve been very frugal, using older equipment now. Our fleet is not current anymore. We’re rebuilding it. We’ve had three to four Cats torn apart all spring.” It means more mechanic time and parts are
needed to keep up. When it comes to light vehicles, they bought several just before the downturn really hit. “We just rigged up a brand new, 2015 crew truck. We bought it two years ago, and parked it in the shed. I have two more brand-new three-quarter tons sitting in the same shed. We got five trucks. In the time of 2014, the economy rolling as hard it was, you had to be ahead of the curve. So if you needed trucks, you had to order them in August so you would rig them up in the winter and have them ready to roll. “We had ordered five new trucks, six, including a semi. The semi, we completed that and put it on the road. But the two three-quarter tons and
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two one-tons, I just took them and parked them at my place. They’re going to be off warrantee in six months, and have never been used. “We’ve got a large surplus of trucks, so no sense running the new ones. You might as well mile it out. We’re running them longer, too – there again – economics. In the past, 160,000 to 180,000 kilometres. Now we’re over 250,000 kilometres, 270,000 kilometres.”
He noted that 300,000 kilometres can just be a number on the dash. For the summer of 2017, they’re gearing up, hiring staff and rebuilding equipment. They’re still shopping for some new equipment as well. PST impact But there’s impact from the 2017 provincial budget that hasn’t got a lot of play – the provincial sales tax (PST) is now charged on many oilfield
activities. “Every lease, road, maintenance crew we send out – we now have to charge PST,” Mainil said, adding that it impacts oil companies’ spending. “I was disappointed with the budget. It should have been simpler, the way they put the PST in. It should have been identical to the GST. “In our business, we went from not charging PST, (charging it) 10, 15 per cent of the time, to
A33
now we’re charging it 90 per cent of the time,” he explained. Oil companies’ budgets will stay the same, but they’re effectively reduced by six per cent, because of the PST. “It’s huge,” Mainil said. Even figuring out what PST is charged on has been a headache. Snow removal on a lease? No PST, but dealing with mud on the same lease? Charge PST, he explained.
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A34
PIPELINE NEWS June 2017
Refracs can bring new life to a well By Brian Zinchuk Regina – Some companies have been breathing new life into old wells, and seeing good results, by refracking horizontal wells. That’s was the thrust of Michael Nelson’s presentation to the Williston Basin Petroleum Conference in Regina on May 4. Nelson works with the Saskatchewan Geological Survey and has a masters degree in chemical and petroleum engineering and specializes in reservoir charac• 30 & 45 ton pickers • Winch + Texas Bed Truck • 24 Hour Hot Shot Services • Short & Long Hauls • Matting Rental • Catwalk Rental • General Delivery • 20kw & 6kw Light Plant Rentals
terization. He looked at two areas of Saskatchewan, the Bakken and Viking, using data mining to come up with his results. “Is this something we can do to promote the ultimate recovery of the province’s resources. “A refrac is a well that was hydraulically fractured, produced for some time, and then fractured again, whether it is a different interval within the same well, or whether they attempt to refrac the same interval that they had previously
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fracked, or a combination of the two,” he said. These were usually attempted after the initial production declined to an economic limit where the well was no longer profitable. He said IHS estimates up to 11 per cent of horizontal wells will be refracked eventually. “The nice part about refracs is the capital costs are considerably less than a new drill. Estimates are between 20 and 35 per cent, in my preliminary research,” Nelson said. “The ultimate goal of
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a refrac is to reinstate the initial well rate. I’ve seen, in my study, that some refracs even met, or exceeded the initial rate of the well. They basically brought that well back to life.” The study looked at 45 wells in the Bakken and 11 in the Viking. By looking at those numbers, he said, “I’m betting you can guess which one worked better.” A total of 126 wells were initially considered, but many were filtered out for various reasons, such as acid jobs.
Bakken There were a whole pile of refracs in 2009, wells that had been initially fracked in 2006, he noted, due to an acquisition in the area. The refrac restored the rate of one sample well at 1-2-8-9-W2 to the initial rate of that well. It resulted in an incremental 14,000 cubic meters of additional oil due to the refract and
waterflood. Another well at 4-7-8-8-W2 had initial production of 22 cubic metres per day. The refrac brought it back to 20 cubic metres per day. It saw an additional 10,000 cubic meters of oil as of February, 2017. The average Bakken refrac restored the oil rate to 79 per cent of the initial oil rate, with a ► Page A35
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Michael Nelson, with the Saskatchewan Ministry of Economy, spoke about refracs in the Bakken and Viking formations. Photo by Brian Zinchuk
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A35
Viking refracs aren't as productive as Bakken ▲
Page A34 median value of 80 per cent of the initial oil rate. The majority of the wells produced 50 to 100 per cent of the initial rate of production, and a few were as high as 200 to 300 per cent. Most of the wells were refracked after production dropped below four cubic meters per day. Refracs restored the rate to 15 to 27 cubic metres per day. It’s not all roses, however. In one case, the refrac completely killed the well. Nelson was not sure why.
Viking In the Viking, initial completions were from 2010 to 2016. There were improvements, but not as substantial as in the Bakken. Some were very marginal. In the Viking, the average refrac restored the oil rate to 35 per cent of the initial rate with a median value of 26 per cent of the initial oil rate. In conclusion, Nelson said the success of refracs is formation dependent. They require less capital to drill. Wells with higher initial rates, or sub-optimal initial
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ewan, of which 723 were horizontal. That’s over double the pace of the previous year for the same time period. She noted that the Petroleum Services Association of Canada recently revised its forecast to 2,670 wells for this year. Almost 90 per cent of wells drilled in Saskatchewan are horizontal now. The average length in 2016 was about 2,100 metres, a slight increase from the year before. In 2016, there were a total of 52,786 active oil and gas wells, 31,022 ► Page A36
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The Bakken is in decline, the Torquay is on the rise in Sask. By Brian Zinchuk Regina – “2016 was a pretty lean year,” said Melinda Yurkowski, Saskatchewan’s assistant chief geologist with the Ministry of Environment, when she provided the Saskatchewan update to the Williston Basin Petroleum Conference on May 3. There were 1,650 wells drilled in Saskatchewan, slightly less than the 1838 in 2015. “The very good news is we’ve seen an increase in drilling in 2017,” she said. By March 31, there were 856 wells drilled in Saskatch-
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A36
PIPELINE NEWS June 2017
Viking accounts for nearly half of new wells ▲
Page A35 inactive wells, and 425 abandoned wells. In 2015, there were 55,247 active wells, 27,614 wells and 958 abandoned wells. Oil production is down from a peak in 2014. Production in 2016 was about 460,000 bpd, compared to 486,000 bpd in 2015. Light oil
was about 38 per cent of production, medium oil was about 21 per cent, and heavy oil was about 41 per cent. In 2013, associated gas surpassed non-associated gas production. Non-associated natural gas production has continued to decline from a peak of approximately
270 billion cubic feet in 2006 to about 67 billion cubic feet in 2016. However, associated gas production has increased. Associated gas production was 123 billion cubic feet in 2016. The Viking formation is, again, the major focus of drilling in the province,” Yurkowski
said. Prior to the horizontal drilling rush, it was producing about 8,000 bpd from about 8,000 vertical wells. Since 2007, there’s been over 5,200 horizontal wells drilled in the Viking. Now, in 2016, it pro-
duced 53,112 bpd. The Viking accounted for nearly half of all wells drilled in Saskatchewan. They are fairly shallow wells, around 1,000 metres deep, and a high API for their oil. In southeast Sas-
katchewan, 529 wells were drilled last year. The Bakken, Torquay and Mississippian formations are the targets. Roughly 30 per cent of production in southeast Saskatchewan came from ► Page A40
Saskatchewan Torquay and Bakken-Torquay Oil Production and Producing Well Count 4.5
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Oil Production (million barrels)
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400
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350
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300
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4.0
100
0.5
50
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0
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Melinda Yurkowski is Saskatchewan’s assistant chief geologist. Photo by Brian Zinchuk
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A37
North Dakota drilling rigs now twice as efficient compared to 6-7 years ago Regina – North Dakota is on an uptick, according to Tim Nesheim, who spoke on behalf of the North Dakota Department of Mineral Resources. Nesheim gave the state’s update to the Williston Basin Petroleum Conference on May 3 in Regina. There are now about 50 drilling rigs working in the state. That’s almost double the 27 that were working a year ago. A few years ago, that number was around 190 active drilling rigs. “Over the past year our rig count has been steadily climbing as prices partially rebound,” he said. Of those, all but one are drilling in the core Bakken area. If oil prices stay where they are at, the state expects the rig count to climb. Rig efficiency has increased. About six or seven years ago, it would take about 40 days to drill a horizontal Bak-
ken or Three Forks well. Nesheim said, “Now that same rig is going to be able to drill that well in less than 20 days. So with 50 drilling rigs, we’re going to be able to drill about 80 new horizontal Bakken/Three Forks wells a month, whereas if we had 50 drilling rigs with the efficiency of six years ago, that would only be 30 wells a month. “To get back to increase our production in North Dakota, we’re not going to need as many rigs. Part of that is due to increases in technology and efficiency. Part of that is from shifting from doing one well to on a spacing unit hold a lease, to doing multi-well pad drilling, where that one rig sits on a pad and drills up to a dozen wells, or more.” With regards to oil production, the state peaked in 2014-2015 at around 1.2 North Dakota rig efficiency has improved greatly. million barrels per day. Oil production ► Page A41
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A38
PIPELINE NEWS June 2017
A unique opportunity for Minister of Energy and Resources Dustin Duncan By Brian Zinchuk Regina – To have a Minister of Energy and Resources from an oil town is one thing, to have him be minister while his home riding hosts the Saskatchewan Oil and Gas Show is another. Dustin Duncan is Saskatchewan’s Energy and Resources Minister in addition to his duties as MLA for WeyburnBig Muddy. He shifted from his previous portfolio as Minister of Health to his current duties last August. Duncan grew up in Halbrite, just down the road from Weyburn, in an oilpatch family several generations deep. Pipeline News met with him on May 3 in his Legislature office. Earlier that day he welcomed delegates to the 25th annual Williston Basin Petroleum Conference, and was the keynote speaker at lunch. So what’s it like be-
ing the local boy whose also the energy minister? Since Duncan was first elected, if there was any portfolio he could work in as a minister, this was the one he had his eye on. “For me, Energy and Resources was the one I hoped that I could look back on my career as something I was able to do. “It was something I thought about and wanted to do,” he said. “It’s pretty neat, being the energy minister from a community in a part of the province where oil is so important in terms of the local economy. I certainly have people, from time-to-time, that know a lot about the industry, give me some advice. But people have also been pretty respectful about it. I probably don’t get as many calls as I thought I was going to, from people working in the industry, wanting to point things out to me. But they’re
there, if I need to pick up the phone and say, ‘I don’t know a lot about this. Can you help me out?’ “It’s been a good experience, so far,” Duncan said. Asked how Weyburn has been dealing with the downturn in oil, he said, “Weyburn is not unlike a lot of communities. One, it has been through this before, on a number of occasions. I think people, overall, are pretty resilient. I would say Weyburn had a pretty big run-up, over the last number of years, in terms of new people moving to town, new jobs sprouting out, new businesses. Having the most significant pullback in my lifetime, or at least since the early part of my lifetime, has meant some challenging times over the last couple of years. “Certainly, you can see it in day care classes, where a bunch of kids
Dustin Duncan
who started the school a year ago aren’t there anymore. It has an effect on families and the community at large. I would say that Weyburn, maybe more than other communities, maybe more than
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Estevan, is a little more diversified in terms of the local economy. So, I think it’s been able to weather it better than others. But, no doubt, it’s been a challenge,” Duncan said. “We’ve seen some
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As a kid, he collected stickers at the oil show ▲
Page A38 things to keep as many people as they can employed.” As an MLA, Duncan has seen things pick up around Weyburn, and more optimism in talking to people. “Companies are back, looking for employees. Some of the trucking companies are looking for drivers, lease trucks, owner-operators-type of operations. We’re starting to see it.” With the oil show coming up, Duncan said, “I’ve been running around the oil show since I was a little kid. I have a lot of fond memories of it. My
brother and I would run around and collect either business cards or stickers from companies. That was our thing. “My dad works for a trucking company, so it was always a big deal to see which new piece of equipment was on display at the oil show. There was a time or two when it was the truck that he drove, so that was a pretty big kick, as a kid. “One of the things, for me, personally, is so gratifying about being in this position now is to be Energy and Resources Minister in the year Weyburn hosts the oil show.
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That’s the icing on the cake for me. “I’m looking forward to it, seeing a lot of family and friends that work in the industry. To attend, as the minister, is pretty neat for me.” Duncan is expected to speak on June 7. The Keystone XL project has now been approved by the Donald Trump administration, although it still has to get permits in Nebraska, a ruling of which is expect-
ed later this year. Asked his thoughts on that, Duncan said, “It directly affects the province in that the longer we have the glut in moving oil to market, whether that’s going south, or west or east. In Western Canada, we’re getting to the point where we’re basically tapped out in terms of pipeline capacity. That causes a differential. “We have figured out that, at the highest point, that differential costs the
Saskatchewan treasury $300 million.” It’s important in getting Canadian oil to tidewater, he noted. That was a major point in his keynote speech earlier in the day. There’s been talk of an American border adjustment tax on energy, but few details. If this includes oil, Duncan said it would strengthen the argument of why we need pipelines to tidewater, east or west. But it remains to be seen
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what the Trump administration is targeting, he noted. Duncan noted that the Petroleum Service Alliance of Canada has substantially increased its drilling forecast for Saskatchewan. “We’re going to keep engaging with companies and tell Saskatchewan stories. If it looks like 2017 is going to be a better year for capital investment, like it does, we want to attract as much of that as possible,” he said.
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A39
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A40
PIPELINE NEWS June 2017
Weyburn is a younger city than you might think average age in the nation for communities of that size, and the second lowest proportion of senior citizens. While this does something to shake off the idea of Weyburn being a retirement community, she added that Good Times Magazine has a focus on Weyburn on that very topic. Workforce demographics are significant as the oilpatch slowly comes back to life, nearly three years after oil prices began their decline in mid-2014. While oil and gas is nine per cent of Weyburn’s business, agricul-
ture accounts for 24 per cent. Asked how the downturn has affected Weyburn, she said, “We’ve seen businesses close their doors. Some downsized.” Long established businesses in some cases had the flexibility to downsize and wait for the rebound, and are now hiring again. However, she noted that they aren’t able to pay as much as in the boom times, and that makes it more difficult to find people. “We see a lot of service companies struggling to find workers,”
Walkeden said. In some cases, the oilfield services companies can’t offer high enough wages to entice people to leave lowerpaying, but more stable jobs. Many have become risk-averse, she noted. To see that change, Walkeden thinks that there needs to be stability in the oil price, and that oil companies will need to be more active and aggressive. They’re also going to have to allow service companies to raise their rates. Even the recent drop for oil prices from just under US$55 per
barrel WTI to just over US$45 has meant some companies have pulled back a bit, she noted. During the boom, a call like this often resulted in three new companies for Pipeline News to do stories on, but that hasn’t been the case for a while. However, Walkeden noted there is one oilfield business looking at Weyburn. She can’t provide details, but it is promising. There are number of other initiatives on the back burner for Weyburn, but she noted they need a development
Page A36 the Bakken in 2016. The Bakken produced 45,464 barrels of oil per day, down from about 54,000 bpd in 2015. The high was in 2012, when Bakken production peaked around 65,000 bpd.
The Torquay has two major plays, the Ryerson along the Manitoba border and the Torquay Main and Roche Percee area along the U.S. border. There are about 400 Torquay wells. Nearly all develop-
Twila Walkeden. Photo submitted
like a large retailer or manufacturer to get the ball rolling. However, Weyburn has positioned itself for growth, with land available and a new water treatment plant.
Saskatchewan Bakken EQUIPMENT - RV - VEHICLE AUCTION peaked at 65,000 bpd AUCTION SATURDAY, JUNE 24 @ 9:00 AM ▲
Weyburn – For many years, Weyburn had something of a reputation as being a community to retire in. However, the city’s executive director of economic development, Twila Walkeden, noted that two recent figures have come out in the 2016 census that might change that perception. She pointed out that the 25 to 34 age group is the greatest proportion of all groups in Weyburn, not baby boomers. That’s significant for the oil industry, as it shows there are available workers. It also has the second lowest
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ment is along the U.S. border. About 57 wells were drilled in this area in 2016. Torquay production was 10,238 bpd in 2016. Land sales brought in $53.5 million in 2016, down from $56.48 million in 2015.
CONSTRUCTION EQUIPMENT 1999 CHAMPION MOTOR GRADER, 12,200 Hours, Front Dozer, Rear Ripper Teeth, Recent Work Orders; 2005 NEW HOLLAND LS185.B SKID STEER, Two Speed, 2,210 Hours, Quick Attach Bucket; 2003 ELGIN ROAD WIZARD STREET SWEEPER, 6616 Hours TRUCKS &VANS 2015 GMC SIERRA DENALI 2500 HD 4WD CREW CAB TRUCK; Diesel, Automatic, 38,600 Kms; 2012 GMC SIERRA 3500 REGULAR CAB 4WD TRUCK; Gas, Automatic, Dually, Service Deck & Amco-Veba 805-3S Picker, 99,965 Kms; 2011 GMC SIERRA 3500 REGULAR CAB 4WD TRUCK; Diesel, Automatic, Dually, Service Deck & Amco-Veba 805-3S Picker, 100,976 Kms; 2011 FORD F550 REGULAR CAB 4WD TRUCK; Diesel, Automatic, Dually, Service Deck & Amco-Veba 805-3S Picker, 132,175 Kms; 2009 FORD F-550 REGULAR CAB 4WD TRUCK; Diesel, Automatic, Dually, Service Deck & Gin Poles, 320,000 Kms; 2009 GMC SIERRA 1500 EXTENDED CAB 4WD TRUCK; Gas, Automatic, 75,600 Kms; 2008 FORD F-350 REGULAR CAB 4WD TRUCK; Diesel, Automatic, Service Deck & Danco 805-3S Picker, 307,125 Kms; 2007 DODGE 4WD 3500 DUALLY DIESEL LONG BOX; 6.7 Cummins, Automatic, 197,429 KM; 2006 GMC SIERRA 3500 REGULAR CAB 4WD TRUCK; Diesel, Automatic, Service Deck & Gin Poles, 3166,690 Km; 2006 GMC 3500 REGULAR CAB 4WD TRUCK; Diesel, Automatic, Service Deck & Gin Poles; 2006 FORD 150 SUPER CAB PICKUP TRUCK, Automatic, 164,743 KM, Silver; 2005 CHEV EXPRESS 2500 CARGO HUGE EQUIPMENT, VAN, White; 2001 GMC SIERRA 4WD 1500 EXTENDED CAB PICKUP, 350 Engine, AutoRV, matic; 1998 DODGE 2500 DIESEL 4WD 12 VALVE CLUB CABVEHICLE TRUCK; 5 Speed Manual, Long Box; 1989 GRAND CARAVAN MINI VAN; 1993 FORD RANGER 2WD PICKUP, 66,326 KM; 1998 INTERNATIONAL 4900 DT 466E DIESEL SERVICE TRUCK WITH ATLAS PICKER
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ESTEVAN MOTOR SPEEDWAY HEAVY TRUCKS 2008 PETERBILT PB340 TANDEM GRAVEL TRUCK, Diesel, 6 Speed Auto-
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matic; 1988 GMC 3 TON OIL TRUCK, 5&2 TRANSMISSION,133,953 KM, OIL TANK, SPRAY BAR, SPRAY WAND, REAR ENGINE; 1979 FORD F700 TANDEM GRAIN TRUCK, Tag Axle, SATURDAY JUNE 5&2 Transmission, 429 Engine, Inland Roll Tarp, 66,242 KM 20, 2015
9:00 A.M. — ESTEVAN, SK
TRAILERS 2013 PJ TANDEM AXLE GOOSENECK FLATDECK TRAILER; Dual Tires, 30 Feet, DIRECTIONS: EAST OF ESTEVAN ON SHAND ACCESS ROAD
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Macdon 16’ 5020 mower conditioner
sprayer, new Pool 3HP aeration fan,
a very large annual2012 Equipment-RVwith very few cuttingZERO acres, Vermeer 2200 bushel Weststeel hopper 267 bottom ACREAGE EQUIPMENT DIXIE CHOPPER 3674 TURN MOWER, 74” Deck,
Vehicle Auction Saturday JuneDIXIE 20, 2015CHOPPER 605L Series round balerZERO with baleTURNbin, 2- 1850 bushel Westeel hopper Hours, CAT Diesel Engine; 2012 2760 MOWER, 60” Deck, Estevan Motor Speedway, Estevan, kicker and Vemeer updates, Degelman bin, 2200 bushel Westeel Rosco hopper Gas Engine, Sask SN.9:00 1098710; F2560 FRONT MOUNT MOWER, Hours am. Consign2003 Today!!KUBOTA A 14’ rock rake PTO drive, Degelman PTO bottom, Westeel 1294 1600 bushel hopper , 60” Deck, 81897 Hours; 1970 MASSEY 2135 complete farm equipment dispersal rockFERGUSON picker, IH 5500 DT 28’ chisel2WD plow TRACTOR, bottom bin, 40 tonConstruchopper bottom for long time rancher Harley2185 Jahn! Up cultivator, MF 850 SP combine, MF 90 2012 fertilizer bin, Sakundiak HD 7-1400 tion, 3PTH; CUB CADET HDS LAWN TRACTOR; 72 Hours; DIXIE CHOPPER for auction TW25 Ford FWA tractor with FEL and grapple fork, Spra Coupe grain auger with Onan 18 HP, Check on 3674 ZERO TURN MOWER, 74” Deck, 267 Hours, CAT Diesel Engine; 2012 DIXIE CHOPPER with dual PTO and 3PTH, DX 90 2WD for parts, 1997 Eagle Industries 24’ this ad each week for new additions to 2760 ZERO TURN MOWER, Engine, 2003 F2560 tractor with FEL and 572060” hours,Deck, 2002 Gas gooseneck flat deck SN. trailer,1098710; 3 PTH yard this large KUBOTA sale!! FRONT MOUNT MOWER, 1294 Hours , 60” Deck, 81897 Hours; 1970 MASSEY FERGUVisit www.mackauctioncompany.com for sale bill and photos. Join us on Facebook and Twitter. SON 2135 2WD TRACTOR, Construction, 3PTH; CUB CADET HDS 2185 LAWN TRACTOR; 72 Hours; BILLY GOAT LAWN VACUUM, POWER LAWN RAKE, YARD MAN MOWER BRANCH SHREDDER COMBO, RYAN LAWN AERATOR
MISC EQUIPMENT2 – ARROW C66 GAS ENGINES; 40 HP; KONGSKILDE GRAIN VAC;
BUHLER FARM KING 480 MOBILE SEED CLEANER; Auger with 3HP Electric Motor, 16 Additional Screens; NEW HOLLAND 971 24’ STRAIGHT CUT HEADER; Batt Reels; SUCKUP PROPANE GRAIN AERATION DRYER; LARGE ASSORTMENT OF OILFIELD TOOLS; 2-1900 BUSHEL WESTEEL HOPPER BOTTOM GRAIN BINS 831, Box 831, Estevan, SKBox S4A 2A7Estevan, SK S4A 2A7 Ph: (306) 634-9512, Ph: (306) 634-9512, (306) 421-2928, (306) 487-7815 421-2928, (306) 487-7815 Licensed, Bonded(306) & Insured P.L. 311962 Licensed, Bonded & Insured P.L. 311962 www.mackauctioncompany.com
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Keep Your Business Strategy in Fighting Form As a player in Canada’s volatile oilpatch you’re as tough as they get. Agile, hard-working, able to move forward in prosperity or adversity. To stay on top of this highly competitive industry, you need to focus on what you can control and have a strong team behind you. MNP’s Oilfield Services team delivers the financial management, analysis and business advisory tools you need to keep your margins up. We offer hands-on oilfield management and operational expertise in every producing region in Western Canada to help you stay sustainable - no matter where the markets go. Contact your local MNP Oilfield Services consultant or visit www.mnp.ca WEYBURN Melissa Swayze, CPA, CA T: 306.842.8915 E: melissa.swayze@mnp.ca
ESTEVAN David Hammermeister, CPA, CA T: 306.637.2310 E: david.hammermeister@mnp.ca
SWIFT CURRENT Jeremy Rondeau, CPA, CA T: 306.770.3679 E: jeremy.rondeau@mnp.ca
ESTEVAN DARYL DONOVAN, CPA, CA T: 306.637.2325 E: daryl.donovan@mnp.ca
MNP.ca
PIPELINE NEWS June 2017
A41
Red River formation might have billions of barrels ▲
Page A37 has stabilized in recent months around one million barrels of oil per day. That being said, the numbers are on something of a roller coaster ride, fluctuating tens of thousands of barrels per day month to month. The state expects production to remain around one million barrels per day. Looking ahead, the state expects steady to declining production until 2018. The rig count and frac crews are expected to climb or remain steady. There are now over 13,500 producing oil wells in North Dakota, mostly Bakken/Three Forks wells. The state’s drilled and uncompleted wells has dropped from over 1,100 wells to under 800. “That’s due to the higher prices and getting prices up over US$50 per barrel for WTI,” he said. Statewide, they are now capturing about 89 per cent of natural gas produced. There are job fairs being held in western
North Dakota. “There’s work in North Dakota again,” he said, adding there’s housing available now. For every barrel of oil, 1.5 barrels of water is produced. Recently produced maps show good places to drill disposal wells. They are using the Inyan Kara sandstone for disposal wells. That formation is shallower than the Bakken, but deeper than potable water aquifers. Some disposal wells can take as much as 5,000
barrels of water per day. Their geologists are also looking at the Red River formation, which comes in after the Bakken and Three Forks (what Saskatchewan calls the Torquay) formations as the thirdhighest producing unit. This formation, which is a self-sourced petroleum system, may have generated as much as 60 billion barrels of oil equivalent in western North Dakota alone. The state has recently spent US$16
million on an update to its core lab facilities. Their core storage space
has now tripled in size. There are now three separate core labs, in-
stead of one. The expansion and renovation was completed in 2016.
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We are committed to becoming the most dependable, efficient & well respected company in SE Sask & SW Manitoba. Over 35 Years Experience Locally Owned & Operated Exceptional Customer Service Top Quality Equipment We know how busy things get when your business is growing. Get advice that fits your schedule – any time, at our place or yours.
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A42
PIPELINE NEWS June 2017
Nalco Champion hosts technical innovation day in Estevan Estevan – Nalco Champion has been on a substantial push in southeast Saskatchewan, updating labs in Estevan and Carlyle, and, most recently, holding a technical innovation day in Estevan on May 10. The first topic came on the heels of a technical presentation to the Williston Basin Petroleum Conference on May 3 on the same subject: scale management and scale squeezing. The next presentation focused on PAA facility treatments and
downhole cleanouts. H2S removal technology was next up on the agenda, followed by computational modelling. Sara Schneidmiller, who holds a PhD in chemistry, focused on scale in her presentation. She opened by noted that scale is essentially the same material we find in our showerhead and coffee pot, the result of hard water. She pointed out that scale, the precipitation of minerals from aqueous solutions, is
governed by thermodynamic, hydrodynamic or kinetic processes. The four most common types of scale are CaCO3, FeCO3, BaSO4 and FeS. The last one, iron, can be particularly challenging, as it is highly insoluable. There is also an issue know as “iron poisoning.” It can often involve the necessity of using much more chemical if the right iron products are not chosen initially. Schneidmiller spoke of using a scale squeeze ► Page A43
Nalco Champion’s Sara Schneidmiller, standing, spoke of using a squeeze process for scale inhibitor in Bakken wells. Photo by Brian Zinchuk
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PIPELINE NEWS June 2017
Scale squeezing ▲
Page A42 technique to force chemical into a well and have it remain in the rock surrounding the well, slowly releasing the required chemistry over time as brine passes over it. The process involves a pre-flush, the main treatment, and an overflush. It is then followed by shutting in the well for 12 to 24 hours, allowing the chemical time to absorb into the rock. Monitoring follows. She spoke of different modelling tools Nalco Champion has to analyze these squeezes, including one that can model different pay zones. The example Schneidmiller spoke of focused on a North Dakota Bakken well that was highly fractured
and had a temperature in excess of 120 C. They tested five scale inhibitors. Proper monitoring is important to determine the success of the squeeze. “In this case, the squeeze lifetime exceeded the expectation of the model,” Schneidmiller said. It also resulted in clean sand screens, pump operation, tubing and rods. Roughly 35 people attended the morning session, and Mike LaCoste, Nalco Champion senior district account manager, expected different people to attend throughout the day as their interest may lie in different topics covered. “The technical day is to bring our newest innovations to the
industry. Our research and development labs are continually improving and bringing new products to the industry. This is also an opportunity for our employees to get an education as well. It’s as much an education for us, for our new products, as our customers,” LaCoste said. The customers present were primarily oil company staff who focus on production, like production foremen, production engineers, reservoir engineers, geologists and facilities people. “If this is received well, we’ll probably do one spring and fall,” LaCoste concluded.
Dustin Pratt Memorial Redneck Golf Tournament
Estevan – The family of Dustin Pratt is organizing the Dustin Pratt Memorial Redneck Golf Tournament, to be held at Estevan’s TS&M Woodlawn Golf Club on Saturday, Aug. 26. After golf, there will be festivities at Rotary Park, and it will be a BYOB event.
Tee time is noon. Registration is $500 per team. All funds raised for the Dustin Pratt Memorial Fund will go towards children and youth sport development and local families in need. Registration is only through email, which is dpoilfield@outlook.com.
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RS A44
PIPELINE NEWS June 2017
Raging River Exploration grows production by 38 per cent Calgary – Raging River Exploration has been on a tear with drilling, and it shows in their first quarter 2017 results, released May 8. The company achieved another quarterly production record with average production of 22,755 boepd (92 per cent oil), an increase of 38 per cent over the comparable period in 2016.
This represents a 29 per cent production per share increase from the comparable period of 2016. The company’s capital expenditures were $112.7 million inclusive of $25 million on waterflood initiatives, $6 million on land and $81.7 million of development capital resulting in the drilling of 94.5 net Viking horizontal wells at
a 99 per cent success rate. The board of directors have approved an updated capital budget of $340 million, an increase of 10 per cent from the previously approved $310 million budget. The strengthened balance sheet has given the company the flexibility to increase the budget to fund several key initiatives including a $10 million of incremental capital to fund water handling facilities in the Gleneath and Eureka areas. The result of these expenditures are expected to reduce corporate operating costs in 2018 and beyond by an
ultants
ecialists
ng
estimated $0.40/boe. It will also allocate $10 million of incremental capital for new play development. These funds will be primarily allocated towards incremental undeveloped land acquisitions. Finally, there will be $10 million of incremental developmental capital resulting in increased 2017 average production guidance to 22,750 boepd from 22,500 boepd. Operations update Break-up conditions to early May have been normal. Three of 31 drilled but uncompleted wells were completed in
mid-April and are currently on-stream. Raging River anticipates that completion activities on the remaining drilled but uncompleted wells will begin around May 15th. Raging River’s four operated drilling rigs are expected to commence operations prior to June 1. With limited new production additions not expected until late in the second quarter of 2017, Raging Rivers estimates that the second quarter production levels will be approximately three per cent lower than first quarter production levels with significant growth in
the second half of 2017. Extended reach horizontal (ERH) well results continue to be strong. To date, the company has placed 73.3 net ERH wells on production with 50 per cent of the wells on stream for six months. Average per well results show a 1.8 to 2.0 times improvement over the comparable offsetting short lateral wells. As a result of the ERH success, the company continues to optimize its drilling program and expects that 50 per cent of the remaining wells drilled in 2017 will now be ERH wells.
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Phone: (306) 842-5344 • Fax: (306) 842-5345 McMahon@McMahonCPA.ca
PIPELINE NEWS June 2017
A45
Opportunity is Knocking! See the bottom of this ad!
Poster presentations are an important part of geology conferences, and the Williston Basin Petroleum Conference is not different. On May 3, Yu Shi explained his poster on the Effects of Viscosity and Heterogeneity on Dispersion in Porous Media during Miscible Flooding Processes. The posters were on display in Evraz Place, in Regina, as part of the conference. Photo by Brian Zinchuk
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A truck fills up at the Ventura Resources battery west of Lampman on May 21. Photo by Brian Zinchuk
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Tank Truck and Pup For carrying large amounts of chemicals. FEATURES: • Tanks total 30 cubic meters
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Dylan Gilliss 306.421.8158
This combo unit, provided by Eldorado subcontractor, R&L Energy Rentals, covers all your well site needs and more. This custom built combo unit features heated bathroom, power, storage, lights and more. FEATURES: • 35 foot (10.668m) flatbed trailer • 2 heated flush toilets • 62 kw diesel generator • 3 cubic meters (3000L) of diesel storage • 2 dumpsters - bear proof - 6 cubic meters each • 25 foot (7.62m) light tower - 4000 watt • Storage barrels for rags and soaker pads
2 Ton Track Pressure Truck These pressure trucks come equipped with Mattracks to access tougher terrains. FEATURES: • Equipped with Mattracks • 3 cubic meter, 2 compartment tanks
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Chemical and Methanol Sales Eldorado can provide any chemicals required for hydrates, dewaxing, batching programs as well as any required hydrotest fluids. We can take care of methanol tank fills with on call services or weekly/monthly fill programs.
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A46
PIPELINE NEWS June 2017
Husky thermal projects producing 20 per cent better than design capacity Calgary – Husky Energy saw strong performance from its Lloydminster thermal project in the first quarter of 2017, according to their quarterly report released May 5. The company said strong performance from the Edam East, Vawn and Edam West Lloyd thermal projects contributed to overall average net thermal bitumen production of 121,000 bpd, including the Tucker Thermal Project and Sunrise. Overall thermal operating costs were $11.83 per barrel in the quarter. The Edam East, Vawn and Edam West developments, which came on production in 2016, are producing at 20 per cent above design capacity, averaging 30,000 bpd. Average operating costs for the three projects were $8.23 per barrel in the quarter.
Construction continued to advance at the 10,000 bpd Rush Lake 2 Lloyd thermal project, with first oil expected in the first half of 2019. Open houses were held for the sanctioned 10,000 bpdy Lloyd thermal projects at Dee Valley, Spruce Lake North and Spruce Lake Central, advancing the projects toward regulatory approval. At the Tucker Thermal Project, first production from a new eight-well pad began in the quarter and drilling continued on an additional 15-well pad. Production from Tucker is anticipated to ramp up through 2017 and 2018 towards 30,000 bpd. Gross production at Sunrise averaged 35,800 bpd (17,900 bpd net to Husky) in the quarter, up about six per cent from the fourth quarter. Current production
Several of Husky’s thermal projects are performing better than expected. This is their Rush Lake thermal project, as seen in February. File photo
has reached 40,000 bpd (20,000 bpd net to Husky), with average per well pair production of about 730 bpd. Work is progressing to tie in 14 new well pairs, and
steaming is expected to commence later this year. To date, the company has signed purchase and sales agreements for the sale of about 3,300 boepd of production in
Western Canada for $88 million in gross proceeds. The Western Canada business is moving ahead with increased capital efficiency, Husky said. The repositioned portfo-
lio is now more than 70 per cent gas-weighted, providing a natural hedge for the company’s energy requirements at its thermal projects and refineries.
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PIPELINE NEWS June 2017
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CAREERS EXPERIENCED
HUTT’S TRUCKING LTD.
Heavy Duty Truck & Trailer Mechanic
REQUIRED FOR ESTEVAN, CARLYLE AND LAMPMAN
WINCH TRUCK DRIVERS
Winch experience an asset. Must have 1A licence.
PICKER OPERATORS & PICKER SWAMPERS Candidates must hold oilfield safety certificates, including: First Aid/CPR and H2S For more information call Travis at 306-487-8338 or Doug at 306-487-8120 Email resume and driver’s abstract to huttholdings@sasktel.net or fax to 306-487-2296
PERMANENT FULL TIME POSITIONS AVAILABLE POSITIONS OPEN IMMEDIATELY
(1) Shop Labourer (2) Picker Operator Helper’s Submit resume and drivers abstract to:
Email: grimessales@sasktel.net Fax: 306-487-2560
Candidates will be subject to Fit and D & A testing.
NOW HIRING Estevan, Shaunavon, Kindersley, and Lloydminster.
We currently have an opening for an Experienced Heavy Duty Truck and Trailer Mechanic in our new shop located in Virden MB. We are looking for a team player who has the mechanical skills and qualifications to service, repair and inspect trucks and trailers as well as strong organizational and time management skills. Wage is negotiable, based upon experience. Position includes health benefits.
Bulk Drivers (Class 1) Operators Supervisors
If you would like to be considered for this role, Send resumes to virdentrucktrailer@hotmail.com or fax to (204) 748-6890. For more information call (204)764-0031.
APPLY @ magnumcement.ca/careers
SRI HOMES’ Estevan Facility SHELTER HOME SYSTEMS
SRI Homes – Shelter Homes, a large manufacturing operation plant in Estevan, is recruiting for a:
is currently accepting applications for
PRODUCTION FOREMAN
PRODUCTION WORKERS
Your qualifications will include 3 - 5 years experience in Residential/Commercial Building Construction along with familiarity with Residential Blue Prints and factory experience. • Excellent communication skills • Capacity planning and deployment of resources • Process management • Understanding of one piece flow and lean manufacturing. • Basic knowledge with Word, Excel and Outlook. • Passion for Continuous Improvement and Quality management.
• Required Immediately
Duties include:
If you are interested in this very challenging goal oriented position, please send your resume in confidence to:
• Assembling and installing modular components Send, fax, e-mail or drop off resume to:
SRI Homes ULC Attention: Production Manager PO Box 845. #200 Highway 18 West, Estevan, SK FAX: (306) 634-7255 Email: jobs.shelter@gmail.com
Box 845 #200 Hwy. 18 West, Estevan, SK S4A 2A7 Fax: 306-634-7597 E-mail: jobs.shelter@gmail.com
Compensation package will be discussed during the interview. Only those chosen for an interview will be contacted. No telephone applications accepted.
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PIPELINE NEWS June 2017