Southeast Saskatchewan Oil Industry Update
December 2019
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PAGE 2 - BLACK GOLD
DECEMBER, 2019
A crew servicing a wellsite
Photo — Greg Nikkel
A service rig crew worked on maintenance for a wellsite in the Goodwater area, one of the remaining areas of activity that is continuing in the oilpatch. PSAC is forecasting less new well drilling in 2020, and PSAC president Gary Mar said the spending on maintenance and repair is one of the few bright spots left right now.
Sask. oil and gas spills mapped by university researchers
A group of university researchers and students have mapped thousands of oil and gas spills across Saskatchewan over the past decade. The map was constructed by researchers and students at the University of Regina, one of four participating universities in the Price of Oil, a national investigative effort coordinated by the Institute for Investigative Journalism at Concordia University. The spills map was created in collaboration with the Corporate Mapping Project, a consortium of researchers examining oil industry influence in Western Canada. Working on the map was an “eyeopening experience,” said Katie Doke Sawatzky, a University of Regina journalism graduate. “I was responsible for the year 2011 and learned that 849 incidents impacted 77
communities with a total of 19.2 million litres of spilled material,” she said. “It’s hard to realize the impact of those numbers on a spreadsheet. When you place those incidents on a map, they suddenly become a story.” Students uploaded initial sample data from the provincial Ministry of Energy and Resources, and identified particularly notable spills for each year. University researchers checked and cleaned the data, then combed through thousands of additional entries in the Ministry of Environment spills database to identify, standardize and geo-locate entries related specifically to oil and gas activities. The map also includes records from the federal Transportation Safety Board, which oversees oil and gas transport by interprovincial pipelines and rail.
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The final map includes some 14,958 spills between Jan.1, 2000, and Dec. 31, 2018, which released a total 189 billion litres of substances. Water bodies were impacted 578 times. The tally includes 59 million litres of oil and 205 million litres of produced water, which is typically laden with salt and chemicals that affect soil fertility. Seventy-one per cent of these substances were reported recovered, leaving 77 million litres behind in the soil and water. Of the 18 billion litres of natural gas and that escaped in accidents, almost none was recoverable, adding to Saskatchewan’s greenhouse gas emissions. Gas that is a byproduct of oil drilling may typically include benzenes, toluene, hydrogen sulfide, PAHs and other substances harmful to human health. Toward the end of the 2018 reporting period, the research team noted Energy and Resources made significant improvements to the system where releases are recorded. Oil companies now enter information about deadly hydrogen sulfide (H2S) gas in their reports, which was the subject of a Price of Oil investigation. “This is a welcome
response to concerns we heard during our investigation,” said Patricia Elliott, a University of Regina professor who led the map data project. “They are now recording public complaints and the concentration of H2S in released substances.” “All the data is publicly available, but most citizens are either unaware it exists and or are overwhelmed by the volume of records,” said Elliott. “As well, the location descriptions aren’t easily recognizable in written form.” Although authorities notify individual farmers and First Nations governments about spills directly on their land, the map gives a wider picture of what has occurred on neighbouring lands. “We hope our map is easy to use, informative and useful,” said Elliott. While the map covers a nine-year period, the team examined records back to the early 1990s. Since 1990, there have been 20,664 spills reported to Energy and Resources totalling 19 billion litres, of which some 300 million litres was recovered. The Environment ministry logged 16.8 million litres spilled in 546 industryrelated incidents identified by the team, while the federal Transportation Safety
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Board reported 13.6 billion litres spilled in nine major incidents, of which 1.5 million litres were reported recovered. Water bodies have been impacted by spills 787 times since 1990. “We recognize that oil and gas production has become central to the Saskatchewan economy, and that the challenges of regulating an industry that expanded at breakneck speed are many,” said Elliott. “Greater public awareness of those challenges can lead to improvements that benefit us all.” “I’m proud I was part of this project. I hope it shows Saskatchewan citizens the crucial role that journalists play in breaking down and communicating complex, government data to the public,” said Doke Sawatzky. The map is shared on the student website: www. crudepower.urjschool.ca; Corporate Mapping Project website: www.corporatemapping.ca; and Dr. Emily Eaton’s saskoil.org website: www.saskoil.org Sample spills reported in the map: 200,000 litres of emulsion spilled on a farmer’s field and two natural wetlands in September 2017 near Alida. Soil samples revealed exceedances of toluenes, ethylbenzenes and xylenes, all
known human health hazards, along with serious salt damage to cropland. • 2 million litres of oil poured from a well site across a pasture north of Senlac in 2008, leaking through the night after the operator failed to respond to an alarm. • On Oct. 31, 2014, an uncontainable gas leak from a well near Lone Rock vented for 31 hours, releasing 28 million litres of gas. The fumes travelled low and horizontal to the ground, impacting over 30,000 square metres. Continued monitoring of the soil was recommended. • An estimated 1.4 million litres of oil and produced water leaked undetected for two weeks near the eastern shore of Antelope Lake in 2008. • On April 6, 2011, a valve failure sent 13,000 litres of oil and 20,000 litres of salt water up a flare stack, spewing substances across a wide area of the Souris River Valley. In total the spill impacted 45,520 square metres (11.25 acres, or 4.5 hectares) of uncultivated and cultivated land and surface water. • An H2S leak in southeastern Saskatchewan on Dec. 14, 2018, was among the first to be recorded as such in the Energy and Resources public online database. H2S was found emanating from a faulty gasket on a storage tank that contained an H2S concentration of 164,400 parts per million, well above the lethal limit of 500 ppm in confined spaces. The leak was contained and no one was injured.
DECEMBER, 2019
BLACK GOLD - PAGE 3
Crescent Point Energy sells gas assets in Saskatchewan
Photo 6612 — Greg Nikkel
Crescent Point Energy announced earlier in the fall they had sold a large part of their natural gas assets in Saskatchewan to Steel Reef Infrastructure Corp. for $500 million. The company will monetize nine natural gas gathering and processing facilities, plus two gas sales pipelines currently operating in Saskatchewan. The gas processing facilities and gas lines have a total throughput capacity of more than 90 million cubic feet of natural gas per day. Shown here is the Viewfield gas plant near Stoughton. It is not known if this plant is part of that sale, but the sale involves Crescent Point facilities like this one.
Crescent Point Energy sells gas assets for $500M
Crescent Point Energy announced they have sold gas assets in Saskatchewan to Steel Reef Infrastructure Corp. for $500 million. As part of the sale, the company will monetize nine natural gas gathering and processing facilities and two gas sales pipelines currently operating in Saskatchewan. These gas processing facilities and gas lines have a total throughput capacity of more than
90 million cubic feet of natural gas per day (MMcf/d), and do not include any oil-related infrastructure. Under the terms of the sale, Crescent Point will enter into a take-orpay commitment with Steel Reef, in exchange for Steel Reef granting Crescent Point processing rights at the facilities. Steel Reef is a midstream company with other gas processing assets in Saskatchewan,
and they will operate the assets. The expected cash flow to the purchaser is estimated at $47 million, excluding cash flow from third parties. Steel Reef has committed to fund an upcoming 12 MMcf/d expansion of one of the gas processing facilities, which will reduce the need for capital to be spent by Crescent Point to do the work. Steel Reef’s cost to do the expansion is estimated at around $30 million,
which will be in addition to the purchase price. The facility expansion will begin in 2020 and will be completed within a year to year and a half following the close of the asset sale. The expansion is expected to enhance sales volumes of gas while also reducing the facility’s emissions intensity. Crescent Point reported that they are also continuing negotiations for third party develop-
ment of a new sales oil pipeline, which will enhance the company’s market access and realized pricing for its southeast Saskatchewan oil production. The new sales oil pipeline will take about a year to construct and to bring into service, once the agreement is finalized. With this sale of gas assets, Crescent Point expects that its net debt will be reduced from $2.8 billion to $2.3 billion. They
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will also use about $50 million from the sale to continue buying back shares. So far this year, as of Nov. 13, the company has repurchased about 16.3 million shares for cancellation. With the sale of these assets, Crescent Point has sold, or is in the process of selling, about $1.45 billion of assets so far in 2019, as part of the company’s restructuring to improve their financial position.
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DECEMBER, 2019
» Editorial
Should we keep investing in the oil-gas industry? By Brad Hayes, Daily Oil Bulletin
T
here’s a lot of discouraging news around the oil and gas industry these days. It’s under siege from activists, governments, and even investors. Is there any smart money left in the industry, and is there a case to be made for new investment? Certainly many don’t think so — or are unwilling to face down societal pressures to stay away. Universities and other institutions are the targets of concerted campaigns to divest fossil fuel holdings, although some have pushed back in recognition of their fiduciary duty to maximize investment returns. Climate change activists have decreed oil and gas to be a threat to the planet, and have convinced many politicians that championing their cause is a quick route to political office. Activist campaigns are infiltrating our educational systems to convince future voters that the road to sunny but not overly warm days ahead will be surfaced (not paved, as that’s an oil product) with something renewable. But when we observe what people are actually doing, we see some very different facts. Oil and gas demand is growing worldwide every year, with no end in sight. Every credible energy forecaster tells us this growth will continue without more aggressive policy interventions — meaning raising energy prices or limiting energy supplies through regulation and taxation. How’s that working out so far? Provincial governments have been elected in Alberta, Ontario and Saskatchewan on promises to cut carbon taxes; According to surveys in North America, most members of the public are not willing to spend significant dollars to reduce GHG emissions. In other words, they’re great supporters of reductions as long as somebody else is paying (“cost-free sentiments”). It seems unlikely they will embrace the requisite policy interventions. Where new policy has raised energy prices, people push back — witness the “yellow jacket” protests in France and the current protests and riots in Chile. And perhaps most tellingly, where activists have delayed or prevented construction of energy infrastructure that affects people directly, there has been strong pushback. Richmond (B.C.) city council, in the face of multiple protests, permitted a marine terminal, tank farm and pipeline to supply Vancouver Airport with aviation fuel. People obviously decided that flying is more important than emissions reductions. In New York state, authorities have refused to permit new natural gas distribution pipelines as activists decry the presence of “fracked” gas. There are no plans for alternative energy supplies for new homes and businesses in Brooklyn, Queens and Long Island — which now face gas rationing or simply shutting down when cold weather hits. One wonders how many cold snaps it will take for some solutions to take shape. And overseas? People in energy-starved developing nations, including China, India, Pakistan and much of Southeast Asia are building energy infrastructure as quickly as they can. Coal, gas, nuclear, hydro, renewables — whatever it takes to provide the power for modern life. While some governments may express GHG emission awareness, their actions demonstrate that CO2 levels are not going to slow progress. They are concerned deeply about air pollution, especially particulates — and so favour natural gas over coal where the choice is available. So it appears oil and gas demand will very likely continue to rise in the foreseeable future. What about supply? Gas supplies appear very secure worldwide. The hydraulic fracturing revolution is spreading beyond North America, and has potential to yield huge gas resources across the globe. Oil, however, is a different story. While fracturing has revitalized onshore U.S. oil production, the bloom is coming off the rose as companies realize they cannot drill wells as close together as originally planned, and therefore can’t recover as much of the resource as had been thought. At the same time, conventional exploration internationally has fallen off since 2014. Where does that all leave us on the question of investing in Canadian oil and gas? Canada holds incredible volumes of hydrocarbon resources in diverse settings, some developed and much not developed. Energy needs across the globe will drive increased demand for these resources in the years ahead in every credible energy outlook scenario. Supplies of oil face considerable uncertainty, and while gas supplies are more secure, many countries lack their own resources and are increasingly interested in importing ours. Smart money invested in good oil and gas projects and companies will eventually yield excellent returns. This approach is not without risks, and requires the patience to hold positions for years. But reality will bite when markets — particularly in North America and Europe – finally understand that the wellbeing of humanity in the coming decades depends upon the energy from oil and gas.
Editorial:
Canada needs a new energy vision
T
he outlook for the oil and gas industry is not looking particularly bright, as year-after-year, the price of oil doesn’t seem to improve at all, and activity in the oil sector has remained stagnant. This is also being reflected in the changes in the companies who comprise the energy sector, in particular in Alberta and Saskatchewan. Some firms are closing their doors and auctioning off their equipment and assets, others are being absorbed by other, bigger companies, or simply closing up shop and moving south of the border to the United States, where they don’t make the oil industry out to be enemy of the world. All the while, environmentalists and climate change activists get all the attention as they spew on about the evils of the oil and gas industry, while ignoring the fact that the industry provides the means for them to heat their homes and businesses and to drive or fly wherever they wish to carry on their activities, often speaking out against this industry. The Justin Trudeau administration survived a federal election with a minority, but they were soundly punished for their actions and policies which have hurt the West, and the oil and gas industry.
There is a maxim in the political world (and in society in general), namely that “nature abhors a vacuum”, and secondly, “where there is no vision, the people perish.” There is no vision, and no leadership in political circles (and certainly not in the Trudeau government) in regard to the energy industry, and there needs to be one. This is a vital industry that provides employment as well as vital products for many manufacturing sectors — and they are integral to the life, health and future of our economy. The president of the Petroleum Services Association of Canada, Gary Mar, said it all: “It’s time our country had a vision for energy, a vision that could inspire Canadians to join together in support of our responsible energy development that benefits the lives of all Canadians. We are reducing our environmental footprint and GHG emissions through new technologies. Let’s find a way to work together for Canada to be the global leader and producer of choice rather than let countries with lower human rights, environment, and regulatory standards meet the needs of growing populations and under-developed nations. Let’s stop penalizing ourselves while other countries reap the benefits that should be ours.”
Volume 2
Issue 6
Andrea Corrigan, Publisher/Advertising Sales Manager Black Gold is published by the Weyburn Review and issued at the office of publication, 904 East Avenue, Weyburn, Saskatchewan. The Weyburn Review is owned and operated by Prairie Newspaper Group LP, a subsidiary of Glacier Ventures International Corp. The Weyburn Review is a member of the Canadian Community Newspapers Association, the Saskatchewan Weekly Newspapers Association and Canadian Media Circulation Audit.
Greg Nikkel, Editor NEWS DEPARTMENT Phone 306-842-6955 Email: editor@weyburnreview.com ADVERTISING DEPARTMENT Phone 306-842-7487 Email: production@weyburnreview.com
DECEMBER, 2019
BLACK GOLD - PAGE 5
Fluid power systems company and U of S partner on project
A University of Saskatchewan research team and fluid power systems company Wil-Tech Industries Ltd. (WTI) are partnering to develop monitoring technology for predicting the failure of hydraulic pumps, an innovation that will avoid costly shutdowns at mines and other industrial sites and help ensure worker safety. “We are developing a new method of evaluating the service life left in a pump by using lowcost sensors that measure the outlet line pressure,” said project leader Travis Wiens, an assistant professor at USask’s College of Engineering. “For industries such as mining, construction, agriculture, and oil and gas that use a lot of hydraulic systems, knowing when a pump needs to be replaced before it fails provides equipment reliability and efficiency — an economic advantage in a competitive global market,” said Wiens, who is working on the project with master’s student Jon Fernandes. The project is funded with $37,500 from the Natural Sciences and Engineering Research Council of Canada, along with industry contributions. WTI, a family-owned company with headquarters in Estevan and offices in Saskatoon and Regina, is contributing $25,000 in cash as well as in-kind support jointly with Parker Hannifin, a global maker of hydraulic products. The project is funded until the end of 2019, and Wiens expects results by then. “This technology will eventually become a product that Wil-Tech can market, either by integrating it with the pumps they are selling, or as a stand-alone service,” Wiens said. “It’s a high-tech product that will employ highly qualified personnel, and will have applications worldwide in mining, agriculture and other industries.” Noting that a pump costs $1,000 or more, Wiens estimates that the cost of providing an external monitor will be considerably less than 10 per
cent of the pump price. “Low cost is key. Conceivably, these pressure sensors can be installed on a pump without significantly increasing the cost of the system,” Wiens said. The pump monitor project with Wil-Tech piggybacks on various research projects Wiens is conducting at USask’s Fluid Power Laboratory in collaboration with a large mining company to evaluate anti-wear properties of fire-resistant hydraulic fluids used in pumps. From that experiment, Wiens and Fernandes are repurposing 36 pumps, whose wear history and other data are readily available, to develop the pump life estimation technology for Wil-Tech. They will use machine-learning techniques to correlate a pump’s dynamic response — its reactions to commands for pressure changes in equipment — with the condition of the pump. “We don’t have to know if a worn machine is responding faster or slower. We give it a bunch of data, and the machine picks out which are the most important features and tells us something about the health of the pump,” he said. Jim Wilson, president and founder of the company, said WTI services the fluid power systems operated by some of the largest companies and industries in Saskatchewan. “We hope to bring efficiencies to our customers from this research in the immediate future. There is no doubt of the financial benefits to Saskatchewan and Canadian economies from improved equipment reliability and safety,” Wilson said.
Mondors make large donation to Salvation Army
Review Photo — Jennifer Lorinczy
Weyburn oilman Norm Mondor, centre, made a donation of $10,000 to the Salvation Army on behalf of himself and wife Shirley, as Jennifer Lorinczy, left, and Helen Orsted of the Salvation Army looked on. The red kettle campaign is ongoing now in four locations around Weyburn up until Christmas Eve, and volunteers are needed to fill two-hour time slots.
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Supporting the oil and gas industries and all those who work within it. Standing with you against the policies that will diminish your ability to prosper. Phone: 306-634-3000 www.drrobertkitchen.ca
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PAGE 6 - BLACK GOLD
DECEMBER, 2019
Annugas shines in Parade of Lights A float from Annugas Compression Consulting of Weyburn was part of the Parade of Lights, held on Dec. 5 by the Weyburn Chamber of Commerce. There were over 40 floats in the annual celebration of the Christmas spirit, with Schmeltzy’s Rentals taking first in the business category, and the Weyburn Kin Club winning for the best float by an organization. Special honourable mentions went to Souris Valley Industries and Dart Services for the creativity of their floats. Photo 0091 — Greg Nikkel
OILFIELD DIRECTORY Drilling Licenses
139583 142393 142384 142752 143277 140434 141568 142993 143004 143446 143341 144038 144425
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13 new licenses issued to Monday, December 9 Vermilion Energy Hz 16-35-1-5 Torc Oil & Gas Hz 3-15-5-6 Torc Oil & Gas Hz 2-25-5-6 Vermilion Energy Hz 16-2-7-5 Crescent Point Energy Hz 13-10-11-6 Crescent Point Energy Hz 3-34-5-25 Crescent Point Energy Hz 5-9-11-6 Crescent Point Energy Hz 3-26-8-10 Torc Oil & Gas Hz 4-3-6-6 Crescent Point Energy Hz 13-34-10-6 Crescent Point Energy Hz 4-28-9-8 Highrock Resources Hz 12-9-6-7 Crescent Point Energy Hz 15-33-1-16
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High marks for Saskatchewan in oil and gas profitability The province of Saskatchewan has received highly favourable rankings for profitability and competitiveness in two separate, independent reports that assess oil and gas investment opportunities across North America. The 2019 Scotiabank Playbook, an annual report that analyzes the profitability of specific oil and gas resources, or “plays,” throughout Canada and the United States, ranked the Mission Canyon Frobisher/Alida play, located in southeast Saskatchewan, as the best in North America. As well, in the Fraser Institute’s Canada-US Energy Sector Competitiveness Survey 2019, Saskatchewan was ranked by industry respondents as the most attractive jurisdiction for upstream oil and gas investment in Canada. “These two reports highlight Saskatchewan’s reputation as a highly competitive jurisdiction that offers a stable, low-risk investment climate,” Energy and Resources Minister Bronwyn Eyre said. “This recognition aligns with
our recently announced Growth Plan, which includes new oil production targets of up to 600,000 barrels per day by 2030 and an emphasis on increasing industry competitiveness and jobs.” Along with the Mission Canyon Frobisher/ Alida oil play, the Scotiabank Playbook ranked the Southwest Saskatchewan Cantuar oil play seventh, based on its leading metric of Profit Investment Ratio. As a result, in 2019, Saskatchewan has two of the top 10 plays and a total of seven plays ranked in the top 35. The Fraser Institute report indicated that Saskatchewan’s horizontal drilling royalty structure is considered an advantage by investors. It noted, however, that Bill C-69, Bill C-48, and the federal carbon tax continue to be perceived by the industry as discouraging investment in Canada. One survey respondent stated that lost revenue resulting from delayed or cancelled pipeline projects in Canada is “significant and can never be
recovered”. “Saskatchewan is a key jurisdiction for our members and these reports confirm it is among the most competitive in North America and an attractive place to invest,” Explorers and Producers Association of Canada President Tristan Goodman said. “The recently released Plan for Growth with key targets will help the province increase investment, ensure responsible development and grow more jobs well into the future.” Saskatchewan’s oil and gas producing industry contributes a significant share of the province’s real Gross Domestic Product (GDP), accounting for an estimated 15 per cent of the total. The industry continues to be the largest contributor among primary industries to provincial GDP. In 2018, the upstream oil and gas industry accounted for an estimated 34,675 direct and indirect person-years of employment, with investment in new exploration and development estimated at $4.5 billion.
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DECEMBER, 2019
BLACK GOLD - PAGE 7
Southeast area has most interest in oil-gas sale
Mainil employees, company donates to Salvation Army
Photo 0750 — Greg Nikkel
Representatives of Jerry Mainil Ltd.’s employees presented a cheque for $5,200 to the Salvation Army for their food bank on Dec. 10. From left are Kevin Linnen, quality control manager for Mainil; Jennifer Lorinczy, community ministries coordinator for Weyburn Salvation Army; and Darcy McCormick, operations manager for Mainil. The employees held a raffle at their annual Christmas party, and the company matched the amount to bring the total to $5,200. This is the fifth year the company has done this, bringing the five-year total to $25,200 donated to the Salvation Army.
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this parcel, which is situated east of Carnduff and is prospective for oil in the Frobisher Beds of the Madison Group. They paid a total of $282,157 for this parcel. Prairie Land investment Services Ltd. was the top bidder in the southeast area, picking up seven leases totaling 422.037 ha, paying a total of $341,627.69. Provincially, there were 97 leases posted and an exploration licence, and 66 of the leases and the licence were sold. Saskatchewan’s Growth Plan: The Next Decade of Growth 20202030 includes the goal of increasing oil production to 600,000 barrels per day by 2030. The province has already worked diligently to create what is one of the most competitive business environments in North America. A recent report on profitability in the oil sector, the 2019 Scotiabank Playbook, ranked Saskatchewan as having two of the top 10 oil or gas plays in North America and a total of seven plays ranked among those in the top 35.
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Saskatchewan’s December oil and gas public offering held on Dec. 3 generated $3.4 million in revenue for the province. This brings the 2019-20 fiscal year total to $15.2 million with one sale remaining, and brings the final 2019 calendar year total to $25.4 million. The Weyburn-Estevan area accounted for $1,462,673.69 for 24 leases totalling 3,014.559 hectares, while the Kindersley area received $1,346,468.25 for 21 leases and one exploration licence totalling 5,037.032 hectares. There were 33 leases posted for the WeyburnEstevan area, and 24 were sold, with the average price per hectare at $485.20. This compares to the previous sale where the bids totaled $1.6 million and an average of $327 per ha. One lease in the Estevan area consisting of 72.549 ha received the highest dollars per hectare offer in this offering at $3,889.19/ha. Cougar Creek Land Ltd. was the successful bidder on
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PAGE 8 - BLACK GOLD
DECEMBER, 2019
PSAC forecasts slightly lower drilling numbers
Jerry Mainil Ltd. donates to Weyburn Hospital Foundation
Photo 0756 — Greg Nikkel
Representatives of Jerry Mainil Ltd. gathered with members of the Weyburn and District Hospital Foundation to present a donation of $2,500 towards a new hospital and equipment for it. From left are Dennis Mainil, owner; Darcy McCormick, operations manager, Mainil’s; Dale Renz, CJ Mainil and Mal Barber, all of the Hospital Foundation; and Dale Mainil, owner. This donation, along with the one to the Legion, was made on behalf of the company’s loyal customer base.
Jerry Mainil Ltd. donates to the Weyburn Legion
Photo 0744 — Greg Nikkel
Representatives of Jerry Mainil Ltd. donated $2,500 to the Weyburn branch of the Royal Canadian Legion, to help pay for the upgrades to the heating and cooling system. From left are Dennis Mainil, owner; Darcy McCormick, operations manager; Brian Glass, second vice-president of the Legion; and Dale Mainil, owner. This donation was made to the Legion on behalf of their loyal customers.
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cent decline in activity to 4,500 wells.” On a provincial basis for 2020, PSAC estimates 2,155 wells to be drilled in Alberta, and 1,795 wells for Saskatchewan, representing year-over-year decreases of 235 and 200 wells, respectively. At 190 wells, drilling activity in Manitoba is expected to drop by 20 wells year-over-year, whilst activity in British Columbia is projected to decrease from 390 wells in 2019 to 345 wells in 2020. At 15 wells for both 2019 and 2020, activity in Eastern Canada is expected to remain flat yearover-year. “The only bright spot for oilfield services companies is the spending on production optimization, maintenance and repair work (MRO) that continues along with new decommissioning and closure activity. With additional funding in place for the Alberta Orphan Well Association and the introduction of the Alberta Energy Regulator’s Area Based Closure program, work in these areas has increased. This MRO and closure work has helped some companies survive while sadly, others have been forced to relocate, however reluctantly, to the US or other international locations or close their doors entirely.” The Petroleum Services Association of Canada (PSAC) is the national trade association representing the service, supply and manufacturing sectors within the upstream petroleum industry.
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R.FRENCH TRANSPORT
The Petroleum Services Association of Canada (PSAC) released its 2020 Canadian Oilfield Services Activity Forecast. PSAC expects a total of 4,500 wells (rig releases) to be drilled in Canada in 2020. For 2019, the Association’s final revised forecast predicts a yearly total of 5,000 wells. PSAC bases its 2020 forecast on average natural gas prices of $1.60 CDN/mcf (AECO), crude oil prices of US$58/barrel (WTI), and the Canadian dollar averaging $0.76USD. PSAC President and CEO Gary Mar commented, “Following a very disappointing 2019 that saw activity plunge to 2015/2016 levels with about 2,000 fewer wells drilled than forecast, the outlook for 2020 is even worse with Exploration & Production (E&P) companies choosing to buy back their own under-valued shares, pay dividends and pay down debt rather than reinvest in Canada. It’s hard to justify spending or attract new capital investment when market access constraints remain and policy uncertainty persists. With the unrelenting focus on climate action during the recent federal election campaign and the resulting minority government that is expected to be supported by parties that have no interest in the global GHG reductions that Canada’s oil and gas industry can deliver nor the economic benefits that Canada’s most prolific industry and largest exporter provides, PSAC is forecasting a further ten per
The Safety Association for Candada’s Upstream Oil and Gas Industry
R. French Transport Ltd.
has developed, implemented and audited a
Health &www.frenchtransport.ca Safety Management System
From Our Crew To Yours; We Are Wishing You A Safe & Happy Holiday Season. May The New Year Be Prosperous & Bright! Thank You To All Our Hard Working Field Hands And Amazing Clients That Have Made 2019 Another Great Year. Join Our Team For 2020! We’re Looking To Hire: Experienced Floorhands & Derrickhands
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