pipeline news september 2012

PIPELINE NEWSSaskatchewan’s Petroleum MonthlySaskatchewan’s Petroleum Monthly Canada Post Publication No. 40069240

September 2012 FREE Volume 5 Issue 4

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Element Technical Services supervisor Josh Ho man bleeds o the valves on the manifold during a job in southeast Saskatchewan. Element is a new player in the hydraulic frac-turing arena, star ng opera ons in Carlyle in March. See story on Page B18. Photo by Brian Zinchuk

See you at the See you at the Lloydminster Lloydminster

Heavy Oil ShowHeavy Oil ShowSept. 11-13Sept. 11-13

Shake'N Bake:Shake'N Bake:Frac & Thermal StimulationFrac & Thermal Stimulation

SECTION A4 Co-op Apologizes For Re nery Fire

6 Editorial

11 Minister Of Economy One-on-One

14 Economist Tackles Nexen Sale

17 Husky Transi ons To More Thermal

19 Lakeland College Pumped For Fall

25 Convoy For Hope

29 Kerrobert THAI Ramps Up

INSIDE

SECTION C1 Carndu Oilmen's Golf Tournament

3 Torq Launches Bromhead Transloading Site

5 Shortline May Haul More Crude Than Kernels

8 Crescent Point Resumes Drilling

13 Shi ing Gears: Honouring Tim Floden

15 Trican Establishes Manitoba Beachhead

SECTION B1 Lloydminster Would Like To Host More Events

4 Aquistore Holds Open House At Well Site

8 "Scooter" Boyes and His Boys

11 Panther Drilling Adds Rig 4

15 Do You Believe Climate Change Is Occurring?

18 Element Technical Services: New Frac Company In Carlyle

Stacey [email protected]

PIPELINE NEWSNEWSSaskatchewan’s Petroleum Monthly

Oct. 2012 FocusContact your Sales Rep

to be a part of the focus edition

SE Sask and SW Manitoba - for all of your advertising needs contact:Ph: 306.634.2654 Fax: 306.634.3934

Cindy BeaulieuSales Manager

[email protected]

Candace [email protected]

Deanna [email protected]

Kristen O’[email protected]

Teresa [email protected]

NW Sask - for all of your advertising needs contact:

Cell: 780.808.3007 Fax: 780.875.6682

Randi [email protected]

SW Sask - for all of your advertising

needs contact:Ph: 306.773.8260 Fax: 306.773.0504

OIL SHOW COVERAGE & TOP JOBS IN THE PATCH

A2 PIPELINE NEWS September 2012

By Geoff LeePipeline News

Lloydminster – Th e 19th annual Heavy Oil Tech-

nical Symposium organized by the Lloydminster

Society of Petroleum Engineers could go into the

history books as the most well attended.

For the fi rst time, the symposium is being held

in conjunction with the Lloydminster Heavy Oil

Show Sept. 12-13, a fact that should attract a large

audience for presentations in the Prairie Room at

the Lloydminster Exhibition Grounds.

“I am actually surprised we haven’t done it

before,” said symposium chair Mark Bacon.

“In the past – I wouldn’t say we compete – but

we would run them at similar times and that likely

caused the attendance at some of our events to go

down.”

Bacon credits the anticipated success of both

events to the double-duty role of Mike McIntosh

who is the chair of the oil show and a member of

the symposium committee.

“It just made sense that we should be running

these together and having Mike on the committee

for both events makes it extremely helpful to do it

this way,” said Bacon.

Bacon will handle the introductory remarks

at the two-day symposium and introduce all four

speakers..

“What it means is that we can get more specifi c

speakers,” said Bacon.

“When people know there’s a much larger

audience, we can get speakers that are much specifi c

to the Lloydminster area. It will appeal better to the

general public and the people in the area.”

Attendance is free for all sessions in the Prairie

Room.

Th e symposium will kick off on Sept. 12 with a

2 p.m. talk titled Rodless Lift Solution for CHOPS by Tommy Kulak, gas lift and hydraulic lift operations

manager at Weatherford.

Th e opening day will wrap up with a 3 p.m.

presentation called Improved Solids Handling Using a New Demulsifi er by LaFrance Rhone, a senior

chemist from Baker Hughes.

Michele Tesciuba, project manager at Schlum-

berger, will kick off the fi nal day of presentations on

Sept. 13 at 9 a.m.

Her presentation is titled Innovation and Col-laboration in Heavy Oil: To take the industry further and deeper into heavy oil recovery.

Th e symposium will wrap with a 10 a.m. pre-

sentation by Brett Davidson, president and CEO of

Wavefront Technology Solutions titled, An In-troduction to Powerwave for Improved Flooding and Stimulation Approaches.

Bacon said the agenda was confi rmed in early

July after receiving good response to calls for tech-

nical submissions.

“We actually had a very good response this year.

We had nine or 10 submissions at least for only

four slots,” said Bacon who is counting down the

days.

“Th ere’s quite a bit of interest. We’re expect-

ing a lot of turnout. It’s worked out really well and

we’ve got good quality speakers lined up.

“It’s been running for a quite a long time, so

there’s a lot of public interest in it as well.”

Attendance at some leading oil and gas shows

in 2012 has reached record levels including 63,000

attendees to the 2012 Global Petroleum Show in

Calgary June 12-14.

Th e 20th annual Williston Basin Conference

held this year in Bismarck, North Dakota, attracted

a record 4,033 registered attendees, representing 46

states, seven provinces and nine countries.

Next year, the show moves to Regina where

Canadian attendance records could be set due to

the continued growth of Saskatchewan’s oil and gas

and resources economy.

“I think a lot of it is people recognize that

things are going to pick up – 2014 and 2015 are go-

ing to be very big years,” said Bacon.

“Anybody who is the industry recognizes that,

and they want to get a jump-start on it as much as

possible.”

Bacon works for Champion Technologies in

Calgary and was interviewed in Aberdeen, Scot-

land, where Champion has its United Kingdom

regional headquarters.

“Aberdeen is all based on North Sea so every-

thing is off shore,” said Bacon.

“We are trying to collect best practices from all

around the world from within our company.

“We are getting hold of what they are going in

the North Sea and trying to fi gure out what we can

take from that and bring to places like Cold Lake

and Lloydminster.

“It’s a good trip and to see how people do

things slightly diff erent. Th ere is always a lot you

can learn.”

Bacon said his trip was well timed as there is

nothing left to do to get the symposium up and

running except show up, introduce the speakers and

lead the applause.

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Early applause for Lloyd symposium

Mark Bacon, who is pictured at the 2011 Heavy Oil Sym-posium, is the chair of this year’s Heavy Oil Technical Symposium being held in conjunc on with the Lloydmin-ster Heavy Oil Show Sept. 12-13. Bacon’s commi ee has lined up four speakers who will address heavy oil produc- on in their talks. File Photo

Mike McIntosh kicked o the 2010 Lloydminster Heavy Oil Show banquet and will likely do so again as the chair of this year’s organizing commi ee. The guest speaker at the Sept. 11 evening banquet will be Kevin Casper vice-president of produc on for Devon Canada Corpora on.


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Invicta completes six-well drilling program

Invicta Energy Corp.

announced the completion

of its second-quarter six (3.3

net) horizontal light oil well

drilling program at Kinders-

ley, Saskatchewan.

Due to wet weather con-

ditions in the quarter, four of

the wells were still in initial

fl ow back as of Aug. 7, but

at favourable rates. Th e fi rst

two wells of the program

have been producing for two

months at an average rate of

45 and 75 bpd, respectively.

Based on the initial produc-

tion rates of the six wells,

Invicta expects these wells to

outperform the company’s

forecasted type curve.

Current net fi eld pro-

duction is estimated to be

over 400 boepd (85 per cent

light oil). As these wells sta-

bilize they will be tied into

the company’s production

facilities.

In addition, Invicta said

it has added over 10 sections

of 100 per cent land through

Crown land sales and acqui-

sitions and now has 53,232

net acres of land in Alberta

and Saskatchewan. From

this developing land base,

Invicta has the potential to

develop a second core re-

source base to complement

its current development on

lands in Kindersley.

By Brian ZinchukPipeline News

Regina – It all came down to corrosion.

Th at was the conclusion of the report by the Regina Fire

and Protective Services into the explosion and fi re at the Co-op

Refi nery Complex last fall. Th e report was released on Aug. 16.

Scott Banda, CEO for Federated Co-operatives Ltd., apol-

ogized for the explosion and fi re at the Regina Consumers’ Co-

operative Refi neries Limited (CCRL) complex that injured a

number of workers.

At 2:06 p.m. on October 6, 2011, a fi re began in the pro-

cess area of the middle distillate unifi ner. Th e CCRL fi re and

emergency response team controlled and extinguished the fi re

with mutual aid support on standby from the Regina Fire and

Protective Services.

Th e fi re caused major damage to the compressor building,

pipe rack east of the compressor building, and adjacent compo-

nents.

Th irteen people were transported to hospital, 10 by emer-

gency medical services, and another three by a contractor work-

ing on the site, according to Vic Huard, Co-op vice-president of

corporate aff airs, who spoke with Pipeline News last October.

Of the 13 taken to hospital, 10 were treated and promptly

released. One was treated and released shortly thereafter. A fur-

ther 23 people reported injuries to Occupational Health and

Safety, but none of these required medical treatment at a hospi-

tal, according to Huard.

Page A5

Co-op apologizes for re nery reCo-op apologizes for re nery re

The Co-op Re nery Complex had a substan al re on Oct. 6, 2011 that injured several workers. This photo was not taken on that day. File photo


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Th e Manitoba govern-

ment collected $565,005 at

its August land sale, and has

one sale left this year to try

to break its all-time annual

bonus revenue record.

A total of 1,738.33 hect-

ares exchanged hands this

week at an average price of

$325.03. Year-to-date the

province has attracted $11.13

million in bids on 17,049.18

hectares at an average price

of $652.73. To the same

point of 2011, the govern-

ment had brought in $10.1

million as 17,798.03 hectares

were sold at an average price

of $567.60.

Last year, Manitoba set

an all-time calendar year bo-

nus revenue record of $13.14

million.

Highlights of the August

sale included EOG Resourc-

es Canada Inc. paying the

highest price per hectare for a

parcel located in the Waskada

area. Th e fi rm paid $1,052.62

per hectare and tendered a

bonus of $16,841.92 for the

16-hectare parcel. Th e com-

pany picked up the rights to

legal subdivision two of sec-

tion 11 at 2-25W1.

Fire Sky Energy Inc.

picked up two parcels, which

combined for $444,444. Each

256-hectare parcel tied for

the land sale bonus high of

$222,222, producing an av-

erage price each of $868.06.

One parcel included all of

section 20, the other all of 29

at 6-29W1.

Th is was the third of four

sales scheduled for 2012. Th e

next sale will be held on Nov.

14.

MB land sale draws $565,005 in bonus bids

Page A4

“On behalf of everyone in the Co-operative Retailing Sys-

tem, we regret what happened last October and apologize to

the citizens of Regina and surrounding area who we consider

our neighbours and who we have grown up with since 1935,”

said Scott Banda. “October 6, 2011 was a dark day for all. We

are recovering. We are rebuilding. And we are moving forward

thanks to the dedication and eff orts of all our employees as we

work to ensure overall operational integrity in order to regain

the trust of the community.”

Th e investigation reveals a high-pitched whistle was heard

by numerous witnesses immediately prior to the fi reball which

enveloped the east pipe rack. Th is was followed by two and pos-

sibly three explosions after the initial fi reball.

Th e generation of overpressure from the initial fi reball or

release was enough to cause the boom of a crane located ap-

proximately 40 metres away to sway violenty. Th e crane operator

fell from the machine to the ground.

Th e concrete pad east of the compressor building was found

to have solidifi ed aluminum alloy on it that had previously melt-

ed. On top of this they found masonry building materials from

the compressor building, indicated the compressor building east

was dislodged after the initial failure.

Banda spoke with Pipeline News by phone on Aug. 17.

“It was accidental in terms of categorization. Th eir conclu-

sion was it was a reactor effl uent line that blew apart.”

Th e culprit was a six-inch line on a straightaway that con-

tained half-processed diesel, hydrogen, and hydrogen sul-

fi de.

“Th ere was a 7.25 inch rupture in that line where it blew,”

Banda said.

Th e pipe was located in the MDU. Built in 1961, the

MDU was being prepared for extensive renovations at the

time of the fi re.

As for the ignition source, Banda said there were mul-

tiple possible sources, but it was most likely set off by a static

discharge due to pressure.

“It was just a matter of time,” he said.

Putting into context the scope of the refi nery, he noted it

is a 640 acre site with 33 process units and over one million

feet of piping. Th e area aff ected was half an acre in size.

Corrosion inspection is typically done visually, via cut-

ting and inspecting the pipe, or through X-rays inspection.

“In this particular part, in 2010, corrosion at the end of

the line was replaced. We missed a part further up the line.

We apologize. We simply missed some,” Banda said.

Th e 2011 fi re was the second major incident in the 75

year history of the refi nery. “We’ll get better,” Banda prom-

ised, adding there have been 19 changes made in processes

and inspections.

“We have to improve and we will improve. We are better

than we were a year ago.

“Th at area of the fi re has been completely removed and

rebuilt. Eighty per cent of the piping in the area has been

changed, the rest inspected.”

“It’s been very tough on our people. Th at (safety) is our

culture.”

Th ere has been a lot of counselling as well as group ses-

sions.

Th e refi nery is a huge complex critical to the economy of

Western Canada, he noted.

Asked about those who were injured, Banda said he

couldn’t comment on them. Th ey were employees of contrac-

tors, and there is a workers’ compensation process in place.

He added, “We have no information.”

When characterizing the dollar value of the damage and

business interruption, Banda said, “$100 million is a good

start.

“We’re down on our diesel production.”

Th ose impacts were felt last winter, when a diesel short-

age on the prairies had truckers scrambling to fuel up. Diesel

fuel production won’t be restored until November this year.

Th e refi nery is just nearing completion of Section 5, its lat-

est addition. Banda noted it is a few weeks away from startup.

Mechanically, the construction is basically complete.

A number of revamps are also underway and nearing com-

pletion. Th e addition of Section 5 and the revamps cost over $2

billion, “and we’re not done yet,” Banda said.

Page A8

How did it blow?How did it blow?Th e report of the Regina Fire and Protective Services

stated:

“Th e reactor effl uent line ... located within the middle

distillate unifi ner 5, 6, 7 suff ered a catastrophic failure to a

small portion of the line. Th e rupture area was located in a

pipe rack adjacent to the east side of the compressor building.

Th is failure is defi ned as a mechanical explosion. Data re-

corded indicates that the system was functioning as expected

immediately prior to the failure, with no anomalies recorded

in the hours leading up to the failure. Given the processes in-

volved in that area of the facility, coupled with the numerous

ignition sources and abundance of ignitable liquites, the fi re

that ensued would have been inevitable.

“Th e initial blast overpressure was experienced immedi-

ately following the ignition of the combustible liquid leaving

the ruptured reactor effl uent line is classifi ed as a combustion

explosion. Th ese explosions are frequently characterized by

the presence of fuel with air and an oxidizer. In combustion

explosions, overpressures are caused by the rapid volume pro-

duction of heated combustion products as fuel burns. Given

the large volume of product under pressure leaving the rup-

ture, explosions of this nature are common in this circum-

stance.

“All the damage sustained in this portion of 5, 6, 7 is

as a result of the ruptured reactor effl uent line. Direct fl ame

contact or radiant heat from the initial fi re caused a number

of hydrogen product lines to breach, thus intensifying the en-

suring fi re on other portions of the aff ected area.”


Publisher: Brant Kersey - Estevan

Ph: 1.306.634.2654

Fax: 1.306.634.3934

Editorial Contributions: SOUTHEAST

Brian Zinchuk - Estevan 1.306.461.5599

SOUTHWEST

Swift Current 1.306.461.5599

NORTHWEST

Geoff Lee - Lloydminster 1.780.875.5865

Associate Advertising Consultants:SOUTHEAST

• Estevan 1.306.634.2654

Cindy Beaulieu

Candace Wheeler

Kristen O’Handley

Deanna Tarnes

Teresa Hrywkiw

CENTRAL

Al Guthro 1.306.715.5078

[email protected]

SOUTHWEST

• Swift Current 1.306.773.8260

Stacey Powell

NORTHWEST

• Lloydminster Randi Mast 1.780.808.3007

MANITOBA

• Virden - Dianne Hanson 1.204.748.3931

• Estevan - Cindy Beaulieu 1.306.634.2654

CONTRIBUTORS

• Estevan - Nadine Elson

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NEWSPIPELINE

Mission Statement:Pipeline News’ mission is to illuminate importance of Saskatchewan oil as an integral part of the province’s sense of community and to show the general public the strength and character of the industry’s people.

EDITORIAL

On Aug. 17, Western Canada newspaper baron

David Black threw the entire Northern Gateway

Pipeline debate and the associated oilsands produc-

tion on its ear when he proposed a massive refi nery be

built at the Kitimat terminus of the pipeline.

It’s a bold suggestion, the very defi nition of vi-

sionary, and it deserves serious consideration.

First off , Black heads up the privately held Black

Press, which owns and operates 150 newspapers in

Canada and the United States. Pipeline News, how-

ever, is not one of them. It is owned by Glacier Media,

Black Press’ main competitor.

Secondly, when most people hear the name

“Black” and word “newspaper in the same sentence,

the usually think of Conrad Black, the recently re-

turned former Canadian who had a substantial stay at

Club Fed in Florida. Th is is not the same man.

David Black’s proposal is this: process every barrel

of bitumen that comes through the Northern Gate-

way Pipeline on Canadian soil. Th e primary resulting

products – gasoline, diesel and kerosene, are light in

comparison to heavy crude. Th ey fl oat, and evaporate,

which is key should the unthinkable happen and a

tanker have a spill in pristine B.C. waters.

Along the way, you would be building one of the

top 10 refi neries in the world, capable of processing

550,000 barrels a day, easily the largest in Canada. It

would be state of the art, employing 6,000 people in

its construction, and 3,000 in its operation.

Black would like construction to start in two

years.

To say it’s an ambitious plan is an understate-

ment. No one has built new, greenfi eld refi nery in

Canada since the 1980s, and you have to go back

another decade to fi nd the newest one south of the

border. As the press has noted, refi neries are a low-

margin business.

However, they are absolutely key economic in-

frastructure. We have seen ample evidence of that in

Saskatchewan.

In the 1980s, the Grant Devine Conservative

government invested heavily in both what were once

known as the NewGrade Upgrader (Regina) and Bi-

Provincial Upgrader (Lloydminster). For many years,

Betting on upgraders in the ’80s paid off. Will B.C. make the same move?

they were slogged as being uneconomic at best and

boondoggles at worst. Th e 2005 Encyclopedia of Saskatch-ewan stated, “Th e NewGrade refi nery received substan-

tial fi nancial investment from both the federal and the

Saskatchewan governments, which has not been recov-

ered as of 2004 because of initial operational diffi culties

and because the price diff erential between heavy oil and

light synthetic oil was often too small during the 1990s

to cover the cost of the upgrading process.”

Yet now, with several decades of experience behind

us, we realize they were some of the smartest moves

Saskatchewan made.

Th e ability to process heavy oil here in Saskatch-

ewan strongly supported the growth of the heavy oil

industry. Th is September the industry will gather in

Lloydminster for that city’s biennial heavy oil show. Ask

those attending if they would have a job today if Husky

didn’t have an upgrader on the east side of town. Most

likely wouldn’t. Lloydminster, itself, would be a shadow

of what it is today.

Th at upgrader was a result of a provincial govern-

ment taking a bold strategic bet on its energy future, and

it has paid off in spades, long after the province divested

itself.

As for Regina, we see a similar story at what the

public refers to as the “upgrader,” but Co-op offi cials re-

fer to as an integral part of the “refi nery.” Long after the

province divested itself of its investments in the refi nery,

Co-op is now putting the fi nishing touches on a $2 bil-

lion expansion and revamp.

So it is in this context, not only industry players, but

perhaps the province of British Columbia itself, should

seriously consider Black’s proposal. Th ey may fi nd that in

order to make the pipeline palatable on the environmen-

tal side by reducing risk, and to the B.C. government by

creating jobs and indeed a whole new industry in the

region, they may have to take a bet on it.

And while we are loath to encourage governments

getting into business, the Conservative megaprojects

of the 1980s were, in the end, good for the province of

Saskatchewan. British Columbia Premier Christy Clark

said she wants to see more benefi ts from the pipeline

fl ow to her province. Maybe she will need to put her

money where her mouth is.


PIPELINE NEWS INVITES OPPOSING VIEW POINTS. EDITORIALS AND LETTERS TO THE EDITOR ARE WELCOME.Email to: [email protected]

OPINION

Lee Side of LloydBy Geoff Lee

From the Top of The PileBy Brian Zinchuk

In 2008, the Bakken play put a lot of money

in the pocket of the Saskatchewan government via

Crown land sales. Th e big question now is, will that

happen again in 2014?

Last month, I wrote:

“In 2008, Saskatchewan blew all previous land

sales records out of the water with $1.12 billion in

Crown land sales. Th e vast majority of that, $915.7

million, was in southeast Saskatchewan, driven by

the push to explore and develop the Bakken play.

During the 2011 Saskatchewan Oil and Gas Show,

Oilman of the Year Scott Saxberg, CEO of Crescent

Point Energy Corp., revealed that Crescent Point

was behind $700 million of that year’s land acquisi-

tion, buying both Crown and freehold permits and

leases.

“In August 2011, Saskatchewan hit an active

drilling rig record on 122 rigs. In the meantime,

North Dakota’s Bakken play has seen its oil produc-

tion shoot past all other states except Texas.

“Now, four years after those phenomenal land

sales, the 2008 leases are nearing their expiries. In

June, Pipeline News asked the Ministry of Economy

what the results have been, and what to expect. Ed

Dancsok, assistant deputy minister of petroleum and

natural gas for the Saskatchewan Ministry of the

Economy, spoke on behalf the ministry.”

Th e long and short of it is this:

•As of late June, 85 per cent of the land leased

in the 2008 rush does not have a well on it, meaning

only 15 per cent has been developed.

•Oil companies have until March 31, 2014 to

prove it up.

•Th e historical trend is for 20 per cent to be de-

veloped and 80 per cent to revert to the province.

To reach that 20 per cent level, we are going to need

record drilling over the next 19 months

Th ere is going to be a LOT of land left over

come April 2014.

My interpretation of this is that we could pos-

sibly see another big land sale year in 2014. Not as

big as the 2008 perhaps, as the premium land has

already been developed. Th is is the leftovers. Th ere

will be a lot of land to develop, but there are a lot of

factors to consider fi rst.

In a follow-up e-mail, Dancsok told me, “We

have monitored the reposting of lands after they re-

vert back to the Crown and found that statistically

it took two to three years for industry to request the

reverted lands to be posted in a land sale. Th is range

varies greatly on a case by case basis and in the case

of hot plays like the Bakken reposting may not fol-

low that statistical average.”

He added, “Certainly it does take some time to

work up a play concept and convince upper man-

agement within a company to pursue your explora-

tion model by posting land. Also within companies

there certainly is competition for exploration budget

dollars amongst the diff erent regions that any one

company may have interests in, not to mention com-

petition for budget dollars for drilling, production

facilities, secondary and enhanced recovery projects

and any other costs that companies need to priori-

tize.

“Also, I would suspect that any rights that revert

back to the Crown in the southeast Bakken play will

likely or naturally be the less prospective areas so

that future interest in acquiring these rights may be

more tempered. All we need is another big discovery

or another sweet spot or technology breakthrough

to turn that around in

a hurry.”

Th e big players

that have emerged from the Saskatchewan Bakken

play have focused on the best prospects fi rst. Based

on the number of wells you see along the highway,

the Stoughton/Forget/Kisbey areas have proven

there was a reason these parcels went for premium

dollars.

Th e other thing to remember here is all the play-

ers have referred to the Bakken as a “resource play.”

As opposed to small pools that might be a couple sec-

tions here and there, this is a widespread play. Th at

probably means a lot of the undeveloped land still has

a lot of oil.

Th e big question revolves around Crescent Point.

In speaking with Ryan Gritzfeldt, their vice-president

of engineering for their eastern area, i.e. southeast Sas-

katchewan, I asked if expiries were a pressure for them.

He said, “No. We’re not feeling pressure. A lot of those

leases had a fi ve-year term.

“When you look at the detail, we know what we

have to drill two to three years out. We know what our

expiry situations are. We build all that into our current

drilling program. Th ere’s always a small portion of our

corporate drilling program that handles that.”

With whatever land is left over, will this turn into

an opportunity for juniors to scoop up parcels and de-

velop it? Or will a large player, such as one of the

existing Bakken producers, make a big grab?

One way or another, 2014 will be an interesting

year when it comes to Crown land sales.

Brian Zinchuk is editor of Pipeline News. He can be reached at [email protected].

Will there be big land sales numbers in 2014?

Excitement is

building on a num-

ber of fronts for the

2012 Lloydminster

Heavy Oil Show

that will be held Sept. 12-13.

Th e show is billed as the world’s premier show-

case for heavy oil knowledge and technology that

benefi ts a number of stakeholders from organizers

and exhibitors to the local hospitality industry and

the reputation of Lloydminster as a heavy oil centre.

More than 6,000 people are expected to attend

the two day show at the completely renovated Lloyd-

minster Exhibition Grounds.

For exhibitors, the show is a fantastic opportunity

to network with new and existing customers face-to-

face in a highly competitive fi eld.

It is also an opportunity for the general public to

learn more about the industry that is driving the rapid

economic growth and prosperity of Lloydminster and

other heavy oil communities in the area.

While some people may not think of the public as

a customer, it is important for the industry to gain the

public’s confi dence and to demonstrate how heavy oil

can be produced in an environmentally sensitive and

profi table manner.

Some of the visitors will be new and returning

oil and gas students from Lakeland College who are

scouting the show for potential job leads as power en-

gineers in the industry.

Show organizers from the Lloydminster Oilfi eld

Technical Society have teamed up with the Society of

Petroleum Engineers to host the Heavy Oil Technical

Symposium in conjunction with the heavy oil show

for the time.

Th e new dual purpose show is in keeping with

the trend to keep the show as innovative and relevant

to many heavy oil audiences.

A couple of the technical presentation topics

that should draw a crowd are Rodless Lift Solution for

CHOPS and An Introduction to Powerwave for Im-proved Flooding and Stimulation Approaches.

Organizers have added a couple of luncheon

speakers as well this year that will give the show more

of a conference look and feel modelled after other

successful shows such as the Williston Basin Confer-

ence that alternates annually between North Dakota

and Regina.

Th is year’s 20th annual show in Bismarck, North

Dakota attracted a record 4,033 registered attend-

ees, representing 46 states, seven provinces and nine

countries.

Oil and gas shows have never been so popular,

with 63,000 attendees at the 2012 Global Petroleum

Show held in Calgary June 12-14.

Th e 2012 Oil Sands Trade Show & Conference

in Fort McMurray will be held Sept. 10 which should

free up visitors from that show to take a look at the

368 inside and outside booths in Lloydminster.

Th e direct economic impact of the Lloydminster

Heavy Oil Show is unknown, but organizers report

all available motel and hotel rooms were booked

months ago.

Restaurants and retailers will also reap the eco-

nomic spinoff s of the oil show held during the tradi-

tional shoulder season for the hospitality industry.

Th e show will serve to strengthen Lloydminster’s

reputation as the heavy oil capital of the world and for

staging large scale events with long lasting economic

benefi ts.

It helps that this year’s show is being held in a

period of relative strength for the oil and gas industry

compared to 2010, the fi rst year of economic recovery

from the downturn in 2008-09.

Two years can be a lifetime when it comes to the

development of new technology and products that can

keep companies ahead of the game and determined to

meet the key players once again at this show.

Pent up interest in Lloyd oil show


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Tim Sharpcell : 780-871-1276

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Page A5

In addition, the following specifi c

actions, beyond normal programs,

have been completed at Co-op Refi n-

ery Complex since the incident:

1. An integrity assessment has

been completed for all hydroprocessor

reactor effl uent lines (the type of pro-

cess line that failed on Oct. 6) within

the Complex. Additional inspection

on these circuits was completed in

May 2012. All reactor effl uent lines

were found to be in good condition

with the exception of one line. Th at

portion of line was replaced and full

due diligence was completed on the

balance of the line.

2. An audit of the entire corrosion

monitoring program has been under-

taken.

3. A written procedure has been

developed that outlines how pipe

wall thickness monitoring locations

are determined. Th is procedure is in

alignment with the principles out-

lined in American Petroleum Insti-

tute’s 570 – Piping Inspection Code.

4. A written procedure has been

developed and implemented that

outlines the actions, and additional

inspection, that must be completed if

the Corrosion Monitoring Program

detects high corrosion rates.

5. Communications have been

signifi cantly enhanced between the

process and inspection departments.

In addition to a weekly meeting that

had been occurring since 2010, a

regularly schedule monthly meeting

is now being held amongst process,

inspection, maintenance and engi-

neering, the groups that form the

cornerstones of CCRL’s Equipment

Integrity Program.

6. Th e equipment inspectors

have attended a three-day risk-based

inspection training course.

7. Th e initial risk-based inspec-

tion assessment has been completed

for three process units. Th e inspec-

tion plans on certain equipment was

modifi ed based on the results of these

assessments.

8. Integrity operating windows

have been developed for three process

units.

9. An inspection of piping circuits

within the heavy naphtha unifi ner

(HNU) and the platformer unit have

been completed to verify that correct

materials have been installed in cir-

cuits at high risk for high temperature

hydrogen attack.

A further 10 additional activi-

ties have been undertaken to further

strengthen the CRC equipment

integrity program, including:

1. Continue with the further de-

velopment and evolution of the CRC

risk-based inspection program.

2. Continue with development

of integrity operating windows being

completed in conjunction with the

RBI assessment.

3. Complete the audit of the cor-

rosion monitoring program.

4. Form a reliability engineering

group that will be focused on identi-

fi cation and resolution of equipment

reliability issues. In the past this

function has been divided between

the maintenance engineering group

and the plant engineering group.

5. Reinforcement of existing

quality control system for fabrication

and installation of piping systems to

include additional fi eld verifi cation

steps.

6. Continue with development

of the process safety management

system that addresses equipment

integrity, documentation, training,

management of change, procedures,

incident investigation, emergency

response, contractor safety, process

hazard analysis, pre-start up safety

review, and audit.

7. Continue with the develop-

ment of written procedures and

documentation to formalize and

reinforce equipment integrity pro-

grams.

8. Additional management staff

will be added to the equipment in-

tegrity group.

9. Plans are currently being de-

veloped to restructure the equipment

integrity group that will include

additional staff dedicated to rotating

equipment condition monitoring.

10. Continue to complete a pro-

cess hazard analysis on all existing

process units.

In addition, the refi nery is work-

ing with a number of third party

companies such as American Petro-

leum Institute, National Petroleum

Refi ners Association, various risk

consultants and inspection contractors

related to process improvements. It

also has been working with DuPont

Sustainable Solutions since 2008 that

is providing full-scale process safety

management program support to the

refi nery.

Speci c actions taken by Co-op Re nery Complex


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PICKER & OILFIELD HAULING SERVICEProudly serving Lloydminster Area for over 20 Years

By Geoff Lee

Calgary – Imperial Oil Limited expects to start

producing bitumen by the end of 2012 from its

$10.9 billion Kearl oilsands open pit mining project

northeast of Fort McMurray.

Th e company is also on schedule to complete

the construction of its $2 billion Cold Lake thermal

expansion, called the Nayibe project, that will use

cyclic steam stimulation (CSS) to produce bitumen.

Imperial allocated more the $2.4 billion of its

2012 capital expenditure budget to its growth proj-

ects at Kearl and Cold Lake in the fi rst six months

of the year according to its second quarter report on

July 26.

Th e Kearl project, jointly owned by Imperial

Oil (operator) and ExxonMobil Canada will be one

of Canada’s largest open-pit mining operations with

regulatory approval for up to 345,000 barrels a day

of production.

Th e Kearl project will recover a total of 4.6

billion barrels of bitumen over its estimated 40-year

lifespan.

Th e project is the largest in Imperial’s history.

Ongoing construction of the initial 110,000 barrels

a day phase project was 94 per cent complete at the

end of the second quarter.

“Th at’s on an overall project basis. Actual site

construction is about 90 per cent complete,” said

Imperial spokesperson Pius Rolheiser during a

follow-up interview on Aug. 20.

“We expect to start up as planned by the end

of 2012. Th at will be the initial development of

110,000 barrels per day,” he said.

“Th at will increase to about 145,000 barrels in

the fi rst several years with increased mining capac-

ity.”

Th e Kearl project was sanctioned in 2009 as a

three-phase development.

Th e execution plan was reconfi gured in mid-

2010 to include an initial development, followed by

an expansion phase and then by a debottlenecking

of both phases.

Th e $8.9 million Kearl expansion project,

scheduled for start-up in late 2015, will have a

similar production profi le – initial production of

110,000 barrels per day, increasing to 145,000 bar-

rels per day over the fi rst several years.

Th e debottlenecking of both phases will in-

crease total production from Kearl to its licensed

capacity of 345,000 barrels per day by about 2020.

It is the largest ongoing project in the oilsands

with a camp-based workforce of 4,000 to 5,000

workers in August, just off the peak construction

force of more than 5,000 workers in 2011.

Page A10

Imperial’s Kearl, Nabiye on schedule

Site construc on at Imperial Oil’s Kearl oilsands project ( rst phase) northeast of Fort McMurray is 90 per cent complete. The company expects to produce bitumen from open pit mining by the end of 2012. The rst phase is designed to produce 110,000 barrels per day, rising to 145,000 a day. A second phase expansion will also produce 110,000 bpd by the end of 2015, eventually rising to 145,000 bpd. The design capacity of 345,000 bpd could be reached by 2020. Photo submi ed


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MAIN OFFICE 1-780-744-3974 FAX 1-780-744-2242

www.kenilworth.ca

Between 4,000 and 5,000 construc on workers camped at Imperial’s Kearl oilsands project have an opportunity see the sunrise over the froth treatment plant at the open pit mining site northeast of Fort McMurray. The company is also on schedule with the expansion of its Cold Lake thermal opera ons at its Nabiye project that will use cyclic steam s mula on to produce bitumen. Photo submi ed

Page A9“Our long-time operational workforce – the

guys who will actually work at Kearl once it’s up

and running, will live in camp as well. Our plan was

always to have it as a fl y-in, fl y-out operation,” said

Rolheiser.

Crews are continuing to reassemble giant size

modules on site that were constructed in South

Korea and transported to Edmonton through the

United States.

Construction at Imperial’s Nayibe project

located at the northeast section of Imperial’s leases

at Cold Lake stood at 22 per cent complete by the

end of the second quarter.

Th e project, sanctioned by Imperial in Febru-

ary 2012, is on target to produce more the 40,000

barrels of day of bitumen with a start-up by the end

of 2014.

“We actually started the preliminary site work

even before we formally sanctioned the project,”

said Rolheiser.

“In the summer of 2011, we did some prelimi-

nary site clearing and some excavation.”

Th e company also built the access road to the

site that is a new development area for Imperial.

Th e Nabiye expansion will access 280 million

barrels of recoverable reserves of bitumen.

Nayibe will include a central steam generation

and a bitumen processing plant which will also

have a 170 megawatt electrical co-generation plant

incorporated in it.

Imperial operates the largest and longest run-

ning in situ oilsands operations in Canada at Cold

Lake. Th at includes four steam generation and bitu-

men production plants.

Gross production of Cold Lake bitumen aver-

aged 152 thousand barrels a day during the second

quarter, versus 158 thousand barrels in the same

period last year.

Th e lower volumes were primarily due to

planned maintenance activities at the Mahkeses

plant as well as the cyclic nature of production at

Cold Lake.

Rolheiser says the decision to produce bitumen

with open pit mining at Kearl or to use CSS or

SAGD (steam assisted gravity drainage) at Nabiye

is primarily due to reservoir characteristics.

“Th e open pit mines are all north of Fort Mac

because the bitumen zone is close enough to the

surface,” he said.

“At Cold Lake and even further south of Fort

Mac, and even further northeast of Fort Mac, the

bitumen oilsands ore is buried so deep it’s just not

practical to surface mine it, so you employ thermal

technology.

“Th e reason we use CSS at Cold Lake is

because in that particular reservoir SAGD simply

wouldn’t be as eff ective as CSS because of reservoir

conditions.

“SAGD requires uniform reservoirs with higher

bitumen saturation to be eff ective.”

Fly-in, y-out operation


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By Geoff Lee

Minister of the Economy, Bill Boyd was on hand for the offi cial opening of

Kerrobert’s upgraded water treatment plant in his provincial riding of Kinders-

ley on Aug. 3.

Boyd spoke to Pipeline News about a number of oil and gas topics fol-

lowing the ribbon cutting, including the roles of his new umbrella Economy

Ministry including the Ministry of Energy and Resources now headed by Tim

McMillan.

Th e Ministry of the Economy, created during a cabinet shuffl e on May 25,

brings together a number of economic functions of the government, including

Enterprise Saskatchewan, Innovation Saskatchewan,Tourism Saskatchewan,

employment, immigration, trade, energy and resources.

Bill Boyd is also the minister responsible for SaskPower and minister

responsible for the Global Transportation Hub in Regina

New Energy and Resources Minister Tim McMillan is also minister of

Tourism Saskatchewan and Trade within the Economy ministry and minister

responsible for SaskEnergy. Depending on their schedules, Boyd and Mc-

Millan could both be at the Lloydminster Heavy Oil Show in Lloydminster

Sept. 12-13.

PN: How is the oil and gas economy of Saskatchewan right now?Boyd: Th e oil economy is pretty good. We’ve seen a bit of a pullback in

oil prices in the last 50 or 60 days which is a bit concerning. Th e oil economy

though, still remains strong. We’ve got some strong drilling activity in Sas-

katchewan.

Gas, on the other hand – there are very low prices, and as a result of that,

there is not much activity there. Fortunately, gas isn’t a big component of our

provincial revenue base – oil certainly is. We still are on track, but obviously, a

little bit concerned about the prices right at the moment.

Page A12

Minister of the Economy Bill Boyd helped to o cially open Kerrobert’s newly upgraded water treatment plant in his Kindersley cons tuency on Aug. 3. The province contrib-uted $1.32 million in provincial infrastructure s mulus funds plus $250,000 under the Municipal Rural Infrastructure Fund.

Boyd tackles A-Z media questions


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Economy Minister Bill Boyd, le , chats with Kerrobert Mayor Erhard Poggemiller during a tour of the upgrades to the town’s water supply and water treatment plant. Boyd was on hand for the o cial opening on Aug. 3.

Page A11PN: How important is heavy oil thermal recovery becoming to the prov-

ince?Boyd: Any of these enhanced oil recovery projects are very important.

Th e enhanced benefi ts are very real – much higher recovery rates than normal

production so they are a very positive generator of additional oil and revenue

for the province.

PN: Is this why the Saskatchewan Research Council is focusing more research on heavy oil recovery?

Boyd: Ongoing work at the SRC as well as the Petroleum Technology Re-

search Centre – always with respect to enhanced oil recovery methods or other

technology – that’s being looked at – these are very good projects that create

signifi cant wealth for our province.

PN: Is there a specifi c heavy oil strategy in the works?Boyd: I don’t know if there’s a strategy necessarily coming up. Th ere is

ongoing work all of the time with respect to enhanced oil recovery types of

opportunities here in Saskatchewan. Th ey are important for the province and

there will be ongoing work.

PN: What impact does the lower rig count in July and early August this year compared to the summer of 2011 have on the province?

Boyd: Th e drilling numbers are still pretty good here in Saskatchewan

right now. Th e weather has been much more co-operative this year than last

year, particularly down in the southeast part of the province where they were

fl ooded last year. Drilling activity is pretty strong though, across the province.

PN: Th e March budget was based on a barrel of oil at $100. Is the lower oil price aff ecting programs?

Boyd: Revenues are off a little bit recognizing we are only four months

into the fi scal year of the province starting April 1. We are a few months into

it – we don’t see our projections are off that much. Most analysts would agree

that they are expecting prices to strengthen in the fall and the winter months.

PN: Will you or Energy Minister Tim McMillan be attending the Lloy-dminster Heavy Oil Show Sept. 12-13?

Boyd: Tim is the actual minister, so I am sure he will there. I am not sure

about my schedule at the moment, but I am looking forward to it if I get the

opportunity.

Page A13

Questions answered


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Page A12

PN: How important is this heavy oil show to the oil and gas industry?Boyd: I think these shows are very important to the industry. It showcases

the latest technology. It certainly is a good opportunity for interaction between

the companies and the consumers of their products.

It’s a wonderful opportunity for the industry to get together and talk and

showcase the new technologies.

Husky Energy is a great example (more than 24,000 barrels of oil from

thermal in Q2).

A number of other companies across the province as well have enhanced

oil recovery projects and many of them working out very well.

Any time we can increase the recovery rates it dramatically aff ects the

amount of production as well as the royalties that are ‘thrown’ from that.

PN: How would describe your new Ministry of the Economy?Boyd: Th e Ministry of the Economy has the economic functions of gov-

ernment all involved in it now. I think that sort of makes sense. We had them

before in about four or fi ve ministries.

Th is change is a good change. It provides companies that are looking to

do business with more of a one-stop opportunity to address any problems or

concerns about setting up a business in our province.

PN: Most of the issues pertaining to energy and resources fall on Tim McMillan’s plate?

Boyd: I am still obviously involved in it as the minister of the Economy.

We have a joint role in some respects with energy.

PN: How important is the upgraded treatment plant for Kerrobert to attract new oil and gas companies or workers?

Boyd: I think it’s very important. One of the things we all take for granted

is good quality water and sewer infrastructure. You never really think about

until you turn the tap on and nothing comes out. Th is is important for the

ongoing operations of Kerrobert and the growth of Kerrobert and the area in

the future.

We are very pleased as a province to be involved in this. It provides stable

funding for the community here and a good water source going forward.

PN: What is your take on the amount of oil and gas activity in your Kindersley riding?

Boyd: Th ere is very strong activity in this area. We are seeing new technol-

ogy – the horizontal wells of course, taking over more and more – production

increasing – a lot of very good jobs and a lot of investment is taking place in

Kerrobert and area.

Th e oil activity in this constituency represents a big part of our economy,

and as a result of that, a lot of people in Kerrobert and Kindersley and other

places in the constituency have very good jobs from it.

PN: Have you visited Petrobank’s THAI thermal oil project near Ker-robert?

Boyd: I have about 18 months ago or so near Kerrobert. It’s a very leading

edge project that is showing very strong results. Th at project is involving a lot

of very good people – a lot of investment – clearly communities like Kerrobert

are benefi ting from it.

PN: Do you see any new companies getting involved in the Saskatch-ewan oilsands?

Boyd: Th ere are a couple of companies involved

in it. Unfortunately it’s slow progress. One of the

companies (Oilsands Quest) had some fi nan-

cial diffi culty. I hope they are working their way

through the process with respect to that.

Th ere certainly is a very large deposit there, and

there are some engineering and technical challeng-

es that have to be met and can be met in the future.

I suspect we will see production there sometime in

the future.

PN: Is heavy oil in this area going to play a bigger role in the province?

Boyd: I wouldn’t say more. I would say it’s a

consistent signifi cant player in the oil here in west

central Saskatchewan with more sweet or lighter

crudes in some other places. Th is has been a stable

area for production for a long time. Production is

actually increasing in this area which is good to see.

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By Geoff LeeRegina – Th e Saskatchewan government should

undergo its own review of the proposed U.S. $15.1

billion takeover of Nexen Inc. by the China Na-

tional Off shore Oil Corporation announced July 23.

Th at’s the belief of potential provincial New

Democratic Party leadership candidate and econo-

mist Erin Weir, who is currently a Regina-based

economist for the Canadian Centre for Policy

Alternatives.

Weir fears CNOOC could drive down oil and

gas prices to supply Chinese consumers with cheap

Canadian energy at the expense of Saskatchewan

where he says Nexen operates more than 1,300

producing gas wells.

“I think a company like Nexen tries to sell oil

and gas at the highest possible price,” he said.

“I think the risk for Saskatchewan is that the

Chinese National Off shore Oil Corporation may

have an interest in supplying Saskatchewan re-

sources to the Chinese economy at lower prices

which would reduce Saskatchewan’s royalty and tax

revenue.”

Nexen began in Saskatchewan following the

1986 privatization of SaskOil, a Crown corporation,

and has gone on to become an international energy

giant.

Th e Nexen deal would extend CNOOC’s

global presence in Western Canada, the U.K. North

Sea, the Gulf of Mexico and off shore Nigeria –

focused on conventional oil and gas, oilsands and

shale gas.

Nexen posted an average production of 207

million barrels of oil equivalent per day (after royal-

ties) in the second quarter 2012 including produc-

tion from its Saskatchewan operations.

Weir said the main diff erence between China-

owned CNOOC and SaskOil being a former

Crown corporation is that SaskOil’s interest was to

make money for the people of Saskatchewan.

“SaskOil tried to sell oil and gas at the highest

possible prices,” he said.

“CNOOC belongs to a government that is an

energy consumer, so it has the opposite interest. It

would want to lower those prices.”

Th e CNOOC bid for Nexen will require

federal government approval under the Investment

Canada Act, which requires some foreign takeovers

of Canadian companies to pass the “net benefi t

test” of being a positive contributor to Canada's

economy.

CNOOC’s last major deal in Canada was a

$2.1 billion acquisition of oilsands developer OPTI

Canada that received federal approval.

Weir thinks more is at stake with the Nexen

deal, and he favours an open debate similar to the

one over the hostile takeover bid for Saskatchewan-

based PotashCorp by Australia’s BHP Billiton Ltd.

in 2010.

Th e federal government eventually disallowed

the foreign ownerships of PotashCorp due to

strong pressure led by Saskatchewan Premier Brad

Wall.

“It is quite striking that the government of

Saskatchewan has said nothing at all about the

proposed Nexen takeover given Nexen’s signifi cance

in the provincial economy, and given how vocal it

was about the proposed PotashCorp takeover,” said

Weir.

Page A16

Economist Erin Weir wants the Saskatchewan govern-ment to launch its own review of the proposed U.S. $15.1 billion takeover bid of Nexen Inc. by the China Na onal O shore Oil Corpora on. Photo submi ed

Economist seeks review on Nexen takeover


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Page A14 “I think there’s a need

for a much more open and thorough review of the

proposed Nexen takeover through the Investment

Canada Act.

“In the past, these reviews have taken place

behind closed doors and usually resulted in foreign

takeovers being rubber stamped.

“PotashCorp. was only one of two exceptions to

that since the Investment Canada Act was passed in

1985.

“Th e process changed precisely because there was

so much public debate and political pressure on the

federal government to reject that proposal.”

Weir will continue to urge the government to be

more transparent about the proposed Nexen sale to

CNOOC as he ponders his next career move.

He said he will announce whether he plans to run

for the NDP leadership in September in advance of

the leadership vote next March at the NDP conven-

tion.

He has also taken a leave from his job as an

economist for the United Steelworkers Union’s na-

tional offi ce.

“I did a lot of my commentary with the United

Steelworkers, but since I am on leave, I am not offi -

cially speaking for the United Steelworkers right now,”

he said.

In a comment posted on rabble.ca on July 25,

Weir said CNOOC’s promise to establish its North

American headquarters in Calgary wouldn’t be good

for British Columbia where Nexen is expanding shale

gas extractions, nor would it be good for Saskatch-

ewan.

He said that’s due to a real risk of CNOOC

under pricing their provincial resources.

Burnaby NDP MP Peter Julian, the offi cial B.C.

opposition critic for Energy and Natural Resources,

said last month he is seeking a “transparent” review

of the transaction by a parliamentary committee on

natural resources.

He wants to examine whether the deal would cost

Canadian jobs by driving raw bitumen from Nexen’s

oilsands projects to China that could otherwise be

refi ned domestically.

Alberta’s Minister of Energy Ken Hughes said his

province welcomes investment with required compli-

ance from all oil and gas companies.

“Today’s potential transaction is further evidence

of the vital importance of Alberta’s oilsands to meet

global energy demand,” said Hughes in a new release.

“Foreign investment benefi ts Albertans, and Ca-

nadians, putting Canadian fi rms in a better position to

compete globally.

“Nexen itself is a Canadian company that main-

tains operations around the world including in the

Gulf of Mexico, Africa and the North Sea.

“Th e investment required to develop oilsands

resources is signifi cant.

“Th e oilsands have already drawn investment

from China, the United States, Norway, Japan, South

Korea, France, Th ailand and the United Kingdom.

Th e result is jobs for Canadians here and abroad, and

competitive products on an international market.”

Weir is miff ed that the Saskatchewan’s Brad Wall

government has been conspicuously silent on the pro-

posed takeover and its potential economic impact.

“I hope there is a rigorous review of the proposed

Nexen takeover, and I would like to see the govern-

ment of Saskatchewan speaking out in favour of such

a review and play an active role in that process,” said

Weir.

Weir is also critical of the fact there is no time-

frame on when a decision will be made by the federal

government.

“Th at’s the whole problem that there are really not

public hearings,” he said.

“Th ere is really no public process or timeline.

Th e process just occurs behind closed doors and we

won’t know until Industry Canada comes forward

and announces it has either approved or rejected the

proposal.

“Th at’s the problem with the process being so

secretive.”

Th e U.S. review is being conducted by the Com-

mittee on Foreign Investment, an interagency panel

chaired by Treasury Secretary Timothy Geithner that

examines deals for national security risks.

Th e U.K. government is also conducting a review

with Nexen’s extensive assets in the North Sea at stake.

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By Geoff LeeCalgary – Husky Energy Inc. continues to tran-

sition its heavy oil operations in Western Canada

to thermal production and horizontal wells while

reducing the number of cold heavy oil production

(CHOPS) wells in the Lloydminster area.

Only three CHOPS wells were drilled in the

second quarter of 2012 compared to 60 such wells

in the second quarter of 2011, as thermal proves to

be a cost-effi cient alternative.

“We’ve been making good progress in transi-

tioning our heavy oil portfolio towards more ther-

mal production and horizontal drilling.” said CEO

Asim Ghosh during a second quarter conference

call on July 25.

“We achieved fi rst oil in the second quarter at

both the Pikes Peak South and the Paradise Hill

thermal projects ahead of schedule, and product is

now shipping from both sides.

“To accelerate this program, we have now sanc-

tioned the Sandall thermal project, and are looking

at the early stages of examination of four additional

thermal projects.

“We'll be developing these projects with a

proven modular approach, which should give us

cost and operational effi ciencies,” Ghosh said.

Production from all of Husky’s thermal projects

averaged 24,000 barrels a day including 4,500 bar-

rels a day from new Pikes Peak South and Paradise

Hill thermal projects near Lloydminster in the

second quarter of 2012.

Production from the, 8,000 bpd capacity Pikes

Peak South and 3,000 bpd capacity Paradise Hill

thermal projects will continue to ramp up by the

end of the year.

“Th ese projects, the two of them, were delivered

in aggregate slightly under budget and in about 13

months and 15 months respectively, so a very good

performance by the business unit there,” said chief

operating offi cer Rob Peabody.

Th e 3,500 bpd Sandall thermal project near

Paradise Hill was sanctioned during the quarter

with commissioning expected in 2014.

Design work continued in the quarter on an

8,000 bpd commercial project at the Rush Lake

thermal development, which is expected to begin

production in 2015.

Fifty horizontal wells were drilled during the

fi rst half of 2012, out of a planned 140 to 150 well

program this year, as heavy oil production continues

to favour thermal over CHOPS.

Only 72 CHOPS wells were drilled in the fi rst

six months of 2012 compared to 121 in the same

period of 2011.

“It’s quite simple really,” said Peabody, in re-

sponse to an investor question about the economic

and strategic rationale of thermal projects such as

Pikes Peak.

Page A18

Ed Connolly, senior vice-president of heavy oil, o ciated at the grand opening of Husky’s new CO2 Capture and Liq-uefac on Project that was held in the second quarter. Four solvent enhanced oil recovery pilots were opera onal in the second quarter, using CO2

recovered from the Lloydminster ethanol plant.

Produc on began in the second quarter of 2012 at Husky’s 8,000 barrel a day Pikes Peak South thermal project lo-cated 40 kilometres east of Lloydminster. Thermal produc on also began at the 3,000 bpd Paradise Hill project on June 16 with produc on levels at both sites con nuing to ramp up. Pictured are thermal pumpjacks at the Pikes Peak site. File photo

Husky increases thermal output, focus


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Page A17 “First, CHOPS has been

a great driver of our production heavy oil over the

years, but the quality at the margin of those wells

is declining, and meanwhile, with the effi ciencies

we’re seeing in executing the thermal projects, we’re

able to replicate the economics of the really good

CHOPS wells now through thermal projects,”

explained Peabody.

“And, in essence, what we see there is we’re able

to achieve the same operating costs with similar

F&D (fi nd and development costs).”

Peabody said that based on just the capital

effi ciency of Pikes Peak South and Paradise Hill,

the projects “were delivered between, on average, at

about $33,000 - $35,000 a fl owing barrel, so very

competitive overall in the portfolio.”

During the fi rst six months of 2012, Husky

spent $245 million on capital expenditures for

heavy oil projects related to thermal projects com-

pared to $232 million in the same period of 2011.

Th e fi rst phase of the Sunrise Energy Project

in the Athabasca Oil Sands using steam assisted

gravity drainage (SAGD) advanced on schedule in

the second quarter with fi rst production planned in

2014.

“Looking at the subsurface side, all 49 SAGD

well pairs are fi nished, and most importantly, we’ve

confi rmed the quality of the reservoir,” said Ghosh.

“On the surface side, the biggest component

is the central processing facility, which is about 30

per cent complete. And construction of the other

feed facilities, including the pipelines, is about half

complete.

“So to summarize, it’s been a steady quarter,

with progress against each of the elements of our

business.”

Husky achieved signifi cant milestones across

its other growth pillars with the completion of the

shallow water platform jacket at the Liwan Gas

Project in the Asia Pacifi c Region.

Th e company also awarded contracts in the

quarter to evaluate potential extension options at

the White Rose fi eld in the Atlantic Region.

Due to weaker commodity prices, Husky ended

the quarter with a profi t of $431 million compared

to $669 million in the second quarter of 2011.

Th e average realized price for the company’s

production as a whole was $51.98 per barrel of

oil equivalent in the quarter, compared to $66.33

per boe a year ago and $65.26 per boe in the fi rst

quarter.

Th e average realized crude oil pricing was

$71.61 per barrel, down from $87.87 per barrel a

year ago and $87.11 per barrel in the fi rst quarter.

On the production side, Husky averaged

282,000 boepd per day in the quarter compared to

325,000 boepd in the fi rst quarter and 311,600 a

year ago.

Th e lower number includes a 34,000 boepd

reduction due to maintenance of off -stations in the

Altantic region.

“We continue to benefi t from a strong down-

stream operational performance and reliability and

these have partially helped off set lower commod-

ity prices and refi ned product margins,” said chief

fi nancial offi cer Alister Cowan.

Th e Lloydminster upgrader contributed $42

million to quarterly profi ts, compared to $48 mil-

lion in the last quarter and $20 million a year ago.

A planned three week turnaround at the

upgrader in April was completed on time and on

budget and led to signifi cant milestones for record

monthly production and shipments.

Husky


Phone: (780) 875-0032Fax: (780) 808-2273Cam’s Cell: (780)205-8316Greg’s Cell: (780) 214-7808

Lloydminster – Back to school will have special

meaning for Lakeland College oil and gas students

with new power engineering programming, upgrad-

ed lab facilities and the construction start of a new

Lakeland College Petroleum Centre.

Orientation takes place Aug. 28 at the Lloyd-

minster campus for heavy oil and gas students who

may be in shock and awe over the changes.

Th e fall semester marks the start of another

one-year heavy oil operations technician or HOOT

certifi cate course for fourth class power engineer-

ing with 46 students enrolled and many more on a

waiting list.

Kara Johnston dances on the site of the rst phase of the new Lakeland College Petroleum Centre. The sod-turning ceremony will take place Sept. 11 – the opening day cer-emonies of the Lloydminster Heavy Oil Show.

Lakeland pumped for fall energy upgradesTh e new academic year also heralds the start of

the fi rst two-year heavy oil and power engineering

diploma course for third class power engineering

students.

“We are launching that program this fall, so we

will have students in the fi rst year of the diploma

program as well as students in the second year of

the diploma program,” said Kara Johnston direc-

tor of Energy, Entrepreneurship & Saskatchewan

Programming.

“We have 25 students from our current group

of HOOT students that just graduated that are

coming back to do their second year and complete

their diploma.

“Interest is picking up through the roof with

the two year diploma. Our waiting list – we have

never seen a waiting list like this. We easily have

over a 100 people who are awaiting entry.

“Our new facility can’t open fast enough so that

we can accommodate all these students,” Johnston

said.

Five of the new heavy oil power engineering

students are returning to class with $22,000 schol-

arships from Husky Energy. Husky off ers students

practicum work placements and full time employ-

ment off ers upon graduation.

Lakeland also wrapped its fi rst Introduction

to Heavy Oil and Gas program at the Onion Lake

First Nations Reserve in July with fi ve students

from that program entering the HOOT program

this fall.

Students in both one and two year program

streams will benefi t from the installation of a new

$700,000 teaching boiler in the existing lab and

new equipment upgrades for third class power engi-

neering studies.

Page A22

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Page A19

“Our lab is currently a four class lab. We have a

new boiler coming to create a third class lab,” said

Johnston in early August.

“It’s currently being shipped from Oklahoma

along with a new deaerator (to remove oxygen in

boiler feedwater) and a new blow-down tank.”

Th e new boiler could be fully installed and

operational by Oct. 1.

“Th is fall, these students will get to see some-

thing really special because they will be there when

the boiler is started,” added Johnston.

“What that means for our diploma students

who are doing their third class, is they can do all of

their steam time in-house.”

Students may also take part in the sod turning

for the construction of the $15 million fi rst phase

of the new Lakeland Petroleum Centre on Sept.

11 – timed for the start of the Lloydminster Heavy

Oil Show.

“We’ll have lots of people in town and we have

invited some provincial dignitaries – the Alberta

government particularly. Th ey contributed almost

$10 million to this project,” said Johnston.

Th e dignitaries will include representatives

from sponsoring oil and gas companies including

Husky, and Canadian Natural Resources.

Husky donated $1.1 million to Lakeland in

May with $750,000 toward expansion and up-

grades and $360,000 to student scholarships and

fi nancial support for power engineering students.

CNRL contributed $500,000 this year toward

the new centre and facility upgrades and CIBC

donated $125,000 for general academic scholar-

ships in January.

“So we’re going to dig the hole and construc-

tion will be underway,” said Johnston who has ren-

derings of the new wing posted in the HOOT lab.

“Th ey are just fi nalizing their plans right now

and it looks phenomenal. We are pretty excited.

“We are still looking a bit more support from

our industry sponsors. We are not quite at our $15

million goal yet, but we are really confi dent that

our industry will come to the table,” added John-

ston.

“We have a really phenomenal investment

team that is out there now meeting with those

investment partners.”

Husky, Cenovus and Keyera Corp. are among

the industry partners that funded the development

of the new heavy oil power engineering curriculum.

Th e programming is also benefi ting from a

$1 million donation that is being paid over four

years from Calgary philanthropist Allan Markin.

Th e donation was made in 2009 through Markin’s

Healthy Learners Fund.

Lakeland is looking for funding to acquire

some specialized heavy oil equipment for the new

wing including a once-through boiler, a distillate

tower and some SAGD and upgrader simulations.

“It’s important to have the latest technology.

You can simulate the entire upgrading process,”

said Johnston.

“Students can go in and they can break it down

and see how it works. Simulation is going to be the

key to the future which is why it is important for

us to have those tools for our students.

“We actually installed symtronics simulation

(boiler simulation) this summer so students will

have some simulation for a boiler. Th at’s pretty

awesome. We are pretty excited about that,” John-

ston said.

Th e new Petroleum Centre will eventually

house three steam boilers, two large theatres,

change rooms, offi ces and numerous class rooms

when both phases are complete.

Th e fi rst phase will feature four 60-seat class-

rooms, a faculty suite, some staff offi ces and the

third class lab. A grand opening for this phase is

timed for Lakeland’s centennial year wrap up in

November 2013.

Th e City of Lloydminster has contributed

$50,000 to the Lakeland Centennial Campaign

that kicks off Nov. 10 in Lloydminster with the

Great Prairie Steak Cook-off sponsored by the

City of Lloydminster and Lakeland College

alumni.

Despite the historic investments and increased

enrolment this year, student housing may not be an

issue in Lloydminster.

All of the available rental accommodations in

the Husky Energy Residence Village will be avail-

able to students this fall.

Students will also be greeted by new faculty

members who will welcome the new third class

and fourth class power engineering students on

orientation day.

“I am very excited. We’ve worked so hard this

past year,” said Johnston.

“We’ve worked so hard on the program and

these lab upgrades, and we are fi nally starting to

see the results of all that hard work.

“We’ve got a couple of new faculty members.

We have the biggest faculty that we’ve ever had; we

have fi ve which is unheard of in this program.

“Now it’s nice to put in all into place and to

implement it.”

Construction will be underway


One Call Will Supply It All

Edmonton – Th ree major oil spills in Alberta this summer have prompted

a safety review of the provincial pipelines regulated by the Energy Resources

Conservation Board.

Alberta Energy Minister Ken Hughes has asked the ERCB to retain an

independent third party to review pipeline safety in the province.

Th e ERCB, in conjunction with an independent third party to be contract-

ed, will review how pipeline integrity is managed, how safety of pipelines cross-

ing waterways is ensured, and how responses to pipeline incidents are handled.

“As leaders in energy production and regulation, our pipeline integrity

standards must be among the best in the world. If changes are needed, Alber-

tans can rest assured that we will make them,” said Hughes on June 20.

“Th e energy industry is the economic lifeblood of our province, and at the

same time we want to ensure that Albertans have clean water, clean land and

clean air. Today we are taking signifi cant steps to ensure this will be the case for

decades to come.”

Th e call for a review was time, with an announcement by Enbridge Inc. to

spend $500 million to change the design of its Northern Gateway pipeline in a

bid to address safety concerns of aboriginal groups and others.

Th e proposed $5.5 billion project has been the focus of heated debate

among local communities, environmental groups and politicians.

Th e request for pipeline safety review came two days after the spill of

230,000 litres of oil from an Enbridge pumping station on the Athabasca pipe-

line near the town of Elk Point on June 18.

On June 7, approximately475,000 litres of oil spilled from an old Plains

Midstream’s Rangeland pipeline near Red Deer in central Alberta.

Some of the leaked oil fl owed into the Red Deer River from a reservoir.

In late May, a Pace Energy Oil and Gas oil leak near Rainbow Lake in the

northwest of the province spilled about 5,000 barrels.

Th e new pipeline safety review will run in conjunction with the current

incident-specifi c investigations the ERCB is conducting.

Th e pipeline safety review will be broader in scope, and will look at existing

regulations and industry best practices from Alberta and around the world. At

the conclusion of the review, a report will be submitted to Minister Hughes.

Alberta has almost 400,000 kilometres of provincially-regulated pipeline.

Th e number of incidents has been steadily declining, from 885 in 2007 to 641

in 2011 said the government.

All incidents, ranging from contact with a pipeline that does not cause a

release to a spill, must be reported to the ERCB.

Pipeline spills prompt safety review

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OIL AND WATER HAULING

Regina – Th e

August sale of Crown

petroleum and natural

gas rights generated

$23.3 million in revenue

for the province, which

was more than double

the $10.5 million from

the June sale.

Th e proceeds from

the August land sale

help to push the total

revenues for the year to

$78.9 million with the

next sale scheduled on

Oct. 1.

Minister responsible

for Energy and Re-

sources Tim McMillan

said the August sale not

only provided a healthy

return for the province,

but also refl ected the

strong, ongoing interest

by the industry in Sas-

katchewan's oilpatch.

“Saskatchewan

off ers a competitive, at-

tractive environment for

exploration and devel-

opment and companies

are placing a premium

on our oil and gas re-

sources,” said McMillan.

“Th at’s refl ected in

the average dollars per

hectare received in these

sales, and so far in 2012

our average dollars per

hectare price is tracking

well ahead of that of the

country's other major oil

producer, Alberta.”

Petroleum and

natural gas rights in Au-

gust sold at an average

of approximately $500

per hectare, slightly

lower than the $542 per

hectare price in June.

Alberta’s lease and

licence totals averaged

just $176 per hectare in

their bi-monthly sale of

Aug. 8.

Th e August sale in

Saskatchewan included

237 lease parcels that

brought in $22.9 million

in bonus bids and two

petroleum and natural

gas exploration licences

that sold for $366,109.

Th e Weyburn-Es-

tevan area received the

most bids with sales of

$10 million. Th e Swift

Current area was next at

$6 million, followed by

the Lloydminster area

at $5.5 million and the

Kindersley-Kerrobert

area at $1.7 million.

Th e highest price

for a single parcel was

$2.4 million. Standard

Land Company Inc. ac-

quired this 1,036-hect-

are lease southeast of

Gull Lake.

Th e highest price

on a per-hectare basis

was $11,151. Ranger

Land Services Ltd. bid

$180,533 for a 16-hect-

are lease parcel north-

east of Turtleford.

A special explor-

atory permit block

on off er southwest of

Assiniboia received a

work commitment bid

of $492,166 from Stan-

dard Land Company

Inc.

Weyburn-Estevan summary

(numbers rounded up)Th e top purchaser

of acreage in this area

was Stomp Energy Ltd.

that spent $1.8 mil-

lion to acquire 14 lease

parcels.

Th e top price paid

for a single lease in this

area was $1.1 million by

Silver Hawk Resources

Ltd. for a 648 hectare

parcel situated six kilo-

metres north of the Ry-

erson Bakken-Torquay

Pool, 13 kilometres

southeast of Redvers.

Th e highest dol-

lar per hectare in this

area was received from

Ranger Land Services

Ltd., at $5,026 per hect-

are for a 64.75 hectare

parcel located within the

Viewfi eld Bakken Pool,

6 kilometres northeast

of Handsworth.

Swift Current areaTh e top purchaser


was Standard Land

Company Inc. that

spent $4.7 million to

acquire fi ve lease parcels.

Th e top price paid

for a single lease was

$2.4 million by Stan-

dard Land Company

Inc. for a 1,036 hectare

parcel situated adjacent

to the Covington Upper

Shaunavon Oil Pool, 10

kilometres southeast of

Gull Lake.

Th is is the highest

dollar per hectare in

this area at $2,286 per

hectare.

Th e top price paid

for a single licence was

$227,337paid by O

& G Resource Group

Ltd. for a 1,292 hectare

block located within the

Hatton Milk River-

Medicine Hat Gas

Pools, three kilometres

northwest of Fox Valley.

Lloydminster areaTh e top purchaser


was Maverick Land

Consultants 2012 Ltd.

that spent $1.5 mil-

lion to acquire 10 lease

parcels.

Th e top price paid


area was $900,742 by



parcel situated adja-

cent to the Turtleford

Waseca and Sparky

Sands Oil Pools, one

kilometre east of the

town of Turtleford.

Th e highest dol-

lar per hectare in the

sale was received from


Ltd. that paid $11,151

per hectare for a 16.19

hectare parcel located

nine kilometres north-

east of the Turtleford

Waseca and Sparky

Sands Oil Pools, 10

kilometres northeast of

the town of Turtleford.

Kindersley-Kerrobert area

Th e top purchaser


was Standard Land

Company Inc. that

spent $460,543 to ac-

quire six lease parcels.

Th e top price paid


area was $204,443 by

Lane Land Services


parcel situated fi ve

kilometers southeast

of the Court South

Bakken Sand Oil Pool,

eight kilometres south

of Fusilier.

Th e highest dollar

per hectare in this area

was received from Stan-

dard Land Company

Inc. that paid $2,340

per hectare for a 64.75

hectare parcel located

eight kilometres north

of the Hearts Hill Bak-

ken Sand Oil Pool, four

kilometres southwest of

Denzil.

Southeast Saskatchewan led the land sales again in Au-gust, with total sales at $10 million. This wellsite is near Benson. Photo by Brian Zinchuk

August land sales revenue doubles up


By Geoff LeeVermilion, Alta. – Th e third annual Tony’s Con-

voy for Hope will be remembered as an emotional

event for organizer Tom Jack and the 28 truckers

who made the ride from Vermilion to Lloydminster

to fi ght cancer.

More than $30,000 was raised for the Cross

Cancer Institute by donations from 40 registered

trucks and supporters of the cause in memory of

Jack’s brother in-law, Tony Rossi from Toronto who

died from cancer in 2010.

Among the supporters for the July 21 event

were members of Jack’s family including his sister

Pat Rossi, Tony’s widow. It made for some heart-

felt opening comments from Jack at the Vermilion

Arena.

“Th e very fi rst year when we pulled out from

the weigh scale, all you truckers – I had my brother

in-law on the phone and you guys had the air horns

blowing for him,” said a tearful Jack to onlookers.

“Last year, I had my sister on the phone and

you guys blew the air horns for her. Th is year let’s

just blow them to make some noise, eh.”

Jack, who is also known as Trucker Tom, was

overcome by the presence of his sister, Pat and his

niece Sherri along with his aunt and uncle Gloria

and Ray Jack who arrived from Scotland.

“I’m super excited about it. It’s very emotional,”

said Jack as registered trucks rolled in for a 7 a.m.

breakfast provided by the Vermilion Rotary Club.

“I have 40 trucks registered, and I am hoping to

hit 50. If we get 50, the money will be there.”

Page A26

Cancer convoy raises money,

lifts spirits

A convoy of 28 trucks weaved its way on a new route through the streets of Vermilion before heading east on Highway 16 for Lloydminster. This year’s convoy raised more than $30,000 for the Cross Cancer Ins tute in Alberta.

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Tom Jack, with his sister Pat Rossi at his side, makes an emo onal speech before the start of Tony’s Convoy for Hope as other family members look on.

Page A25

“I have 40 trucks registered, and I am hoping to hit 50. If we get 50, the

money will be there.”

Th e event raised more than $47,000 in its fi rst two years, a fact that contin-

ues to amaze and delight Amber Williams from the Alberta Cancer Founda-

tion who celebrated her birthday at the convoy.

“Th is event is fantastic. Tom Jack has a lot of passion and he just wanted to

do something to help and, man does he help,” she said.

Th e event was also an eye opener for Pat and Sherri who made the trip out

west to experience the convoy for the fi rst time.

“It’s quite the thing to see. Th e support that is given from the community

is fantastic. Tony would have been very proud,” said Pat.

Ditto the enthusiasm of Sherri who said, “Th is is the third year and every

year my uncle says it’s getting bigger and better. We wanted to see it for

ourselves this year and be here in honour of my father, and take it all in and

experience it for ourselves.

“We are all going to be in the truck with my uncle leading the convoy.”

Jack hauls fl uid for W-K Trucking in Mundare with his red 2006 Western

Star truck that led the convoy on a new route through downtown Vermilion

before heading east on Highway 16 to the Lloydminster Exhibition Grounds.

In the pack was Darryl Huber from King’s Husky Petroleum Agency in

Lloydminster who decorated his bulk diesel truck with purple balloons repre-

senting a rare type of cancer.

“King likes to be involved in the community,” said Huber.

“Th is event is particularly in touch with us because we had a co-worker

(Richard Czuchro) died of mesothelioma earlier this year.

“I was asked by Darren Schneider (client relations) to come out. I was

actually hired as Richard’s replacement, so I am new to the company and new

to the event.”

Vermilion resident Perry Pottle who hauls produced water for Stanchuk

Trucking in Lloydminster drove in the convoy for the fi rst time with pink rib-

bons on his truck.

“My wife had breast cancer so she wanted the pink on there,” said Pottle.

“She did it."

Page A28

Over $47,000 in to years

Rob Vankosky, an operator with Op mus Transport, sprays his res in prepara on for the start of the Tony’s Convoy for Hope ride for cancer on July 21 from Vermilion to Lloydminster.


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This year’s cancer convoy was an emo onal a air for organizer, Tom Jack who, was joined by a number of family members for the event. Back row (l-r) wearing blue shirts are John Harold (Tom’s stepson) and his wife Kiersten Har-old, Sherri Rossi (Tom’s niece), Ray Jack (Tom’s uncle) Janice King (Tom’s wife), and Sarah Jack (Tom’s daughter). In the front row are: Tom Jack, Katelyn Harold (daughter of Tom’s stepson), Mandy Jack (Tom’s mom), Pat Rossi (Tom’s sister), Gloria Jack (Tom’s aunt) and Ashley Harold (oldest daughter of Tom’s stepson).

Page A26 “I fi gured I’d been doing

this because my wife had breast cancer. It’s my day

off so I fi gured I’d come out and join the convoy.

“Th is is my fi rst year in it, but I’ve been sup-

porting it since he started it. It’s a good turnout.

Th ere are quite a few people here.”

Th e event is well promoted by Alberta sponsors

that include 106.1 FM Th e Goat in Lloydminster,

W-K Trucking in Mundare, Simply Signs and Tom

Jack Trucking in Vegreville, and Action Towing &

Recovery in Lloydminster.

John Buhnai and his wife Ginette, who own

Action Towing, entered two of the largest trucks in

this year’s convoy including their yellow Tow Mater,

one of the largest tow trucks in North America.

Th ey also bought a partially restored 1981

W900, one of two such antique trucks in the lineup.

“It’s a project that we’ve been working on for a

few months,” said Buhnai.

“We’re not anywhere near done, but we thought

we were done far enough along with it that we

would bring it along and show it off a bit.

“I am looking to raise money to help the Cross

Cancer clinic cancer out. It’s awesome.

“Th e oil patch is booming this year, and we’ve

had some oilfi eld trucks show up here today, so

that’s good to see. Th ey are supporting the convoy

better this year than they have in the last two years.”

Th e event included a fundraising barbecue

in Lloydminster with Sumo wrestling suits and a

bounce castle for kids.

Prizes were also awarded for the best three

decorated trucks.

Rob Vankosky, an operator with Optimus

Transport, took fi rst place for decorating in 2011

and he his wife Stacy pulled out all the stops with

truck cancer banners and ribbons in keeping with

the cause.

“I had lots of people from my family who have

died from cancer,” said Vankosky who hauls oil and

water for CNRL in Lloydminster.

“Th is the third year and I have been in it every

year. I can’t wait every year for it to happen. It’s a

great time. It’s nice to see everybody out.

“I think it’s supposed to rain, but all the victims

‘up there’ are going to hold the rain off for us today.”

Nothing short of running out of gas could keep

Earl Cleland and his wife Lisa away behind the

wheel of a loaner B&R Eckels Transport truck.

“Th is is my third event. I was involved in the

very fi rst one and it was such an emotional day

I just had to come back again and again,” said

Cleland, who currents works as shop foreman for

Leading Manufacturing Group (LMG).

“I will be coming back every year as long as I

can possibly keep driving these things. I love it and

my wife loves it.

“My mom survived breast cancer and there is a

long history of cancer in parts of my family so it is a

cause that’s dear to me and a very worthwhile cause

even if it I hadn’t known anybody with cancer.”

Cleland notes LMG made a donation to the

cancer convoy last year when he worked for B&R

Eckels without knowing much about him.

“Th ey sent a donation through my boss at B&R

at the time for me to make the donation,” said Cle-

land who believes what goes around comes around.

“I get along really well with the B&R manager

in Vermilion so he said come work for me for a cou-

ple of days and you can have a truck in the convoy.

So I took him up on his off er, and away we went.

“B&R Eckels made a large donation again this

year and last year. My fi rst event, I was with Lake-

land College and they made a donation that year.”

Convoy


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By Geoff LeeKerrobert – Petrobank continues to ramp up upgraded heavy oil production

at its toe-to-heel air injection, or THAI project, near Kerrobert using a bal-

anced operating protocol. Production was approximately 400 barrels a day by

mid-August.

Th at’s a signifi cant improvement from the 193 bpd in the fi rst quarter

and the 236 bpd produced in the second quarter due to an operating plan to

steadily increase production of upgraded THAI oil.

“Th e objective of our operating plan has been to balance air injection and

produce gas rates across the fi eld in order to actually build up the combustion

fronts,” said senior vice-president and chief operating offi cer Chris Bloomer

during a second quarter conference call on Aug. 14.

“We also optimized the confi guration and the performance of the produc-

tion pumps to help in achieving a balanced injection versus production rate,

and to extend the operating run time to reduce costs.

“Th is operating protocol has enabled more consistent operations overall

and improved well performance. To achieve this performance, we have kept air

injection at reduced rates,” he said.

“With improved performance we expect to bring up air injection rates, and

at the same time, continue to maintain a balanced approach to operations to

continue to improve production rates.”

Bloomer also noted the site experienced minimal intervention and well

downtime in the quarter due to improved pump operations with all surface

production equipment running smoothly.

Th e THAI wells were pre-steamed to heat and pressurize the formation

before air was injected into vertical injectors to ignite the oil in the reservoir.

Th at created a combustion front meant to push the oil into horizontal produc-

tion wells where it could be pumped to surface.

Th e THAI project became operational in September 2011 with 12 pro-

ducing wells after 15 months of an initial two well demonstration to prove the

technology works and upgrades recovered oil.

“Th e average quality of our sales oil is consistently upgraded at 14 degrees

API versus native oil at 10 API,” said Bloomer.

Th e current Kerrobert Phase II project has four production well pads, two

air injector pads and four compressors that can generate more than 100,000

cubic metres of air per day. Page A30

Kerrobert THAI project ramping up

The Kerrobert THAI project site includes this three stage treater with oil and water stor-age tanks in the background.


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Ministry of theEconomy

Page A29Th e company is currently injecting air at only

eight per cent of design capacity with plans to

increase the rate of air injection to build the THAI

combustion front.

Th e balanced approach to air injection versus

the push for production is a lesson learned from

the pilot demonstration wells on how to create a

uniform combustion front on all of the producing

wells for THAI to function to its potential.

“We’ve moved toward a balanced approach,

spreading the air injection across the whole fi eld

generating a consistent burn in the combustion

front and minimizing the drawdown, and mini-

mizing the opportunity for ‘point breakthrough’

of combustion gas into the production wells,” said

John Wright, president and CEO.

“We have been very cautious in this process,

and we are starting to see what we consider to be

very good results. We are now seeing consistently

upgraded crude produced across the fi eld.”

Wright noted the cautious approach is due

to that fact not all 12 wells are producing at the

desired rate as a result of “hot spot breakthroughs”

from the combustion gas.

“We’ve tapered off on the air injection and re-

duced the drawdown on those wells to avoid having

kind of a fi ngering eff ect for the combustion front

actually going through to the horizontal well,” said

Wright who told an investor the balanced strategy

is working.

“Really, the single biggest thing that has hap-

pened in recent times is the combustion front is

starting to act like a much more elastic homoge-

neous burn front.

“It’s not a series of individual points. It’s start-

ing to join together and link up,” he explained.

“Th is is the stage we are looking forward to –

ramping up air injection rates – ramping up with-

drawal rates, and starting to really get going with

the full implementation of the THAI process.

Page A32

Chris Kennedy, instrumenta on technologist at the Ker-robert Phase II site is dwarfed by this giant size produc- on wellhead at the facility near Kerrobert.

Hot spot breakthroughs complicate THAI


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Page A30

“Th ere is no question we’ve taken

it slowly. We have been perhaps overly

cautious, but I think we have some

history with our pilots of creating

point breakthroughs and very high

fl ow rates which are what these wells

are capable of – but not necessarily

creating a full reservoir application of

the combustion front that allows for

the best recovery and the best sweep

of the fi re front itself.

“We are looking forward in this

next phase to ramping things up,” he

added.

Petrobank received regulatory

approval in August to initiate cold

production on its two well THAI

demonstrate pilot at Dawson in the

coming weeks.

Th e plan calls to cold produce the

wells for a period of time to order to

condition the reservoir prior to THAI

operations.

“We believe the placing of two

horizontal wells on cold production in

producing conventional heavy oil will

create a broader drawdown area along

the horizontal well,” said Bloomer.

“Th ere is the potential for a sig-

nifi cantly faster start up and ramp-up

under THAI.”

Petrobank completed three

CHOPS wells (cold heavy oil produc-

tion with sand) near Luseland and

three CHOPS wells in the Kerrobert

area in the Q2 with more to more to

come on line in the foreseeable future.

Luseland is also a potential

expansion site for THAI as noted in

Petrobank’s corporate presentations.

Wright told the conference that

he expects the second half of 2012 to

a be a productive period for Petrobank

and its oil light entity, PetroBakken.

“I am pleased to report that both

PetroBakken and Petrobank continue

to show positive improvements.

“PetroBakken’s production

increased 10 per cent quarter over

quarter even though we sold 4,100

barrels of oil equivalent a day in late

2011 and the fi rst half of 2012,” said

Wright.

“Petrobank’s Kerrobert project

has recently seen a faster production

ramp-up which we will focus on ac-

celerating.

“With 75 per cent of PetroBak-

ken’s drilling planned for the second

half, and growing production at

Kerrobert with Petrobank, we look

forward to an active and busy second

half of 2012 and stronger growth into

2013.”

Control panel operator Richard Schmalzbauer keeps tabs on the computer func ons of various produc on facili es at the Kerrobert Phase II THAI project located 20 kilome-tres south west of Kerrrobert.

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Kerrobert – Th e town of Kerrobert is poised

to add new oil and gas workers to its population

of 1,100 now that it has fl ushed its reputation for

producing brown drinking water down the drain.

Th e Town celebrated the completion of $5.4

million in upgrades to its water supply and water

treatment plant Aug. 3 with Saskatchewan Minis-

ter of Economy Bill Boyd on hand for the ribbon

cutting.

“One of the things we all take for granted is

good quality water and sewer infrastructure. You

never really think about it until you turn the tap on

and nothing comes out,” said Boyd.

“Th is is important for the ongoing operations

of Kerrobert and the growth, a new reverse osmo-

sis water fi ltration system, a new well, and a new

lagoon to contain additional waste produced by the

water treatment process.

“Kerrobert has had a reputation for brown

water and that has been a big deterrent for people

moving to town,” said Mayor Erhard Poggemiller.

“Now, we have a water system where we have

clear water, and we have a lot more of it. We’ve

allowed for growth for the community. We could

easily accommodate growth to 1,500 people with-

out doing any more work to our water treatment

system.

“If we had businesses come in that want to

develop in the oilfi eld or for manufacturing they

would defi nitely be tied into our water system.”

Th e project was completed with approximately

$4.9 million in funding from the federal, provincial

and municipal governments.

Th e government of Canada contributed more

than $1.32 million to the project under the Infra-

structure Stimulus Plan and the Municipal Rural

Infrastructure Fund (MRIF).

Boyd told the audience that the province of

Saskatchewan also contributed more than $1.32

million in matching stimulus funds, $500,000 in

MRIF funding and $325,000 in an interest deduc-

tion grant.

“We are very pleased as a province to be

involved in this. It provides stable funding for the

community here and a good water source going for-

ward,” said Boyd. Page A35

Kerrobert turns on taps for growth

Kerrobert Mayor Erhard Poggemiller, with scissors in hand, waits for the cue to cut the ribbon to celebrate the completed upgrades of the Town’s water supply and water treatment plant. Poggemiller is anked by town Councillor Monica Knorr, le , and Saskatch-ewan Minister of the Economy Bill Boyd and Council-lor Wayne Mock on the right. The treatment plant lies in Boyd’s riding of Kindersley.


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Page A34

Th e balance of the funding comes from customer billing to recover the cost

to the Town including ongoing maintenance.

“You have to show the province that your water billing system will eventu-

ally pay for whatever indebtedness you have, and that’s what we’ve done,” said

Poggemiller.

“Th e cost of our water to the user is probably higher than most communi-

ties around us, but those communities around us are also fi nding out that they

need upgrades. Pretty soon we will all be in the same boat.”

Th e upgrades will help to open the doors to new business startups and

entice more younger families to move to the area for jobs in the busy oil and

gas fi elds around Kerrobert.

“Th e oil and gas companies that I have talked to are very happy and very

pleased that we fi nally have clear water that they can rely on. However, the cost

is a factor,” he said.

“Th e water has always been an issue in this town and that was one of the

determinants in holding the town back as far as population goes.

“People came to town and they would look at the water fi xtures in a house

or a motel or hotel and they would know that immediately we had that brown

water problem.

“Th at was a big deterrent and that’s gone. We don’t have that now,” he said.

“Th ere was a huge cost to clean that and there are also ongoing mainte-

nance costs for the reverse osmosis system that needs fi lters.

“Th ose fi lters need to be replaced on a three to fi ve year basis and that’s a

budgeted cost in that time span of anywhere from $40,000 to $70,000 depend-

ing on how bad the fi lters are.”

Th e new water treatment upgrades are well timed with the construction

start this summer on the $23 million Kerrobert & District Integrated Health

Centre that should add to the town’s workforce and population.

“What we are looking for is new families coming to town – a younger pop-

ulation,” explained Poggemiller prior to the water treatment plant ceremony.

“Some of the things we get asked about are schools, health care and what

we have for utilities.

“Th is is one of the biggest investments that we have done in the last 50

years.

“Next, I would like to see a major paving program in town. We are work-

ing with highways (Ministry of Highways and Infrastructure) to try to get the

highway through town upgraded and we are also doing upgrades to our water

pipeline.”

Mark Knorr, public works superintendent of Kerrobert, explains some of the electronic controls at the Town’s new reverse osmosis water treatment plant during the grand opening on Aug. 3


SEWEURODRIVE

www.kelro.com

Calgary – CWC Well Services Corp. has

boosted its original capital spending budget of

$8.7 million for 2012 by $5 million to build two

new service rigs by the end of the year.

Th e new service rigs will bring the CWC

fl eet count to 68 by year-end and position the

company to expand its area of operations into

the north central region of Alberta this coming

winter.

Th e Calgary based company released the

news with its second quarter and year-to-date

highlights of 2012 with revenue of $56 million

for the fi rst six months, a 33 per cent increase

compared to the same period of 2011.

Th e bulk of the revenue gains resulted from

the acquisition of 22 service rigs from Trinidad

Well Servicing (TWS) in June.

Without the TWS purchase the company

would have made a 3 per cent revenue gain over

2011 for the second quarter ending June 30.

Th e company said further increases refl ect

the general recovery in the oil and gas sector

and stronger demand for CWC’s equipment and

services.

Th e service rig acquisition from TWS makes

CWC the sixth largest well servicing company

in Western Canada with its well servicing and

snubbing and testing activities.

Th e service rigs provide completions, work-

overs and abandonments with depths ranging

from 1,500 to 5,000 metres with operating loca-

tions in Grande Prairie, Red Deer, Lloydminster,

Provost and Brooks in Alberta and in Weyburn

Saskatchewan.

CWC also operates 8 coil tubing units to a

maximum capacity of 2 inch coil and depth rat-

ing from 1,500 to 4,000 metres.

Th e company has one of the largest snubbing

and well testing divisions in Western Canada

with 8 rig assist and standalone snubbing units

seven of which operate at 5,000 psi.

CWC operates 12 well testing packages

ranging from 200 to 285 psi trailer-mounted

pressure tanks and 18 metre freestanding fl are

stacks.

Major capital expenditures in Q2 included

$800,000 to complete the construction of a new

double service rig, and $700,000 toward the

construction cost of a new Class III, 2-inch coil

tubing unit.

Th e company also spent $200,000 to free

stand two double service rigs.

Th e company reports it will continue to focus

on providing services to better capitalized and

fi nanced senior and intermediate companies with

higher exposure to oil opportunities instead of

dry natural gas plays due to stronger prices for

oil.

CWC said 99 per cent of its work is currently

derived from oil related activities.

Field activity levels picked up in July and

August compared to an extended spring breakup

and rainy weather in the second quarter that pre-

vented the company from getting its equipment

to the fi eld.

CWC shifted its sales and operations focus

towards maintenance, workover and abandon-

ment activity as opposed to completions oriented

work in its service rig division in Q2 resulting in

better activity levels in July and August.

Th e strategy was in response to volatile oil

prices due to a global economic slowdown that

led some exploration and production companies

to reduce their capital spending.

Th e company said it doesn’t expect to experi-

ence any pricing pressure in its service rig from

its key exploration and production customers or

incur any hourly rate reductions in the second

half of 2012.

Despite the potential for a slowdown in

global economic activity, CWC said it is confi -

dent that its well servicing division will experi-

ence good utilization and activity levels for the

rest of the year.

Th e well servicing division accounts for ap-

proximately 90 per cent of its annual revenue.

Th e company also made the TSX Venture

Top 50 Companies list in 2012 for its strong

performance in the areas of market capitalization

growth, share price appreciation, trading volume

and analyst coverage.

CWC posts strong Q2 with TWS takeover

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Saskatoon – Federal Minister of Natural Resources Joe Oliver extolled the

benefi ts of the government’s plan called Responsible Resource Development for

Saskatchewan during an address to the Greater Saskatoon Chamber of Com-

merce on Aug. 9.

“Responsible Resource Development achieves the balance we need now to

unleash the potential of our country’s natural resources,” said Oliver.

“It will create good jobs and economic growth here in Saskatoon and

across Canada, while strengthening environmental protection and enhancing

consultations with Aboriginal peoples.”

While in Saskatoon, Oliver met with Bill Boyd, minister of the Economy,

and Tim McMillan, minister Responsible for Energy and Resources, to discuss

the benefi ts of the resource development plan to Saskatchewan’s economic

growth.

In 2011, the natural resource sectors employed nearly 800,000 people

in communities across Canada. Natural resources represent 11 per cent of

Canada’s gross domestic product and generate billions of dollars each year that

benefi t provinces such as Saskatchewan.

“Th e Canadian oil and gas extraction industry alone pays an average of $22

billion a year in taxes, land payments and royalties. Mining adds another $2.8

billion a year to government revenues — billions of dollars a year for health

care, education and other vital services that are such a fundamental part of our

quality of life,” said Oliver.

“Th ere is optimism because the Harper government has created an eco-

nomic climate that attracts the investments we need to ensure economic

prosperity and a high standard of living for all Canadians, now and for future

generations.”

Responsible Resource Development puts in place maximum beginning-to-

end timelines for project reviews and helps to eliminate unnecessary and costly

duplication in environmental assessments while strengthening environmental

protection and enhancing consultations with Aboriginal peoples.

Oliver and Kelly Block, MP for Saskatoon-Rosetown-Biggar, also took

the opportunity to tour the Potash Corporation of Saskatchewan Inc.’s Cory

potash mine and met with employees and offi cials to emphasize the value of

Canada’s mining industry.

Chamber digests feds’ resource policy

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Zargon resumes drillingFollowing a quiet summer,

Zargon Oil & Gas Ltd. will resume

horizontal drilling for oil this fall at

Bellshill Lake (three wells), Hamilton

Lake (three), Taber South (three) and

for Williston Basin Frobisher targets

(four).

Each of these locations target

increased oil recoveries from existing

oil pools.

Field activities in the second

quarter of 2012 were mostly limited

to the completion and tie-in of wells

drilled last winter. Refl ecting spring

breakup, the second quarter of 2012

drilling program was restricted to 0.2

net oil wells that had a 100 per cent

success rate.

For the year, Zargon has drilled

9.8 net oil wells.

Zargon is developing a tertiary

recovery alkaline surfactant polymer

(ASP) oil exploitation project at

Little Bow, Alberta. Th is ASP project

entails the injection of a dilute chemi-

cal solution into a partially depleted

reservoir to recover incremental oil

reserves.

This new apartment complex on the Alberta side of Lloydminster should help to alleviate the hous-ing shortage in the city due to rapid growth led by the heavy oil industry.

Lloydminster Mayor Je Mulligan is over the moon knowing CBC television will air more than 12 hours of coverage from Lloydminster during the 2013 Sco a-bank Hockey Day in Canada event ac vi es Feb. 5-9.

NEWSPIPELINE SECTION B

September 2012

By Geoff LeeLloydminster – Th e Lloydminster Heavy Oil Show Sept. 12-13 fi ts plans by

the City of Lloydminster to make event hosting a major industry.

Event hosting could be part of Mayor Jeff Mulligan’s re-election campaign

for the Oct. 24 municipal election, based on the success of the heavy oil show

as an economic generator.

“Since I got elected, I said that we wanted to make our third industry event

hosting,” said Mulligan.

“Th e reason I was confi dent in saying that is because of events like the

heavy oil show and its suc-

cess, not just on a regional

scale, but on a national and

international scene.

“Every time we host

something here, I am left

with another relationship

that we can leverage as a

city – another source of information, another potential investor.

“Often time when we talk about the heavy oil show, we get an opportunity

to meet people who have access to energy ministers both in this country and

other countries. Th ose contacts are invaluable,” said Mulligan.

“Th is heavy oil show brings people that aren’t just interested in heavy oil,

but they’ve got to fi gure out where to put regional offi ces and where they can

get people.

“I think we can do a really good job of starting to leverage those opportu-

nities.”

Lloydminster will also have the opportunity to sell itself as a great place

to live, work and play when it hosts 2013 Scotiabank Hockey Day in Canada

events Feb. 5-9.

Th e city will also host the Women’s Volleyball Nationals March 7-9 at

Lakeland College during their centennial year celebrations.

Th e city committed $50,000 for Lakeland’s centennial, a donation that

Mulligan calls a no-brainer.

“What they’ve put into this economy in terms of people and talent and

what it means to have a college of that calibre in our city – is hard to explain

how valuable that is,” he said.

Th e city and oil and gas companies can also expect to reap valuable expo-

sure and sponsorship opportunities from CBC television coverage of Hockey

Day in Canada.

Lloyd oil show incubates event hosting

e-y

c

“Th ere will be an opportunity for us with CBC to have the oil story told

and have it told in a positive manner,” said Mulligan

“Th ey always do over 12 hours of prime time television. Th ey feature what’s

diff erent about your community.

“Th ey’re going to spend some time getting underneath the oil industry and

really showing in a light that we probably could never do.”

Mulligan will begin his pitch during the Sept. 11 banquet to kick off the

heavy oil show at the newly renovated Lloydminster Exhibition Grounds with

a message that Lloydminster is a world class centre for heavy oil.

He said he’d be telling an international audience that “we have world class

innovation; we have the best entrepreneurs; we have some of the most talented

experts in the industry, and that we continue to stake our claim to be the heavy

oil capital of the world.”

Mulligan said the most important impact of the oil and gas industry on the

development of the Lloydminster in the past two year is the rapid rate of new

construction in the Hill Industrial Park.

“Th e buildings are popping up like carrots, and it’s all to support oilfi eld

services,” he said.

“I would say there is probably 30 per new development and 60 to 70 per

cent are either guys who are trading up or consolidating.”

Construction is also underway on the City’s new $40 million Infrastruc-

ture Services Operations Centre in the Hill Industrial park.

Mulligan said the high level of industrial development means the oil and

gas industry is still very strong in Lloydminster.

“We continue to export more than ever our technology,” he said.

“We are continu-

ing to attract businesses

because it’s clearly evi-

dence there is marginable

(profi table) business to be

done here at a reasonable

price point.”

Th e city set a build-

ing permit record of $180 million in 2011, and is on track for its second best

year in 2012 with more than $82 million in permits in the fi rst six months of

the year.

Page B2

B2 PIPELINE NEWS September 2012

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Page B1 “We’ve got some big stuff going on as we speak,”

said Mulligan, referring to the ongoing construction of the new $13.3 million

RCMP building due to open sometime in 2013.

Planning is proceeding on a new Synergy Credit Union building expected

to be under construction in 2013 and a new high school could also be an-

nounced in 2013.

Construction is also proceeding on two new schools in keeping with Lloy-

dminster’s status as one of the fastest growing cities in Western Canada and

one of the youngest in terms of demographics.

“Th e oil and gas sector requires a goodly number of people that are under

45 years old for the type and style of work that’s been done,” said Mulligan.

“We continue to attract those people who are starting their lives and trying

to get a higher than average disposable income so they can make a diff erence in

their lives.”

Aff ordable housing remains a key issue as new and existing rental proper-

ties can price families out of the entry level market.

“Th ere is no ability to save the down payment,” explained Mulligan, allud-

ing to the high rental rates in the city.

“We’re blessed to have some wonderful developers in our city. Some have

actually turned their focus to building aff ordable entry level homes both in the

rental market and in the purchase market.

Page B3

Visco Demoli on Contractors are using a crusher to re-cycle concrete from the rubble of the former Nelson Lum-ber buildings at the corner of Highway 16 (44th Street) and Highway 17 (50th Avenue). The demoli on and recycling of all site materials is being managed by Fillmore Construc- on. The property is currently owned by Loblaw.

A city block of Highway 16 (44th Street) through Lloydminster is undergoing rehabilita on and repaving just three years a er it was rebuilt. Tra c issues have come to the fore in recent years with the rapid growth of the oil and gas industry in Lloydminster.

Affordable housing

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“It takes some time for those to come on stream. We have three really good

projects started right now in apartments, apartment/condos and row housing

condos.

“I think within the next 18 months, we will alleviate some of this, but the

pressure right now is on. Basically it’s moved from $52,000 to about $72,000 in

family income to be able to move into home ownership.”

Mulligan hopes Lloydminster can follow the Saskatoon model that’s

taking advantage of the Saskatchewan government’s Headstart program to

build new entry level homes in partnership with credit unions, developers and

municipal governments.

“We think we can do some things in that area. We’re working with the

credits unions that are involved in that project with the government of Sas-

katchewan,” said Mulligan.

“We’re pretty excited that in 2011 we could announce that we had the

same number of ‘residential doors’ built on both sides of the border.

“Now, there are diff erent styles of housing in some cases or diff erent values,

but we are really pleased to say last year, we were about 50-50 for the fi rst time

in anybody’s recent memory.”

Th e downside of rapid growth and construction in Lloydminster is traffi c

fl ow including tie-ups from the rehabilitation and repaving of a city block on

the Highway 16 corridor that was rebuilt in 2009.

Th e city is also in the planning stages for the staged twinning of Highway

17 downtown including ongoing water and sewer replacements on the corridor

route that could take fi ve to seven years to complete.

“Really you won’t eliminate the gridlock on Highway 17 until you’ve got

the twinning end to end,” said Mulligan, who estimates the total cost between

$37-40 million.

“Th ere is an expectation in Lloydminster that you can get anywhere in fi ve

minutes. We may to recalibrate that to anywhere to anywhere in 10 minutes as

the city grows.

“Obviously, the white elephant in the room is what about the train tracks

and what about an overpass and what about those things?

“Th ose take the co-ordination and the support of the railway companies

who have rights that pre-date our city.”

Th e industrial ring road will also require a sizeable investment from three

or four levels of government to engineer and construct better corners for large

oilfi eld and agricultural vehicles to navigate safely.

All of these planning issues will come to light with the release of the City’s

draft E4 long term strategic plan next spring that may have more to say about

event hosting for economic development.

“I like to see us start thinking again about a number of sporting events that

are on a national stage,” said Mulligan.

“We’ve got the best facilities. We’ve got the best organizations; we’ve got

the cash, so I think there is a lot of good to come from positioning ourselves as

an event host.

“Th ings like the heavy oil show every second year putting Lloydminster

best foot forward puts me in a great platform in which to talk.”

Lloydminster is one of the fastest growing ci es in West-ern Canada. Construc on of new housing was equal on both sides of the border in 2011 for the rst me in re-cent memory.


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COME AND SEE US AT LHOS BOOTH 317!

By Brian ZinchukEstevan – When it comes to special wells, there aren’t many like the new

Aquistore injection well that was drilled during July and August near Estevan.

To that end, it’s not often you have an open house on a drilling rig, but

that’s what happened on July 24.

“It went pretty well. We had the mayor of Estevan, the reeve, (MLA)

Doreen Eagles and Mike Monea as the man in charge of building the CO2

capture on the power plant,” said Dr. Malcolm Wilson, CEO of the Petroleum

Technology Research Centre. Aquistore is a project of PTRC.

Aquistore is an independent research and monitoring project which

intends to demonstrate that storing liquid carbon dioxide (CO2) deep under-

ground (in a brine and sandstone water formation) is a safe, workable solu-

tion to reduce greenhouse gases. Th e project will take carbon dioxide from the

nearby Boundary Dam Power Station and inject it into the Deadwood forma-

tions just above the Precambrian basement.

A bus came from Regina carrying about 35 people to the open house.

Another half dozen were picked up in Estevan. A presentation took place at

Boundary Dam Power Station, the source of the CO2 for Aquistore, but due to

construction activity they were unable to visit the capture facility beyond driv-

ing past.

Th ere were people in attendance from the United States, South Korea and

Japan. Wilson noted the Koreans spent about a week with the PTRC, talking

to engineers and geologists.

Th ere was also interest in Aquistore from South Africa. South Africa has

a unique role in the history of carbon dioxide capture and storage. Th e nation

took a process initially used by wartime Nazi-Germany to gasify coal and built

the largest coal gasifi ers on the planet. Th ey were the model for the Dakota

Gasifi cation plant at Beulah, North Dakota, which supplies the 20-inch

pipeline feeding carbon dioxide to the Weyburn-Midale project. Th e PTRC

provided the scientifi c study for that project.

Th e South African Sasol coal-to-liquids plant is the largest single emitter

of carbon dioxide in the world, Wilson said. Page B6

Aquistore holds open house during drilling of injection well

A geologist chips o the ends of core samples before the tubes were sealed.


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Page B4Now things have come full circle, with Wilson saying

the South Africans are interested in repeating the Aquis-

tore project by 2017. Th e South African Energy Develop-

ment Institute is in charge of developing a carbon capture

and storage project for their nation.

“Th ey have no background at all. It’s a country that is

heavily involved in mining,” he said regarding South Afri-

can experience in drilling.

“Any time you’re working with a gasifi cation facility,

your ability to capture CO2 is improved.”

Th e South Africans are looking at sites, he said. “Th ey

won’t be as big as Aquistore. Th ey’ll be trucking in CO2,”

he said.

Indeed, that nation’s best locations for large scale

storage are off shore. However, the test well will be done

onshore.

Th e PTRC has had a continual fl ow of tours pass

through the Aquistore site. Later in August a group from

the United Kingdom visited, as did SaskPower executives.

In mid-August the fi rst of two holes was nearing

completion. Th ree pieces of core were taken from the well.

“It’s horrendously expensive doing core,” Wilson noted.

After the open-hole logging and some side wall coring,

the next stage was the installation of the special casing,

equipped with sensors.

Following completion of the injection well, a second

well will be drilled nearby. Th e purpose of this well is for

observation. “Th e observation well has more jewelry,” Wil-

son said of the sensor package.

Th e PTRC has also launched a new website dedicated

to Aquistore. It can be found at aquistore.ca.

Coring is pricey

The grey tube is the inner core barrel as it was removed. The bar-rel contained the second piece of core taken from the Aquistore injec on well. Photo by Brian Zinchuk


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Carnduff – Trucking

is in the blood of the

Boyes family of Carn-

duff , owners and opera-

tors of Bandit Oilfi eld

Hauling.

Th e company is

headed up by Scott

“Scooter” Boyes and

his wife Sherry. Th eir

sons are involved as

well, with Jason, more

commonly known as

“Jake,” and Shawn, who

goes by “Gump,” both

driving.

Bandit specializes

in light and heavy oil-

fi eld hauling. Th ey have

fi ve of their own trucks

and one leased-on unit.

Th eir wheels include

winch trucks and a

Texas bed tri-drive.

Th e trailer fl eet

includes hiboys, 50- and

60-ton scissor-necks,

trombone lowboys and

jeeps.

“We’ve hauled sub-

structures, derricks, pipe

– any aspect of a drilling

rig,” Scott said.

To that end, they

work with both rig

movers in the south-

east, Fast Trucking and

Circle D. Th ey could

fi nd themselves haul-

ing tanks one day and

wellsite trailers the next.

Loaders, excavators and

dozers are also com-

monly carried.

Th ere aren’t any

pickers, though. “Th ere’s

only one person in this

outfi t with a picker tick-

et, and he doesn’t want

to run it. Th at would be

me,” Scott said.

“We started in 1976

with Fast Trucking. I

swamped for Tony Day.

He drove it, I swamped.

He had two trucks,”

Scott said.

“Th ere was about

10 of us there. I worked

with him off and on for

18 years. I truck pushed

for fi ve years,” Scott

said.

A truck push is the

supervisor on a rig move

who co-ordinates all the

action.

“I was taught by

one of the best, and

that was Tony Day. He

taught me a lot about

work skills and ethics.

I have a lot of respect

for him and Vi. If I had

an idol, that would be

him,” Scott said.

It explains a close

working relationship

with the Fast Trucking

group of companies that

continues to this day.

Page B9

Making off like a BanditSco “Scooter” Boyes.


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Sherry and Sco “Scooter” Boyes stand at the site of their soon to be constructed shop for Bandit Oil eld Hauling. Day Construc on did the dirt work.“Other people go on

Facebook. I go on Ritchie Brothers or Kijiji. I just bought two trailers and my last truck off Kijiji.”

-Scott “Scooter” Boyes

Page B8“I used to be partners with a rental company

for, oh, two-and-a-half, three years,” he said. “Apex

came along and bought us out in 2007. We had

wellsite trailers, tanks and pumps. We had one

truck and trailer.”

“Th at’s when my son and I bought a truck and

leased it on with a company out of Estevan. He

drove and I managed and dispatched.”

Scott also truck pushed for Bar-D out of Nisku,

and was stationed at Handsworth, north of Stough-

ton, moving rigs.

Bandit was incorporated in 2008. Sherry noted,

“Our youngest, Jason, who everyone calls ‘Jake,’ said

we should go out on our own. We started with one

truck, and then added a second truck.”

In the meantime, Sherry spent her career in the

fi nancial industry. “I worked for the credit union for

30 years. I took early retirement two years ago to

become the full-time bookkeeper for Bandit,” she

said.

Prior to making the jump, she was working four

days a week at the credit union.

“I was fi nding it was too much work. Now I’m

full-time offi ce manager,” she said.

She’ll soon have a new offi ce to manage, too.

Th e company is the fi rst to build on one of the

eight sites the Town of Carnduff has recently

opened up for commercial development on the

northwest corner of town.

“We ran out of yard space where we’re at,” Scott

said. Th eir current facility is south of Highway 18

on the west end of town.

Day Construction of Carnduff is doing the dirt

work.

Th e new shop will by 60 by 120 feet, with six

bays.

“I added an extra bay just in case I buy another

truck,” Scott said.

With a laugh, he added, “If you can’t fi ne me in

the oilpatch, you’ll fi nd me at Ritchie Brothers.

Page B10


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Carnduff trucking out t a family affair

Page B9“Other people go on Facebook. I go on Ritchie

Brothers or Kijiji. I just bought two trailers and my

last truck off Kijiji.”

Th at extra bay will also have wash bay capabili-

ties. But the company has been making use of the

new truck wash in Oxbow operated by Courage

Oilfi eld.

Th e company has doubled its fl eet since De-

cember. Scott noted, “When guys started walking

through the doors, looking for jobs, I said, ‘If you

want to work here, I’ll buy more trucks.’

“So I did.

“I can buy all the iron in the world, but if you

don’t have the people to run it, it just costs you

money.

“I still drive every day when we don’t have an

extra driver,” Scott said, characterizing himself as

chief mechanic and dispatcher for the seven-person

outfi t.”

Shawn went to Wyotech in Wyoming, where

he got a diploma that focused on automotive colli-

sion and refi nishing, street rod and chassis fabrica-

tion, high performance engines and custom paint-

ing.

As for Jason, he wanted to drive truck right out

of high school.

When they’re not behind the wheel, the Boyes

family can be found on the links, such as at the

Carnduff Oilmen’s Golf Tournament.

“We usually spend about six weeks in Mesa,

Arizona and golf every day,” Sherry said. “We’re

golf fanatics.”

Th e pace for the company this year has been

down compared to last year, when they had people

out every day and there was no time off . “We went

non-stop until March 22. I think we took Christ-

mas off ,” Scott said.

Th is summer has been slower, but he expects

things to pick up in September.

“We like what we’re doing. We know what

we’re doing and we’ve been doing it since 1976,”

Scott concluded.

From le , Scooter, and his sons Jake and Gump, pose around their tri-drive truck.


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By Brian Zinchuk

Weyburn – When you’ve got a good thing going,

you probably don’t want to mess with it. So when

it came time for Weyburn-based Panther Drilling

Corporation Ltd. to add a fourth rig to its fl eet,

they made a carbon copy of Rig 3.

Rig 3, completed in September 2010, was a

departure from their previous two rigs. Solidifying

the company’s approach to operating some of the

deepest-rated rigs in the southeast, the new rig is

built a bit beefi er.

“Rig 3 was a Range 3 double. In eff ect, it’s like

a triple-sized derrick, but we run Range 3 tubulars

which are 14 metres in length as opposed to 9.6

metres in a Range 2. We have two stands of pipe

when you rack your pipe in the derrick, as op-

posed to three,” said Jim Kopec, general manager of

Panther.

Th e result is a dramatic reduction in pipe

connections, reducing them by a third compared

to the same length of pipe using 9.6 metre joints.

If everything’s going well, and in normal drilling

conditions, it can result in a day to a day and a half

reduction in drilling time per hole.

“Th e clients like it. It saves them time in trip-

ping and surveying,” he said.

Rig 4 was nearing completion in August at

their yard along Highway 39, just a few kilometres

southeast of Weyburn.

Parts of the rig have been coming from “all

over,” according to Kopec. “We tried to do as much

locally as we could.”

Th e combination building, doghouse and

pumphouse were sourced from Stewart Steel of

Weyburn.

Th e only real diff erence between Rig 4 and its

predecessor is the use of a Caterpillar transmission

on its draw works.

“All our engines and clutches were from South-

ern Industrial,” he said. Southern Industrial and its

sister company, Rouse Industries, located on the

west side of Weyburn, specializes in power packages

for drilling rigs.

Page B12

Panther Drilling repeats a good thing

Driller Corby O’Byrne, in the black shirt, and roughneck Jason Shelly, in the red, use a telehandler to adjust the align-ment of a mudpump engine to its pump. When the engines are this big, you need something bigger than a ball peen hammer to give it a love tap. In this case, they had to use chains.


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Page B11“Th is is the fi rst time this transmission has been

used with this engine combination on a drilling rig

application,” Kopec said, referring to the Caterpillar

transmission on the draw works. It is attached to a

C27 Cat engine rated at 900 horsepower.

Th is confi guration had been considered for Rig

Rig 4 added to Panther’s eet3, but that didn’t come to pass.

Th e derrick, substructure and draw works came

from Nisku, with Hyduke providing the derrick

and sub. Revolution did the draw works, in a con-

fi guration similar to Rigs 2 and 3.

Th ere’s one 450 kilowatt gen set.

Th e mud tank and catwalk were built by Cenar-

ius Industries of Calgary.

Rig 4 will have two mud pumps, each rated at

1,000 horsepower.

“Th e second is basically insurance,” said Bernie

Bjorndalen, who handles sales for Panther.

“It’s a bonus to the client,” Kopec added.

A “jackknife triple”, the rig is rated for 4,500

metres of vertical, the same as the rest of the fl eet.

Th at greater capacity is useful for areas right along

the U.S. border, where Panther has been seeing

much of its action in recent years. Panther’s or-

ange rigs could often been seen south of Outram,

Torquay and Radcliff e. Kicking off the horizontal

leg of a well at around 2,000 to 2,200 metres, that

drilling hotspot is deeper than the areas around

Stoughton, for instance.

Tentatively the fi rst hole is planned for Wey-

burn-based Caprice Resources.

Recruiting hasn’t been an issue, since for the

fi rst time since Rig 3 went out two years ago, they

have a rig sitting. Th e company had seen nearly 100

per cent utilization from Sept 2010 until this past

July.

Southeast Saskatchewan’s drilling activity has

slowed considerably compared to the same time

in 2010, when things were still relatively dry, and

2011, when record drilling numbers were set even

after the fl ooding in the area. In early August 2012,

there were over 50 rigs sitting in Saskatchewan,

whereas at the same time last year, that number was

less than 20.

“Th e U.S. has a surplus. You hear stories of

pipeline capacity,” Kopec said.

“Some guys are tired of soft lease conditions,”

Bjorndalen added.

Despite a relatively dry July, Kopec noted, “It’s

wet underneath. You dig down and it’s wet.”

Bjorndalen said, “It only takes half an inch of

rain, and it’s soft again.”

Th e pair also noted there is some nervous-

ness in the world economy that may be having an

impact on drilling activity.

Panther Drilling is locally-owned and operated.

The engine packages were put together in Weyburn by Rouse Industries.

Panther Drilling is comple ng Rig 4, with the new unit expected to go to work in early September.


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Carnduff – Jason

Miller has hauled a bit

of everything in the

patch, but now, with a

couple of partners, he’s

working with his own

outfi t.

Miller is one of the

partners in Mil-Lar

Trucking Ltd. Th e other

partners are Al and

Shawn Larson.

Shawn’s wife Carla

does books for the op-

eration.

“Al has SLR Rent-

als, with about ninety

400 barrel test tanks,”

Miller said. “Th at’s

why we bought (the

truck) for moving them

around.

SLR has about

a half dozen treater

buildings and a lot of

production equipment,

he said.

Th e operation fi red

up in October 2011.

Th ey’ve got one

truck and two scissor

neck trailers. Th e newest

one, a 2012 Doepker,

comes with a fl ip-over

roll, making it more

universal for moving

equipment.

Miller, 39, is

originally from Ninette,

Man., 45 miles south-

east of Brandon.

“Once I got out of

high school, I worked

for the odd farmer and

worked at MTS bury-

ing fi bre optic cable,” he

said.

He moved to Car-

nduff in 1993, saying,

“When I fi rst moved

to Carnduff , I didn’t

know what the patch

was about. I wanted to

fi nd some consistency

in work. In Manitoba,

there was nothing.

“I started out with

Fast Trucking. I had my

Class 1 before I moved

down here. I worked

as a swamper for six

months, then started

driving.”

Miller was with

Fast until things slowed

down substantially

in the late 1990s. He

found work hauling

gravel at Creelman, then

returned to Carnduff

two years later.

Like many others in

his generation, he found

work in Alberta when

there wasn’t work here.

“I had gone to

Alberta and worked

for Calnash at Lac La

Biche. Th ey were doing

a lot of gas work. Th at

was the only oilpatch

working at the time. I

spent fi ve winters doing

that,” he said.

His summers were

spent at Fast Trucking

until 2003, when he

started working for a

rental outfi t that even-

tually became Peak En-

ergy Services. He spent

fi ve years there, the last

three-and-a-half as sales

representative and rental

co-ordinator.

Page B14

When work slowed down, he beat the bushes and found more

Jason Miller comes in at the end of the day a er hauling tanks for a ser-vice rig near Carndu .


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Originally from Manitoba, Jason Miller came to Sas-katchewan a er high school to nd work. Now he’s got his own trucking ou it, which he owns with two partners.

Page B13 In 2008 he was back in a truck,

driving for Carnduff -based B&B Oilfi eld Hauling

until this opportunity came up in 2011.

“I’ve always wanted to do it,” he said of going

on his own. “Last September, Shawn and Al ap-

proached me.”

Th e Larsons have a shop in Carnduff which is

helpful for storing the truck in winter.

Last winter things slowed down come January

1, Miller said, and a lot of tanks came back in. “I

have friends whose rig shut down the 15th of March

and still haven’t gone back to work yet,” he said.

As for this summer, things started off not too

badly, he said, but when Crescent Point Energy

Corp shut down all but one drilling rig, he said,

“Uh-oh.”

While there was work chasing two service rigs,

he started beating the bushes and found additional

work hauling equipment for a general oilfi eld

maintenance company and matting for local outfi t

Easyrider.

“It has been really good ever since,” Miller said.

Dealing withslowdowns

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Regina – Only two

per cent of Canadians

believe climate change

is not occurring, a

new important survey

released Aug. 15 by

IPAC-CO2 Research

Inc. concluded.

Th e survey comes

on the heels of Alberta

Premier Alison Red-

ford’s recent push for a

national energy strate-

gy, which would address

the future of Canada’s

oil and gas industries,

and its approach to

carbon management.

“Our survey indi-

cates that Canadians

from coast to coast

overwhelmingly believe

climate change is real

and is occurring, at least

in part due to human

activity,” explained Dr.

Carmen Dybwad, CEO

of the environmen-

tal non-government

organization. “Th ese

fi ndings have been con-

sistent from 2011 and

2012. Canadians care

about issues like ex-

treme weather, drought

and climate change.”

Opinions about

the cause of climate

change and how to

combat it are, however,

sharply divided among

the provinces and by

region.

“Canadians most

commonly (54 per cent)

believe that climate

change is occurring

partially due to human

activity and partially

due to natural climate

variation,” said Briana

Brownell of Insightrix

Research, who con-

ducted the survey for

IPAC-CO2.

“Residents of

Quebec (44 per cent),

Atlantic Canada (34

per cent) and Brit-

ish Columbia (32 per

cent) are more likely to

believe climate change

is occurring due to hu-

man activity than those

on the Prairies (Alberta

and Saskatchewan 21

per cent, Manitoba 24

per cent).”

Canadians are also

divided on what they

believe should be the

priorities to fi ght cli-

mate change.

A total of 35 per

cent of Canadians be-

lieve the priority should

be to promote cleaner

cars running on elec-

tricity or low-carbon

fuels while only 13 per

cent favoured a tax on

carbon dioxide emis-

sions from the whole

economy. Support for a

carbon tax is lowest in

B.C. (6 per cent) and

highest in Quebec (24

per cent).

A key solution cited

by Canadians is carbon

capture and storage, or

CCS, which involves

capturing carbon diox-

ide from an industrial

source of greenhouse

gases, transporting it,

and storing it deep in

the Earth’s subsurface.

A majority of

Canadians agree that

capturing and storing

carbon dioxide should

be compulsory when

building a new coal (59

per cent) or natural gas

(57 per cent) power

plant, though Canadi-

ans are concerned about

the risks associated

with CCS.

Quebec residents

(71 per cent) would be

the most concerned

if carbon dioxide was

stored underground

within 1.5 kilometres

to three kilometres

from their home, while

Saskatchewan residents

(43 per cent) were the

least worried.

Residents of Brit-

ish Columbia (60 per

cent) are most likely to

believe that the stor-

age of carbon dioxide

represents a safety risk

in the future. Again,

Saskatchewan residents

(48 per cent) are sig-

nifi cantly less likely to

hold this belief.

“CCS is not the

“magic bullet” solu-

tion to combat cli-

mate change, but the

development of CCS

technology represents a

necessary step in reduc-

ing Canada’s emis-

sions,” said Dybwad.

For a second con-

secutive year, IPAC-

CO2 contracted In-

sightrix Research, Inc.

to conduct an online

survey of Canadian

residents. Survey re-

sponses were collected

from 1,550 Canadians

between May 29 and

June 11.

Th e percentage

of Canadians who are

unsure whether or

not they would ben-

efi t from CCS has

increased notably from

42 per cent in 2011 to

48 per cent in 2012.

Residents of

Ontario are more

likely to believe that

it would (33 per cent)

benefit them, while in

Quebec the reverse is

true, where 30 per cent

believe they would

not benefit from the

technology.

The proportion

of Canadians who

are unsure of the ef-

fectiveness of carbon

capture and storage

has increased notably

from one-quarter (24

per cent) in 2011 to

one-third (35 per cent)

in 2012.

Despite the

concerns many Cana-

dians have about the

technology, Dybwad

remained optimistic

about the future of

CCS and its impact on

Canada’s environment.

“Canadians are

concerned about the

risks and benefits

involved with CCS,

but IPAC-CO2 exists

to ensure that carbon

dioxide is stored safely

and permanently in

the ground by provid-

ing risk and perfor-

mance assessments of

carbon dioxide storage

projects.”

The 2012 survey

on Public Awareness

and Acceptance of

CSS in Canada now

is available on IPAC-

CO2’s website at:

www.ipac-co2.com/

research.

Canadians overwhelmingly believe climate change is occurring


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Shaun Kozak, Mineral Manager 306-790-4352Chad Morris, Surface Manager 306-790-4363Celeste Farrow, Surface Coordinator 306-790-4378Laurie Bielka, Assistant Branch Manager 306-790-4360Crown Sale Inquiries 403-261-6580Main Line: 306-359-9000

Scott Land & Lease Ltd.

By James Mahony(Daily Oil Bulletin)

– While posting record

revenue thanks to high

levels of pressure pump-

ing in Western Canada

and the United States, a

$9.8 million foreign ex-

change loss spoiled the

party for Calfrac Well

Services Ltd., creating

a net loss in the second

quarter.

Th e loss attribut-

able to shareholders was

$11.86 million or 27

cents per share, down

from earnings of $12.07

million or 28 cents per

share in last year's quar-

ter. But for the foreign

exchange loss, the net

loss in the period would

have been only about

$4.3 million or 10 cents

a share, the company

said.

Management said

fracturing and coiled

tubing activity in

Western Canada saw

“reasonably high” equip-

ment utilization during

spring breakup, which

was bolstered by several

projects in the Montney

and Horn River Basin.

Still, June's poor

weather dampened

activity and fi nancial

performance, preventing

crews from completing

scheduled work, much

of which was delayed

to the third quarter. To

maximize equipment

utilization, the company

has temporarily sent a

fracturing fl eet and deep

coiled tubing unit from

Canada to North Da-

kota, where demand has

been more resilient.

In the second

quarter, Calfrac was in

on many of Western

Canada's emerging

liquids-rich natural gas

and oil plays, such as the

Beaverhill Lake, Du-

vernay, Slave Point and

Montney. Initial data

from the plays is favour-

able and Calfrac expects

further development of

such plays to drive ex-

pansion of its Canadian

division.

Calfrac's U.S.

operations continued to

expand into oil-produc-

ing plays in the second

quarter, including North

Dakota's Bakken. In the

Marcellus shale play,

Calfrac's operations

increased from fi rst-

quarter levels, despite

customers trimming

capital spending due

to gas price weakness.

Th rough its presence in

the liquids-producing

region of the Marcel-

lus, the company was

able to realize relatively

high levels of equipment

utilization during the

second quarter.

Th e industry's shift

to unconventional oil

basins has driven high

demand and costs for

some proppants, guar

and other chemicals,

which continue to

squeeze service compa-

nies' operating margins.

Calfrac was able to

avoid a more signifi -

cant negative fi nancial

impact in the second

quarter by buying its

guar earlier in the year,

cutting its exposure to

the volatility in guar

pricing seen in the sec-

ond quarter.

In the year to date,

Calfrac booked record

revenue of $809.89

million against $606.86

million in last year's

period, led by higher

year-over-year activ-

ity in Canada, the U.S.

and Latin America.

Net income attribut-

able to shareholders

rose to $58.99 million

or $1.32 per share,

including a $4.1 million

foreign exchange gain,

compared to earnings

of $61.15 million or

$1.38 per share in the

2011 period, which

included a $10.5 million

foreign exchange gain.

Capital spending rose

to $159.40 million from

$137.80 million in the

fi rst six months of 2011.

In the three months

ended June 30, 2012,

revenue advanced to

$335.78 million from


earlier period. Capital

spending rose to $75.29

million in the second

quarter from $72.05

million a year ago.

Calfrac sent some of its equipment to work in North Dakota during a slow period in Canada. This is the Calfrac base at Bienfait. Photo by Brian Zinchuk

Some of Calfrac’s eet jumped the border to stay busy


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Home Sweet! Home

Calgary – When

you see a new market

pop up, it’s time to get

into it while the get-

ting’s good.

Hall Technologies

Ltd of Calgary special-

izes in custody transfer

metering. Barry Hall,

who heads up the com-

pany, has a background

in instrumentation and

controls. Hall Technolo-

gies has been in business

for seven years.

Transloading crude

from trucks to rail cars

has really taken off in

the last two years, ac-

cording to Hall. “More

and more people are

doing it now.”

Th at’s true in West-

ern Canada and North

Dakota. He said, “We’re

seeing a lot of interest in

the Bakken fi eld and all

over.”

In Saskatoon they

have a system set up for

Kleysen Transport that

pumps biodiesel from

rail cars onto B-train

semis for transfer to

Suncor’s distribution

terminal. It’s the reverse

process of what’s done

in crude-by-rail trans-

loading.

Th ey’ve done a sim-

ilar blending transloader

for Central Manitoba

Rail in Winnipeg.

Th e company also

builds fi xed systems. In

Edmonton, they have

installed long headers

that connect with each

rail car.

Anyone driving past

Stoughton on Highway

33 can fi nd six examples

of Hall’s transloaders

working for Crescent

Point Energy Corp. Th e

oil producer established

its own, in-house crude-

by-rail facility earlier

this year, and has been

expanding its capabili-

ties since then by adding

additional transloaders.

“We’re doing some

for Enbridge in North

Dakota. Th ey wanted

pumps on those,” Hall

said.

Th eir transloaders

come in two varieties

– those with their own

pumps, and those which

use the pumps on the

trucks. Th e ones without

pumps don’t require

high-voltage power

supplies. Even a small

inverter in the back of a

truck will power them.

A transloader is

essentially a metering

package with an Enviro-

box for spill protection

where the truck hooks

up. Hall noted they have

a bulk air eliminator to

prevent air from being

metered. A meter deter-

mines density and mass

fl ow of the product.

Th e systems are

designed to moni-

tor for rail car overfi ll.

Th ey also have electrical

grounding to prevent

sparks due to static dif-

ferentials.

Th ey typically have

a stair case and platform

to access the hatch at

the top of the rail car.

One design has an ar-

ticulating platform that

can be lowered with a

screw-jack so that it is

low enough to get under

powerlines while travel-

ling on the road.

Most of their

systems load from the

top of the rail car, which

Hall said is preferred as

it is easier to work with.

“Th ey’re very

user-friendly. Train-

ing doesn’t take long,”

he said. Th e control

systems are common to

those used by truckers

throughout the industry.

Th e company has

had a lot of interest in

their transloaders, with

order sizes coming in

two, three or even fi ve

units at a time.

Hall noted it’s easier

and quicker to set up

a transloading facility

than other options such

as building a permanent

site.

“As long as the

pipelines are having is-

sues, rail will be popu-

lar,” he said.

A new market in building transloading units

These transloading units at Stoughton were built by Hall Technologies.

Photo by Brian Zinchuk

PIPELINE NEWS September 2012 B19B18 PIPELINE NEWS September 2012

FAX: 306-453-4476BOX 40, CARLYLE, SASK. S0C 0R0

www.evergreenenviro.ca

306-453-4475

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By Brian Zinchuk

Carlyle – Th e strength of the Carlyle business community has shown itself

again this year with the establishment of a new hydraulic fracturing company –

Element Technical Services. Approximately 70 per cent of the investors are from

southeast Saskatchewan, with a strong background in growing local companies.

An independent operation, Element joins a marketplace that is dominated

by some of the largest players in the industry – Baker Hughes, Schlumberger,

Halliburton, Trican and the like. But by taking a targeted approach at their

specifi c area, the Williston Basin area of southeast Saskatchewan and southwest

Manitoba, the company is seeking to carve out its own share of the market.

Th e company launched operations in March.

“It’s really been ignored by frac companies for a long time,” Mike Grossman,

Element’s technical sales manager, said of southeast Saskatchewan and south-

west Manitoba. “Other companies weren’t sending their top level equipment or

guys.

“We’ve gathered signifi cant crew experience to bring to the table.” Gross-

man said. Th e location also puts Element a step closer to the Sinclair and

Waskada fi elds in Manitoba, the two areas that have seen the most growth in

that province.

Grossman is from Carlyle, and handles sales both in Calgary and southeast

Saskatchewan.

Element’s new shop and offi ce is located right next door to Canadian

Energy Service’s campus south of Carlyle which includes PureChem, Moose

Mountain Mud and Equal Transport. “We’re right beside one of our key suppli-

ers with lab support and blending facilities to complement our Calgary labora-

tory,” Grossman said.

Whereas of other companies need to have supplies trucked in, they are

literally a forklift load away. It also means they can keep product storage to a

minimum.

Th e new 15,000 square-foot shop has fi ve bays plus a wash bay. With 29

acres, they have lots of room for more equipment.

Frac methods a mixed bag Completion techniques have been rapidly changing in the southeast

throughout the Bakken development.

“We’ve been thrown a mixed bag. We’ve seen every completion style in the

southeast,” Grossman said.

Th ose include the ball drop system, open hole infl ate packers, and a new

trend – sliding sleeves. “Th ose are the three that win the day,” Grossman said.

“Th e vast majority in our area are sliding sleeves.

“We need to be well-versed in how these systems work. At the end of the

day, we’re pumping the same fl uids and rates, it’s largely how fast we execute the

jobs.

Second spread comingElement started off with one frac spread – a complete setup for one frac job.

Grossman said that to run one frac spread, you need three crews – one day, one

night, and one on days off . Typically there are eight to 10 workers on a crew.

“We’ll be coming out with another frac spread in November 2012,” Gross-

man said. Th erefore the company will be hiring approximately 30-40 people in

the future.

Th eir current frac spread is made up of two 2,500 horsepower trailer

mounted pumps, a body-job truck-mounted blender, chemical addition trailer,

hydration unit, truck-mounted data acquisition van, and iron truck. When it

comes to sand storage and cartage, there are also two 45-tonne trailers, one 100

tonne trailer storage, and ten 40 tonne sand bins.

Th e second spread will be slightly larger with the addition of a third pump-

er. “We have three more (pumpers) we’re about to take delivery on,” Grossman

said.

Coil tubing plannedTo round out the fl eet, Element is adding its own coil tubing unit, expected

in January.

“We’re looking at 4,400 metres of 2-7/8 inch coil,” Grossman said. “It’s a

deep unit. It’ll cover most of the deep work in the area.”

Having an in-house coil tubing unit will makes it easier logistically, he said,

explaining, “You’ve got a unit dedicated to your best interests.”

Even so, they have strong relationships with the coil providers they are

working with now.

New equipment Element has brand new equipment suited to the area. Th at’s important,

because as opposed to fracturing operations in northeastern British Columbia

or western North Dakota, the fracs in this area tend to be smaller in nature.

“In North Dakota, you’d be pumping fi ve to six cubes (cubic metres) per

minute. In our area, we’re really close to the Lodgepole (formation), so you have

to keep it under one cube per minute. Otherwise you risk fracking into the

Lodgepole which comes with a lot of water. In Williston, they don’t have that

overlying Lodgpole so close. Th ey can pump faster and create larger fracs.”

Th is is where fi tting their equipment to match local conditions has been a

key strategy. Grossman said a lot of the competitors’ equipment from Medicine

Hat’s shallow gas areas was moved into Saskatchewan, but it was suited for

pumping at higher rates.

“We have a lot smaller pumps,” he said. “Everything is sized for the lower

pump rates of our region.”

“I would almost call it pinpoint fracking. Th e industry has gone to smaller

tonnages and more zones.”

Element Technical Services established in CarlyleElement Technical Services established in CarlyleThe data van, right, is the control centre of a frac job.

Frac supervisor Patrick Spagrud keeps an eye on the numerous computer monitors as the frac progresses.

This is the view from the blender, looking at two pumpers on the le , and the coil tubing unit on the right.

Tyrell Olson keeps an eye on things from the blending unit. The heavy-duty earmu s are necessary on the loud site.


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ESTEVANESTEVAN

By Pat Roche

(Daily Oil Bulletin) Calgary – Th e best way to craft a Canadian energy

strategy is in discrete pieces that don't necessarily involve all governments, says

an industry group that spent two-and-a-half years drafting such a plan.

Th e Energy Policy Institute of Canada (EPIC) released its 151-page

Canadian Energy Strategy Framework at a news conference in Calgary on Aug.

2. Th e report makes recommendations in fi ve areas: regulatory reform; market

diversifi cation; energy “literacy” and conservation; innovation; and carbon man-

agement.

“It's not the end-all. It is a beginning. But we think it's a very constructive

beginning to move us forward to where we net to get,” EPIC president Doug

Black told a news conference.

EPIC is a policy advocacy group for key energy producers, transporters and

consumers as well as entities fi nancing energy projects. Members include the

Canadian Association of Petroleum Producers (CAPP), and companies such

as Canadian Natural Resources Limited, Imperial Oil Limited, Suncor Energy

Inc., TransCanada Corporation and Enbridge Inc.

Separating the drafting of a Canadian energy strategy into manageable

goals would prevent any one province from derailing the entire process.

Energy strategy possible without national consensus, says A recent attempt by Alberta Premier Alison Redford to convince other

Canadian premiers to work towards a Canadian energy strategy was derailed

by British Columbia Premier Christy Clark.

Facing a general election in May and badly trailing the provincial New

Democrats in the polls, B.C.'s Liberal premier recently declared she wants no

part of Redford's plan – or Enbridge's proposed Northern Gateway pipeline

to ship Alberta oil the West Coast – unless B.C. gets a cut of Alberta's energy

revenue.

Asked how a Canadian energy strategy could be built without B.C., Black

said, “We are continuing [our] work, the other premiers are continuing to work.

And we're saying to British Columbia, ‘When you're ready to join our delibera-

tions, we welcome you.’”

Black believes B.C.'s opposition to Northern Gateway is a temporary

problem, and until it's overcome, oil can be shipped by other means, such as

rail.

“But our work cannot stop ... we have to continue to look at diversifi cation.

I think it's fair to say at EPIC we’re optimistic and we believe this problem will

be resolved,” he said.

EPIC believes a Canadian energy strategy can be crafted without a na-

tional consensus or an omnibus framework.

“Some people, I think, felt that at the end of the day we were going to

prepare an overall document encompassing absolutely every element of energy

in the country. Th at's not the case,” said Gerry Protti, vice-chair of EPIC.

“What we did was identify fi ve areas (but not) the magnum opus of

Canadian energy strategy,” Protti continued. “But if we could work on each of

these fi ve areas and make improvements, we're going to move some distance

(towards) realizing our energy goals as a country.”

He added, “Each province has its objectives in terms of its energy strategies

and energy potential and capability. I think what this document tries to do is

bring that national pan-Canadian framework, saying this is important for every

part of the country.”

Protti noted Ottawa, Alberta, British Columbia and Nova Scotia have

already moved individually on regulatory reform.

EPIC's report groups its recommendations into these fi ve areas where it

believes change is possible and necessary.

Regulatory reform“While Canada has a strong environmental regulatory system that has

protected Canadians for years, it has become a maze of duplication and inef-

fi ciencies that has led to a drawn-out approval process unappealing to energy

investors,” said Protti.

Page B21


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Page B20“From the beginning of our discussions, our recommended course of action

was evident: Bring more certainty to the regulatory process by establishing fair

rules and timelines, better defi nition of the scope of environmental assessments,

what government bodies should act as the regulatory lead and fi rm deadlines

for stages of the process,” he said.

EPIC commended the federal government for already acting on some of

these recommendations through legislative changes that streamline the regula-

tory process.

InnovationIn EPIC's view, becoming a global energy leader isn't just about increas-

ing production – Canada must continually invent technologies to improve the

economic and environmental performance of its energy sector.

To spur technology development, the group recommends creating “in-

novation clusters” – collaborations of a wide range of industry players, includ-

ing producers, academics, suppliers, service providers and “non-governmental

organizations.”

Energy "literacy" and conservation EPIC is urging the federal and provincial governments to develop a shared

vision on “energy literacy” and conservation, and to actively promote this vision

to businesses and individuals.

“To assist in promoting energy understanding among our citizens, EPIC

has also recommended the development of a Canadian centre for energy learn-

ing that will serve as an energy educator for all Canadians,” Protti said.

Market diversifi cation“Globally, the world has never known a time of such energy demand. In

fact, this was part of the rationale for creating EPIC and an energy strategy to

help take advantage of this opportunity,” said Protti.

EPIC recommends taking all necessary steps to capitalize on growing

overseas energy markets – including worldwide promotion of Canada's energy

resources, and upgrading and expanding infrastructure and transportation

networks.

“To help diversify (Canada's energy) markets, ... our recommendations

rely heavily on the involvement of Canadian governments to promote our

energy through trade missions, and to put trade agreements in place with other

nations to ensure the rules of the game are clear and to solidify our market ac-

cess,” Protti said.

Carbon managementOn the question of how to deal with carbon emissions, EPIC recommends

more time and study.

“Our working group studied the diff erent approaches of the provinces and

the federal government and how they're evolving with time. As well, we looked

at developments in the United States and globally,” said Protti. “And what we

need to do at this point is to synthesize the very diff erent myriad approaches

that are occurring in Canada and around the world."

To that end, he said EPIC recommends creating a joint federal-provincial

committee of energy and environment ministers “to continue to study the issue,

begin to synthesize these developments and develop a carbon management

framework for review in 2013.”

industry group urging regulatory reform, market diversity


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Calgary – Th e Northwest Territories will be-

come the next oil frontier in Western Canada for

Husky Energy Inc., which has planned a winter

exploration program this upcoming season.

Husky’s plans for its Slater River Project in

N.W.T. include the construction of an all-season

road along with further evaluation of the two verti-

cal wells drilled in the fi rst quarter of 2012.

“We will have a better sense of this resource af-

ter we do our winter exploration plan this upcom-

ing season,” said CEO Asim Ghosh in response to

an investor question during the company’s second

quarter conference call on July 25.

Page B23

Husky CEO Asim Ghosh, pictured talking on his cellphone at the grand opening of Husky Place in Lloydminster in May, said the company will conduct a winter explora on pro-gram this upcoming season at its Slater River Project in the Northwest Territories.

File photo

Husky to pan NWT


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Page B22Th e planning is subject to a lot of approvals. Th ose plans include evaluating

an over 200-kilometre 3D seismic in the area.

“So, it’s a sequential process, and the results are being assessed, but there’s

much work still to do and in parallel we are continuing consultations with

community and offi cials,” added Ghosh.

At its property in the Saleski carbonates, south of Fort McMurray, Husky

continued to evaluate the vertical stratiographic test wells drilled in 2011 in the

quarter.

In response to an investor question about the game plan and size of the

resource, Ghosh said Saleski is at a very early stage, however.

“We gave you guidance last time about the resource evaluation that we did,

which was massive,” said Ghosh.

“And we are advancing the early work of the pilot plan and the initial envi-

ronmental monitoring, which will support a regulatory application for our pilot

plan development.

“But that’s about all it is. We don't see this as a project that will make a

diff erence to Husky in the fi rst fi ve-year timeframe. It’s something that we will

look at for the future.”

Husky also continues to evaluate and advance its large pipeline of projects

in Western Canada as it expands its focus to unconventional resource plays.

Th e company targeted its second quarter activity at the Viking, Lower

Shaunavon and Oungre projects in southern Saskatchewan and the Redwater

and Alliance Viking plays in Alberta.

A total of eight (gross) horizontal wells were drilled in the second quarter,

resulting in a total of 34 (gross) horizontal wells and two vertical wells drilled

in the fi rst half of 2012.

In the northern Cardium resource play at Wapiti in west-central Alberta,

two of three horizontal wells drilled in the fi rst quarter were brought on pro-

duction, with results as expected.

“At the Rainbow Muskwa play in Northwest

Alberta, we drilled and cased two additional hori-

zontal wells and brought one on to production,”

said chief operating offi cer Rob Peabody.

“We're looking to complete four wells over the

summer that were drilled earlier this year on the

play, along with one carryover well from last year.”

Husky continues to focus on liquids-rich gas

opportunities in Western Canada.

Drilling and completion activity at Ansell in

West Central Alberta was limited over the quarter

due to spring breakup.

A total of three wells were drilled, including

one multi-zone vertical well, one vertical Cardium

well and one Woolrich horizontal well.

“Th e horizontal well was drilled to the inter-

mediate casing point before the rig was laid down

for spring breakup,” said Peabody.

“We’ve now drilled a total of 12 wells in the

fi rst half of 2012 and completed 31 wells at Ansell.”

Four horizontal wells were drilled at Kaybob

to evaluate the liquids-rich Duvernay gas play, with

one completed and placed on production in the

second quarter.

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Melville, 6-29-22-06-W2 • Willmar, 11-36-5-4-W2

Calgary – Fairborne Energy Ltd. reported a loss in the second quarter, pro-

duction remained fl at with the previous year, and the company says it will focus

on its highest netback properties for the remainder of the year.

Th e company reported a net loss of $44.72 million in the second quarter

compared to a profi t of roughly $652,000 during the same period last year. Oil

and gas production was roughly fl at with last year, averaging 13,956 boepd in

the second quarter, compared to 13,915 during the same three-month period

of 2011.

Fairborne maintained its production level despite property dispositions,

production interruptions and the continued shut-in of production due to low

natural gas prices.

Transactions completed in the second quarter generated $91 million in

gross proceeds on the disposition of approximately 800 bpd of oil production,

representing the majority of the company’s properties in Saskatchewan and

Manitoba.

Production averaging 1,000 boepd from the company’s Wild River prop-

erty remained shut-in throughout the second quarter in response to continued

low natural gas prices.

Current production is approximately 13,000

boepd, with an additional 1,000 boepd that re-

mains shut in due to low natural gas prices. Capi-

tal spending in the second quarter was limited to

about $4 million, which included drilling one (0.7

net) natural gas well on the company’s Marlboro

property.

Second quarter 2012 production was impacted

by several factors including property dispositions,

production interruptions and economic decisions to

shut-in certain natural gas properties. Th e company

disposed of the majority of its producing properties

in Saskatchewan and Manitoba (approximately 800

bpd of crude oil) through two separate transactions,

both of which closed during the second quarter.

Fairborne’s production was also impacted by several

third party turnarounds including the Keyera Nevis

gas plant and the Semcams K3 gas plant.

Page B25

Fairborne disposes of most of its Sask. and Manitoba production


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Page B24

With no measur-

able recovery in natural

gas prices, approxi-

mately 1,000 boepd of

production from Wild

River was shut-in at the

end of the fi rst quarter

and will remain shut-in

until commodity prices

improve.

Fairborne’s ability

to generate cash fl ow to

support a second half

capital expenditure pro-

gram is a result of the

company’s focus on its

highest netback prop-

erties, including the

liquids-rich Cardium

play at Harlech in the

Deep Basin of west-

central Alberta.

Th e company has

drilled two Cardium

horizontal wells to

date with the second well, which refi ned and advanced both the drilling and

completion techniques, continuing to deliver strong performance with an initial

production rate of 1,000 boepd and current production of 420 boepd, which

includes a consistent liquids yield of 50 bbls per mmcf, of which 35 bbls per

mmcf is high-value condensate. Th e high liquids yield present in the Cardium

wells generates a strong netback of approximately $25 per boe, even in the cur-

rent low gas environment.

With a current land position of approximately 65,000 net acres and the

previously released resource study at March 31, 2012, supporting 131 million

boe of economic contingent resource (best estimate), attributable to the com-

pany’s working interest share, the company has an extensive inventory (330

gross locations, best estimate) of exploration and development opportunities on

this high-netback property.

Fairborne’s focus for the remainder of 2012 will continue to be on areas

that generate the highest returns in the current environment. Maintaining a

cash fl ow based capital expenditure program of $20 million for the balance of

2012, Fairborne will concentrate spending on its highest netback properties,

including liquids-rich Cardium production at Harlech and high netback/low

operating cost development opportunities at Marlboro.

Fairborne Drilling was the rst client for Eagle Drilling Services Rig 6 in the sum-mer of 2009. Fairborne has since sold much of its Saskatchewan and Manitoba produc on, and Eagle is now part of CanElson Drilling. File photo


Rentals Ltd.

Calgary – PetroBakken Energy Ltd. boosted

production in the second quarter but recorded a

net loss during the period of $21.51 million, which

includes a $61-million non-cash impairment on its

natural gas assets in northeast British Columbia.

Second quarter production averaged 38,715

bbls of oil equivalent per (83 per cent light oil and

liquids), a 10 per cent increase over the second quar-

ter of 2011 though lower than fi rst quarter of 2012

due to reduced fi eld activity on account of seasonal

weather and the divestment of non-core properties.

Capital expenditures before dispositions totalled

$109.76 million in the second quarter, resulting in

nine net wells drilled in the quarter and 56 net wells

drilled in the fi rst half of 2012, with approximately

75 per cent of PetroBakken’s wells to be drilled in the

second half of the year.

In southeast Saskatchewan, the Bakken busi-

ness unit averaged 14,819 boepd of production

during the second quarter. A signifi cant portion of

the decrease from the fi rst quarter was the result

of the 2,900 boepd non-core Bakken disposition,

which occurred near the end of the fi rst quarter. In

addition, spring breakup resulted in moderated fi eld

activity and shut-in production due to limited access

to wells. Activity levels resumed towards the end of

the quarter, with six net wells drilled and four net

wells brought on production. As of mid-August,

PetroBakken had seven drilling rigs operating in

this business unit and has drilled 12 net wells since

quarter-end, with 11 net wells waiting to be com-

pleted or brought on production.

Th e company continues to develop its assets

in the Cardium, with production averaging 15,912

boepd in the second quarter, representing a 71 per

cent increase over the second quarter of 2011. Pro-

duction decreased slightly from the fi rst quarter of

2012 due to downtime related to spring breakup and

facility turnarounds. PetroBakken brought 11 wells

on production during the second quarter and, since

then, has drilled another 10 net wells and brought

two net wells on production, leaving a current in-

ventory of 13 net wells waiting to be completed or

brought on production. Th e company currently has

seven drilling rigs operating in the Cardium.

Th e remainder of PetroBakken’s production

came from the southeast Saskatchewan conventional

and Alberta/B.C. business units.

Th e southeast Saskatchewan conventional busi-

ness unit continued to provide a low decline, light

oil-rich production base. Production averaged 5,134

boepd in the second quarter, and the company drilled

one net well in the area with one additional well

waiting to be brought on production. One drilling

rig is currently operating in this area and new wells

drilled, combined with further additions to infra-

structure, are expected to grow production through

the balance of the year.

In the Alberta/B.C. business unit, the company

has 2,850 boepd of production and has assembled

over 190 net sections of land that are prospective for

new oil resource plays in one or more of the Nor-

degg, Montney, Duvernay and Swan Hills zones.

Activity was minimal during the second quarter but

there are plans to drill four wells in the second half of

the year to further evaluate these opportunities.

In northeast B.C., the company’s approach

in recent years has been to maintain its lands that

are prospective for natural gas. However, given the

inventory of oil-weighted prospects that compete

for capital and the current price outlook for natural

gas in North America, the company has elected not

to allocate capital to this area and consequently will

let 45 net sections of lands that were prospective for

natural gas in the Horn River area of northeast B.C.

expire and revert to the Crown, resulting in a $61

million non-cash impairment charge.

In terms of an overall outlook, the company

currently has 27 net wells waiting to be completed or

brought on production and 14 drilling rigs operating

within the core Bakken and Cardium areas. With

approximately 75 per cent of PetroBakken’s wells yet

to be drilled in its $875-million capital program for

2012, production growth will gain momentum in the

second half of the year as the company brings new

and existing wells on production. Th e company is still

expecting 2012 exit production rates of 52,000 to

56,000 boepd.

Th e monthly dividend of eight cents per share

has remained constant since the company’s inception,

resulting in total dividends of $45 million for the

second quarter.

PetroBakken see SE Sask production drop due to disposition


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Calgary – Th e Petroleum Services Association of Canada expects 650 fewer

wells will be drilled this year than it forecasted in April due to low natural gas

prices, the European debt crisis and declining demand from Asia.

PSAC, which represents about 260 oilfi eld service and supply companies,

predicts 12,500 wells will be drilled this year compared to its previous predic-

tion of 13,150 wells.

Th e new three per cent decline in forecast drilling activity is reported in

the third-quarter update of PSAC’s 2012 Canadian Drilling Activity Forecast released on July 30.

Th e updated 2012 drilling forecast is based on average natural gas prices of

$2.50 a gigajoule at AECO and West Texas Intermediate oil prices of US$90 a

barrel.

“Commodity prices on the natural gas side of things have had a big impact

on activity levels so far this year,” said PSAC president Mark Salkeld.

“As well, activity has been impacted by key shifts in the global economy,

including the European debt crisis and the decline in demand coming from

Asia.”

“We are cautiously optimistic about activity levels staying at or around the

2011 well count, with activity more weighted towards liquids-rich gas and oil,”

he said.

“PSAC member companies continue to be busy and the demand for their

services in Western Canada seems to have steadied following a late breakup

and some persistent wet weather.

“Our forecast update includes positive numbers with regards to effi ciency

in the patch,” he added.

“Th e average [metres] per well is up over 2,000 metres, but we are forecast-

ing that the average operating days per well will decrease by seven per cent this

year.”

PSAC expects the greatest increase in well count to take place in Manitoba

with 663 wells, an increase of 14 per cent over 2011 numbers.

PSAC is forecasting that Alberta will see a decline in the number of wells

drilled in 2012 by four per cent to 7,795 wells and British Columbia will see a

decrease in the number of wells drilled by 22 per cent to 485 wells.

PSAC believes Saskatchewan’s well count for 2012 will be relatively un-

changed from the previous year.

PSAC lowers forecast

PSAC believes Saskatchewan’s well count for 2012 will be rela vely unchanged from the previous year. However, with roughly 30 fewer drilling rigs working in Saskatchewan this summer compared to last summer, there’s going to have to be a lot of catch up to meet those numbers.


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Calgary – South-

ern Pacifi c Resources

Corp. is circulating

steam through all 12 of

its steam assisted grav-

ity drainage well pairs at

its STP-McKay thermal

project with bitumen

production expected be-

fore the end of 2012.

Th e STP-McKay

Phase 1 SAGD project,

located north of Fort

McMurray, began July

1 with the circulation of

steam to the fi rst pad of

six well pairs followed

by the second pad of six

well pairs on July 15.

Southern Pacifi c

said it took only three

days for steam to reach

the ends of the wellbores

in the fi rst pad, with sub-

sequent consistent circu-

lation, temperature and

pressure performance

within the well pairs as

expected.

Th e Athabasca oil-

sands project is the

only new SAGD proj-

ect coming on stream

in Alberta in 2012 and

was completed at $468

million, just $18 million

over budget.

Southern Pacifi c an-

nounced plans to expand

Phase 1 to 18,000 barrels

a day of bitumen in May

to reduce future capital

costs and boost produc-

tion.

Byron Lutes, presi-

dent and CEO of the

Calgary-based company

told BNN on July 24 that

the four cent cost over-

run of Phase 1 was rea-

sonable given the scope

of oilsands projects.

“We were hoping to

be slightly under budget

– we were fortunate –

we were one of the only

projects that was in con-

struction most of 2011,”

said Lutes.

“A lot of our costs

were done over a period

of time when they wasn’t

a lot of industry activity,

Only in the last months

we really noticed an in-

crease in activity levels

and some stress on our

costs, so that’s how we

wound up slightly over

budget.”

Lutes said construc-

tion of the Phase 1 ex-

pansion won’t begin

until 2014 when activ-

ity and labour and ma-

terials costs could be

higher.

“We have noticed

industry activity picking

up, and that is defi nitely

a concern that we have

to manage as we move

forward,” added Lutes.

Th e Canadian As-

sociation of Petroleum

Producers estimates oil

companies will spend

around $20 billion in

2012 in the oilsands

with SAGD costing less

than bitumen mining.

“Th ere’s lots of ac-

tivity. We’re a relatively

small component of

that, but there is a lot of

activity and companies

in Alberta are not slow-

ing down. Oilsands proj-

ects – you can’t just stop

and start them,” Lutes

told BNN.

Page B29

Southern Paci c steams McKay SAGD

Southern Paci c started up its STP-McKay SAGD project north of Fort McMurray in July with rst produc on expected before the end of 2012. The company conducted core evalua ons of the site in February 2011 prior to construc on of Phase 1. File photo


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Southern Paci c also has thermal opera ons at Senlac Saskatchewan. Pictured are processing and steam buildings at Senlac. The company started its Phase 1 STP-McKay SAGD project with the rst steam circula on on July 1. File photo

Page B28“It’s back to the fundamental belief that there is an overall supply shortfall

in the world for our products and we have a very large neighbour to the south

who consumes a lot of our oil products.

“As long as that keeps going, I think there is going to be lots of activity in

Alberta in terms of oilsands development.”

Lutes said Southern Pacifi c avoided the high cost of camp labour and

transportation at McKay by fabricating equipment for the central processing

facility in Calgary and trucking the components to the construction site.

“Th ey are basically put together like a very large Lego kit,” explained Lutes.

“You can save a lot of your steel costs. Your steel costs are by far your most

expensive in terms of labour – you’re probably paying 60 per cent more for

somebody to work in the fi eld, having to pay for their camp costs and their

access in and out of the campsite, so that’s where the savings can be fundamen-

tally diff erent from a mining project.

“We watch costs very carefully. If you go back to the big boom that hap-

pened in 2007-08, I don’t think we are going to experience that type of cost

increase again.

“Number one, a lot of us, as producers, learned a lesson from that. Th e large

majors are spacing themselves out. Th ey are working together to manage the

labour force.

“Secondly, there’s not as many mines being put on stream today as there

was a few years ago. I just think the overall demand for labour is going to be a

little bit less.”

All components of the McKay facility have been commissioned and are in

use. Th e central processing facility is generating all of its own power from two

to three cogenerators.

In addition to steam being circulated, the return fl uids from the wellbores

are being separated. Produced water is treated onsite and recycled for steam

generation.

Southern Pacifi c plans to proceed with its 6,000 bpd Phase 1 expansion

before it constructs its Phase 2 expansion to boost overall production to 36,000

barrels a day of bitumen at McKay.

Th e company fi led its application for the 18,000 bpd Phase 2 expansion in

November 2011.

Approval for the Phase 1 expansion will be incorporated into the Phase 2

approval process. Regulatory approval for the projects is expected in the fourth

quarter of 2013.

Phase 2 will be a separate facility located approximately fi ve kilometres east

of Phase 1 and will include a central processing facility, well pads and associ-

ated well pairs.

Th e Phase 2 project will also require the construction of a distribution and

gathering system and access roads.


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Edmonton – Th ey came, they saw and they ap-

plauded the early improvements for a three-year oil

sands monitoring program between the federal and

Alberta governments.

Th e joint program will set up a series of envi-

ronmental monitoring sites for air, water, land and

biodiversity in the oilsands region of Alberta.

Canada’s Environment Minister Peter Kent,

and Alberta’s Environment and Sustainable Re-

source Development Minister Diana McQueen

toured several of the new oilsands monitoring sta-

tions in July.

Both ministers were pleased with the progress

they saw, noting that the monitoring enhancements

for the fi rst year of the joint plan are well underway,

that the joint approach is working well, and that

initial results from the new enhanced monitoring

are expected this year.

“Th e Alberta oilsands are a key driver of the

Canadian economy. Th ey are currently responsible

for over 400,000 jobs,” said Minister Kent.

“In February, Minister McQueen and I

launched one of the most transparent and account-

able oilsands monitoring systems in the world.

“Today, it is clear to see that this system is on

track for full implementation in 2015. We challenge

others in the international oil producing commu-

nity to match Canada's commitment to environ-

mental monitoring.”

By the time the three-year plan is fully-im-

plemented in 2015, the number of water sites will

increase from 21 to 40 and the number of air sites

will increase from 21 to 30.

Th e number biodiversity/wildlife contaminant

sampling sites will increase to 25 from three to 25

and biodiversity monitoring will increase to more

than 70 locations from 35.

“Th e enhanced monitoring program for the oil

sands region provides assurance to Albertans, Ca-

nadians, and the world that this critical resource is

being managed properly,” said Minister McQueen.

“I’m confi dent that these enhancements are set-

ting the stage for a truly state-of-the-art environ-

Ministers tour oilsands monitorsmental program for the oilsands region.”

Implementation will continue to be phased

in over three years to ensure installation of neces-

sary infrastructure, incremental enhancement of

activities and appropriate integration with existing

monitoring activities in the region.


Members of the Canadian Association of Oilwell Drilling Contractors

booked 51,565 operating days in the fi rst six months of 2012, Rig Locator

records show, down from 54,565 days booked in comparable period last year.

But total metres rose to 10.02 million in the January-to-June period from

9.38 million metres to the end of June 2011.

Th e average length/depth per well for CAODC members continued to

be greater than 2,000 metres. In the fi rst quarter of this year, it rose to 2,011

metres per well, and in the second half lifted slightly to 2,013 metres per well.

It took CAODC members an average of 10.40 days to drill a well over the

fi rst six months of 2012 compared to 10.20 in the January-to-June interval last

year.

Including oilsands evaluation holes and experimental wells, the top con-

tractor of the half was Precision Drilling. Th e contractor drilled 1,650 wells and

fi nished 2.51 million metres of hole. Second-place fi nisher Ensign Drilling Inc.

rig released 1,302 wells and drilled 1.73 million metres.

Precision’s main customer during the half was Canadian Natural Resources

Limited, which accounted for 540 of its wells (32.7 per cent). Husky Energy

Inc. (126 wells, or 7.6 per cent) and Encana Corporation (115 wells, or seven

per cent) were the following top customers for Precision.

Canadian Natural was also the main customer of Ensign Drilling (216

wells, or 16.6 per cent), followed by Cenovus Energy Inc. (147 wells, or 11.3

per cent) and Suncor Energy Inc. (139 wells, or 10.7 per cent).

Savanna Energy Services Corp. was the only other contractor to drill more

than one million metres during the half. Th e company drilled 787 wells and

fi nished 1.23 million metres of hole.

Panther Drilling tops out rig utilization numbersRanked by wells drilled, Trinidad Drilling Ltd. rig released 434 wells

during the fi rst six months of the year, compared to 347 for Nabors Drill-

ing, although Nabors drilled more metres (888,818) than Trinidad (843,604

metres).

Excluding test wells, Precision’s share of the market declined to 26.88 per

cent in the fi rst half of 2012 from 27.91 per cent in 2011. Ensign’s market

share rose to 17.86 per cent from 16.92 per cent.

Precision was the top contractor for horizontal wells during the half with

702 wells rig released and 1.83 million metres of hole (excluding test or ex-

perimental wells). Ensign was second with 502 horizontal wells (1.22 million

metres), followed by Trinidad with 303 horizontal wells (749,408 metres),

AKITA Drilling Ltd. with 212 wells (461,267 metres) and Savanna with 202

wells (643,724 metres).

Rig utilization during the second quarter for CAODC members stood at

35.78 per cent, up from 21.73 per cent in last year’s second quarter.

As usual, smaller contractors dominated rig utilization and most metres

drilled per rig categories.

Panther Drilling Corp.’s three rigs had a 59.16 per cent utilization rate.

AKITA’s 38 rigs booked a 55.1 per cent utilization rate, while Fox Drilling

Inc.’s two rigs had a 53.3 per cent utilization rate.

Ironhand Drilling Inc. ranked fi rst in metres drilled per rig (29,727

metres), followed by Betts Drilling Ltd. (21,883 metres) and Lasso Drilling

Corporation (19,894 metres).

Savanna’s rig 412 drilled drilled 64 wells to the end of June, the highest

count for a rig.

Excluding test wells, Savanna had the biggest year-over-year jump in

operating days for the half, reaching 7,520 days from 4,837 in the fi rst half of

2011. Western Energy Services Corp.’s operating days lifted to 3,673 in the

half from 2,608 in the comparable period last year.


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Blackbird Energy Inc. is buying Ruger Energy Inc., an Alberta junior oil

and gas exploration and development company with 100 per cent working

interest in 680 acres in the Alsask area on the Alberta/Saskatchewan border.

Blackbird entered into a non-binding letter of intent Aug. 2 for the acqui-

sition of Ruger, whose assets consist of cash as well as oil and gas, and plans to

build on the strength of its Bigstone liquids-rich Deep Basin gas play.

Th e company is now in a position to capitalize on the assets where it is the

operator and will focus on making additions, said Garth Braun, CEO of Black-

bird.

Blackbird's Bigstone project is comprised of lands and licences covering

5,120 (1,120 net) acres in Township 60, Ranges 22 and 23W5 at Bigstone,

Alberta.

By completing the terms of a farm-in agreement with Donnybrook Energy

Inc., Blackbird earned 25 per cent of Donnybrook's interest in the Bigstone

lands and in any future operations within an area of mutual interest.

Th e acquisition, an arm's length transaction, will be subject to the approval

of the TSX Venture Exchange.

Ruger's Alsask property has three producing Mannville oil wells and one

glauconite water-disposal well that takes water on vacuum at 150 bbl. of water

per day.

Current production is 20 bbls of 15-degree API oil per day.

Th e Mannville pool is an outlier to the large Conoco Marengo pool six

miles east. Other outlying pools have been discovered in the area as well. Th ese

wells have produced in excess of 230,000 bbl. of oil to date.

Proved and probable producing remaining reserves are 29,000 bbl. Present

value before taxes discounted at 10 per cent is $1.01 million.

If the acquisition is completed pursuant to the terms of the letter of intent,

Blackbird will acquire Ruger by issuing common shares of its capital stock to

Ruger at a deemed price per share of 12 cents, based upon the net asset value of

Ruger at closing.

Th e net asset value of Ruger as determined at closing may not represent

fair market value.

Th e acquisition is subject to a number of conditions that include comple-

tion of due diligence reviews by the parties, successful negotiation of a de-

fi nitive purchase agreement, and receipt of all required regulatory and stock

exchange approvals.

As a result of the issuance of the acquisition shares, Ruger will become an

insider of Blackbird.

“We are very pleased with the development of Blackbird and the addi-

tion of two very experienced operators to the team,” said Braun. “We feel that

adding this tremendous operational expertise will enhance shareholder value, as

value achievement for our shareholders must be created both through the de-

velopment of our existing project and also with the origination of new projects

that are oil-weighted.”

Blackbird to acquire Ruger


Curly’s Picker Service Ltd.Curly’s Picker Service Ltd.Mark T. (Curly) Hirsch

1595 Dieppe Cres.Estevan, Sask.S4A 1W8

Secor Certi edCell: (306) 461-5898Fax: (306) 634-6690Cell: (306) 487-8120 Bus: (306) 487-2608 • Fax: (306) 487-2296

Lampman, SK. Email: [email protected]

HUTT’STRUCKING LTD.

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Primate – After be-

ginning the fi rst phase

of its summer drilling

program early, Edge Re-

sources Inc. has success-

fully drilled, cased and

completed two wells in

Primate, Saskatchewan,

southeast of Mack-

lin, one of which has

resulted in the discovery

of a new pool.

Both wells will

begin production testing

and pressure buildup

analysis simultaneously.

Additionally, the

company acquired 100

per cent of the land

it posted at a recent

Crown land sale, adding

395 net acres of con-

tiguous property to its

existing Grand Forks oil

asset.

In Primate, the

company had secured

the drilling rig, which

was between wells on

a nearby program for

another operator, on a

short-term window. Th is

allowed the company to

start drilling earlier than

it had planned.

Th e wells were

successfully drilled to

the primary target, the

McLaren formation, at

less than 850 metres,

having passed through

several other potentially

hydrocarbon-bearing

sandstones. On-site

geological analysis

and logs indicate no

less than 12 metres of

McLaren formation

sands were encountered

in both wells.

Th e company is

now equipping the wells

for pressure buildup

analysis and production.

Production testing com-

menced in mid-August

and will likely require

four weeks, but possibly

up to three months,

before a stabilized pro-

duction regime can be

established, as is normal

with all CHOPS (cold

heavy oil production

with sand) wells.

“We are very happy

with the initial geologi-

cal results from these

wells,” Brad Nichol,

president and CEO,

said in a news release.

“We are especially

pleased with the well

drilled in the eastern

section, which was

previously given zero

value on our reserve re-

port. Our Primate asset

continues to represent

a wonderful opportu-

nity to increase both oil

production (and associ-

ated cash fl ow) and asset

value. It was nice to drill

the fi rst two wells early

and establish production

in the eastern section

before drilling the rest

of the program.”

Th e fi rst well was

drilled in an eastern

section of the company’s

property at Primate.

Th is section is a non-

producing section that

immediately off sets a

very actively-drilled

area. As this section

did not contain any

producing wells, it was

previously allocated zero

value in the company’s

reserve report and bal-

ance sheet. Th is new

pool, described as a

mid-Mannville heavy

oil accumulation, is

off setting a similar, but

separate, pool to the

east, which is believed

to be currently produc-

ing over 2,000 bbl. of oil

per day.

Th e second well was

drilled into the compa-

ny’s existing, producing

pool and encountered

approximately 15 metres

of net pay. Th is was the

southernmost location

into the existing pool

to-date, which helped

to further delineate

and defi ne a relatively

undrilled area of the ex-

isting pool. After being

perforated, the well was

shut in to begin a multi-

day pressure buildup.

Production testing

started after several days

of collecting pressure

data.

Edge discovers new oil pool at Primate


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NEWSPIPELINE SECTION C

September 2012

Par 3 Winners:1st Nolan Rohatyn Brett Blackstock Shawn Boyes Wilson McKinnon2nd Jeff Pratt Dustin Wilson Devon Carrington Lorne Tytlandsvick3rd Wayne Carley Bill Halkyard Colin McInnes Clayton JahnHorse Race 1. Nolan Rohatyn 2. Jeff Mosely 3. Darin TrimbleChampionship Flight 1. Kris Carley 74 2. Brett Blackstock 75 3. Darin Trimble 77First Flight 1. Jamie Didrick 73 2. Cory Anderson 77 3. Dustin Wilson 82Second Flight 1. Lorne Tytlandsvick 84 2. Keith Hamilton 84 3. Scott Haliday 85Third Flight 1. Terry Theil 91 2. Laurier Carriere 93 3. Sam Bachorick 93Fourth Flight 1. Wilson McKinnon 88 2. Brad Dutton 89 3. Al Walker 91Fifth Flight 1. Gerry Naka 93 2. Trevor Davies 100 3. Arnold Marcotte 100Sixth Flight 1. Thayne Giroux 93 2. Tony Thompson 97 3. Nick Shier 99Seventh Flight 1. Jim Trimble 93 2. Curt Ermantraut 100 3. Ben Dizzarri 103Eight Flight 1. Brad Meyers 94 2. Graham Ball 103 3. Bob Hahn 106Ninth Flight 1. Ian Taylor 113 2. Ken McClemment 116 3. Josh Bayliss 126

Ken Bayliss gets evaluated on his swing. The ladies in the back all gave the boss a 10. The crew from Easyrider Trucking, is, from le , Natasha Bevan, Randi Thiry, Pamela Miller and Fay Myers.

By Brian ZinchukCarnduff – Th e three-day Carnduff Oilmen’s Golf

Tournament was a success, with 120 golfers taking part on

the 9-hole course.

Th e tournament took place Aug. 10 to 12 at the Car-

nduff Golf Club.

Th e par 3 event on the Friday, Aug. 10 had all its slots

taken, with 27 teams participating.

Saturday saw the end of the qualifying round, com-

pleted with a Calcutta and a horse race. In the horse race,

12 golfers start on the 4th hole, and two are dropped on

each subsequent hole. Only two are left on the last hole.

Sunday was a shotgun start.

“Th e money we raise, the majority of it goes back to the

golf course,” said Al Larson, president of the event. “One of

the bigger things we support is our junior golf program.”

“It’s a good secret we have here. Guys come back until

they die,” Larson laughed. “It’s just a good bunch of guys.

Th ere’s a lot of hard work that goes into it.

“It’s a lot of fun. Th e guys can sit back and relax.”

Page C2

Carnduff Oilmen’s Golf Tournament

Results:

Kent Kirkhammer powers through a tee o . Carnduff Carnduff

Oilmen’s a Oilmen’s a successsuccess

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Right: Mike Fowler of Bak-er Hughes serves up some souvlaki. They were so good, you couldn’t stop at just one.

Right: Thayne Giroux of Peak En-ergy at Lampman knocks his put in the hole.

Shawn “Gump” Boyes watches his put head toward the hole. Shawn drives truck with his family’s busi-ness, Bandit Oil eld Hauling, of Carndu .

Jason Miller of Mil-Lar Truck-ing connects on the tee.

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PIPELINE NEWS September 2012 C3

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Crude-by-rail is con nuing to gain trac on in Saskatchewan. Torq Transloading now has facili es near Shaunavon, Unity, Lloydminster and, most recently, Bromhead.

Torq Transloading facilities popping up everywhere By Brian Zinchuk

Bromhead – Th e move away from pipeline

shipping and toward crude-by-rail is gaining

steam, as yet another transloading facility has

begun operating in southeast Saskatchewan.

Torq Transloading announced in early August

they would being shipping crude-by-rail just west

of the hamlet of Bromhead, approximately 55

kilometres west of Estevan. Th e facility makes use

of a new shortline railway – Long Creek Railroad

(See related story page C5)

Jarrett Zielinski is president and CEO of

Torq Transloading, as well as one of the owners.

Torq got its start in May 2011, and since then

has been establishing crude-by-rail facilities

throughout Saskatchewan and Alberta.

“We are a sister company of Goulet

Trucking,” Zielinski said. Both opera-

tions are owned by parent company

Torq Capital Partners. It’s a pri-

vately held company with four

owners. Page C4


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Page C3“Goulet is a

52-year-old business

we purchased over a

year-and-a-half ago,”

he said.

Th eir transloading

sites are popping up all

over.

“We have six in

total,” Zielinski said.

One is at Instow, just

outside of Shaunavon.

“We off er our

customers a portfolio

of loading facilities in

order to capture the

best economic arbi-

trage opportunities,” he

said. Th eir objective it

to be diversifi ed across

a cross-section of crude

types and to freely

move about diff erent

areas to take advantage

of price diff erentials

between two markets.

“We also operate

two facilities on behalf

of CP Rail,” Zielinski

explained. One is at

Tilley, Alta., east of

Brooks, while another

is at Lloydminster.

“We have one in

Unity and another in

Whitecourt, Alberta,”

he said. “Th e one in

Whitecourt we operate

on behalf of CN.”

Th e Unity facil-

ity, using trackage at

North West Terminal,

started in April.

“We can load up to

40 cars per day in its

current status,” he said.

“Th at facility is fairly

busy. We are loading

15 to 20 cars per day

there.”

“We load fi ve to

seven cars per day. We

have a 27 car spot,”

Zielinski said in refer-

ence to the Instow site

where Torq has one

transloading operation.

Torq has one

transloading system

there.

Th ey load from

the bottom and use

closed-loop vapour

recovery systems.

Asked why they

got into the crude-by-

rail business, Zielinski

said, “Th e demand is

there. Pipeline ap-

portionment is more

frequent. It leads

producers to make

a decision between

shutting in or explor-

ing alternatives that

increase their netback.

“In addition, all

the producers we

work for are looking

to achieve greater

economics for their

products.

“We’re not

marketers. We’re a

fee-for-service trans-

loader. We follow the

crude markets and

understand the arbi-

trage opportunities. By

shipping crude to areas

underserviced by pipe-

lines or accessing large

amounts of water-

borne crude, refi ners

and terminals fi nd an

advantage by receiving

crude by rail.

Zielinski noted

there are opportunities

between the Brent and

West Texas Intermedi-

ate diff erential, be-

tween WTI and West-

ern Canadian Select,

and Maya and Western

Canadian Select.

As for where it all

goes once this crude

hits the rails, Zielinski

said, “Typically about

50 per cent of our

shipments go to the

eastern markets. Forty

per cent is southbound,

and 10 per cent is

westbound.”

“We don’t own

any cars. We expect

cars from marketers,

producers and refi ners.

Th ere is a shortage of

cars right now. It’s 18

months delivery for

new cars. We’ve seen

asphalt cars moved to

crude service. Every

day it seems more cars

are coming online. It’s

substantial.

“Our business has

seen increased volumes

and demand year over

year.”

BromheadTh e Bromhead lo-

cation is called South-

hall. Th ey chose it in

part because there was

already a loading facil-

ity in Estevan, one that

got a cool reception

from city hall.

“It’s a sensitive

topic. Th at is part of

the decision of choos-

ing the location we did.

It mitigates trucking

and environmental

impacts,” he said.

Zielinski pointed

out Southhall is an iso-

lated location, with low

population density.

Th ere is a “Y”

turnaround track at

the site, roughly where

the loading will take

place. Th ey are starting

with a 10 car spot. Th e

track to Oungre from

the “Y” has long been

abandoned and pulled

up.

“We have the abil-

ity to move cars,” he

said, adding they can

load up to 20 cars a day

in its current phase.

“In later phases

there are designs for

us to load unit train

volumes, between 100

and 120 cars,” he said.

“Looking at some of

the licensing activity

in that area, we felt it

would provide an op-

portunity as the area

continues to develop.”

Th ere’s no small

coincidence that the

Bromhead site is prac-

tically within spitting

distance of the U.S.

border. Th ere are two

ports south of Bro-

mhead. A key target

market is attracting

North Dakota oil to

come north across the

border to be loaded

onto Canadian trains.

Another issue with

crude-by-rail sites has

been damage to roads.

Torq has worked out

a road maintenance

agreement with the

rural municipality for

the portion of RM

roads needed to access

the site.

Th e company’s

expansion plans aren’t

over yet. “We’re cer-

tainly looking in

northern Alberta, and

some smaller things in

southern Alberta, and

another opportunity in

west central Saskatch-

ewan,” Zielinski said.

“We are looking at a

couple of opportuni-

ties that are pipelined

with fi xed infrastruc-

ture.”

Bromhead location out of town, and close to border


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By Brian ZinchukEstevan – It took seven years for farmers west of Estevan to get to the

point where they have their own railroad. Now that they have it, a new oppor-

tunity has been thrown into the mix – shipping crude-by-rail, in quantities a

lot larger than they were initially expecting.

Long Creek Railroad starts just east of the KFC in Estevan and runs 41

miles west to Tribune along a line that has seen little use for many years.

Glenn Pederson is president and a shareholder. He’s one of about 25 farm

producers in the area who are involved in the new shortline. He spoke to

Pipeline News via cellphone while combining on his farm north of Bromhead.

Pederson farms 7,500 acres with his father, Dallas.

“Th ere’s no oilfi eld money in the purchase or maintenance of the track,” he

said.

“Back in 2005, Canadian Pacifi c listed it on their three-year abandonment

plan. We felt the Canadian Transportation Agency miscalculated the net sal-

vage value. Th ey didn’t include land reclamation and statuatory payments. We

took that to court and made an application.”

Th e result was a settlement on net salvage value, but it took until 2011 to

achieve. “Th en we had a fi nal price,” Pederson said.

Th e fi rst year was a tough one for the fl edgling railroad.

“Last year we fl ooded out and had no crop, so we had no traffi c,” he said.

Th e line was washed out in some spots, and they had no grain to haul.

Indeed, before the handover, a key portion of track within the city of Este-

van near the overpass over Highway 39 subsided several feet. Canadian Pacifi c

took care of that.

Th ere’s one elevator at Outram owned by a farmer, two at Torquay and two

at Bromhead. Two of the three owners of elevators are also are investors in the

railroad, but Pederson is unsure if those elevators still have the capacity to load

rail cars. Th e sidings are still in place, however.

“We have all our sidings and switches intact,” he said. As a shortline, they

can spot cars on sidings or their mainline.

Th e decision to set up a short line came down to a matter of economics, he

explained. It’s a lot cheaper to haul grain fi ve miles away than to Weyburn. It

costs an additional $5 to $7 per tonne to truck grain to Weyburn. When you

factor in the charge for using the elevator, the costs for Pederson personally can

be up to $20 to $25 per tonne.

“Th at’s where we see the value. Th e oil was an afterthought,” he said. “I

strongly believe it will benefi t everyone bargaining with the elevator.

“Our distance from the ocean has not changed. Th e grain will still be

loaded on rail, despite the demise of the Canadian Wheat Board.”

Opportunity knocksCoincidentally, the past year has seen an upsurge in crude-by-rail in south-

east Saskatchewan. And it so happens that Long Creek Railroad runs along

one of the most active drilling spots in the province, right along the U.S. border

south of Highway 18.

“Currently we are working with Torq Transloading period. We’ve built a

loading site at Southhall between Bromhead and Tribune,” Pederson said. (See

related story page C3).

Torq told Pipeline News they initially are looking at loading 20 tanker cars

per day, and are considering expanding that to unit train capabilities. A unit

train can be 100 to 120 cars.

Th at’s a fair bit more than the “conservative number” of 500 grain cars per

year the railroad initially planned for.

He noted that several years ago, the idea of shipping crude-by-rail had

been brought up, but it was “nothing we could put in our business plan.”

“Th ey contacted us,” he said of Torq. “We’ve had half a dozen interested

parties.

“I believe there’s two or three more waiting to see if they want to invest.

We never advertised.” Page C6

Shortline was planned for grain, but may end up hauling more crude than kernels

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They may end up hauling a lot more than initially planned

The owners of Long Creek Railroad are glad they didn’t buy a road-railer, as it looks like they may end up pulling more cars then they ini ally planned.

Photo by Katrina Zinchuk

Page C5“Th ere’s a tremendous amount of oil business to be had. Pipelines are only

so big, and they can only move so much.”

Indeed, while Canadian Pacifi c had divested itself of the rail line, their

website now lists Long Creek Railroad as a partner.

“I must say, CP has been good to work with,” Pederson said.

He pointed out that the line to Radville, which had been slated for aban-

donment, is not being torn up, despite all the conditions for abandonment

having been met.

As for pulling the trains, Long Creek does not have its own engines, at

least, not yet. “We hired the services of Central Canadian Rail from Manitoba

to pull cars for us.”

Th ey have one locomotive, freshly painted blue, which is in Estevan now.

Another can be added in the future.

Pederson said they are going to take a wait-and-see approach to engine

power. Th ey had initially considered a Brandt road-railer, a half truck/half rail

engine. Th at might have been suitable for moving some producer cars of grain,

but woefully inadequate for large oil shipments. Now he said they are glad they

didn’t go down that route.

In the long term, he said, “We’re considering getting our own locomotive.”

Pederson said perhaps we need to looked at the mindset of 100 years ago, a

mindset of development. “Th is whole Western Canada – let’s get at ’er and fi nd

ways to solve problems. Today there’s a lot of negative talk,” he concluded.


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For much of the summer, a sole CanElson rig, simi-lar to Rig 21 seen here, was the only drilling rig working for Crescent Point. The company usu-ally has over a dozen.

Crescent Point resumes drillingCrescent Point resumes drilling By Brian Zinchuk

Calgary – Th e rumour fl ashed around the Es-

tevan OTS Golf Tournament in June like wildfi re:

Crescent Point Energy Corp. had shut down their

drilling program and released their rigs. Th at’s a big

deal in a town where the active rig count is a lead-

ing economic indicator. When one of the most ac-

tive drillers shuts down activities, there are impacts.

In this case, the rumour was true. Saskatch-

ewan’s second largest oil producer, which had 15+

drilling rigs working in Western Canada, mostly in

Saskatchewan, had dropped to just one active rig

for much of June and July. Th at one rig, CanElson

Rig 23, could be found working in their core View-

fi eld Bakken play.

By early August, things began to turn around.

Th e company had three rigs working in southeast

Saskatchewan and one in a new area in southwest

Manitoba. Soon more would be at work in south-

west Saskatchewan and in Alberta. By Aug. 17,

that number was up to eight.

Crescent Point vice-president of engineering

east Ryan Gritzfeldt explained to Pipeline News the

reasoning behind the companies deferral, and then

resumption, of much of its drilling program.

“Th e production results we had in fi rst and

second quarter were well ahead of target,” he

said. As a result, the company was in no hurry to

ramp up spending right after breakup, especially

given the volatile price of oil and the

pipeline diff erential.

Another major factor was the declining price of

oil, which in recent months had fallen into the $70

range for WTI before climbing back to the $90

range seen in mid-August.

Gritzfeldt said, “If you combine that with the

current volatility in the pipeline diff erentials, it

actually put realized wellhead prices not far off of

the low 2009 price levels.”

At that time, oil prices were somewhat lower,

but the diff erence in the exchange rate made up

for it.

Th e pipeline diff erential is the diff erence be-

tween what the going WTI price is and what

you are getting paid. It has been in a discount

situation due to the shortage of pipeline ship-

ping capacity. “Th ey were as high as $20,” he

said of the diff erential per barrel.

“Th is approach keeps our balance sheet

strong, a key attribute of our corporate strat-

egy since our inception of our company. Now

we’re well-positioned fi nancially in Q3 going

into Q4, which enables us to capture any

opportunities that come along. Th ey usually

do come along in lower, volatile price com-

modity cycles,” he said in reference to their

delaying the drilling program.

Page C9


Page C8Th ere were other factors as well. Th e Canadian dollar exchange rate with

the U.S. dollar has an impact. Exporters, like Crescent Point, see more of a

return when selling in U.S. dollars when the Canadian dollar is worth less than

the American buck. Th e loonie has recently been fl oating near par with the

Greenback.

Gritzfeldt noted, “Out Bakken formation (wells) are economic at $30.”

Th e delayed drilling allowed the company to build up cash. An average

Saskatchewan Bakken well runs around $1.8 million to $2 million to drill,

complete and tie in, but in North Dakota and Alberta’s Swan Hills, the prices

are higher.

After having delayed their drilling program, things are set to resume.

Noting the company is well positioned fi nancially, Gritzfeldt said, “Now we’re

executing the rest of our program as planned.

“It’s about our sustainable growth targets. We analyze them weekly,” he

explained, adding that during a low price commodity cycle, they can hold back

a little bit. Now prices has stabilized somewhat.

Crescent Point has normally had over a dozen rigs operating during ac-

tive drilling seasons, many of which were working in the Bakken, but also in

southwest Saskatchewan and in Alberta. Th e company is also drilling in North

Dakota’s Bakken play as well. During the fi rst quarter of 2012, the total num-

ber of rig was 15 or higher.

“We’ll be back up to that 15 company-wide,” he said.

“We still have a lot of locations to drill in southeast Saskatchewan,”

Gritzfeldt said.

One new fi eld for Crescent Point is just across the Manitoba border, north

of Highway 1, known as the Elkhorn, with some south Kirkella and Birdtail in

for good measure. Th e land was acquired as part of the deal for Reliable Energy.

Gritzfeldt said, “We’ll probably have a rig going there for the rest of the year.”

One of the things Crescent Point has done over the past year to address

the pipeline diff erential is to shift some shipping to rail. Earlier this year it es-

tablished its own crude-by-rail transloading facility just west of Stoughton and

a few miles north of its key Viewfi eld facility. “When pipeline diff erentials are

at it’s peak, we do a lot better on rail,” Gritzfeldt said. “If pipeline diff erentials

come down, we’re doing better on pipe.

He noted that Enbridge’s line 14 closure in late July meant they were

restricted 30 per cent in shipping capacity by that method.

It’s no surprise, then, that the shortline between Stoughton and Regina has

seen constant activity with oil tanker cars at most of the sidings and frequent

trains in motion.

Th e company is also looking into rail at Shaunavon, where they could go

with their own facility like Stoughton, or use a third party.

“We’re looking into Alberta as well,” Gritzfeldt said.

Expiries not an issueAt the 2011 Saskatchewan Oil and Gas Show in Weyburn, Crescent Point

president and CEO Scott Saxberg noted how they did $700 million in 2008

deals that year. Th e company was the largest player in that record-breaking year

for Crown land sales.

Now many of those leases are coming closer to their end. Th e Saskatch-

ewan Ministry of the Economy told Pipeline News in late June that much of

the Crown leases purchased in 2008 will expire April 1, 2014, just 19 months

from now, and that 85 per cent of the land leased that year (by all players, not

just Crescent Point) had not yet been proven up.

Asked if Crescent Point is feeling pressure to prove up land before it ex-

pires, Gritzfeldt said, “No. We’re not feeling pressure. A lot of those leases had

a fi ve-year term.

“When you look at the detail, we know what we have to drill two to three

years out. We know what our expiry situations are. We build all that into our

current drilling program. Th ere’s always a small portion of our corporate drill-

ing program that handles that.”

Bristow Projects Bristow Projects was doing some pipeline work near Benson on Aug. 10. Photo by Brian Zinchuk


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Calgary – In second quarter 2012, Crescent

Point Energy Corp. achieved a new production

record and averaged 96,972 boepd, weighted 92 per

cent to light and medium crude oil and liquids. Th is

represents an overall growth rate of 47 per cent over

second quarter 2011. Second quarter 2012 produc-

tion also represents growth of more than 6,500

boepd over fi rst quarter 2012.

As a result of strong 2011 and fi rst half 2012

drilling, acquisitions completed year to date and a

spring breakup that was less severe than expected,

the company is upwardly revising its 2012 guidance.

Crescent Point’s average daily production in 2012

is expected to increase to more than 95,000 boepd

from 88,500 boepd and its 2012 exit production

rate is expected to increase to 100,000 boepd from

97,500 boepd.

In second quarter 2012, the company spent

$188.4 million on drilling and development activi-

ties, drilling 75 (34.8 net) wells with a 100 per cent

success rate. Crescent Point also spent $47.6 mil-

lion on land, seismic and facilities, for total capital

expenditures of $236 million.

On June 1, 2012, the company closed an agree-

ment with a senior oil and gas producer to acquire

certain assets in the Shaunavon area of southwest

Saskatchewan for cash consideration of $343 mil-

lion. Th e Shaunavon assets acquired include pro-

duction of approximately 2,500 boepd, 98 per cent

oil-weighted, from three operated legacy units and

one non-operated unit in which the senior producer

had a minor working interest. Th ese assets are adja-

cent to and contiguous with Crescent Point’s exist-

ing Shaunavon land base and solidify the company’s

dominant position in southwest Saskatchewan.

Page C11

Crescent Point sets production record

A service rig can be seen working on Crescent Point land near Stoughton on Aug. 9. Photo by Brian Zinchuk


SPECIALIZING inLOG HOMES/BUILDINGS

South East Rentals Ltd.

Page C10Crescent Point continued to increase oil

deliveries through its Stoughton rail terminal,

providing access to diversifi ed refi ning markets

and improving netbacks. In late second quarter,

Crescent Point completed an expansion to the

facility, increasing capacity to more than 16,000

bpd. Current throughput exceeds 16,000 bpd,

with an additional 1,000 bpd also being delivered

to third-party sites. To provide a hedge against

price diff erential volatility, Crescent Point plans to

continue to increase crude oil deliveries through

its new Stoughton rail facility, which is providing

access to new markets.

Crescent Point announced on Aug. 10 it had

entered into an agreement, on a bought deal basis,

with a syndicate of underwriters for an off ering

of 13.42 million Crescent Point shares at $41 per

share to raise gross proceeds of approximately

$550 million.

Th e maximum gross proceeds raised under

this off ering will be approximately $633 million,

should this option be exercised in full. Closing was

expected to occur on or about Aug. 30, 2012. Net

proceeds of the fi nancing will be used to reduce

indebtedness and for general corporate purposes.

“We’ve signifi cantly outperformed in the fi rst

half of this year, relative to expectations. Spring

break-up was better than expected but, more im-

portantly, we’ve had strong drilling results in 2011

and the fi rst half of 2012. Our waterfl ood pro-

grams in the Bakken and Shaunavon, as well as fa-

cilities’ optimizations, have also contributed to our

results,” said Scott Saxberg, president and CEO of

Crescent Point. “We’ve executed a successful drill-

ing program, our oil production is well-hedged

and we are well positioned as we move into the

second half of the year, all of which has allowed us

to upwardly revise our production forecasts.”

Given the company’s signifi cant production

gains in second quarter 2012, Crescent Point

delayed capital projects until the middle of third

quarter 2012, allowing it to optimize the remain-

ing 2012 budget. With reduced industry activity,

Crescent Point also expects cost pressures to be

alleviated in the second half of 2012, which will

help improve operating costs and capital effi cien-

cies across all areas. (See related story page C8)

Th e company will also continue to expand the

waterfl ood programs in the Viewfi eld Bakken and

Shaunavon resource plays, which continue to show

positive results.

Southeast Saskatchewan and Southwest Manitoba

In second quarter 2012, Crescent Point par-

ticipated in the drilling of 23 (13.9 net) wells in

southeast Saskatchewan and Manitoba, achieving

a 100 per cent success rate. Of the wells drilled,

12 (10.0 net) were horizontal wells in the Bakken

light oil resource play. the Company also partici-

pated in the drilling of 11 (3.9 net) horizontal oil

wells in conventional zones. During the quarter,

the company converted 2 additional Viewfi eld

Bakken producing wells to water injection wells.

By end of second quarter 2012, the company had

converted a total of 35 producing wells to water

injection wells in the play. Production performance

from water injection patterns in the Viewfi eld

Bakken resource play continues to exceed Crescent

Point’s expectations and has demonstrated the

fi eld wide applicability of waterfl ood to the play.

Discussions with potential unit partners and the

Saskatchewan government to implement a unit-

wide waterfl ood are advancing.

Page C12

2012 exit production expected to crack six gures


Page C11Southwest

SaskatchewanDuring second

quarter, the company

participated in the

drilling of 8 (5.3 net)

oil wells in southwest

Saskatchewan, achiev-

ing a 100 per cent

success rate. Of these

wells, 3 (2.9 net) were

drilled in the Shau-

navon area.

During the quar-

ter, Crescent Point

integrated the senior

producer’s operations

in the Shaunavon area.

Integration of the

assets is now largely

complete.

The company

is currently inject-

ing water into seven

horizontal injection

wells in five pressure

maintenance programs

in the Lower Shau-

navon zone. Crescent

Point continues to be

encouraged by results

to date in all pro-

grams. Plans to con-

vert up to four wells in

the Upper Shaunavon

zone to water injec-

tion wells in 2012 are

also underway and

are expected to bring

the total number of

injection wells into the

play to 11 by year-end

2012.

Crescent Point

completed construc-

tion and commis-

sioned one of three

new batteries planned

for 2012. Construc-

tion on the remaining

two is underway, with

commissioning antici-

pated by fourth quar-

ter 2012. Also during

the quarter, the com-

pany’s new gas pro-

cessing plant became

operational. The gas

processing plant has a

capacity of 6 mmcf/d

and is expandable to

12 mmcf/d.

AlbertaDuring second

quarter, 20 (10.2 net)

oil wells were drilled,

achieving a 100 per

cent success rate. Of

the wells drilled, 14

(5.8 net) were in the

Beaverhill Lake light

oil resource play. The

company’s plans for

its first waterflood

pilot in the play are

well underway, hav-

ing begun reservoir

modelling and facility

design. Crescent Point

expects the pilot to be

operational in early

2013.

Crescent Point has

access to a significant

land base in southern

Alberta and has been

pursuing several explo-

ration projects in the

area. During second


drilled 1 (1.0 net) well

to follow up on previ-

ously drilled uncon-

ventional exploration

wells in the Alberta

Bakken play and 2 (2.0

net) horizontal wells

in conventional zones

in southern Alberta.

Plans for 2012 include

drilling up to 14 net

conventional and un-

conventional wells on

these lands.

United StatesDuring second


participated in the

drilling of 24 (5.4 net)

oil wells, of which 12

(2.6 net) targeted the

Three Forks forma-

tion, achieving a 100

per cent success rate.

In total in 2012,

the Company expects

to drill up to 18 net

wells targeting the

Bakken and Three

Forks zones. Crescent

Point has secured

adequate drilling,

service and fracture

stimulation equipment

to complete its current

2012 capital program.

For the remainder

of 2012, the company

expects to continue

to develop its emerg-

ing plays in Beaverhill

Lake, North Dakota

Bakken/Three Forks

and southern Alberta.

Crescent Point’s North Dakota drilling numbers similar to SE Sask

This are near Benson is bright during the day, but even more so at night, visible for many miles. Photo by Brian Zinchuk

Burning bright


www.crescentpointenergy.com

We’re proud to be a part of your community.

738 5th Street (back door) Phone: 634-3522

24 Hour Service - 7 Days A Week!

• Two Way Radios• Alarm Monitoring

• Safety Checks

"We Dispatch for the Oil Patch"

Although I had only

met him on a half dozen

occasions, Tim Floden’s

death in July of 2011

from lung cancer at the

age of 52 years aff ected

me deeply. At the time

of his death, Tim was

working for Crescent

Point in the comple-

tions division of the

company as a comple-

tions technician. Many

of the tickets I had

written up for Crescent

Point in my job as a hot

shot driver prior to his

diagnosis of cancer were

directed to his attention

in the Weyburn offi ce.

I did not know him

well, but we shared a

number of things in

common. We were

the same age, we had

lived for a time only a

couple of blocks apart

in Estevan, we had a

similar hard work ethic,

we loved our families

intensely, and we adored

pie. To be specifi c, we

both adored lemon me-

ringue pie and we both

adored Sweetie Pie.

Lemon meringue

pie needs no introduc-

tion – the sweet but

tart lemon fl avored

pie topped with fl uff y

melt in your mouth

meringue. But you may

need an introduction to

Sweetie Pie – Iris Elena

Floden, born in March

2010. Tim and I shared

a deep and instant love

for one sweet little girl

born as a result of the

marriage of the Floden’s

son, Ryan, to the Elson’s

daughter, Monica.

Tim’s diagnosis of

lung cancer took him by

surprise. He had been

on top of the world

fi guratively and literally

only six months before.

He and his wife Debo-

rah had been in Swit-

zerland on a mountain

peak (proudly wear-

ing his Saskatchewan

Roughrider colours)

as part of a European

trip in June 2010. He

had the world by the

tail. After years of hard

work on service rigs in

Alberta, Saskatchewan

and Russia and consult-

ing for 12 years in his

own company, he was

recruited by Crescent

Point in 2008 for his

dream job.

His wife, Deborah,

maintained a daily blog,

a memorial love story,

from his diagnosis of

cancer in January to his

fi nal day of life on July

29, 2011. It allowed

his friends and family

members a glimpse into

the couple’s daily jour-

ney of cancer and death,

witnessing beauty and

joy along with messi-

ness, fear, and sadness.

Crescent Point

closed down their ser-

vice rigs on Wednesday,

Aug. 3 to allow Tim’s

friends and co-workers

to attend his memorial

service in Regina. Chad

Lundberg, team lead

completions engineer

for Crescent Point in

Calgary, and Tim’s boss

and friend was the

emcee for the service.

He held a football and

spoke of Tim’s love

of the Saskatchewan

Roughriders. He told us

about Tim’s hard work

ethic. He said that Tim

had more knowledge

in his head about the

Crescent Point leases

than Crescent Point had

in their computers. He

told us about Tim’s love

for his family and that

Tim was infl uential in

getting Crescent Point

to close down their

service rigs every second

weekend as a matter

of course so the guys

could spend time with

their families. Tim had

missed a lot of family

time as a result of his

work so he knew how

hard it was on the men.

He also spoke of their

friendship and how he

would miss Tim.

I had wondered in

the months leading up

to Tim’s death about his

spiritual needs. He had

attended church with

us when the kids were

married and for Iris’

baby dedication, and

in the months leading

up to his death, did not

rebuff off ers of prayer,

but still I had wondered.

I got my answer when

Chad announced that

the musical selection to

be played next in the

service was Tim’s favor-

ite hymn – It Is Well

With My Soul.

“… Though Satan

should buffet, though

trials should come,

Let this bless as-

surance control,

That Christ has

regarded my helpless

estate,

And shed His own

blood for my soul! ...

Refrain- It is well, it is

well with my soul!”

And so on Sunday,

July 29, 2012 I marked

the one year anniver-

sary of the death of

Tim Floden with two

kinds of pie – Sweetie

Pie and lemon me-

ringue pie. I cut a

small piece and served

it to her. “Th is is pie,” I

said.

“Pie” she repeated

in her clear sweet little

voice. “Mmmm!”

“Grandpa loved

pie!” I said. “And you,

too!”

Nadine lives in Es-tevan with her husband and family, and works as a hot shot driver in the oil patch regularly deliver-ing goods in and around Estevan and Shau-

navon, and Sinclair and Waskada, Manitoba. Her mission, beyond deliver-ing the goods quickly, is to have every interaction be a positive one. She can be reached at [email protected].

Honouring Tim Floden’s life with pie

One Woman’s Perspective on Life, Liberty and the

Pursuit of Land Locations By Nadine Elson

Shifting Shifting GearsGears


By Brian ZinchukBrandon, Man. – In the oil business, the usual pattern is to go to where the

resource is. Towns fl ourish near active fi elds, and some places, like Fort Mc-

Murray, would hardly exist otherwise.

But in southwest Manitoba, Trican Well Service is turning that on its head.

It’s going to where the resource is, but in this case, it’s human resources.

As such, in January, the company established a base in Brandon, Manitoba.

Down the road from Virden, Manitoba’s long-time oil capital, Brandon’s

still quite a way from where most of its services are currently needed, including

the fi elds around Cromer and Waskada. But it’s a little closer than Estevan, and

more importantly, it has two things other centres lack: housing and people. A

shortage of both has been a continual issue for southeast Saskatchewan busi-

nesses that typically service the southwest Manitoba oilpatch.

Other places were considered, but Brandon was the choice.

Brandon base manager Curtis Nerlien said, “We are just over 50 (employ-

ees). Fifty-four was our last count.”

“A lot of our guys are from western Manitoba. A few are from this area

and have worked for us out west and have transferred back.”

Some are from eastern Saskatchewan as well.

“Th e biggest thing is we need to be in a place with a population big enough

to draw from,” Nerlien said.

Th ey also needed truck services to support the fl eet. As Manitoba’s second

largest city and being located on the TransCanda Highway, there are plenty of

truck servicing outfi ts, from Fort Gary Industries to Peterbilt.

Nerlien said that as a larger centre, Brandon off ers more attractions for

employees.

In the shop you can fi nd mechanic Dwayne Woytkiw. He’s originally from

Swan River, Man. Woytkiw went to work for Trican at Clairmont, Alta., in

2006, having moved to Grande Prairie. He was off ered a transfer to Manitoba,

which brings him closer to family and the opportunities for future promotion.

“Lots of guys who are from Manitoba working out west can now move

back home and work,” Nerlien said.

Nerlien, himself, started with Trican as a bulk cement hauler in Lloydmin-

ster 12 years ago. Originally from Porcupine Plain, Sask., the former farm boy

brought his wife and three children with him to Brandon. It’s closer to family

for him as well.

“We deal with fracturing and cementing right now,” he said, but there are

plans in the works for expansion into coil tubing,

nitrogen and acid. Th e company has begun hiring

for those positions already.

“We’ve got guys in training,” he said.

Page C15

Mechanic Dwaye Woytkiw is originally from Swan River, Man. He was o ered a transfer back home to Manitoba a er working in Alberta for several years. It’s a story o en heard in Saskatchewan – where locals went to Alberta to nd work, only to return once more work became available at home. Here Woytkiw changes an air intake pipe.

Trican establishes Manitoba beachhead


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Currently one frac crew is based in Brandon. They will soon be joined by coil tubing, nitrogen and acid opera- ons. The new base is a beachhead for the oilpatch in a

city more known for agriculture.

Page C14Before the end of the year, most of Trican’s

pumping services will be off ered in Brandon.

“We’ll be around the 70 employee mark,” accord-

ing to Nerlien.

His offi ce is currently in a rental trailer. Th at

will soon change, as there are plans for a newly

constructed building to be located on their

campus just east of Brandon. “We’re going to be

building on this site soon. Th e contractor is fl ag-

ging out the yard this week,” he said Aug. 1.

“It’ll be a fi ve-bay shop with a cement bulk

plant and chemical warehouse. Th ere will be of-

fi ces as well.

Th eir closest frac job is about 115 km from

Brandon. Th at’s shorter than the distance from

Estevan, where Trican also has a base. With the

fl ooding last year and a bridge still out west of

Waskada because of it, their service area can be

more accessible from the new base, especially in

spring.

In establishing its Brandon base, Trican

also created a beachhead for the oilpatch in a

city whose hockey team is known as the Wheat

Kings. It’s the fi rst large oilpatch venture of its

type in the city. It comes at a time when Mani-

toba has been setting records for drilling and

production. As of Aug. 1, there were 27 rigs in

Manitoba, with 16 active. Th ose numbers were

unheard of until the past year-and-a-half. Riglo-

cator.ca actually had to adjust its graph to allow

for a higher number of rigs for Manitoba.

“We managed to fi nd a good crew of guys, a

good solid bunch,” Nerlien concluded.


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By Josh LewisEstevan - Th e Estevan Oilfi eld Technical

Society held its 14th Annual Oilwomen’s Golf

Tournament on July 20.

Th e tournament, which resumed after a

one-year hiatus due to fl ooding, took place at

both the Estevan Woodlawn Golf Club and

Hidden Valley Golf Resort, due to the current

redesign taking place on Woodlawn’s back

nine.

Just under 80 women participated in the

one-day event.

Th e winning team was comprised of

Trudy Firth, Tami Kofoed, Maggie Stephen

and Darlene Sens.

Th e second-place foursome included

Shelley Naka, Shannon Knibbs, Mary Jane

Pineo and Shelly Big Eagle.

Coming in third was the team of Jennifer

Moore, Brandi Day, Arliss Schindel and Shelli

Schlingmann.

Nearly 80 golfers attendEstevan Oilwomens’ tourney

Trudy Firth lines up a put during the Estevan Oil eld Technical Society 14th Annual Oilwomen’s Golf Tournament on July 20.Photo by Josh Lewis/Estevan Mercury


Gibson Welding Ltd.Oilfield Trucking & Rentals

John 861-1280Fax 842-1707

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John 861-1280

Saskatoon – Allstar Energy Ltd., a 100 per cent

owned subsidiary of 49 North Resources Inc., plans

to develop its heavy oil properties on its Riverside

lands near Leader, Sask. with a farm-in agreement

with Westcore Energy Ltd.

Westcore will spend up to $1 million to com-

plete a 3D seismic survey at Riverside with a

planned drilling program to follow.

Under the terms of the agreement announced

July 25, Westcore will earn up to a 60 per cent

working interest in certain wells drilled on the Riv-

erside lands under that drill program.

Westcore has also been granted an ongoing

right of fi rst refusal to participate in additional

wells on Riverside lands.

Th e Calgary-based Westcore can fund up to

100 per cent of drilling, completion and equipping

costs (to a maximum amount of $1 million) for up

to a further 60 per cent working interest in such

wells.

Th e transaction is subject to the review and ap-

proval of the TSX Venture Exchange.

Th e farm-in agreement follows news that All-

star completed its second re-entry well at Riverside

with a combined two well production of 160-170

barrels of oil per day by July 20.

“After removing the abandonment plug and

equipping the well bore for pumping, the targeted

formation has been performing above initial expec-

tations,” said Ashley Drobot, president and CEO of

Allstar.

“Much like the fi rst re-entry well in the pro-

gram, the second well had initial 24-hour pump

tests in excess of 100 barrels of oil per day.”

Drobot said the second well was restricted and

produced at a stabilized rate of approximately 60-

70 bpd in excess of 30 days up to the news update

in July.

Given favourable pressures and fl uid levels

evident in the wellbore, Allstar was able to increase

the pump rate on the second well to approximately

100 bpd.

Allstar is a potential major player at Leader

with title to approximately 31,360 acres at River-

side.

Th e company acquired an additional 16,000

acres of property at Riverside from third party

producers in May following the purchase of 15,360

acre in a Crown sale in October 2011.

Th e neighboring Mantario oilfi eld 20 kilome-

ters north of Allstar’s Riverside property has been

producing heavy oil since the early 1990s with

cumulative production in excess of 47 million bar-

rels of oil.

Th ose fi elds continue to produce oil with the

help of secondary recovery methods such as water

and polymer fl ooding.

At Riverside, Allstar has successfully incor-

porated new pumping methods and equipment

that have shown to vastly improve operations and

production over previous activities in the area.

In total, Allstar now owns or has exclusive

exploration and development permits covering ap-

proximately 58,000 acres of highly prospective Vi-

king oil, Viking gas and heavy oil lands all located

in west central Saskatchewan.

49 North is a Saskatchewan focused resource

investment company with strategic operations in fi -

nancial, managerial and geological advisory services

and merchant banking.

Allstar to farm-in Riverside wells


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• Motor Scrapers, Graders, Gravel Truck

634-6081

National Oilwell Varco completes acquisition of CE Franklin

NOV Distribution Services ULC, a wholly-owned subsidiary of National

Oilwell Varco, Inc., has completed its previously-announced acquisition of CE

Franklin pursuant to a plan of arrangement as of July 23.

Th e arrangement resulted in NDS acquiring all of the issued and outstand-

ing common shares of CE Franklin for cash consideration of $12.75 per share.

Th e arrangement was approved by the shareholders of CE Franklin and by

the Court of Queen’s Bench of Alberta on July 16, 2012. Articles of arrange-

ment have been fi led by CE Franklin with the Registrar of Corporations for

the Province of Alberta, pursuant to Section 193 of the Business Corporations

Act (Alberta).

Pursuant to the arrangement, NDS paid an aggregate of approximately

$239 million to acquire CE Franklin, which is now a wholly-owned subsidiary

of NDS.

Th e common shares of CE Franklin are expected to be voluntarily delisted

from the TSX and NASDAQ by the end of July.

What do you call a group of sidebooms? A ock? A eet? A herd? There’s got to be a

joke in there somewhere. These sidebooms will be working with Surerus on the Enbridge Bakken Pipeline. They were sighted at the Frobisher boneyard. Photo by Brian Zinchuk.

Sidebooms


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By Elsie Ross(Daily Oil Bulletin) – Alberta will be the largest benefi ciary of upstream

oilsands development resulting from new projects spurred by additional pipeline

capacity to export markets, says a new study.

Of the cumulative GDP growth of $2.82 trillion in Canada between 2011

and 2035, nearly 95 per cent or $2.67 trillion (2010 C$) would accrue to Alberta,

according to the Canadian Energy Research Institute study, Pacifi c Access, Link-ing Oil Sands Supply to New and Existing Markets. Th e various cases in the report

are based on the eff ect of the addition of the Keystone XL, Trans Mountain

expansion and Northern Gateway pipelines.

Alberta also would see the economic impact of $551.6 billion in taxes paid

by citizens and businesses and 13.55 million person-years of employment with

the three new pipelines in operation. Th at shouldn't be surprising, given that

the oilsands are in Alberta, Dinara Millington, co-author of the report with Jon

Rozhon.

With its manufacturing base that can provide products for the oilsands and

its large population, Ontario would see GDP growth of $83.3 billion and tax-

es of $27.4 billion, followed by British Columbia with $36.8 billion in GDP

growth and another $9.8 billion in taxes paid.

Th e study was the fi rst of three that CERI would be releasing over a two-

week period. Th e second study due out Aug. 9 would look specifi cally at the

economic impact of the construction of Northern Gateway and Trans Mountain

expansion while the third study, released Aug. 14, looked at the impact in Brit-

ish Columbia related to natural gas development for the oilsands and for LNG

export markets.

Th e results of the fi rst study indicate that Kinder Morgan Canada's Trans

Mountain expansion would have the lowest economic impact on Canadian

GDP at $307.9 billion compared to $617.4 billion for TransCanada Corpora-

tion's Keystone XL and $373.5 billion for Enbridge Inc.'s Northern Gateway.

Th is could be due to the fact that TMX has the lowest capacity addition to the

total export capacity and hence the bitumen production volumes that will be

transported via TMX are the lowest among the cases, the study suggests.

In the case of Keystone XL, which opens up new markets to the United

States Gulf Coast, the incremental GDP impact in Alberta would be $583.2 bil-

lion in Alberta, $18.6 billion in Ontario and $8.3 billion in British Columbia.

In contrast, TMX would result in incremental GDP of $291.3 billion in Al-

berta and $9 billion and $4 billion in Ontario and B.C., respectively. Th e North-

ern Gateway case projects incremental GDP of $352.3 in Alberta, $11.4 billion

in Ontario and $5.1 billion in B.C.

Apart from existing pipelines, Keystone XL would spur the largest incre-

mental tax revenue of $131 billion ($121 billion from Alberta), followed by $80

billion for Gateway and $65 billion for Trans Mountain. Th e same pattern holds

for employment with the largest benefi ts under Keystone XL, apart from exist-

ing pipelines, followed by Northern Gateway and TMX.

Excluding the existing pipeline operations case, royalties collected by the

Alberta government are the second highest under the Keystone XL case, fol-

lowed by Northern Gateway and then TMX.

On an annual basis, total royalty revenues from all cases will increase signifi -

cantly to just over $35 billion in 2035 from $3.4 billion in 2010. Cumulatively,

Alberta will collect $585.7 billion in oilsands royalties over the 25-year period.

Under CERI's reference case scenario, oilsands production is projected to

increase to 3.3 million bpd by 2020 and 5.3 million bpd in 2030 from 1.5 mil-

lion bpd in 2010.

In 2010, non-upgraded bitumen and synthetic crude production accounted

for 52 per cent of total Canadian crude production and 76 per cent of Alberta

total production, versus 54 per cent and 77 per cent, respectively, in 2011.

Over the 25-year projection period, the total initial capital required for all

oilsands projects is projected to be almost $281 billion under the realistic sce-

nario. New investment dollars start to drop off by 2030.

Th is does not refl ect a slowdown in oilsands investments but instead CERI's

assumptions for project start dates and announcements from the oilsands pro-

ponents as CERI does not include in its scenarios any future projects unless

publicly announced by the companies involved.

Ongoing investment, in the form of sustaining capital, will take place on an

annual basis. Th e annual sustaining capital required for the oilsands (excluding

royalty revenues, taxes, and fi xed and variable operating costs) grows to almost

$5 billion by 2035 from the current amount of $2 billion, with an annual average

of $4 billion per year.

Total operating costs account for the largest share of total oilsands costs.

Between 2011 and 2035, total operating costs will be $759.6 billion, with an an-

nual average of $30.4 billion.

New pipelines would generate upstream bene ts


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Regina – It’s hard to

make arguments either

for or against an idea

without background

knowledge. CCS101.

ca has recently been re-

vamped to do just that.

CCS here refers

to carbon capture and

storage. CCS101.ca’s

purpose is to explain the

basics about the process.

“It’s really our at-

tempt in Canada to put

up an informational

website good for Grade

5 to Grade 12 students,

and linking to places

for materials for teach-

ers,” said Dr. Malcolm

Wilson, CEO of the

Petroleum Technol-

ogy Research Centre

(PTRC). Th e PTRC is

behind the CCS101.ca

website.

Th e website also

provides basic informa-

tion for people who

want to know what

carbon capture and

storage is. Wilson said

they are trying to do it

in a manner that is “in

an unbiased fashion as

possible.”

Th ere’s is a more

detailed section called

CCS Pro, where Wil-

son said they “dive into

more detail.”

Th e website is

designed to be digestible

by the public as well.

Th e site has a new

version of a teach-

ers’ page with a new

international curricu-

lum guide for teachers

produced in Australia.

Its resources are varied

from “six-hat thinking”

to an argument map

about the pros and cons

for carbon capture and

storage.

CCS101.ca also

introduces younger

students to the carbon

cycle.

CCS101.ca seesa revamp

This screen capture shows the teachers’ page on CCS101.ca.


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(Daily Oil Bulletin) – Operators across Canada

licensed 907 new wells in July, as Manitoba was the

only western province to see a lift in well authoriza-

tions from last year.

Th e 907 well permits represent a 32 per cent

decline from 1,341 licences approved in July 2011.

Manitoba granted 64 well authorizations in

July – a record for that month – and up 25 per

cent over 51 well permits issued in the year-ago

period.

Over the fi rst seven months of the year, Mani-

toba authorized a record 397 new wells, up from

333 wells to the end of July last year, and close to

British Columbia's tally through the January-to-

July period.

B.C. assigned 57 new licences in July, while

63 were approved (input). To the end of July, the

province had assigned 411 new permits (off from

641 a year ago).

In Alberta, the 517 well authorizations in July

were off about 41 per cent from last year's 872

permits. Th e province had licensed 5,333 wells to

the end of July, down over 1,000 wells from last

year, or 16 per cent, from 6,358 permits in the fi rst

seven months of 2011.

Saskatchewan granted 265 well permits in July

2012 compared to 342 in July 2011, and to the end

of July has authorized 2,669 licences compared to

3,027 a year ago.

Operators in Western Canada licensed 643 oil

and bitumen wells in July, down from 893 a year

ago. Over the fi rst seven months of the year, 6,111

oil and bitumen wells were permitted compared to

6,687 a year ago.

Gas permitting in Alberta, B.C. and Saskatch-

ewan continued to decline. In July, only 199 gas

wells were licensed compared to 311 a year ago.

To the end of July, just over 1,000 gas wells have

been authorized (1,049), off about 44 per cent from

1,864 in the comparable period of 2011.

Only four oilsands evaluation holes were li-

censed in July, down from 27 a year ago. Operators

have licensed 774 oilsands evaluation holes to the

end of July compared to 1,083 a year ago.

Th rough the fi rst seven months of the year,

operators licensed 4,614 horizontal wells, off almost

12 per cent from 5,217 horizontal wells permitted

to the end of July 2011.

Th e top fi ve licensees of new wells in July, ex-

cluding experimental and oilsands evaluation holes,

were Encana Corporation (88), Husky Energy Inc.

(80), Royal Dutch Shell plc (52), Canadian Natural

Resources Limited (49) and Cenovus Energy Inc.

(46).

Drilling licences were down in July, in keeping with a trend for lower ac ve drilling rig num-bers for the same month. Here a crew clears mats from a drilling site near Sinclair, Man. on Aug. 5. Photo by Brian Zinchuk

Manitoba only bright spot in Western Canada licence count


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(Daily Oil Bulletin) – CanElson Drilling Inc.

saw earnings in the second quarter rise 43 per cent,

more than doubling in the fi rst six months, thanks

in part to sharply higher revenue from the United

States and Mexico.

Income in the quarter rose to $3.88 million or

fi ve cents per share from $3.33 million or fi ve cents

per share reported in last year’s period, while year-

to-date earnings leapt to $19.48 million or 26 cents

per share from $10.07 million or 15 cents a share in

last year’s period.

“Our expanding, modern drilling rig fl eet and

operations in key oil-weighted basins across North

America enabled us to generate strong fi nancial

results ... even though it is a period of seasonal

slowdown in Canada and North Dakota,” Randy

Hawkings, CanElson president and chief execu-

tive, said in a statement accompanying the second-

quarter report.

Revenue in the drilling contractor’s foreign

division, consisting of the U.S. and Mexico, grew 62

per cent, to $26 million, representing 69 per cent of

total revenue in the second quarter. Total revenue in

the period jumped 49 per cent, to $37.49 million,

from $25.14 million a year ago.

On May 15, 2012, CanElson acquired the

shares of CanGas Solutions Ltd. in exchange for

about 2.05 million of CanElson’s own common

shares. CanElson’s management believes CanGas is

the only provider of compressed natural gas (CNG)

transportation services by truck-hauled CNG trail-

ers in Western Canada that is positioned for rapid,

profi table growth and potential cost-savings to

customers.

Looking ahead, the company expects its 2012

capital program to be about $89 million, of which

$57.9 million should be incurred in the second half,

with a signifi cant amount funded by cash fl ow.

Key parts of the second-half capital program

are drilling services, at $38.3 million, with $25.8

million for construction of four tele-doubles, long-

lead items for one tele-double, and other growth

capital investment. Th e company will also spend

$12.6 million for spares, shop upgrades and mainte-

nance capital, management said. Page C23

U.S., Mexico boost CanElson's revenue


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CanElson Driling Inc. is con nuing its rig build program. This is CanElson Rig 21, working near Ben-son in early August. It was formerly an Eagle Drilling Services unit before the company was purchased by CanElson.


Page C22For CanGas, the

company plans to spend

$19.6 million in the sec-

ond half to convert the

primary diesel engines

on 14 of its drilling rigs

to bi-fuel capability by

the end of 2012, so that

the engines can operate

on a mixture of natural

gas and diesel fuel; to

expand its fl eet of truck-

hauled CNG delivery

trailers to more than

50 from six currently;

to expand the portable

compression units by

four to six units; and

for further research and

development associated

with the company’s pro-

prietary small-scale, raw

gas conditioning tech-

nology to employ por-

table, small-scale fi eld

facilities to condition

raw stranded natural gas

so that it would be suit-

able for consumption in

engines.

Also in the second

half, CanElson plans to

deploy 27 per cent of

its fl eet to crude oil-

directed drilling in the

Permian Basin in Texas,

where management

believes its equipment is

likely to achieve utiliza-

tion over 90 per cent in

2012, similar to 2011,

with the only non-utili-

zation being attributable

to rig move intervals.

In Mexico, man-

agement expects its

customer to move to

a production-sharing

contract with PEMEX

in the next six months.

Th e change may cause a

“minor and temporary”

lull in activity later this

year in the transition

of contracts, but should

provide CanElson

with an opportunity

to expand service and

increase its exposure to

performance-related

contract terms in 2013

and beyond, manage-

ment said.

At Nisku, Alberta,

CanElson is building

three more small-foot-

print, ultra-heavy-duty,

telescoping double drill-

ing rigs at an estimated

cost of $8 million each.

Th e company will de-

ploy these new rigs with

long-term contracts in

the second half.


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Box 4 • Midale, SK S0C 1S0Phone: (306) 458-2367 Fax: (306) 458-2373

email: [email protected]

By James Mahony(Daily Oil Bulletin)

– While posting healthy

production increases

in the second quarter

and year-to-date, ARC

Resources Ltd. saw earn-

ings in both periods drop

sharply, due to continu-

ing low commodity

prices.

In the second quar-

ter, net income fell 75

per cent to $38.10 mil-

lion or 13 cents per share

from $150.10 million

or 52 cents per share in

last year's period, while

earnings in the fi rst half

dropped 63 per cent to

$79 million or 27 cents

per share from $215.30


share in the fi rst half of

2011.

Higher production

had a positive aff ect on

netbacks and funds from

operations in both the

quarter and fi rst half, but

these gains were eroded

by sharply lower natural

gas prices and higher

crude oil diff erentials

during the fi rst half of

2012, the company said.

ARC saw combined

oil and natural gas liq-

uids (NGL) volumes rise

19 per cent in the second

quarter, advancing 14

per cent in the year-to-

date, while natural gas

volumes rose 11 per cent

in the quarter and 25 per

cent in the fi rst half.

In releasing second

quarter results, the com-

pany said it had decided

to keep some Montney

land in northeast British

Columbia that it had

put on the block back in

February. Th e land repre-

sented about one-tenth

of ARC's B.C. land base,

and in pulling it off the

market, management

said it had only planned

to sell the assets if an of-

fer representing "supe-

rior value" materialized.

ARC also said it

would issue stock to

raise about $300 mil-

lion, which will be used

to increase working

capital and fund ongo-

ing capital development

programs. Under the

bought-deal agreement,

about 12.7 million com-

mon shares at $23.65 per

share will be issued. Th e

underwriters have been

granted an over-allot-

ment option to buy up

to 1.90 million common

shares on the same terms

as those sold under the

off ering, to cover over-

allotments, if any.

Th e company also

confi rmed it will cut

its 2012 capital budget

from the original $760

million to $600 million,

due to low gas prices and

volatile oil diff erentials

in the year's fi rst half.

ARC will continue to

invest in its oil proper-

ties at Ante Creek and

Pembina in Alberta,

Goodlands in Manitoba

and southeastern Sas-

katchewan as well as in

liquids-rich gas plays in

B.C.'s greater Parkland

area.

It recently submitted

an application to build

two 60 mmcf per day

gas processing plants at

Parkland with capability

of up to 130 bbls of oil

and liquids per mmcf.

Preliminary estimates

for the company's 2013

capital budget call for

about $800 million in

spending, which would

see commissioning of

Phase 1 of the Parkland

gas and liquids process-

ing facilities late in 2013.

ARC's second

quarter production

was 93,997 bbls of oil

equivalent per day, up 14

per cent from the second

quarter of 2011. In the

fi rst half, production of

94,484 boepd was 21

per cent higher than

the 2011 period. ARC's

drilling program in last

year's second and this

year's fi rst half, the com-

missioning of the new

30 mmcf/d Ante Creek

gas plant in February

and smooth operations

at ARC's Dawson facili-

ties contributed to the

higher production.

Th e company's sec-

ond-quarter liquids pro-

duction of 36,125 bpd

rose 19 per cent from

the second quarter of

2011. Strong production

results from new wells at

Pembina and Goodlands

and expanded processing

capacity at Ante Creek

have contributed to the

signifi cant increase in oil,

condensate and NGLs

production in 2012.

Capital expenditures,

prior to acquisitions,

in the second quarter

totalled $97.9 million, as

ARC drilled 18 oper-

ated wells, comprised

of 14 oil wells and four

liquids-rich gas wells.

In fi rst half, ARC spent

$284.8 million of capital

(prior to acquisitions),

drilling 77 gross oper-

ated wells, comprised of

67 oil wells, nine liquids-

rich gas wells and one

gas well.

ARC said it would

continue to focus on oil

and liquids-rich op-

portunities at Tower,

Ante Creek, Pembina,

Goodlands and south-

east Saskatchewan in

2012. Th e company's

anticipates it will drill

approximately 150 gross

operated wells this year.

Th e 2012 capital pro-

gram will prioritize the

highest return projects,

mainly focused on oil

and liquids projects.

In the three months


funds fl ow fell to $169


share from $236.70 mil-

lion or 83 cents per share

in last year's second

quarter. Capital spending

in the quarter dipped to

$103.30 million (includ-

ing acquisitions) from

$157.90 million in last

year's period. Revenue

in the quarter fell to

$317.80 million from


2011 period.

In the six months


funds fl ow declined to

$353.50 million or $1.22

per share from $428.80

or $1.50 per share report-

ed in last year's fi rst half.

Capital spending in the

fi rst half fell to $308.50

million (including acquisi-

tions) from $329.60 mil-

lion posted in last year's

half. Year-to-date revenue

fell to $684.60 million

from $699.60 million

reported in the fi rst half

of 2011.

Low prices gouge ARC earnings, as budget pared


Leading The Wayg y

Setting new standards Setting new standards for performancefor performance

Fast Growing Fast Growing CompanyCompany

www.CanElsonDrillingCanElsonDrilling.com

Box 312Carlyle, SK S0C 0R0Office: 306.453.2506Fax: 306.453.2508

Suite 700, 808 - 4th Avenue SWCalgary, AB, Canada T2P 3E8Phone: 403.266.3922Fax: 306.266.3968

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Opportunities On Our RigsOpportunities On Our RigsCanElson Drilling Inc. is currently looking for hard working individuals that are looking CanElson Drilling Inc. is currently looking for hard working individuals that are looking

for challenging and rewarding work on top-of-the-line equipment in Saskatchewan. for challenging and rewarding work on top-of-the-line equipment in Saskatchewan. We provide competitive wages and bonuses, stock options for Drillers and Rig We provide competitive wages and bonuses, stock options for Drillers and Rig

Managers. Interested individuals can drop off resumes in person at our Managers. Interested individuals can drop off resumes in person at our Carlyle Office or fax to 306-453-2508. Carlyle Office or fax to 306-453-2508.

Offices in Calgary, Nisku, and Carlyle, as well Offices in Calgary, Nisku, and Carlyle, as well as Midland, Texas and Mohall, North Dakotaas Midland, Texas and Mohall, North Dakota

Since it was established in late 2008, CanElson Drilling Inc. has grown quickly to become one of Canada’s premier drilling contractors. In addition to building its own drilling rigs, the company is expanding its eet of drilling and service rigs through acquisition. CanElson now operates a eet of 37 rigs (34 net).

With operations in Western Canada, West Texas, North Dakota and Mexico, CanElson Drilling Inc. is setting new standards for rig utilization.

With right-sized, purpose-built rigs built for horizontal and resource play drilling and experienced, well trained crews, the company is achieving new records for cost-effective, ef cient drilling operations.

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Cold Lake – Osum Oil Sands Corp. could be in a position to steam ahead

with the development of its 45,000 barrel a day Taiga thermal bitumen project

in the Cold Lake oilsands region in early 2013.

Th e privately held company hopes to receive regulatory approval from

Alberta’s Energy Resources Conservation Board for the 23,000 bpd fi rst phase

project by the end of 2012 with fi rst production expected in 2016.

Th e ERCB began public hearings in Cold Lake in mid-July with news

Cold Lake First Nations have withdrawn their objection to the $2.9 billion

project. Page C27

Osum opts for SAGD and CSS at Taiga

Osum Oil Sands is tes ng SAGD in the Grosmont carbonates at Saleski with its joint venture partner Laricina Energy Ltd. Privately held Osum hopes to receive regulatory approval in 2012 to construct the rst phase of its 45,000 Taiga thermal bitumen proj-ect north of Cold Lake in 2013. Osum’s applica on calls for the use of SAGD and CSS in the Clearwater forma on. Image submi ed


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Page C26

“We are very

pleased with Cold Lake

First Nations’ decision

to withdraw their objec-

tion, and we’re excited

to move forward and

deliver an outstanding

project that will benefi t

the region for decades

to come” said Rick

Walsh, Osum’s CEO.

“We’re confi dent

that we have a fi rst-rate

project that will raise

the bar for our industry,

and we take great pride

in sharing the Taiga

story, how it will benefi t

the community and how

oilsands development

benefi ts all Canadians.”

Osum has already

spent approximately $3

million on pre-approved

contracts with Ab-

original businesses with

more economic oppor-

tunities to follow once

the fi rst phase of the

project gets the green

light.

Osum plans to

recover oil from bitu-

men in the Clearwa-

ter formation using a

combination of steam

assisted gravity drain-

age (SAGD) and

cyclic steam stimulation

(CSS).

CSS is a popular re-

covery method utilized

in the formation by

competing companies in

the area such as Impe-

rial Oil because shale

layers within parts of

the formation have low

vertical permeability.

SADG requires

high vertical perme-

ability for horizontal

well pairs to operate

eff ectively by producing

steam around the upper

well to drain bitumen

into the lower produc-

ing well by gravity.

Imperial’s Cold

Lake thermal oil pro-

duction in Cold Lake

has been ongoing for

more than 30 years,

yielding approximately

of 160,000 barrels of

bitumen a day.

Osum plans to use

SAGD on the por-

tions of the Clearwater

that have good vertical

permeability and CSS

on areas with limited

permeability.

Osum’s Clearwater

property north of Cold

Lake is well suited to

SAGD because “it’s

laterally and vertically

permeable,” said Walsh

in response to a ques-

tion at a TD Securities’

Energy Conference in

Calgary in mid-July.

“Th ere is a portion

of the lease that has

more limited vertical

permeability, and that is

where you want to apply

cyclic steam stimulation

to kind of open up the

rock a bit,” said Walsh.

Osum’s application

for a two phased in situ

thermal project will

include a cogeneration

unit, making the project

among the most energy

effi cient of its kind.

Th e company

initially applied for ap-

proval from the ERCB

in January 2010 with a

central processing facil-

ity that would occupy

30 hectares of land on

the east side of second-

ary Highway 897.

Based on feedback

from the community,

Osum determined a site

three kilometres to the

west on the west side

of Highway 897 was

a more suitable loca-

tion. Th e new location

is the old Norcen pilot

site which is an already

impacted area.

Osum has also

reduced the number of

project well pads from

69 in its original plans

to just 36 to reduce

ground disturbance.

Th e project will also

be built in two con-

struction phases instead

of three as previously

planned to reduce the

number of days of heavy

traffi c fl ows in a shorter

construction schedule.

Th e Taiga project

will be one of the fi rst

thermal developments

to use zero fresh water

for steam generation.

Th e water will be re-

cycled using the latest

water treatment tech-

nologies.

Osum is also

partnered with La-

ricina Energy Ltd. in

an ongoing pilot and

potential commercial

development of bitu-

men in the Grosmont

carbonate trend at

Saleski.

The joint venture

project to test optimal

recovery factors using

SAGD and exploring

the potential of sol-

vents began in 2010.

Osum’s net stake

in the Grosmont

carbonates represents

an estimated 2.3

billion barrels of

recoverable resources.


CAREER Gu de

#6 - 461 King St. • Estevan, SK

637-3460 www.petrobakken.com

Strength In Our Resources

Canyon is the fastest growing fracturing company in North America. We deliver quality customized pressure pumping and service solutions to the oil and gas industry, improving our industry one job at a time. If you’re looking for a career with a leading organization that promotes Integrity, Relationships, Innovation and Success, then we’re looking for you.

Now hiring Canyon Champions for the following positions:

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Sun Country Well Servicing Inc. is currently seekingexperienced Service Rig Personnel. Preference will

be given to Class 1A and 3A applicants.

Interested individuals can submit a resume via email or fax to Shannon Leibel at:

Email: [email protected] 306 634 1200 • Cell 306 421 3418

CAREER Gu de


Do you want to work for a progressive company that takes safety seriously and uses today’s newest technologically advanced equipment? If your answer is “yes”, we are interested in talking to you!We are currently seeking to fill the following positions in the Provost, Consort and Lloydminster areas.

Well Servicing Division

Tool PushesDrillers

DerrickhandsFloorhands

All applicants must have a valid driver’s license, as well as all of the required industry training for the position they are applying for. We offer higher than industry standard wages, an exceptional employee benefits package, several employee incentive programs and unlimited opportunity for advancement.

If you want to grow with a company where you are known by your name and not your employee number, please forward your resume to:

Central Well Services Corp.Box 1360

3803 52nd AveProvost, AB T0B 3S0

E-mail: [email protected]

Quality people delivering quality service.

Oilfield Construction Limited

NOW

COME JOIN OUR TEAM! We’re hiring for various

projects throughout Southern Saskatchewan

Over 50 years strong, Arnett & Burgess

Oilfi eld Construction Limited safely

provides quality pipeline construction,

facility installation, pipeline integrity,

custom fabrication, maintenance and

related construction services to the

energy industry.

Compensation:Competitive wages

Overtime

Daily Subsistence /Living

allowance

Preferred Certifi cationsH2S Alive

Standard First Aid & CPR

Required Certifi cations Driver’s License

Ground Disturbance – (Heavy

Equipment Operators only)

For more details and other career opportunities please visit:www.abpipeliners.com

For Inquiries please call: 780.384.4050

Please submit your resume to :email: [email protected] • Fax:403.265.0922

• CONSTRUCTION MANAGER- Candidates must have previous leadership/managerial experience within the Pipeline Construction industry (mainly underground lines max 16”).This position’s home base is in Regina.

• FIELD SAFETY ADVISOR- The ideal candidate will have a CSO designation. This position will oversee pipeline construction projects in southern sk with a home base in Regina

• PIPELINE CONSTRUCTION LABOURERS • FOREMEN• HEAVY EQUIPMENT OPERATORS-Employee & Owner Operators with Pipeline Construction Experience

All positions require previous experience in Pipeline Construction.

Previous experience on Pipeline Integrity projects is an asset.

We require the following:

Matrix Well Servicing

Permanent Full-TimePenta Completions requires a

Warehouse/Yard Assistantfor our Estevan operation.

Penta Completions Supply & Services Ltd.58 Devonian Street P.O. Box 667

Estevan, Sk. S4A 2A6Fax: 1-306-634-6989

or Email: [email protected]

Duties Include• Shipping & Receiving

• Inventory control• Invoicing

• Some on call work is required

Requirements• Valid Class 5 drivers licence

• Computer experience would be an asset• Successful candidate will earn a current

WHMIS and TDG certi cate

Submit resume including references to:


Equal Opportunity EmployerAll applications are welcome

Currently seeking• Cathodic Protection Technicians

• General Labourers• Journeyman Electricians

Experience an asset but willing to trainCompetitive wages

Apply today with resume at:937 Henry Street, Estevan, SK S4A 1N5

Ph: 306-634-1917

Fax: 306-634-1918

Be Part of TEAM!

CAREER Gu de


Journeymen Electriciansand Apprentices

PowerTech Industries Ltd. in Estevan is seeking

Journeymen Electricians and Apprentices for

work in the Estevan and Carnduff areas.

Experience: Safety Certifi cates are needed.

1st Aid/CPR, H2S. Applicants must have a valid

driver’s license. Full benefi ts packages and RSP

plan.

Duties: Day to day electrical construction and

maintenance in the oilfi eld.

Wage/Salary Info: Depending on experience &

qualifi cations.

To Apply: Fax: (306) 637-2181, e-mail

sschoff [email protected] or drop off resume to

62 Devonian Street, Estevan, SK.

EMPLOYMENT OPPORTUNITYPERMANENT FULL-TIME

HYDROVAC OPERATORS

• Require class 3 or class 1 licence

• Safety tickets

HYDROVAC SWAMPERS

• Require safety tickets

Offering competitive wages, benefits available after 3 months. Offering living accomodations.

Email resumes to:[email protected]

or fax to:306•483•2082

About Tundra Oil & Gas LimitedTundra Oil & Gas Limited is a wholly-owned subsidiary of James Richardson & Sons, Limited, a private, family-owned company established in 1857 with operations in agriculture, food processing, financial services, property management and energy exploration. Tundra’s corporate head office is located in Winnipeg, Manitoba, where we commenced operations in 1980. Our field office in Virden, Manitoba oversees the operation of 1,800 wells, while our office in Calgary, Alberta, provides our geological, geophysical and reservoir engineering support. The Tundra family of companies also includes Red Beds Resources Limited and Tundra Energy Marketing Limited. To learn more about us, we invite you to visit www.tundraoilandgas.com.

Tundra Oil & Gas Limited is Manitoba’s largest oil producer, currently exceeding 25,000 barrels of light, sweet crude per day. Our oil and gas exploration company operates over 95% of our production, with core properties located within the Williston Basin in southwestern Manitoba and southeastern Saskatchewan.

This is a very exciting time to be part of the Tundra team as continued growth and expansion has created new opportunities in our Virden, Manitoba location. Take a closer look at these available opportunities:

If you are interested in joining our rapidly growing team, please visit the Employment section of our website at www.tundraoilandgas.com and to submit your cover letter and resume, along with your salary expectations.

Drilling Field Superintendent• High school diploma is required with an equivalent of 10-15 years specific job related experience; or• Technical school/college diploma in Petroleum Technology with an equivalent of 7-10 years specific job related experience; or• An undergraduate degree in Petroleum Engineering with an equivalent of 5-8 years specific job related experience.

Completions Engineer / Technologist• Undergraduate degree in Engineering or a diploma in Petroleum Technology• 5-10 years completions experience working in oil

Production Engineer / Technologist• A sound knowledge of production engineering, 5 – 10 years of relevant experience.• Exposure to rod pumping artificial lift systems; well completions and workovers; waterflood facilities and monitoring.• Oil production facilities exposure an asset.

Maintenance Manager• Post-Secondary education• Preventative Maintenance programming • Requires extensive technical knowledge of facilities and equipment. • Requires 8 or more years of experience in maintenance, manufacturing support, or production.

Drafting/Design & Technical Support Technician• Engineering / CAD Technology Diploma. • New grads are welcomed.

CA

REE

R

Gu

de


[email protected]

www.aspentrailer.com

Aspen Custom Trailers

6017-84th Street S.E.

Calgary, AB T2C 4S1

[T] 403 236 2244

[F] 403 236 8829

[C] 403 813 6319[Toll Free] 877 236 2244

Lance Wotherspoon

Regional Sales Manager

BIG D’S LEASE SERVICE

P.O. Box 544

Stoughton, Sask. S0G 4T0

(306) 457-7033(306) 457-7673

Backhoe

Mowing

Snow Removal

Towing

Fencing

Road Grader

Gravel Supplies & Hauling

LECLAIRTRANSPORT

Lyle LeclairCell: 306-421-7060

General Oilfi eld Hauling

Cordell JanssenCordell JanssenDistrict ManagerDistrict Manager

DownholeDownhole

93 Panteluk Street, Kensington Avenue N93 Panteluk Street, Kensington Avenue NEstevan, SaskatchewanEstevan, Saskatchewan

PHONE:PHONE: 306-634-8828 • 306-634-8828 • FAX:FAX: 306-634-7747 [email protected] • www.nov.com

JUSTIN WAPPEL - Division Manager

401 Hwy. #4 S. Biggar, SaskatchewanPO Box 879 S0K 0M0Ph (306) 948-5262 Fax (306) 948-5263Cell (306) 441-4402 Toll Free 1-800-746-6646Email: [email protected]

a l t u s g e o m a t i c s . c o m

Specializing in well site and pipeline surveys

Yorkton

306.783.4100

Weyburn

306.842.6060

Regina

800.667.3546

Swift Current

306.773.7733

Lloydminster

780.875.6130

Medicine Hat

403.528.4215

Edmonton

800.465.6233

Calgary

866.234.7599

Grande Prairie

780.532.6793

Lloyd Lavigne • Kirk ClarksonOwners/Managers

6506 - 50th AvenueLloydminster, AB

Phone: (780) 875-6880

5315 - 37th StreetProvost, AB T0B 3S0

Phone: (780) 753-6449

Fax: (780) 875-7076

24 Hour ServiceSpecializing in Industrial & Oilfield Motors

Your best choice for accommodations

in Carlyle, Sk.• Full kitchen and upscale extended stay

• Complimentary continental hot breakfast• Free high speed internet

• Meeting roomReservations: 306-453-2686

RICK CORMIERManager

Box 609 Bus: (306) 634-8084Carlyle, SK Cell: (306) 577-8833S0C 0R0 Fax: (306) 453-6075www.truetorq.ca [email protected]

RESOURCE Gu de

CN TransloadingCN is con nuing to expand its Bienfait transloading fa-cility. This packer was making several runs along the north side of the site on Aug. 11.



• Oilfi eld, Industrial, Commercial,

Residential, Agricultural

• Fully Equipped Field Units

• GPS Equipped for Faster Response Time

• Knucklepickers

• Excavation Equipment

• Generators – 50-200 KW

• Directional Boring

• Trenchers, Skidsteers, Mini Hoes

Ph: 306.453.2021 Fax: 306.453.2022Cell: 306.577.7880Email: [email protected]

Box 1238 Carlyle, SK S0C 0R0

All Aspects of Electrical All Aspects of Electrical ConstructionConstruction

pipeline news september 2012

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