Saskatchewan Oil Report - 2013

SASKATCHEWAN The voice of the oil industry in Saskatchewan.

2013

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www.saskatchewanoilreport.com Tight and shale oil plays in the WCSB Fraser Institute: Saskatchewan very attractive for Canadian petroleum exploration and development Oil boom creates new opportunities for Saskatchewan’s construction industry Pilot oil upgrader could lead to bigger things in the Battlefords The unconventional renaissance

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Saskatchewan Oil Report 2013

SASKATCHEWAN Oil Report is published by:

Contents

DEL Communications Inc. Suite 300, 6 Roslyn Road Winnipeg, Manitoba, Canada R3L 0G5 www.delcommunications.com

messages – reports – events

Message from the Premier of Saskatchewan – The Honourable Brad Wall..........................................................................8 2013 Ministry of Economy report – Our competitive edge.................................................................................................12 Safeguarding oil security – International Energy Agency..................................................................................................18 New country, new career, new future................................................................................................................................24 Safer Saskatchewan workplaces: injury is predictable and preventable.............................................................................28 Lloydminster: growth and prosperity in the heart of Canada’s heavy oil region.................................................................32 PTI offers ‘more than a place to stay’ in the Bakken............................................................................................................38 The unconventional renaissance........................................................................................................................................42 Dating dirt.........................................................................................................................................................................46 No crude left behind..........................................................................................................................................................52 Southeast Regional College – SE Saskatchewan’s educational connection to the energy industry....................................60 Public outreach more important than ever........................................................................................................................64 Big progress in the ‘Energy City’.........................................................................................................................................70 Home-grown investment opportunity in Saskatchewan’s oil and gas sector.....................................................................76 The Bakken shale region: permitting across an international basin...................................................................................78 D&D Oilfield Rentals offers diversity after Deranway deal..................................................................................................80 Finding innovative solutions for the oil and gas industry...................................................................................................82 Oil boom creates new opportunities for Saskatchewan’s construction industry.................................................................86 Fraser Institute survey results: Saskatchewan very attractive for Canadian petroleum exploration and development......88 Clarifying dataroom confusion...........................................................................................................................................92 Kilo Technologies Ltd.: finding a better way ......................................................................................................................96 PTAC’s role in the sustainable development of Canada world-class hydrocarbon resources.............................................100 Logan Completion Systems advances multistage fracturing technology.........................................................................102 Construction in expansive soils – geotechnical research at the University of Regina.......................................................104 MRC Canada: serving with excellence..............................................................................................................................106 Pilot oil upgrader could lead to bigger things in the Battlefords......................................................................................108 Growing green: Kenilworth Combustion..........................................................................................................................110 With great production comes great storage opportunity.................................................................................................114 Weyburn: a century of opportunity..................................................................................................................................116 Tight and shale oil plays in the WCSB...............................................................................................................................118 Saskatchewan’s heavy oil opportunity.............................................................................................................................122 Soil stabilization – an emerging technology....................................................................................................................124 RAM Industries Inc.: custom cylinder solutions for the oil and gas industry.....................................................................126 Shaunavon, Saskatchewan: 1913 – 2013........................................................................................................................130 Skyway Canada: 46 years in business with solutions you can trust..................................................................................132 CAPPA: proudly serving production accountants for over 50 years...................................................................................135 You may already qualify: APEGS engineering and geosciences licensees.........................................................................136 Millennium Directional Service Ltd.: complete directional drilling services.....................................................................138 Swift Current: an economy on the move!.........................................................................................................................140 Kramer Ltd. a Gold Standard member in 2012 ................................................................................................................144 Penta Completions provides entire rod-pumping optimization and design.....................................................................146 Precision Well Servicing – high performance, high value................................................................................................148 A proud past, a brighter future – Swagelok.....................................................................................................................152 Safety a priority for Stoney Mountain Rentals..................................................................................................................155 Jatco exceeds 98 per cent BTEX elimination.....................................................................................................................156 GlobalFlow: ‘Integrated Energy Solutions’........................................................................................................................158 Import Tool Corp. Ltd. proudly serves Saskatchewan’s oilpatch........................................................................................159 Polycore thermoplastic lined tubing: ‘Give Us Your Worst Well!’........................................................................................160 Korpan Tractor: family-operated with family values........................................................................................................162 Index to advertisers .........................................................................................................................................................164 Saskatchewan Hotel & Motel Guide.................................................................................................................................166 6

Saskatchewan Oil Report 2013

President & CEO: David Langstaff Publisher: JASON STEFANIK Managing Editor: KATRINA A.T. SENYK katrina@delcommunications.com Advertising Sales Manager: DAYNA OULION dayna@delcommunications.com Advertising Sales Representatives: ROBERT BARTMANOVICH | JENNIFER HEBERT GLADWYN NICKEL | JIM NORRIS COLIN JAMES TRAKALO Production services provided by: S.G. Bennett Marketing Services www.sgbennett.com Art Director: kathy cable Layout & Design: dana jensen Advertising Art: REANNE DAWSON | JULIE WEAVER Cover photo courtesy of Lloydminster Economic Development. www.lloydminsterdevelopment.ca © 2013 DEL Communications Inc. All rights reserved. Contents may not be reproduced by any means, in whole or in part, without the prior written permission of the publisher.

While every effort has been made to ensure the accuracy of the information­contained in and the reliability of the source, the publisher in no way guarantees nor warrants the information and is not responsible for errors, omissions or statements made by advertisers. Opinions and recommendations made by contributors or advertisers are not necessarily those of the publisher, its directors, officers or employees.

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Premier’s Message

The Honourable Brad Wall

8

Saskatchewan Oil Report 2013

On behalf of the Government and the people of Saskatchewan, I welcome readers to the 2013 edition of the Saskatchewan Oil Report. This publication is a chronicle of the achievements of the many companies, institutions and communities that contribute to the industry’s growth.

As the pages which follow clearly illustrate, the dynamism of our oil and gas industry is reflective of the broader prosperity and optimism that is transforming our province. Independent forecasters have Saskatchewan among

the provinces leading the nation in economic growth this year. Economic growth is being driven by record investment, which last year surpassed $20 billion for the first time.

The oil and gas sector is one of our province’s top industries, attracting billions of dollars in investment and accounting for more than 34,000 direct and indirect jobs. The industry contributes greatly to the prosperity of our communities, and is a major reason for our current economic success and enviable quality of life.

On January 17th of this year, I sent a letter to U.S. President Barack Obama urging the U.S. Administration to approve the Keystone XL Pipeline as quickly as possible. We need to increase pipeline capacity in North America to ensure we can safely transport Canadian oil to the United States and to the growing economies of Asia. This will not only benefit the industry, but the entire province as well, by helping to narrow the price gap between West Texas Intermediate (WTI) and Brent Crude. Brent Crude currently sells for between $15 to $18 per barrel more than WTI on the world market.

This discount represents a loss of up to $300 million in revenue for the people of Saskatchewan and more than $2 billion to producers in our province.

The Government of Saskatchewan is committed to ensuring our province remains on the path of steady, long-term growth. By maintaining a stable oil and gas royalty regime and a competitive tax and regulatory environment, Saskatchewan will maintain its place as the number two supplier of oil in Canada and will increase production.

The Ministry of the Economy,

through its PRIME program, is introducing legislative and regulatory improvements aimed at modernizing business processes and information systems to meet the needs of the industry. In cooperation with the Government of Alberta, the Ministry of Economy launched the Petroleum Registry (PETRINEX) in April 2012, the first initiative under the PRIME program. This has served to provide industry with the benefits of selfservice information entry and access, more accurate and timely information, reduced turnaround times and the alignment of key oil and gas business processes with Alberta in the spirit of the New West Partnership.

In terms of production, 2012 was a record year in Saskatchewan. It was the best year ever for horizontal oil well drilling and the fourth-best year ever for total oil well drilling. This translates directly into near record levels of investment and employment and another strong year for revenues. While land

sale revenues dropped in 2012, companies bid an average of $523 per hectare for oil and gas rights, far exceeding the $360 per hectare received by Alberta during the same period. In 2012, we also saw the sale of five oilsands special exploratory permits north of the Primrose Lake Air Weapons Range, two of which were acceptable bids. Our province is cautiously optimistic that the results of this exploratory work will provide further insight into the potential of the resource in Saskatchewan.

Our province has adopted an agenda aimed at fostering continued growth that will pay for a high quality of life for Saskatchewan residents. When I talk to officials in your industry, I am told that one of the things they value most is consistency. Your enthusiasm for the prospects you see in our province is encouraging, and this is why we strive to offer a highly stable, predictable and competitive regime for our royalties and taxes. You can continue to count

on this in the future.

As we move forward, I encourage oil and gas companies operating in our province to use Saskatchewan-based service companies whenever possible.

There are hundreds of service companies operating in Saskatchewan – businesses with the skill and experience required to support the industry as it grows.

Our people, expertise, and innovation give Saskatchewan a significant advantage in the ever more competitive and dynamic energy sector. Our government is committed to moving Saskatchewan forward, and we will continue to offer the business climate that is essential to keep our province growing. v

Brad Wall Premier

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The Kenilworth Combustion PHM is a burner system like no other on the market. With a full product line ranging from Under 1MM BTU/Hr (U1), 1MM-5MM BTU/Hr (U1-O5), 5MM-10MM BTU/Hr (O5-U10) Kenilworth Combustion has you covered for any application. With a heating requirement below 1MM BTU/Hr, the Kenilworth Combustion U1 Process Heater Module is the perfect system for almost any application.

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The Kenilworth Combustion O5-U10 PHM comes with a choice of three patented Kenilworth Combustion burners. Kenilworth Combustion is proud to offer the Oil Gas Industry a simple and cost effective solution to its BTEX and Fugitive Emissions challenges. The Kenilworth Combustion BTEX and VRU (Vapour Recovery Unit) Process Heater Modules (PHM) have been developed over the last 10 years and are field proven. Kenilworth Combustion’s BTEX systems have a proven 99.9% destruction rate of BTEX at a fraction of the cost of other systems on the market. Whether you need to reduce your BTEX emissions or want to utilize fugitive tank emissions, Kenilworth Combustion has you covered.

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Our competitive edge

By Jillian Mitchell As the second-largest oil producer in Canada, Saskatchewan accounts for 14 per cent of total crude oil production, with an estimated 1.2 billion barrels of remaining established crude oil reserves. In fact, according to recent statistics released by the Saskatchewan Ministry of the Economy, Saskatchewan oil production hit a new record in 2012.

Undeniably, the oil and gas industry continues to be one of the largest contributors to the Saskatchewan economy, representing about 20.7 per cent of the province’s gross domestic product (GDP).

In fact, the combined value of oil and gas sales for 2012 was estimated at $12.5 billion. Comparatively, crude oil production in the province reached 172.9 million barrels in 2012, up more than 7.0 per cent from the previous record of 161.0 million barrels set in 2008. Further, the daily average for oil production was 473,600 barrels per day, up from the previous record set in 2008 of 441,200 barrels per day.

SAVE THE DATE

“In 2012, Saskatchewan’s oil industry had an exceptional year,” Minister of Energy and Resources Tim McMillan says. “Our economy continues to be one of the strongest in the country, and this record year in oil production proves that we have the resources and business climate the industry is looking for.”

This past year, Saskatchewan’s land sales topped $100 million, with highperforming areas including WeyburnEstevan, Kindersley-Kerrobert and Lloydminster, respectively. As the 2012 stats confirm, industry bid an average of $523 per hectare for oil and gas rights and $5 per hectare for oilsands permits (which includes a work commitment of $8 per hectare), compared with Alberta’s oil and gas rights that averaged $360 per hectare and oilsands that averaged $136 per hectare. Approximately $1.8 billion was paid to the province in 2011-2012 in oil and gas royalties and bonus bids.

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Saskatchewan Oil Report 2013

With future development foreseen in the Bakken, Viking and Lower Shaunavon formations, the province will no doubt witness continual growth. As well, existing reservoirs are now seeing new investments due to technologies such as horizontal drilling and fracking.

“We’re seeing production levels that we wouldn’t have expected a few years ago, and we’re seeing the drilling following that as well,” McMillan adds. “In this most recent year, we’ve seen pieces of that technology carrying to other pools around our province that have produced for decades but are now being unlocked a second time.”

Minister McMillan is confident that the 2012 numbers accurately reflect Saskatchewan’s “competitive edge”, a drive that has earned the province a spot among top industry contenders. In fact, this year Saskatchewan stands firm in sixth place for oil production in North America, just trailing Alaska and California.

In May 2012, a new initiative was created in an effort to develop a sharper, more integrated approach to the Saskatchewan’s economic growth and opportunity: the Saskatchewan Ministry of the Economy. As McMillan explains, the new structure “brings together key economic levers – including labour market development and immigration, energy and resource management, and economic development including First Nations, Métis and northern economic development” – in order to achieve the objective set out by the Saskatchewan Plan for Growth.

“2012 was a year that built upon our strengths,” the minister notes. “We looked across government and wanted to do things better. By having the consistency we do now [with the Ministry of the Economy], we think that we are offering better opportunities, better value

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for money and a better investment jurisdiction.”

Evidently, the long tail of the oil and gas industry is wide-spread; that is what the Ministry of the Economy has set out to address. In fact, it is estimated that the province’s oil and gas industry provides more than 34,000 direct and indirect jobs. As such, this strong employment opportunity has resulted in an unprecedented provincial population growth – anticipated to reach 1.2 million by the year 2020.

If 2012 was the year that built upon the province’s strengths, then 2013 will be the year that addressed its weaknesses.

Magazine Add.plt 08/01/2013 1:23:53 PM

14

Saskatchewan Oil Report 2013

Scale: 1:0.59 Height: 2.135 Length: 4.635 in

According to Statistics Canada, Saskatoon and Regina are among the nation’s fastest-growing young cities in census metropolitan areas (CMAs)1, with populations increasing by 11,000 and 7,000, respectively. As such, this year marks the province’s strongest residential growth in four decades (urban and rural housing totaled 9,968 units2) as the construction sector strives to meet the demands of both international immigration and interprovincial migration.

“We haven’t seen a population growth rate like this since the 1920s when Saskatchewan was very young,” McMillan shares. “It’s great to see growth in our province, which for too long saw our young people move out of the province for opportunity. Now those same people are bringing experiences they’ve gained back home. We’re hoping they not only bring that, but family and friends to join as well.”

In January 2012, nearly 25,000 additional jobs were created compared to the same period in 2011, resulting in a 4.7 per cent increase for the province.

Saskatchewan also boasts the lowest unemployment rate in Canada, below 4.0 per cent (the current national aver-

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Oil & Gas Drilling: Oil Wells Horizontal Oil Wells Total Wells Oil Production: (Millions of barrels)

2011 3528 1992 3578 2011 157.7

2012 3208 1999 3218 2012 172.9

2012 oil production breakdown by area (in millions of barrels): Area 1 (Lloydminster) 60.2 Area 2 (Kindersley) 22.2 Area 3 (Swift Current) 18.9 Area 4 (Weyburn/Estevan) 71.5 Total Province 172.9 age is 7.0 per cent). And, as McMillan notes, the stats are “on track for 2013.” Already, the saskjobs.ca website has received over one million visits in 2013 – the majority of visits within Canada; international visits from the United States, the Philippines and India a close second. Further, it is anticipated that many of these newcomers will find work in the oil and gas sector.

If 2012 was the year that built upon the province’s strengths, then 2013 will be the year that addressed its weaknesses. No

Already, the saskjobs.ca website has received over one million visits in 2013. industry is without its challenges, of course, and the minister is quick to note the need for increased product transportation as a top priority for this year. As well, price differential – specifically between West Texas Intermediate (WTI) and Brent prices, which some days differs by as much as $20 U.S. per barrel – creates a substantial disadvantage for the producers in the province, he says, as well as for all Western Canadian and even North Dakotan oil as well.

“As a government, we’ve been very vocal and supportive of any project that helps our products get to market, be that Keystone XL, Northern Gateway,” the minister concludes.

“We need more capacity in the pipelines. That is my hope for 2013 – that these projects continue to move forward, and that those reasonable and high-expectations can move forward in a meaningful fashion.”

ENDNOTES 1 Stats correlated between July 1, 2011 and July 1, 2012.

2 Canada Mortgage and Housing Corporation (CMHC) report for 2012. v

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Safeguarding oil security Maria van der Hoeven Executive Director, International Energy Agency Energy security has been the primary mission of the International Energy Agency (“the Agency”) since its founding in 1974, following a major oil crisis. Indeed, the Agency was created to provide a framework in which IEA countries could defend their interests as key oil consumers. While that mission has since diversified across the fuel spectrum, oil remains the dominant energy source globally, and oil supply security remains a core responsibility of the IEA. And yet over almost 40 years, how we define and address that responsibility has developed considerably. Taking a wider view of energy and oil security is particularly important given the significant shifts that we are now seeing in the oil market – in terms of rapidly growing emerging market demand, but also in terms of new supply patterns all along the value chain.

Energy security refers to the ability of a given country to obtain uninterrupted availability of its main energy sources at an affordable price. In the short term, energy security is the ability of a given energy system to react promptly to sudden changes in supply and demand, maintaining the availability, affordability, accessibility and quality of energy. Longterm energy security is linked mainly to making timely investments to ensure that the future supply of affordable energy will support economic development and environmental goals.

Traditionally, the IEA put a strong emphasis on mitigating the risks and effects of energy supply disruptions, particularly within oil markets. Coordinating the use of emergency oil stocks in the event of 18

Saskatchewan Oil Report 2013

disruption is a well-known tool, but only one. Analysis to boost transparency in global oil markets, active participation in the Producer-Consumer Dialogue with OPEC and other major producers, and efforts to improve statistical openness, timeliness and accuracy through the Joint Organisations Data Initiative all help to reduce the risk of disruption. At the same time, the IEA’s tool-kit to respond to acute disruptions goes beyond emergency oil stocks, to include demand restraint and fuel-switching measures.

Another important characteristic emphasised by the IEA is resilience – the ability of energy systems to mitigate or withstand disruptions, including in the oil market. Regular emergency response reviews of IEA member countries report on systemic strengths and vulnerabilities of national energy security policies, procedures and infrastructure, and the IEA’s Model of Short-Term Energy Security (MOSES) measures both risk and resilience factors for comparison across countries and across fuels.

Yet while the traditional focus on supply disruptions remains important, major changes in the global energy economy since 1974 have required our conceptions of oil security (and energy security more broadly) to adapt. When the IEA was created, the oil market was based on long-term contracts and a stable relationship between suppliers and refiners. That has changed with the globalisation of oil markets, the importance of the spot market, and the development of high-speed information flows. Concerns about supply security of other fuels like gas and elec-

tricity, and also the interplay between fuel markets, has broadened the focus of energy security. And indeed, we are defining energy security to include long-term concerns, like creating the conditions for sufficient investment and promoting energy access to boost living standards and economic development. We also recognize the linkage between sustainability and energy security – they are two sides of the same coin. Not only do low-carbon technologies help reduce import dependence and diversify the fuel mix, but recent IEA discussions have highlighted the adverse impact of climate change on energy infrastructures. All of this helps to change the nature of the energy security debate.

Perhaps the most significant change is a shift in the global energy map, and specifically the global oil map. Where OECD countries accounted for more than threequarters of oil consumption in 1974, they will soon account for less than half. The economic rise of emerging markets like China and India have signalled a global economic rebalancing, including within energy markets. IEA analysis shows growing non-OECD demand, particularly in China, to continue over time. Meanwhile, oil demand in Europe and the U.S. is stagnating or falling.

That reality is the driver behind IEA efforts to engage with key partner countries in many areas, but particularly with regard to oil security. For several years, we have supported countries like China, India, ASEAN countries, and others in their efforts to improve emergency response measures and in some cases to build their own emergency oil stocks. That has in-

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We are currently working with Elcano Exploration Inc., Elkhorn Resources Inc., Kinwest 2008 Energy Inc., Federated Co-op Limited and Pennwest Energy

For rental information and availability, please contact:

Brad Lamontagne Owner/Operator

Phone: (306) 577-9818 Fax: (306) 739-2263 email: smrltd@sasktel.net PO Box 213, 309 Walter Street Wawota, SK S0G5A0

Trust on the drilling side. On the completion side we are working with Magellan Res. Ltd. and Renegade Petroleum Ltd.

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cluded technical support, those countries’ participation to regular IEA emergency response exercises (EREs), and unique tailored EREs in Thailand and India. Going forward, the IEA is working to develop a framework for cooperation with countries outside the IEA in the event of a disruption.

But the shift of the oil map does not just mean the rise of Asian demand, particularly looking forward. Our forecast

20 Saskatchewan Oil Report 2013

of the oil market reveals a medium-term future marked by uncertainty, uneven supply and demand changes, and the potential for technological game-changers.

That kind of volatility means a very different oil security environment, and one that requires both broad engagement and nimble response.

Despite volatility on both the supply and demand side, we have seen continued market tightness and consistently

high prices thanks to contradictory forces at play. The economic recovery is stagnating. OECD countries suffer from persistent debt concerns, notably in the euro zone, and there are signs that even China is slowing. On the supply side, continued political upheaval in the Middle East and North Africa disrupted crude exports from several countries. Also, unplanned maintenance and technical disruptions at mature fields reached record highs last year, rekindling concerns about decline rates in aging plays. These risks are not going away, and contribute to a new “reality of risk” in the oil market.

At the same time, there is also good news on the production side. Despite events in the Middle East, the region has also seen success stories. Saudi production has surged to 30-year highs, and Iraq is also breaking production records. A special IEA report released in October 2012 highlighted Iraq’s potential as a gamechanger going forward. Production is also surpassing expectations in North America, where high prices and new technologies have unlocked light, tight resources that were long thought to be impossible to tap economically. Our 2012 World Energy Outlook predicted that the U.S. could become the largest oil producer around 2017 largely thanks to light, tight oil.

Combined with increased efficiency, we expect this overall picture to yield less-tight markets over the medium term.

While that is generally good for supply security, and helps to lessen the impact of disruptions, it is no reason for complacency. In the U.S., for example, any talk about prospects for energy independence leaving room for disengagement from global markets or certain regions must be laid bare for the fallacy that it is. First of all, we project the U.S. to continue to import more than a quarter of its oil by 2035. But in any case, the oil market is global, and no matter its provenance, oil price and availability are still intricately tied with events and availability elsewhere – emphasising the need for cooperative oil security policy. And while supply may be growing globally, both supply and demand growth are exceptionally uneven, with effects throughout the market.

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Most of the new supply is expected from the Americas, and most of the new demand from Asia, the Middle East, and the former Soviet Union. These twin changes have clear consequences for the midstream and downstream sectors, those often-overlooked but critical links in the supply chain. International crude trade volumes are forecast to dip, while product trade is expected to grow in both volume and scope amidst resurgent refin-

ing capacity expansion in Asia and the Middle East – and reducing capacity in the OECD. Those changing trade and product import patterns affect disruption risks, and also the paradigm for emergency oil stock-holding when it comes to crude/ product balances.

Given these new realities – increased uncertainty, volatility, and technological change – we recognise that international oil security governance and emergency

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Saskatchewan Oil Report 2013

response procedures need to react in a timely and decisive manner. We regularly review the assessment procedures for IEA collective action in response to a substantial physical supply disruption. The important element in defining “substantial” is to analyse the potential economic impact against the backdrop of the current market. That is why there is no “one-size-fitsall” response, nor is there a specific size of disruption above which we act. It is also why the changing geographical dynamics of the oil market are so important to understand, as well as seasonal supply and demand fluctuations, refinery demand patterns, crude and product quality breakdowns, spare capacity figures, and timely commercial stock data.

For example, while the IEA used emergency stocks in 2005 in response to the U.S. disruptions caused by Hurricane Katrina against a backdrop of tight markets, it did not act at the end of 2008 when hurricanes Gustav and Ike had a similar effect against a backdrop of looser markets and a deteriorating global economic situation. When the IEA last released stocks in 2011 as a result of the crisis in Libya, the size of the disruption was comparatively small and the response was not immediate. That was because production remained shut-in as markets began to tighten seasonally thanks to rising demand in the summer. No two disruptions, and no two IEA actions, are ever the same.

The IEA’s responsibility to safeguard oil supply security has been evolving alongside major changes in the global oil economy – particularly a major and on-going redrawing of the global oil map. As this evolution continues, so changes the nature of our mission. A broader concept of energy and even oil security means focusing on resilience and long-term challenges, as well as response. When that response is necessary, it must be quick and decisive. And critically, safeguarding oil security requires global cooperation more than ever before.

Previously published in the World Petroleum Council’s 80th Anniversary Publication, Jan./Feb. Republished with permission. v

New country, new career, new future

Great Plains College students receiving rig rescue/fall protection training. A full list of course offerings is available at www.greatplainscollege.ca, or you can contact Great Plains College directly to arrange specific, customized training.

Chris Ayala came to Canada to build a better life for his wife and two children.

The price he paid was three-and-a-half years without seeing them once.

A carpenter by trade, Ayala moved to Edmonton from the Philippines in 2008.

When that job dried up, his immigration agency found him some manufacturing work in Swift Current.

Ayala’s permanent residency was eventually granted last summer and his family was finally able to join him in Canada on June 19th, 2012.

“During that time, processing my permanent residency was so hard for me,” Ayala says, relief still evident in his voice.

Before any of that could happen though, Ayala had to follow through on a vision for his family’s future. In the beginning he wasn’t entirely sure what that future held, but he knew it wasn’t in the Philippines, or in Saudi Arabia where he had worked previously in the construction industry.

24 Saskatchewan Oil Report 2013

“If I was staying in the Philippines or Saudi Arabia, there’s no life there because everything’s very expensive,” he states. “It is nicer living here comparing to there.”

He took the next step toward a better life last winter by acquiring his H2S Alive, Confined Space and First Aid safety tickets through Great Plains College.

That paved the way for his new career as a steam truck operator with Swift Current-based Trevor’s Oilfield Services, where he was hired last June by owner Trevor Prescesky.

After a few months of training, Prescesky sent Ayala out on his own while Prescesky moved into a new position with Caradan Chemicals.

Prescesky admits that good help can be hard to find and he greatly appreciates having Ayala around.

“He was excited to work for my company and when he started he was a very hard worker,” says Prescesky. “He is a

very quick learner and he’s got a good attitude … I’m really happy with everything he’s done.”

For his part, Ayala says the feeling is mutual.

With Ayala at the wheel, Trevor’s Oilfield Services continues to offer steam truck, chemical transfer and pressurewashing services as a subcontractor to Gull Lake-based Central Energy Services.

“Especially my boss right now, Trevor, he treats me really nice and that’s why I really continue doing this kind of job.

I’m really happy with my employer. I can say nothing bad.

“They treat me well and that’s why I am doing the best that I can.”

And Ayala’s best may be yet to come.

He has plans to obtain his Class 1A driver’s license this spring, which would allow him to drive vac trucks and semis and open yet more doors when it comes to his career.

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Great Plains College is your trusted partner for all your skills and safety training needs.

Skills and Safety Training Choose from our regular course offerings: • • • • • • • • • •

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25

1/17/2013 2:31:09 PM

But, for the time being anyway, all roads would still seem to lead back to Swift Current. “Swift Current, it’s really good,” said Ayala. “One thing I like about it is because it’s a nice place to grow up here for a family.

As your trusted partner in safety training, Great Plains College is pleased to offer skills and safety training when and where you need it! They’re dedicated to understanding and serving the training and education needs of the industry sectors vital to the college region.

Great Plains College works closely with business to deliver courses and provide the certification that is required for the development of productive and safe employees.

Training is available at all college locations, or you can take advantage of Great Plains College’s mobile training opportunities and have their instructors come to you.

Great Plains College works closely with business to deliver courses and provide the certification that is required for the development of productive and safe employees – H2S, First Aid, Fall Protection, Heavy Equipment Operator, Confined Space Entry and Ground Disturbance, to name just a few.

Great Plains College’s Swift Current Campus is home to the only indoor fall protection/ rig rescue tower in all of Saskatchewan.

A full list of course offerings is available at www.greatplainscollege.ca, or contact Great Plains College directly to arrange specific, customized training. v

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MultiStim

Multi-Stage Fracturing

with Removable Ball Seats and Shiftable Sleeves is an innovative completion technology from Logan Completion Systems that is especially designed for producers who are tackling multi-stage fracs. One-trip installation for faster completion times and frac valves with fully removable ball seats post-fracturing — without milling or drilling — reduces well costs, improves production, and maximizes your profits. The key feature of the MultiStim System is the use of the full-bore inner diameter which allows conventional tools to be run after the seats are removed. Cementing, or plugging and perforating operations are not required. MultiStim is suited to extended reach horizontal wells. Sleeves can be selectively opened and closed post-fracturing to allow customized stimulation, testing or production management of the entire wellbore for the life of the well. The MultiStim Fracture Isolation Liner System and MultiStim Cup Frac Tool System (a straddle cup system) are suitable for acid, proppant or energized fracturing operations in all types of formations. Contact us for complete details. www.logancompletionsystems.com

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Safer Saskatchewan workplaces:

injury is predictable and preventable

Last year in Saskatchewan, there were nearly 40,000 work-related injuries. Each of these injuries could have been predicted and prevented. Our mission is to help Saskatchewan people be safer at work.

To achieve this mission, our government is strengthening labour legislation, revising safety regulations, and working with the Workers’ Compensation Board to support Mission Zero.

Each of us – as individuals, employers, employees, and family members – has a responsibility to keep ourselves and the people around us as safe as possible.

The first step to increasing safety in Saskatchewan is making sure that we are all aware of how to be safe on the job.

In October 2012, Premier Brad Wall introduced the Saskatchewan Plan for Growth, which commits to reducing

workplace injuries, promoting the importance of workplace safety, and ensuring workplaces are in compliance with health and safety regulations. In the past five years, progress has been made. Since 2007, the rate of lost work time due to injury has decreased by 20 per cent; however, there is still more work to do.

Last year, our government undertook an important legislative initiative that resulted in amending The Occupational Health and Safety Act, 1993, enacting new regulations to better protect workers in late-night retail premises, and allowing for summary offence ticketing.

The Ministry of Labour Relations and Workplace Safety has scheduled information sessions across the province to help workers and employers become more familiar with the new and amended legisla-

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1.877.374.9079 Celebrating 20 years of Excellence www.healthservsask.com 28 Saskatchewan Oil Report 2013

tion and regulations. To register for a session, call 1-800-567-7233 or 1-800-6675023. For a list of information sessions in your area, visit www.lrws.gov.sk.ca/ohsinformation-sessions-2012-2013.

We also introduced two new pieces of legislation: The Saskatchewan Employment Act and The Workers’ Compensation Act, 2012. To learn more about what the Government of Saskatchewan is doing to keep your workplace safe, visit www.lrws.gov.sk.ca.

The Saskatchewan Employment Act: consolidates labour legislation into one updated and comprehensive Act that more clearly defines the rights and responsibilities of employees, employers and unions to better protect workers, promote growth, and increase accountability in Saskatchewan.

Amendments to The Workers’ Compensation Act, 2012: improves benefits for injured workers by increasing the maximum insurable earnings, introducing a system of indexation to ensure benefits are adjusted annually, allowing workers who reach the age of 65 to choose between purchasing an annuity or receiving a lump-sum payment, and allowing the Workers’ Compensation Board to assess administrative penalties.

Bill 23 Amendments to The Occupational Health and Safety Act: puts the safety of working people first while ensuring Saskatchewan’s economy continues to grow. We’ve established ways to better engage employers in creating safe workplaces, enhanced appeal processes, and further empowered occupational health officers. We need clear, consistent and easy-to-understand laws

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Northwest surpasses regulatory safety standards and customers’ expectations through exemplary safety performance and through leadership roles with organizations like the Chemistry Industry Association of Canada (as a Responsible Care® partner and TransCAER® member), and the National Tank Truck Carriers.

It is this commitment to be the very best, that has delivered customer peace of mind for 58 years.

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Each of us – as individuals, employers, employees, and family members – has a responsibility to keep ourselves and the people around us as safe as possible.

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30 Saskatchewan Oil Report 2013

to help reduce Saskatchewan’s unacceptably high injury rate, while creating an environment that helps attract business and skilled workers to Saskatchewan and supporting Saskatchewan’s Plan for Growth.

Summary Offence Ticketing: allows occupational health officers to issue financial penalties for non-compliance with health and safety laws at workplaces. Occupational health and safety is a system of shared responsibility: employers, contractors, owners, suppliers, supervisors, self-employed persons and workers can all be ticketed under this system for any of 71 violations (only two of which apply exclusively to workers).

The 71 violations reflect an on-going pattern of non-compliance, offences that are frequently recommended for prosecution, or offences where non-compliance has a high risk of injury, illness or death.

Summary offence ticketing will serve as a deterrent to all stakeholders not following occupational health and safety laws in Saskatchewan workplaces and help keep the working population in the province healthy and safe.

Late-night Retail Premises Safety Regulations: better protect late-night retail workers from violence in the workplace through safe cash handling procedures, use of video cameras, and the provision of good visibility and signage for all late-night retail premises. In addition, the regulations will require a check-in system and personal emergency transmitters to be provided to all employees working alone in late-night retail establishments.

Mission Zero: is an awareness and education campaign to let everyone know that zero is the only acceptable number of work-related injuries, because all workplace accidents are predictable and preventable. Visit www.worksafesask.ca to learn more. v

Lloydminster:

growth and prosperity in the heart of Canada’s heavy oil region

By Lisa Fattori Lloydminster’s current economic boom builds on the past successes and the more recent milestones of the local oil industry. Improved drilling techniques, expanded operations, an infrastructure to support spin-off businesses, and a growing population all contribute to recordbreaking numbers in growth and prosperity. Husky’s new office building, oil by rail service and a new state-of-the-art Petroleum Centre currently under construction at Lakeland College all speak to the ideal location of Lloydminster as the hub of heavy oil production in Canada.

“In 2011, construction values were over $180 million, which is a 38-percent increase over the previous year, and 2012 construction values are 16 per cent over that record,” says Ward Read, CEO of Lloydminster Economic Development.

“There is a record number of new homes being built, as well as more investment in infrastructure, including an RCMP station, two elementary schools, a longterm care facility and a public-works building. From graphic design personnel to hospital staff to construction workers, there are few sectors in Lloydminster that are adequately staffed. People are moving here because the jobs are here, and energy is driving that growth.”

As the major employer in Lloydminster, Husky Energy has played a domi32

Saskatchewan Oil Report 2013

nant role in the local economy for more than 60 years. Since the 1990s, the company has primarily used the cold heavy oil production with sand (CHOPS) technique, but in recent years, has incorporated new technologies to regenerate its heavy oil foundation. Husky is extending the life of its heavy oil fields in the region through thermal projects, including those at Pikes Peak South and Paradise Hill. These projects achieved first oil ahead of schedule, last summer, and produced approximately 17,000 bbls/day over the fourth quarter of 2012. At Rush Lake, a 10,000-bblsper-day thermal project is expected to begin producing in 2015, while a Sandall thermal development is well under construction, with first oil expected in 2014.

Husky Energy has also increased its horizontal well production, and drilled 144 horizontal wells in 2012, compared to 130 the year before. Overall, production in heavy oil in 2012 increased 12 per cent, year over year.

In May 2012, Husky also opened Husky Place, a new office building, which “is a symbol of the long-term investments we’ve made in this region,” says Asim Ghosh, president and CEO of Husky Energy Inc. “The transformation of our foundation business toward more

long-life thermal projects and horizontal drilling is on track, reinforcing our position as a leading Canadian heavy oil producer.”

According to Industry Canada, 7.76 per cent of all firms in Lloydminster fall under the category of mining, quarrying, and oil and gas extraction. This is double the figure for Alberta, triple that of Saskatchewan and almost ten times more than the number of firms for all of Canada. Heavy oil requires a lot of transportation and eight per cent of Lloydminster companies provide transportation services. Again, this is ahead of the figure for Alberta (5.4 per cent), Saskatchewan (4.6 per cent) and all of Canada (5.2 per cent).

New transportation services include a CP trans-load facility to ship crude oil by rail, which opened in Lloydminster in February 2012. Operated by Torq Transloading, the facility provides NuStar Energy LP with efficient oil-by-rail service in transporting product to NuStar’s terminals in the Gulf Coast and northeast U.S. Other oil-related companies, including Weatherford, are seeing an increase in new business. “Growth in my division has been significant in the last number of years,” says Bob Mottram, Canadian manager for production systems, Weatherford. “In general, the market is getting

Aerial shot of the Husky upgrader looking west, with Lloydminster in background.

better and we expect that oil prices will

As the birthplace of CHOPS and many

oil production. Coinciding with the 100th

continue their upward trend. We should

new EOR technologies, it is fitting that

anniversary of Lakeland College is the con-

see a lot of investment in heavy oil going

Lloydminster be the seat of academic ex-

struction of a new Petroleum Centre at the

forward.”

cellence and training in the study of heavy

college’s Lloydminster campus. Construc-

safety service reliability

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34 Saskatchewan Oil Report 2013

Picker trucks up to 50 ton Cranes up to 250 tons

Artistic rendering of the Petroleum Centre at Lakeland College’s Lloydminster campus.

tion of the $17-million building will begin this year.

The facility will include a large power engineering and heavy oil lab, where students will be able to simulate complete heavy oil upgrading and steam-assisted gravity drainage processes from beginning to end.

A fully functioning power plant, the lab will also be able to produce 200 kilowatts of power that will go into the campus grid.

The state-of-the-art Petroleum Centre will accommodate more students and will enhance the college’s curriculum that combines both power engineering and heavy oil in certificate and diploma programs.

“For us to respond to industry needs, we needed to have a bigger space,” says Kara Johnston, director of energy, entrepreneurship and Aboriginal programming for Lakeland College. “There are over 100

people on a waiting list, wanting to take our certificate and diploma programs. The new Petroleum Centre will triple our space.

Right away, we’ll be able to jump from 40 first-year students to 120, and that number will eventually be 200 students. We have the expertise in heavy oil and the support from local industry. Geographically, the centre is in the right place to offer this training.” v

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PTI offers ‘more than a place to stay’ in the Bakken

When we think of Saskatchewan, most of the country pictures majestic plains filled with canola and wheat crops. This was the backbone of the Saskatchewan economy for many years. As the province continues to diversify, however, the growth of Saskatchewan’s oil and gas industry has attracted a great deal of attention and has reshaped the province’s brand as a net contributor to the national economy.

The Bakken oil and gas formation in southern Saskatchewan and Manitoba is

responsible for a good deal of this newfound attention. With an estimated 24 bbl of recoverable oil and speculation of 200 to 300 bbl in total, this makes the Bakken formation one of the richest in the world.

With the growing number of people coming into the region seeking work, the need for workforce housing in close proximity to project sites has been a key consideration. PTI Group is one company looking to address the issue. As one of North America’s largest fully inte-

Looking Back...

Looking Forward...

1954 GMC

2007 Kenworth 1966 International

38 Saskatchewan Oil Report 2013

grated suppliers of remote site services, PTI provides temporary and permanent workforce accommodations, food services, facility management, and other value-added services to resource industries worldwide. The company owns and operates over 19,000 beds in a network of open-lodge properties and modular contract facilities, serving most major natural resource plays in North America.

The company also operates 8,600 beds in Australia through its subsidiary, The MAC Services Group.

PTI is currently expanding its footprint in the Canadian Bakken to serve the growing number of projects in the region. With lodge properties already operating in Redvers and Waskada, PTI will welcome guests to two new locations to be announced this summer. Collectively, this will provide over 850 rooms serving the area by the end of 2013.

PTI owns and operates its open-lodge properties and also builds and operates private facilities owned by resource companies. In recent years, there has been an increasing demand within industry to improve the lifestyle and living standards for those working in remote areas. This is especially true in regions like Alberta’s oilsands where the labour market is highly competitive.

With a mindset that is closer to that of an hotelier than a traditional camp

provider, PTI has elevated industry standards in its new generation of facilities by adding a variety of amenities and services focused on contributing to quality of life.

PTI’s commitment goes beyond offering just a bed to sleep in – they strive to

make the transition from home to work as seamless as possible.

“Quality of life means different things to different people,” says Sean Crockett, PTI’s vice-president of business development. “If we can provide the com-

At Pyramid Corporation, our pride and professionalism is shown in our dedication to quality and development. Pyramid is an expanding corporation with offices in Canada and the U.S. and is strategically placed to meet the electrical and instrumentation service needs of the oil, gas, pulp paper,

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mining, petro chemical, wood products and manufacturing industries.

Pyramid Area offices are in a position to service the industrial E/I workload in Saskatchewan. Please see applicable Pyramid locations below: ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆

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40 Saskatchewan Oil Report 2013

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forts and conveniences that give people peace-of-mind while they are on rotation in remote areas and away from family and friends, then we are serving our customers well.”

In each of PTI’s lodge properties, guests stay in private rooms and make the space their own. Free in-room Internet access and satellite TV allow guests to connect with loved ones and stay up-to-date on current events, sports, and favourite television programs. Game rooms provide outlets for guests to socialize and unwind at the end of their day. PTI also supports those who seek healthier lifestyles with catered dining rooms that always have nutritious options available. Additionally, guests can continue their workout routines in well-appointed fitness rooms.

“The oil and gas customers we serve understand the value of a strong accommodations plan,” says Crockett. “The decisions that go into facility design and the services and amenities that we provide are very much a part of our clients’ overall labour strategy. These decisions help increase employee retention and overall productivity.”

With this approach to workforce accommodations, it’s clear that PTI properties offer guests more than a place to stay. They offer a place to live. v

EQUIPPED FOR LIFE Trinity Safety & Training Mission Statement “To deliver effective safety training, which inspires confidence, and equips people for sustainable employment.”

“To increase people’s capability by equipping them with effective safety training, which inspires confidence and facilitates sustainable employment.”

“To be a significant contributor to the community by being involved with initiatives that increase intrinsic value to human life.”

VALUES 1. Competency We will accomplish all we do with integrity, ensuring safety, skill, effectiveness and personal growth as constant pursuits.

2. Reliability We will strive for optimal use of time & resources, providing our clients with organized, efficient access to all scheduled programming.

3. Relationships We will conduct all efforts with respect and appreciation for the intrinsic value of each individual human life.

4. Atmosphere We will deliver all training and instruction within a fun environment, which stimulates comprehension and retention.

Trinity Safety Bay H – 2301 Millar Avenue, Saskatoon, SK S7K 2Y1 Office: (306) 261-SAFE or 261-7233 Fax: (306) 955-8718

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The unconventional renaissance Kevin Heffernan, CSUR President

Un-con-ven-tion-al – adjective Innovative; out of the ordinary; productive of something fresh Saskatchewan, as Canada’s second-largest oil producer and third-largest producer of natural gas, is in an enviable and strategic position at this game-changing time in our industry’s history.

Our organization, the Canadian Society for Unconventional Resources (CSUR), like Saskatchewan, is technology-driven. The province, known for its world-class geoscience research, has been both an innovator in petroleum research and a pioneer relative to horizontal well drilling.

The oil and gas industry continues to evolve and change as a result of the unprecedented growth of unconventional resource exploration and production. Across Western Canada, significantly, more horizontal wells completed with multistage hydraulic fracturing are being drilled than conventional vertical wells. Unconventional has truly become conventional. Horizontal drilling and hydraulic fracturing have been integral to that transition, and to the myriad of challenges that the industry must address in today’s resource development environment – social licence, commodity prices, capital requirements, market access.

CSUR has recognized the fundamental changes that all aspects of the industry are experiencing. The re-emergence of a strong and growing oil industry in Saskatchewan is a reflection of the impact technology can have. The rejuvenation

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of legacy oil pools, such as Dodsland (Viking), Whitemud/ Dollard/Chambery (Shaunavon) and Viewfield (Bakken) are a strong testament to the impact that unconventional resource development is having in the province.

The industry has also entered a new era of technological and operational transparency. Never before has our organization (CSUR) faced the number of inquiries about resource development and calls for engagement from the full spectrum of stakeholders – landowners, operators, communities, municipalities, NGOs, professional organizations, governments, and regulators – as it faced in 2012 and so far in 2013. In the past year, we undertook a doubling of face-to-face engagement with that spectrum of stakeholders, including involvement in

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60 presentations, symposiums, workshops, and community and multi-stakeholder meetings. Operators are also responding at the community level and through actions, including voluntary disclosure of chemicals, development and publication of hydraulic fracturing operating practices, increased community engagement, and collaboration to reduce the footprint of development. Service companies, too, recognize the need for transparency and visible recommitment to a set of health, safety, environmental (protection) and community values. Other industry associations (CAPP, PSAC) besides ourselves have significant initiatives, guiding principles, etc., around their members’ unconventional activities.

The evolution of technology is continuing from drill bits to software to geological models, and it will continue to influence the way resources are developed, how we perceive Canada’s resource endowment, and how we talk to stakeholders and communities where the industry operates.

What plans does CSUR have to support and morph with the evolution? We will continue to: • Participate in speaking engagements, including face-toface with communities and multi-stakeholder groups, for the purpose of raising the understanding and awareness of the technologies and development processes related to the unconventional resource industry in Canada, as well as highlighting emerging resource-play opportunities.

• Host our Technical Luncheon Series, field-trips and playspecific workshops – these are popular learning experiences and in high demand. CSUR’s flagship technical event is the 15th annual Canadian Unconventional Resources Conference (CURC), to be held in October 2013.

• Develop and update our Understanding booklet and factsheet series, as well as the video collection, all of which are very popular destinations on our website for a diverse group of surfers and stakeholders, world-wide. With a very keen group of staff and volunteers, we’ll also renew our efforts to tackle the communication and understanding challenges presented by audiences seeking improved science and engineering literacy.

• Engage in dialogue with regulatory agencies to ensure a solid understanding of evolving technologies and development processes, and that issues identified by the industry are considered.

CSUR is active across Canada, facilitating communications and understanding between the unconventional oil and gas industry, provincial, federal and municipal governments, the public, First Nations and the media. With a strong focus on technology transfer amongst professionals (engineers, geologists, etc.), CSUR’s major role is to provide this information that enables resource development in an environmentally, socially and economically sensitive manner. v

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Dating dirt

By Jim Finnigan, Krista Gilliland, and Terrance Gibson, Western Heritage Whether in the fields of archaeology or oil and gas, soil is often considered just overburden, something that has to be removed. For archaeology, artifacts are embedded in soils, which are quite timeconsuming to remove; but what if dirt was not overburden – what if dirt was data? You would still need to remove it, but you would increase the density of information recovered per unit of cost. In fact, many generations of naturalists and archaeologists have recognized the importance of recording the context of artifact finds, and knowledge of dirt’s value as an archive of tremendous amounts of cultural and environmental information has increased throughout the 20th and 21st centuries.

With this in mind, Western Heritage has been working the last few years on developing a specialized data collection approach that incorporates geoarchaeology as its operational principal.

A geoarchaeological approach focuses on understanding how archaeological sites are formed through the study of the sediments that contain artifacts and features that that archaeologists rely on to interpret past human history. Western Heritage’s geoarchaeological initiative is focused on several areas, including magnetic susceptibility, detailed stratigraphic analysis and dating.

In this article, we discuss the relatively recent science of measuring and dating dirt. Until recently, most archaeological dating has relied on analysis of radioactive isotopes of carbon contained in organic samples such as bone or charcoal to obtain measurements of absolute age.

This is most commonly referred to as radiocarbon dating. This method has been constantly improved since its invention in the mid-20th century, and it is now possible to date samples containing organic carbon that weigh only a few grams.

46 Saskatchewan Oil Report 2013

A portable OSL reader (POSL) in a field laboratory setting (a hotel room in Fort McMurray). This tool helps characterize processes of sediment deposition, identify former land surfaces within otherwise undifferentiated-looking sediments, assess cultural or natural disturbances, estimate relative ages, and select the best samples for formal dating.

However, when attempting to date such a tiny sample, knowledge of its origin and exact position within the dirt at an archaeological site is critical.

Without precise positioning, errors in interpreting the date relative to associated archaeological remains are almost certain to occur. Of course, to undertake radiocarbon dating there must be a carbon source to analyze. This is not always possible because many archaeological sites are poorly preserved and have no organic remains, since they are often rapidly dissolved wherever soils tend to be acidic, such as in the boreal forest.

In the 1980s, the science of dating dirt (also called soil or sediment) using optically stimulated luminescence (OSL) began to be regularly applied to archaeological sites. OSL measures the last time that certain minerals (most commonly quartz and feldspars) in a sediment were exposed to sunlight. OSL is related to another technique, thermoluminescence dating (TL), which has been used to date when a material (such as clay pottery) was last fired. The advan-

tage of these kinds of dating methods is that they require no organic material to obtain dates.

One of the most recent developments in OSL technology is the invention of the portable OSL reader (POSL) by the Scottish Universities Environmental Research Centre (SUERC), located near Glasgow in Scotland. This instrument was made commercially available in 2010; the one recently purchased by Western Heritage was custom-built and is only one of nine now operational in the world. The POSL is designed for transport to field locations and can be operated in a field lab situation such as in a hotel room, classroom, or even a tent, provided low-light conditions can be maintained.

The collection of sediment samples that the instrument can measure is straightforward, requiring only the vertical face of a soil pit, and roughly 10-centimetre lengths of common copper tubing. These tubes are hammered into the vertical pit face, usually at fiveto 10-cm intervals, labeled, then taken to the instrument location – taking care

not to expose the soil in them to direct sunlight. The instrument is used to measure the time since a soil sample was last exposed to sunlight, relative to samples above and below it. Theoretically, the longer soil layers remain buried, the older the measurements will be. Using the instrument, individual samples can be measured in as little as three minutes, and the results from a single pit profile can be processed in less than two to three hours.

The instrument results can be used as a quick indicator of the depositional history of a sediment profile. Normal profiles should relatively date from oldest to youngest, going from the bottom to the top of a pit. However, abrupt breaks in this progression could indicate that at some time in the past, a buried soil layer was re-exposed to sunlight (for example becoming exposed by wind or water erosion) with its “age� being reset. This could indicate significant natural (or cultural) events that took place in the

past, which may have been triggered by changes in the environment or by modification by people.

The quick turnaround time in sample measurement means that the results of POSL analysis in an area from one day can inform decisions and interpretations made the next day. This information is particularly useful when deciding the most appropriate place to sample for formal OSL or radiocarbon dating, for assessing disturbance by humans or natural processes, and for disentangling single or multiple occupations, which has implications for the relative value of an archaeological site.

To date, Western Heritage has used its portable OSL reader at archaeological sites in Saskatchewan, Alberta, and Ontario. It was most recently used as part of a geoarchaeological-focused archaeological assessment in an area near an archaeological reserve and significant site located near Fort MacKay in northeastern Alberta. One of the questions to

Sampling for POSL analysis. Copper tubing is inserted into the vertical face of a soil pit; to the left are samples collected for rapid POSL measurements, while to the right are samples for formal OSL dating.

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Stratigraphy and results of POSL analysis, HgOv-31 (Two Creeks site), north of Fort McMurray. H = Halt in deposition (hiatus). The hiatus between samples 10 and 11 supports the interpretation (from the artifact concentrations) that there were at least two occupation periods at the site.

be answered during the site assessment was, given the presence of significant sites in the region, was deeper testing using a backhoe required? Using the POSL combined with detailed analysis of the layers of sediments within three pits demonstrated that, provided shovel tests were excavated to approximately 35- to 50-cm depth, no deeper testing was required. This resulted in a significant time and cost-saving.

Additional geoarchaeological analysis also helped to reconstruct the sedimentary history of the tested region.

Results indicated that aeolian (windblown) sedimentation likely took place in the area following a period when running water deposited sediments there (fluvial processes). The fluvial deposits were probably associated with a river that was present at the time that ancient glaciers were melting not far away. These finer aeolian sediments overlaying the river sediments would have undergone reworking through 50 Saskatchewan Oil Report 2013

cycles of erosion and redeposition during periods of landscape destabilization throughout the Holocene period (generally, the last 10,000 years). Artifacts found within the wind-blown sediments suggest that humans occupied the site during these destabilized, aeolian-dominated times, probably many millennia ago. More artifacts were found in soil deposits higher in the profile, where there are indications that the people who left them lived in the stable environment and vegetation now seen in the area.

The POSL analysis also indicated a break in aeolian sedimentation, which suggests a separation of the two primary concentrations of artifacts at the site, This “break� was not visible in the sediments within the vertical face of the pit and could only be detected by differential analysis of the POSL samples. This has archaeological implications, as artifacts found above and below this break could represent

separate groups of people living in the area at different times. This determination that the site has multiple occupations increases its archaeological value and suggests that, contrary to received wisdom, boreal forest sites can actually contain information that can be used to reconstruct past environments and lifeways. It also demonstrates that formal OSL dating of this and other sites with poor organic preservation (such as in the boreal forest) is a viable alternative to radiocarbon dating.

In summary, a geoarchaeological approach to archaeological assessment can provide significant new insights into cultural and environmental processes operating in Western Canada throughout the Holocene period. By increasing the quality and usefulness of the data collected during archaeological assessment, this approach maximizes the return on the considerable investment made by developers in meeting their compliance requirements. v

No crude left behind Pipeline, rail, barge... any way out!

Prior to the shale and tight oil boom in the U.S. and significant expansion of oilsands in Canada, the U.S. and Canadian system for delivering crude oil to market was stable and relatively predictable. In general, the U.S. and Canadian crude oil pipeline networks were originally designed for taking crude oil into the U.S. Midwest. Then matters started to change as production started to rise, and pricing for WTI at the Cushing, Oklahoma hub, which had always run in close parity with Brent, started to disconnect. Discounts deepened, affecting essentially all inland lower-48 crude grades, as well as Canadian crude oils (since these are also priced off WTI). Since January 2011, these discounts have been steep and have been considered “structural” (see Figure 1).

This article will delve into the issues that are behind this soaring discount.

West Coast or the Gulf Coast The North American crude pipeline system was caught off-guard by expanding production in Western Canada, as well as the Bakken and other shale plays in the Figure 1: Daily WTI and Brent Prices

Source: EIA, CERI.

52

Saskatchewan Oil Report 2013

U.S. As a result, pipelines are operating at near full capacity and delivering crudes to hubs where lack of capacity leads to congestion, as seen at Cushing, which continues to persist today. It has become a race between expanding supply and attempts to put adequate capacity in place in order to move crude oil to markets beyond the U.S. interior and inland Western Canada.

Two such pipeline projects are currently being reviewed. However, no one would have anticipated that these projects would become the focus of “political heat” at the highest levels. The TransCanada Keystone XL project, originally intended as a 700,000 to 900,000 barrels per day (bpd) line to mainly carry oilsands streams from Hardisty, Alberta, to the Gulf Coast via Cushing, has become a focal point of the political and environmental pro- and antioilsands debate in the U.S. Likewise, the Enbridge Northern Gateway project that would initially take 525,000 bpd of heavy oilsands streams west to British Columbia’s port of Kitimat – and then to markets mainly in Asia – has become the centre of heated support and intense resistance in Canada.

Since then, the Keystone XL project has been split into two parts: a southern leg project from Cushing to the Gulf that has received all the permissions necessary to proceed, and which is expected to start operations by late 2013; and a northern segment from Hardisty to Steele City, Nebraska (where there is an existing line onward to Cushing), which hasn’t yet received the U.S. presidential permit. Start-up would likely be no earlier than 2015. For the Northern Gateway project, Enbridge has filed an application with the Canadian National Energy Board (NEB), but a review will take at least until the end of 2013. The expected start-up for this is around 2017, but some delays are likely.

The response to the delays on these two headline projects from the midstream industry has been an almost ever-changing array of new developments and proposals.

There are already several project proposals related to modifying existing pipelines and/ or taking advantage of existing rights-ofway to construct new parallel pipelines. A leading example is the 300,000 bpd Trans Mountain pipeline from Edmonton to Vancouver, which has recently been heavily over-subscribed. Currently a spur pipeline carries the bulk of the crude to U.S. refineries in Washington State and another 50,000 bpd has consistently gone to a refinery at Burnaby near Vancouver.

As a result, historically, less than 50,000 bpd of crude has been exported over the one and only export dock that currently exists for Western Canadian crudes.

Operator Kinder Morgan has obtained sufficient shipper commitments to support expanding the Trans Mountain capacity by 400,000 bpd. Much of the increased throughput would be moved over the Vancouver (Westridge) dock, with destinations mainly in Asia. The expansion has a startup date of 2016, although this could slip because of concerns over the resulting increase in tanker movements in the alreadybusy Port Metro Vancouver harbour.

Glitches in the System The Northern Gateway and the Trans Mountain expansion represent the only pipeline projects that would take Western Canadian crude west to the Pacific. All other pipeline capacity moves Western Canadian crudes south into the U.S. Rocky Mountain and Midwest regions, from which there is an onward pipeline to Sarnia in Ontario. After recent expansions, which include the base Keystone system and Alberta Clipper, there is more than 3.5 MMbpd of cross-border capacity from Alberta into the U.S. interior. There are, however, bottlenecks in moving Canadian crudes through and out of the Midwest.

We have identified such pinch-points along these crucial oilsands export routes. They are: • Enbridge Lakehead System south of Clearbrook/Superior – Enbridge’s Mainline moves a variety of crude types from Edmonton and Hardisty to Superior, Wisconsin. From Superior, crude is delivered to the Pine Bend refinery and Line 5 moves product farther east to Sarnia, but the bulk of the throughput is moved south to refineries in the Chicago area via the Lakehead System. These southern legs are capable of transporting 1.3 MMbpd, but also have accommodated increasing amounts of Bakken production at the Clearbrook connection point, northwest of Superior. Enbridge’s Southern Access project added 400,000 bpd of capacity south of Superior when it came online in 2009, and the addition of further pumping stations is planned that will raise the line’s throughput. Nevertheless, growing oilsands and Bakken volumes will keep this route near its stated capacity. Beyond the Lakehead System, Enbridge’s Spearhead System transports crude from Flanagan, Illinois to Cushing, Oklahoma. Spearhead’s capacity is 193,300 bpd. Enbridge is moving ahead with the Flanagan South project, which would add an initial 585,000 bpd of capacity (expandable to 800,000 bpd) along the route of Enbridge’s existing Spearhead Pipeline between the Flanagan, Illinois Terminal, southwest of Chicago, to Enbridge’s Cushing, Oklahoma Terminal.1 Other company proposals, such as the reversal of the existing 1.2 MMbpd Capline pipeline to Louisiana, would also help transport oversupplied Midwest markets south.

• TransCanada Keystone XL – TransCanada operates the Keystone base pipeline, which began operations in June 2010 after converting a gas pipeline from Hardisty, Alberta west to Manitoba and constructing a new pipeline from Manitoba south to Steele City, Nebraska and then east to Patoka, Illinois. In 2011, the line’s capacity was expanded to 591,000 bpd, and the pipeline’s southern path from Steele City to Cushing was extended. The proposed Keystone XL project would establish a direct route from Hardisty to its existing Steele City connection point, but U.S. government approval is needed. Keystone XL also includes plans to construct a new pipeline from Cushing to the Nederland, Texas terminal, allowing access to the Gulf Coast market. Approval for the Gulf Coast portion has been granted.

54 Saskatchewan Oil Report 2013

• Kinder Morgan Express/Platte2 – Kinder Morgan’s Express Pipeline, with a stated capacity of 280,000 bpd, feeds into Casper, Wyoming where the Platte system moves the crude south and east to Wood River, Illinois. Platte capacity shrinks to 145,000 bpd past Guernsey, Wyoming while also adding volumes from the Rocky Mountain region, including Bakken oil. The constrained capacity on this leg of the pipeline limits the amount of volumes capable of moving south on the Express line. Kinder Morgan’s Pony Express, which will be converted from the existing gas to an oil line, has secured sufficient project support in earlier open seasons to transport up to 230,000 bpd from Guernsey, Wyoming to Ponca City and Cushing, Oklahoma starting in the third quarter of 2014.

These potential pinch-points are in addition to the current and well-publicized shortfall in capacity to move crude out of Cushing. Increasing supplies from Western Canada, the Bakken, the Permian Basin region (West Texas), as well as from Oklahoma and Kansas, are all creating pressure to move crudes mainly from the north into Cushing and out in multiple directions, but especially south to the large refining centres on the Gulf Coast. As well, the lack of capacity to move oil supply directly to the U.S. Gulf Coast is leading to increased volumes arriving at Cushing and adding to the oversupply problem there.

Continental Inland Expansions, Extensions, and Conversions Until recently, there was only one pipeline that flowed south to the Gulf Coast – the Pegasus line (up to 93,000 bpd) – which runs from the Chicago area to the Gulf and carries mostly Western Canadian crude. This pipeline was reversed in 2006 and expanded to its current capacity in 2009. The Seaway line used to flow north to Cushing, but this has recently been reversed with current capacity of 150,000 bpd. It will be expanded to a capacity of 400,000 bpd from Cushing to the Gulf Coast by early 2013 and to 600,000 bpd by mid-2014.3 Associated with these expansions is a new Flanagan South line that will use the right-of-way of the existing Spearhead line to add nearly 585,000 bpd of initial capacity4 from Chicago to Cushing with an in-service date of mid-2014. This will help relieve the bottleneck in the Chicago area and will enable Canadian and Bakken crudes to flow via Seaway to the Gulf Coast. A Seaway reversal and expansion, with the Keystone XL southern leg, will add over 1.65 MMbpd of capacity out of Cushing to the Gulf by 2014. This will substantially alleviate the “Cushing congestion” and should, consequently, narrow the WTI-Brent spread, as well as Western Canadian-WTI differentials, at least in the short term.

Growing Western Canadian and Bakken supplies have also led Enbridge to propose modifying its existing pipeline through Eastern Canada. The system already carries western crudes east as far as the refining complex at Sarnia. Another line (Line 9) originally used to run east from Sarnia to Montreal, but was reversed; is now bringing imported crudes west via Montreal and a connecting Portland, Maine to Montreal

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55

Pipeline (PMPL) into Sarnia. Enbridge has now proposed to re-reverse Line 9 with a stated capacity of 240,000 bpd so that it runs east to Montreal, where there is access to two refineries in Montreal and Quebec City. This could also tie-in with a possible reversal of the PMPL to take Western Canadian and Bakken crudes out to the Atlantic, from where they could reach refineries in the Canadian Maritimes, the U.S. East Coast and potentially beyond.

Enbridge has already reversed a short section of the line and has applied for permits that would allow full reversal.

This project, like Northern Gateway and Keystone XL, is meeting some resistance on the environmental basis, and so its timing is uncertain.

TransCanada is also considering switching one or more existing gas pipelines that run from Alberta to Quebec into crude service. The concept is attracting interest and a possible capacity range of 400,000 to 900,000 bpd is being discussed.5 The main objective would be to carry Western Canadian crudes, including oilsands, synthetic crude and/or diluted bitumen, through to Quebec and then to the 300,000 bpd Irving refinery in New Brunswick. At the moment, this is only

an idea and has not been taken to the formal “open season” stage to test the level of commercial commitment. Part of the impetus behind this possible gas line conversion and the Enbridge Line 9 project is uncertainty over the major projects that would move Western Canadian crudes to the west, and south to the Gulf Coast. To the extent that either the TransCanada or Line 9 projects go ahead, they will enable light-sweet and medium-sour crude oils to move to Eastern Canada and possibly also to refineries on the U.S. East Coast and free up some room on the pipelines heading south to the U.S. Rail, Rail and More Rail Uncertainties over key pipeline projects, and steep discounts in U.S. lower-48 and Western Canadian crude prices, have spurred the above-mentioned proposals to modify and expand existing pipeline infrastructure, but they have also led to a growing role for rail. This is especially visible in the Bakken. There has been marked growth in Bakken “takeaway” capacity via rail.

Faced with a lack of existing infrastructure in North Dakota, mainly smaller producers and transport companies began a rapid expansion of rail termi-

Figure 2: Williston Basin Oil Production and Export Capacity

Source: North Dakota Pipeline Authority. “Great Plains and EmPower ND Energy Expo”.

November 2012.

56 Saskatchewan Oil Report 2013

nals in 2009. These use “unit train” technology (load dedicated 60,000 to 75,000 barrel trains, often one or more per day) that then move crude to corresponding receiving terminals with no stops along the route. Williston Basin rail takeaway capacity went from 30,000 bpd in 2008 to 275,000 bpd by 2011 and was anticipated to reach nearly 730,000 b/d by the end of 2012 (see Figure 2).6 Pipeline takeaway capacity is also expanding rapidly, but what is new here is that rail is becoming established as an important mode for moving crude oil, at scale, to multiple destinations.

Most delivery terminals for Bakken crude are in the Gulf Coast, but movements are expanding to both the West Coast and, especially, the East Coast.

These movements are taking Bakken production – which recently passed the 640,000 bpd mark and is expected to go much higher – into coastal U.S. markets.

The year 2012 may also be the point in time when crude movement via rail starts to catch on as a means to move Western Canadian crudes. Small volumes of Western Canadian crudes have recently moved to the Western U.S., the Gulf Coast and the East Coast, as well as Ontario via rail. What is new is that longer-term commitments and unit train developments are starting to surface – for instance, for the movement of Bakken crudes at scale to the Irving refinery in New Brunswick.

Rail movement via “manifest” train can be three times the cost of pipeline.

However, unit trains narrow the gap and shorten the delivery time. Moving oilsands bitumen by rail can come even closer to pipeline costs as less diluent is needed; even bitumen with no diluent can be carried if the rail cars are heated. Given the severe price discounts on heavy Canadian crudes, rail looks to be an attractive option. Both pipeline and rail are also tying in with barge movements, notably from the Midwest to the Gulf Coast, using rail or pipeline for part of the way and then barges down the Mississippi River

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for the last leg. Within the Gulf Coast, midstream companies are also expanding their options to move crudes along the coast (for example, Eagle Ford crude east along the Gulf and also via tanker up to the East Coast) and to move crude west to rail terminals in St. James, Louisiana.

The end result is that the combination of pipeline expansion, and rail and barge transportation options will enable U.S. lower-48 and Western Canadian crudes to flow in an increasingly less restricted way to coastal markets. Data showed that as of the third quarter of 2012, U.S. and Canadian oil movements by rail had already increased by 650,000 bpd, compared to their historical level.7 This is consistent with the surge in rail loading and offloading capacity that, by the end of 2012, was anticipated to see over 700,000 bpd of receiving capacity in operation: with over 200,000 bpd on the Eastern coast (U.S. and Canada),

450,000 bpd on the Gulf Coast and 50,000 bpd on the West Coast.

By the end of 2013 and into 2014, this rail capacity will have essentially doubled to over 1.4 MMbpd, with nearly 600,000 bpd of receiving terminals on the Eastern Seaboard, close to 750,000 bpd on the Gulf Coast and around 110,000 bpd on the West Coast. By 2015-2016, this new capacity may well have grown further and will have been joined by 1.65 MMbpd of new pipeline capacity to the Gulf Coast from Cushing. Hence, a total of over three MMbpd of capacity will exist to take U.S. and Western Canadian crudes to coastal markets in the U.S. and Canada. This capacity growth is well-underway; it is developing rapidly and is substantial.

The Bottom Line The net effect of all these developments is that the U.S. and Canadian crude oil logistics system is changing

rapidly as it seeks to adapt to a new reality of steadily growing oil production, both north and south of the border.

There is appreciable uncertainty, however, over how the system will evolve in the longer term. It will depend in part on whether (and when) a few major pipeline projects are brought online, as well as on how much Western Canadian crude ends up moving west and to Asia versus south into the U.S. and east into Eastern Canada. By 2014, WTI discounts could be partially alleviated, but we are witnessing a race between production growth and infrastructure restructuring. Crude oil discounts could persist to 2020 – and even beyond – if U.S. shale production rises at optimistic rates. The emergence of rail is an important new factor. Although rail car availability is a constraint in the short-term, terminals are low-cost compared to pipelines, can be put online within 12 to 18 months, and offer shorter payback times.

Endnotes http://www.enbridge.com/~/media/ www/Site%20Documents/Investor%20Relations/2012/2012_ENB_Investment_Community_Booklet.ashx 2 Spectra Energy Corp. bought the Express-Platte Pipeline System for $1.25 billion in cash; the deal is set to close in the first half of 2013.

3 Enbridge. Investment Community presentation. December 2012.

4 Expandable to 800,000 bpd.

5 OPEC. “World Oil Outlook”, 2012 6 North Dakota Pipeline Authority.

“Great Plains and EmPower ND Energy Expo”. November 2012.

7 EIA. The estimate might include some volumes of NGLs. 1

Originally published in the November 2012 issue of CERI Commodity Report – Crude Oil. Reprinted with permission. v

58 Saskatchewan Oil Report 2013

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Southeast Regional College: SE Saskatchewan’s educational connection to the energy industry

Students preparing for energy-related careers in SRC’s Electrician (left), Power Engineering (centre) and Office Education (right) Certificate programs.

With over 35 years of experience in delivering education and training to southeast Saskatchewan, Southeast Regional College (SRC) puts people and communities in touch with a variety of higher learning opportunities that can lead to successful careers in the energy industry. With campus locations in Moosomin, Whitewood, Indian Head, Weyburn, Estevan, and Assiniboia, the key benefits for SRC students include a quality educational experience that is close to home.

Just what types of energy-related training and education opportunities are available at SRC? Post-Secondary Education SRC delivers a variety of technical and trades certificate programs through its 60 Saskatchewan Oil Report 2013

main educational partner, SIAST. Students taking these programs receive the exact same instruction that they would receive at SIAST and receive a SIAST certificate upon graduation. The Electrician Certificate program, delivered in Estevan and Moosomin, prepares graduates for work in mining, oil and gas, and a variety of other sectors. Fourth-class Power Engineering Certificate grads from the Estevan program are hired regularly by power generation plants and in some cases, become battery operators in the oilpatch. In addition to the trades there are other opportunities within the energy sector, such as office administrative support, which provide solid careers for graduates of Estevan and Moosomin’s Office Education Certificate.

Adult Basic Education SRC’s Adult Basic Education (ABE) program is for adult learners wanting to complete high school, meet post-secondary entrance requirements, improve their employment opportunities, or develop personal skills. The ABE program provides employability skills for entry-level jobs in the energy sector, and also prepares individuals who want to delve further into post-secondary trades or technical training for more advanced energy-related careers. ABE programs are offered regionwide at the Moosomin, Weyburn, Estevan, and Indian Head campuses as well as a variety of First Nation locations including Kahkewistahaw, Ocean Man, Ochapowace, Piapot Urban (Regina), Piapot Valley (On-reserve), and Pheasant Rump.

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The SKIDCAR training simulator and Driver Evaluation training course was recently developed with feedback from industry.

Safety and Industrial Training The Saskatchewan Energy Training Institute (SETI) is a division of SRC that specializes in industrial training. In operation for over 20 years, SETI has grown with the southeast Saskatchewan energy industry in order to provide employers and employees with the training and certification they need to enter or develop in their chosen energy-related fields.

With its new 44,000-square-foot training facility in Estevan, SETI offers a wide variety of safety training courses for the oilfield through its main training partner, Enform. Other training partners, including St. John Ambulance, Global Training, Sask Safety Council, and the Saskatch-

ewan Trucking Association, provide a well-rounded slate of safety courses that are available year-round. Visit www. southeastcollege.org for a complete A to Z course listing and schedule.

With the high volume of industrial construction in the southeast, SETI is graduating a number of students from the SIASTaccredited Heavy Equipment Operator program. In just one month, students become certified and employment-ready on three pieces of heavy equipment – crawler tractor, excavator, and front-end loader.

Registrations have also been growing in the one-week 1A Truck Driver Training programs due to the increased hauling required in the oilpatch.

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SETI business consultants meet with employers regularly to determine what their training needs are and how they can be met. By keeping in close contact with industry, the business consultants can monitor developing industry trends and training requirements. For example, in 2011 SETI purchased a SKIDCAR training simulator and launched a new driver evaluation training course based on industry feedback and the need for this type of training closer to home. To date, a number of employers have taken advantage of this training in order to provide additional knowledge and tools for employees who spend many hours driving a vehicle as part of their job in the energy industry.

Partnerships Stakeholder partnerships are a critical success factor for SRC and SETI as it moves forward into the future. In addition to partnerships with various training providers, employment agencies, industry groups, and employers, SRC just recently created a partnership with an international energy provider that will provide $60,000 in scholarships to Aboriginal students. With partnerships and support such as this, SRC and SETI will continue to evolve to meet the changing needs of learners seeking successful careers in the energy labour market.

To learn more about Southeast Regional College or the Saskatchewan Energy Training Institute, please visit www.southeastcollege.org. v

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Public outreach more important than ever Canada’s oil and gas industry has a lot of experience. Working in some of the toughest conditions on the planet, we have become experts in finding and producing oil and gas safely and efficiently, while protecting people, animals and the environment. Over the past 100-plus years, our industry has continually improved on science, technology and training, to ensure we operate within, and often above, the most stringent regulations in the world.

In short, we do a top-notch job of supplying Canadians and others with the vital energy they rely on every single day.

So why do we sometimes get a bad rap? Because the one thing we haven’t been quite as good at is communication. We haven’t been good at talking about what we do, why we do it and how. We haven’t been good at answering questions or addressing concerns about our operations or performance. And we haven’t been good at showcasing our innovations and successes. That’s changing now.

New Era, New Initiative This year, the Petroleum Services Association of Canada (PSAC), along with several of our members from the service, supply and manufacturing sector, are reaching out to stakeholders with a new program called the Working Energy Commitment.

The program, officially launched in late February 2013, is named in honour of the more than 80,000 PSAC member-company employees who are on the front lines of the Canadian oil and gas industry. These hard-working people drive rural roads to access remote locations, get their hands dirty when they have to, and do their highly skilled jobs at all hours and in conditions some would call unworkable. As such, they truly personify the concept of “working energy”.

The Working Energy Commitment program’s goal is to increase public confidence in these people – and our industry – by listening to public concerns about oil and natural gas development and addressing those concerns with facts and honesty. The program is also designed to bring greater transparency to the efforts that service companies and their skilled employees put into health, safety and the environment, whenever and wherever they work.

Fracturing First PSAC’s Working Energy Commitment is first going to focus on hydraulic fracturing, which has been much in the news of late. Many of the public’s concerns stem from a lack of information – or misinformation – about hydraulic fracturing: what it is, 64 Saskatchewan Oil Report 2013

why it’s needed, how it works and how any risks are mitigated.

Tackling this topic first is a must because hydraulic fracturing is a critical part of our industry’s business. Without hydraulic fracturing, our industry – and Canada’s access to many of the proved reserves of oil and natural gas resources – could grind to a near halt, with no road to recovery and tens of thousands of jobs lost.

No surprise then that 10 PSAC member companies, all involved in hydraulic fracturing, were the first to sign on to the Working Energy Commitment. They are: Baker Hughes Canada Company, Calfrac Well Services Ltd., Canyon Technical Services Ltd., GasFrac Energy Services LP, Halliburton Group Canada, Nabors Well Services Canada Ltd., Iron Horse Energy Services, Sanjel Corporation, Schlumberger Canada Limited and Trican Well Service Ltd. These companies are leaders for stepping up to the plate.

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Online Outreach As part of the Working Energy Commitment initiative, PSAC is also reaching out to stakeholders via our public information website www.oilandgasinfo.ca. The site provides users with key information about Canada’s oil and gas resources and industry. Fracopedia, a new section developed for the site, provides more detail about hydraulic fracturing operations. An With support from PSAC, the 10 pumping companies started by developing and committing to a Working Energy Commitment Statement of Principles (see sidebar) that reflect how they operate every day.

Their next task is to develop a hydraulic fracturing code of conduct, which will bring these high-level principles down to the ground level. It is expected that this code of conduct will define mutual expectations for working with stakeholders, and reflect standard practices for sound technical and environmental performance when fracturing a well.

Because of its very nature, a code of conduct like this should not, and will not, be developed in isolation. Rather, PSAC and its pumping company members are holding a series of public engagement sessions to gather stakeholder input into the code of conduct.

other new section will act as the home base for updates about the Working Energy Commitment program, the public consultation sessions and the hydraulic fracturing code of conduct. These website updates are still in their infancy, but will grow in content and scope along with our program.

These public events, taking place this year in key operating centres throughout Western Canada, will provide local community members with the opportunity to meet and speak directly with representatives from hydraulic fracturing companies, as well as local representatives from producing companies and regulators.

We recognize that not all regions of Western Canada are as supportive of our industry as others. We may be asked some tough questions. But PSAC and our members are confident about how well our industry operates and about our commitment to health, safety and the environment, so we welcome the opportunity to answer questions and address concerns as a way to build public trust. We fully believe that with the productive dialogue from these sessions, we will be able to draft a comprehensive and respected hydraulic fracturing code of conduct, and release it by year end.

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Building Momentum Our Working Energy Commitment builds on another successful public outreach program we launched in 2010. Along with the support of the other major Canadian oil and gas associations, PSAC created Community Partners, in direct response to public feedback about how we operate as an industry. Community Partners, still managed by PSAC, is an industry-wide in-thefield courtesy program that commits companies, their employees and their contractors to be good neighbours.

Each of the companies leading the Working Energy Commitment has also signed on to the Community Partners program.

That commitment demonstrates to local stakeholders that we are starting this year’s public consultations from a place of sincerity. Dozens of other producer and services companies have also signed on to the program since it launched. (For more information, please visit: www.communitypartners.ca.)

How PSAC members – and the industry as a whole – operate is very complex and technical. But it’s no longer enough

to operate safely and responsibly. We have to communicate about it. We have to help the general public and residents of communities most impacted by our operations understand how and why we do what we do, so we can strengthen relationships and build valuable support of our industry.

PSAC is the national trade association representing more than 250 of Canada’s leading service, supply and manufacturing companies in the upstream industry. Our members employ more than 80,000 people, and contract almost exclusively to exploration and production companies.

For more information, please see us at the Saskatchewan Oil and Gas Show or visit: www.psac.ca.

A PDF of the Working Energy Commitment statement of principles can be found online here: http://www.oilandgasinfo.ca/images/Postcard.pdf. v

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Big progress in the ‘Energy City’

Over the past five years, Estevan has been in the midst of significant economic growth as its diverse resource-based economy continues to fire on all cylinders. Recent advances in agriculture, clean coal, carbon gasification, hydraulic fracturing and horizontal drilling have helped secure the community’s long-term economic success, transforming the city and surrounding rural municipality (RM) in to one of the country’s greatest investment opportunities.

The two municipal governments (city and RM) welcome business investment and have taken significant consideration in to ensuring the community’s long-term economic success

through continued investment. Both desirous of seeing continued private-sector development, the city and RM have developed a positive working relationship which includes a working agreement to allow for a quick and seamless annexation process, provision of water to the RM’s industrial parks, and a clear distinction of the type of investment each municipality desires. Due to the relationship that has been established, and both municipalities’ wish for continued growth and investment, the last few years have been witness to record land development and building-permit values while a number of significant capital projects have taken place.

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Recent advances in agriculture, clean coal, carbon gasification, hydraulic fracturing and horizontal drilling have helped secure the community’s long-term economic success, transforming the city and surrounding rural municipality (RM) in to one of the country’s greatest investment opportunities.

Recent concerns regarding emissions from coal-fired power generation plants encouraged the municipalities, along with the local business community, to work together in order to ensure the long-term viability of Estevan’s coal mining and power-generating sectors. The result is the world’s first and largest commercial-scale, coal-fired integrated carbon cap-

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ture, sequestration and enhanced oil recovery project at then 880-megawatt Boundary Dam Power Station. Once complete, the $1.2-billion project will capture one million tonnes of CO2 per year from the 110-megawatt Unit 3.

SaskPower has signed a 10-year deal with Cenovus that will see the energy company purchasing the liquefied CO2 for enhanced oil recovery (EOR) purposes. Cenovus has been using CO2 for EOR for the past ten years; in 2011, they injected 4.2 million tonnes (purchased from a North Dakota company) with quite impressive results. Of their 27,000 barrels per day extracted from the EOR project, 19,000 of it is incremental as a result of CO2 injection. This agreement provides Cenovus with greater security in their CO2 supply, while providing SaskPower with the financial security to make the project successful; in fact, with the sale of CO2 for EOR, the economics of clean coal become comparable to combined-cycle natural gas plants. After the project’s construction, which is due for completion in the spring of 2014, SaskPower will monitor the facility for two to three years prior to making their decision (likely in 2016 or 2017) whether to convert units 4 and 5.

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While not as significant of a financial investment, the Shand Power Plant (also located in the RM of Estevan) is undergoing its own major renovation – a $60-million carbon capture test facility. This test facility will provide national and international companies the opportunity to experiment with their own carbon capture technologies using Shand’s infrastructure and up to six megawatts of power. Hitachi is on board with the project as a 50/50 partner, providing half the capital funds and the opportunity to be the first to test their technology once the facility is complete, also in the spring of 2014.

With the combination of local clean coal/enhanced oil recovery, expectations of another 3,200 oil wells being drilled in Saskatchewan in 2013, and the continued growth of the region’s agriculture sector, Ceres Global Agriculture Corporation, in partnership with The Scoular Company, has bought land 60 kilometres southeast of Estevan in order to construct a $90-million logistics terminal for shipping oil and agricultural commodities. The facility will include two high-efficiency rail loops, each capable of handling unit trains of up to 120 rail cars. One loop will be used for grain handling and shipping, while the other is to be used for transloading and shipping

Saskatchewan Oil Report 2013

73

oil. The facility is expected to handle upward of 40 million bushels of grain annually and 70,000 barrels of oil per day. The three-year construction period is expected to begin in the fall of 2013 and provide full-time employment to 30 people once complete.

With the increasing economic activity has come significant demand for housing and accommodation. Estevan has seen rental vacancy rates well under one per cent for the last few years. In order to try to remediate the issue, the city instituted a tax abatement policy geared toward encouraging rental development and has started to work with private land developers to add two new residential subdivisions to the city’s northeast section. The RM has also worked to increase residential services primarily through country residential development and the opening of two work camps. Within city limits, 585 new homes have been added over the past five years; however, in a community with well over 1,100 jobs being advertised on any given day, it has simply not been enough.

The city is currently working with two private development firms to help meet the growing community’s increasing housing demands. One firm is Trimount Developments; after having completed a number of condominium projects, they are now well on their way to developing an 86-acre property titled Dominion Heights which, when complete, will service up to 470 sites and upwards of 700 new homes. Demand for housing in this new area has been high; after having broken ground in the fall of 2012, half of the lots in the first phase were sold by the end of January 2013. The Dominion Heights subdivision is expected to include a commercial centre, an 8.6-acre central park and space for the city’s new fire hall.

All in all, things continue to progress in the Energy City. With continued focus on economic development and community improvement, Estevan will continue to maintain its position as Saskatchewan’s energy capital while attracting a whole new generation of investors and residents set to take part in this growing community’s exciting future. v 74 Saskatchewan Oil Report 2013

Home-grown investment opportunity

in Saskatchewan’s oil and gas sector

By Katrina A. T. Senyk The Golden Opportunities Fund (“the Fund”) has been providing Saskatchewan residents with the opportunity to invest at home for 14 years.

Managed by Westcap Mgt. Ltd., Saskatchewan’s largest private-venture capital fund manager with over $500 million under management, the Fund was the first provincial Retail Venture Capital Fund in Saskatchewan, and today has

76 Saskatchewan Oil Report 2013

grown to over 25,000 investors. Golden Opportunities expanded its offerings this year to provide Saskatchewan investors with the opportunity to invest in a portfolio specifically focused on the province’s oil and gas industry.

The Resource Class R-share is designed for investors seeking 100 per cent exposure to Saskatchewan resource companies, including oil and gas exploration and development and other resource services. The R-share is concentrated on emerging plays in Saskatchewan and provides access to experienced oil and gas management teams focused on our province’s thriving oil and gas industry.

Saskatchewan’s oil and gas industry continues to be one of our province’s leading sectors and 2012 marked another exceptional year with record oil production, up more than seven per cent from the previous record of 161 million barrels set in 2008, according to the Saskatchewan Ministry of Economy.

The demand for crude oil is only expected to increase and with an estimated 1.2 billion barrels of established crude oil reserves, Saskatchewan is in an ideal position to meet that demand.

Grant Kook, president and CEO of Westcap Mgt. Ltd., said that being able to invest in a share-class specific to an industry is a unique opportunity to this province. “You can’t go to Ontario or the Atlantic regions or even B.C. and say, ‘Which part of the economy do I want to help grow?’. We have that opportunity here in Saskatchewan since our province is so diverse.”

This was an ideal time for Golden Opportunities to launch a dedicated resource share option, given the current state of Saskatchewan’s oil and gas industry combined with the Fund’s strategic partnerships with well-known oil and gas management teams developed from past activity.

Although the R-share is new to Golden Opportunities’ portfolio, investing in Saskatchewan’s oilpatch certainly is not.

Saskatchewan’s oil and gas sector is innovative, sustainable and thriving with a corporate landscape that is diverse.

The oil and gas sector remains the Fund’s largest portfolio weighting in its Diversified Class A-share, the Fund’s longeststanding and largest asset class comprised of an energized, balanced portfolio. Saskatchewan holds a rich endowment of petroleum reserves – an estimated 4.2 billion barrels of recoverable oil and four trillion cubic feet of natural gas – representing enough to heat every home in Canada for four years. Saskatchewan has a total of 45.6 billion barrels of oil-inplace; however, less than 13 per cent of the province’s oil is recoverable based on current conditions. Enhanced oil recovery techniques, such as horizontal drilling and multi-stage fracturing, and experienced oil and gas management teams using innovative technologies are crucial to increase efficiency and maximize the potential of the oil in the ground.

Saskatchewan’s oil and gas sector is innovative, sustainable and thriving with a corporate landscape that is diverse. Golden Opportunities is leveraging strategic partnerships to benefit from the skills and knowledge of successful management teams operating in our energy-rich industry and providing residents with a home-grown investment opportunity to participate in the future potential of Saskatchewan’s oil and gas industry.

Investments in the Golden Opportunities Fund can only be made through a licensed financial advisor.

For more information on Golden Opportunities Fund and its shareclasses, please contact your financial advisor, or visit www. goldenopportunities.ca. v

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Invest iN SASkATChewAN! Manulife Securities and the block design are registered service marks and trademarks of the Manufacturer Life Insurance Company and are used by it and its affiliates including Manulife Securities Incorporated/ Manulife Securities Investment Services Inc. Manulife Securities Incorporated is a Member of the Canadian Investor Protection Fund. Manulife Securities Investment Services Inc. is a Member MFDA IPC. SOLD BY PROSPECTUS ONLY. *35% tax credit available on investment amounts up to $5,000 annually. Commissions, trailing commissions, management fees and expenses all may be associated with an investment in the Golden Opportunities Fund, a Retail Venture Capital Fund (RVC). RVC shares are speculative in nature and may not be suitable for all investors. RVCs are not guaranteed, their values change frequently and past performance may not be repeated. Tax credits are available to eligible investors provided that the shares are held for at least eight years from the date of purchase. Redemption restrictions may apply. RVCs are outlined in the Prospectus, which you should read before investing. To obtain a free copy, please contact Manulife Securities Investment Services Inc, or your Financial Advisor. Paid for in part by Golden Opportunities Fund Inc. Saskatchewan Oil Report 2013

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The Bakken shale region:

permitting across an international basin There are many producers operating within the Bakken shale region in Canada and the United States. While Canadian-based companies are typically familiar with permitting in Saskatchewan and Manitoba, there are a few significant differences as soon as one crosses south of the 49th parallel. An awareness of the various permitting requirements at the federal, provincial/state, and local level is critical for the successful execution of a project when operating on both sides of the international border.

Permitting on federal lands in the United States or in Canada can be a slow process and companies need to plan ahead to accommodate the lengthy timelines. In Canada, federal

78 Saskatchewan Oil Report 2013

agencies are involved if the project includes federally owned land such as national parks, national historic sites, Agriculture and Agri-Food Canada pastures (formerly PFRA pastures) and Indian Reserves. In addition, the National Energy Board becomes involved in certain instances such as when a pipeline crosses a provincial or international boundary.

Similarly, the Canadian Environmental Assessment Agency may need to be included for projects that could have a potential effect on aquatic species, fish and fish habitat and migratory birds under federal jurisdiction, as well as projects located on federal lands and project related effects that cross federal or provincial boundaries.

In the United States, there potentially is federal involvement as a result of either surface or mineral ownership. Typically, when U.S. federal agencies are involved, the application process starts with a Notice of Intent that initiates the National Environmental Policy Act (NEPA) process.

Depending on the scope of the project, NEPA decides on the level of assessment required that can range from months to years to complete and get approval. In addition to the NEPA process, consultations with a number of other federal agencies are usually required. These include the U.S. Fish and Wildlife Service, the U.S. Army Corps of Engineers, and the U.S. Environmental Protection Agency (EPA). The U.S. EPA deals with many

of the regulations related to air and water and often require air quality and air monitoring/ modeling as part of the permitting process.

In Canada, at the provincial level, oil and gas activities on provincially-owned or designated lands such as Wildlife Habitat Protection Act (WHPA), Fish and Wildlife Development Fund (FWDF), Protected Areas, or crown lands will require a submission (typically either an Oil and Gas Project Proposal or a Class 2 Environmental Assessment) to the appropriate provincial regulatory agencies for approval prior to construction. The typical turnaround on these reports is shorter than the federal process and averages less than a month. In addition, all archaeological resources in Saskatchewan and Manitoba are regulated by the province and an archaeological impact assessment may be required if it is located in a sensitive area regardless if the project is on crown or private land.

In North Dakota, numerous state agencies can be involved in permitting oil and gas activities, but two important ones are the Public Service Commission and the State Historic Preservation Office. Again, depending on the scale of the project, navigating through state-level processes can be a lengthy procedure, particularly for larger pipeline projects that can involve numerous impacts requiring management.

At the local levels, Saskatchewan, Manitoba, Montana, and North Dakota share many of the same issues such as road maintenance, waste disposal, and concerns of local landowners and municipalities. Many operators make a concerted effort to contribute back to the communities in which they work, building positive working relationships between the oil and gas companies and the local communities.

In both countries, oil and gas producers are faced with numerous permitting issues at the federal, provincial/state, and local levels. Overall, there are many similarities, but producers are finding that there are significant differences when operating in different jurisdictions. Taking the time to understand the various permitting requirements and the associ-

ated timelines to acquire the necessary permits allows companies moving into a new area to successfully execute their projects without unexpected delays. A well-thought-out permitting strategy saves time and money in the long run.

About Golder Associates With offices strategically placed in the Bakken shale region in Estevan, Sask. and Bismarck, N.D., we are well-positioned

to provide a full range of environmental and ground engineering services to our oil and gas clients on both sides of the Canadian-U.S. border.

To learn more about our services in the Bakken, please contact Brad Novecosky in Estevan (bnovecosky@golder.com, 306.634.2814) or Jon Ellingson in Bismarck (jellingson@golder.com, 701.258.5905). v

NEED SOLUTIONS ACROSS THE BAKKEN? JUST ASK GOLDER.

Operators in the Bakken gain greater access to Golder Associates’ sustainable solutions with offices in Bismarck and Estevan. Providing independent engineering, environmental and social services for exploration, development, and production activities, we help clients reach their sustainability goals. From permitting to reclamation, upstream to downstream, contact Golder to find the right people and solutions for every stage of your project.

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Bismarck + 701 258-5905 Estevan + 306 634-2814 shalegas@golder.com www.golder.com

Saskatchewan Oil Report 2013

79

D&D Oilfield Rentals offers diversity after Deranway deal On December 1st, 2012, D&D Oilfield Rentals purchased Deranway Enterprises Ltd., an acquisition that involved over 200 pieces of rental equipment and will allow D&D to expand to meet the growing needs of their customers.

“I think it’s a great acquisition,” says Ken Goldade, general manager, D&D Oil-

field Rentals. “Through the acquisition we are adding both quality and volume to our inventory while, at the same time, increasing the number of qualified and knowledge people in our company.”

This acquired inventory includes over 200 pieces of equipment including 185 well-site trailers, winch tractors with air

Celebrating our 10-year anniversary.

80 Saskatchewan Oil Report 2013

D&D Oil Field Rentals’ offices in Western Canada.

ride trailers, lavatories, generators, loaders, and more.

“We now have everything under one roof so D&D can be a one-stop-shop for construction, pipeline, forestry, and oilfield companies wanting to get everything they are looking for in one place,” Goldade explains.

While Deranway excels in the well-site trailer business, and D&D has a large variety of tanks, pumps, and other smaller rental pieces, the two companies have come together to complement one another and offer customers more under one roof than the competition.

“There is no other company in the industry that offers as much diversity as we do,” says Wayne Poole, operations manager. “This means that with one phone call, we can offer the oil company all of their surface rental requirements.”

With D&D and Deranway working under the same roof, the company has over 40 years of experience in the rentals business combined, so not only is D&D now able to offer their customers a variety of high-quality equipment, but Poole says that they are also looking forward to continuing to provide these products at a reasonable price with superior service.

“With the acquisition, we now have an even greater amount of expertise and perspectives that can be brought to the table, so we can offer an even better experience to our customers,” he adds.

To the customer, this means immediate reaction to issues or concerns, should they happen to arise, with trained D&D service technicians on the road – often within the hour that a phone call is made.

In order to make this happen, communication also remains strong between D&D’s offices in Swift Current and Weyburn in Saskatchewan, as well as in Redcliff, Calgary, Lloydminster, Nisku, and most recently Acheson in Alberta, so that the needs of the customer can be met as quickly and efficiently as possible.

D&D can also be expected to expand into North Dakota in the near future, which will serve to complement their existing markets throughout Saskatchewan, Manitoba, Alberta, and British Columbia.

Available trailer: 12-feet by 60-feet (skid) E/E, which includes water storage tank pressure system, central A/C, washer, dryer, built-in gas BBQ, satellite receiver, TV, DVDs, coffee maker, microwave, and more.

Contact us today to find out how D&D can be the one-stop-shop for all of your rental needs! Email info@ddoil.net or visit www.ddoil.net. v Saskatchewan Oil Report 2013

81

Finding innovative solutions

for the oil and gas industry

Biochar field.

The Saskatchewan Research Council (SRC) has been a leader in oil recovery improvement methods for years, so it is no surprise that the Enhanced Oil Recovery (EOR) team in Regina has come up with a unique take on core displacement processes. SRC research engineers have created a 3D physical model that tests larger samples for oil and gas companies assessing their reservoirs. They have adapted a model and process that allows companies to conduct higher pressure and temperature tests to better plan their field operations and create valuable efficiencies.

A few years ago, SRC was approached by a large international client with a difficult and interesting challenge. The client wanted to conduct core displacement tests at much higher pressures and temperatures using much larger cores than is typical. A core sample is a cylindrical section of a substance that is obtained by drilling. Core displacement tests are typically used by the oil and gas industry to evaluate characteristics of an oil and gas reservoir, which they use to plan operations in their fields.

SRC research engineers repurposed a 3D physical model, originally used to replicate reservoir conditions, to study in-situ heavy oil and bitumen extraction processes. The model is now lending its advanced capabilities to the study of one-dimensional core-displacement processes. What makes this project unique is the size of the core samples that can now be studied, as well as the conditions they can undergo.

“To the best of our knowledge, we are the only laboratory in the world that can accommodate this type of core displacement sys82 Saskatchewan Oil Report 2013

tem,” says Kelly Knorr, manager of EOR field development at SRC. “The interesting part for me is that we are able to be this innovative, to change our systems to accommodate our clients at their request.”

A typical core sample measures approximately two to five centimetres in diameter by 15 to 90-centimetres long. SRC is now testing core samples that are 10 cm in diameter by one-metre long in the repurposed physical model, which is capable of testing much larger samples up to 25 cm in diametre by 2.5-metres long, if necessary.

High-temperature and high-pressure core displacement up to 250 degrees Celsius and 21 megapascals (mPa) is possible with the repurposed apparatus.

Knorr notes that several benefits come with the ability to test wider and longer core samples. “Large core samples provide a much greater range in determining displacement shortcomings and give better field estimates and predictions. The longer the core and the larger the differential pressure, the more errors are reduced in the experimental procedure,” Knorr explains.

This new technology will assist oil and gas companies, in Saskatchewan and beyond, by helping to better evaluate the characteristics of their reservoirs, thus allowing them to better plan field operations and as a result, create more efficiencies.

Pyrolysis: Turning Ag Residues into Fuels and Fertilizers Farmers and agricultural processors in Saskatchewan produce a tremendous amount of crop and livestock residues, such as

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wheat and flax straw, oat hulls and poultry litter, which must be managed. Researchers at the SRC see this as an opportunity and are currently working to find out how these residues and other waste materials can one day be used in a practical way through a process called pyrolysis.

Pyrolysis can turn these agricultural residues into materials that can be used as fuels and fertilizers. Pyrolysis breaks down material using heat in the absence of oxygen. The process results in three things: a bio-oil (liquid), a gaseous fuel (gas) and a granular biochar (solid/charcoal).

SRC research engineer Dr. Erin Powell says that while pyrolysis itself is not new, finding applications that are practical for the average person is. “Bio-oil and biochar have both received a lot of interest in recent years. In Saskatchewan, there is a lot of interest around finding uses for agriculture and livestock residues. Farmers are looking for avenues to manage residues and waste, and creating value-added products from that material makes it even more attractive.”

SRC’s process development team is one of just a few groups in North America doing diverse research and client work using a pyrolysis platform. This includes biomass preparation, assessment of pyrolysis and its end-products, technology development and downstream value-added processing of bio-oil and biochar.

SRC recently finished work on a provincial Agricultural Development Fund (ADF) project that focused on making pyrolysis viable and practical for Saskatchewan farmers. As part of this project, SRC demonstrated a one tonne/day mobile pyrolysis unit based on Advanced Biorefinery (ABRI-Tech Inc.) technology. This unique unit is operated at SRC’s Saskatoon location but could also be transported to feedstock locations around Saskatchewan for remote processing.

Powell says the mobile aspect of the technology is what really makes it unique. “The capability for remote processing allows for biomass densification. This means that you can sidestep a fundamental economic hurdle in biofuels. Transporting biomass is expensive because of its bulk volume, whereas liquid fuel from biomass has a higher energy content and is far more economical to transport. As a result, pyrolysis products can be generated locally, then transported for processing into valuable fuels, fertilizers and chemicals.”

Photos courtesy of the Saskatchewan Research Council.

SRC then used the unit to evaluate several different agricultural and livestock residues to see how they pyrolyzed and find out what potential uses could be made for the end-products. They also assessed what might be needed to make the technology commercially viable.

In a follow-up project with ADF, SRC focused more on the practical application side, including value-added upgrading of the oil and char products that were created in the first project so that they are useable for the average person. SRC developed a method for turning bio-oil into a heating fuel oil suitable for agricultural use, and using biochar and microbes to remove unwanted compounds from manure before disposal.

SRC’s research in this area will assist farmers and agricultural processor – in Saskatchewan and beyond – by helping them to find practical solutions for their waste and residue problems. The hope is that these residues will one day be used to produce fuels to heat homes, power cars, and create products for bioremediation and soil improvement.

For further information Rebecca Gotto | Communications Advisor, Business Ventures & Communications Saskatchewan Research Council 125-15 Innovation Blvd., Saskatoon, SK S7N 2X8 Phone 306-933-6298 | Cell 306-371-2127 | Fax 306-933-7446 rebecca.gotto@src.sk.ca | www.src.sk.ca v

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85

Oil boom

creates new opportunities for Saskatchewan’s construction industry

By Lisa Fattori The oil boom in Saskatchewan fosters spin-off benefits for a variety of sectors, including the construction industry. Oil production requires the construction of on-site infrastructure in the oilpatch, but it also necessitates new development to support the influx of oilfield suppliers and related businesses, as well as workers and their families. New retail stores, restaurants, recreation centres and housing are a sample of the amenities needed to support a growing population, and are indicative of thriving communities experiencing economic prosperity.

“The Estevan and Weyburn region is the area where we’re seeing the most activity in new construction,” says Doug Folk, acting president for the Saskatchewan Construction Association. “Lloydminster is also having an impact and there are construction projects with the new oil development in the Swift Current area. We’re seeing the construction of hotels, restaurants, coffee shops and work camps; and in the oilpatch, the construction of pre-engineered buildings, which can be completed quickly.

Along with the oil and gas industry, we also have the mining sector that is absolutely booming, so there’s lots of work for anyone in construction.”

According to Statistics Canada, in 2012, capital investment in Saskatchewan increased by 6.5 per cent to $20.9 billion, compared to 2011. Spending by the private sector accounted for 83.2 per cent, while the public sector contributed 16.8 per cent. 2013 is expected to be the sixth consecutive year in which new capital spending in Saskatchewan exceeds $14 billion. In 86 Saskatchewan Oil Report 2013

March, Statistics Canada reported a 66.7 per cent increase in building permits in January 2013, over December 2012, with residential construction up by 50.2 per cent and non-residential construction up by 115.7 per cent. Saskatchewan enjoyed the second-highest percentage increase among Canadian provinces and is ahead by leaps and bounds of the national average of an increase of only 1.7 per cent in building permits for January.

The expertise of heavy construction workers in earth work, grading and road-building is in high demand by both the oil and gas, and the potash industries, which increases competition and secures top wages for employees. “Approximately 60 to 70 per cent of heavy construction work used to come from government for contracts to construct highways,” says Shantel Lipp, president of the Saskatchewan Heavy Construction Association. “Now we’re seeing a lot more demand coming from the resource sector. Contractors have more choice in the projects that they take on and employees also have more options.

They have the opportunity to make more money, because contractors have to pay more to retain their workers.”

The oil boom has increased construction demand for new shops and offices, as well as the renovation and expansion of pre-existing properties. Estevan-based Wilhelm Construction Services Inc. saw both its on-site and office teams triple in size between 2008 and 2011. The company is currently working on four construction projects for clients from the oil industry, including a 16-building rural development project

that replaces multiple facilities in several locations throughout the city with one complex on an 80-acre parcel of land. Wilhelm Construction Services is providing design-build services for the construction of various buildings that include specialized spaces for heavyequipment maintenance, wash bays, pipe yards, office buildings and supply stock.

“The demands occurring in the oil industry have put a strain on the size and functionality of many companies’ existing facilities,” says Nathan Wilhelm, owner and operator of Wilhelm Construction Services Inc. “Established oilfield companies have been willing to take a chance with us, even in our infancy of five years of business. We have gained valuable building experience and have increased the size and number of types of projects that we are able to handle, because of the willingness of oil companies to try out a local contractor who answers their calls quickly.”

Estevan and the surrounding RM have a population of 12,093, which is an increase of over nine per cent, compared to population figures in 2006. With transient workers living in the area, the population is higher, but is difficult to pinpoint.

Within Estevan, new developments include Spectra Place, a multi-purpose entertainment and sports facility that opened in April 2011. The state-ofthe-art Saskatchewan Energy Training Institute is a new 44,000-square-foot facility that is part of Southeast Regional College. The $14.2-million building opened in May 2012 after three years of construction. On the east end

Home construction booms in southeast Saskatchewan.

of Estevan, a new strip mall is under construction. The city has also seen the opening of additional fast-food restaurants and has a residential housing project currently under construction.

“With the booming economy in southeast Saskatchewan, there is a need for more housing,” says Manpreet Sangha, economic development officer for Estevan. “People are waiting over a year for an apartment, so there’s a lot of demand for rentals as well. Right now, we have a lot of workers staying in hotels and motels. A housing report is coming out in June and, after its release, we’ll have a better idea of the types of housing development that we need for Estevan.”

According to Statistics Canada, in 2012, urban housing starts in Saskatchewan increased by almost 40 per cent, whereas the national average was up by only 11 per cent. In Weyburn and Estevan, new housing developments are helping to alleviate the shortage of accommodations in this oil-active region of the province. Home-building company Trimount Developments currently has a 39-unit condominium under construction in Weyburn, with town-

homes and condominiums planned for subsequent phases, for a total of 108 homes. In Estevan, Dominion Heights is a master-planned community that is situated at the north end of the city.

Trimount will be constructing singlefamily homes in the first two phases of the project, to offer 267 new homes to the Estevan market.

“There is enough land for over 700 homes, a project that would take about five years to develop,” says Mike Reinheller, VP of operations for Trimount Developments. “This is a community that has a mix of single-family and multi-family homes, set on 86 acres.”

Since the spring of 2011, Trimount has constructed 117 condos and seven

single-family homes in the Estevan/ Weyburn area. Although prices have risen significantly in the last 18 months, the company is committed to keeping its home prices at an affordable level.

“The oil boom is a big driver of the demand for housing, but coal and agriculture are also strong industries in the area,” Reinheller says. “We feel that Estevan is very sustainable and a good market to be in. Fort McMurray had a big boom five years ago that saw prices go through the roof, which created a bubble that wasn’t sustainable.

We don’t want to see the same thing happen here. We want to be good corporate citizens and keep our pricing at a reasonable, affordable level.” v Saskatchewan Oil Report 2013

87

Fraser Institute survey results:

Saskatchewan very attractive for Canadian petroleum exploration and development Saskatchewan was ranked as the second-most attractive Canadian jurisdiction for petroleum exploration and development by participants in the Fraser Institute’s 2012 Global Petroleum Survey. While Saskatchewan was dislodged from first place by Manitoba, both provinces have consistently been among the top two Canadian performers for a number of years. Because Manitoba has virtually no natural gas production, Saskatchewan – with oil production 10 greater than Manitoba – is clearly the first choice for investors focused on both commodities.

The 2012 Fraser Institute Survey rankings reflect the responses received from 623 petroleum industry officers, managers and advisors pertaining to how a number of important factors impact investment in oil and gas exploration and development in jurisdictions with which they are familiar. Sufficient data was gathered to rate 147 countries, states, provinces, territories and offshore regions around the world. The 18 factors on which jurisdictions were judged include fiscal terms, taxation in general, the regulatory climate (including the uncertainty with regard to environmental regulation, the cost of compliance, duplication and inconsistency, and legal system fairness), trade barriers, quality of infrastructure, land-claim disputes, labour availability, political stability, security of personnel and equipment, and corruption. Because the rankings are based on index values derived from the percentages of negative responses such as “a major deterrent to investment” or “would not invest” received with regard 88 Saskatchewan Oil Report 2013

Table 1 Survey Results for Selected Canadian Jurisdictions Index Values and Canadian Rankings (of 7)

Manitoba Saskatchewan Alberta Nova Scotia British Columbia Newfoundland & Labrador Northwest Territories

2012 11.1 (1) 14.6 (2) 21.1 (3) 26.2 (4) 27.7 (5) 33.8 (6) 39.6 (7)

2011 17.5 (2) 17.5 (1) 32.7 (5) 26.6 (3) 41.4 (6) 32.3 (4) 64.8 (7)

2010 12.5 (1) 17.6 (2) 37.7 (6) 33.3 (5) 33.2 (4) 32.4 (3) 44.1 (7)

2009 20.1 (1) 25.1 (2) 47.5 (6) 30.4 (3) 37.7 (4) 40.1 (5) 62.8 (7)

The 2012 Fraser Institute Survey rankings reflect the responses received from 623 petroleum industry officers, managers and advisors. to each of the various factors, jurisdictions with lower scores are regarding as the more attractive.

Table 1 shows that the four western provinces ranked within the top five of Canada’s seven significant oil- and gasproducing jurisdictions in 2012 – the best overall performance of any of the past four years. The fact that each of the four western provinces achieved significantly lower (and therefore better) scores on the survey in 2012 than previously is an indication that barriers to investment have been toppling to some extent, especially in Alberta and British Columbia, where they’ve been of most concern in recent years.

Saskatchewan outperformed Manitoba with regard to a number of the important investment drivers addressed in the 2012 survey including fiscal terms (essentially, production taxes and land lease and permit costs), difficulties and costs imposed

by existing labour regulations and agreements, and the availability and quality of geological data. However, Manitoba achieved improved scores compared with the year-earlier results and also performed somewhat better than Saskatchewan in 2012 on the survey questions pertaining to taxation in general, the cost of regulatory compliance, uncertainty over environmental regulation, and infrastructure quality.

Alberta moved up to third spot in Canada from fifth. That province’s improved performance is attributable to modest improvement with regard to a number of factors which shape the commercial environment such as fiscal terms but, more importantly, to an improved regulatory climate. In particular, respondents expressed less concern than a year earlier regarding uncertainty pertaining to regulatory administration and enforcement (including

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How the Western Provinces Ranked Worldwide

Manitoba Saskatchewan Alberta British Columbia

2012 2011 2010 2009 (of 147) (of 135) (of 133) (of 140) 5 12 8 21 13 11 17 38 21 51 60 92 39 69 52 71

Data was gathered to rate 147 countries, states, provinces, territories and offshore regions around the world. environmental regulation), the cost of regulatory compliance and regulatory duplication and inconsistency.

British Columbia also achieved a muchimproved score this year compared with 2011, and moved up to fifth place in Canada from sixth place as a result. B.C.’s improved assessment is due in part to stronger performance on the taxation in general parameter question. (The reason for this is unclear but it could reflect the provincial government’s decision to abandon harmonization of the provincial sales tax with the federal GST.) In addition, British Columbia achieved improved scores on a number of issues including fiscal terms, regulatory uncertainty, the cost of regulatory compliance, labour availability, and disputed land claims.

As Table 2 illustrates, the improved scores allowed each of the western provinces except Saskatchewan to move up in the global rankings – indicating improvements in their relative attractiveness for investment in oil and gas exploration and development compared with other jurisdictions around the world. Furthermore, Manitoba, Alberta and British Columbia each attained higher global rankings than at any point during the 2009-2012 period.

However, Saskatchewan continues to rank very high on the global scale and, like Manitoba, achieved an enviable first quintile (0 to 19.9) index value for the third successive year. Because not many jurisdictions have index values in that category, this means that survey participants viewed only a relatively small number of locations to be more attractive for up-

stream petroleum investment than those two provinces.

Among the western provinces, the improvements indicated by the 2012 survey results were most remarkable in the case of Alberta and British Columbia, each of which climbed a full 30 positions to reach rankings of 21st and 39th (of 147) respectively. Alberta, with an index value of 21.1, was very close to being among the prestigious group of first quintile performers while, as indicated, British Columbia also made significant gains.

As a group, Canada’s westernmost provinces are clearly preferred locations for investment in petroleum exploration and development. While some challenges remain, as with the cost of regulatory compliance and land claims disputes, especially in British Columbia, considerable improvement is indicted by the results of the 2012 survey.

Globally, Saskatchewan stands out as the 13th most attractive of 147 states, provinces, offshore regions and countries for petroleum investment on the basis of survey participants’ scoring of the factors impacting investment decisions. This compares with the province’s 11th-place ranking (of 135 jurisdictions worldwide) in 2011, and 17th-place performance (of 133) in 2010.

Saskatchewan’s strong global ranking is due to several factors. The province ranked fifth (of 147) with regard to fiscal terms in 2012. It also scored particularly well on the surveys questions pertaining to socio-economic agreements, trade barriers, and the quality of both the available infrastructure and geological data. As

in most Canadian and U.S. jurisdictions, both political stability and security of personnel and equipment are virtually non issues in Saskatchewan.

Land-claim disputes and regulatory duplication and inconsistencies are the most significant obstacles to petroleum exploration and development in Saskatchewan, followed by uncertainty regarding protected areas and the cost of regulatory compliance. However, these issues do not pose as much of a problem for investors as in a number of other Canadian jurisdictions. Land-claim disputes, for example, pose a greater barrier to investment in Nova Scotia, New Brunswick, Quebec, British Columbia, the NWT and the Yukon.

(In fact, that issue was of greatest concern in the NWT, the Yukon and Bolivia than in any of the other 144 jurisdictions that were ranked.) Similarly, regulatory duplication and inconsistency appears to be more of an issue than in Saskatchewan in all of the other Canadian jurisdictions that were ranked except Manitoba, Nova Scotia and Alberta.

Looking ahead, Saskatchewan will be challenged to maintain its position as one of the most attractive jurisdictions for upstream petroleum investment in Canada and worldwide. In particular, the province will need to monitor how its fiscal regime and taxation levels compare with the other western provinces, U.S. states and other jurisdictions with which it must compete for investment and make adjustments as necessary. Saskatchewan must also ensure that the cost of regulatory compliance and other factors affecting its regulatory climate remain competitive and strive to reduce the barriers to investment posed by land-claim disputes and regulatory duplication.

The Fraser Institute is a non-profit research and education organization. The results of the 2013 Survey (currently in progress) are expected to be available in August or September. v

The full 2012 Global Petroleum Survey report may be downloaded free-of-charge at: http://www.fraserinstitute.org/uploadedFiles/fraser-ca/Content/research-news/research/publications/global-petroleum-survey-2012.pdf

90 Saskatchewan Oil Report 2013

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Clarifying dataroom confusion

By J. Douglas Uffen P. Geoph (APEGA), P. Geo (APEGBC), President and Managing Partner, Geo-Reservoir Solutions Ltd. Geophysical datarooms are an important element of business in the resource industry. They are staged for many reasons such as: when a company undertakes a sale process of assets or properties, during a show and tell presentation, or a farm-in process to attract new investors. Confidentiality agreements (CAs) are often put in place to protect the data and competitive information of the disclosing party. The geophysical dataroom is often appended to the primary business activity at hand. As such, it may often be handled separately in another meeting, is implemented with a variety of non-standard procedures across industry, and may involve a broad mix of entities.

Those involved in the dataroom can vary from internal land departments, internal exploration/development business groups, third-party property divestiture houses, third-party consulting houses, financial institutions, and investment houses. Over the years, an informed geophysical person has not always been involved in the process, leaving the opportunity for inadvertent poor practices to evolve and become entrenched in industry.

In May 2010, the Association of Professional Engineers and Geoscientists of Alberta (APEGA) published a guideline entitled, “The Ethical Use of Geophysical Data” in an effort to assist professional members in dealing with the use of licensed geophysical data within the oil and gas industry (APEGA, 2010). The document was general in nature, but it did provide a few scenarios as examples in an effort to give context regarding what constituted ethical behaviour. However, of particular interest to APEGA members are what activities can or cannot be done in a dataroom. In turn, how does one go about setting up a dataroom in compliance with the APEGA guideline? The purpose of this article is to focus on the specific subject of datarooms.

92 Saskatchewan Oil Report 2013

Background on Data Ownership, Competition, and Applicable Law The original stakeholders who acquire the geophysical data are said to possess the “trading rights” to the data, much akin to an author holding the copyright or ownership to a book. Multiple parties could be involved in the original field operation, often tied together only with an AFE (Authority For Expenditure) document. This document may become the sole record denoting who the original participants in the geophysical data acquisition were. Hence, adequate management of data records is vital to prevent the potential loss of this historical record and to identify what datasets possess which ownership classification.

Data of varying data ownership classes possess different privileges. The greatest freedoms are associated with 100 per cent ownership of proprietary data because it involves only one entity. In this scenario, any harm created by offering the geophysical data to another third party is solely related to the entity making the decision. With partnered data, there is another entity to consider. Licensed data, speculative survey data and participation survey data all have licence agreements, subject to varying terms, obligations and conditions. Keeping track of data ownership classes and the ensuing agreements that govern them, such as Joint Venture (JV) agreements, and AMI (Area of Mutual Interest) agreements, is a vital precursor to identifying what geophysical data could be used to stage a dataroom.

Within industry, seismic data is an asset that can be bought and sold. The data can be sold by one of two methods.

Most commonly, a licence to the data can be granted by the original acquirers of the data by means of a licence agreement. The licence may disclose terms or

conditions with respect to the ongoing protection of the confidential nature of the data and its use by the licensee.

Hence, once again, suitable records management practices are required to keep track of this important documentation.

It is industry standard practice for any geophysical data to be released for potential sale that unanimous stakeholder approval be granted. Any one party possessing the trading rights, regardless of their working interest, can prevent the data from being released for sale. This is related to the fact that geophysical data is often thought to be confidential information that offers a competitive advantage regarding the potential acreage involved to the party that possesses the data.

When dealing with seismic data one needs to understand the common law (including how it applies to contracts), applicable legislated law such as copyright law, and the laws governing confidential information (Hunt et al, 2012).

These aspects of law are in place to protect the competitive interests of all parties involved, including the data owners.

Some third-party seismic data licensing agreements can be quite liberal regarding the use of the data by the licensee while other agreements can be quite restrictive. These differences in licences, and the uses they allow, often become relevant when dealing with a geophysical dataroom scenario. Knowing what privileges a licence permits is essential for setting up a dataroom as licence agreements are not standardized across industry between vendors, and have often changed over the years by the same vendor.

The second method to convey ownership of the data is to sell the trading rights possessed by the original acquirer(s) of the data. Working interest entitlements

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cannot be subdivided in order to accomplish this. For instance, if two parties owned a dataset equally with a fifty (50 per cent) working interest, one party could not “cut-in” an additional third party by reducing their interest to 25 per cent and granting 25 per cent ownership to the third party without the consent of the other 50 per cent partial owner because this creates a third entity who would then be entitled to the data.

Due to the confidential nature of geophysical data, the first partner possesses the right and ability to have a say in the creation of a third licence. Within industry, trading rights can be sold without the consent by a partner in the dataset, but this can only be accomplished by “stripping” the previous partnered owner of all instances of the data so as to ensure that a new licence is not created. “Stripping” an entity of all instances of the data does not stop at just simply removing it from a storage house, but also removing it from the interpretive workstations, map racks and all other instances of occurrence. For datasets that have permeated an organization for years, this becomes an almost impossible task; hence these deals occur much less frequently due to the nature of this obligation. They are often restricted to 100 per cent proprietary data transactions only.

Setting-up a Dataroom One of the first aspects to consider is to determine what classes of data would be involved in a dataroom. If 100

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per cent proprietary data is involved, the host company may choose to permit a review of the data along with their accompanying interpretation or they may wish to permit the act of interpretation. Interpretation is the “process of deriving a geological model or concept from geophysical data”.

It includes the creation of derived products by measurements made on processed data and the maps and other displays made from the data. It also includes conclusions or inferences made by the interpreter, such as geologic edges or fluid contacts (APEGA, 2010). A review of an existing interpretation is a general assessment of the information as presented, without active manipulation of geophysical data.

If third-party licensed data is placed in a dataroom, the act most likely to be permitted is that of a review rather than an interpretation. This is also true for partnered data, but sometimes the partner will permit the act of interpretation if so asked. Regardless of whether the act of interpretation or a review is permitted, maintaining direct control of a dataroom environment is paramount. “Direct control” is the ability to prevent copying or other unauthorized use of a licensor’s data (APEGA, 2010). Direct control can be exercised in numerous ways, sometimes employing multiple methods simultaneously. Read-only workstation access can be granted that restricts the visiting party from conducting an interpretation, even if they tried. The USB ports can be disconnected, thereby preventing any copying or loss of the data and the ensuing interpretation. A “babysitter” who monitors the visiting party’s activities or who actively drives the workstation for the attendee is another way to maintain direct control. It is the obligation of the hosting party of a dataroom to make sure that third-party licensors or partners are not harmed in any way. This obligation does not extend just to the professionals licensed by APEGA, but also to the companies that possess a permit to practice from APEGA. When acting on behalf of a company disclosing geophysical data, a professional member is obligated to advise any visitors about their requirement to comply with applicable licences.

Based upon ownership classifications and any licence agreements, one of the first decisions to make is whether the dataroom will have an interpretive approach or a reviewonly approach. Licence agreements need to be checked to make sure that the data being placed in the dataroom environment is permitted to be there. One should also check to see if there are any Area of Mutual Interest (AMI) documents, Joint Venture (JV) documents or other partner agreements that prevent the data from being viewed by other third-parties. Many properties being sold in a divestiture process have not been worked on for years. It is prudent to access the most recent workstation project(s) and clean up the interpretations to tell a uniform story. Nothing is more frustrating for the dataroom attendee than to try to sift through years of history on a project to discern what horizons have been uniformly interpreted over the project area.

An interpretive “clean-up” is often a good investment of time and money. After all, don’t you wash and wax your car before you try to sell it? Companies with limited resources may find this an onerous task. Options exist for companies experienced in dataroom set-up, to “clean-up” existing interpretations prior to staging a dataroom.

Attending a Dataroom Visitors to a dataroom are obligated to inquire about the ownership status of the data in order to guide their own conduct. “When geophysical data, information and knowledge derived from the data is being disclosed, all professional members must be aware of their professional responsibilities.

Professionals must be aware of and honour any restrictions associated with the disclosure of the data” (APEGA, 2010).

Before knowingly interpreting any third-party trade data, the visitor must have the data owner’s consent or have acted with diligence in determining that such activity is specifically provided for in the licence agreement.

What Is Appropriate Conduct In a dataroom environment, none of the data may be removed or copied. Sketches, notes and diagrams may be made but nothing can constitute a tracing of an image on the screen. The hand-drawn diagrams cannot make reference to any measurable numbers derived from the data itself. The taking of a camera image via a cell phone camera or any recording device is strictly forbidden. Some datarooms may even request that cell phones or any electronic device that contains a camera be surrendered in advance of entering a dataroom. If the dataroom is set up as a review only option, the attending party and professional are obligated to conduct themselves accordingly.

Summary Companies are allowed to make use of their geophysical data to facilitate their business. They are not allowed to harm a third party in the process. The creation of a geophysical dataroom can be a worthwhile exercise to showcase the upside potential of the assets being sold or divested. Care must be taken that the dataroom be set up in compliance to the APEGA guidelines and any third-party licence agreements of partner agreements. The type or style of dataroom must be considered along with what action (interpretation or a review) will be allowed in a dataroom setting. Taking a bit of time and effort to clean-up the project can add considerable value to the sale or divestiture process.

Acknowledgements I wish to recognize and thank Doug Pruden P. Geoph. (APEGA) and Lee Hunt P. Geoph. (APEGA) for their contributions associated with editing this article.

About the Author Doug Uffen, P.Geoph (APEGA), P. Geo (APEGBC) is the president and managing partner of a consultancy called Geo-Reservoir Solutions Ltd. He is a seismic interpreter with over 30 years of experience. Doug has extensive experience and knowledge with respect to seismic licensing issues and dataroom conduct. Doug teaches a course to industry which focuses upon the rules associated with various classifications of seismic data ownership in different business situations. He was also a member of the APEGA committee that created the guideline document regarding the ethical use of geophysical data. He is a past president of the Canadian Society of Exploration Geophysicists (CSEG) and is a member of APEGGA, APEGBC, CSEG, SEG, EAGE and the Calgary Petroleum Club.

References Guideline for Ethical Use of Geophysical Data, V1.0, May 2010, APEGGA. http://www.apegga.org/pdf/Guidelines/ EthicalUseOfGeophysicalData.pdf Hunt, L., B. Palmiere, H. den Boer, J. Boyd, M. Sykes, D. Uffen, C. Welsh, 2012, A Practical perspective on APEGGA’s Guideline for Ethical Use of Geophysical Data: CSEG Convention Abstracts, 1-4. v

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Kilo Technologies Ltd.: finding a better way As drilling activity in the Williston Basin continues to increase, the associated need to have accurate and efficient oilwell production data correspondingly increases. The prolific Bakken play occupies two Canadian provinces and two U.S. states. Regulatory requirements for production reporting, alone, can become both cumbersome and expensive depending upon the state or province and the number of mineral-right holders. At the same time that energy companies are trying to streamline their operations and reduce their surface footprints, antiquated measurement technologies and methodologies are stymieing their efforts.

In many cases a mixture of produced oil, gas, and water passes through many hands before it is ready to be sold as a barrel of crude oil. Well output is pumped into a storage tank near the wellhead or piped to an off-site tank.

These storage tanks can be owned by the well owner, a co-op of producers, or a third party. Trucking companies get involved in transporting production from the well to larger storage tanks or batteries. The battery separates the mixture and processes oil to a set standard for delivery to a terminal or refinery. Everyone along this supply chain is either paid or charged based on how much oil or water is contained in the well’s production fluid. Unfortunately, many oil producers are forced to estimate the composition of their individual well output based on limited information or even guesswork.

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measurement issues while working in oilfields in Western Canada. This familiarity led to the development of the Well Production Monitor (WPM) monitoring skid. This patent-pending technology measures the specific gravity of flowing fluids to within 0.0007 of a static measurement using differential pressure (static head). Kilo has now incorporated this technology into three completely engineered measurement skids: the Well Production Monitor (WPM), the Well Testing System (WTS) and the OffLoad Monitor, (OLM).

Utilizing Allen Bradley PLC and touchscreen technology, the WPM provides real-time, on-going measurement and recording of oil, water, and gas volumes.

One hundred per cent of the mixture pumped from a well passes through the monitoring skid on its way from the well to an oil battery or remote storage tank.

The WPM-MKII separates the gas from the water and oil, measures the amount of water versus oil, re-combines the gas, and allows the mixture to continue on its way. With a minimal pressure drop and continuous flow, the production

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composition details are recorded by the WMP at better than +/- 0.1 per cent accuracy. The instantaneous data can be viewed for immediate insight into well performance and is stored in the system for collection-reporting purposes.

The Well Test System (WTS) was created to test high-water-cut oil wells by combining Kilo’s patent-pending technology with a slanted weir constrained vessel. To increase the return on investment for what may appear to be marginal wells, the entire system can be housed in a robust, enclosed trailer unit.

The trailer mounted system can be easily drained, disconnected, transported and re-connected to another oil well for the next round of continuous fluid measurements. For facilities with test headers, the WTS can be installed in place of a test separator; changing from well to well then only requires the opening and closing of valves.

Kilo Technologies Ltd. is a company that oil and gas producers can rely on to come up with “a better way.”

The Kilo Off-Load Monitor (OLM) performs the same highly accurate measurements as the WPM in situations where gas removal is not required. This makes it ideally suited to measure truckloads of water, emulsion, and oil being removed from a remote well site, or fluids delivered to a processing facility.

Incorporated into a facility operation, the OLM can assist in directing gravityseparated oil directly into a treater feedtank rather than mixing it with higher water content emulsions. An OLM used to monitor water disposal can help prevent the accidental introduction of oil into the disposal well – saving the time and money associated with having to bring in a service rig. Anywhere that the accurate measurement of a liquid’s SG

can be useful is an ideal place for Kilo’s OLM. In response to initial customer feedback, Kilo has added an Internet-based database service, where Kilo skids with access to Internet services can automatically download their data. Customers can then use the Internet to review or download their own data from anywhere in the world. This service, Kilo Hub, was introduced by Kilo at the World Petroleum Show – 2012 in Calgary. It has met with praise from both users and competitors for its ease-of-use and pre-loaded reports.

Once again, Kilo is finding a better way.

For more information about Kilo Technologies products, visit www. kilotechonline.com. v Saskatchewan Oil Report 2013 99

PTAC’s role in the sustainable

development of Canada’s world-class hydrocarbon resources

By Soheil Asgarpour, PhD., P.Eng.

The Petroleum Technology Alliance Canada (PTAC) is a not-for-profit organization that was created to promote collaborative research and technology development for the Canadian hydrocarbon energy industry. In 1996, downsizing and tight budgets resulted in a dramatic decrease in research and development spending for the oil and gas industry. The Vice-president’s Breakfast Club, an informal organization comprised of executives from 25 Canadian oil companies, soon recognized that a new model for developing technology was required.

The PTAC was created at that time to be a neutral organization with the goal of increasing R&D capacity through increased collaboration among all industry stakeholders. Through this model, issues from multiple stakeholders have been identified and many consortia have been launched, achieving significant financial leveraging, reducing duplication of effort, and pooling resources on non-competitive issues.

The PTAC has been founded on the belief that the application of new and better technologies will improve oil and gas re-

covery, lower costs, make operations safer, and reduce the impact on the environment.

The PTAC believes that these goals are best achieved when all industry stakeholder groups work together in a structured way to identify industry problems and define research projects and technological solutions to address them.

With 17 years’ experience in collaborative research and development, including the recent emphasis on field projects and technology deployment, the PTAC stands as a model for transforming challenges into opportunities within Canada’s hydrocarbon industry.

PTAC’s network is comprised of approximately 200 member organizations representing a broad spectrum of stakeholders: oil and gas producers, transporters, government bodies, research providers, venture capital firms, academic institutions, individuals, as well as service and supply companies. PTAC producer members produce approximately 80 per cent of Canadian conventional oil and gas. On the other end of the spectrum, over 150 mem-

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100 Saskatchewan Oil Report 2013

ber companies are small- and medium-size enterprises (SMEs), companies that are the engine behind innovation and the development of technologies. PTAC’s intention is to be a bridge between SMEs and producer members to ensure they stay abreast of one another’s innovations and foster collaboration among all stakeholders. The PTAC also has over 340 volunteer technical experts serving 71 industry-led consortia and projects. PTAC has successfully completed over 370 industry-led projects that helped develop technology, policy, and best practices, while the execution of over 450 PTAC events has helped identify challenges, investigate technology solutions, and disseminate research and technology results.

The PTAC is well-positioned to provide a mechanism for collaboration on long-term solutions, as it possesses a proven record of understanding the technology needs of the hydrocarbon energy industry, effective facilitation of joint industry projects, and an extensive partnership network. The PTAC is well recognized as the facilitator of choice for innovation, applied research, technology development, demonstration, and deployment.

Recently, the PTAC has formed four networks: the Clean Bitumen Technology Action Plan (CBTAP), the Resource Emissions Technology Action Plan (REMTAP), the Tight Oil and Gas Technology Action Plan (TOGTAP), and the Remote Sensing Technology Action Plan (RSTAP). The purpose of these networks is to bring together experienced individuals and creative ideas, in order to develop projects that address specific issues. These networks utilize a

systematic approach in developing breakthrough technologies that will materially improve industry performance in the areas of reducing costs, reducing environmental impacts, and increasing recovery. These action plans start with the identification of challenges, which leads to internal and external search to identify technology solutions. This, in turn, results in the formation of multi-stakeholder consortia in the areas of applied research, engineering studies, field pilot projects, and the commercialization of technologies. The networks serve as a place to share the inventory of technologies, prioritize technology projects, and launch consortia for further work.

From the very beginning, the PTAC has stood by its mission to facilitate innovation, collaborative research and technology development, demonstration, and deployment for a responsible Canadian hydrocarbon energy industry. The PTAC continues to further this mission today, envisioning a future in which Canada is a global leader in hydrocarbon energy technology. The creation of a Virtual Centre for Commercialization at PTAC in January 2013 is a step toward meeting this vision. v

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Logan Completion Systems advances multistage fracturing technology Reduce overall well costs, improve production, and maximize profits with Logan Completion Systems’ MultiStim Fracture Isolation Systems Logan Completion Systems, Inc., an innovative oil and gas service company active in Canada, the United States, and the international market, provides high-quality equipment and remedial and stimulation services to the unconventional oil and gas fracturing markets, along with a comprehensive line of completion products, including conventional completion, thermal, well construction, and other multi-zone products. What sets Logan apart, in addition to its superior equipment, is its focus on ensuring 100 per cent customer satisfaction through the integrity and reliability of its people.

Headquartered in Calgary, Logan Completion Systems complements the other companies – Logan Oil Tools, Dennis Tool Company, Kline Tools, Logan Scope, and Logan Xtend – in Logan International’s downhole tool segment, and enhances offerings to Logan International customers by combining its products and services to the Canadian market.

MultiStim Fracture Isolation System According to Logan Completion Systems’ general manager Steve Kilshaw, the MultiStim Fracture Isolation System – Logan Completion Systems’ proprietary multistage fracturing technology used in horizontal wells in oil and gas plays – is unique in the marketplace.

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102 Saskatchewan Oil Report 2013

Logan’s fracture isolation technology facilitates the removal of the balls and seats post-fracturing, and leaves an open wellbore that increases production flow capacity and allows easier downhole intervention without the need for costly and debris-creating milling or drilling of seats.

Most of Logan’s competitors leave the seats in the well and produce the well with these restrictions remaining in place. “The problem is that these ball seats limit the full production potential of the reservoir,” Kilshaw notes. “Our competitors recommend to their clients that they remove the ball seats by drilling them up, or alternatively, to simply leave them in place. But the problem with the drilling process is that all of those ball seats are converted into debris that contaminates the wellbore and, in some cases, reduces production rates achieved from the well.”

Logan’s Fracture Isolation Systems have been particularly designed for multistage fracs. They feature valves with fully removable seats post-fracturing via threaded tubing, without milling or drilling. Rather than milling the balls and ball seats, MultiStim removes the ball seats from the sleeve, and can either bring them back to the surface or leave them at the bottom of the wellbore.

The advantages, Kilshaw says, are time savings and the reduction

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of debris created from the drilling process. “With our system, a client has the option of removing the seats with fewer problems and quite a bit less debris. It gives our customers more options in how they want to produce their well.”

The technology, which has been used throughout Western Canada, has been well-received since it was introduced to the market two-and-a-half years ago.

Growth in Saskatchewan Logan has been heavily involved in Western Canada for years and operates eight service locations in high-growth oil and gas resource play areas throughout Western Canada, including Estevan, Kindersley, Lloydminster, Grande Prairie, Edmonton, Brooks, Red Deer, and Bonnyville. Logan continues to grow and develop these stations in order to find new applications and markets for its products in these locations.

While the majority of Logan Completion Systems’ downhole completion tool product line has been utilized in key unconventional oil and natural gas resource plays (target markets that include the Williston Basin, the Bakken, Kindersley, Lloydminster, and others) in the Western Canada Sedimentary Basin (WCSB), “Saskatchewan is a key part of our growth strategy,” Kilshaw says. “Our product development group in the U.S. and our engineering group in Canada continue to develop new products for these reservoirs.”

Logan introduced its proprietary MultiStim technology and other multi-zone completion products and services into the U.S. market last year. “We have a very aggressive growth strategy for the company for the next two years and Saskatchewan will play a key role in that,” Kilshaw says.

Part of Logan’s growth strategy also involves attracting and retaining new talent. “We’re getting more involved with the communities where we have a presence, so people understand that we are here to stay,” Kilshaw notes. “We’re also working very closely with educational institutions to develop career models for students and industry professionals so they know we’re not just one stop along their career path, but that they can come here and make it their home.” Logan looks for good people of all skillsets. The biggest challenge, according to Kilshaw, is finding field staff with experience with subsurface equipment and downhole tools.

Logan focuses on being an innovative organization, not only in its equipment design, but also in how it does business. The company focuses on its core values – safety, quality, innovation, integrity, and reliability – to drive its growth strategy. By following its core values and focusing on 100 per cent customer satisfaction, Logan believes it will achieve profitable growth well into the future.

For more information Logan Completion Systems Inc. Steve Kilshaw, General Manager Direct: 403-930-6810 Email: skilshaw@logancompletionsystems.com v Saskatchewan Oil Report 2013 103

Construction in expansive soils Geotechnical research at the University of Regina

Dr. Shahid Azam conducts a laboratory test.

The expansive Regina clay is a blessing for the farmers as it can offset the influence of the semi-arid climate prevalent in southern Saskatchewan. This type of soil can store a large amount of water within its pores for a long time, thereby ensuring a healthy crop.

However, this same soil is an engineer’s nightmare because it swells and shrinks due to seasonal changes in meteorological conditions. The cyclic movement generates stresses, severely affecting civil infrastructure constructed in and on this soil. Wavy roads, cracked basements, and ruptured pipes are part of the daily lives of Reginians and entail high maintenance costs. The situation is continuously deteriorating because of infrastructure aging and increasing number of extreme weather events. For example, the bursting frequency in the 850-kilometre-long water distribution system has doubled over the last two decades, to 160 breaks per year; the associated annual repair cost is estimated to be $2 million.

The University of Regina Geotechnical Research Team, led by Dr. Shahid Azam, an associate professor at the University of Regina, is developing innovative meth104 Saskatchewan Oil Report 2013

Ruptured pipes in Regina, caused by expansive clay that swells and shrinks due to seasonal changes in meteorological conditions.

ods to improve the design of new and existing facilities. With twenty years of experience in expansive soils from different parts of the globe, Azam recently completed a three-year monitoring study on underground water mains in the city.

This investigation focused on understanding complex pipe-soil-atmosphere interactions. Thorough instrumentation and extensive data interpretation revealed that the top three-metre layer of soil that houses the buried facilities is the most affected by climatic parameters, and that this layer can heave up to 30 per cent of its original volume. The team is extending this understanding by including the effect of vegetation, deicing salt, and road cover on periodic soil volume changes.

“Our work provides a framework for rehabilitating buried pipeline networks in Western Canada, particularly in cities founded on similar soils such as Regina, Winnipeg, and Edmonton,” states Azam.

His group is currently developing green technologies by re-using different types of municipal wastes (such as broken glass and tire chips) to reduce the al-

ternate shifting of the local soil. For this purpose, Azam and his team have established the Saskatchewan Advanced Geotechnical Engineering (SAGE) Laboratory.

This state-of-the-art facility is sponsored by provincial and federal funds, including those from the Canada Foundation for Innovation, and the University of Regina. Azam mentions that his laboratory is equipped with apparatus that is uniquely suited to undertake the green initiative. Some of these apparatuses include the Large-scale Odometer Test System (LOTS), the centrifuge system, and the physicochemical testing facilities.

“Our laboratory testing and fieldmonitoring facilities and methodologies are always designed, fabricated, and calibrated in-house,” Azam says.

The next-generation green technologies will be applicable to lightly loaded structures such as pavements, houses, and pipelines. These Regina-based construction methods developed for expansive clays will be useful for most unsaturated soils occurring in arid to semi-arid regions of the globe.

For more information, visit uregina.ca. v

Realize. Research for sustainable mining.

Economic prosperity depends on exploring new sources of energy and materials along with the development of existing reserves. Sustainable development in the mining industry is key to meeting the growing demand for metals, minerals and energy resources worldwide.

Front Centre: Dr. Shahid Azam; L to R:Maki Ito (PhD Student), Ryan Clark (B.Sc. Student), Dr. Mavinakere Raghunandan (Post Doctoral Fellow), Umme Salma Rima (M.A.Sc. Student)

Dr. Shahid Azam in the Faculty of Engineering and Applied Science and his research team are devising innovative waste management methods to reduce the environmental footprint of surface mining in the uranium and oil sands industries. His research focuses on the design of next-generation tailings streams to ensure physical and environmental stability of the deposited materials in the containment facilities at a lower cost.

Azam is developing industry specific methods to improve the removal of water from mine tailings at various stages in the ore beneficiation process.

Enhancing water recovery helps reduce the tailings volume and encourages waste water reuse.

www.uregina.ca

MRC Canada:

serving with excellence On October 5th, 2012 MRC celebrated its 25th anniversary in Canada. While the company’s name changed from MRC Midfield to MRC Canada this year, the company has a longstanding legacy of taking great pride in having the best people who are passionate about providing exceptional customer service. Some things never change.

Today, more than 680 employees serve customers from more than 50 servicing locations, which stock upwards of $130 million in PVF inventory. What began as a small, upstart service company is now a leading PVF distributor to the energy industry in Canada.

“We have evolved into part of a global company that has the resources to provide the best products when and where our customers need them,” Paul Peters, MRC vice-president, says. “Our customers look at us and know that we have the strength to support their operations on any scale.”

Looking forward, MRC believes that the future is bright for their industry in Canada. Drilling activity in the Canadian oil-

sands, increased activity in the North American shale plays and a rebounding global economy all point toward a promising future in the region.

To further support the robust capital projects and oilsands activity, MRC will be expanding its Edmonton, Alberta operations to include an additional 5,575 square metres of warehouse space. This expansion is in addition to a dedicated team of project specialists also based in Edmonton, Alta. This experienced team works with end-users throughout Canada to create solutions for strategic sourcing, material management and document management for major capital projects.

“Our projects team creates real value for our customers by putting their years of experience sourcing and coordinating the

An MRC employee fills an order at the company’s Edmonton, Alta. service location.

MRC’s Edmonton, Alta. location will be expanded in 2013 to better serve the active oil and gas regions in Canada.

106 Saskatchewan Oil Report 2013

distribution of materials for capital projects to work for our customers,” says Peters. “We simplify our customer’s supply chain so they can focus on their business operations, while we take care of the details.”

The PVF distribution industry has seen growth in all of Western Canada, especially in Saskatchewan. Currently, MRC has nine locations throughout Saskatchewan, including their newest branch in Estevan.

“Estevan was opened about a year ago to better service our clients in the Bakken alongside our Weyburn and Carlyle locations,” Peters says. “We are committed to supporting the major North American shale regions in Canada, including the Montney, Duvernay, Horn River and the thriving Bakken shale play.

MRC sees large growth potential in Saskatchewan and we are excited to continue serving our customers in this region and the remainder of Western Canada.”

Today, MRC maintains broad contracts with end-users, manages complex projects and stocks one of the largest and most complete PVF product inventories in the world – while maintaining their local touch.

“Our employees have always been dedicated to the success of MRC and this has been proven by our high standards in both product quality and customer service,” explains Peters. “MRC employees will go above and beyond to get the customer the product when and where it is needed.”

After more than 25 years serving Western Canada, it is clear that MRC has become a leader in PVF distribution to the energy industry by staying true to the values they were founded upon – high-quality employees serving customers with excellence every day.

To find out more about MRC, visit www.mrcglobal.com. v

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2/19/2013 11:29:09 AM Saskatchewan Oil Report 2013 107

Pilot oil upgrader

could lead to bigger things in the Battlefords

Turning heavy oil into diesel could eventually have a heavy impact on the Battlefords and area economy.

In February, Calgary-based Bayshore Petroleum Corp. announced it had entered into a 30-year agreement in Beijing with China Foreign Economic Cooperation Centre to license the catalytic upgrading technology to convert heavy oil into light oil in Canada. Bayshore is committing to using the technology to construct a small-scale 350-barrel heavy-oil facility in the Meota area – about 35 kilometres north of North Battleford.

If the small pilot upgrader works, Bayshore Petroleum Corp. would consider expansion, spurring a lot of activity in the Battlefords area.

“The increase of oil and gas exploration and production near North Battleford is advancing this emerging sector here,” says Denis Lavertu, City of North Battleford director of business de-

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velopment. “We anticipate seeing more energy-sector activity and services that will complement our diverse growth over the next few years.”

Heavy oil produced in the Meota area will be processed directly into diesel-quality light oil as fuel products or as diluents. Both commodities are in high demand in northwest Saskatchewan.

“We’re turning some raw products directly into a product,” states Peter Ho, president and CEO of Bayshore Petroleum Corp.

“We think there is definitely a market for it.”

The pilot upgrader is expected to be in operation by late summer or early autumn due to its simple design.

Under a Letter of Intention (LOI) with an unnamed oil and gas firm to extract from the Meota area, Bayshore can earn up to a 50 per cent working interest in 1.5 sections (960 acres) of oil and gas lease acreage. Under the LOI, Bayshore will earn that working interest by drilling up to two horizontal wells and developing the property. Ho says his company will be the operator and he will hire contractors to do the horizontal drilling.

Ho’s goal is to have the pilot upgrader built by June or July. He predicts only five to 10 jobs will be created with the construction of the small upgrader – mostly welding.

Bayshore is a Calgary, Alberta-based corporation engaged in the exploration, development and production of petroleum and natural gas. The Common Shares are listed on the TSX Venture Exchange under the trading symbol “BSH”. *By Mike Halstead, with information from Marketwire and Battlefords Daily News. v

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Growing green Another year at Kenilworth Combustion has come and Figure 1: MODEL #U1 2011 HP SLS gone, with it there have been some tremendous changes for the Alberta-based producer of Natural Draft Burner systems. In September 2012, Kenilworth Combustion moved in to their new 15,000-square-foot facility, situated on five acres east of Vermilion, Alberta.

“This move was necessary to increase our production capacity and accommodate the growing staff,” says Heine Westergaard, company president.

Kenilworth Combustion takes a slightly different approach to the design and manufacturing of their Natural Draft Burner systems. Instead of the conventional “built on site” type of system, Kenilworth Combustion has developed a fully pre-assembled, prewired and functiontested system called a Process Heater Module (PHM); these systems range from 35,000 to 20,000,000 BTU/ hour.

“On a conventional 1,000-barrel production tank, the installation time is between three to three-and-a-half hours from when our installation and service guys arrive on-site, having these systems prebuilt and function-tested really helps streamline the installation and SCC/CSA Field Approval process. Each system that we produce is a set standard, so there is a level of consistency with each of the systems we make,” says Westergaard. “After taking a look at the numbers, we realized that our customers Figure 2: MODEL #U1 2011 HP SLS were saving an average of 25 per cent on the total project cost [over a conventional built on site system]”. Another one of the benefits of the Kenilworth combustion PHM is that all of the electrical components and controls are located inside an enclosure (see figures 1 and 2).

In addition to the standard burner system packages that Kenilworth Combustion produces, they have also developed a line of BTEX and VRU Utilization Systems.

“This technology is pretty exciting,” enthuses Westergaard. “We have been building and developing the BTEX and VRU Utilization Systems for the last 15 years. These systems take waste gas that is typically vented – in the case of BTEX gas in Alberta, you are limited to emitting one ton per year. Our BTEX systems can reduce that number by 99.9 per cent, while also reducing the amount of natural gas used in the process. Ninety-nine per cent BTEX emissions seem like a pretty unbelievable claim, so we had a third-party emissions analysis company review an operational system. Their findings proved what we had been telling people for years.”

In addition to the numerous BTEX Utilization projects already in service, Kenilworth has also taken a unique ap110 Saskatchewan Oil Report 2013

In addition to the standard burner system packages that Kenilworth Combustion produces, they have also developed a line of BTEX and VRU Utilization Systems. proach to recapturing fugitive emissions from production Figure 3: MODEL #U1-BTEX 2012 LP PILOT tanks. “The VRU (Vapour Recovery Unit) is something that we first designed about 20 years ago as an R&D project,” says Westergaard. “The idea was to see if there was enough vapour being emitted from a standard production tank to actually meet the heating demand of the tank. We were really excited when we saw that this was actually a possibility. Over the years we have developed the VRU product into a PHM (standard Kenilworth Combustion burner system) that can be integrated into almost any application. Surprisingly, the ROI on these types of projects is under a year.”

In addition to Kenilworth Combustions line of PHMs is another product that they have been manufacturing for the last 25 years: the Kenilworth Combustion Skim System. “This product came to be after looking at the standard Cable and Pulley method of skimming oil off of the tops of sales tanks. We looked at the mess of cables and decided that we could do better.” The result is a system free of pulleys and is fully serviceable without needing access to the tank. The result is a free-floating 316 stainless steel system that only takes the cleanest oil off of the top of the tank (see Figure 5).

So what does 2013-2014 have in store for Kenilworth Combustion? According to Westergaard, “We have a pretty busy schedule for the next couple of quarters. We Figure 4: MODEL #U1-BTEX 2012 LP PILOT will be exhibiting at the ISA Show in Calgary, the Williston Basin Petroleum Conference in Regina, the Peace River Petroleum Show, the Go-Expo in Calgary, and the Bonneville Oil Show. Those are just the shows – when it comes to product, we are seeing a tremendous amount of interest in our PHM product line. The Alberta municipal affairs variance on CSA B149.3 expires on June 1st, 2013 and producers are gearing up to upgrade their burner systems,” he explains.

It is worth mentioning that all of the PHMs that Kenilworth Combustion produces are fully compliant and are guaranteed to pass SCC/CSA field inspection. “There are a lot of falsehoods and rumours floating around in the industry regarding the CSA B149 series of codes. I can tell you this: Kenilworth Combustion has been at the forefront of code compliance since the beginning,” Westergaard affirms. But you might ask, what is really required to comply with CSA B149.3?

“A few years ago, we teamed up with a third-party company that does SCC/CSA inspections. We had them review our whole product line and make suggestions Saskatchewan Oil Report 2013 111

Figure 5: SKIM SYSTEM

on what we could do to make the product more code-compliant.

From that we have built a relationship with the inspection bodies performing the required SCC/CSA field approvals, and Kenilworth now offers SCC/CSA Field Approvals as additional option to all of

their systems. The producer may have an internal process that they already follow to get the SCC/CSA field approvals; in that case, we work with them to make sure they receive all of the documentation that they need.” v

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With great production comes

great storage opportunity

Saskatchewan has had an exceptional last few years when it comes to oil production. According to the Ministry of the Economy, Saskatchewan produced 172.9 million barrels of oil in 2012, which is the new record. Some refer to the increased production as the “Bakken Boom.” The name comes from the Bakken formation which consists of parts of Saskatchewan, Manitoba, North Dakota and Montana. The increase in oil production in the Bakken formation started in 2006 and has been considered a “boom” since 2009. This boom isn’t expected to slow down any time soon. With so much oil production comes an overwhelming need for storage. GLM Industries is prepared to meet these needs and provide a product on which you can count.

Saskatchewan remains Canada’s second-largest oil producer, which means there is plenty of oil available; but does not necessarily mean revenue will be high. It is due to the increase of production and decrease in price that makes oil storage appealing. The price of oil was consistently over $100 per barrel until May 4th, 2012 when it dipped to $98.5. After that, there was a continual decrease until it hit a low of $77.69 on June 28th, 2012. Following, oil started to gradually rise again and has remained fairly steady, in the high $80s to low $90s. So in just eight months, the price of oil has dipped drastically and is now making a progressive recovery.

Prices have been on the rise again due to confidence in the market. With the low prices, high production and the expectation of the price of oil to increase,

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114 Saskatchewan Oil Report 2013

storing oil now and selling it for a higher price later has become an attractive solution to build revenue.

GLM is an industry leader in the design, manufacturing and fabrication of atmospheric and pressure storage tanks.

With the increase of production, there has been an expansion of production facilities and an increased need for both production equipment and storage solutions. GLM Industries is proud to be a part of this growth. With our facilities in both Battleford and Nisku, coupled with our professional engineering and drafting teams, GLM is able to accommodate the ever-growing demand for these storage solutions. GLM Industries is always ready to adapt to this changing economy. Whether it is a need for one tank, or an order for hundreds, GLM Industries will apply a combination of experience, good manufacturing practices and industry standards to provide solutions specific to the individual customer financial and technical requirements.

“The ever-increasing level of equipment complexity and client specification means GLM Industries, with its in-house engineering team, is well-positioned to provide clients with storage solutions that are designed and built for their particular applications,” states Craig Bradley, GLM sales manager. v

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Whether in one of our manufacturing facilities or at your field location, G.L.M. will provide top-quality service and a product you can count on.

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Saskatchewan Oil Report 2013 115

Weyburn

A century of opportunity

As the City of Weyburn celebrates its centennial year in 2013, the future looks bright. Looking back over the success of the last 100 years it is evident that, for each resident, the opportunity to build a prosperous future has never been as available as it is today. While offering the business certainty that comes with the boom of industry, Weyburn strongly maintains its reputation of offering its residents an unparalleled quality of life.

Located only one hour from the Capital City, Weyburn is the central community in the southeast region. The city is the chosen location for many professional regional offices and energy-sector headquarters, ensuring an enduring inventory of stable employment opportunities and a robust economic environment for the region.

The youthful corporate culture contributes to the lively professional atmosphere of the city.

As the fastest-growing city in Saskatchewan (population 10,000-plus), people are flocking to Weyburn to capture their opportunity. Community leaders continue to actively address the demand for adequate housing options to meet the needs of new residents and companies.

In 2012, Weyburn saw the development of 212 single and multifamily residential 116 Saskatchewan Oil Report 2013

Weyburn Inland Terminal.

dwellings, and five new major residential subdivisions are currently approved or under development.

The Weyburn Regional District Planning Commission effectively brings the city and the RM of Weyburn together to ensure an open environment for business.

Working collaboratively with stakeholders is the foundation for Weyburn’s commitment to cultivating a sustainable environment for development opportunities and proactively addressing the challenges of rapid expansion and development. The immediate focus of local municipal governments is to undertake activities that

continue to foster economic growth by building on strengths that welcome investors and create a competitive economy.

The City of Weyburn has become a leader in fiscal responsibility. Having the reserves to manage the challenges that many municipalities face with aging infrastructure and the demands of rapid growth puts Weyburn in the unique position to meet those needs and ensure that there be no interruption to the pace of development.

As innovation is the key to sustainability, Weyburn has a strong hold on the future. Weyburn-based companies continue to advance innovation and development

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in industry. Building on the 50 years of influence that oil production and exploration has had on the trajectory of the development of the city, Weyburn-based companies are continually pushing the envelope, guiding the industry into the next era. New development in production technologies and techniques are ever pushing the boundaries of recoverable oil.

Leading research projects are extending the life of oil resource plays in ways never thought possible only a few years ago.

Weyburn remains firmly rooted in its agricultural heritage as the largest inland grain gathering point in North America. With the world looking to it’s farmers to meet an ever increasing need

for food supply Weyburn sits poised to lead the field.

No doubt the healthy resource sector contributes to the phenomenal investment climate that exists in Weyburn.

Construction and expansion of retail outlets, hotels and restaurants is everpresent to meet the needs of the growing population. Manufacturing firms in Weyburn have seen growth rates of up to 400 per cent in recent years. This economic diversification further ensures the continuation of the city’s tremendous growth and prosperous presence.

For 100 years, the spirit of investment in community has lead Weyburn to be the one of the most sought-after lo-

cales in which to live and raise a family.

This community offers the best of both worlds, with easy access to the amenities of a larger centre, and the safe, clean and convenient lifestyle of the smaller rural setting. With significant growth and investment comes the welcomed opportunity to advance the quality of life for residents. With plans for improvement to heath care and educational facilities, development of leisure and recreation services and a broadening range of cultural experiences, Weyburn looks forward to the next 100 years of abundant opportunity. v

Saskatchewan Oil Report 2013 117

Tight and shale oil plays in the WCSB Whenever shale oil is mentioned, most think of the U.S. shale oil plays and their unprecedented production growth in the last five years. Some energy agencies are predicting future U.S. oil supply will outstrip oil production of Saudi Arabia and that the U.S. will become energy-independent.1 When it comes to shale and tight oil formations in the Western Canadian Sedimentary Basin (WCSB), they are spoken about less frequently.

It is no secret that low natural gas prices are driving producers away from pure gas plays in the WCSB towards the more lucrative oil and liquids plays, and more specifically, to tight oil. The National Energy Board (NEB) notes tight oil production in Canada started in the Saskatchewan and Manitoba Bakken play in 2005 but by 2010, Alberta led all provinces because of activity in the formations such as Cardium (see Figure 1). The type of oil drilling in Western Canada has also changed. In 2005, about 28 per cent of oil-directed wells were horizontal. By early 2011, this had increased to close to 80 per cent; over the same time period horizontal rigs targeting tight oil went up from 10 rigs to 140.

The NEB cautions it is still too early to confidently estimate the ultimate impact of exploiting tight and shale oil plays in Western Canada.2 Tight and shale oil have the potential to add significant light crude oil production that had not been anticipated. While this article will cover five key plays where activity is starting to pick up, there is increasing interest in other plays that could emerge as important sources of new exploration and production. The new oil supply from these and other plays will impact transportation requirements to move WCSB oil production to market. The Canadian Energy Research Institute (CERI) will continue to monitor WCSB tight oil developments along with other emerging trends.

The Alberta Bakken When the Bakken is mentioned, most think of southeastern Saskatchewan and North Dakota in the U.S. But straddling the international border in southern Alberta, the Alberta Bakken may be just as big.

Geologically similar to its eastern counterpart, it’s a Devonian shale light oil play that extends from southern Alberta into Montana, measuring over 160 kilometres north to south and around 50 kilometres across.3 While widespread, the Bakken formation is not prospective across the entire formation as reservoir conditions vary widely. Bakken reservoirs in Alberta are generally deep, high118 Saskatchewan Oil Report 2013

Figure 1: Oil Production by Play Source: NEB

Figure 2: Bakken Stratigraphy Source: Saskatchewan Ministry of economy

Figure 3: Bakken, Three Forks, and Torquay Tight Oil Production Source: NEB

Figure 4: Montney Deposits Source: NEB

Figure 5: Montney/Doig Tight Oil Production Source: NEB

Figure 6: Schematic of Viking Formation Stratigraphy Source: NEB

pressure and oil-prolific. Wood Mackenzie, Ltd., an energy consulting firm, estimated the resource potential of the Alberta Bakken at 2.6 billion barrels in late 2011.4 As Figure 3 shows, the production out of Bakken and related units had increased substantially, going up by almost 80 thousand barrels per day (Mbpd) in 2011. Within the Bakken play, the new supply indicates production levels of above 60 Mbpd.

One of the companies currently exploring this play is DeeThree Exploration Ltd. The company started in this play in early 2011 and wasn’t too successful until it moved its search to its eastern block, where a much thicker part of upper Bakken was discovered to be full of oil. In 2011, analysts estimated drilling in the Alberta Bakken would be targeting 35 to 42 degree API oil at depths ranging from 1,500 to 2,400 metres. But DeeThree’s wells have been shallower – at around 1,250 metres – and its discovered oil is closer to 30 degree API, with very low gas-to-oil ratios (GORs).

Montney Oil Montney, too, has been mentioned for the past half-decade or so, especially when it comes to shale gas in British Columbia. But its oil-prone side, primarily in western Alberta, is gaining momentum. The Triassic Montney and Doig Formations were deposited in western Alberta and northeast British Columbia approximately 240 million years ago (see Figure 4).

The Triassic Montney formation consists generally of shallowwater sands in the east and deep-water muds to the west.

They’ve been exploited for decades, but with the introduction of horizontal multistage fracking, the deep-water mudstones became attractive for shale gas. Now, more explorers are moving into the less mature mudstones seeking oil.

The exploration and development for tight oil in the Montney/Doig play had picked up in 2009, when production rose sharply from under one Mbpd in 2009 to six Mbpd in 2011 (see Figure 5).

Some companies got in early. One company, Trilogy Energy Corp., claims they have acquired the best part of the pool.

Trilogy is planning on spending about $125 million in the Montney this year. Reservoir depth is about 1,800 metres and Trilogy’s wells go out about 1,600 metres on the horizontal, with around 22 fracs each.

Open Range Energy Corp., recently acquired by Peyto Exploration & Development Corp., has been getting good rates in the Montney oil play as well. The company has been drilling its wells to around 2,400 metres with horizontal legs up to 1,400 metres, with 17 fracs on its last well.

Alberta Viking The Viking Formation is understood to be a coastal system that was deposited during the Lower Cretaceous (about 100 million years ago) in a similar manner to the Cardium Formation.

The sea level periodically fell and caused deposition of shoreline sands on what was the sea floor, creating what would become conventional sandstone oil reservoirs (Figure 6).

Saskatchewan Oil Report 2013 119

Like the Cardium, muddy sandstones of the sea floor surrounding existing oil pools are new targets. The Viking is shallower in many places, generally less than 800 metres in the Dodsland and Redwater areas, which means drilling costs can be reduced, but can also present challenges to horizontal drilling. So far, companies have reported about 58 million barrels of proved and probable reserves in the Viking.5 In Alberta, the Viking stretches from the Alberta-Saskatchewan border south of Lloydminster, around Provost, roughly northwest to Redwater. From central Alberta, it grows thinFigure 7: Viking Tight Oil Production Source: NEB.

Figure 8: Duvernay Shale Deposits Source: NEB.

ner and more “shale-y”, to almost entirely silty shale around Redwater. Activity is concentrated in three main regions: greater Dodsland in west-central Saskatchewan, and HalkirkProvost and Redwater in Alberta.

According to the NEB, total Viking production rose to 16 Mbpd mid-2011, of which Alberta Viking oil production was just under six Mbpd.

Several companies are exploring this area. In the Halkirk-Provost region, Crescent Point Energy Corp., Charger Energy Corp., Muirfield Resources Ltd., and Equal Energy Ltd. are dominating the scene. The leading producers at Redwater are WestFire Energy Ltd., Baytex Energy Corp., Tamarack Valley Energy Ltd., and Husky Energy Inc. Wells in the play are mostly shallow, averaging between 700 and 900 metres in vertical depth. And horizontal sections are relatively shallow, between 600 and 800 metres long, although there have been a few long laterals reaching 1,200 to 1,400 metres.

Because the Viking is shallow, short horizontals are more common in order to keep costs low. The Halkirk-Provost region sees a mix of both. Initial production rates range from 70 to 100 barrels per day at Redwater, to over 100 to 150 barrels per day on some of the Halkirk-Provost properties.

Another indication of increased activity in the area are the mergers and acquisitions among Viking-focused players, including deals involving Whitecap Resources Inc. and Compass Petroleum Ltd.; Crescent Point Energy Corp. and Cutpick Energy Inc.; and the pending acquisition of WestFire Energy Ltd. by Guide Exploration Ltd. Duvernay Shale Liquids The Duvernay and Muskwa Shales make up the same formation, but are named differently in different areas. The shale is called the Duvernay in central Alberta and called the Muskwa in northwest Alberta and northeast British Columbia. The shale was deposited in marine basins between tall reefs and a large, shallow water carbonate platform that grew in the midDevonian (Figure 8). The Duvernay has long been known as the organic-rich source rock for the oil and gas in the Leduc reefs surrounding it. It’s what started the development of Alberta’s oil and gas industry in 1947.

John Whitehead Consultant

phone (403) 343-0822 mobile (403) 845-0808 address 50 Parkside Drive Red Deer, AB T4P 1K1 email meter-mansamplers@telus.net web www.meter-man.ca • Auto Samplers & Gauge Calibration Repairs • 120 Saskatchewan Oil Report 2013

Office in Swift Current, SK with newly opened office located in Kindersley, SK 11 years experience in all oilfield construction and reclamation Site supervision Full line of construction equipment (including cats and hoes) at our disposal Fencing • Demolition • Trucking P.O. Box 2223, Swift Current, SK Canada S9H 4V2 Swift Current Office: 306-778-6776 • Kindersley Office: 306-430-7810 Cell: 306-741-0078 • Fax: 888-522-7953 E-Mail: prairiestormconst@sasktel.net

The Muskwa Shale is already being exploited for natural gas in the Horn River Basin of northeast British Columbia as shale gas. In Alberta, bituminous (organic-rich) shales of the Duvernay and Muskwa are gaining interest, not just for shale gas, but also for oil. In particular, it appears that, in many areas toward the east and southeast the formation is oilier, or at least the gas is “wet”.

Costs for Duvernay wells are on the high end compared with some other shale plays. Trilogy Energy Corp. had experienced an average well cost somewhere between $11 and $12 million ($6 million for the drill and $5 to $6 million for the completion). Trilogy has budgeted $40 million for Duvernay in 2012 in hopes to develop commercial production while trying to control costs.

Lower Amaranth Formation (Manitoba) Often termed the Manitoba Spearfish, this play is actually the Lower Amaranth formation in the southwestern corner of Manitoba. Across the U.S. border in North Dakota, it is called the Spearfish. The Lower Amaranth in Manitoba is a section of sandstone and siltstone deposited on top of a widespread erosional surface that formed during worldwide low sea levels at the beginning of the Triassic (see Figure 9). Oil migrated into the Spearfish from underlying oil-rich formations where they overlap at the erosional surface.

Until the advent of horizontal multistage fracking, the play was only marginally economic. Now producers like its shallow, low-permeability sandstone, which yields sweet, light oil. It is expected to account for about 30 per cent of Manitoba’s oil production this year. With approximately 250 wells, the production in Lower Amaranth reached 14 Mbpd in mid-2011 (Figure 10).

The Legacy Oil & Gas Inc. is active in the Spearfish on both sides of the border and drilled its first well in early 2011.

Another company, EOG Resources Inc., had been highly successful – in 2008 initial production rates on their wells were reported at 150-200 barrels per day.

NEPTUNE PUMP SERVICES Installations, Sales & Rebuilds of T&E Pumps Box 1901 Swift Current, Saskatchewan S9H 4M6

Marshall Waker - Cell: 774-5454

Phone: 773-4980

Fax: 778-2089

Servicing South Western & South Eastern Saskatchewan

Figure 9: Schematic of Lower Amaranth (Spearfish) Stratigraphy Source: NEB.

Figure 10: Lower Amaranth Tight Oil Production Source: NEB.

Endnotes 1

IEA, “Medium-term Oil Market Report”. 2012

2

NEB, “Tight Oil Developments in the Western Canada Sedimentary Basin”. Energy Briefing Note. December 2011.

3

An estimate because it’s still being delineated.

4

Oilweek, “The Hot, Hot West”. October 2012.

5

NEB, “Tight Oil Developments in the Western Canada Sedimentary Basin”. Energy Briefing Note. December 2011.

Originally published in the October 2012 issue of CERI Commodity Report – Crude Oil. Reprinted with permission. v

LISA SWEET

OWNER OPERATED

PH: (403) 348-0540 ldsweet@xplornet.com RR 1 SITE BOX 2 RED DEER, AB T4N 5E1

20 YEARS IN THE TOOTH BIT BUSINESS

Saskatchewan Oil Report 2013 121

Saskatchewan’s heavy oil opportunity

By Mark Smith-Windsor When we think of steam-assisted gravity drainage (SAGD) and

There are several advantages to building a thermal oil plant

thermal recovery, the Alberta oilsands come to mind. Recent

in Saskatchewan. Our royalty rates are lower than Alberta’s, al-

successes in Saskatchewan could shift some of the focus to the

lowing for quicker paybacks and better economics, all else be-

Saskatchewan side of the border. Once in production, SAGD fa-

ing equal. Additionally, the infrastructure and labour pool of our

cilities are attractive assets as they have a long life and a very low

province helps to avoid the worst of the Fort McMurray cost

decline rate when compared to conventional production.

escalation. The remoteness of many oilsands projects can sub-

Saskatchewan’s heavy oil resource is estimated at 21 billion

stantially increase the cost when compared to operating in west-

barrels.1 The majority of our heavy oil resource is in the Lloyd-

central Saskatchewan.

minster region of western Saskatchewan. Conventional heavy oil

The biggest player in thermal oil in Saskatchewan is Husky

production recovers approximately 10 per cent of the original oil

Energy. According to their corporate presentation, they have five

in place. While not every reservoir is suitable for thermal recov-

thermal projects in production, another five in development, and

ery, those that are can potentially recover 50 per cent or more of

a number of early-stage prospects. Two of Husky’s newest proj-

the original oil in place with thermal technologies.

ects have shown impressive results. Pikes Peak South and Paradise Hill are both producing about 40 per cent over their name plate production capacity. Their capital cost per flowing barrel is between $24,000 to $28,000. This is significantly better than the capital intensity per barrel of production that many oil sand projects are experiencing.

Some of the other thermal heavy oil players in Saskatchewan are Canadian Natural Resources, Southern Pacific Resources, Baytex Energy, PetroBank Energy & Resources, Black Pearl Resources, and Rallyemont Energy.

As enhanced oil recovery techniques such as SAGD continue to advance, we should see more projects develop in Saskatchewan. Thermal recovery could literally be Saskatchewan’s next hot resource play.

FOR LEASE IN WEYBURN, SASKATCHEWAN SUITES STARTING AT 1,200 SQ. FT. 117 - 3 Street • Weyburn, Saskatchewan

The Telsec Group is pleased to present an exceptional leasing opportunity in Downtown Weyburn Saskatchewan, at the corner of Souris Avenue and 3rd Street. Telsec is committed to providing top-quality office and retail developments that are tailored for your specific requirements.

About the Author Mark Smith-Windsor, CFA, is an investment advisor with MGI Securities Inc. He is based in Saskatoon, and provides advice to individuals and corporations regard their investments. Contact Mark for advice on your investment portfolio or a second opinion. He can be reached at 306-385-6261 or via email at: msmith-

Find your space in Weyburn, the “Opportunity City.”

Contact Sean Flathers for leasing inquiries Sean Flathers sflathers@telsec.ca For leasing information contact Telsec at 403-203-3000 or visit our website at www.telsec.ca

windsor@mgisecurities.com.

ENDNOTE 1

“The 21-billion-barrel question”. The Oil and Gas Inquirer, November 2011. v

122 Saskatchewan Oil Report 2013

MGi Securities is a member of the Canadian Investor Protection Fund

Soil stabilization – an emerging technology

Initial application of production on a lease.

The oil and gas service sector in Saskatchewan has seen numerous technology changes and innovations over the years – the environmental sector is no different.

Summit believes that innovation is paramount to the continued, long-term success of our industry within the province.

Coming into spring break-up and the unpredictable weather we inevitably get, there will no doubt be challenges around flooding and dust control, potentially damaging road infrastructure and causing safety issues on the roads. Over the past number of years, as the economy continues to grow, there continues to be no solution to avoid these challenges. The past has presented us with timelines in order to get equipment out in time, avoiding Mother Nature’s wrath at break-up. In some cases, producing companies have had their wells shut in for a period of time due to flooding. This direct hit to the bottom line is a challenge that needs to be overcome. Are we close to a solution? Are there any answers? Simply, yes!

There are many solutions for soil stabilization and dust suppression including soil cement, polymer products, recycled asphalt and cement to name a few. Cer124 Saskatchewan Oil Report 2013

tain products Summit has tested are environmentally friendly, biodegradable liquid copolymers used to stabilize, solidify and suppress any soil or aggregate.

Depending on the application and soil type, this product is applied to the soils and as the water dehydrates, the copolymer molecules coalesce and form bonds between the soil or aggregate particles, thus creating a durable, flexible and water resistant matrix. Under a microscope it would look like a network of tiny fibers connecting and linking particles together.

The key advantage of this solution originates with its long, nanoparticle molecular structure that link and cross-link together. Once cured, the product becomes completely transparent, leaving the natural landscape to appear untouched. Comparatively, existing stabilization solutions, such as soil cement, are a higher-cost solution with potential reclamation challenges down the road. For dust suppression, CaCl and CaMg are harmful to the environment and provide further reclamation challenges.

Applications include, but are not limited to, lease roads, leases, well pads, laydown yards, heli-pads, parking areas, pathways,

construction sites, forestry and agriculture roads, and municipal roads plus many others. Further, it could alleviate compaction and potentially reduce admixing. Application rates range from one litre per square metre to 4.2 litres per square metre for soil stabilization, and 0.1 litre per square metre for dust suppression. Dilution rates can range from a 4:1 ratio of water to co-polymer for soil stabilization and 30:1 ratio for dust suppression. The dust suppression component, in most cases, can be applied once per year without having to provide maintenance or re-application.

This provides us the ability to provide a cost-effective solution to each application while providing a stellar product that is extremely durable is a huge advantage in a market where companies are cutting costs wherever possible.

Through our R&D over the past oneand-a-half years, we feel there is a significant opportunity to reclaim this product in-situ. Summit has taken on some vigorous testing to determine how this can be attained. Within this testing, there are concurrent tests being done to determine the affects of hydrocarbons, acid and condensates on the finished product. All

Helicopter landing pad and laydown yard.

Road.

of these results combined can provide a “win-win-win� situation for producers, service companies and municipalities.

The biggest foreseeable challenge hinges on Mother Nature. The product has to be applied properly, in favourable conditions (above five degrees Celcius) and has to dehydrate completely for the bonds to properly form and result in an effective solution. In Western Canada, especially Saskatchewan, this leaves a window of about five months (June to October). Inevitably we will get rain and inclement weather.

Combined with weather, logistics and equipment availability can be challenging as well.

Summit continues to push the boundaries on technology that can help this great province, improving roadways and alleviating some of the year-over-year challenges we have seen over the past decade. Results from lab analysis should be received in the coming weeks which will provide more options and understanding to everyone who works and lives within Saskatchewan!

NTRICATE

WELL SERVICING

3 free standing single double rod rigs with all the latest innovative ideas and features All mobile equipment operated and maintained by owner/operators with reliable experienced crews

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Saskatchewan Oil Report 2013 125

RAM Industries Inc. Custom cylinder solutions for the oil and gas industry

This CNC Big Bore Acra Lathe was recently added to RAM’s mix of equipment to accommodate more large-size machining suitable for products and cylinders used in the oil and gas sector.

RAM Industries Inc. was established in 1973 in Yorkton, Saskatchewan. In its early years, the company focused on the production of hydraulic and pneumatic cylinders serving manufacturers across the Prairies. Four expansions and almost 40 years later, cylinder design and manufacturing are still the company’s core business and expertise. RAM cylinders now serve a much more diverse range of users in industries that include oil and gas, construction, mining, forestry, transportation, agriculture, material handling, and industrial equipment across the continent.

As a custom manufacturer, RAM establishes a close technical rapport with every customer to share ideas and gather critical information regarding the cylinder’s fit and performance requirements.

Within the oil and gas industry, this relationship is often with project managers, engineering consultants or teams, branch operations, service shops, rig sites, endusers, and entrepreneurs developing new 126 Saskatchewan Oil Report 2013

applications to serve this dynamic market in Canada, the United States and Mexico.

As such, RAM Industries is very versed in cylinder applications within the oil and gas industry, including cylinder applications on drilling and exploration equipment, production and service equipment, and accessories such as power torque wrenches, pipe handling equipment, grapples, and rig-walking systems.

RAM can supply cylinder products from pre-engineered cylinder drawings; however, complete design services are more often the norm. Cylinder designs by RAM may originate from something as simple as a customer’s conceptual idea or a new product innovation, which is common in this growing industry. RAM also has the technical expertise to deliver cylinder solutions for other needs, such as cost reduction or performance improvement, reverse-engineering for replacement or repair cylinders, or re-engineering foreign-designed cylinders to North Ameri-

can dimensional and material standards.

Engineering services using 3D modeling files shared via the Internet provide customers with critical dimensions and simulated images of their custom cylinder. This service is beneficial to design verification, customer pre-approval, and integration of the file into the customer’s overall equipment design. On-site visits, engineering meetings, technical support, and prototype services are also available to ensure cylinder fit and function testing before full production.

RAM provides a diverse mix of cylinder designs to the oil and gas industry. While any customization is available, examples of common cylinders produced by RAM include: • Welded double- and single-acting cylinders • Dog-house cylinders • Mechanical-locking stabilizer cylinders • Pipe-tub cylinders

• Levelling cylinders

RAM INDUSTRIES INC. PO Box 5007, 33 York Rd E., Yorkton, SK, S3N 3Z4 Canada T: 1-877-799-1005 F: (306) 786-2651

estimating@ramindustries.com MEMBER

www.ramindustries.com

Your first choice reliable supplier of ISO 9001 certified custom design hydraulic cylinders and precision machining

• Hydraulic-wrench cylinders • Mast-raising cylinders

• Indexing cylinders • Mast-scoping cylinders • Make-up/break-out cylinders • Custom-designed telescoping cylinders • Heavy-duty cylinders • Position sensor (smart) cylinders • BOP cylinders • Catwalk cylinders

• Hydraulic pumpjack cylinders • Large-bore cylinders

• Long-stroke cylinders RAM’s manufacturing facility, equipment mix, and production flow is set-up to ensure order needs from one to thousands of cylinders per delivery are easily accommodated. This gives customers the advantage of receiving the exact number of cylinders required at the time required for installation. RAM’s company-wide ERP and bar-coding system tracks design, material, and production progress.

The system provides RAM with a reliable

means to ensure promised delivery dates are met while maintaining cost and quality standards expected by its cylinder customers.

RAM continues to add to its capabilities and expertise in meeting the cylinder needs of its customer base. Recently, RAM expanded its manufacturing facility by over 40 per cent in size to accommodate new CNC machines, increased crane capacity, and greater production capabilities. The addition has given RAM the ability to handle additional product lines, increased volume, more sophisticated machining, and larger-sized cylinders. An active capital equipment acquisition program, particularly in CNC machining capabilities, also offers customers a reliable source of custom-machined components with the same quality and delivery performance as its custom cylinder production.

For over 12 years, RAM Industries Inc. has maintained ISO 9001 certification for cylinder manufacturing and custom-machining services. This dedication to quality continues today with the company’s commitment to test every cylinder before shipping. RAM is also experienced with accommodating quality requirements to API (American Petroleum Institute) standards or other customer-specific requirements.

Every RAM customer receives after-sales support, installation guidance, parts, and warranty services as part of its ongoing commitment to every relationship.

In 2012, RAM was named the Yorkton Chamber of Commerce Business of the Year. Additionally, the company was recognized as a finalist in the prestigious Saskatchewan Chamber of Commerce ABEX Awards for its achievements in growth and expansion.

The RAM name has become synonymous with delivering quality custom cylinder solutions to the oil and gas sector.

For more information contact: RAM Industries Inc. P.O. Box 5007 Yorkton, Sask. S3N 3Z4 Toll Free: 877-799-1005 Fax: 306-786-2651 Email: estimating@ramindustries.com www.ramindustries.com v

128 Saskatchewan Oil Report 2013

3

3

IL BOSS RENTALS LIGHT OILFIELD HAULING OILFIELD HAULING OFFICE TRAILER RENTAL ROUGHNECK TRAILERS WELLSITE SHACKS & ORIENTATION CENTERS LIGHT TOWERS AND GENERATORS 56 KW / 70 KVA SILENT PACK LIGHT TOWERS 60 KW / 60 KW TWIN SKID GENERATORS ENVIRO BINS COMBO UNITS ELEVATED WORK PLATFORMS & CATWALKS BOOMLIFT/ TELEHANDLER/ SKIDSTEER 30m3 HOT TUBS RIG MATS HEATERS / HEATER TRAILERS FUEL TRANSPORTATION & STORAGE POTABLE RADIO SR CELLULAR REPEATER 210 CFM COMPRESSOR MUD CANS / GER CANS SPILL CONTAINERS Office (888) 844-3031 • Fax (866) 914-7507 info@oilbossrentals.com www.oilbossrentals.com

“DEDICATED TO PROVIDING INNOVATIVE SOLUTIONS FOR EVERYDAY PROBLEMS”

Shaunavon, Saskatchewan

1913 – 2013 That’s right! 100 years! 2013 is an exciting year for Shaunavon and time to celebrate. The town is full of new friends and neighbours to join in the celebration, and a lot of these new acquaintances are due to the industry this publication dedicates its pages to: oil.

When you get up in the morning and head out down the highway from Swift Current, Medicine Hat, Cabri, Gull Lake or Ponteix – or any other southwest com-

munity – you are probably heading to Shaunavon to work in one of the busiest oilfields in Saskatchewan. The commerce train to and from Shaunavon runs all day, every day, here in the southwest and it is quite an inspiration to see all that traffic heading our way. For our little town, it means progress, more school children, more new houses: it means a lot.

Shaunavon’s future looks bright thanks to partnerships formed with our

Environmental Protection Plans • Impact Assessments • Pre-Site Assessments Environmental Audits and Assessments • EM Surveying Well Site and Battery Abandonments • Environmental Monitoring Drilling Waste Management • Pre/Post Water Well Testing Shaunavon Office

BOB PHAIR

Ph: (306) 297-2870 | Fax: (306) 297-2875 | Cell: (306) 297-9161 Email: bob.ege@sasktel.net Carlyle Office

DEAN HOFFMAN

Ph: (306) 453-4475 | Fax: (306) 453-4476 | Cell: (306) 483-8554 Email: dean.ege@sasktel.net

Industrial | Specialty | Medical Gases Welding & Cutting Equipment Gas Apparatus & Safety Supplies

CUSTOMER FOCUSED SOLUTIONS! 1-800-225-8247 anywhere in Canada www.praxair.com 130 Saskatchewan Oil Report 2013

newest citizens in the oil business – we see nothing but growth for the next 100 years! The Crescent Point Wickenheiser Centre, which opened in 2011, is an example of one of those major partnerships providing a new recreation facility for the population to enjoy. We have an excellent nine-hole golf course, The Rock Creek Golf & Country Club, and we have 13 of 46 lots in the new Benchview Subdivision ready for sale with curbs and paving being installed this spring. Canalta Hotels have opened a brand-new 50-plus-room hotel, and the Bears Den Motel has 30 new rooms.

There are several more projects set to go in the spring or early summer, including new residential and commercial enterprises as well as the expansion of existing local businesses.

Shaunavon’s airport has been upgraded with the AWOS system, lights, weather station, and the availability of jet fuel. For worker safety, the airport has been readied to accept STARS as well as emergency medical planes day or night. Shaunavon’s hospital is also slated to become the first within Saskatchewan to have a primary health care system implemented this summer.

The Town Council of Shaunavon has been, and still is, a forward-looking

CONTRACTOR • SAND • GRAVEL • ROCK • EXCAVATION BACKHOE • TRACKHOE • LOADER SERVICES P.O. Box 609 Stoughton, Saskatchewan S0G 4T0 Del Coderre Bus: 306-457-3131 Fax: 306-457-3244

Cell: 306-577-7219 Res: 306-457-3173 Email: coderre@sasktel.net

www.coderre.sasktelwebsite.net

council with their sights set clearly on

opportunities that we have to offer –

family-friendly lifestyle and abundant

the future. The community is prepared

maybe we can help each other to grow.

business opportunities.

to embrace growth – because a growing

Come and enjoy Shaunavon’s green

community is a healthy community. With

spaces, swimming pool, brand-new

Check us out at www.shaunavon.com.

the future looking bright, we invite the

skate park, ball diamonds, walking trail,

We invite you to come for the party

many friends we have yet to meet to visit

wide open skies, and friendly folk. You

July 18th to 21st, and stay for the

our community and discover the many

will discover a community that offers a

lifestyle! v

Town of

GROWING ECONOMICALLY

Thanks to the strength of the activity in the Oil & Gas Industries in our area.

GROWING SOCIALLY Thanks to generous donations from our Oil & Gas Companies toward our facilities & community organizations.

GROWING PHYSICALLY

Growing

with You!

With the development of a new residential subdivision and the creation of new industrial lots.

306-297-2605 • www.shaunavon.com

41091193/SWOG12

Saskatchewan Oil Report 2013 131

Skyway Canada: 46 years in business with solutions you can trust

Scaffolding, insulation, sales, rentals and service

Kanata Bridge shoring.

Skyway Canada has been safely supporting its customers since 1967.

Skyhigh, a Division of Skyway Canada, is a trusted provider of safe, cost-effective scaffold and shoring solutions across Western Canada and Ontario. Skyway is a single-source solutions provider offering scaffolding, insulation, swing stage and shoring, engineering, design, erection and dismantling services; project management and control; and cost control and billing systems. Tailored management solutions can be integrated with clients’ internal systems, ensuring accuracy, efficiency and timely reporting.

“Our approach is to develop the right solution for every project, to ensure safety, production efficiency, cost effectiveness and on-time completion,” says Gary Carew, Skyway Canada president and CEO. “What makes us unique is our experience and expertise in the design, engineering, delivery and maintenance of our systems. We have set the highest industry standards for safety and quality. We are a safe company – not just a company with a safety manual. Our vision for this company is to be the safest, smartest scaffolding company in Canada.”

This Canadian-owned and operated company has 165 full-time employees and 1,100 employees in the field, with 132 Saskatchewan Oil Report 2013

Regina expansion, June 2010.

Skyway branches in Toronto, Sarnia, Thunder Bay, Edmonton, Calgary, Bonnyville, Whitecourt and Grande Prairie. The company, which operates under the Skyhigh name in Saskatchewan and Manitoba, has branches in Saskatoon, Regina, Winnipeg and Brandon, as well as in Edmonton.

Skyway Canada was established in Toronto in 1967, in order to supply contractors and the commercial market in southern Ontario. In 1996, Skyway expanded to Sarnia, in order to better serve Ontario’s industrial market; and in 1998 the company established itself in Alberta. In 2005, Skyway acquired Skyhigh Scaffold, in order to expand its operations into northern Ontario, Saskatchewan and Manitoba. Skyhigh Scaffold had built a good reputation with the Skyhigh name, and these acquisitions have provided Skyway Canada with a strong market presence from Ontario through to Alberta.

Skyhigh is currently supplying all of the scaffold labour and all materials for the Consumers’ Co-operative Refineries Limited (CCRL) expansion in Regina. Skyhigh was chosen as the scaffold contractor of choice, thanks to its Track-RITE system for managing cost, schedule and productivity, Carew says.

Skyway’s proprietary Track-RITE Project Control System keeps labour and equipment costs and worker productivity

Canadian Museum for Human Rights.

ENVIROTRAP SY STEMS Responsible Product From a Responsible Company

in plain view, on a real-time basis so expenses and project progress can be reviewed daily. With Track-RITE, every scaffold build is uniquely identified and tracked in a database, so the customer maintains complete visibility over every aspect of the project. On repeat jobs, such as annual maintenance shut-

THE PROBLEM

downs, Track-RITE’s data mining capacity is particularly valuable. When the next scheduled event approaches, it’s easy to go back to the data to compare previous estimates and actual data, and obtain solid information for the next project.

In Saskatchewan, Skyhigh is focused on opportunities as-

THE SOLUTION

sociated with potash mine expansions. In Alberta, Skyway is focusing on oilsands opportunities, and it also plans to return to the B.C. marketplace.

As projects in Western Canada heat up, one of the major Chemical Barrel Containment Stand Wellhead Containment Unit

All Your Wellhead Containment Needs Including Hydraulic Pumping Units

Hydraulic Pump Containment Unit

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MISSION STATEMENT

“We Work In Harmony With Both The Oil Industry & Landowners To Protect Our Environment”

ENVIROTRAP SYSTEMS 1-306-483-7330 Sales Contact: CHEYENNE OILFIELD SERVICES 1-306-483-7924 E-mail: envirotrap@sasktel.net www.envirotrap.com

134 Saskatchewan Oil Report 2013

challenges the company is now facing is the requirement for additional labour. “Bring the skills we need to the company, and we’ll support you, empower you and help you grow your career,” says Terry Haunn, Skyway Canada vice-president, business development. “We want to be the place to work for scaffolders and insulators – we want people to come and develop a career here. We believe in open, honest communication, and we treat them well.”

Skyway Canada: solutions you can trust – since 1967. v

CAPPA: proudly serving production accountants for over 50 years Production Accountants perform the accounting tasks relating to volumes of oil, gas and water that are separated from the well effluent. Every month, production accountants determine each party’s share of production from the wells, each party’s volumes held in inventory at the facility and each party’s share of products that are sold from the facility.

CAPPA Member Privileges • Online RECAP magazine • Up-to-date industry information • Preferred pricing for educational luncheons and seminars • Conferences • Social events

What’s New at CAPPA As a national organization, CAPPA is committed to more effort spent on working with the different provincial jurisdictions to represent our members and find opportunities to support our business. 2011 marked the 50th year of CAPPA, and in 2012, we looked forward to the next 50 years and what it will mean for our members.

We continue to provide our comprehensive certificate program through three schools as well as online. We provide seminars, educational luncheons, an annual conference and other social events for networking opportunities. All information can be utilized by our members on our website and from our quarterly online magazine called RECAP. CAPPA Objectives Are: • To strengthen the profession of production accounting.

• To provide a forum for the people interested in the compiling and reporting of production statistics in the oil and gas industry.

• To represent this section of the industry in a technical and procedural capacity when dealing with other organizations or government agencies.

• To develop an education program designed to assist the individual member, the company, and the industry as a whole in efficient production accounting practices and procedures.

• To promote a cordial relationship among all members of the association.

Our members have access to extra website content including • CAPPA Job Board • Salary survey results • Membership surveys • Materials from CAPPA presentations CAPPA Program Overview What can a CAPPA Certificate do for you? – A CAPPA Certificate opens doors in the oil and gas industry and leads to a career in production accounting.

What is involved in taking the CAPPA program? – The program consists of five levels (45 hours per level) plus 100 hours of registry (government reporting) modules.

What are the prerequisites? – A high school diploma, but accounting courses or an accounting diploma would be an asset.

If you would like more information on our education programs or you would like to volunteer for CAPPA, please visit us on our website at www.cappa.org. We look forward to hearing from you! v

DEL Communications Inc. has in excess of 100 years combined experience working for you.

We offer outstanding personal service and quality in the areas of: DIRECTORIES TRADE PUBLICATIONS ADVERTISING DESIGN & LAYOUT QUALIFIED SALES & EDITORIAL TEAM Suite 300, 6 Roslyn Road, Winnipeg, Manitoba R3L 0G5 Toll Free:1.866.831.4744 | Toll Free Fax: 1.866.711.5282

www.delcommunications.com

Saskatchewan Oil Report 2013 135

You may already qualify APEGS engineering and geoscience licensees Isn’t it great when you find a treasure you didn’t know you had?

If you work in the sciences or technical trades, you may be on the brink of finding a professional treasure. You may be qualified to become a professional engineer or geoscientist and not realize it. Although the main path for becoming a registered engineer or geoscientist is by studying those fields in university, the Association of Professional Engineers and Geoscientists of Saskatchewan (APEGS) offers an alternate registration stream for people with the right combination of education and life experience. For example, if you are a chemist and have years of experience in geological exploration, or if you are a technologist and have spent years doing engineering type work, you may qualify to have your skills and experience recognized by APEGS. As an engineering licensee or geoscience licensee, you will enjoy many of the same rights, privileges and benefits as professionals with P.Eng. or P.Geo. certification, including the right to sign-off on engineering or geoscience work within your defined scope of practice. As a licensee, you would be entitled to engage in the practice of professional engineering or professional geoscience within an approved, defined field of practice without being supervised by a professional engineer or professional geoscientist. Licensees can even offer

consulting engineering or geoscience services, provided the services offered fall within the field of the restricted licence.

How do I become a licensee?

There are different qualifications for different scopes of practice. At least five years of the required experience must be supervised by a professional engineer or professional geoscientist, and the professional member must endorse the experience reports submitted with the application.

For further information More detailed information is contained in the Guide to Engineering and Geoscience Licensee Applicants found on the APEGS website. Questions can be directed by email to either Patti Kindred, P.Eng., FEC director of Education and Compliance (pkindred@apegs.sk.ca), or Tina Maki, P.Eng., FEC director of Registration (tmaki@apegs.sk.ca). You can also phone (306) 525-9547 or toll free 1-800-500-9547. v

TWO WAY RADIOS Manufacturing NORBERT’S THE LEADER IN Custom Enclosed, Flatdeck & Utility Trailers for the Oilfield Industry

For information regarding Doghouse & Boiler Trailers, please call factory direct Norgert’s Mfg. - Glenbro, MB. | PH: (204) 827-2015 | www.Norberts.com

Since 1986 136 Saskatchewan Oil Report 2013

Sales - Rentals

Mobiles - Portables

Redvers: 306-452-6309 Russell 204-773-3038 Yorkton 306-786-4200 Toll Free: 1-800-797-7234

ENGINEERING LICENSEE GEOSCIENCE LICENSEE You may already qualify for registration with the Association of Professional Engineers and Geoscientists of Saskatchewan (APEGS) A suitable combination of education and experience may enable you to become an Engineering Licensee or a Geoscience Licensee with APEGS. Licensees are full members of APEGS and have the right to independently practice professional engineering or professional geoscience within a specified scope of practice.

Contact APEGS for information on how to register:

1-800-500-9547 306-525-9547

www.apegs.sk.ca

Millennium Directional Service Ltd.:

Complete directional drilling services

Millennium Directional Service Ltd. was founded in 2005 in response to demand for quality, reliable directional drilling services in the Williston Basin area of southeast Saskatchewan. Based

in Carlyle, Sask., with a sales office in Calgary, the company is now the provider of choice for many of the largest and fastest-growing oil and gas companies in Western Canada and North

• Winch Trucks • Bed Trucks • General Oilfield Hauling DENNIS TROBERT • OWNER OPERATOR Cell: (306) 421-3807 OFFICE: (306) 634-3009 P.O. Box 453, Estevan, Saskatchewan S4A 2A4 Waskada, MB • (204) 264-0566 138 Saskatchewan Oil Report 2013

Dakota, and can provide services on 16 separate drilling operations at any given time.

“The potential for directional and horizontal wells in the Western Canadian Basin was significant at start-up. The number of horizontal wells drilled in Western Canada was steadily increasing. Our focus on directional grassroots and horizontal wells in southeast Saskatchewan provided an excellent business opportunity,” says Dan Eddy, company president.

Clients First Local companies were Millennium’s initial focus. By providing directional drilling tools in a timely fashion, with superior performance and service standards, this group became the company’s loyal client base.

“We are committed to the development of long-term relationships with our clients based on personal service and professional performance. Our goal is to provide clients with the most

reliable equipment, combined with highly skilled and experienced field personnel in order to optimize drilling operations,” Eddy states.

Tools and Technology Millennium’s high service standards and state-of-the-art equipment, coupled with consistent reliability and cost-efficiency, maximize economic benefits to clients. This has served the company well and allowed it to surpass original business goals and objectives.

“By combining the latest advances in directional drilling technology and the expertise of reliable, proven manufacturers, we stay at the forefront of current industry trends,” he says. “We work closely with our clients and suppliers to ensure all equipment issues are addressed and all technical requirements are met, in order to achieve performance goals and maximize our client’s drilling potential.”

We are committed to the development of long-term relationships with our clients based on personal service and professional performance.

That’s what really sets Millennium apart from our competitors – the reliability of our tools and the experience of our personnel,” says Eddy. “We designed our MWD system specifically for the conditions experienced in southeast Saskatchewan and North Dakota, and regularly see upwards of 2,500plus hours MTBF.” Also, clients can pick and choose basically any motor configuration to suit the particular area or formation they are drilling. “We work with three suppliers, National, Dynomax and Shamrock,

which enable us to provide clients a large variety of top-of-the-line mud motors; and we are always happy to offer a recommendation of what has worked best in a certain area in the past.

Experienced Personnel The company has made impressive gains while remaining true to its original goals and objectives. According to Eddy, Millennium’s personnel play the biggest roll in the success of the company.

“We are privileged to count among our employees some of the most experienced and skilled directional drillers and MWD supervisors in the business, people who have shown their commitment to superior service. All of our personnel are well-versed in teamwork and the roles of others that combine to plan and execute a successful drilling venture,” he concludes. v

Saskatchewan Oil Report 2013 139

The City of Swift Current:

An economy on the move!

The City of Swift Current’s economy relies on agriculture, manufacturing, oil and gas, tourism and service sectors and in the past six years, all industries have been growing and prospering.

The City of Swift Current has grown tremendously in the last number of years, to the point where additional lands had to be incorporated into city limits as development had reached the existing city boundary. In 2011, and again in 2013, the City annexed a total of eight quarter-sections of land from the neighbouring rural municipality, and is currently undertaking area structure plans for the additional lands.

The City of Swift Current has an official community plan which shows the future growth of the city and indicates that by the year 2020, the city’s population will reach 20,000 people.

According to Saskatchewan Health numbers, the city of Swift Current advanced from a population of 16,500 in 2009 to 17,365 in 2012. The city has seen obvious growth, including in excess of 500 immigrants choosing the city as a location in which to live and work.

In terms of construction in the City of Swift Current, the trend over the past six years has been extremely strong. In fact, over that time, the value of building permits issued is more than the total of the previous 25 years combined. The year 2011 boasted the second-highest value of building permits issued in the city’s history, with 2012 being the highest at 83 million.

2012 construction activity continues the strong trend for the city. Prior to the end of the year, two new elementary schools were under construction directly adjacent to the Cypress Regional Hospital. Plans continue for the addition of a new 225-room long-term care facility, and city facilities such as an aquatics leisure centre, field house and library and art gallery. This “integrated facility” concept will provide extreme benefits to all demographics within the city of Swift Current and region.

Over the past six years, more than 600 housing units have been constructed in the city to accommodate the demand

The City of Swift Current Where Life Makes Sense

Swift Current’s newest Industrial Park has land available at $90,000 per acre!

Affordability Accessibility Education Health

Security Recreation Culture Environment

FOR MORE INFORMATION ON SWIFT CURRENT OPPORTUNITIES CALL: MARTY SALBERG - Director of Business Development Phone: (306) 778-2700 Fax: (306) 778-2194 Email: m.salberg@swiftcurrent.ca

www.swiftcurrent.ca 140 Saskatchewan Oil Report 2013

Ken Francis, Manager 118 - 3rd Avenue West, P.O. Box 2349 Kindersley, SK S0L 1S0

Tel: (306) 463-1002 | Cell: (306) 463-8591 Fax: (306) 463-4173 Email: palliser.land@sasktel.net

Donny Duncan, Manager – Swift Current 145 1st Avenue N.E. Swift Current, SK S9H 2B1 Tel: (306) 778-4430 | Cell: (306) 741-9879 Fax: (306) 778-4432 Email: donny@mland.ca

Troy Becker, Manager – Eatonia 216A Main Street, P.O. Box 136 Eatonia, SK S0L 0Y0 Tel: (306) 967-2622 | Cell: (306) 460-7410 Fax: (306) 967-2627 Email: troy@mland.ca

www.mland.ca

Proudly providing Saskatchewan based Land and Environmental Consulting • Planning • Regulatory compliance • Environmental monitoring • Drilling waste management • Environmental site assessments • Spill response • Remediation • Reclamation

Trent Klarenbach, PAg, President Tel: (306) 463-1431 Email: administration@grassland.ca www.grassland.ca

Providing regulatory and environmental solutions for industry since 2003.

MoneySense Magazine placed Swift Current as the second-best place to live in Saskatchewan and 24th-best in the country. for those choosing to move to Swift Current or relocate within its boundaries. This includes single-family homes, apartments, condos and affordable housing complexes.

In the past few years, the city has invested in a new state-of-the-art hospital, wastewater treatment plant, hockey and curling facility, expansion to the water treatment plant and more. Total investment in this infrastructure exceeds $50 million.

There has been an increase in the oil activity in the region surrounding the city of Swift Current, and this trend is anticipated to continue. In fact, one of the largest oil companies in the region, Crescent Point Energy, anticipates significant investments into their drilling program over the next number of years.

This bodes well for Swift Current as many service companies will be either expanding or relocating to the city to take advantage of this opportunity.

The agriculture sector has had an extremely strong year in the Swift Current region. With large acreages seeded with peas, lentils, wheat and canola, coupled with fantastic yields, our local businesses that serve the agriculture industry are thriving as well as the producers.

Manufacturing is an important component to the economy of our city and region and for the past number of years, this industry has flourished. Many are exporting throughout North America and beyond is resulting in a continual increase in the labour requirement.

Being located on the TransCanada Highway has always proven to be an asset. Tourism and business travel have continued to keep our hotels busy, as well as our many restaurants, casino and performing-arts centre. This year 142 Saskatchewan Oil Report 2013

The City of Swift Current has the lowest municipal residential taxes in the province. we have seen the construction of two new hotels, and new restaurants to serve this growing sector. Interestingly, our hotel industry has an occupancy rate significantly higher than most areas throughout the country.

In terms of our service and retail sector, those businesses are fortunate to provide for the entire southwest region of the province. This is significant and has resulted in substantial investments in our vibrant downtown core, our highway commercial areas and our prospering shopping malls. The future looks extremely strong in terms of the growth of the service and retail establishments in Swift Current. v

Saskatchewan Oil Report 2013 143

Kramer Ltd. a Gold Standard member in 2012 Regina, Sask., February 26, 2013 – Kramer Ltd. was a winner of Canada’s Best Managed Companies program in 2009, and has demonstrated their commitment to the program and successfully achieved the designation as a Gold Standard member in 2012.

“Excellence in support is both customer and employee driven,” says Kramer president Timothy R. Kramer. “That’s why, every day since 1944, Kramer Ltd. is committed to making our customers more profitable by providing safe, innovative, cost-effective solutions.

“We’re proud to be Saskatchewan’s Caterpillar® dealer, and we are honoured and humbled to be recognized as a Gold Standard member in the Canada’s Best Managed Companies program.”

Regina, Saskatoon, Tisdale, Estevan, Swift Current, Kindersley and North Battleford as well as Kramer Rents – The Cat Rental Store.

Kramer serves the industries of oil and gas, road building, mining, agriculture, electrical-power generation, landscaping, material handling, and on-highway trucks and forestry.

For more information about Saskatchewan’s Caterpillar dealer, log on to www.kramer.ca.

For more information, please contact: Becki Schultz - Communications Associate, Kramer Ltd. 306.564.6452 • bms@kramer.ca v

About Kramer Ltd. The family-owned and operated business of Kramer Ltd. has been the Caterpillar dealer for the province of Saskatchewan since 1944. Kramer operates complete parts, sales and service facilities in

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144 Saskatchewan Oil Report 2013

critical power when you need it most Kramer ltd. offers parts, sales, and service for the sasKatchewan oil fields.

neil shaw energy specialist regina (w) 306.545.3311 (c) 306.533.3568 nds@kramer.ca

Brent uitti energy specialist saskatoon (w) 306.343.7368 (c) 306.380.7100 bru@kramer.ca

Kramer.ca

Penta Completions

provides entire rod-pumping optimization and design

By Jacqueline Louie

Penta Completions Supply and Services Ltd. is the only Canadian oilfield company specializing in the sale and service of sucker rods and related equipment. Founded in 1987, the Edmontonbased firm was proud to celebrate its 25th anniversary in 2012.

Originally focused on fibreglass sucker rods, Penta Completions expanded into a complete rod pumping optimization and services organization as directional and horizontal drilling increased well design complexity.

“We’ve earned a national reputation for helping producers design and install anything from a conventional pumping configuration to a highly specialized rod string,” says Penta Completions president Tom Dennehy. “The quality of our people is the key to our success. We are very careful not to sell more than we can service properly.” Penta has offices in Estevan and Calgary as well as in Edmonton, and has a total of 24 employees.

Rod pumping horizontally drilled wells inherently brings production problems such as rod and tubing wear to the forefront.

146 Saskatchewan Oil Report 2013

“When wellbores are planned, consideration must be given to the cost of drilling and the long term maintenance costs associated with rod pumping the well over the long term. Small changes to the wellbore path can minimize the long-term operating costs and extend the operating life of the well, says Fred Morrow, contract engineer at Penta.

“Wells can be drilled in such a way that the operational costs will limit the economic life of the well. By designing the wellbore path with production concerns taken into consideration, changes in the wellbore path can increase a well’s economic life by many years,” Morrow says. Most of these changes, such as including a tangent to the curve in the build section of the wellbore plan, add little cost to the original drilling cost.

And the results are well worth it. “We’ve got wells where we’ve run three to four years with no rod or tubing failures,” Morrow notes. “Twenty minutes of conversation before the well is drilled can literally save hundreds of thousands of dollars in

maintenance years down the road. And if you don’t do this, you could be on this well every two or three months because you’ve worn a hole in the tubing because of the wellbore path.”

This is where Penta Completions can help. “The service we put behind that product is what ultimately saves the oil companies money down the road,” says Bob Wanner, sales manager at Penta. “We like to be involved with the oil company from the conception of their drilling plan through to the actual completion and follow-up monitoring.”

Many of the companies that Penta works with will come to Penta before drilling the well to ask for feedback on their plan from a rod-pumping perspective; Penta will recommend changes to the wellbore path if necessary.

“We’ve been lucky enough to have a close relationship with our clients, which enables us to stay in contact after the well is put on production to monitor how actual pumping conditions compare to the design,” Wanner says.

As Morrow puts it: “What we bring to the table is rodpumping expertise. The things that we do will increase the life of the downhole pump, limit pumping unit repairs, and increase the average time to failure from months to years.

We’ve gone in and optimized rod pumping to where the mean time to failure has been increased by magnitudes.”

The company’s success depends on having well-informed customers, and to this end Penta Completions offers classes that deal with artificial lift, optimizing rod life and the basic economics of producing a rod pump well.

“Our expertise is beam lift and sucker rod pumping,” Morrow explains. Since 1992, Penta has offered three-day rod pumping seminars, and the course is now more popular than ever.

Penta provides analysis and optimization recommendations from fluid level and dynamometer testing, along with a full line of steel and fibreglass sucker rods, sinker bars and related accessories. Its services also include long-term monitoring and optimization through cellular accessed pump-off controllers. Penta specialists will supervise installs to ensure optimal performance and life cycles in rodpumped oil wells.

The drilling technology that has come into play with horizontal completions will ensure the long-term success of companies like Penta. “Oil companies are now drilling in places they had previously written off as non-productive.

All of a sudden, new drilling and completion techniques are breathing new life into the Cardium, as just one example,” Morrow says.

Since drilling-in operations come with an environmental footprint, “this requires a little more expertise in planning the wellbore path,” he explains. “Penta can reduce the costs to get the oil to the surface. We will help design these wellbore paths, which will decrease the maintenance during the economic life of the well.”

Another strength that Penta brings to the table is diagnostic capacity. “We have the ability to verify fluid levels production to increase production potential and equipment loading. Among the new horizontal wells that are being drilled, with proper planning it is now possible to install the pumps deep into the curve and get significantly improved life expectancies from the production equipment. We are installing pumps around the curve and having the run life exceed three years,” Morrow says. v Saskatchewan Oil Report 2013 147

Precision Well Servicing High performance, high value

As Canada’s largest well-servicing contractor with approximately 190 service rigs, Precision Well Servicing (PWS) provides customers with quality staff and equipment to provide a full slate of services, including completions, work-overs, abandonments, well maintenance, high-pressure and critical sour-well work and re-entry preparation.

PWS rigs are deployed from key centres in Saskatchewan, Alberta, Manitoba and British Columbia to reduce travel, increase efficiency and lower total well costs for customers.

PWS can provide customers more than 100 free-standing service rigs, representing about half of its fleet. This type of service rig tends to be more efficient to set up than traditional anchored units, minimizes surface disturbance and, with no need for anchors, reduces the possibility of striking underground utilities.

PWS also has a number of specialty “slant” service rigs that perform mainly in heavy-oil producing areas and cater to specific customer needs.

The Precision advantage extends beyond equipment to the quality of our crews and the levels of training and support provided to all staff members.

Coil Tubing Services Precision offers coiled tubing services to customers in the Canadian market. Precision’s coiled tubing service offering was launched at the beginning of 2012 to address customers’ needs for additional downhole completion and maintenance services on horizontal wells.

Reel Capacity 50.4mm (2 inch) 60.3mm (2 3/8 inch) 66.7mm (2 5/8 inch) 73.0mm (2 7/8 inch) 82.6mm (3 1/4 inch)

9,000 6,000 5,200 4,400 3,100

m m m m m

The technical features of Precison’s coiled tubing rigs are well-aligned with customers’ demands related to developing unconventional reservoirs.

Precision believes it is now able to assist customers complete almost any completion or production-related task by offering coiled tubing and traditional well servicing and snubbing rigs. In addition to the coil tubing, Precision also offers its customers in Canada a new line of fluid pumps and nitrogen pumps, consisting of four to 1,000HP twin trailer pumps and two nitrogen pumpers (one of which is a trailer unit and one body job).

148 Saskatchewan Oil Report 2013

New product liNe: Brooks, AB: Calgary, AB: Estevan, SK: Fort St. John, BC: Grande Prairie, AB: Lloydminster, SK: Red Deer, AB: Virden, MB: Swift Current, SK:

(403) 362-4335 (403) 781-5555 (306) 634-8886 (250) 785-5096 (780) 539-4440 (780) 875-5333 (403) 343-3174 (204) 748-2381 (306) 778-7707

Now offering Coil tubing, Fluid Pumps and Nitrogen Pumps as well as our high performance Service rigs and Snubbing units.

PWS rigs are deployed from key centres in Saskatchewan, Alberta, Manitoba and British Columbia.

www.precisiondrilling.com

Snubbing Services Precision Well Service Snubbing Services has a fleet of 12 truckmounted hydraulic rig assist snubbing units, seven self-contained, free-standing snubbing units, rod snubbing services as well as freeze/hot tap service. Precision Well Service Snubbing Services operates throughout the Western Canada Sedimentary Basin as well as in some northern basins in the United States.

Snubbing is ideal for underbalanced drilling programs and by facilitating string movement under pressure, ensures that an entire drilling operation can be conducted in a continuous, pressure-controlled environment to reduce the potential for formation damage.

Precision Well Service Snubbing Services operates a fleet of rig assist snubbing units which work in conjunction with a service rig on the well site to lift the snubbing unit into place.

Precision Well Service Snubbing Services also markets standalone snubbing units that do not require a rig on site and improve efficiency and safety with an automated pipe-handling system.

A cost-effective rig up procedure as well as minimal crew and vehicle needs and a small footprint on the wellsite are among the advantages of a stand-alone snubbing unit.

Features of Precision Well Service Snubbing Services rig assist and self-contained, free-standing snubbing units include: • Snubbing unit engineering, construction, recertification and safety devices that comply with Industry Recommended Practice No. 15 - Snubbing Operations.

150 Saskatchewan Oil Report 2013

• Crew competency and operating practices that comply with Industry Recommended Practice No. 15 - Snubbing Operations.

• Easy-to-use power rotary tables which provide drilling service for most completion operations where pipe rotation is required.

• Rig assist snubbing unit design that eliminates the need for multiple operator interaction between the snubbing unit crew and the drilling or service crew.

PWS has an industry-leading health, safety and environment (HSE) initiative called Target Zero, which places a premium on safe working practices. When coupled with Precision’s other training and employee initiatives, these programs consistently yield top-quality personnel for PWS who exceed industry safety standards and customer expectations.

For more information, call: Estevan, Sask.: (306) 634-8886 Lloydminster, Sask.: (780) 875-5333 Swift Current, Sask.: (306) 778-7707 Virden, Man.: (204) 748-2381 Brooks, Alta.: (403) 362-4335 Grande Prairie, Alta: (780) 539-4440 Red Deer, Alta.: (403) 343-3174 Calgary, Alta.: (403) 781-5555 Fort St. John, B.C.: (250) 785-5096 v

Class I, Class II, Class III Nitrogen Services • Production & Frac Cleanouts Bridge Plug Retrieving • Drillouts & Abandonments Production Logging • Pipeline Cleanouts Estevan: 306.634.8912 | Weyburn: 306.842.8901 | toll free: 1.877.580.8901 www.essentialenergy.ca | #3 20th Ave. SE, Weyburn, SK Saskatchewan Oil Report 2013 151

A proud past, a brighter future SwagelokŽ RHPS-series regulators RHPS-series regulators are now available across the globe through authorized Swagelok sales and service centres. Swagelok acquired RHPS B.V., now operating as Swagelok B.V. (as of April 2010), enhances Swagelok’s strategy to broaden product and services for fluid system customers around the world.

RHPS-series products are based on more than 20 years of engineering expertise for applications in the chemical/petrochemical, oil and gas, power, biopharmaceutical, semiconductor, and alternative-fuels industries. These regulators are constructed of 316L stainless steel for line sizes up to four inches, and provide a variety of options. Key products for pressure control now available through Swagelok include: Pressure-reducing regulators, including both spring-loaded and dome-loaded models, are designed for general industrial applications.

TM

152 Saskatchewan Oil Report 2013

Back-pressure regulators are available in both spring-loaded and dome-loaded models, and are designed for general industrial purposes.

Make the unpredictable totally predictable.

Swagelok® Pressure Regulators are now an even better choice for all your pressure regulator needs. Why? Well, alongside our proven experience and expertise, our range now covers sizes from 1/4 up to 4 in. and all your regulator needs—high-flow capability, two-stage, back-pressure and vaporizing models. With our regulators you get accuracy, sensitivity and pressure stability. In short—total predictability. Exactly what you would expect.

Visit swagelok.com/pressure.

Swagelok Central Canada Authorized Sales & Service Center for Saskatchewan—Manitoba—N.W. Ontario

Specialty regulators include products designed specifically for tank blanketing, pharmaceutical applications, and bulk semiconductor gas delivery.

DOMELOADED PRESSURE REGULATORS Swagelok® RHPS-series domeloaded pressure regulators permit high flows and exhibit less droop than spring-loaded designs in controlling the pressure of liquids and gases. The domeloaded design relies on a pressurized chamber above an elastomer diaphragm in place of a spring to operate the regulator. Depending on regulator size and configuration, inlet pressures can range to 5,800 psig (400 bar). Regulated pressures span 1.4 to 29 psig (0.10 to 2.0 bar), zero to 1,000 psig (zero to 70 bar), zero to 2,900 psig (zero to 200 bar), and zero to 5,800 psig (zero to 400 bar).

Swagelok domeloaded regulators are available for pipe sizes ranging from 1/4 to four inches, with corresponding Cv values ranging from 0.1 to 73. End connections include NPT female, BSPP female, and ANSI and DIN flanges. Body, dome, and trim material for all models is 316L stainless steel. Operating temperatures range from -4 to 176° F (-20 to 80° C).

Seal, O-ring, seat, and diaphragm material options include nitrile, EPDM, and fluorocarbon FKM. (Seat materials also include PCTFE and PEEK.) Larger models, 1-1/2-inch and above, include an integral pilot regulator to keep the dome pressure constant. The dome can be energized by system pressure or an external pressure source. Special external feedback configurations which require no external power are available, permitting even finer control of pressures. All models, regardless of size, include connections for installation of pressure gauges or other pressure measurement devices.

154 Saskatchewan Oil Report 2013

REGULATORS FOR LOW PRESSURE CONTROL Swagelok RHPS-series TBRS and TBVS model regulators provide accurate pressure control in low-pressure gas systems. One common application is accurate control of a blanketing (inert) gas in a closed tank or vessel. Installed on a tank’s inlet and outlet, the TBRS (inlet) and TBVS (outlet) regulators maintain a tank’s blanketing gas at a constant pressure.

Changes in the tank pressure due to a change in its level or temperature automatically trigger the regulators to maintain the desired pressure of blanketing gas over the tank’s contents. The regulators provide full mechanical control, and are not dependent on external power sources.

The spring-loaded, pressure-reducing TBRS model accommodates inlet pressures between 1.5 psig (41.5 in. H2O) to 230 psig, (0.1 to 16 bar) and can regulate outlet pressures down to between 0.07 psig (1.9 in. H2O) to 7.3 psig, (5 to 500 millibar).

Likewise, the spring-loaded back-pressure TBVS model senses pressures between 0.07 psig (1.9 in. H2O) and 7.3 psig, (5 to 500 millibar). Operating temperature range for both models is -4 to 280° F (-20 to 140° C).

Both models feature 316L stainless steel body and spring housing construction, PTFE diaphragms, standard fluorocarbon seals and optional EPDM or perfluorocarbon seals.

Sizes range from half-inch to two inches. End connections include NPT female, BSP parallel female, ANSI 150# flanges, DIN DN25 PN 16 flanges, or sanitary tri-clamp. Regulators are ultrasonically cleaned and degreased. Cleaning based on ASTM-G93 Level C/CGA 4.1 is available as an option.

Headquartered in Solon, Ohio, U.S.A., Swagelok Company is a major developer and provider of fluid system solutions, including products, assemblies, and services for the research, instrumentation, pharmaceutical, oil and gas, power, petrochemical, alternative fuels, and semiconductor industries. Its manufacturing, research, technical support, and distribution facilities support a global network of more than 200 authorized sales and service centers in 70 countries. For more information about Swagelok, visit the company’s website at www.swagelok.com.

Swagelok Central Canada has authorized sales and service centres in Saskatchewan, Manitoba, and Northwest Ontario. Email info@winnipeg.swagelok.com or visit www.swagelok.com. v

Safety a top priority for

Stoney Mountain Rentals

By Brad Lamontagne

Stoney Mountain Rentals (SMR) has benefited from the fracking revolution. If you want to get more revenue from new wells, use multistage fracing. This expensive liner system can be lowered into the well without being damaged. The frac liner reamer sizes the well, removing ledges which could damage inflatable packer ports.

When we first started running multistaged frac liners, the most common comments I heard were, “I hate running that reamer”, “I hope I’m on days off when they run that reamer”, and “Did you hear, the rig down the road has their reamer stuck?”. The cost of a stuck reamer can mean huge money to a oil company. There’s the cost of recovering it or abandoning it in the well. Now you’ve lost the operational cost to drill the well ahead of the reamer and are facing the resultant lost production. SMR reamers lower that anxiety for oil companies and drillers alike.

On one of our projects we worked with Dennis Hodge, who was looking for a way to eliminate the cost of renting jars and bumper subs (hole insurance). Canadian machine shops were understaffed or too over-worked with present customers

to take on any new work. We chose an Oklahoma machine shop with experience in milling products of this type and their ability to apply the carbide hard-banding.

We had to prepay everything to be a customer (the trust-building process). Hodge agreed to test the new reamer design on Tristar wells. I couldn’t have found a better man to partner with! “If it doesn’t work the way you and I think, we (Tristar) will pay for all your out-of-pocket expenses,” he promised. You don’t get a guarantee like that every day!

The first reamer was delivered midMay 2009. It worked very well and Tristar was able to achieve their goals of cost reduction. We later were able to move the manufacturing process back to Canada.

We chose Metaltek Machining, Bar Engineering and Creative Carbide Works of Nisku. With the help of Bar Engineering, SMR was able to increase the strength by 37 per cent over the first U.S. model. By allowing 50 per cent of the reamer blades to float on a mandrel, you can reduce the over-pull to free a stuck reamer by up to 50 per cent. Also, when the sleeve moves down the mandrel, it changes the reaming angle which now acts like two different reamers; a shorter model to ream

through first and a longer one for the second pass.

Top drive rigs are able to get the full advantage of a SMR reamer. (Around the shop, we like to call it the “SMaRt reamer” that comes with a built-in get out-of-jail-free card.) When mono bore wells started to increase, there was no equipment in that size range to help these larger liners. We met with Dale Bernard of Magellan Resources and offered our solution to the problem: build it bigger. Bernard ordered a 200-millimetre hole model that very day. With this size, we were able to move into the Pennwest Waskada Unit, which proved very successful for both companies.

Safety is SMR’s and our clients’ top priorities so in 2011-12, we were able to be ISN-accredited and SECOR-certified.

A second highlight was getting our U.S. patent for the reamer. As a small company, far from Calgary, we take no job today as a granted job tomorrow. We ask for feedback on performance to optimize customers’ wells. Our clients have very accessible area co-ordinators and excellent field consultants, which make this job much easier. Every tool is made as if I were going to run it in my own wells. v Saskatchewan Oil Report 2013 155

Jatco exceeds 98 per cent BTEX elimination To meet the requirements of the ERCB Directive 39 requirements, ZIRCO has introduced the Jatco Shell and Tube BTEX Eliminator. The Jatco system is a closed-loop, counter-flow heat exchanger and condensing system used to capture and recycle BTEX and VOC vapours from the glycol dehydrator still

column. The Jatco Shell and Tube system forces vapours to serpentine through the condenser for efficient cooling using the coolest glycol from the regeneration system to cool the dehydrator still-column vapours. Condensed liquids are collected in the Jatco tank, then automatically transferred to storage.

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The residual VOC vapours can be routed to the reboiler main burner for fuel assist, routed to an existing flare, or using our ejector system, can be routed to the compressor suction line for 100 per cent recycle of the still-column vapours.

There are various types of condensers in use today that condense and store the liquid hydrocarbons. As these are not closed-loop systems, tons of hazardous air pollutants, VOCs and BTEX vapours are emitted through the tank vent or hatch.

The Jatco closed-loop technology prevents vapours from being vented. Greater than 98 per cent of the total still column emissions are either condensed and burned in the reboiler burner, or condensed and ejected to compressor suction, flare or VRU – a closed-loop system that continually reuses BTUs. Each dehydrator location is evaluated based on site-specific parameters; including gas flow rate and composition, pressure, temperature, and presence of H2S. These inputs are used in both industry-accepted estimating and modeling software such as GRI GLYCalc 4.0 and our other proprietary software programs. Based on the calculation results, ZIRCO determines the condenser sizing required to efficiently condense the liquids and what options can be used to reuse the noncondensed vapours. The system as a whole continually reuses BTUs versus requiring or wasting BTUs. The resulting benefits to the environment are quantifiable using GRI GLYCalc 4.0 or equivalent software programs, and depend most importantly on the flow rate and on the composition of the gas to be dehydrated. Both hydrocarbon liquid recovery and reduction in BTEX emissions can be determined.

At a particular facility flowing 21 MMSCFD, the estimated Uncontrolled Regenerator Emissions can be reduced from 261 tons/year to .56 tons/year and Hydrocarbon Liquid Recovery estimated at 4.6 bbls/day. At current prices, the revenue stream is impressive.

Footprint is also a consideration for many owners. The Jatco system is very compact and can usually be accommodated in the Dehy building. On new installations, the Jatco Shell and Tube can be installed and piping completed before shipping to site, facilitating the ease and cost of the field work to be done.

Energy is continually conserved and reused in the day-today operations of the Jatco Shell and Tube. All control valves are pneumatically operated by instrument gas which is readily available at each site, and if installed in the Dehy building, additional heat sources are not required. ZIRCO does offer electric valve options to meet customer requirements.

ZIRCO has been providing environmental solutions and aiding our clients in the oil and gas industry meet regulatory compliance issues for 30 years.

If you would like further information, or to join our growing list of companies supporting good environmental stewardship, please contact us at www.zirco.com. v

ZIRCO • Natural Draft Burners • Burner Management Systems • Burner Ignition Systems • BTEX VOC Eliminators • API 2000 Tank Venting and Breathing • Flame Arrestors • Flare Stacks • Water Cut Meters • Oil in Water Analyzers

Instrumentation and Environmental Solution

Phone: 403.259.3303 Toll Free: 1.800.461.3120 5614A Burbank Road SE Calgary, Alberta T2H 1Z4

ZIRCO

www.zirco.com Saskatchewan Oil Report 2013 157

GlobalFlow: ‘Integrated Energy Solutions’

Formerly known as the Maverick Group of Companies, GlobalFlow was incorporated just about 10 years ago.

“We have went through many changes over the course of our 10 years,” says Bruce McKenna, sales manager at GlobalFlow Inc. “We started building fully automated metering skids for the shallow gas areas in southern Alberta and Saskatchewan, installing all of the electrical and instrumentation with our own field people.

“As our oil and gas industry has changed dramatically, so have we,” McKenna explains. “Within the last

year, we have consolidated all of our operating companies into GlobalFlow and its three business units, Automation-Controls-Process Equipment. We specialize in offering ‘Integrated Energy Solutions’. Through our automation group, we offer project management, design, and field installation with highly qualified SCADA technicians. We offer commissioning, programming, integration, and ongoing support.

“We also have a full-panel construction shop dedicated to constructing with the highest-value components and assembly techniques,” he states. “Our

Experience, leadership, performance.

CanElson Drilling Inc. Suite 700, 808 - 4th Avenue SW, Calgary, AB, Canada T2P 3E8 Phone 403.266.3922 Fax 403.266.3968 www.CanElsonDrilling.com TSX: CDI Operations offices: Nisku Alberta

158 Saskatchewan Oil Report 2013

Carlyle Saskatchewan

Midland Texas

Mohall North Dakota

controls division offers electrical and instrumentation maintenance and construction through locations across the Western Canadian Basin in B.C., Alta., Sask. and Manitoba. With a full line-up of highly qualified electrician and instrumentation techs, we are satisfying the current demands that the oilpatch has to offer.

“In the last year, our process equipment division has expanded their footprint into the market by adding on 28,000 square feet in a new facility.

The addition of crane capacity, welding capacity and a 10-acre lot has certainly had a huge impact on our clients’ needs for vessels, separator packages and process equipment of all sorts. This has also allowed us to diversify our client base and build equipment for international producers.

“By combining GlobalFlow’s expertise and offerings under one umbrella, we offer a synergistic value to producers that no one else does. We are able to send out equipment from our process facility that is ‘project completed’. This certainly has proven to save producers valuable time and money by using our ‘Integrated Energy Solutions’,” McKenna concludes.

For more information, visit globalflowinc.com. v

Import Tool Corp. Ltd.

proudly serves Saskatchewan’s oilpatch Import Tool Corp. Ltd was founded in Edmonton in 1952 by Don Wilkin and Delbert Lewis, Jr. as a liner hanger and cementing equipment oilfield service operation. From those early days, Import’s business philosophy was simple: provide the Canadian oilpatch with the best-quality tools and on-site services by representing world-class manufacturers and attracting exceptional personnel.

Sixty years later, Import Tool is proud to exclusively represent BakerHughes liner hanger tools and Davis-Lynch/F.E.T. cementing equipment, and to employ the best-trained and most conscientious staff in our history. Although our relationships with our customers, suppliers and employees have never been better, Import is committed to continuous improvement in every area. It was also a conscious decision to avoid the “diversify or die”, “go public” and “move to international markets” bandwagons and instead put our collective efforts into improving tool application and operational quality.

1988 saw a management buy-out which has resulted in an ownership made up of individuals from the operations, sales and administration areas. It is this partnership model that is largely responsible for the continued growth and quality improvements at Import Tool.

Import’s head office and major shop facility is located in Edmonton, with a sales office in Calgary. We like to say that we have some “depth”, too, as we have completed over 95 per cent of all producing wells off Canada’s East Coast through our St. John’s facility. Many of these wells are as deep and technically sophisticated as any in the world.

SAGD represents a key part of Import’s business portfolio. Our ultra-high-

Import Tool is proud to exclusively represent BakerHughes liner hanger tools and Davis-Lynch/F.E.T. cementing equipment, and to employ the best-trained and most conscientious staff in our history. temp liner-top packers are used by the majority of SAGD operators and thanks to initial designs by our own Terry Ostapovich and on-going research and development, we are confident that we will continue our premier position in this growing and important area.

While horizontal liner systems represent the majority of our work for over forty operators in Saskatchewan and

Manitoba, we are also experienced in providing tools and services related to potash solution wells.

Interestingly, Import Tool operated a small shop in Estevan in the late 1960s.

We’re now thrilled with our newly completed shop facility on Devonian Street and intend to be a real part of the Estevan and southeast Saskatchewan business communities for years to come. v

• Manufacturer of Irontech Service Rigs & Pump Trucks • Repair & Total Rebuilding Services for Rigs, Pump Trucks & Associated Equipment • Complete Oilfield Fabrication, Mechanical, Machining, Certification, Sandblasting & Painting Services

“We Build Your Rig” #11 53016 Hwy 60, Acheson, AB T7X 5A7 Telephone: (780) 960-4881 • Fax: (780) 960-8840

irontech@irontechrig.com • www.irontechrig.com Saskatchewan Oil Report 2013 159

Polycore thermoplastic lined tubing:

‘Give Us Your Worst Well!’

Polycore Tubular Linings provides thermoplastic liners that have been proven in downhole applications in over 30,000 wells during the past 15 years. Operators experience drastic reductions in operating costs by eliminating rod-on-tubing wear and corrosion failures. Savings can also be found with less work-overs, prolonged tubing life, minimized lost production, reduced energy required for lifting in pumped wells, and reduced need for corrosion inhibitors.

Thermoplastic liners are extremely abrasion-resistant and chemically inert, eliminating concerns associated with wireline damage, coil tubing mechanical damage, acid treatments, and chemical treatments.

Polycore’s patented products have been particularly effective in eliminating rodon-tubing wear in beam-pumped wells, progressive-cavity pumped wells, and any well associated with deviations. Today’s horizontal wells are a perfect application for Polycore’s thermoplastic liners, cutting rod load friction on downhole tubing in half. Thermoplastic liners are also effective with other artificial lift methods such as plunger lift wells, submersible pumped wells, and gas lift wells. Use of this technology eliminates the need for tubing/rod rotators as well as rod guides and/or special rod boxes.

Thermoplastic liners have also been proven effective in reducing corrosion fail-

Regina (306) 525-2777

•

Saskatoon (306) 931-4448

Winacott Equipment Group located in Regina and Saskatoon, are dealers for new and used Western Star trucks, Hyundai construction equipment & Cancade trailers.

Winacott Equipment Group carries a full line of parts for the equipment we sell and our certified technicians are qualified to handle all your service needs.

We carry all major brands of engine parts for Detroit, Cummins, Mercedes and Caterpillar, we also carry a full line of heavy-duty drive train parts, Fuller transmissions, Eaton and Meritor cluches, Spicer & Meritor driveline components, Detroit & Dana axles and parts.

We are proud to be a member of the Saskatchewan Oil & Petroleum Industry.

www.winacott.ca 160 Saskatchewan Oil Report 2013

ures in injection wells, disposal wells, and flow lines.

This mechanically bonded liner solution allows you to realize additional savings by promoting the use of used inspected tubing including yellow band, blue band, and green band. The Polycore liner installation process also allows re-using tubing already internally coated with plastic or epoxy, without incurring the cost of having the old internal coating removed.

Thermoplastic liners can also be installed in used tubing which may previously have been scrapped due to pin thread mechanical damage or corrosion damage caused by chipped coatings. With sufficient upset remaining, the threads can be repaired and a thermoplastic liner installed.

Polycore’s unique and innovative endfinishing process, in combination with a coupling internally coated in the J-area, ensures zero corrosion through the entire string of tubing while maximizing the ease of running tubing in the field. No corrosion barrier donuts/inserts, special torque make-up requirements, or service technicians are required. Polycore lined tubing is run using a torque to optimum API specifications.

For more information, contact us at www.polycore.ca. v

Lower costs AND increase revenues?

YES! Polycore Tubular Lining products will protect your downhole tubing and reduce work over costs.

•

Minimize rod on tubing wear

•

Reduce corrosion

•

Maximize rod life

•

Extend the life of your well

•

Line new and used tubulars

KEEP YOUR WELLS PRODUCING AND REDUCE COSTLY DOWNTIME Working temperatures from 65C to 260C

POLYCORE Tubular Linings More than 32,000 wells and 50 million feet worldwide

306-421-POLY(7659)

www.polycore.ca

Korpan Tractor:

By Ashley Foley

family-operated with family values

Locally owned and operated for three generations, Korpan Tractor in Saskatoon has provided reliability and flexibility for nearly 50 years.

The company was founded by Nick H. Korpan in 1965, after Nick had gained experience from working at a Caterpiller dealership for 21 years. He decided sell parts and tractor supplies and opened up Korpan Tractors in order to do so.

The business was successful and soon after opening, he expanded the shop to a three-acre yard, doubled the building size, and began selling used equipment and tractors as well.

162 Saskatchewan Oil Report 2013

In 1980, he sold the company to his sons, Ray and Bob. Five years afterward, the brothers expanded the family business again, this time to a 12,000-square-foot facility on five acres.

In 1998, Korpan Tractor expanded even further, adding 6,000 additional square feet to the operation. This allowed for seven new service bays, additional warehouse space, and more office space. Today, it is still an independent, family-owned operation, now with six partners in ownership.

“My grandfather started it in 1965 after having worked for a local Caterpillar dealer,” explains Tyler Korpan, Nick’s grandson who is now a partner in the business. “He decided to branchout and start servicing the market by selling used parts for Caterpillar equipment as well as other manufacturers. From there, the business evolved into importing components from overseas, primarily Italy.”

“We have been family-owned and operated since its induction. Ray and Bob, my father and my uncle, have worked at the business since 1965. They started working in the parts department. From there, we began to sell tractors, whole units, to the construction market here in Saskatchewan.”

The business takes pride in offering fair prices on the purchase of heavy equipment and their parts, as well as repair and rentals services, which has led to the business’s successes and expansions today.

Tyler says though there are no particular plans in place yet for

future expansion, the company is determined in its goals and is continuously looking for ways to improve.

“Our vision and our goals, we keep them aggressive, but we don’t brag about them. We just keep them within and hope that we can continue to exceed and go above and beyond what we set as goals for ourselves,” Tyler says, hopeful for further expansion in the future. “Of course we have ambition for expansion.”

Tyler says being family-owned and operated plays a large part in their service and who their customers are.

“It’s probably a factor, yes, and a reflection of the history as a whole,” he affirms.

“That translates to reflect a lot of who our customers are – they’re often family-owned and operated companies. We try to provide that sense that we are a family business and we service them as if they were family.”

Most of Korpan Tractor’s customer base, both industry and

private, contains an aspect of construction. Tyler said in a week they may service the oil and gas sector, mining, site reclamation and earth-moving projects.

Being situated in northern Saskatchewan, the oil industry is very active in and around the Korpan Tractor location, which Tyler says has helped in the success of their business greatly.

“We work with oil companies but we work indirectly with them, because it’s customers who are building roadways or they’re preparing sites for oil construction,” he says.

“There’s construction work that’s required for oil services. If an oil company is told to put in a well, they need to move the earth and so require all the appropriate parts to enable them to drill.”

Korpan Tractor provides services throughout Canada, the United States and world-wide. “There is nowhere but up for the company,” he concludes optimistically. v Saskatchewan Oil Report 2013 163

Index to advertisers 24-7 Enterprises Ltd............................................................ 114

Golder Associates.................................................................. 79

Mullen Oilfield Services LP..................................................... 9

49 North Resources Inc........................................................... 5

Goodwater Machine Shop (1986) Ltd................................... 95

Neptune Pump Services..................................................... 121

Alberta Innovates Technology Futures............................... 113

Graham Construction...........................................................IFC

Neset Consulting Service...................................................... 84

Alliance Pipeline................................................................... 37

Grassland Environmental Inc.............................................. 141

Noble Well Services Inc......................................................... 94

Allied Cathodic Services L.P................................................... 30

Great Plains College.............................................................. 25

Norbert’s Manufacturing Ltd.............................................. 136

Annugas Compression Consulting Ltd................................ 156

Grimes Sales & Service Ltd................................................... 22

North Dakota Petroleum Council.......................................... 12

Arrival Oil Tools Inc................................................................ 93

Halliburton........................................................................... 13

Association of Professional Engineers & Geoscientists of Saskatchewan..................................... 137

Healthserv (SASK)............................................................ 28

Big Country Energy Services Inc........................................... 42 Black Gold Emergency Planners Inc...................................... 72 Brandt Tractor....................................................................... 69 Britespan Building Systems.................................................. 20 Brock White Canada........................................................... 101 Canadian Linen & Uniform Service....................................... 61 Canadian Western Bank....................................................... 21 CanElson Drilling Inc........................................................... 158

Hempel (Canada) Inc.......................................................... 102 Hitachi Power Systems Canada Ltd....................................... 51 Hot Rods Oilfield Services Inc............................................... 66 Hub International Horizon Insurance................................. 135 Hunt Hot Shot....................................................................... 70 IFP Technologies Canada.................................................... 112 IFR Workwear Inc................................................................ 144 Import Tool Corp. Ltd............................................................ 11

North West Regional College................................................ 58 Northwest Tank Lines........................................................... 29 Oil Boss Rentals.................................................................. 129 Outlaw Oilfield Hauling Ltd................................................ 138 Palliser Land Ltd. / Millennium Land Ltd............................ 141 Penta Completions............................................................... 23 Platinum Energy Services Corp............................................. 44 Platinum Grover................................................................... 17 Polycore Tubular Linings..................................................... 161

Intricate Well Servicing Ltd................................................. 125

Prairie Mud Service............................................................... 72

IROC Energy Services Partnership......................................... 74

Prairie Rat Hole Services....................................................... 70

Irontech Rig Repair & Manufacturing Inc........................... 159

Prairie Storm Construction Ltd........................................... 120

J. Giesbrecht & Son Cranes Ltd.............................................. 34

Praxair................................................................................ 130

JK Containments................................................................... 55

Precision Well Servicing...................................................... 149

J.L.M. Supply Ltd.................................................................. 91

PTI Group Inc........................................................................ 39

Days Inn - Swift Current...................................................... 166

JNE Welding.......................................................................... 67

Pure Energy Services Ltd....................................................... 59

Do All Industries Ltd............................................................. 73

Karam A.l.............................................................................. 48

Pyramid Corporation............................................................ 40

Dueck’s Mechanical Inc......................................................... 53

Kenilworth Combustion....................................................... 10

Racken Enterprises Ltd.......................................................... 68

Dynamic Resources Ltd......................................................... 63

Kenosee Inn Resort Hotel................................................... 166

RAM Industries Inc.............................................................. 127

Ecoquip Rentals & Sales Ltd................................................ 165

Kilo Technologies Ltd............................................................ 97

Elad Geological Consulting Ltd............................................. 66

Korpan Tractor...................................................................... 31

Electric Power Generating Equipment Inc............................ 25

Kramer Energy.................................................................... 145

Encore Trucking & Transport Ltd......................................... 150

Lakeland College.................................................................. 98

Ener-Test Well Servicing and Rentals Ltd.............................. 62

Leader Inn.......................................................................... 166

Envirotrap Systems............................................................. 134

Lloydminster Economic Development.................................. 33

Essential Coil Well Service................................................... 151

Logan Completion Systems.................................................. 27

Estevan Economic Development.................................... 71, 75

Manulife Securities............................................................... 77

Estevan Meter Services Ltd..................................................... 8

Marquis Alliance Energy Group Ltd....................................... 85

Ever Green Enviro. Corp....................................................... 130

Maverick Land...................................................................... 66

Fast Trucking Service Ltd....................................................... 38

Medius Industrial.................................................................. 25

Site Energy Services............................................................ 115

Flexpipe Systems.................................................................. 45

Metalex Metal Buildings Inc................................................. 55

Skyway Canada Limited..................................................... 133

Frozen Topsoil Cutting Ltd..................................................... 15

Meter-Man Flow Products Ltd............................................ 120

Smith Bits............................................................................. 49

Glentel Inc............................................................................ 16

MGI Securities Inc............................................................... 123

South East Electric Ltd........................................................ 128

G.L.M. Industries L.P........................................................... 115

Millennium Directional Service Ltd.................................... 139

Southeast Regional College.................................................. 61

Global Flow, Inc.................................................................... 43

MRC Canada....................................................................... 107

Spectra Credit Union............................................................... 4

Cat-Tek Cathodic Services/Construction............................... 89 City of North Battleford...................................................... 109 City of Swift Current............................................................ 140 Classic Vacuum Truck Ltd.................................................... 112 D & D Oilfield Rentals Corp.................................................... 81 D&G Poly Products................................................................ 78

164 Saskatchewan Oil Report 2013

Ranger Land Services Ltd..................................................... 80 Redz Retipping Ltd............................................................. 121 RL Supervision Ltd.............................................................. 102 Ronald Communications.................................................... 136 Roughrider Rigging Ltd........................................................ 26 Saskatchewan Ministry of Economy....................................IBC SaskTel ................................................................................... 7 SEREDA............................................................................... 117 Shaunavon Economic Development................................... 131

Stoney Mountain Rentals Ltd............................................... 19

Trent’s Tire............................................................................. 83

Watson Land Services (1984) Ltd....................................... 100

Summit Liability Solutions Inc................................................ 3

Trinity Safety & Training Inc.................................................. 41

Western Heritage................................................................. 47

Surerus Pipeline Inc.............................................................. 65

TSL Industries....................................................................... 36

Western Safety Sign Co......................................................... 14

Swagelok Central Canada................................................... 153

United Centrifuge Ltd.........................................................OBC

Wheat Country Motors....................................................... 108

Tarpon Energy Services Ltd................................................... 35

University of Regina........................................................... 105

Winacott Equipment Group................................................ 160

The Telsec Group................................................................. 122

Vehicle Mounted Air Compressors...................................... 143

ZCL Composites Inc............................................................. 152

Tremcar Inc........................................................................... 57

W.H. Coderre & Sons Construction Ltd................................ 130

Zirco Ltd.............................................................................. 157

You need downtime, your pump jack shouldn’t

The Ecoquip 9000 series Hydraulic Pump Jack is reliable, durable and powerful.

• No unreliable and faulty sensor bars or proximity switches mounted on or near wellhead.

• The only unit using a true N2 counter-balance which ensures an energy efficient and smooth stroke that reduces wear on equipment, rods, pumps or seals.

• 144” stroke length, 35,000lbs lifting capacity and speeds up to 7 strokes per minute all at the same time.

No de-rating of performance based on well dynamics.

Pump Jacks

www.ecoquip.ca Saskatchewan Oil Report 2013 165

Saskatchewan Hotel & Motel Guide Superior hotels when your crews are on the road.

Leader Inn Newly renovated, flat screen tv’s with buit-in DVD Free to use laundry/free wireless Wi-Fi PH: (306) 628-3854 FAX: (306) 628-3788 BOX 327 LEADER, SASKATCHEWAN S0N 1H0

ENJOY YOUR NEXT CONFERENCE HERE AT THE KENOSEE INN NESTLED IN THE BEAUTIFUL MOOSE MOUNTAIN PROVINCIAL PARK

Spend Less Travel More • Flat screen TV, mini-fridge, microwave, coffee maker, hair dryer, iron & board • Free Daybreak Café breakfast, daily newspaper & local calls

We can accommodate small & large groups varying in size from 10 to 100 people.

30 Rooms & 23 Cabins — All Crews Welcome.

…

WHETHER IT’S FOR COMPANY FUNCTION | WEDDING | FAMILY REUNION WE CAN MEET YOUR NEEDS.

www.kenoseeinn.com

• Free high-speed Internet and Lobby The Bestterminal Value Under The Sun SM computer Flat screen TV, mini-fridge, microwave, coffee maker • •Fitness room & hair dryer in all guest rooms

• •Jacuzzi suite,Café wheelchair Free Daybreak breakfast &accessible daily newspaper & one bedroom suiteinavailable •suite Free high-speed Internet access all guest rooms Lobby computer terminal • •On-site Lounge, Beer & Wine Store • Free local calls

• •Banquet & meeting facilities Fitness room JacuzziTruck suite &parking wheelchair accessible suite available • •Large with plug-ins • On-site lounge, beer & wine store • Banquet & meeting facilities

www.daysinn.ca LOCAL: 773-4643 TOLL FREE: 1 800 DAYS-INN (1 800 329-7466)

905 North Service Rd East Swift Current, SK S9H 3V1 Fax: 773.0309

166 Saskatchewan Oil Report 2013

MOOSE MOUNTAIN PROVINCIAL PARK | BOX 1300 | CARLYLE, SASKATCHEWAN | S0C 0R0 P. 306 5772099 | F. 306 5772465

New name.

Increased focus on business.

Saskatchewan has one of the most exciting economies in the world. To maintain it, to generate growth and to create wealth in our province, we’ve created the Ministry of the Economy.

The new ministry brings Enterprise Saskatchewan together with the Ministry of Energy and Resources, as well as labour market development, immigration, and Aboriginal and northern business development. Through responsible resource development, and the maintenance of a skilled workforce and a competitive business environment, we’ll continue to create Real Growth. Real Opportunity.

Visit www.economy.gov.sk.ca

24 Hour Service

Be Safety Smart From The Start

Solids Control And Dewatering Equipment • Centrifuge • Polymer Tanks • Shale Bins

• Dewatering Tanks • Premix Tanks • EZ Load Hydra Lift System

C.O.R. Certified www.unitedcentrifuge.ca Phone: (306) 842-2378 Fax: (306) 842-2403 Email: unitedcentrifuge@sasktel.net Shop 1560, New City Garden Road, Weyburn, Saskatchewan S4H 2L5