Saskatchewan Oil Report 2015

SASKATCHEWAN The voice of the oil industry in Saskatchewan.

2015

Oil Industry Will Rebound Premier Brad Wall states it’s time for North America to act like an energy superpower

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Pipe Dreams – Keystone XL debate continues to rage into 2015 Going Up and Coming Down – Six planning imperatives for oil and gas companies in volatile times

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Contents

messages – reports – events

Premier’s Message – Oil Industry Will Rebound – It’s time for North America to act like an energy superpower.................8

SASKATCHEWAN Oil Report is published by: DEL Communications Inc. Suite 300, 6 Roslyn Road Winnipeg, Manitoba, Canada R3L 0G5 www.delcommunications.com

Fraser Institute 2014 Global Petroleum Survey Findings – Saskatchewan still Canada’s most attractive jurisdiction for petroleum investment..........................................................14

President & CEO: David Langstaff

Economic Pain Before Recovery – After years of high commodity prices, oil drilling companies transition to survival mode..................................................22

Publisher: JASON STEFANIK

Pipe Dreams – Keystone XL debate continues to rage into 2015........................................................................................24 Diversity in the Workforce – Petroleum Human Resources offers insight on Saskatchewan labour market challenges.................................................30 Making it Matter – Tips on managing relationships while in the oil and gas industry.......................................................38 Investing in the Future – Saskatchewan helps build the oil industry.................................................................................44 Saskatchewan Government Delivering New Tool – IRIS to benefit oil companies..............................................................50 The Oil Story – Moving the province’s oil via rail................................................................................................................54 The Significance of Rail – The importance of this mode of transport will be seen Saskatchewan and Canada for years to come..............................58 Going Up and Coming Down – Six planning imperatives for oil and gas companies in volatile times................................64 Advanced Extraction – Saskatchewan Research Council’s Flow Technology Centre™ expansion project............................66 The Heavy – The Petroleum Technology Research Centre expands its research beyond heavy oil......................................70 Plan to Attend – 23rd Williston Basin Petroleum Conference & Expo.................................................................................72 Committed to Community – Redvers & District Oil Showcase gives back...........................................................................76 Poised for Growth – Weyburn builds for stronger future....................................................................................................78 Recording Breaking – The city of Swift Current is anticipated to see significant growth in 2015........................................82 With Care – Empowering oilfield safety practices..............................................................................................................85 Timely, Responsive, and Customizable – Training at Great Plains College..........................................................................86 Capitalizing on the Entrepreneurial Spirit – Calroc Industries aims to hit it big.................................................................90 Dig In – Changing standards in archaeology.....................................................................................................................95 Closer Connecting – Enform Saskatchewan moves near to the heart of the industry........................................................98 Find the Energy – Energized expansion at Lakeland College’s Lloydminster campus.......................................................100 In it For the Long Haul – Redhead Equipment provides assurance in an uncertain economy...........................................104 Trucking on into the Future - TSL Industries puts people first in their business................................................................106 Keeping Up With Innovation – Kenilworth Combustion continues to produce performance and safety..........................110 Drilling it Home – Millennium Directional Service Ltd. uses a proactive approach to be top of mind with clients........................................113 The Trainer of Choice – Southeast College offers the training students need close to home............................................116 Modern Pipes – Flexpipe Systems is upgrading pipelines................................................................................................118 Working for You – EasyRider Trucking brings safety and service to every job...................................................................120 Suburban Hotels – How one brand supports Saskatchewan’s oil and gas industry..........................................................122 Park Derochie – Trusted partners in the oil and gas industry...........................................................................................124 Add to Your Fleet – Kramer Energy is a proud provider of Cat® equipment and other valuable vehicles for the oilfield.................................126 The Standard of Excellence – Select-SAI, Inc. designs, manufactures, and supports superior tubular welding electrodes.............................................128 From the Well to Your Phone - SMART technology offers wireless production reporting..................................................130 Safe and Sound– RCM Safety Services Ltd. offers high-quality health and safety service in Saskatchewan....................133 Index to advertisers.........................................................................................................................................................136 6

Saskatchewan Oil Report 2015

Managing Editor: Carly Peters carlypeters@mts.net Advertising Sales Manager: DAYNA OULION dayna@delcommunications.com Advertising Sales Representatives: ROBERT BARTMANOVICH | DONNA BURNER NICK CUNNINGHAM | KEN HARRISON JENNIFER HEBERT | GLADWYN NICKEL JIM NORRIS | ANTHONY ROMEO 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: SHERI KIDD | JOEL GUNTER Cover Photo Credit: Tina Hudson Image courtesy of Weyburn Regional Economic Development www.weyburneconomicdevelopment.com © 2015 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.

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4G LTE Coverage – September 30, 2014

Visit a SaskTel Authorized Dealer or SaskTel Store | 1-800-SASKTEL | sasktel.com The coverage areas shown are approximate. SaskTel cannot guarantee that coverage will be exactly as shown since factors beyond our control also affect coverage. These include weather conditions, terrain, your distance from a cell tower and whether the cell is being used indoors or outdoors. Saskatchewan 4G coverage is as of September 30, 2014. 4G LTE coverage effective date is September 30, 2014.

Coverage areas outside of Saskatchewan are subject to change without notice. Long distance charges apply outside local calling areas.

Rates vary depending on service plan. Mobile internet access speed provided by the network operator may vary due to the divide being used, network congestion, distance from the cell site, topography, environmental conditions and other factors. Speed on the Internet is beyond the wireless network operator’s control and may vary with your configuration, Internet traffic, website server and management policies and other factors. 4G and 4G LTE are not available in all areas.

Oil Industry Will Rebound It’s time for North America to act like an energy superpower

By Brad Wall, Premier of Saskatchewan

The great British Prime Minister Benjamin Disraeli once said “There’s no education like adversity.” If that’s the case, the oil industry has done a lot of learning during the last few months, and so have governments that rely on the industry for investment, revenue, and jobs.

We have witnessed a precipitous drop in oil prices that virtually no one foresaw, a decline so steep the industry’s basic operating assumptions are being questioned by many.

This is indeed a challenging time for companies, employees, and jurisdictions like Saskatchewan.

As we deal with those challenges, we need to keep in mind that we’ve been here before, and not so long ago.

Oil prices plunged in 2009, and the industry faced the same uncertainty it confronts today. But prices bounced back fairly quickly, thanks in large part to growing demand in the developing world.

And while this time prices may not recover as quickly, the industry’s demand dynamics have been forever altered by the rise of countries like China, India, Indonesia, and Thailand.

Even if those Asian economies weaken in the short term, it is difficult to envision a scenario where global demand for oil languishes for long.

The world’s population is expected to increase to more than nine billion by 2050, with much of that growth to take place in Asia. Moreover, the world is becoming more affluent and more urbanized, which will translate into higher demand for energy.

From 2000 to 2012, demand for oil in Asia grew by 41.5 per cent, while demand declined in Europe and the United States, according to OPEC. OPEC forecasts that oil demand will climb from 90 million barrels a day in 2013 to 111 million barrels a day by 2040, with most of the increase coming in Asia.

This is why I believe in the long term, the North American oil industry will prosper, provided we have the appropriate taxation and regulatory regimes in place and the necessary infrastructure to get our product to market.

In the short term, there will be some rocky days.

8

Saskatchewan Oil Report 2015

Thankfully, the oil and gas industry is made up of tough and resilient people, and so is the province of Saskatchewan. We are both accustomed to market volatility.

Saskatchewan is a province of traders, exporting almost threequarters of the total value of what we grow, mine, or build to markets around the world. Our economy relies heavily on natural resources to drive growth and investment.

But while many know Saskatchewan as a leading producer of potash, uranium, and agricultural products, and that diversity of resources will help see us through a slowdown, the contribution of oil to our economic well-being is not as well known outside the province.

That’s why, wherever I go, I am quick to point out these facts: • That our province has 53.9 billion barrels of initial oil in place and 1.3 billion barrels of remaining recoverable reserves • That Saskatchewan is Canada’s second largest oil producer and its third largest natural gas producer • That prior to the recent decline in prices, Saskatchewan was producing a record amount of oil - more than 500,000 barrels of oil a day, with 65 to 70 of production exported to the United States. We ship more oil to the U.S. than Kuwait does • That Saskatchewan is a global leader in the research and development of enhanced oil recovery technologies • That our industry has a solid track record of innovation, and has eagerly utilized horizontal drilling and hydraulic fracturing to boost production Oil has provided an enormous economic boost to our province.

In 2013, the industry accounted for an estimated 15.1 per cent of Saskatchewan’s $61.1 billion real gross domestic product. In 2014, it invested an estimated $6 billion in exploration and development, and supported approximately 38,000 jobs.

Our government is extremely grateful for the hard work and enterprise of the hundreds of companies operating oil and gas wells in the province and the firms that support them. The private sector deserves the credit for the impressive growth in Saskatchewan’s oil sector.

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In 2014, Saskatchewan ranked 1st in Canada, 3rd in the world, for petroleum exploration and development investment potential.

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Saskatchewan upstream oil and gas capital expenditures: ($ billions) 2004 $2.0 2005 $2.4 2006 $2.9 2007 $3.1 2008 $4.8 2009 $2.8 2010 $4.5 2011 $5.1 2012 $4.9 2013 $5.6 2014 $6.0 (est.)

For our part, the government has tried to help by creating an atmosphere conducive to growth.

That we have had some success is borne out by the Fraser Institute’s annual Global Petroleum Survey, which ranked Saskatchewan as the third most attractive place in the world for the oil and gas industry.

In these uncertain times, we will do ev-

Saskatchewan oil wells drilled: (wells drilled)

Saskatchewan crude oil production: (million barrels)

2004 1,740 2005 2,007 2006 2,340 2007 2,297 2008 2,824 2009 1,610 2010 2,730 2011 3,528 2012 3,208 2013 3,371 2014 3,657 erything we can to ensure Saskatchewan remains a competitive place to do business for the industry.

That includes serving as a strong advocate on the national and international stage.

We have been vocal in our support of major pipeline projects that will benefit Canadian oil producers, such as Northern Gateway, Keystone XL, and Energy East.

2004 154.7 2005 152.9 2006 156.4 2007 156.2 2008 161.0 2009 155.0 2010 154.3 2011 157.9 2012 172.9 2013 177.9 2014 188.0 In our view, it is imperative these projects proceed if Canada is to live up to its status as a world energy superpower.

The pipelines will provide a major boost to the North American economy, and ensure our oil can get to tide water, enabling producers to receive world prices for their product.

I’ve travelled to Washington in support of TransCanada’s Keystone project.

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In speeches and in meetings with lawmakers, I’ve made the point that there are already more than 80 pipelines carrying hydrocarbons between Canada and the United States, all operating safely right under the nose of actress Daryl Hannah and other fervent opponents of Keystone.

In those discussions, I’ve stressed the project’s economic benefits. According to the U.S. State Department, Keystone will contribute $3.2 billion to the U.S. GDP and create more than 42,000 jobs during construction.

The State Department has also concluded that Keystone will not significantly increase greenhouse gas emissions.

Keystone is truly a “no brainer,” as Prime Minister Harper has said. But President Obama doesn’t see it that way. The project is caught up in an intense political debate in the United States. I’m troubled by that debate, but I understand it. Opposition to the $12 billion Energy East project is harder to fathom.

Energy East, another TransCanada undertaking, entails converting an existing natural gas pipeline to an oil pipeline, and extending the pipeline to ports in Quebec and Atlantic Canada. Seventy per cent of the pipeline is already built.

Energy East, like Keystone, will enable Canadian oil producers to get world prices for their product, which will not only benefit those companies, but all Canadians through increased tax revenue, wages, and investment.

The pipeline will allow for the shipment of conventional oil from west to east, opening up the possibility of Canadian oil displacing oil importing from countries like Saudi Arabia, Iraq, and Nigeria.

The economic benefits associated with Energy East have been confirmed by independent studies completed by Deloitte and the Conference Board of Canada.

The Deloitte report predicts the pipeline will boost economic activity by $35 billion over its lifetime. This includes $10 billion in additional tax revenues, of which 20 per cent will flow to Quebec and 36 per cent to Ontario.

It is estimated Energy East will create 10,000 full-time jobs in the construction

Saskatchewan Oil Wells Drilled – Top 5 Years:

Saskatchewan Horizontal Oil Wells Drilled – Top 5 Years:

2014 3,657 1997 3,608 2011 3,528 2013 3,371 1985 3,343

2014 2013 2012 2011 2010

2,837 2,433 2,036 1,992 1,531

Saskatchewan Crude Oil Production (million barrels) – Top 5 Years: 2014 2013 2012 2008 2011

188.0 177.9 172.9 161.0 157.9

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All Canadians should be proud of our oil and gas industry.

We should trumpet its risk-taking, its innovation, and its social responsibility. phase, with most of the jobs going to workers in eastern Canada.

Energy East is now the subject of a rigorous National Energy Board review.

I was pleased to see that my colleagues, Premier Kathleen Wynne of Ontario and Premier Philippe Couillard of

Quebec, have dropped their demand to expand that review to include the greenhouse gas emissions (GHGs) generated in the production of the oil transported in Energy East.

Still, Quebec and Ontario are not yet supporters of Energy East. There is, in

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Saskatchewan Oil Report 2015

fact, considerable opposition to the project.

I have no doubt TransCanada will do everything it can to allay concern and correct misinformation.

Those of us who support the oil industry, and understand and appreciate its importance to the Canadian economy, must help with the effort.

And as we do, we need to deal in facts, for as the American president John Adams noted: “Facts are stubborn things.”

We should emphasize the fact that pipelines are by far the safest way to transport oil, far safer than moving oil by rail.

We should make known the fact that every year, Canadian resource companies and governments lose out on billions of dollars in profit and tax revenue because we are unable to ship our oil to world markets.

That means less money for job creation, less money for schools, hospitals and roads, less money for programs to help the most vulnerable among us.

We need to disseminate the fact that few countries in the world have done as much as Canada to ensure the environmental sustainability of fossil fuel production. Over the years, billions of dollars have been invested to reduce the industry’s impact on the environment.

And finally, we need to explain that the oil and gas industry has sustained the Canadian economy through difficult times, with the economic benefits extending far beyond the borders of Alberta and Saskatchewan. In 2013 alone, the industry invested $74 billion and employed 530,000 people.

All Canadians should be proud of our oil and gas industry. We should trumpet its risk-taking, its innovation, and its social responsibility.

Today, Canada can make an honest claim to being an energy superpower. It’s time we started acting like an energy superpower. v

Fraser Institute 2014 Global Petroleum Survey Findings Saskatchewan still Canada’s most attractive jurisdiction for petroleum investment

By Gerry Angevine Petroleum explorers and developers participating in the Fraser Institute’s latest Global Petroleum Survey indicated that Saskatchewan is the most favourable place in Canada for upstream petroleum exploration and development, repeating the province’s achievement in the 2013 survey. This marks the sixth consecutive year that Saskatchewan has placed either in first place or second place in Canada and also achieved a very high rating when compared with jurisdictions in the United States and other countries according to the all-inclusive Policy Perception Index scores. Manitoba ranked second in Canada for the second year running but the gap between its score and Saskatchewan’s has narrowed considerably.

The eighth annual Fraser Institute survey was conducted during the summer of 2014 and the results were published in November. The findings are based on responses from 710 petroleum industry executives, managers, and experts to questions regarding barriers to investment in petroleum exploration and production development in 156 provinces, states, and countries. As in previous years, the survey questions targeted 16 important factors impacting investment in upstream petroleum exploration and development. These include fiscal terms; taxation and other factors affecting the commercial environment, such as the availability of skilled labour; quality of and access to essential infrastructure; the regulatory climate 14

Saskatchewan Oil Report 2015

which investors face including the cost of regulatory compliance, duplication, inconsistent interpretation, and enforcement of regulations; uncertainty regarding how environmental regulations may be altered; and a number of other important issues such as land claims disputes, political stability, and security of personnel and equipment.

The various jurisdictions’ survey scores are based on the percentage of negative responses such as whether or not a given factor posed “a mild or strong deterrent to investment” or is so onerous that respondents “would not invest” in a given jurisdiction due to that policy factor. Consequently, those jurisdictions with the lowest scores are considered to pose lower or fewer barriers to investment and, therefore, to be the most attractive for investment.

The “Policy Perception Index” rankings referred to earlier, in which all of the jurisdictions rated in the survey are included, don’t take the extent of their oil and gas resources into account. When an indication of their proved petroleum reserves is considered, the rankings are different. For example, when grouped with 27 other jurisdictions each holding at least one per cent of the total proved petroleum reserves (of the 140 jurisdictions ranked in the survey which have at least some proved reserves), Alberta - the only Canadian jurisdiction in the group - ranks as the second most attractive jurisdiction for

investment, behind only Texas and ahead of Norway – North Sea, the United Arab Emirates, Qatar, and the 22 other jurisdictions in this group of large reserve holders. In this group, Alberta moved up from third position (of 26) in the 2013 survey.

In a group of 44 jurisdictions each holding at least 0.1 per cent of total proved reserves, but less than one per cent, Newfoundland and Labrador ranks as the 15th most attractive jurisdiction for investment.

The only other Canadian jurisdiction in this group, British Columbia, dropped to 19th place from 14th position (of 40) in 2013. Newfoundland and Labrador was moved to this group in the 2014 survey as the result of an increase in the province’s estimated reserves.

All of the other Canadian jurisdictions with proved reserves fall in a group of 69 jurisdictions with relatively small reserves.

Saskatchewan achieved second place in this group the 2014 survey, repeating the province’s 2013 performance. This time, Manitoba was very close behind, sitting in third position compared with fifth spot in 2013. The two provinces’ high rankings, both overall and within the group of jurisdictions with relatively small reserves, reflects their generally positive attributes with regard to most of the investment drivers addressed in the survey. The four other Canadian jurisdictions in this group - Nova Scotia, New Brunswick, Yukon, and Northwest Territories - all ranked near the middle of the group.

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

2014

2013

2012

2011

2010

Saskatchewan

10.3 (1)

11.4 (1)

14.6 (2)

17.5 (1)

17.6 (2)

Manitoba

11.5 (2)

16.9 (2)

11.1 (1)

17.5 (2)

12.5 (1)

Alberta

26.6 (3)

24.5 (3)

21.1 (3)

32.7 (5)

36.7 (6)

Newfoundland & Lab.

39.1 (4)

26.4 (4)

33.8 (6)

32.3 (4)

32.4 (3)

Nova Scotia

49.0 (5)

27.5 (5)

26.2 (4)

26.6 (3)

33.3 (5)

British Columbia

49.6 (6)

35.6 (6)

27.7 (5)

41.4 (6)

33.2 (4)

Northwest Territories

53.1 (7)

40.8 (7)

39.6 (7)

64.8 (7)

44.1 (7)

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Saskatchewan Oil Report 2015

On the basis of the Policy Perception Index rankings obtained when all of the jurisdictions for which sufficient survey responses were obtained are included, regardless of the extent of their petroleum resources, Table 1 shows that the three prairie provinces were ranked higher by the survey participants in 2014 than Canada’s four other significant oil- and gas-producing jurisdictions in terms of attractiveness for upstream investment – repeating the success of this group in this respect during 2012 and 2013. Compared with Manitoba and Saskatchewan, Alberta has demonstrated the most improvement since 2009 and 2010 as the provincial government backtracked from the royalty hikes embedded in the socalled “New Royalty Framework.” However, Alberta received a less attractive overall score for the second consecutive year on account of less positive responses with regard to a number of factors including regulatory uncertainty, the increasing cost of regulatory compliance and infrastructure quality.

Manitoba gained considerable ground on Saskatchewan in the 2014 survey as the result of significantly more positive results (and more so than Saskatchewan’s) than in 2013 with regard to the disputed land claims and uncertainty with regard to protected areas factors. In addition, Manitoba achieved a much-improved score with respect to uncertainty surrounding environmental regulations and benefited from perceived improvements in factors impacting the commercial environment such as the fiscal regime, taxation in general, and the quality of infrastructure with respect to which that province outshone Saskatchewan. However the cost of regulatory compliance and uncertainty with regard to the interpretation and administration of regulations (as well as with environmental regulations) were again judged to be of significantly greater concern in Manitoba than in Saskatchewan. Moreover, Saskatchewan was perceived to be preferable to Manitoba in terms of the regulatory duplication concerns. As a result, Saskatchewan continues to have the most positive regulatory climate in Canada in the eyes of upstream petroleum investors. The fact that Saskatchewan outperformed Manitoba with

TABLE 2: How the Western Provinces Rank Worldwide

2014 (of 156)

2013 (of 157)

2012 (of 147)

2011 (of 135)

2010 (of 133)

Saskatchewan

3

3

13

11

17

Manitoba

5

9

5

12

8

Alberta

16

19

21

51

60

British Columbia

62

47

39

69

52

respect to the labor regulations and agreements, labour availability, database quality issues also contributed to Saskatchewan’s first-place performance.

Newfoundland and Labrador, Nova Scotia, British Columbia, and the Northwest Territories each received significantly poorer scores in 2014 than in 2013 (Table

1). In all four provinces the deterioration in investor sentiment was broadly based, resulting in much less attractive Commercial Environment Index and Regulatory Climate Index ratings. In Nova Scotia, the percentages of negative responses recorded on the questions pertaining to land claim disputes, the cost of regulatory

compliance and regulatory duplication increased significantly. In the three other jurisdictions in this group increased uncertainty pertaining to environmental regulation contributed to less favorable rankings than a year earlier, while in both British Columbia and the Northwest Territories greater concern with regard to the manner in which regulations pertaining to the upstream oil and gas industry are interpreted and administered was recorded. In British Columbia responses with regard to “taxation in general” also contributed to the deterioration in the province’s performance. In Newfoundland and Labrador much greater negativity was expressed regarding labor regulations and agreements and land claims disputes than in 2013.

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Commercial Environt

Fiscal Regime

Tax. in General

Environ.

Regs

Reg. Uncertainty

Cost Reg. Complice

Uncertainty Prot’d Areas

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

MB

10.2

14.2

6

10

7.7

16.7

13.4

25.9

14.2

11.1

25

19.2

10

20

SK

12.5

9.9

7.1

1.3

8.6

8.2

12.3

8.2

10.5

4.2

16.3

13

14.3

18.8

AB

21.3

17.1

13.5

13.6

18.5

16.1

38.1

32.1

27.9

20.2

44.9

32.1

27.1

35.5

Nfld

40.5

33.9

26.3

23.8

23.6

25

47.1

18.9

23.5

13.9

20

25

35.7

20.7

NS

47.7

32.9

40

25

42.1

25.8

50.1

29.3

55.6

23.5

37.6

22.2

37.6

15.3

BC

42.8

27.6

34.8

22.1

45.3

25.4

68.3

48.4

44.4

22.1

59.7

41.4

56.3

47.1

NWT

45.4

35.5

27.3

16.6

27.3

13

54.5

38.1

50

20

40

50

62.5

46.6

Again on the basis of Policy Perception Index results for all jurisdictions regardless of the extent of their petroleum resources, Table 2 illustrates that third place Saskatchewan (for the second year) ranks among the top 10 jurisdictions worldwide in terms of attractiveness for upstream investment for the second year running.

Manitoba, which has been among the top 10 for three consecutive years moved from ninth to fifth place. Although Alberta didn’t achieve a score as attractive as those posted by Manitoba and Saskatchewan, the province continued to improve

its global position in the wake of its return to a more competitive fiscal regime. British Columbia, which slipped from 39th place (of 147) in 2012 to 47th place (of 157) in 2013, slid to 62nd spot (of 156) in the 2014 survey as a consequence of considerably less favorable scores on a wide range of factors.

In order to maintain its position as one of the more attractive jurisdictions for investment in petroleum exploration and production development, Saskatchewan will need to ensure that the fiscal regime applicable to crude oil and production and

taxation in general continue to contribute to a competitive commercial environment.

But more important, in light the 2014 petroleum survey findings, Saskatchewan must strive to reduce investors’ concerns with regard to infrastructure availability, access and quality, as well as with the cost of regulatory compliance and with uncertainty pertaining to laws and regulations pertaining to protected areas.

Gerry Angevine is a senior fellow at the Fraser Institute. v

The Fraser Institute is a non-profit research and education organization.

The full report on the results of the 2014 Global Petroleum Survey may be downloaded free-of-charge at: http://www.fraserinstitute.org/uploadedFiles/fraser-ca/Content/research-news/research/publications/global-petroleum-survey-2014.pdf The 2015 survey will be launched during the summer and results will be available in the fall.

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Economic Pain Before Recovery After years of high commodity prices, oil drilling companies transition to survival mode

By Tim Banman

The Canadian Association of Oilwell Drilling Contractors (CAODC) revised its annual drilling activity forecast – and scratched its earlier estimate of $85/bbl WTI – as oil prices tanked in late 2014 and stayed low into the early months of 2015. Not since 2009 have circumstances required a revised forecast, with prices having plunged 60 per cent since highs in the summer of 2014.

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CAODC forecasts the depressed price of oil and natural gas will reduce the number of active drilling rigs in service in Western Canada, resulting in an industry-wide slowdown and job losses.

Assuming WTI averages $55/bbl in 2015, CAODC forecasts the number of active drilling rigs in service to drop to 203 per day from an average of 370 per day last year.

CAODC projects decreased drilling activity could result in direct job losses of up to 3,400, in addition to 19,500 indirect jobs. Around 25 to 30 per cent of CAODC members’ operating hours occur in Saskatchewan.

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President Mark Scholz sees months of pain ahead for drillers, which will transition to survival mode until commodity prices recover. As Saskatchewan Oil Report goes to press, CAODC reports casualties have so far been minimal. But, Scholz cautions: “The longer this prolongs, the more likely there are going to be additional companies in very difficult positions.”

“Companies are just trying to survive right now,” reflects Scholz. “Their day rates are being hit very hard. Pressures from producers are hitting hard. It’s just a very brutal experience for a lot of our members.”

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The economic forecast estimates first quarter results could see 35 per cent fleet utilization – compared to an average year at 55 per cent. Second quarter utilization is expected around 12 per cent – half last year’s. Overall for 2015, the association expects fleet utilization to drop to 26 per cent from 46 per cent last year.

With first quarter utilization down by 20 per cent, companies will see significant strains on cash flow through 2015.

The first quarter provides the bread and butter to sustain work throughout the rest of the year, explains Scholz. With the hit to cash flow, it will take more time for companies to accumulate the funds required reinvest in production.

CAODC considers the $55/bbl average a realistic overall estimate for 2015, but still expects to see price volatility throughout the year. The reality is, explains Scholz, no one knows for sure what the price will do in the coming months.

“The volatility we see in the market that we see today is something that a lot of people haven’t seen in a very long time,” he states.

Until commodity prices recover, companies are working to minimize fixed costs as much as possible.

“I think every kitchen cupboard is being explored for cost savings,” says Scholz. “The challenge is that the longer we’re in this period, the longer it’s going to take to come out.”

Despite the tumult in recent months, the long-term prospects for oil and gas in Saskatchewan are sound. In 2013-14, oil and gas provided $1.6 billion to the provincial economy, and Saskatchewan’s plentiful resources provided 15 per cent of Canada’s total crude production. Remaining recoverable gas reserves are estimated at 52.1 billion cubic metres.

Significant opportunities persist in shale gas in central and east-central Saskatchewan, as well as 2.7 million hectares of oil sands potential.

“Long term, I think the business is still a good one to be in. This is just part of

the oil and gas business,” comments Scholz. “This is something the industry’s been through, and we’ll get through this one. We’re just hoping we get through it with as minimal bumps and bruises on the way through it, and as few casualties as possible.”

A crucial part of the recovery will come from retaining key crew workers and by keeping rigs working as long as

possible. The loss of drillers, rig managers, and derrick hands to other employment opportunities in 2009 impeded the recovery, as the tickets and training for new recruits can be costly. Scholz hopes to see members able to hold onto their most valuable asset - their staff.

For more information, visit www.caodc.ca. v

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23

Pipe Dreams

Keystone XL debate continues to rage into 2015

By Leonard Melman It is amazing how sometimes random events can serve to highlight areas of public controversy.

In terms of fossil fuel production and distribution the past year has seen more than its share of headline-generating developments.

From more distant regions we note that the Ukraine-Russia dispute has served to place new pressures on natural gas distribution in the European market and the sudden eruption of violence and political uncertainties within oil-producing regions such as Venezuela, Iran, and Nigeria has raised questions regarding the reliability of petroleum production and exports from those regions. Closer to home, we note that Saskatchewan’s burgeoning petroleum industry has suddenly been hit by two particular news items including the serious drop in crude and gasoline prices plus the recent Presidential veto of the Keystone XL pipeline. It is the last item that has been foremost in terms of media attention in the first quarter of 2015.

International developments over the past decade or more have served to highlight the importance of generating reliable North American supplies and that consideration, plus long-standing attention from the vast environmental community, has brought sharpness to the polarizing debates surrounding one of the most important projects now dominating North American energy media headlines – the proposed Keystone XL pipeline which is designed to move Canadian petroleum through the central U.S. and eventually down to major refining and shipping facilities located on the American Gulf Coast.

The Keystone-XL pipeline project should be of vital interest to the entire Canadian west in general and to Saskatchewan’s growing petroleum industry in particular 24 Saskatchewan Oil Report 2015

where intense exploration and development efforts relating to both ‘natural’ petroleum deposits and those associated with tar sands developments are ongoing. In fact, petroleum production - both present and future - has become a vitally important base upon which governments look to build future economic growth.

Alberta, of course, is already well known for conventional, as well as oil sands development and production while Saskatchewan looks toward increasing natural gas and petroleum extraction as major sources of present and future economic growth. As it happens, it is Alberta’s enormous “tar sands” oil recovery programs which lie close to the heart of the Keystone XL debate.

Keystone XL is actually only one part of the “Keystone Pipeline System” with three phases carrying crude oil from Alberta already in operation as of spring 2015. Phase 1 carries crude from Hardisty, Alberta through Regina, Saskatchewan to Steele City, Nebraska and then on to refineries in Illinois. Phase 2 operates between Steele City and Cushing, Oklahoma and Phase 3A continues on to Nederland, Texas. Phase 3B which extends the pipeline to Houston is currently under construction.

The Keystone XL pipeline - Phase 4 of the total system - will be an entirely new pipeline from Hardisty directly to Steele City which is located in southernmost Nebraska. And it is Phase 4 that has aroused an almost unprecedented political, regulatory, and environmental storm reaching all the way through the U.S. and Canadian political systems right up to the Oval Office of the United States President Barak Obama.

The fact that controversies surrounding Keystone XL are making well-publicized pro and con headlines on an almost daily

basis can be attributed, at least in part, to the influence of great personal wealth on either side of the issue.

To a large extent, forces opposed to the construction of Keystone XL are funded by billionaire Tom Steyer, founder and former Chairman of Farallon Capital Management. In a 2014 interview, Steyer declared that he was dedicating himself to tackling energy and climate issues and in order to work toward those goals he founded and funded “NextGen Climate” which identifies itself strongly with promoting climate change awareness, as well as supporting clean air and water issues.

Meanwhile, noted libertarian and free market activists Charles and David Koch - also themselves billionaires - are equally vigorous in support of Keystone XL. The Koch Brothers, respectively chairman and executive vice president of Koch Industries, have consistently promoted Keystone XL on the basis of the huge potential economic and job-creation benefits which could accrue upon its construction and successful completion.

Political influence has played an important part in the overall debates regarding the project. Generally, those on the political Left and therefore carrying substantial influence within Democratic Party circles right up to the U.S. President have fervently opposed the project on environmental grounds. One of their arguments is that completion of Keystone XL would enable further expansion of tar sands petroleum recoveries in Northern Alberta which they regard as environmentally harmful, while another is that approval of Keystone XL could endanger the entire Ogallala Aquifer. Ogallala underlies the central core of the U.S. and hosts one of the largest reserves of fresh water in the world which provides drinking water for more than two million people.

Saskatchewan Oil Report 2015

25

On the opposite side, those favouring the project point toward two significant considerations. First, they claim direct job creation benefits which would include construction employment, permanent operational job placements, support for many retail establishments during construction and operation, as well as further employment within the Canadian oil industry and capital gains which would then be redistributed throughout the economy.

Most recently, they have also noted that the Ukraine-Russia and Iraq-Syria plus Venezuelan and Nigerian instabilities demonstrate the potential vulnerabilities associated with the importation of fossil fuels from distant - and possibly unreliable - sources. Accordingly, they favour extensive development of North American alternatives.

There are other political issues as well.

Since the Keystone XL pipeline originates in Canada but passes through U.S. territory, the project requires approval by the U.S. Secretary of State which means relations between Canada and the U.S.

are directly involved. Also, and of prime political importance to Americans, the elections of last November resulted in the Republican Party achieving majorities in both the House and Senate, leaving President Obama in a more vulnerable position than at any time during his two administrations.

Both sides of the issue appear to have substantial data to back up their cases.

Those advocating the project can point to a specific study by the American State Department which discussed some of the economic benefits and these include the eventual creation of over 40,000 jobs which would take place during construction and operation of the pipeline. They have also estimated that completion of the pipeline would add many billions of dollars to overall economic activity.

As noted, another argument of the pro-pipeline forces remains that construction and operation of the pipeline would allow additional oil to flow into America from Canada, thereby further reducing dependence upon unreliable foreign sources.

The anti-pipeline argument continues to focus on possible environmental harm and takes several different forms.

First, they argue that construction of the pipeline would enable Alberta tar sands oil to be produced in ever-larger quantities, thereby increasing what they regard as “dirty oil” production.

Next, they suggest that the by increasing distribution efficiency and perhaps lowering overall costs, a successful pipeline would encourage further fossil fuel usage, thereby worsening “climate change” impacts - something environmentalists have been fighting against for decades.

In addition, they also argue that actual construction of the pipeline itself could increase general environmental risks, particularly in wetland areas such as eastern Nebraska.

Matters came to at least a temporary head in early 2015 when both the U.S. House and Senate passed pro-pipeline legislation after the last legal challenges to the project had been set aside by the courts. However, in early March, Presi-

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dent Obama interposed his veto, thereby once again bringing the project to a halt. His objections appeared to be primarily environmental, but he also noted that he believed some of the new job claims were exaggerated. His reasoning was clearly expressed in the following Presidential quote immediately following his veto action:”The reason that a lot of environmentalists are concerned about it is the way that you get the oil out in Canada is an extraordinarily dirty way of extracting oil, and obviously there are always risks in piping a lot of oil through Nebraska farmland and other parts of the country.”

He did add that his veto was not permanent and further studies should take place.

Ironically, this entire controversy surrounding a project which would enable further production and distribution is taking place at a time when there is already evidence of significant overproduction of petroleum within North

America. In fact, the excess of supply over demand has grown to the point where numerous oil tanker vessels are being hired, not to transport petroleum to distant markets, but rather as the most cost-effective means of aboveground storage of excess supplies.

Another evidence of a growing oversupply problem has been a significant decline in petroleum pricing. As an example, the price of crude oil on the international commodity market has declined from over US$90 per barrel as recently as October 2014 to below US$50 per barrel by early March 2015.

Within Saskatchewan, quite ironically yet another problem has developed and that is the discovery during this era of presumed over-production of yet another promising area of oil exploration called the “Torquay”, located in the southeast part of the province and geologically associated with the giant Bakken oil discovery. Early estimates of total resources indicate possible recovery of

over 4,000,000,000 barrels of oil. However, some industry sources suggest activity might be constrained by both low current petroleum prices, as well as a growing difficulty in moving final product to markets - a situation which directly applies to the proposed Keystone XL Pipeline.

Whatever the eventual outcome of the Keystone XL project, there is little doubt that the Saskatchewan petroleum industry, like that of other provinces and states, now finds itself at a critical juncture with distribution, production, demand, and pricing all in a state of considerable flux.

It will be most interesting to watch developments within this vital industry going forward, but one thing is certain.

The entire debate surrounding Keystone XL has served to significantly raise the level of public knowledge regarding the entire subject of North American fossil fuels developments. v

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Diversity in the Workforce Petroleum Human Resources offers insight on Saskatchewan labour market challenges

By Tim Banman

The Petroleum Human Resources division of Enform (PHR), continues to tackle the big questions facing oil and gas industry human resource departments, with two pivotal reports released in 2014 that offer insight into Saskatchewan’s unique labour situation.

The PHR division measured aboriginal employment trends in their report Aboriginal Employment in Saskatchewan’s Oil and Gas Industry – funded by the Government of Saskatchewan. The PHR division followed up with HR Trends and Insights: Diversity in Canada’s Oil and Gas Workforce, funded by the Government of Canada and released in late2014, which offers a broad perspective on immigrants, women, youth, and disable persons working in the oil and gas industry across Canada.

30 Saskatchewan Oil Report 2015

Both reports aim help solve the critical skill shortages that challenge industry during ideal economic times. The reports compare statistics from the 2006 national census and the 2011 National Household Survey.

With the price of oil per barrel less than half what it was a year ago, the PHR division acknowledges key recruitment strategies aimed at diversifying the workforce could face pressure on budget cutting room floors. Strategic cuts that preserve access to diversity recruitment capacities can help support a recovery with the anticipated future return of commodity prices, says Claudine Vidallo, project manager for Labour Market Information with PHR. “With companies being forced to re-evaluate their budgets, we’ve heard

that some companies are cutting back on workforce initiatives by as much as 50 per cent,” confirms Vidallo. “There’s going to be implications of that going forward. That said, if the situation does turn around, you could see that being refreshed and budgets and resources put back in place. Industry has gone through several cycles of ups and downs. This is just a phase that you need to be surviving at this point in time.”

Aboriginal focus The Aboriginal Employment report found aboriginals comprise six per cent of the oil and gas workforce in Saskatchewan, an encouraging number that is double the aboriginal participation rate in the Canadian labour market as a whole. Multiple factors contribute to the higher participation rate of aboriginals in oil and gas, including: communities in close proximity to project worksites; high wages; opportunity for career advancement; as well as specific recruitment and attraction initiatives.

“There’s always room for improvement, but it is a good statistic to start with,” says Vidallo, adding though that when compared to local populations, six per cent may not necessarily be adequate representation in some areas. “It’s good that we have access to that talent there, but when you look at regional stats, maybe what we’re doing is not enough.”

The report notes aboriginal employment numbers in Saskatchewan’s oil and gas industry plateaued between census periods; however, company surveys suggest numbers may be on the rise since 2011, as employer surveys reported success in new recruitment and retention strategies.

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The PHR division found a number of companies offer solid aboriginal relations programs.

Best practices include delegated personnel to support aboriginal recruitment and retention, face-to-face interaction with aboriginal leaders, carefully planned initial contact with an aboriginal community, and fostering collaborative relationships with aboriginal communities.

Successful companies, the report notes, established relationships with aboriginal communities for mutual benefit, and recognized building trust takes time. Successful companies also employed strategies to plan for retention before hiring, such as: mentoring; new worker on-boarding programs to help acclimatize recruits; and tailored benefits like transportation or celebrating career accomplishments.

Diversity in Canada’s Oil and Gas Workforce credits award-winning Savanna Energy for developing strong partnerships with aboriginal communities through joint-venture agreements, as well as its Green Hand Training program. The report also recognizes Syncrude’s 30-year relationship with aboriginal communities, and its strong representation of aboriginal people at nine per cent of its workforce, higher than industry overall.

Companies with effective recruitment strategies recognize that aboriginal employment is crucial to achieving business goals, the report notes. However, many companies do not have a corporate policy aimed at increasing the recruitment of aboriginal people, and many do not measure the level of aboriginal employment in their organization.

Diversity in the workplace The PHR division found representation of key diversity groups within the oil and gas labour force increased modestly from 2006 to 2011 – with the exception of youth demographics. Among companies interviewed in the Diversity in Canada’s Oil and Gas Workforce report, most stated that having a fair and inclusive environment is considered a given in today’s workplace, and that it is an ingrained part of the company’s practices.

The bottom line continues to be that diversity initiatives can help meet business goals.

“There has to be a strong business case for doing any kind of program,” reflects Vidallo.

Diversity and inclusion strategies help provide employers with access to new and 32

Saskatchewan Oil Report 2015

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Diversity in Canada’s Oil and Gas Workforce found the best success where diversity programs had a champion at the executive or leadership level, as opposed to solely the human resources department.

“If you don’t get an executive engaged in this or buying into this, then sometimes it won’t work because it’s not going to be implemented across the board,” says Vidallo.

The report recommends diversity training for all employees of a company, as well as employer-sponsored resource groups and diversity and inclusion networks as effective strategies for encouraging a fair and inclusive work environment.

Another challenge facing industry is measuring the results. “If you’re not measuring results, you don’t know whether it’s improving or not, or even if it’s working,” notes Vidallo.

larger talent pools, as well as meet regulatory and social requirements to operate. Diversity can also be an important strategy for achieving a social license to operate.

The report highlights the success of partnerships that have increased attraction to Science, Technology, Engineering and Math (STEM) careers. For example, Imperial Oil’s Enhancing Opportunities in Post-Secondary Students and Graduates with Disabilities in Science and Technology Related Fields program emphasized investment in education of math and sciences, environment, and civic and community programs.

Another example featured Enbridge’s Engineering Futures Partners with Braided Journeys, which provided female aboriginal high school students an opportunity to learn about engineering careers with a female engineer mentor.

The report also highlighted the Shell partnership with Actua, a network of universities and colleges, which builds

Youth, women, immigrants, and persons with disabilities Diversity in Canada’s Oil and Gas Workforce shows a decline in youth employment in oil and gas sectors between 2006 and 2011, falling from 15 to 11 per cent. Prior research from PHR found many youths harbour negative views and misconceptions about the oil and gas industry. At the same time, the report found the number of employees over 45 increased from 34 to 38 per cent by 2011, making the challenge of youth recruitment that much more crucial in the years ahead as a generation of skilled workers prepare for retirement.

Vidallo attributes the youth statistics to barriers to participation on both the demand and supply sides, and to an overall lack of education on the complexity of industry. Companies often require a higher level of education and experience than youth possess. For example, many pipeline projects require applicants to not only have an engineering degree, but also several years of job experience,

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which excludes much of the youth workforce.

“We are kind of creating a top heavy workforce,” comments Vidallo.

On the other hand, youth may not be aware of the types of entry-level jobs that are available in the service industry. The nature of field-based work and exposure to the elements may dissuade youth from entering the oil and gas industry.

High turnover continues to hinder industry. While the average turnover rate is 30 per cent, high turnover in service jobs – as high as 100 per cent for some companies over a year – is costly. Education can inform career-seekers of the employment opportunities available that match their skill sets.

“It’s quite expensive and really onerous for companies to fill in these roles. So if people come prepared and understand what the work is like that they are applying for, that really would help the companies and would result in cost savings,” advises Vidallo.

Overall participation of women in the industry as a whole increased modestly from 20.4 to 21.3 per cent by 2011, far short of the 48 per cent of the total workforce comprised by women in Canada. Employment trends for women in the oil and gas industry are encouraging though when considering the number of women qualified for core oil and gas occupations nearly matches the employment rate in core industry jobs.

In the 38 core occupations for oil and gas, the number of women qualified for these occupations is 11.3 per cent, close to the number of women that are actually in those occupations at 9.8 per cent.

A longer term look at narrowing the gap between the total workforce available and the number of qualified women for core oil and gas occupations requires enhancement at the recruitment and training stage, explains Vidallo.

The report notes barriers to female employment in the oil and gas industry include safety and security concerns,

conflict between family and job responsibilities, an unwelcoming culture, lack of mentorship, negative perceptions of their ability, and lack of flexible work arrangements.

Immigrant representation in the oil and gas workforce improved the most and increased from 10.3 per cent to 12.1 per cent in 2011. In Canada, immigrants comprise 22 per cent of the total labour force, indicating there is more work to do, says Vidallo. Around 20.8 per cent of immigrants are qualified for core oil and gas occupations, which reveals a disparity between the qualified immigrant workforce and the actual number working in the oil and gas industry.

“From a qualifications point of view, Canada is attracting the right kind of immigrants that will serve our industry,” adds Vidallo.

Further recruitment could be accomplished by addressing barriers, such as the lack of recognition of foreign education and work experience, limited understanding of Canadian work culture, remote work locations, and English language proficiency.

The number of disabled persons in the oil and gas workforce stood at 11 per cent in 2011, compared with 13 per cent total representation in the Canadian workforce. In a separate study, the Petroleum Industry Human Resources Committee found some students do not pursue certain careers because of their disabilities, and in particular, are concerned over a lack of accommodation.

The report recommends offering programs to support access challenges and integration into the workforce.

For more information Both Aboriginal Employment in Saskatchewan’s Oil and Gas Industry, and HR Trends and Insights: Diversity in Canada’s Oil and Gas Workforce the Workforce, can be found online. Visit the Labour Market Information Section at www.careersinoilandgas.com for access to the PHR reports. v

36 Saskatchewan Oil Report 2015

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Making it Matter Tips on managing relationships when a parent or spouse is away for extended periods of time in the oil and gas field

By Melanie Franner When Alicia Ranford turned to her close friend – and practicing psychologist – for advice on how to better cope with her husband’s busy travel schedule, she started on a road that would eventually lead to a gem of a resource for thousands of people. That “gem” came into being in 2010 when Ranford and co-founder Lainie Anderson, launched the Mining Family Matters Australia website, a free support website that aims to boost the emotional resilience of employees involved in the mining, oil and gas industries.

The site proved so popular that a Canadian version (www.miningfm.ca) followed in March 2014. This site tracked more than 8,000 visitors within the first 12 months – and continues to grow with virtually no marketing efforts.

“Our goal is to offer professional support and friendship to Canadian families coping with the pressures of fly-in, flyout (FIFO) rosters or life away from strong support networks,” explains Angie Willcocks, the site’s resident psychologist – and a close friend (since the teenage years) of Alicia Ranford.

Willcocks became involved in the site five years ago after helping Ranford come up with tips and strategies for her children, who weren’t coping overly well with their dad being away. Willcocks had five years of experience in the mental health industry before becoming a psychologist 10 years ago. She has two children of her own and runs a private practice specializing in postnatal depression and nutrition, as well as mental health.

“Over the years, I have worked with many different couples and families who regularly face the same issues that Alicia was facing,” states Willcocks, who adds 38 Saskatchewan Oil Report 2015

Alicia Ranford, Lainie Anderson and Angie Willcocks.

the Canadian site features Canadian mining lifestyle columnists (Virginia Heffernan and Jocie Ferron) and a careers specialist (Terry Lende). “Through speaking with many Canadian couples, we’ve learnt that the issues are very similar. In fact, they’re similar no matter where you are in the world.”

So what are some of the key issues being faced by couples or families who find themselves in an FIFO or no-support situation? According to Willcocks, the top five include: communication; time spent; sex and intimacy; helping children cope; and parenting and discipline.

Here’s a look at each of the issues, along with Willcock’s well-honed words of wisdom on how to deal with them.

Issue #1: Communication There’s no such thing as a perfect couple or a perfect relationship. All relationships have ups and downs, and in relationships where one partner works fly-in,

fly-out (FIFO), the ups and downs can feel extreme.

DO: • Know your hot topics, the things you are likely to argue or disagree about and then establish a plan on how to deal with them properly so you can prevent yourself from going over the same old ground.

• Try different ways of staying connected when one partner is away, such as notes, letters, texts, phone, and video calls.

• Try to always work as a team. Frequently use the term “we” in conversations. For example, “What shall WE do” ... about whatever the problem is (rather than “what are YOU going to do about it” or “what do you want ME to do about it”).

• Know yourself - monitor your own thoughts, feelings, and behaviour within the relationship.

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(L-R) Jack Anderson, Sam Ranford, Abby Ranford and Harry Anderson.

• Regularly check in with each other about how the lifestyle is going.

DON’T: • Stick your head in the sand and hope problems will go away.

• Personally criticize each other. Ever. It’s fine to complain about a behaviour you’re not keen on (“I really don’t like it when you leave your work gear in the hallway”), but not “You’re such a lazy slob”.

• Expect deep and meaningful conversations every day. You wouldn’t have

them if you both worked in a 9-5 office job, so don’t expect them when one partner is away.

• Allow FIFO to be an excuse for bad relationship habits.

• Confuse good communication with endless talking about all your problems or difficulties.

Issue # 2: How time is spent Lots of FIFO couples argue about how each person spends their time – be it getting annoyed about how much time is (not) spent with family when the part-

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ner is home to being annoyed with how often the partner at home is going out.

It’s worth remembering that arguments about how time is spent usually come down to differing priorities.

DO: • Talk about priorities and areas of importance. You might not share your partner’s priorities and motivations around how time is spent, but when you hear about what is important to them, you might start to understand their reasons for spending their time the way they do. Understanding each other’s time priorities can lead to respectful compromises.

• Agree on a realistic list of jobs/tasks that need doing while the “away” partner is home.

• Let your partner know one or two fun/ relaxing things you’d like to do when you’re all together.

• Be clear about who is responsible for which jobs. Allocate tasks by roster or lists.

• Build a support network of family, friends, or paid help.

• Plan on spending some time doing things separately when you’re together.

• If you’re the “away” person, make sure you keep in contact with friends and family while you’re away – it will ease the pressure to see everyone and catch up every time you’re home.

DON’T: • If you’re the “home” person, don’t try to cram everything into the time your partner is away.

• Expect to always agree on how each other’s time should be spent. The intensity of the time together can definitely add to the pressure for “everything to be perfect” but it won’t be.

There will be times when you disagree.

• Always do a couple things just to please your partner (this goes for both the “home” and “away” person).

Issue #3: Sex and intimacy The pressure to squeeze all the loving into a week or so, and differing libidos (common in all long-term relationships)

can leave one or both partners feeling disappointed, dissatisfied, and disconnected.

DO: • Stay connected when one of you is away for work (e.g. sexy text messages or phone calls, little gifts or notes).

• Think about your partner while you’re apart. Remember the things that first brought you together and what you love about them now.

• Work on breaking your “sex cycles.”

If you always wait for your partner to initiate sex, you do it next time. If you always initiate in a certain way at a certain time, try something different and unexpected.

• Discuss your satisfaction with your sex life in a respectful way.

• Understand each other’s “love language.” Some people feel most loved when their partner makes love to them; others feel loved when their partner hangs out the washing.

DON’T: • Emotionally disconnect from your partner when you’re apart.

• Allow stress, worry, and resentment into the bedroom.

• Withhold sex as a way to try to get your partner to understand your feelings.

• Worry if your sex life is not perfect.

Issue #4: Helping Children Cope People do FIFO for all sorts of reasons, and those who have kids don’t make the decision lightly. Here some tips to help kids cope when one parent works away.

DO: • Be consistent with expectations, discipline, and routines. Kids thrive on predictability.

• Create a set of family rules. The rules can cover things like using manners, daily jobs such as making beds, and also some fun ones like have pizza once a week. The rules should definitely be created when the whole family is

Saskatchewan Oil Report 2015

41

together, with rules for everyone (including mum and dad).

Re-visit the rules every three months or so. And ensure that the rules stay the same whether you’re all together or one parent is away.

• Be organized. Keep a family calendar with the FIFO parent’s roster in a format that the kids can understand. Stickers work well for young children, but try to avoid “smiley face” and “sad face” related to mum or dad being home or away. Add in important events for all the family, and don’t forget to include those for the FIFO parent.

• Let your children express their feelings. It can undoubtedly be tough when a parent works away, and sometimes your kids will struggle. At these times it’s important to remember that coping well doesn’t mean always feeling happy about the way things are. If your kids are sad about mum/dad being away and missing an important event, let them know you understand their feelings.

• Model good coping strategies. Like your children, you will have days when you struggle to cope with FIFO – and that applies whether you’re the home or away parent. It’s important that your kids see you problem-solve your way through the tough times, rather than just be defeated by them.

Relationships aren’t easy, even for those couples or families who don’t have to deal with the added stress of having a parent or spouse being away for extended periods of time.

DON’T: • Ignore differences in parenting styles. The danger is they change what is expected of the kids rather than addressing the real issue, which is between the parents.

• Forget to stay connected while you’re apart, especially if you’re the working away parent. It’s very normal for you to miss your children and for them to miss you while you’re away. Many FIFO workers do find it tough, and so they withdraw a bit emotionally while they’re at work. While this might make it easier for you, it’s not the best strategy for your family.

• Lose interest in keeping up-to-date with your children’s lives.

It’s not okay to use FIFO as an excuse for ignorance about your kids’ lives. Make it your priority to know what is going on and when. Keep a calendar or diary with up-to-date information about your children, like dentist appointments, school projects and due dates, and sports games.

42 Saskatchewan Oil Report 2015

Issue #5: Parenting and discipline When it comes to discipline, FIFO couples most often disagree in three key areas: expectations, the rules, and discipline. Expectations refer to what is expected of the child. The rules relate to what sorts of behaviours are unacceptable and will not be tolerated. And discipline refers to how these expectations and rules are managed. It’s not just about punishment after bad behaviour, but also encompasses clear rules, praise and encouragement, planned ignoring and consequences.

DO: • Take the time to have a think about the three areas of parenting – expectations, the rules and discipline – and figure out which areas you think you and your partner agree and/or disagree. See if you can think of reasons why you might disagree about a particular area.

• Set a time to discuss parenting with your partner. Give your partner time to think about the areas on which you agree and disagree as well.

• Work towards reaching some common ground for your kids.

• Create a list of family rules. Depending on the age of your kids, involve them. Write them up and stick them to the fridge. Make it fun as well as practical and re-visit your family rules at least every six months.

DON’T: • Forget that the rules apply all the time, whether you are home or not. Standard rules are very important for kids in hectic households.

• Neglect to talk to your partner while you are away so you know the current issues of concern. Be sure to catch up about ‘what to expect’ before coming home so you can hit the ground running with family rules and expectations.

• Prevent your partner from guiding you when you first return.

Trust each other and give each other the benefit of the doubt.

Making it matter Relationships aren’t easy, even for those couples or families who don’t have to deal with the added stress of having a parent or spouse being away for extended periods of time. But according to Willcocks, there are ways to lessen the pressure and cope with the stress. And with the launch of the Mining Family Matters Canadian web site, these strategies have become readily available for free.

“It think this support site fills a really big gap that needed filling,” concludes Willcocks. “It’s so rewarding to hear how simple little changes can make a big difference to people’s lives and can improve their relationships.”

For professional advice and practical strategies on parenting, relationships and working away in mining, oil and gas, visit www.miningfm.ca. Mining Family Matters also publishes a 32page guidebook for companies seeking to increase the emotional resilience of employees and families. v

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Photo Credit: Saskatchewan Ministry of the Economy

Investing in

the Future Saskatchewan helps build the oil industry

By Melanie Franner 44 Saskatchewan Oil Report 2015

“Build it and they will come” seems to be a motto that the Saskatchewan government is taking to heart, especially as it relates to the oil and gas producing industry. The province is the number two oil producer and number three gas producer in the country – which is impressive no matter which way you look at it. In 2014, Saskatchewan produced an average of 515,300 barrels of oil per day and 566 million cubic feet of gas per day.

The combined value of its oil and gas production in 2014 was a record $15.9 billion.

“The oil and gas producing industry continues to be the largest contributor among primary industries to the provincial GDP,” states Ed Dancsok, assistant deputy minister, Petroleum and Natural Gas, Ministry of the Economy, who adds it accounts for 15.1 per cent of the province’s total GDP. “For 2014, industry investment in new exploration and development is estimated at approximately $6 billion, and the upstream oil and gas industry accounted for an estimated 38,000 direct and indirect person years of employment.”

With these numbers, it’s easy to understand why investment in infrastructure for this all-important sector is a critical component of the province’s current and future economic strategy.

A vision for the future In its Saskatchewan Plan for Growth: Vision 2020 and Beyond, the Saskatchewan government identifies the need for “Building the Infrastructure for Growth” as one of its top priorities.

“We’ve invested $1.8 billion in transportation infrastructure since 2011, which puts us ahead of pace to meet our commitment to invest $2.2 billion over four years,” states Joel Cherry, communications consultant, Ministry of Highways and Infrastructure. “In total, we’ve invested $4.3 billion since 2008.

These investments are a key part of Saskatchewan’s ‘Plan for Growth’, the goal of which is to accommodate the province’s current economic growth and facilitate future growth. These investments will benefit all sectors of Saskatchewan’s economy, including the oil and gas industry.”

Improvements have been made to close to 7,500 kilometres of provincial highways since 2007 alone.

The Ministry of Highways and Infrastructure also provides funding for municipal roads through the Municipal Roads for the Economy Program (MREP), which also benefits the oil industry. According to Cherry, the 2014-2015 MREP included $25.5 million in funding for 80 road, bridge, and culvert projects in 64 rural municipalities.

Additionally, the province has increased its primary weight system highways by nearly 60 per cent since 2008. In 2015, it also undertook a pilot project to convert low-quality, thin-membrane surface roads to super grids, which are wider grid roads built on an engineered base that can handle primary weight.

The two super grid projects include 31 kilometres of Highway 361 from the junction of Highway 9 east to Alida and five kilometres of Highway 47, 20 kilometres north of Stoughton.

“The Shortline Railway Sustainability Program is another example of investment in infrastructure,” says Cherry. “It’s a 50/50

cost-shared investment in shortline rail, which is being used to move an increasing number of oil cars in the province. Since 2008, the government has invested $4.7 million in the program.”

Beyond highways and byways The government of Saskatchewan’s investment in those infrastructure projects that benefit its growing oil and gas industry isn’t restricted to transportation improvements alone.

“One of the best and most comprehensive examples of the government’s investment in infrastructure for the oil and gas industry is our Process Renewal and Infrastructure Management Enhancement (PRIME) – a multi-year, multi-project program to renew and modernize the Ministry of Economy’s oil and gas business processes and computer systems,” states Dancsok, who adds that the cost of PRIME is estimated to be $70 million.

“This long-term project is replacing systems and processes that are 30 years old. Through its 17 independent but interconnected projects, PRIME is building the Integrated Resource Information System (IRIS), which will support the ministry’s oil and gas business processes and facilitate industry online self service.”

PRIME is currently in its seventh year and is scheduled for final release in November 2015.

“PRIME’s fundamental goal is to improve how the ministry conducts business with the oil industry,” says Dancsok. “The project is building IT infrastructure and modernizing business processes for the administration of oil and gas regulatory administration.”

More to come According to Dancsok, the Ministry of Economy’s 2014-2015 Mid-Year Report estimated that the province’s oil and gas revenue would reach $1.7 billion.

It’s a good thing, then, that more infrastructure investment is in the works, as can be seen by the following projects currently underway.

“The Ministry of Highways and Infrastructure is currently conducting the pre-construction work for the future twinning of Highways 6 & 39 between Regina and Estevan,” states Cherry, who adds that the ministry is currently doing a general location study. “The construction of passing lanes between Delisle and Rosetown is nearing completion. And we have also begun preconstruction for the twinning of Highway 7 between Saskatoon and Delisle.”

A new Estevan Truck Route is also in the works. It will improve traffic flow, enhance safety and generate potential development opportunities in the Estevan area. The selected route runs north of the city from the intersection of Highway 39 and Shand Road to Highway 39 west of the city. The 12-kilometre route will initially be constructed as a two-lane road. The plan for the truck route was developed to allow for twinning and interchanges at the west and east ends, and at the junction of Highway 47 as future traffic volumes require. A functional planning study is now underway to determine the locations of those future interchanges.

Saskatchewan Oil Report 2015 45

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Although Cherry admits that pre-construction work for projects of this magnitude can take two to three years to finish, he states that the aforementioned

projects will provide a direct benefit to the oil industry.

“These projects will be a benefit to shippers in southeast and west-central

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Saskatchewan, which are experiencing increasingly heavy truck traffic related to oilfield activity,” he states.

Nurturing future growth The oil and gas industry has proven to be a significant part of the province’s growing economy. And the government of Saskatchewan has recognized this salient fact by committing to infrastructure investment and future infrastructure investment in order to continue to build the sector. This investment includes the highways and byways that crisscross the province – not to mention the railways – and it also includes innovative technology designed to ease the administrative side of the very industry itself.

By establishing such a strong foundation, the government of Saskatchewan is putting in place the necessary prerequisites for the continued growth and prosperity of its all-important oil and gas sector. v

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Saskatchewan Government Delivering New Tool IRIS to benefit oil companies

By Melanie Franner Don’t let it be said that the Saskatchewan government isn’t interested in servicing its growing oil and gas industry. Thanks to the Process Renewal and Infrastructure Management Enhancements (PRIME) program, which started back in 2009, the province’s oil and gas companies are about to see some significant changes to how things are done. That’s because the Integrated Resource Information System (IRIS) is about to go live with its second phase – modernizing practices, offering increased transparency, improving accuracy and speeding up timelines in the process.

Changing times “PRIME and IRIS are all about bringing self service into the mix,” explains

Ed Dancsok, assistant deputy minister responsible for the Petroleum and Natural Gas Division, with Saskatchewan’s Ministry of the Economy. “IRIS is designed to support the ministry’s new business processes by providing web-based, selfservice functionality to the industry.”

Dancsok states the processes in place for the past 35-plus years have been paper-based. Ministry staff was responsible for inputting company information.

It was a labourious system that provided plenty of opportunity for error.

PRIME and IRIS are changing all of this.

The first phase of the $70 million PRIME project was launched in April 2012 with the inclusion of Saskatchewan production data on Petrinex. This has already resulted in significant benefits to industry,

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50 Saskatchewan Oil Report 2015

reducing the time between production reports and royalties from 90 days to 40.

In September 2014, the ministry opened the virtual doors of IRIS to industry by introducing limited functionality that enables companies to: apply for access to IRIS and an IRIS Security Administrator account; apply for a full or partial waiver of Petrinex non-compliance penalties; and search, view, and download oil and gas invoice summaries and details.

Although too early to gauge industry participation in IRIS, estimates suggest the numbers will exceed the approximate 350 oil and gas companies that currently do business in the province. Although organizations must have a business reason to gain access to IRIS, the ministry believes the user base will include companies’ contractors and consultants, academia, law firms, land brokers, and more.

Since the launch of the limited phase one in September 2014, 256 individual users have logged into IRIS. “My guess is that there will be at least 5,000 users eventually,” states Erin Raaf, lead subject matter expert, Petroleum Tenure Project (one of the modules to be implemented in phase two). “The reaction thus far has been very positive.”

Increased functionality Phase two of IRIS includes the introduction of two new modules: the Petroleum Tenure and the Well and Facility Infrastructure. Both are expected to “go live” in November 2015.

“The Petroleum Tenure module will increase the functionality of IRIS,” states Raaf. “Companies will be able to use the

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system to acquire petroleum and natural gas dispositions. All of the dispositions will be held in the registry in electronic format. Users can search and print dispositions themselves. Today, companies have to rely on the ministry to do the searches and they have to pay to do so.

In the future, companies can do it themselves and there will be no fee for routine searches.”

Companies will be able to use IRIS to apply for land sale parcel postings, participate in land sale bidding, and apply for non-advertised dispositions. Available functionality geared to managing dispositions will include: registering documents, searching dispositions, applying to transfer disposition ownership, applying to surrender dispositions, and obtaining lease information following annual review.

“Companies can get the information themselves whenever they want,” adds Raaf. “The whole process is more accessible and transparent.”

The second module will focus on well

frastructure Project. “We’re offering one application to attain approvals from all the necessary ministries – including the Ministry of Environment and the Ministry of Agriculture.” and facility infrastructure. It will enable companies to: apply for well licenses, including those for horizontal drilling, offtarget and water injection/disposal; submit drilling and completion information, including casing, perforation, and workover data; attach reports and other information to a well, including logs, tests, fluid analysis, core analysis, geological reports, and surveys; view and track well and facility infrastructure information; and submit spill and incident data. Additionally, companies will be able to receive inspection results from the ministry and communicate resolutions back and forth within IRIS. “We’re also using a ‘single-window’ approach to well licenses within IRIS,” says Debby Westerman, lead subject matter expert on the Well and Facility In-

Help is on the way IRIS has been designed to be a userfriendly, intuitive system. Regardless, the system will contain a “help” feature and a terminology glossary. Additionally, the ministry has launched a “support desk” to field questions on how to use IRIS, who to contact, etc. Industry orientation seminars will be offered and will most likely be held in Calgary and Regina sometime this fall.

Webinars are also being considered as an option.

“Saskatchewan is considered – and will continue to be considered – a good place to invest in the oil and gas industry,” concludes Dancsok. “IRIS is one of the tools we’ve developed to keep Saskatchewan at the top of the list. It’s a way to help ensure we continue to grow our industry for many years to come.” v

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Saskatchewan Oil Report 2015

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Oil Via Rail The Oil Story

Moving the province’s oil via rail

By Melanie Franner

Forget about “taking the midnight train to Georgia”. The oil trains that run through Saskatchewan have a just as exciting a story to tell. Arising out of the need to service small towns and various grain elevators, the province’s rail system has developed into a finely tuned network of commoditydriven lines run by Canadian Pacific Railway (CP) and Canadian National Railway Company (CN).

Add to that a number of independently owned, short-track rail systems that were decommissioned by the two giants in the late 1980s and 1990s and you’ve got an interesting look at how the province’s railway network helps move oil across the country.

The big picture According to a March 2014 report from the Canadian Association of Petroleum Producers (CAPP), entitled Transporting Crude Oil by Rail in Canada, the use of rail tank cars to transport crude oil has increased rapidly over the past several years.

This trend is expected to continue until at least the current constrained pipeline capacity is alleviated, which is anticipated to take between three to five years.

The report states that Canada transported, by rail, almost 200,00 barrels of crude oil per day by the end of 2013. And this number is expected to grow.

“As a result of a number of new facilities and minor expansion coming into service throughout 2013, the rail-loading capacity originating in western Canada has now increased to 300,000 b/d,” states the report, which adds that the capacity at the beginning of 2013 was only 180,000 b/d.

The report goes on to suggest that by the end of 2015, Western Canada rail uploading capacity for crude oil is expected to exceed one million b/d and could be expanded to be as high as 1.4 million b/d.

Included in these recently announced new facility and expansion plans is TORQ Transloading Inc.’s building of a $100-million large-scale, state-of-the-art unit train, crude-by-rail terminal in Kerrobert, Saskatchewan. The Kerrobert Rail Terminal will be engineered to handle two 120-car unit trains per day or up to 168,000 b/d.

Additionally, Altex Energy Ltd.’s transloading terminal in Lashburn, Saskatchewan, is undergoing expansion. A 2012 track expansion increased capacity to 143 tank cars while current expansion plans will further increase this to 350 cars. A new terminal currently under construction near the existing site will be able to handle more than 60,000 b/d.

Ceres Global Ag Corp., which owns interest in the short-track Stewart Southern Railway, recently saw an expansion to its Stoughton transloading facility which has increased capacity to over 45,000 b/d.

“We expect to move 115,000 to 120,000 carloads of crude in 2014 and anticipate it will grow to 140,000 carloads in 2015,” states the company.

Size doesn’t matter With both the heavy hitters – CN and CP – reporting growth in their crude oil business, it’s no surprise to see Saskatchewan’s own network of independently-owned, short-track systems experiencing the same trend.

These systems may owe their origin to discontinued segments of CN’s and CP’s long-track rail systems but they have long since proven their worth many times over. Purchased by various private companies or private groups of individuals, many of the systems now play an important role in the province’s transportation of oil.

“In a lot of cases, these investors were groups of farmers or rural communities,” explains Joel Cherry, communications consultant, Ministry of Highways and Infrastructure, which is the government ministry responsible for overseeing the short-track rails within the province. “The rails were initially used for transportation of grain but they are increasingly being used for oil because of the growth of the local oil industry.”

In 2008, Saskatchewan had eight short-track rail systems that covered some 1,400 kilometres of track. Today, there are 13 systems and more than 2,000 kilometres of track. According to Cherry, the four short-track systems that transport oil are: the Stewart Southern Railway at 132 kilometres of track; the Great Western Railway at 496 kilometres; Long Creek Railroad at 66 kilometres; and Big Sky Rail Corp. at 356 kilometres.

“The bulk of oil transportation in 2013 took place with the Stewart Southern Railway and the Great Western Railway,” adds Cherry.

In 2011, Saskatchewan’s short-track systems moved a total of 2,000 cars of oil. That number jumped to 8,000 cars in 2012 and reached a record high of 21,000 in 2013.

The Saskatchewan government helps to keep its short-track systems running smoothly via a Short-Line Railway Sustainability Program that was started in 2008. The program sees the provincial participate in a 50-50 per cent cost-sharing plan with the owners of the short-track lines, with the money earmarked solely for railway track maintenance and upgrades.

“The government has invested $4.7 million in the program since its inception,” says Cherry. “That means that there has been $9.4 million invested in total.”

Canada transported, by rail, almost 200,00 barrels of crude oil per day by the end of 2013. And this number Heavy rollers is expected to grow.

CN is the largest railway company in Canada and, as such, has moved a lot of oil across the country and beyond.

According to Mark Hallman, director, communications and public affairs, the company moved approximately 128,000 cars of crude oil in 2014. This compares to 75,000 cars in 2013. Still, Hallman adds that CN’s crude-by-rail car loadings in 2014 accounted for only about two per cent of the company’s overall freight car loadings.

“CN believes its crude-by-rail business will continue to grow, as rail continues to play a complementary role to pipelines in getting crude oil to markets,” states Hallman. “Many CN customers are large producers that have invested significantly in their crude-by-rail infrastructure, such as rail cars and loading and unloading facilities.”

CN anticipates that its crude oil and frac sand (it doesn’t provide separate numbers for the two) business will increase by 35 per cent in 2015. This would bring the combined total of carloads in 292,000.

CP has also seen rapid growth in its oil business. The company moved 90,000 carloads in 2013, a dramatic increased over the 11,000 carloads reported for 2011. This makes crude the fastest growing line of the company’s business.

According to the company’s Investor Fact Book 2014, the Bakken represented 54 per cent of CP’s total $375 million crude oil revenue in 2013. Western Canada represented the remaining 46 per cent.

The allure of rail The aforementioned CAPP report identifies several beneficial reasons to transport crude oil by rail, aside from the “constrained pipeline capacity” situation that currently exists. Additional advantages include: Saskatchewan Oil Report 2015

55

• Speed to market: Getting oil to the refinery more quickly means producers are paid sooner and refiners get feedstock sooner.

• Optionality/Flexibility: Railway tracks are already in place to multiple destinations throughout North America.

• Diluent: Less or no diluent is required when transporting bitumen in rail cars, representing a significant cost savings.

• Scalability: Producers have the flexibility to adjust volumes being shipped with manifest trains rather than unit trains. (The former are typically individual cars or small groups of cars while the latter are typically 70 to 120 railcars that move from one destination directly to another.)

• Product integrity: Commodity isolation in separate rail cars provides for no loss of quality at destination.

• Low capital requirements: Typical costs to build unit train terminals range from between $30 to $50 million, with a capital payout of five years or less.

Another advantage of rail, according to Saskatchewan Ministry of Highways and Infrastructure’s Cherry is the ability for rail to ease congestion and pressure on the highway and road network.

“A lot of wear and tear on our highways comes from trucks,” he says. “Being able to use rail as another transportation option takes the pressure off our roads. There are certain areas of the province, in particular, that have been affected by oil. In these areas, like Estevan for example, the number of trucks on the roads has increased by leaps and bounds.”

The real picture A new report soon to be released from the Canadian Energy Research Institute (CERI) will set further light on the transportation of oil by rail within the country. The report, which has the working title Commodities by Rail, will identify the top commodities being transported on the rail network in Canada – from where to how many tonnes and number of railcars – and what the traffic might look like in the next decade.

The first section will provide a background of Canada’s largest players, namely CN and CP. The second section will explore the movement of commodities across Canada’s rail network, providing a snapshot of commodities on the network and in what direction they are being transported. This section will include the movement of commodities between and within provinces and the movement of commodities between and within western and eastern Canada. The third and final section of the report will forecast rail traffic in Canada in 2015, 2018, 2021, and 2024 by region and province.

“I think this report will benefit a number of different sectors,” states Pete Howard, president emeritus, CERI, and project keader of the report.

Information gleaned from the report shows that in 2012, crude oil was ranked number nine in the top list of 15 commodities transported by rail within the province of Saskatchewan.

The forecast for 2024 sees oil moving up into the number two position, beat out only by “mixed loads”. According to Howard, Saskatchewan will likely see 1.5 million mixed load container railcars move across the province in 2024 and 600,000 oil cars.

Highlights from the report can be read in the following article.

Focus on safety The tragic railway event that occurred in Lac Mégantic, Quebec in 2013 put the industry spotlight on safety as it relates to the transportation of crude oil. The Canadian government subsequently underwent a review of the Rail Safety Act and the Transportation of Dangerous Goods Act. CP describes these modification as focusing on: the rules associated with securing unattended trains; the classification of crude oil being imported, handled and offered for transport or transported; and the provision of information to municipalities through which dangerous goods are transported by rail.

The current review on the part of both Transport Canada, and its counterpart the U.S. Department of Transportation, may lead to potential changes in regulatory requirements within the two acts.

A new report soon to be released from the Canadian Energy Research Institute (CERI) will set further light on the transportation of oil by rail within the country.

56 Saskatchewan Oil Report 2015

According to the CAPP report, the review will focus on four key areas: classification, tank car standards, emergency response, and liability and insurance.

“Key questions remain on how new regulations will apply to the existing car fleet as well as new tanker car builds,” states the report. “New safety features could also result in lower capacity of individual tank cars or additional time and investment.”

CP reports that it will invest approximately $1.5 billion in its capital programs in 2015, of which approximately $770 million will be targeted toward annual maintenance.

CN has announced that it will continue to spend core capital to improve the productivity, fluidity and safety of its track and railways. In 2015, CN plans to invest approximately $2.6 billion in its capital programs, of which approximately $1.3 billion is targeted toward maintaining the safety and integrity of the network, particularly track infrastructure.

The capital program also includes funds for projects supporting growth, and productivity.

CP and CN, along with the Saskatchewan Ministry of Highways and Infrastructure, have already implemented changes as a result of the Quebec incident, ahead of any anticipated regulatory changes.

A robust future The transportation of oil within Saskatchewan and beyond has become an important part of the country’s economy. Major pipelines have been announced to help transport this oil – Keystone XL, the Trans Mountain Expansion, Enbridge’s Northern Gateway Project, and TransCanada’s proposed Energy East Pipeline. All have yet to come to fruition.

As a result, rail has become the central focus over the past few years. And the industry has responded positively, moving record numbers of railcars of crude oil. Regulatory changes concerning safety may dampen this growth slightly but most indus-

try experts predict continued growth in the years ahead. This is evidenced by the increasing number of loading terminals in the works for Western Canada.

“As major pipeline expansions are not likely to be in place in the next few years, rail transportation is poised to play a more significant role in the near term,” concludes the CAPP report.

“In the longer term, as crude oil production from Western Canada is expected to grow significantly, even with new pipeline projects in operation, rail is expected to continue playing a role in niche markets and as such will continue to offer a valued transportation alternative as producers seek to expand market access.” v

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Oil Via Rail The Significance of Rail The importance of this mode of transport will be seen Saskatchewan and Canada for years to come

By Paul Kralovic Production from the oil sands comprises of an increasing share of Western Canada’s crude oil production.1 CERI’s Reference Case Scenario suggests production is projected to increase to 3.4 MMBPD by 2020 and 4.8 MMBPD in 2048; this is up from 2.1 MMBPD in 2013.2 Meanwhile production in the Bakken formation, straddling Saskatchewan and North Dakota, has experience rapid growth and is also slated to increase.

Western Canadian resources, however, are restricted by a shortage of pipeline capacity. Enbridge’s Northern Gateway, TransCanada Pipeline’s (TCPL) Keystone XL, and Kinder Morgan’s TransMountain’s (TMX) expansion are all experiencing delays in either the regulatory process and/or strong opposition. With a shortage of pipeline capacity looming, uncertainties over key pipeline projects are inspiring other solutions to deliver Canada’s crude oil to the United States (U.S.) East Coast, U.S. Gulf Coast, or to other lucrative markets. One such proposal is transporting crude oil by rail. Though the concept is not new, it is an idea that is rapidly gaining steam.

However, while rail is emerging as an important factor in transporting crude to coastal markets in the U.S. and Canada, it is useful to examine the current snapshot of what commodities are being transported in Canada, to illustrate the diversity and importance of rail to transport a plethora of products across Canada and North America. Railways truly connect Saskatchewan and their valuable resources to lucrative consuming markets all over Canada, North America, and the world.

And this is true for every province in the nation.

The objective of CERI’s latest study, Commodities by Rail, is two-fold: to examine the movement of commodities across Canada’s rail network, by province and region, providing a snapshot 58 Saskatchewan Oil Report 2015

of what commodities are on the rail network and the direction of rail movement in 2012, and what rail traffic might look like in the 2015, 2018, 2021, and 2024.

This article highlights various trends in Western Canada and Saskatchewan.

Rail movements of commodities in Western Canada While the analysis in the report is on a disaggregated (63 commodities) and aggregated commodity groups (11 commodity groups), only the latter is discussed in this article. The following reviews the top aggregated commodities in number of railcars in Western Canada, as well as identify Western Canada’s top exports to Eastern Canada. Rail traffic is split into three types: shipments to and from the other region, and intra-provincial rail traffic for all provinces within that region.

Figure 1.1 illustrates the total rail traffic in the western provinces by aggregate commodities, in terms of number of railcars in 2012. The top five commodity groups in Western Canada are mixed loads or unidentified Freight (1,196,476 railcars), coal (462,673 railcars), food products (376,324 railcars), lumber and wood products (284,592 railcars) and metals and minerals (221,966 railcars). It is important to note that wheat and petroleum products account for 207,649 rails cars and 204,581 railcars, respectively; this is approximately six per cent and 5.9 per cent of total rail traffic in Western Canada. On the other hand, mixed loads or unidentified freight comprises of 34.8 per cent of all traffic in Western Canada. Included in mixed loads or unidentified freight is intermodal freight, or railcars used to carry trailers and containers often utilized for different modes of transportation.

The top five commodity groups in eastern Canada are mixed loads or unidentified freight (1,356,705 railcars), metals and minerals (508,788 railcars), lumber and wood products (218,215 railcars), automobiles and transportation equipment (202,592 railcars) and petroleum products (199,787 railcars).

Rail movements of commodities in Saskatchewan The following reviews commodities transported through (westwards and eastwards) and within Saskatchewan in 2012.

Figure 1.3 illustrates rail traffic of the top five aggregated commodities in Saskatchewan in terms of number of railcars. The top five commodities are mixed loads or unidentified freight (853,683 railcars), food products (228,683 railcars), potash (137,687 railcars), petroleum products (133,853 railcars) and metals and minerals (118,896 railcars). Mixed loads and Unidentified Freight comprises of 42.5 percent. Food products, potash and petroleum products make up 11.4 per cent, 6.9 per cent and 6.7 per cent, respectively.

The top five rail traffic heading westwards: mixed loads or unidentified freight (327,570 railcars), food products (123,100 railcars), metals and minerals (66,741 railcars), coal (56,079 railcars) and potash (55,782 railcars).

The top five rail traffic heading east: mixed loads or unidentified freight (526,045 railcars), lumber and wood products (84,671 railcars), wheat (69,869 railcars), manufactured goods (67,740 railcars) and petroleum products (67,355 railcars). Petroleum products include: Fuel oils and crude petroleum (26,788 railcars), gaseous hydrocarbons, including LPG (21,164 railcars), and other petroleum products (19,402 railcars).

The top five intra-provincial traffic are: potash (72,861 tonnes), food products (59,085 tonnes), petroleum products (34,123 tonnes), metal and minerals (13,701 tonnes) and wheat (9,796 tonnes). Petroleum products can further be divided into: other petroleum products (20,506 tonnes), fuel oils and crude petroleum (11,214 tonnes) and gaseous hydrocarbons, including LPG (2,403 tonnes).

Potential rail movements in the next decade The first step of creating the forecast was to segment 2012 rail movements (potash, lumber and wood products, and wheat) into its domestic and international components. This was done to be able to allow different growth rates for a commodity depending on its destination or origin, to reflect the difference in growth potential over the forecast period of 2013-2024.3 While not realistic to discuss in greater detail, it is important to note that to establish a forecast by aggregated commodity, four aspects were considered: the historic trends of each aggregated commodity, the specific economic outlook for that commodity, the growth of the Canadian economy and growth in Canadian population.4 CERI estimates that Canadian GDP will grow at an average of 2.0 per cent over the forecast period. While this ignores some year-over-year variation in future GDP growth, it falls generally in line with other long-term estimates for the Canadian economy.5 CERI estimates that Canadian population will grow at an average of 1.0 percent.

Figure 1.4 illustrates a forecast of rail traffic in Western Canada, in terms of number of railcars.

Figure 1.1

Figure 1.2

Figure 1.3

Figure 1.4

Saskatchewan Oil Report 2015

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Railcar traffic is expected to increase, in part fuelled by increasing crude oil products, combined with pipeline capacity limitations looming. CERI anticipates the highest rate of growth in petroleum products, nearly doubling from 204,581 railcars in 2012 to 455,203 railcars expected in 2015. Recall that Petroleum Products is a culmination of three parts: other petroleum products, fuel oils and crude petroleum and gaseous hydrocarbons, including LPG. Within these categories, the most significant growth is expected to be fuel oil and crude petroleum. This increase is expected to be particularly prominent in the next few years, and tailing off near the end of the forecasting period.

The increase of crude oil exports by rail is dramatic, increasing from an average of 170,125 bpd, up from 127,943 bpd in 2013 and from 46,000 bpd in 2012.6 And while crude exports by rail make up less than five per cent of total crude exports, this number is expected to continue to increase. Canadian Association of Petroleum Producers (CAPP) is suggesting that crude by rail exports could reach 700,000 bpd by 2017.

Figure’s 1.5 show a forecast of Saskatchewan’s rail traffic in number of railcars to 2024. Mirroring the increase in rail traffic in Western Canada, Petroleum Products is expected to increase from 133,853 railcars in 2012 to 359,923 railcars in 2015. Similarly, the largest rate of growth stems from the increase in the export of Fuel Oils and Crude Petroleum.

Whether transporting potash, wheat, or petroleum products, railroads will continue to play an important role transporting Western Canada’s valuable resources to lucrative consuming markets all over Canada, North America, and the world. And just as significant as its unique world-class resources, the province of Saskatchewan is just as important in its location on the vast rail network, as products move from east to west and west to east, as well as exports south to the United States. v Footnotes 1 Millington, Dinara, Carlos Murillo and Rob McWhinney, Canadian Oil Sands Supply Costs and Development Projects (20142048), CERI, Study No. 141, July 2014, pp. xiii 2 ibid 3 Note again that the last year of data available from Statistics Canada (Table 404-0021) is 2012.

4 Historic trends for each commodity and their economic outlooks are contain in the report.

5 For example, the Conference Board of Canada predicts a very similar forecast for the same period in their Canadian Outlook 2015: Long-Term Economic Forecast.

6 National Energy Board website, Canadian Crude Oil Exports

by Rail – quarterly Data, http://www.neb-one.gc.ca/clf-nsi/ rnrgynfmtn/sttstc/crdlndptrlmprdct/2014/cndncrdlxprtsrl-eng. html

Canadian Energy Research Institute CERI is a non-profit energy institute funded by industry, government and academia providing relevant, independent and objective economic research. CERI research encompasses the whole value chain from production to consumption for all energy sources.

Recently Completed Research Reports: • Refining Bitumen: Costs, Benefits and Analysis • Canadian Economic Impacts of Oil Sands Development in Alberta • Economic Impacts of TransCanada’s Energy East Pipeline Project • North American Natural Gas Pathways Current Research Activities: • Electricity Requirements for the Oil Sands Industry • Impact of Oil transport on the Canadian Rail System • LNG Update • Increasing Efficiences of the Upstream Oil and Gas Sector

For more information visit: www.ceri.ca Email: info@ceri.ca or Telephone: 403.282.1231 60 Saskatchewan Oil Report 2015

Monthly Reports • Commodity Report - Crude Oil • Commodity Report - Natural Gas • Geopolitics of Energy Conferences • Oil, April 20-21, 2015 • Petrochemical, June 7-9, 2015

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Going Up and Coming Down

Six planning imperatives for oil and gas companies in volatile times

By Geoff Hill, Deloitte

When I think about the price of oil these days, Newton’s law of universal gravitation inevitably comes to mind: what goes up must come down. After five years of commodity prices well “up”, sure enough they came back down; the price per barrel of oil sliding to under $50 from over $100 in only eight months.

Even if the slight uptick we started to see at the time of writing in February holds or continues, this is neither the first nor the last price bust we will see.

The opportunity now is to apply lessons learned from past business cycles and avoid repeating the same mistakes.

When times are tough it’s tempting to retreat. Hard choices must be made – but it’s critical that companies do not put long-term goals in jeopardy.

We’ve already seen the headlines about layoffs and cancelled/suspended projects, but it’s not too late to implement a strategy to see you through the

current low-price environment so that you are poised for growth when prices inevitably rebound.

More specifically, we see six key areas that demand careful and deliberate planning – even if the plan is to do nothing.

1. Sustainable cost reduction Cost reduction initiatives are often the first resort when the market turns sour, but they often fail to deliver lasting results. Our view is that you cut if you must, but use a scalpel and magnifying glass. Cost reductions must support strategy, mitigate risk (including any new risk you plan to accept), and enhance efficiency. The goal is to cut the right costs to meet short-term needs without impeding long-term goals. But don’t cut anything that would harm the company in normal times, because that will leave you at a disadvantage when higher prices return.

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Beyond cuts, costs can be reduced by optimizing operational efficiencies and by analyzing vendor contracts, among other approaches. It is also important to distinguish between indispensable “business partners” and those who are simply “vendors.” This will better ensure you’re reaping maximum cost benefit from these relationships while still reducing costs. In any event, before you cut, you must know the impact of each cost so you can be aware of potential ripple effects.

2. Portfolio management It’s too simple to say it’s either a buyer’s or seller’s market. Depending on your assets and liquidity, you may be in a position to buy or a position to sell.

For instance, if you are in a strong fiscal position, now may be the time to make acquisitions. If your company is fiscally challenged, however, divesting non-essential assets may bring new strength and stability. Optimize your portfolio by examining your assets to determine whether they support your strategy.

Consider what business you want to be in and how you will get there. Is it a time to diversify or specialize?

3. Financial management Money talks, so listen up. The key to financial management in volatile times is to have a stable foundation to weather the storm and proactively position yourself for future growth. This may require corporate or tax restruc-

turing, or changes in how you balance shareholder value with reinvestment in the business. Remember that companies need liquidity to survive, which could come from optimizing working capital or external debt, but must be sufficient to meet the organization’s short- and long-term needs alike.

4. Talent management Layoffs appear to be inevitable in tough times, but they shouldn’t have to be. Now more than ever it is crucial to retain top talent wherever possible.

Some down- or right-sizing may be called for, but it is imperative that you keep your best people – they’re very hard to get back. Besides, you don’t want your competitive advantage going to a competitor. Given how costly it is to re-train and re-hire employees, now is the time to innovate engagement programs and performance management systems to maximize the passion and productivity of all employees.

Workforce analytics, for instance, can offer a deeper look at corporate and HR data to identify efficiencies and cost savings, especially in terms of over-time or productivity.

ment to take a long-term view and to make more sustainable decisions – including establishing contingency plans for when the future unfolds counter to plan. Just remember, hope is not a strategy.

We’ve been through these price environments before, and will surely experience them again. The key is not to hope the boom days return, but to craft a strategy that prepares your company

to take a stronger position when they inevitably do. These are, after all, exactly the sorts of times that distinguish leading companies from everyone else.

Geoff Hill is a Calgary-based partner in Deloitte’s Consulting group, where he focuses on operational excellence and leads the firm’s national oil & gas sector practice. He can be reached at gehill@deloitte.ca. v

5. Stakeholder engagement Leaders don’t follow, they lead, so have a plan to manage relationships with banks, boards, and shareholders – all key stakeholders ultimately. Analyze the company’s position with regards to its stakeholders and look for potential opportunities for growth or risk mitigation. Create a foundation of action that you can bring to your stakeholders to engage them with your strategy.

Of course, central to all this planning is careful communications that keep all stakeholders informed and engaged.

6. Strategy Strategic decisions are usually based on conditions the organizations sees directly ahead of it. However, the world moves fast, and the full effect of these decisions may not be implemented until conditions have changed.

Scenario planning challenges manageSaskatchewan Oil Report 2015

65

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The oil and gas industry is a key sector of both the Saskatchewan and the Canadian economy. In fact, Canada now has the third largest reserves in the world thanks to various leading-edge technologies developed over the past couple decades.

With the conventional oil pools in both Saskatchewan and Alberta becoming mature this has led to the application of different enhanced oil recovery (EOR) methods which use solvent and steam to 66 Saskatchewan Oil Report 2015

achieve higher oil recoveries from mature fields. In addition, the growth in steam assisted gravity drainage (SAGD) technology – an EOR method that uses steam to separate oil from the sand in the well - in the oil sands is poised to outstrip miningbased extraction. All of these fluids are transported by pipeline at some point in the process but reliable data that could be used to design these pipeline systems has been lacking.

Piti Srisukvatananan, research engineer at the Saskatchewan Research Council, says this dilemma created a need for a test loop that can handle hazardous and explosive materials such as heavy crude oil and bitumen.

“Canada has huge heavy oil reserves and oil sands deep underground where surface mining is not a viable option. Industry is interested in understanding, developing, and improving ways to pipeline

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heavy oil to the surface using steam, solvent mixture, or a combination of both,” he says.

The Saskatchewan Research Council’s (SRC) Pipe Flow Technology Centre™ expanded its facilities to include these capabilities at the new Shook-Gillies HPHT Test Facility. This Class 1, Division 1 building is capable of handling volatile materials and is equipped with a four-inch diameter Class 600 ANSI flow loop. The system is designed to test industrial conditions, including multiphase flows from enhanced oil recovery projects involving solvent or steam.

SRC has over 55 years of experience in research, development, and demonstration in the area of transportation of complex mixtures. SRC’s Pipe Flow Technology Centre™ is acknowledged as an international leader in its field and has collaborated with Canadian and international clients on a range of groundbreaking pipeline and fluid mechanics applications. Serving the oil, gas, and mining industries, the centre helps re-

source industries expand the horizon of how and when they operate.

Srisukvatananan says SRC was wellequipped to handle this expansion.

“We have the facilities needed but more importantly, we have experienced staff who have been involved in slurry transport for many years, both with testing and modelling. With the right tools and the right people, we believe we can help industry and community push the envelope and scientific boundaries,” he states.

The expansion complements and builds on SRC’s growing expertise and capabilities in slurry transport, and enables SRC to support the oil and gas industry with a broader range of services including: • Testing at temperatures up to 250oC, which will allow the system to simulate SAGD field conditions • Testing at pressures of up to 1,400 psig, to reproduce conditions that may be seen in sales pipelines • Testing involving mixtures that include

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volatile materials, including light crude oil and solvents, to mimic flows involving produced fluids from enhanced oil recovery projects • Testing of complex mixtures that involve slurries with volatile components, such as the complex mixtures involved in oil sand solvent extraction projects “These capabilities will allow the oil and gas industry to do large scale testing at elevated temperatures and pressures, where available data is somewhat limited, as well as testing of volatile materials,” says Srisukvatananan.

The new capabilities of this facility will allow SRC to continue to break ground in slurry pipeline research, and at the same time support the continued development of Canada’s oil and gas and oil sands industries.

The $3.19-million expansion was funded through the Canada-Saskatchewan Western Economic Partnership Agreement (WEPA) and by SRC. v

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The Petroleum Technology Research Centre expands its research beyond heavy oil

The Petroleum Technology Research Centre (PTRC) has long been known for its funding of leading-edge research into improving recovery from Western Canada’s often difficult-to-access heavy oil reservoirs. Founded over 17 years ago with a mandate to improve recovery rates from heavy oil and to develop enhanced oil recovery research capacity in Saskatchewan, PTRC has been instrumental in improving solvent recovery methods in heavy oil deposits in the Lloydminster area, and had established a worldwide reputation in carbon diox70 Saskatchewan Oil Report 2015

ide enhanced oil recovery (CO2-EOR).

However, changing times demand changing research focuses. Light/tight oil plays and reservoirs are now some of the most important sources of oil production in Western Canada and North America. Reservoirs in Saskatchewan and Alberta such as the Bakken, Viking, Shaunavon, and Cardium have grown significantly in production over the past decade.

These formations are very challenging due to higher than average capital and operating costs (most tight oil forma-

tions require horizontal drilling and hydraulic fracturing). Maximizing recovery is important to not only the operators of these fields, but also to the jurisdictions and governments that derive revenue from production royalties.

What are the challenges of tight oil?

Common amongst all light/tight oil plays are high drilling and stimulation costs, and steep production declines.

Because of these issues, there is economic incentive for effective enhanced

oil recovery (EOR) in tight oil formations.

At a time of lower world oil prices, EOR holds the potential of maintaining production in light/tight fields without the additional cost of drilling and stimulating new wells.

With extensive research capacity in EOR for heavy and medium crudes, as well as an extensive database of results from research that includes heavy oil waterflooding, solvent and surfactant use, thermal technologies and CO2 utilization and storage, the PTRC has positioned itself to expand research into optimizing and improving recovery from Canada’s tight oil deposits.

“Tight oil continues its rise as an important source of hydrocarbons for Canada,” notes Ken From, CEO of the PTRC. “The Bakken formation in southeast Saskatchewan and similar formations in Alberta experience several technological challenges. Optimizing production from tight oil deposits is a crucial part of assuring Canada’s energy future, and PTRC is positioned to use its extensive network of research providers to provide the needed EOR.” PTRC has funded research at several Canadian universities and research councils, and has managed research projects that have included partners in the United States and Europe. Fostering connections between companies operating in tight oil fields and this wide array of research providers is something at which the PTRC has always excelled.

“The company’s model is to build consortia of interested industry partners,” notes Erik Nickel, the PTRC’s senior project manager in charge of the Heavy Oil Research Network. “We have leveraged individual company’s financial contributions with government funding to design solutions to field problems and reduce environmental impacts.”

The first steps in building a research program in tight oil is to bring together industry participants with leading researchers to identify what is needed in tight oil fields and develop a program to better optimize returns.

The PTRC’s research into tight oil will be directed by the companies working

in such reservoirs in Canada. Industry partners will bring specific challenges to the attention of the consortium for the creation of individual projects to shape the direction of research, and technologies or methods that improve recovery will be given priority.

“Although we are in the early days of planning our tight oil program,” notes From. “Our research projects will be driven by industry partners. Projects

will not be driven by PTRC or researcher agendas, but shaped by industry partners. We remain committed to open dialogue about the directions tight oil research in should go, and the means of addressing challenges with the best researchers we can find.”

For more information about the PTRC’s research projects and the development of a tight oil program, please visit the PTRC’s website at http://ptrc.ca.v

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We are proud to be a part of the Estevan Community Saskatchewan Oil Report 2015

71

Plan to Attend

23rd Williston Basin Petroleum Conference & Expo

by Ron Ness, president, North Dakota Petroleum Council

SAVE TH E DATE » Biggest Bakken Conference in the U.S. » Talks from Industry Experts & Leaders » Networking Opportunities » 500 booths & More!

Learn more at www.wbpcnd.com /WBPCND

72

@WBPCND

Saskatchewan Oil Report 2015

24TH ANNUAL WILLISTON BASIN PETROLEUM CONFERENCE MAY 24-26, 2016 | BISMARCK, ND Hosted by

N O R T H

D A K O TA

PETROLEUM C O U N C I L

This year will mark the 23rd year that North Dakota has partnered with Saskatchewan to host the Williston Basin Petroleum Conference (WBPC). The states and provinces within the Basin have seen many changes since then.

In fact, we’ve seen changes since just last year when the conference was held in Bismarck. These changes, however, are neither new nor insurmountable.

The WBPC began as a Hydraulic Fracturing Symposium and explored the technologies that have since unlocked the Bakken, defining our region as a top energy producer in the world. This is a feat that just a little more

Photo credit: Renae Mitchell

74 Saskatchewan Oil Report 2015

than a decade ago may not have seen plausible because at that time the Bakken was still considered uneconomic to produce. However, the relentless work of industry pioneers led to the innovation and combinations of technologies that have since made the Bakken shale play a world-class resource. The conference has evolved since then to focus on more efficient oil drilling and completion methods that are helping us recover more resource from the Williston Basin.

For several years, the Williston Basin has enjoyed growth and prosperity, helping move the U.S. toward more energy security and North Dakota into economic stability. The importance of this region to our nations is aptly summed up in this year’s conference motto: “One Basin Fueling Two Nations.”

However, our success in increasing production does not come without its challenges. Over the past few months we’ve seen the economics in the Bakken change, but the fact that the Williston Basin contains a vast reserve of oil has not. This knowledge has driven industry giants to find new ways to extract that resource in the past, and no doubt it will drive others to find better, more effective, more efficient,

and less expensive ways of recovering it.

Today, our industry’s best and brightest must now find ways to make the economics work if we wish to continue on our paths to becoming energy super powers. If that first conference taught us anything, however, it is that our industry has the talent, innovation, knowledge and skill to find new and better ways to develop our natural resources, and this year’s WBPC could very well be where the seed for the next big technology or efficiency may very well be planted.

We want to thank the Government of Saskatchewan Ministry of the Economy and Petroleum Technology Research Centre for organizing this year’s conference. Putting together a world-class conference of this magnitude during even good times is not easy, and during tough times, it presents more difficulties. Regardless, these industry partners continue to outdo themselves, and we consider this year’s conference – just like past years – to be a worthwhile investment.

We also want to thank this year’s participants and sponsors. We recognize that there are many shows each year focused on the oil and gas industry, but your continued support ensures that we can continue the WBPC and its reputation as one of the best and biggest conferences dedicated to the Bakken and shale plays overall.

A few years back, the motto for the WBPC was “The best is yet to come.”

We still believe that’s true. We look forward to the discussions that will grow out of the 23rd Annual WBPC and continue the momentum we have seen in the Williston Basin well into 2016 and beyond. v

Saskatchewan Oil Report 2015

75

Committed to Community Redvers & District Oil Showcase gives back

The fifth Redvers & District Oil Showcase was held on May 8 and 9, 2014, and was a great success with 1,500 people attending.

The show was sold out and included over 150 indoor and outdoor booths that highlighted the best of what the oil and gas industry and the region had to offer. The keynote speaker was Tim McMillan, the MLA in charge of Energy and Resources, spoke to a sold out supper crowd.

With the continued success over the last five shows the Redvers & District Oil Showcase has been able to make substantial contributions to organizations in the region. Prior to 2014, the oil show was able to make donations upwards of $60,000 over a period of seven years to non-profit organizations in Redvers. These donations would not have been possible without the hard work and dedica76 Saskatchewan Oil Report 2015

tion of the countless number of volunteers that work tirelessly and the commitment of gold sponsors and those sponsors that go above and beyond to ensure the oil show goes forward.

After a successful 2014 show organizers were able to donate over $40,000 to organizations in six different communities in the region. These organizations are all community-based organizations dedicated to the continued advancement and development of our region and the betterment of children and families that call the area home. Many of these organizations were hard hit by the flooding that took place during the summer of 2014 but it’s been encouraging to see the hard work of all the dedicated volunteers that responded to and continue to rebuild their communities.

• Redvers Arts Centre: $10,000 to help rebuild their building following the flood that condemned their building • Carievale Hall Auxiliary: $5,000 to renovate their flooded basement • Carnduff Theatre: $5,000 to renovate the stage and redo the lighting • Ecole de Bellegarde: $4,000 to bring smart boards into their classrooms • Redvers Activity Centre: $3,000 to upgrade their computer system • Redvers Early Learning & Child Care Centre: $2,500 to upgrade their sprinkler system • Gainsborough Community Theatre: $2,500 to install new front doors for their building • Redvers Golf Course: $2,000 to assist with their new club house • Envision Counselling – Oxbow: $2,000 to bring a family and women’s counselling centre to Oxbow • Carievale Rink: $1,000 to sponsor their ice plant upgrade • Redvers Fire & Rescue: $1,000 to facilitate the new fire hall The town of Redvers’ location in southeast Saskatchewan and close to southwest Manitoba and the play in North Dakota makes it the perfect location to showcase existing and upcoming technologies for the oilfield and related industries. The Oil Showcase will have items and exhibits of interest from company officers, engineers, consultants, drillers, landpeople, and many others who work in the oil industry. v The next Redvers & District Oil Showcase will be held May 12 and 13, 2016, with registrations currently being accepted. With space limited and the show regularly selling out early do not miss your chance to be an exhibitor and contact the show’s office.

To be a sponsor or to request a booth at the next show being held Thursday, May 12, 2016, and Friday, May 13, 2016, please contact the Redvers and District Oil Showcase Committee at (306) 452-3225 or email redversoilshow@hotmail.ca. You can also visit online at www.redversoilshow.com or on Facebook.

Saskatchewan Oil Report 2015

77

Poised for Growth Weyburn builds for stronger future

By Melanie Franner Identified in the 2011 Canada Census as the fastest growing city in Saskatchewan with a population of over 10,000, the City of Weyburn is a dynamic community that has both a strong and diverse economic base. And with more than $200 million in capital spending projects expected over the next 15 years, it’s no wonder that the current population of 11,000+ is expected to more than double over this period.

A rich history “Agriculture has been the backbone of this community since the beginning,” states Rochelle Wendt, general manager, Weyburn Regional Economic Development. “But oil and gas have played a significant role as well, since oil was first discovered in the area in the 1950s to the more recent development of the Bakken oil play. The City of Weyburn sits at the very north end of the Bakken formation that extends south into the U.S.” Today, companies continue to work the older formations, as well as the Bakken formation.

Weyburn-based companies are reportedly some of the largest investors in the Canadian Bakken play. Crescent Point Energy, for example, has its regional headquarters in Weyburn and is said to be the largest Canadian producer of Bakken oil.

78 Saskatchewan Oil Report 2015

Photo credit: Tina Hudson

“Crescent Point Energy has been a part of our community for a number of years now,” states Wendt. “They expanded their operations about six or seven years ago and are now one of the largest employers in our region. The company is also a very good corporate citizen.”

And, in fact, Crescent Point Energy recently made a $4.5-million contribution toward the city’s fundraising efforts for a new hospital, helping the city reach its goal and enabling it to enter into discussions with the province.

Another major oil and gas player is Cenovus Energy. The company operates a 215-square kilometer field in the region and has a 62 per cent ownership

Photo credit: Credit Jon Gillies

stake. The Weyburn field contained approximately 1.4 billion barrels of oil when it was first discovered in 1954. With the main productive zones located about 1,450 metres underground, the Weyburn field has benefitted from a series of innovative developments that Cenovus Energy has used to produce more oil from the reservoir.

Manufacturing is another strong component of the Weyburn economy, with products as diverse as wire and cable, plastic pipe, windows, concrete wood products, and steel buildings. Growth in this sector over the last decade or so has included: the major expansion of the Parrish and Heimbecker Terminal (formerly

Weyburn Inland Terminal); a $12-million expansion in manufacturing facilities for underground cable; multi-year oil industry expansion worth $2 billion; an innovative livestock feed supplement plant; and new food-processing initiatives.

Weyburn appeal The City of Weyburn is also the locale of choice for several professional and public sector headquarters, among them: Sun Country Health Region; Southeast Cornerstone School Division; Southeast Regional College Business Offices; and Sask Power Regional Distribution Centre.

“People gravitate here,” states Wendt.

“People want to live here because it is

The City of Weyburn is a dynamic community that has both a strong and diverse economic base.

Saskatchewan Oil Report 2015

79

a clean and safe community with good schools and good people. We offer a good quality of life. Residents are engaged in the community. When companies set up here, they know that their employees will be happy. They can use our community as a way to attract potential employees.”

And with Weyburn located only an hour’s drive from the province’s capital city of Regina, it provides that small community feel within the context of a large, big city environment.

“People here still have access to the big-city amenities without much effort,” adds Wendt.

The proximity to Regina is one advantage. Another is its proximity to three major highways.

“We’re in a very good position from a transportation point of view,” says Wendt. “We sit in the heart of three major highways, two of which extend into the U.S. and one into Manitoba.”

Another advantage is the Global Transportation Hub, Canada’s only autonomous and self-governing Inland Port Authority – located only an hour from Weyburn. The Global Transportation Hub provides rail access to all major Canadian ports, Gulf Coast ports, and mid-western U.S. trans-shipment points and trucking connections to all major networks.

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80 Saskatchewan Oil Report 2015

Living the life Over the last year, unemployment in Southeastern Saskatchewan (and thus, Weyburn) has been anywhere from under one to four per cent.

“Traditionally, we’ve had the lowest unemployment rates in the province for the past several years,” states Wendt.

Vacancy rates in the city are also at a reasonable level of about four per cent right now, having been as low as one per cent before the latest drop in oil prices and subsequent slow down in activity.

“Back in 2010, we were in a position where we were struggling to find housing for all the employees coming into the city,” says Wendt. “At that point, the municipal government really stepped up and began working on a plan to address the issue. Now, we’re ahead of the game and have a good complement of housing across the board.”

This municipal leadership has also resulted in the 2010 establishment of the Weyburn Regional Planning District Commission (RPDC) to cultivate a sus-

Over the last year, unemployment in Southeastern Saskatchewan (and thus, Weyburn) has been anywhere from under one to four per cent.

tainable environment for development opportunities for both the city of Weyburn and the regional municipality of Weyburn. Today, this RPDC is described as a model of excellence for inter-municipal cooperation and planning – removing any barriers to growth and development in the region.

It is this same RPDC that has earmarked over 450 acres of land for future development and million of dollars in capital projects. Already, the city of Weyburn is experiencing record numbers in building and development projects, as well as construction values.

Top three and counting According to Wendt, there are many reasons why businesses are attracted to

Weyburn but the top three, she says, are the city’s stable economic base, its transportation accessibility and its attractive labour force.

“While we feel the fluctuations of a volatile industry like oil and gas, we have a stable base that insulates us from that of other cities that are based almost entirely on oil and gas,” she concludes.

“We also have a city where people want to live. That proves advantageous to both employers and employees. We are a growing city that is expected to double in size over the next 15 years. And we’re very conscious of building that growth in such a way as to ensure that we still offer an excellent incentive package for business and an excellent quality of life for our residents.” v

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Saskatchewan Oil Report 2015

81

Recording Breaking The city of Swift Current is anticipated to see significant growth in 2015

Swift Current Long Term Care Centre project.

The city of Swift Current’s economy is very diverse and mature.

Relying on agriculture, manufacturing, oil and gas, tourism, retail and service sectors, the past 10 years have resulted in all industries realizing significant growth and prosperity.

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 the 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 recently adopted a strategic plan which shows the future growth of the city and indicates that by the year 2025, the goal is to increase the city’s population to 25,000 people.

According to Saskatchewan Health numbers, the city of Swift Current advanced from a population of 16,500 in 2009 to 17,990 in 2014. The city has seen obvious growth including in excess of 1,000 immigrants choosing the city as a location to live and work.

In terms of construction in the city of Swift Current, the trend over the past number of years has been extremely strong. Since 82 Saskatchewan Oil Report 2015

2004 there has been close to half a billion dollars in construction activity take place and this trend is anticipated to continue.

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.

2014 construction activity continued the strong trend for the city. Some highlights include: the opening of two new elementary schools directly adjacent to the Cypress Regional Hospital; the opening of an innovative modern 72-unit personal care home; opening 47 new residential lots with many of them being sold; new seniors living complexes under construction; many new commercial and industrial buildings completed; and plans for additional construction including commercial, industrial, and residential.

In fact building permits issued in 2014 have resulted in Swift Current enjoying the third best year in history with in close to 70 million dollars worth of construction permits.

In addition, the construction of a new 225-room long-term care facility is underway which will provide much needed living accommodations for those who need this level of care. When completed, this will be a project with a construction value in excess of 100 million dollars.

City of Swift Current, Elmwood Community.

Over the past eight years, close to 750 housing units have been constructed in the city to accommodate the demand for those choosing to move to the city or relocate within. This includes single family homes, apartments, condos, and affordable housing complexes.

To ensure the ability to accommodate future growth and prosperity, 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 is significant and accents the proactive and confident planning by the city council and senior administration.

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, oil companies in the region antici-

Saskatchewan Oil Report 2015

83

Being located on the TransCanada Highway has always proven to be an asset. Tourism and business travel have continued to keep hotels busy, as well as the many restaurants, casino, and performing arts centre. pate significant investments into drilling programs over the next number of years.

This bodes well for the city of Swift Cur-

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rent as many service companies will be either expanding or relocating to the city to take advantage of this opportunity.

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

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Manufacturing is an important component to the economy of the city and region and for the past number of years this industry has flourished. Many are exporting throughout North America and beyond 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 hotels busy, as well as the many restaurants, casino, and performing arts centre. Over the past few years the city has seen the construction of two new hotels, and new restaurants to serve this growing sector. Interestingly, the hotel industry has an occupancy rate significantly higher than most areas throughout the country.

Although this is not an exhaustive list of activities and accomplishments for the city of Swift Current, it certainly outlines the vibrancy and growth that has occurred. This trend will continue well into the future heightening the need to properly plan and invest in the community.

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84 Saskatchewan Oil Report 2015

With Care

Empowering oilfield safety practices

By David Dickert, Aggreko With unconventional oil and gas operations in North America continuing to increase at an exponential rate, producers and service providers are working overtime to ensure the highest levels of productivity. However, the sense of urgency to meet production and revenue goals has the potential to impact job safety, causing safety to be deprioritized or overlooked.

According to an April 2014 Bureau of Labor Statistics report on fatal and nonfatal occupational injuries and illnesses in the oil and gas industry, support activities for oil and gas operations accounted for 58 out of 112 fatal work injuries recorded in 2011.

The potential for incidents can be especially high in the field of temporary power. Supplemental power installations can be one of the most dangerous services provided on an oilfield site.

Without taking this into consideration, project engineers and managers could be cutting corners to get production online, compromising the safety of coworkers and customers.

Selecting a power provider with an established safety program is essential to not only guarantee a successful outcome of a production goal but to also ensure the overall well-being of all participants operating on site. When evaluating a temporary power company’s safety program, project managers should take into account several factors.

People People on a project site should wear proper personal protection equipment while working where hazards exist. This requires steel-toed footwear, highly-visible safety vests, head and eye protection, and cut-proof gloves. Technicians

should provide proper certification that they are trained to install and operate equipment in a safe and neat manner.

They should be geared with H2S monitoring devices, and there should be an option proposed to leverage alternative fuels versus diesel to improve air quality around the workers.

Equipment Oilfield equipment should be UL-listed and meet National Electrical Code standards for intended use. Generators need to be grounded using appropriate materials. The installation area should be clearly marked by the local utilities for any underground hazards, and cables must be rated for outdoor use. Operators should ask if there is an option to run generators via an alternative fuel source as well as the availability of remote monitoring services or telematics to track the performance of their temporary power installations to identify unforeseen safety issues.

As exciting as times are in oilfield production, there can be no compromise for safety.

Safety culture A strong HSE program must be evident by the provider’s employees during on- and offsite operations. Power providers should discuss job site safety during daily pre-planning meetings, and their crews need to have Stop Work Authority. Contractor employees should be

well-hydrated and properly rested when working in extreme weather conditions and areas of higher than normal activity, and the power provider should work with the operator to review HSE procedures in place and identify any potential hazards. A power provider should also insist that its subcontractors follow established safety rules while on site.

Experience There is nothing more credible than real-world experience in the oil patch.

Temporary power providers with a strong and established safety culture and record are valuable partners to add to a team. Companies promoting new equipment and lower costs without a verifiable track record should be examined closely. The operator should ask for real examples of previous installations comparable to its operation’s needs. If the power providers cannot produce comparable examples, this will likely introduce safety risk to the project, company and employees.

As exciting as times are in oilfield production, there can be no compromise for safety. If power generators are not properly installed, electricity can be very dangerous to the team. Teams should be empowered to cautiously evaluate and hire a temporary power provider that is engineering for safety as well as performance and reliability. It could require extra time and added costs to ensure everyone makes it home in the same condition as they arrived, but it’s a very small price to pay compared to experiencing an incident that could have been prevented. v Reprinted with permission by E&P from April 2014.

Saskatchewan Oil Report 2015

85

Timely, Responsive, and Customizable Training at Great Plains College

By Elizabeth Heatcoat If there is one industry that is unpredictable, it is the oil and gas industry.

That is why Great Plains College offers timely and responsive skills and safety training.

“Since we are tasked with serving an area of over 100,000 square kilometres we have to be ready to respond to industry needs,” says Lyla Cooper, skills and safety training consultant for Great Plains College clients in southwest Saskatchewan.

“There are two ways we do this,” she adds. “One is through regularly scheduled classes, the other is working directly with companies to offer customized training not only when they need it, but where they need it.”

Mark Kuss, the field safety coordinator for Teine Energy, an oil and gas producer operating in the Kindersley area, has accessed both the scheduled and customized training options at Great Plains College.

86 Saskatchewan Oil Report 2015

“We were able to bundle courses into

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Campuses and program centres are lo-

a week-long training that was specific to

week if one doesn’t work.”

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Regularly scheduled classes such as

Rosetown, Swift Current, and Warman.

a huge increase in workers over a two-

audiometric testing, confined space

But, customizable and mobile skills and

year period and it was important to get

entry, fall protection, first aid/CPR/AED,

safety training can be offered anywhere

them all booked together. Now, their

ground disturbance and H2S Alive can

in between.

regular courses are more than enough

easily be found on the newly redesigned

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The college offers more than just the basics. Other ENFORM courses such as well service blow-out prevention (WSBOP), coil tubing blow-out prevention (CTBOP), fall protection for rig work, fall rescue for rig work, and safety management and regulatory awareness for wellsite supervision (SARA).

88 Saskatchewan Oil Report 2015

don’t make that claim lightly,” says Lana Rhodes, skills and safety training consultant for Great Plains College clients in west central Saskatchewan.

“For courses such as confined space entry, we have a state-of-the-art simulation unit and equipment that replicates a real-work experience,” notes Rhodes.

“The more hands-on and real training experience we can provide, the better we know your employees are prepared to respond to a situation in the field. We hear often that safety training is a pain to keep up to date, but the reality is that there are enough stories coming out of the industry of accidents gone bad that everyone knows it is a necessity.

Rhodes adds: “As your partner, we want to ensure it is as painless as possible for you to get the certification that is required for the development of productive and safe employees. Then, you can respond to the fluctuations in the industry not incidents on the job site.”

“I have recommended [Great Plains College] many times, when I hear from someone looking for training I share their course calendar,” notes Kuss.

The college offers more than just the basics. Other ENFORM courses such as well service blow-out prevention (WSBOP), coil tubing blow-out prevention (CTBOP), fall protection for rig work, fall rescue for rig work, and safety management and regulatory awareness for wellsite supervision (SARA) are regularly scheduled during spring breakup.

Great Plains College and Swift Hearing Centres Inc. recently partnered to provide affordable audiometric testing.

“We also have the capacity to test groups of employees at the college or, the technicians can go to worksites and do on-site testing,” comments Cooper.

A full list of courses is available at greatplainscollege.ca, or you can contact Great Plains College directly to arrange specific customized training at 1 (866) 296-2472 (Swift Current) or 1 (888) 3827972 (Kindersley). v

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Capitalizing on the Entrepreneurial Spirit

Calroc Industries aims to hit it big

By Melanie Franner

90 Saskatchewan Oil Report 2015

When co-founders Dan Echino and Lawrence Duchesne sold their highly successful operation in 2004 to National Oilwell and Foremost Industries, they dreamed of semi-retirement and a life without the pressures that had helped build Corlac Inc. into a multi-million-dollar oil-field equipment manufacturing company.

That dream didn’t come to fruition.

Sure, the two men eased up a bit – Echino took up the habit of driving fast cars and Duschense “dabbled” in producing oil wells. But the two were largely unsatisfied until they met up again years later in another start-up venture – this one called Calroc Industries.

“We started Calroc Industries three years ago in 2011,” states Echino, who adds that the name is “Corlac” spelt backwards. The venture started with a few trucks and a shop located in Lloydminster. “We were bored and wanted to get back into business.”

Calroc Industries may have started as an oil-field equipment rental business but the same entrepreneurial spirit that fuelled the growth of its predecessor is working its magic here as well.

“We began as a rental operation and then started a trucking division to satisfy our own transportation needs,” explains

Echino. “We have since started manufacturing certain oil production products.

And we also have an online ‘buy and sell’ Internet site. Right now, the business is split between these different divisions.”

Calroc Industries has three dedicated people in Calgary to handle the Internet equipment site. It also has a 100,000-square-foot shop in Medicine Hat, a 20,000-square-foot shop in Lloydminster, and a rental office in Kindersley, Saskatchewan. A presence in Grand Prairie could be next.

Innovation first and foremost At the heart of Calroc Industries is a drive to succeed; a need to innovate.

“Our previous company, Corlac Inc., had won numerous awards for innovative products and entrepreneurship,” explains Echino. “A lot of people thought that was due to Lawrence and myself.

But we were smart and surrounded ourselves with good people who were better than us. That’s the key. To hire people who are brighter and smarter than you.”

And it looks like Echino’s strategy is paying dividends yet again. Calroc Industries is in the midst of launching two new products that have the potential to help benefit the industry.

The first is a newly developed Rig Mat, with a single mat capable of handling more than 160,000 pounds due to the way it’s engineered and constructed (compared to the average Rig Mat, which can handle only 40,000 pounds, that’s being generous).

The load capacity is up to 600,000 per mat when interlocked by distributing the weight. The product has been in R&D for over a year, with the prototype currently in the testing stage.

“We anticipate that we’ll be in production in May,” says Echino, who adds that the RigMats will be produced at the Medicine Hat facility at a rate of one per hour. “It’s a true interlock design and can drastically reduce the lay down and pick time by between 20 to 30 per cent.”

The new RigMat is also 100 per cent Occupational Health & Safety compliant, making it “safer, stronger, faster, and better” than its predecessors.

Another innovative Calroc Industries’ product just coming to market is a newly designed hydraulic pump jack. This version – 92 Saskatchewan Oil Report 2015

which is the brainchild of the same man who designed the original ‘Corlift’ that subsequently swept the market – features two hydraulic pistons, is easier to install, takes up less of a footprint, and is more reliable, resulting in less downtime.

“It’s also a cleaner design, which makes it aesthetically more pleasing,” says Echino. “It’s been in testing since last summer and is currently being produced at the Lloydminster facility.”

The two new products demonstrate Echino’s ongoing ability to recognize a potential game changer.

“If someone has a good idea, we put money into it,” he says, likening Lloydminster and oil well products to the way Silicon Valley is to the Internet. “Corlac did $48 million in sales per year and I never once did a budget. I’m sure my CFO did one but I never looked at it. Sure, we watch our costs and watch we’re doing but if a good idea comes along, we’re not afraid to funnel money into it.”

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Another innovative idea coming from Calroc Industries is the newly created venture of renting oil tanks to companies interested in hedging their bets by waiting for higher oil prices.

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Making the most of the downturn Another innovative idea coming from Calroc Industries is the newly created venture of renting oil tanks to companies interested in hedging their bets by waiting for higher oil prices.

“We have about 150 oil tanks, each of which holds 1,000 barrels of oil,” states Echino. “The tanks are used a lot for fracking but with the slowdown in the industry, a lot of them are sitting idle.

So we came up with the idea of renting them out at the reduced rate of $1 per barrel per month, instead of the usual rate of $2. That works out to $1,000 per tank per month. For those companies that want to store their oil in anticipation of higher oil prices, it’s a great deal.”

Echino already has some takers – and is anticipating more will take advantage of the “generous” offer. He’s quick to add that back in 2004, oil prices were down to $29 barrel and everybody still managed to make money.

“Our costs today are maybe 15 to 20 per cent higher but the price of oil is almost double what it was in 2004,” he says. “We can all make good money at $50 per barrel. We just have to do it smarter.”

A winning attitude It’s this type of positive outlook, along with an ongoing commitment to innovation, that will grow Calroc Industries into a thriving operation with over 200 employees – a goal that Echino envisions as reasonable in only five more years.

“I think we will have grown substantially,” he says, looking ahead to 2020.

“We’ll have a lot more products and probably a lot more divisions. And we’ll certainly be a major player in the industry.”

Until then, it will be hard work and 16-hour days for Echino. The end game: another go at retirement. v

94 Saskatchewan Oil Report 2015

Dig In

Changing standards in archaeology

By Joshua Glew, MBA For a quarter century, Western Heritage has worked to provide oil and gas customers with a high degree of certainty when performing archaeological investigations. They have achieved this through years of experience, and by always employing the best archaeological practices along with leading technologies and techniques to insure that the results of investigations are accurate. The purpose of a Heritage Resource Impact Assessment (HRIA) is to discover if heritage sites exist, and to identify the extent to which development will impact them.

Recently, regulators in Western Canada have noted a steep decline in discoveries of heritage sites; HRIA’s are not leading to site discoveries as often as they used to. In some jurisdictions this decline is as much as 50 per cent. So why is this happening? Industry leaders and government regulators agree that it is likely in part to an influx of new archaeologists, who are inexperienced and who have been applying a lower standard in order to be price competitive. Many of the fundamental principals that are recognized as crucial

to site discovery, including shovel test placement and screening of shovel tests, were established in 1970s and 80s, and are being overlooked by less experienced firms. This is troublesome for the field of Canadian archaeology, for the protection of heritage sites, and especially for the developers and proponents, who are exposing themselves to unnecessary risk at no fault of their own.

2015 will be a year of changing standards and regulations across Canada.

Provincial heritage regulators are working at setting a formal bar for standards - you can exceed the bar but you cannot go below the bar. Ontario and Manitoba are the leaders in Canada, having already established requirements for five metre grids for shovel testing. In most archaeological jurisdictions, screening of shovel tests is a requirement and in all jurisdictions it is the recommended best practice. Ontario is the leader here and has announced to the professional association that they are not renewing the licences of a number of archaeologists in the province, based on failures to meet

these standards. Alberta and Saskatchewan have changes on the horizon, and will most likely be in place within the year, potentially affecting current projects.

This is good news for the industry and customers. It aims to ensure that sites are not missed by inadequate testing, and that sites are properly characterized when they are discovered. This in turn will help to ensure that regulatory clearance is based on the best science available, and provides risk management to customers by ensuring that development will not be stopped or slowed by rework due to inadequate archaeological testing. Any delays can be very costly and time consuming, and can damage relationships with local communities.

Proper shovel testing depends on the location, frequency, and size of shovel tests. A single negative shovel test only indicates there is not an artifact in that tested location and does not demonstrate that a site is not present. Clearly, multiple tests on a structured grid have a much greater likelihood of identifying Saskatchewan Oil Report 2015

95

a site. Screening these shovel tests is also very important. Without screening, only the largest of artifacts will be discovered, meaning many important sites will be missed. In fact, if you look up various definitions of shovel tests, screening is an integral part of the definition.

Western Heritage has consistently applied the highest standards to testing throughout their history. For example, Western Heritage uses around 20 screened shovel tests per well site. Based on the literature and past research, the confidence of finding a buried site with this type of testing is high - in the 75 per cent range. In comparison, when reviewing a competitor’s tests, the standard was eight, but that included shovel tests on the access road and so the number of shovel tests was actually closer to four.

None of the shovel tests were screened.

Based on the literature and past research, the confidence of finding an archaeological site is quite low - in the five per cent range. Although the competitor was able to offer a 10 per cent lower price, West-

ern Heritage’s work raised the confidence in the results by about 70 per cent. As the bar is raised across Western Canada, regulators are being to recognize that this the lower level of testing will not reliably detect archaeological sites. This is sure to lead to costly rework, time delays, and costs to proponents, and a reactionary raising of prices.

In addition to exceeding the standard best practices, Western Heritage has a long history of shaping the discipline by applying new technology and techniques to create value for our customers by more thoroughly managing heritageassociated risks.

GIS mapping and modelling is completed in-house to not only map each project, but to forecast heritage potential in project areas. This potentially allows customers to avoid high potential areas by moving access roads or using directional drilling.

Near surface geophysical techniques such as ground-penetrating radar and magnetic susceptibility are applied when

more information is needed, or when intrusive investigations are not feasible, such as in urban environments, or when burials are present.

Geo-archaeology techniques such as portable optically-stimulated luminescence (POSL) readers are used when applicable in order to enhance our evaluations of site integrity and significance, and increase the value of HRIA work for the client, the regulator, and community heritage groups.

Western Heritage uses the best combination of services for each individual project to make sure it is protected by sound science that represents the best practices available. Ultimately this will save time, money, and ensure everything possible is done to protect Canadian archaeology, the histories of the communities you operate in, and the financial and operational security of your project. Western Heritage encourages its partners and customers to talk to us about how these changes can affect your business. v

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Closer Connecting Enform Saskatchewan moves near to the heart of the industry In 2014, Enform Saskatchewan relocated their offices from Regina to Weyburn, placing them closer to industry activity and increasing the ease of client access with a location in the heart of the oil patch.

“Our relocation to Weyburn provides us with better field-level exposure to gain knowledge that is transferable throughout the province,” says Arnold Betzema, program manager at Enform Saskatchewan. “In this location we can become closely attuned to clients’ health and safety needs and more conversant with industry issues.”

Enform is the safety association for Canada’s upstream oil and gas industry. Supported by the six major oil and gas industry associations, Enform works in collaboration with industry to serve as the advocate and leading resource for the continuous improvement of industry’s safety performance.

Enform and its network of training partners deliver more than 120 courses and issue over 250,000 certifications for workers in Canada and around the world every year. In collaboration with industry associations and other stakeholders, Enform brings together experts to develop industry recommended practices and safety tools, set priorities and achieve shared safety goals.

“The relocation of Enform Saskatchewan to Weyburn demonstrates our commitment to support companies operating in Saskatchewan’s growing oil and gas industry and to support a strong safety focus within the industry,” says Cameron MacGillivray, president and CEO of Enform. “The decision to relocate was easy because a significant part of what we do is work directly with workers. The Weyburn location places us closer to a centre of operations for oil and gas and enables us to better connect with our clients and support our training activities.”

Providing comprehensive services to all sectors Enform Saskatchewan serves a variety of sectors involved in the industry throughout the province, such as drilling and service companies, trucking companies, and oil and gas producers.

To help workers and employers improve and promote health and safety practices in the industry, Enform Saskatchewan provides the following services: • information on enhancing the health and safety of workers in reducing accidents and injuries in the workplace • onsite meetings with employers to discuss health and safety initiatives and assist in developing action plans to enhance worker health and safety.

• information on Enform’s training programs and services 98 Saskatchewan Oil Report 2015

• details relating to training providers in the province • a facility to complete online training and exams • quarterly advisory committees and industry information working group meetings • printing of replacement certificates Enform Saskatchewan is committed to their clients throughout Saskatchewan and though their relocation places them in the southeast part of the province, their office is driven to provide clients in every region of the province with Enform’s full spectrum of services.

“Being close to industry activity in the southern half of the province helps us keep in touch with the heart of the industry, but we’re also reaching out to the whole province to meet their needs and training requirements,” says Betzema. “We conduct regular safety workshops and in the fall, we will be conducting lunch and learn sessions in every region to address hot topics in the industry and provide insights on how to improve safety performance.”

In addition to the lunch and learn events, the Saskatchewan Petroleum Industry Health and Safety Information group meets quarterly in Weyburn, providing a forum for employers and workers to share ideas, best practices, and ways to improve the health and safety of workers.

Anyone who would like to stay connected with Enform Saskatchewan to find out about upcoming events can subscribe to their mailing list by sending a message to sk@enform.ca.

“We are continually striving to become more conversant with our stakeholders and to provide direct supports within the province,” says Betzema.

To provide Enform Saskatchewan with direction and focus on provincial oil and gas industry issues, the Saskatchewan Advisory Committee meets on a quarterly basis.

Designed to represent a cross-section of industry, the committee is comprised of members from the six industry associations that support Enform, representatives from Saskatchewan Workers’ Compensation Board (WCB) and other key regulators and industry partners.

Diverse expertise to improve safety performance Enform Saskatchewan conducts direct, one-on-one employer consultations to help companies who are struggling with their safety performance. The employers gain an understanding of their safety performance in comparison with their peers and

learn how Enform can support their efforts to improve performance through training programs, resources and tools.

“Our employer consultations typically take place at their worksite and we work with them to help them develop programs, establish relationships with the Workers’ Compensation Board, and we let them know if there are specific Enform contacts who can assist them in improving their safety performance,” explains Betzema.

The Enform Saskatchewan office is developing a number of pilot programs to improve safety performance in the province.

They are currently developing programs on the oilfield trucking industry and the oil well servicing rig segment of the industry.

Increased synergy with training delivery partners At the grand opening of Enform’s new location in Weyburn, Cameron MacGillivray presented Judi Jones, chair of the Southeast College Board of Governors, with a $10,000 donation towards scholarships for the college’s Oil and Gas Rig Worker program.

The Saskatchewan Energy Training Institute (SETI) division of Southeast College is one of Enform’s largest petroleum safety training delivery partners in Canada. With six campuses throughout the province, SRC’s largest campuses for safety training are located in Weyburn and Estevan.

In response to the high demand for training within the energy and industry sectors of Saskatchewan, Southeast College

opened a state-of-the-art, 44,000-square-foot SETI facility in Estevan in 2012.

“Enform provides us access to industry-approved curriculum and in turn we provide a distribution network to get it out to industry for employees that need their safety certificates to work,” says Dion McGrath, president and CEO of Southeast College. “It is beneficial relationship for both parties because we have the infrastructure on the ground to provide Enform certified courses in locations that are close to industry workers.”

With the Southeast College administrative offices in Weyburn, the relocation of Enform SK has contributed to an increased synergy between the organizations. McGrath says, “Now we’re closer to people on the ground at Enform and there is more opportunity for regular, face-to-face communications. We’re happy that they’re right next door.”

“The data mining that Enform performs to help understand the present and future labour market needs in the energy sector helps us identify emerging training opportunities for our institute,” says McGrath.

Connect with Enform Enform Saskatchewan is located in the MNP Building, Suite 208, 117-3rd St NE. The office is open Monday through Friday from 8:00 am to 12:00 pm and 1:00 pm to 4:30 pm. For more information, visit enform.ca/enform_sk.

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Find the Energy

Energized expansion at Lakeland College’s campus Lakeland College’s new Energy Centre isn’t officially open yet but it’s already creating even greater interest in energy programming at the college.

The opportunity to train in this new leading-edge facility at the Lloydminster campus has prompted hundreds of prospective students from throughout Saskatchewan and Alberta to submit their application to Lakeland College for a seat in the heavy oil power engineering (HOPE) program.

The HOPE program is already at capacity for the fall of 2015.

An additional 99 prospective students have been waitlisted.

As excited as prospective students are about training in the Energy Centre, so too are current students. Though the heavy oil and power engineering lab has yet to be commissioned, students have had the opportunity to train in the $17.5-million facility. As to not interfere with construction, second-year students have completed evening shifts in the lab so they understand the facility’s construction.

“They are pretty excited to be able to be in that space already – we have a fantastic lab,” says Kara Johnston, dean of energy, entrepreneurship and aboriginal programming, adding the Energy Centre’s classrooms opened in time for the start of 100 Saskatchewan Oil Report 2015

the second semester in early January.

The centre includes a two-storey distillation tower, four types of boilers – once through, D-type water-tube, O-type water-tube, and fire-tube – as well as a turbine generator and observation deck. The lab features six breakout training rooms: control room, water treatment technology, refrigeration equipment, pump repair, and two working labs. Other features of the 2,400-square-metre facility include two 50-seat simulation theatres, locker rooms, a common area, and office space.

“Our energy and petroleum faculty members are all experts in their field. For them to have this facility and state-of-the-art tools to share their knowledge will only contribute to our students’ success,” says Johnston.

With specialized computer software programs, students will be able to simulate complete heavy oil upgrading and steamassisted gravity drainage (SAGD) processes from beginning to end in the Energy Centre. Multiple heating systems will be used so students can study different types of technology.

“When students are producing energy in the lab, which serves as a fully-functioning power plant, they are actually heating our campus,” says Johnston, adding the open ceil-

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of wells and specific duties vary from one position to another, and from one company to another. The four-part GPO program takes students through the theory and practical skills related to working as a pumper with wellhead equipment or battery operator whose responsibilities include more duties.

Lakeland’s production field operator course is designed for anyone interested in learning more about the sector, particularly related to heavy oil production sites. Both online courses include an instructor who will host a class each week. Students have the option to sit in the class, watch the class live stream, or watch the recording. ing allows students to see the lab’s mechanical system. “This learning experience gives our students tremendous opportunities for when they graduate. They are more industry ready and have immediate employable skills.”

It’s anticipated the Energy Centre will be fully operational in March, with a grand opening to be held in the spring. Of course a project of this magnitude does not happen by acting alone, says Johnston.

“We are grateful for the support of industry, alumni, community members, and the Alberta Government. We also appreciate the input we received from industry and advisory committee members as well as our own students and faculty,” she says.

Admissions in all oil and power engineering programs at Lakeland – including the heavy oil operations technician (HOOT) certificate program and the HOPE diploma program – increased in fall 2014. Lakeland also offers online blended courses accredited by Alberta Boilers Safety Association and the Technical Safety Authority of Saskatchewan for fourth, third, and second-class power engineering training.

Earn while you learn Lakeland offers flexible and convenient learning opportunities for those already working in the oilfield who want to expand their skills. With the gas process operator (GPO) certificate program and the production field operator course, students can earn while they learn online.

Oilfield production operators are responsible for a number

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Another side of industry Just as Lakeland trains students to work in the oilfield, the college provides hands-on learning for those interested in another side of the energy industry.

Lakeland’s environmental conservation and reclamation (ECR) major teaches students about soils and re-vegetation competencies, among other areas of study. Accredited by ECO Canada, the environmental sciences program provides students with in-demand industry skills and connections.

ECR major graduates can transition from the classroom to careers as soil conservation technologists, environmental consultants, drilling waste technologists and re-vegetation specialists.

“The hands-on skills that we learn are extremely valuable.

Classes are a community where we are all live and learn together,” says Spencer Thomas, class of 2013. “I came to Lakeland after completing a BSc degree. Lakeland stood out as the place to be to make more connections and learn new skills.”

Established in 1913, Lakeland College serves more than 7,500 students every year at its campuses in Vermilion and Lloydminster, and through online and off-site programs and courses. Lakeland offers programming in the areas of agricultural sciences, business, energy and petroleum technology, environmental sciences, fire and emergency services, health and wellness, human services, interior design technology, trades and technology, and university transfer. For more information visit lakelandcollege.ca. v

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2015, many companies are evaluating their business plans and are looking for ways to minimize their costs,” says Craig Slobodian, corporate sales manager in the construction division. “All of the industries that we participate in are cyclical,

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and we’ve seen it enough times when you go through high spots and low spots and everything in between.”

Regardless of some economic uncertainty ahead in the oil and gas industry, Redhead Equipment continues to see Saskatchewan well positioned for continued growth in other sectors.

“There’s a lot of other things going on in Saskatchewan that are very positive,” says Ron Duda, corporate sales manager for the truck and trailer division. “The energy sector will pick up in due time, and until then, we see a lot of positives in agriculture, construction, forestry, and mining.”

“Saskatchewan’s a great place to do business. It’s a market that is still very much people buying from people – where people’s word or handshake is still worth a lot,” adds Slobodian. “We’re definitely proud to be a Saskatchewan company.”

Customer support One way that Redhead Equipment provides assurance during uncertain economic times is through comprehensive warranty protection.

“When a unit goes down, companies are hit with the double whammy of lost revenue, as well as the repair bill,” notes Duda.

Having the right warranty is crucial, and allows the peace of mind to be able to deal with unexpected events.

“In today’s day and age, dealer support is absolutely critical for anyone to be successful,” says Duda. “You can’t guarantee their revenue stream, but what you can do, is when an unscheduled down-

time occurs, you can make sure that the warranty side will look after the repairs.”

Redhead Equipment is pleased to offer Case ProCare on select new Case excavators, wheel loaders, dozers, and graders.

ProCare features a three-year, 3,000-hour factory warranty that includes service mileage and machine maintenance, such as oil and filter changes. ProCare also includes three years of the state-of-the-art telematics system that allows the user to retrieve data from the machine remotely over the cellular network. Telematics can also be used to create a geo-fence that notifies the owner if the machine has left approved boundaries, or to send notifications should the machine be in use outside approved hours. Engine error codes can also be pulled remotely, helping with a speedy and accurate diagnosis.

“It’s a really great support package.

Nobody in the industry is doing that at this point,” praises Slobodian. “Case has really put its money behind their product with ProCare. In these tight times, it’s a fantastic product offering for when guys are forced to sharpen their pencils.”

New product offerings Redhead Equipment’s oil and gas industry product lines include skid steers, track loaders, backhoes, excavators, and wheel loaders, as well as a select line of Mack trucks and trailers. Redhead Equipment recently added a new product offering from Volvo for the pipeline industry, the PL3005 Pipelayer, based on the excavator design. The model includes 360-degree swing capability, modern lifting technology, sensors, and warning lights for superior stability and lifting.

“It is a pretty revolutionary product,” describes Slobodian. “It has greater ability to place pipe and adjust, and you have a tonne of safety built into the machine.”

Another offering that has impressed customers throughout the years is the Volvo wheel loader, featuring Volvo’s exclusive Torque-Parallel linkage. The technology has the advantage of superior breakout and lifting forces through the whole path of the loader arms.

Redhead Equipment also sells the Chinese-made SDLG (Shandong Lingong) wheel loader – a joint venture with Volvo, which prices around 30 to 40 per cent less than other brands. The product has received positive customer reviews and appeals to businesses looking for a dependable, value-priced model.

Redhead Equipment stocks top-of-theline Mack trucks, including the classic Mack Pinnacle CHU model and the Mack Granite for heavy body mounted applications. The handpicked line of trailers includes MAC, Dakota, Neustar, Ridgemar, as well as the Canadian-made BWS EZ2-Load trailers for equipment, forestry, construction and tag-along applications.

Recently, Redhead Equipment announced a partnership with K-Tec Earthmovers Inc., and now offers K-Tec’s Direct Mount, Train and ADT scrapers.

“K-Tec is a very reputable, quality manufacturer,” says Slobodian. “It’s a great acquisition for us and just one more example to the industry that we’re committed for the long haul.” v

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Trucking on into the Future

TSL Industries puts people first in their business

By Deb Smith “We do what it takes to get the job done.”

That philosophy has fuelled the success and reputation of TSL Industries, a respected family-owned oilfield services company in Kola, Manitoba for more than a decade. When Bob and Martha Penner sold their farm to begin a small trucking business, they had no idea where their hard work and commitment would eventually take them.

“I’ve worked around equipment most of my life on farms,” explains Bob Penner, CEO of TSL Industries. “But I didn’t know anything about the oilfield when I started. A friend who was in the industry asked if I wanted to build a hydrovac with him, and I had to ask what that was.”

By 2003, the Penners and their partner had two hydrovac trucks and more work than they could handle. Twelve years after that, the company owns close to 100 different pieces of equipment with five mechanics working full-time to keep them working and in top condition. Today, its 85 employees take pride in the integrity and hard work of TSL and the translation of its four key corporate mission statements into their everyday working lives.

TSL mission statement “To Ensure Our Customers Receive the High Quality Service They Expect and Deserve.”

As part of fulfilling this statement, TSL Industries has strived to have on hand the equipment and the drivers for whatever the oilfield industry might need - everything from tank trucks to daylighting equipment to tractors and a track hoe. And if a customer has a special trucking need, the company will find a way to fulfill that need. As Marianne Ludlam, CFO explains: “We will go the extra mile to strategically design and implement solutions that may not have been considered.”

For example, in 2013, TSL had a state-of-the-art hydrovac truck built to certain specifications to service the needs of a customer. The success of that piece of equipment led to the purchase of two more to add to their fleet.

106 Saskatchewan Oil Report 2015

Being situated close to major oilfield areas, the main dispatchers juggle complex schedules to maintain the company’s promise of 24/7 service coverage over southern Saskatchewan and Manitoba. Diversification has been one of the keys to growth, dictated by the customer rather than what “should” happen.

To ensure that all work is done safely Taking care of business at TSL means taking care of both its customers and its employees. As part of its “Working Alone” policy, the company has installed GPS units in all its trucks so that dispatch knows where each one is at any given time. Drivers are fully trained in the safe operation of equipment and hold all current certifications and tickets required in both the oil and gas and the trucking industries.

The company has also begun purchasing units with attached sleepers to accommodate often long hours of work, benefiting the customer with uninterrupted service but also for the safety and comfort of its drivers. Two full-time safety supervisors exceed recommended practices with constant updating and regular safety meetings at all levels.

People come before profits When the Penners and their original partner named their company after the first initials of their daughters, they were also making a commitment to build their business with the principles of respect as are within a family.

“The employees here are not numbers,” says Ludlam. “Each one is known by name.” With TSL centred in the small community of Kola, most employees have come from other parts of Manitoba, as well as other provinces to make the company and the area their new home.

Drivers take all required courses offered online through reputable companies. After that, they go out with experienced drivers who already know how to run the equipment. TSL makes sure that all its employees are confident and skilled in order to

OILFIELD SERVICES in Manitoba and southeastern Saskatchewan.

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TSL has held its focus on maintaining positive relationships with not only its customers, but with anyone and everyone the company comes in contact with - the rural municipalities, the public, and local communities - for the benefit of all.

provide professional and reliable service on every job. In their turn, the people who make up TSL can take pride in doing their part towards maintaining the excellent reputation that the company has earned over the years.

TSL has held its focus on maintaining positive relationships with not only its customers, but with anyone and everyone the company comes in contact with - the rural municipalities, the public, and local communities - for the benefit of all. For example, TSL works with truck servicing shops in other locations to get any downed equipment up and running as soon as possible, while calling upon its extensive inventory of vehicles for immediate replacement. In this way, TSL not only minimizes downtime

to its customers, but ensures that its own people and the community can work together to complete the job. The goal is and always has been to provide unbeatable service whenever and wherever it’s needed with honesty, integrity, and loyalty.

Ludlam does not hesitate to attribute the core of TSL’s success to its husband and wife owner team: “We have two remarkable people who are at the head of this business. That’s where our mission statement comes from.”

When the Penners needed work, they went out and made it happen. Their company continues to move towards the future with that same determination and promise of prosperity and pride. v

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9.5 - 13.5 (14.14 - 20.09)

3.920 - 4.090 (99.60 - 103.90)

3.750 (95.25)

2.668 (67.77)

15.1 (22.47)

3.826 (97.20)

3.600 (91.44)

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4.126 - 4.408 (111.96 - 104.80)

3.968 (100.79)

2.668 (67.77)

13.0 - 17.0 (19.35 - 25.30)

4.892 - 5.044 (124.30 - 128.12)

4.532 (115.11)

3.000 (76.20)

17.0 - 23.0 (25.30 - 34.23)

4.670 - 4.892 (118.60 - 124.30)

4.438 (112.73)

3.000 (76.20)

23.0 - 26.0 (34.23 - 38.69)

4.548 - 4.670 (115.50 - 118.60)

4.250 (107.95)

2.668 (67.77)

5.0 (127.0)

5.5 (139.7)

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31 Survey Pin .

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Keeping Up With Innovation

110 Saskatchewan Oil Report 2015

Kenilworth Combustion continues to produce performance and safety Standing in the main fabrication shop at Kenilworth Combustion one thing is clear, things have come a long way since we first met years ago in their old fabrication shop. The new facility is situated on a six-acre parcel east of Vermilion, Alberta - the picturesque embodiment of the prairies surrounds the facility.

There you will find Heine Westergaard, president and CEO of Kenilworth Combustion along with the host of tradespeople, administrative, sales, and engineering staff that make up Kenilworth Combustion.

“Things have really come together in the past few years for us” says Westergaard. “Our business has grown considerably, but not so fast that we have lost focus on what is important to us and our customers: performance and safety.”

Safety and performance are at the core of Kenilworth Combustions business philosophy, and that becomes very clear when you take a look at the innovative product line that has been developed over the years. Often thought of as a provider of just burner systems (or “Process Heater Modules”, a phrase coined by Kenilworth Combustion), Kenilworth has branched out over the years and put to use their extensive experience in oil and gas processes.

For 2015, Kenilworth Combustion has launched a new product line focusing on transport loading.

“The issue was brought up to us by a customer, they were concerned about the amount of spills and the potential for injury that they had when truckers were taking loads of oil out of tanks,” continues Westergaard. “We took a look at the safety concern and costs associated with each spill, there was definitely a need for a device that ensured the safe transfer of fluids from tank to truck.”

From that the team of designers and tradesman at Kenilworth got to work, and within a few weeks a prototype of

the gate valve safety devise (GVSD) was installed in the field.

“Field testing is really important to us, if it works in the shop that’s great, but where it matters is in the field. We simulate designs in our CAD software, test theoretical loads, and do all of the engineering from the ground up, but there is no better proving ground than the real world,” claims Westergaard.

“Our field testing [of the GVSD] was so successful that the customer ordered 1,000 units immediately after testing was complete…. even with the downturn in oil prices, they saw the value added by being proactive on preventing spills and lost time incidents.”

In addition to the GVSD, Kenilworth Combustion has also developed a ball valve safety device (BVSD) to round out the types of valves commonly used in the industry.

Throughout the years, Kenilworth Combustion has had a loyal following of customers, and through high and low oil prices they have always managed to deliver products that stand the test of time.

One product is the Kenilworth Combustion skim system. Necessity being the mother of all invention, it was first introduced to the market in the same manner as the GVSD and BVSD. About 25 years ago, Kenilworth Combustion Founder and current Product Developer Per Westergaard, noticed a common theme when it came to turn around season. Tanks were emptied, inspected, repaired and typically the skim system was replaced. Consultants, project managers and operations staff all had the same complaint: there wasn’t a skim system that worked for long before it had to be replaced. The common issue being that the cable, ropes, and pulleys would tangle or jam full of debris and heavy oil, making replacement a common occurrence. The solution was obvious, create a skim system that was free floating and had no rope, cables, hoses, or pulleys. It Saskatchewan Oil Report 2015 111

Throughout the years, Kenilworth Combustion has had a loyal following of customers, and through high and low oil prices they have always managed to deliver products that stand the test of time.

also had to be fully serviceable from the outside of the tank. That was 25 years ago, and Kenilworth combustion skim systems have become one of the industry standards.

“Many of the original systems are still in service today,” says Westergaard with a smile. “It’s not too often that you hear of an oil and gas product lasting that long, we rarely see failure in our skim systems. We have shipped these units overseas to the Middle East, Balkans and all though North America they have a really strong following. That wasn’t built overnight and I think it says a lot about the product.”

With all of the new product development, the above mentioned GVSD, BVSD, and skim system, it begs the question: what has happened with the Kenilworth Combustion burner systems (PHM)? Standing in the main fabrication area of his facility, Westergaard points over to a gasfitter standing in front of a PHM. “You see that tech over there, they’re performing a shop commissioning test for a customer’s system. It was assembled here in under a day and will be on a truck heading out to site tomorrow morning 112 Saskatchewan Oil Report 2015

having been fully function tested, wired and fired on our test firetube.”

Obviously these systems are pretty detailed, and building them has to take more than a day between welding the firebox, flame arrestor, powder coating, fuel train assembly, wiring in the control system and installing the burner.

“We have built these systems to be fully modular, no matter what the configuration needs are, we stock the necessary parts and pieces to quickly put together a system that meets our customer’s needs. When you think about it, modular is the way to go. We can build or upgrade a system quickly and easily.

What’s even better is that we have all of our designs approved in principle with a SCC/CSA Certification Body, this means that when you get a system it is ready for CSA B149.3 inspections, all you have to do is send in the documentation package that Kenilworth supplies to you, and the inspector comes out to look at the installation and issues the CSA Certification.

It’s pretty turnkey,” he explains.

Kenilworth has partnered with a number of fabrication companies throughout Western Canada building all of the components.

“It serves us and our customers well to invest in local labour and local fabricators. We’ll never stray from our Western Canadian roots; we support local,” states Westergaard. “From there we have our crew of tradesman do the QA/ QC checks and do all of our assembly inhouse. This lets us keep a close eye on what is coming in and ultimately going out. Many of our in-house tradespeople end up as service techs, The topic then turned on to product service: “we have partnered with a few instrumentation companies throughout Western Canada, there is a service tech trained by Kenilworth anywhere from Fort St. John, B.C. to Virden, Manitoba.

This took a while for us to set up, we had to find the right kind of people to service our product and represent our brand. The main criteria was someone who cares for and takes pride in their work, someone who doesn’t call it quits until the job is done right. That seems to be rare these days, but we have a roster of tradespeople who exude this quality and it is not by accident.” v

Drilling it Home

Millennium Directional Service Ltd. uses a proactive approach to be top of mind with clients 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 and Manitoba. Based in Carlyle, Saskatchewan, the company has sales offices in Calgary and Denver, along with a MWD Service / Operations facility in Leduc, Alberta. Millennium is the provider of choice for many of the largest and fastest growing oil and gas companies in Western Canada and the United States; providing services on 15 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 Saskatchewan Oil Report 2015 113

“Millennium Directional played a huge role in decreasing Elkhorn’s average drilling time. They had extremely reliable tools for the drilling environment in [southeast] Saskatchewan combined with excellent staff that made them a vital component to Elkhorn’s success,” claims John Jenkins, drilling engineer, Elkhorn Resources Ltd.

and Manitoba provided an excellent business opportunity,” says company President Dan Eddy.

At start up, competition in southeast Saskatchewan was primarily from large, publicly-traded, Calgary-based directional drilling contractors.

“There were no small independent directional drilling companies in the area that provided a complete range of new directional drilling equipment with the reliability and high-service standards that we were determined to achieve. The objective was to react quickly and be far more proactive than our competition,” he states 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 technicians and experienced field personnel to eliminate downtime, increase productivity, and optimize drilling operations,” explains Eddy.

Clients agree “I just wanted to drop you a note to say ‘thank-you’ to you and the entire Millennium team. The Iver well was drilled in record time. From spud to TD was only at 11 ½ days and spud to rig release was only 14 days. You guys are a big part of what we have been able to accomplish in our Spyglass field, and I wanted you to know and pass on to everyone that American Eagle is very appreciative of your help and efforts. So now, I guess we have to figure out how to do a long lateral in 10 days. Damn, you guys have set the bar pretty high,” claims Richard A. Pershall, operations manager, American Eagle Energy Corporation.

“In our business too often the producer only sends a note on to its service provider when things go wrong. Well to change the trend just wanted to send off a quick note to let you know that Millennium is definitely a big part of our drilling success.

Consistent performance of equipment along with always qualified personnel enable us to meet our drilling time, financial and quality targets. We do appreciate the care and attention that Millennium gives to Aldon and look forward to our continued partnership in our drilling plans,” state Del Mondor, president/ CEO, Aldon Oils Ltd. 114 Saskatchewan Oil Report 2015

Tools and technology Millennium’s high service standards, state-of-the-art equipment and software technology, 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 manufactures, we stay at the forefront of current and emerging industry trends.

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,” states Eddy. “That’s what really sets Millennium apart from competitors, the reliability of our tools and the experience of our personnel.”

Also, clients can pick and choose basically any motor configuration to suit the particular area, or formation they are drilling.

The company works with three suppliers - National, Dynomax and Shamrock - which enables them to provide clients a large variety of top-of-the-line mud motors; and 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.

“All of our personnel are well versed in teamwork and the rolls of others that combine to plan and execute a successful drilling venture,” he says. “We are privileged to count among our employees some of the most experienced and skilled directional drillers and MWD operators in the business, who have shown their commitment to superior service. As new processes and technologies become available, constant upgrading, training and educational seminars allow our personnel to keep up to date on advancing industry trends.”

Safety and the environment Millennium is also committed to providing a safe working experience for all employees and consultants.

“Millennium takes pride in its responsibility to conduct business in a safe and reliable manner. We strictly comply with all environmental legislation and safety regulations in every aspect of our work and employees at all levels including management and field supervisors are responsible and accountable for implementing safety initiatives,” he says.

The result has been no lost time accidents since the company began doing business in 2005. v

• Personal service, professional performance • Highly skilled, experienced personnel • State-of -the-art technology & equipment • Positive Pulse MWD & High Performance Drilling Motors • Committed to your success

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Calgary, AB Ph: (403) 264-8206

Carlyle, SK Ph: (306) 453-2533

Leduc, AB Ph: (780) 986-3309

Denver, CO Ph (303) 228-7156

The Trainer of Choice Southeast College offers the training students need close to home Southeast College has six locations across the southeast region of Saskatchewan: Estevan, Weyburn, Assiniboia, Moosomin, Indian Head, and Whitewood. The campuses serve over 70 communities throughout 20,000 square kilometres and our locations let students stay closer to home while getting the training they need.

The college delivers a diverse and flexible set of full-and part-time programs, safety training, and education upgrading options and celebrates its 40th anniversary throughout 2015.

Full-time programs are accredited through Saskatchewan Polytechnic. Part-time credit programs make room for learning along with life, with courses that run on evenings and weekends to allow students to balance their other obligations, such as full-time jobs or family time.

The Saskatchewan Energy Training Institute offers training for real life and work in the energy sector, with a diverse selection that includes fall protection, ground disturbance, first aid, and many more choices to enrich an employee’s opportunities.

Many Energy Training Institute programs were developed with industry partners, such as Enform and the CAODC. Other Southeast College courses are also developed in consultation with the communities we serve, such as the customer service excellence workshop, which was created by request from the local business community.

Southeast College is also working in partnership with local businesses who qualify for the Canada-Saskatchewan Job Grant. (Visit http:// economy.gov.sk.ca/job-grant to find 116 Saskatchewan Oil Report 2015

out more about how employers can qualify for this program.) With job grant funding, employers can train new or existing employees for about one third of the normal cost, providing excellent value for employers and opportunities for employees to train for a new or better position.

Training can be tailored to meet your specific company or organization’s needs, allowing for flexible and successful programming that works for students and employers.

The college also offers adult basic education (ABE), a program for students who may not have completed high school or wish to improve their marks to allow them to be admitted to post-secondary training. Students can set their own pace, suited to their needs and abilities, and will be assessed by a qualified instructor at the start of their program to help set and meet goals for learning.

Southeast College is committed to dynamic, flexible programs for the communities we serve, and also offers labour market attachment specialists who work to create opportunities to turn students into employees, providing training and support for both students and potential employers.

For more about Southeast College and Canada-Saskatchewan Job Grant training, or to find out about custom training options, contact the administrative office in Weyburn at 306-848-2525.

To see a complete listing of available safety courses, visit the website at http://www.southeastcollege.org/ programs/seti/safety-classes.htm v

With over 20 years of

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Modern Pipes

Flexpipe Systems is upgrading pipelines Traditional jointed piping systems have been used for decades. They require a large installation crew, heavy equipment, wide rights of way, and high transportation costs. There is a better way. Flexible composite linepipe, like Flexpipe Systems’ FlexPipe Linepipe and FlexCord Linepipe, has been providing the solution to jointed piping systems for over 10 years.

Composites offer the same transportation capabilities and the additional benefits of minimal environmental impact, fast installation times, cost savings, less heavy equipment on site, and lower transportation costs (up to 1,150 metres of pipe is spooled on each reel).

Safety is another important element that benefits from using composite linepipe over steel. More product in one shipment takes trucks off the road, while 40 per cent smaller crew sizes decrease labour costs and safety risks.

The most important of these benefits in our community – Saskatchewan – is minimizing the environmental impact of our industry. Our land is used for more than oil and gas. It grows our food, it’s our backyard, and we raise our children here. It is crucial for oil and gas companies to partner with landowners so that we can grow our industry while protecting our environment.

Flexpipe Systems’ products are manufactured in Canada, have internal diameters of two to four inches (and multiple lines can be run to increase capacity) and can be installed through horizontal directional drilling, plowing, or chain trenching. These three options have the least impact on our land.

Horizontal directional drilling Horizontal directional drilling is great for building landowner relationships. It has the least environmental impact as 118 Saskatchewan Oil Report 2015

bell holes are spaced 500 metres apart.

This method doesn’t mix top soil with clay and farmers can even work the land the same day as the install. They can be seeding the row at the same time as the project. Approximately 1,000 metres can be installed per day, meaning fast completion times.

“We probably bore 90 per cent of our pipelines. The main reason is it’s less intrusive. Especially in the wet conditions of Saskatchewan, it is hard to get a good compaction on your backfill. This way we just have a bell hole every 400 metres,” says Dale Barnard, operations manager, Elcano Resources. “The more pipelines we put in the ground [about 20 kilometres in 2014] the more farmers are asking about it as an option. What we save on reclamation costs more than makes up for the initial investment.”

This method is especially good for organic land as nothing touches the land and there is no need to pre- or re-clean equipment.

Plowing Plowing offers similar advantages – no ground disturbance, there is no need to strip the top soil, and efficient installation times. From four to eight kilometres of pipe can be laid in a single day.

Chain trenching Chain trenching, a form of open trenching, can be done year round with no back filling and no rocks. The only piece of equipment needed is the chain trencher which increases a project’s safety because it limits the number of people on site and there are no side booms to worry about. This method is so fast that some Flexpipe customers complete two or three jobs in one day.

Composites paired with the three installation methods outlined allow oil and gas companies to get to work faster because landowners have few concerns about the impact to their land. Please visit fps.global/or for more information. v

LANDOWNER CONCERNS

Minimal ground disturbance means happy landowners.

Flexpipe Systems’ linepipe is easy to install through horizontal directional drilling, plowing or chain trenching.

Visit us at fps.global/or for more information.

fps.global/or

Working for You EasyRider Trucking brings safety and service to every job

As a company EasyRider Trucking strives to work with every client to help make their project go as smoothly as possible.

120 Saskatchewan Oil Report 2015

Ken Bayliss, president of EasyRider Trucking Ltd., started this business in 2010 and brought with him over 30 years experience in the oil and gas industry. He started out like many other men and women in the community of Carnduff, Saskatchewan – at a local rig moving company. He slowly worked his way up in the company by working in the shop, swamping for various trucks, and then eventually receiving his class 1A license to drive the various trucks that he previously swamped on. He then went on to directing the rig moves as a truck push. Bayliss had moved around a lot after he began his career as a truck push, but his roots were always in Carnduff where his wife, children, and family resided.

With all this experience under his belt he bought his first truck and trailer - a 1998 Western Star - to meet an ever increasing need in this small corner of Saskatchewan: the hauling of rig matts to leases that were being built around the country side. So he started to collaborate with the local matting company to supply the mats that were needed.

The need for matting and trucking continued to expand, so did the fleet of trucks and trailers.

With this increase in employees and equipment, which included highway haulers, winch tractors, hi boy trailers, super bs, beaver tails, Bayliss and his team were able to start helping out with the local rig moving company when they became short of trucks on a rig move, as well as start to move their own equipment.

As the need for matting increased, Bayliss saw another opportunity to expand once again. He decided that just hauling the mats was not enough for his ever growing business. So he brought in a couple of loaders to start laying the mats along with hauling them. This brought on the purchase of bob cats and later track hoes. With this new expansion in equipment and employees, we started to be able to offer the services of laying, placing, picking and stacking of the mats for the oil companies that required this service. With this they were now able to expand their work area into Manitoba and Alberta.

EasyRider Trucking prides itself on number one customer satisfaction. Bayliss is always available to work with the client on what they may require or their goal/ budget for the upcoming project. As a company EasyRider Trucking strives to work with every client to help make their project go as smoothly as possible. Because of this they offer competitive pricing for any job big or small.

In order to provide consistent quality of work, EasyRider Trucking makes sure they have qualified workers on all of the job sites and that they stay up-to-date on safety tickets and required orientations that go with the customers’ requirements.

Just as the name states, EasyRider Trucking tries to ensure every job is made as easy as possible. v

We can help you with the rental of mats, trucking & spotting for any lease or road. * Highway & Winch Tractors * Super Bs, Triple Highs, 24 Wheelers, Flip Over Roll & Jeeps * Loaders, Track Hoes, Bob Cats * Rig Mats – 20’ & 40’ * Access Mats – 3 Ply Oak & Fir * Geotech

Ph: 306-671-7885

Fax: 306-482-5286 Email: easyridertruckingltd@gmail.com

Suburban Hotels

How one brand supports Saskatchewan’s oil and gas industry Less than four years ago, oil and gas workers across Saskatchewan were facing a desperate situation. Although there was plenty of work, this abundance didn’t apply to the availability of hotel rooms or rental properties. Often working in smaller towns, there was little to no accommodation to be found, many workers reported sharing of accommodation and sleeping in cars after a long day’s work.

The province has been overwhelmed with interesting industry developments. In addition to SaskPower’s first carbon capture coal plant in 2012, the Boundary Dam Power Station near Estevan has recently been retrofitted to meet aggressive standards for carbon emissions. These improvements in carbon capture and storage mean huge opportunities for the industry and the province. The demand for technologies and jobs has been more popular than ever.

It was these reports that garnered the interest of Bridge Road Construction and later spurred the opening of Suburban Extended Stay Hotel in Estevan. As the first Suburban hotel to open in Saskatchewan it is also the only long-term living hotel property in the community. This is a notable accomplishment in an area where demand for extended stay is high, largely due to the local economy.

“About two thirds of our guests work in the oil and gas sector,” says Ruth Wall, general manager of Suburban Extended Stay Hotel in Estevan. “These guests often work long hours and can be on the road for weeks on end, so being able to provide

an accommodation option with the comforts and conveniences of home is very important.”

Part of the Choice Hotels Canada family, the 89 room allsuite Suburban Extended Stay Hotel in Estevan is one of only two Suburban hotels in Canada with the second located in Kindersley. A third property is slated to open late fall in Moose Jaw, making Saskatchewan the only province to offer Suburban accommodation in Canada.

The brand provides its customers with affordable pricing based on a combination of volume and length of stay. Typically rates are set for stays under four days, from five to 11 days, 12 to 29 and 30 or more, although the size of a group can also lead to preferred pricing on guest accommodation.

“On average about half of our guests stay for 30 nights or more,” says Wall. “We continue to see a strong demand from the industry, so we’re working on expanding our property with the addition of 48 more rooms which should be ready this spring.”

The hotel stands apart from its competition in the area by providing guests with a comprehensive list of in-room amenities, including a fully-stocked kitchenette with full size refrigerator, microwave, cooktop, cooking utensils, and more. The spacious rooms also include a flat-screen television, coffee maker, free wireless high-speed Internet access and a work space with desk. v

For more details or to book a short term or extended stay, visit www.ChoiceHotels.ca.

Hotel amenities include complimentary hot breakfast and parking, a business centre and separate meeting space, fitness centre and onsite laundry facilities – a necessary requirement for long-term guests.

The property is also conveniently located within walking distance of a local shopping centre, The Estevan Shoppers Mall.

With the third Suburban opening coming up fast and continued interest in the coal-fired power plant, the future is looking bright for the brand, as it looks to deepen its ties to the industry.

122 Saskatchewan Oil Report 2015

Hotels for Real Life速

One Bedroom and Studio Suites

ESTEVAN LOCATION

Box 1486 - 404 Kensington Ave. Estevan, SK S4A 2L7

Call: 306-634-8332

www.choicehotels.ca/cn923

KINDERSLEY LOCATION

BY CHOICE HOTELS SuburbanHotels.com | 800.4.choice

Box 1946 - 700 - 12th Ave. East Kindersley, SK S0L 1S0

Call: 306-463-5000

www.choicehotels.ca/cn996

Park Derochie

Trusted partners in the oil and gas industry

By Krystal Simpson and Michelle Ward

Thickener tank, drive shaft for 180 meter rake arm.

With 57 years of experience offering services such as coatings, fireproofing, mechanical and spray foam insulation, scaffolding, and abrasive blasting, Park Derochie has earned its reputation as one of Canada’s most trusted partners in the oil and gas industry.

As Saskatchewan’s economy and industry continues to grow, large commercial and industrial clients can rely on Park Derochie’s unique ability to provide services individually, or as a combined package of coordinated services with a single project manager, resulting in superior coordination that translates to time and cost savings for projects. Expertise gained by having worked with and applied product from several of the large coatings manufacturers allows accurate recommendations regarding products to be utilized for numerous varied and specialty applications.

Park Derochie Coatings (Saskatchewan) Inc. heads up the company’s polyurethane spray foam insulation services. Mobile units offer this service to clients throughout Saskatchewan and across Canada. Certified by BASF The Chemical Company (one of the largest manufacturers of spray foam and spray foam chemicals in the world) Park Derochie is capable of spraying 124 Saskatchewan Oil Report 2015

according to client formula specifications. Where required, they are willing and able to make necessary accommodations to ensure exceptional service and quality, including additional consideration for rough, rocky or steep terrain.

Most commonly considered for building insulation, spray-applied polyurethane foam (SPF) services can be beneficial to the oil and gas industry in multiple capacities, including roofing, insulation of tanks and buildings, and pipeline applications.

When polyurethane spray foam is used for roofing the seamless and monolithic placement keeps water out and its excellent wind uplift resistance withstands even hurricane force winds.

It can provide up to 30 per cent savings in both heating and cooling costs, allowing full cost recovery to occur in as little as five years, the benefits of which have been seen in commercial applications and in many Saskatchewan potash mines.

Polyurethane foam can also be used to cool off tanks by insulating them with spray-applied polyurethane foam and coatings. It uses the same principle as a Thermos jug: the spray-applied insulating foam system helps maintain the desired internal temperature, as well as protect from rust, age, and harsh weather. Proven spray-applied products and ap-

plications perform equally well in hot and cold temperatures with high R values.

In addition to temperature control, the foam and coatings help dampen sound on interior and exterior surfaces and reduce thermal shock between changing summer and winter conditions.

Additionally, spray foam is a cost-efficient, environmentallyfriendly alternative to traditional pipeline pillows, breakers, and shields. Spray foam pillows are used to prevent and protect the pipe from laying on rock or rough surfaces can be pre-formed on site or sprayed directly in place using our mobile spray foam units. To prevent flooding and control erosion, water barriers or breakers can be installed that do not require the use of forms.

Polyurethane foam adheres to almost any surface, including itself, allowing breakers to be sprayed vertically eliminating the pyramid effect necessary when using sand bags. Spray foam application is less labor intensive as spraying can be done from the top of the ditch, making installation more economical and timely than traditional methods. When spray foam is applied it reacts and becomes totally inert, making it safe for the environment.

“We have 15,000 square feet of shop space at our Saskatoon facility capable of handling materials 42 feet wide, 23 feet high, and 100 feet long. And we’re in the process of expanding to 20,000 square feet. The temperature controlled environment provides the perfect setting for facilitating both spraying and curing times year round. That space with a crane capacity of 120 tonnes and our 10 (soon to be 39) acre yard make Park Derochie an ideal contractor for a wide range of projects,” says Dave Odnokon, vice president of Park Derochie Coatings (Saskatchewan) Inc. “Our shop is often just the first stop for many projects that then move to module yards and then onto site. Park Derochie is often contracted to follow those materials each step of the way, it just makes economic sense for the client.”

To serve clients better the company is also in the process of building a 5,000-square-foot paint shop in Regina on 5.2 acres and are now working all over the province doing tank linings, as well as above and below ground pipeline coatings. Adding this location allows Park Derochie to quickly and easily mobilize equipment and manpower to clients throughout the province.

IMPACT TEAM impactoil.ca

Impact Oilfield Management Team Inc. Gregg Fischer & Steve Lobreau

Impact Oilfield Management Team Inc. 304 7th Street West Carlyle, SK S0C 0R0 Gregg Fischer & Steve Lobreau (306) 304 7th 453-6248 Street West Carlyle, SK S0C 0R0 (306) 453-6248

Quality Park Derochie Coatings (Saskatchewan) Inc. staff includes NACE Certified Coatings Inspectors and NACE Corrosion Technicians; aiming to provide NACE certified supervisors on every job and ensuring quality workmanship.

As a result of continuing efforts in education, training and safety, Park Derochie has achieved SSPC QP 1, 2, 3 and 6 certifications. This makes PD the only Canadian company to hold all of these certifications.

Adhering to the stringent standards set out by the Society of Protective Coatings (SSPC), the BASF Raising Performance to New Heights® program, and guided by ISO 9001-2000, their quality management system is designed to meet the specific requirements of the client.

Safety The company is proud to be an industry leader in safety and their WCB experience ratio, which is consistently lower than the industry average, speaks to their dedication to protect people and the environment. For client convenience, Park Derochie is a member of prequalification management companies such as ISNetworld, PICS, ComplyWorks and the CQ Network, (formerly CanQual).

Employment Park Derochie is proud to be an equal opportunity employer and encourages hiring and training of any qualified individuals regardless of gender or ethnicity. Preference is given to candidates who most closely meet the knowledge, skills, and competencies required. We are proud to have several long-term superintendents, general foremen and foremen of aboriginal descent (including women) making up our diverse workforce.

In addition, they have recently entered into an agreement to train and utilize labour force from the Pasqua First Nations Band on an upcoming project.

As a company, they promote, encourage and financially support continuous learning for all employees, at all levels and provide mentors for trainees in numerous trades.

Park Derochie is known for providing the right people, expertise, quality, safety and value, demonstrating time and again a well-earned reputation for being “Proven Partners since 1956.” v

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 • Saskatchewan Oil Report 2015 125

Add To Your Fleet

Kramer Energy is a proud provider of Cat® equipment and other valuable vehicles for the oilfield

Kramer Energy is proud to serve the Saskatchewan oil business with their industry-leading line-up of solutions that provide the power oilfield operation needs.

Kramer offers prime power and standby generators, along with multiple configurations of Cat® engine and transmissions that will meet any need in the oilfield.

Kramer Energy is pleased to provide the reliable, long-lasting Cat® equipment that has earned the trust of customers around the globe.

Cat® engines have proven themselves to be used in the most demanding applications in the oilfield. Engines and generator sets from Kramer energy feature proven Cat® reliability and durability. They have the right power for each application, offer easy servicing, and are tuned to optimize fuel consumption.

126 Saskatchewan Oil Report 2015

Cat® engines are also known for their ease of installation, and low owning and operating costs.

Kramer is pleased to have seven branches located around Saskatchewan to serve customers. With facilities located in Regina, Saskatoon, Tisdale, Swift Current, Estevan, Kindersley, and Battleford, they have over 160,000 square feet of shop space and 53,000 square feet of parts warehousing to meet your needs. Customers can count on Kramer to be there to support them and their equipment long after the purchase is complete. Kramer is also proud to have 30 class 4, 5, and 6 vehicles in their fleet that they use to bring service to the job site. These mobile shops have the tools, technology, and highly skilled technicians needed to get work done in the field.

Kramer Rents is another aspect of the Kramer Ltd. organization that is built to support business in the oilfields of Saskatchewan. Kramer Rents is a total equipment solutions provider. They can access any type of rental product companies may need. Offering pumps, generators, air compressors, heaters, electrical and instrumentation equipment, and safety gear to name but a few of our product lines, Kramer Rents is there to support the fluctuations in equipment needs you will have in your business throughout the different seasons. Some of the advantages of Kramer Rents are that we help minimize costly breakdowns, we help to complete projects more efficiently, eliminate equipment obsolescence, reduce capital investment, and give better control over your maintenance and storage costs. With daily, weekly, monthly, and rent-to-own options, be sure to remember Kramer Rents in your project planning.

The Kramer Truck division also offers equipment built to work in the oilfield.

The Cat® CT660 Vocational truck is available in a variety of configurations.

Whether outfitted with a fifth wheel hitch for hauling a trailer, a water tank, or a dump box, the CT660 does what you need it to do. Kramer is pleased to be the exclusive distributor of the Premier Oilfield Equipment (POE) Hydrovac. With several sizes available, the POE hydrovac lets companies work safely on many oilfield sites and is sure to be a valuable addition to any truck fleet.

With more than 70 years serving clients, Kramer builds deep relationship with customers that are built on trust and mutual respect. v

Kramer Ltd. offers parts, saLes, and service for the sasKatchewan oiL fieLds.

Neil Shaw

energy specialist regina (w) 306.949.6202 (c) 306.533.3568 nds@kramer.ca

kramer.ca

BreNt Uitti

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

The Standard of Excellence

Select-SAI, Inc. designs, manufactures, and supports superior tubular welding electrodes Select-SAI, Inc. has worked diligently to make their company the standard of excellence in tubular welding electrodes. They are committed to providing customers with the highest-quality products, the best service, and the most value-added. To achieve this goal, Select-SAI, Inc. have assembled a team of exceptionally skilled personnel to design, manufacture, and support superior quality products. The company’s unprecedented growth and success are attributed to customers’ recognition of the service, response, and product supremacy they deliver.

Select-SAI, Inc.’s family of premium quality flux cored and metal cored welding wires have grown to encompass a comprehensive line of: • Carbon steel electrodes • Low alloy electrodes • Stainless steel electrodes • Nickel alloy electrodes • Hardsurfacing electrodes Select-SAI’s rigorous engineering and manufacturing standards ensure maximum quality in feedability, weldability, and weld performance.

Select-SAI has recently introduced several new premium welding electrode products to the market including, Select 78, Select 78Ni1, SelectAlloy 182-AP, and Select FP 409Ti. Select 78 is an E71T-8J-H16 wire that is designed to handle critical structural applications. It provides smooth globular arc transfer, excellent bead shape, fast freezing, easily removed slag and operates on straight polarity (DCEN). Select 78 is utilized in structural steel erection, ship and barge construction, bridge fabrication, and in the manufacture and repair of machinery parts and heavy equipment.

Select 78Ni1 is an all position, flux cored, self-shielded electrode manufactured for critical structural applications such as offshore platforms, shipbuilding, heavy wall tubular construction, generalstructural fabrication and weathering steel uses.

This E71T8 wire is especially effective where exceptional low temperature toughness is needed.

128 Saskatchewan Oil Report 2015

SelectAlloy 182-AP combines corrosion resistance, high temperature strength and oxidation resistance. This electrode is engineered for welding in harsh environments such as desalination plants, petroleum facilities, power generation plants and in temperature critical conditions such as furnace equipment and piping.

Select FP 409Ti is one of a series of Select-SAI stainless steel electrodes designed for welding components fabricated from sheet stock such as manifolds, mufflers, catalytic converters and exhaust tubing.The titanium is this wire acts as the stabilizing agent to provide oxidation and corrosion resistance. v

Select 7000-SR

Stress Relief

Select-SAI introduces Select 7000-SR, a gas-shielded, flux cored electrode designed for welding carbon and certain low alloy steels where excellent mechanical properties are required after extended stress relief. Select 7000-SR, a CWB approved (E491T-12MJ-H4) wire, offers the unique capability to maintain good tensile strength, notch toughness and low hardness, even after the longest and most demanding stress relief operations.

This product is the ideal choice for welding: • Tanks, piping and pressure vessels • Oil and gas facilities equipment • Repair welding and applications that experience repeated stress relief cycles • Specialized applications requiring excellent low temperature toughness and low hardness This new all position wire delivers: • Smooth and stable arc transfer that virtually eliminates spatter.

• An easily removable, fast freezing slag which enhances welder appeal.

• Deep penetrating characteristics that dramatically reduce lack of fusion.

Select 7000-SR (E71T-12MJ-H4) Mechanical Properties

1

Stress Relieved Condition As-Welded 1 hr @ 8 hrs @ Condition @ 1150°F @ 1150°F

16 hrs @ @ 1150°F

Yield Strength (ksi)

65

58

62

59

Ultimate Tensile Strength (ksi)

82

76

78

74

Elongation (%)

34

30

31

29

CVNs @ -40°F (Ft-Lbs)

91

101

94

100

CVNs @ -60°F (Ft-Lbs)

82

77

79

83

Hardness (HV10)

219

1

200

Actual test result values from welding performed in the 3G position with a heat input of 64KJ/in.

For more information on the vacuum-packed Select 7000-SR, call us at 1-877-869-4009/ 1-613-361-2223 or visit our website at www.SELECT-SAI.com.

TM

From the Well to Your Phone

SMART technology offers wireless production reporting

The goal of Southeast Tank Rentals in partnership with Quest Measurement is to bring single-well production monitoring into the 21st century. Together these companies have joined forces to produce the industry’s first Self Measuring Alarm Reporting Tank (SMART) rental. Using state-of-the-art digital gauges along with proprietary wireless and satellite messaging technology, they have created a system that simply texts or emails the operator through local cellular networks, their daily production reports and prevents high-level overflow.

The concept of oilfield telecommunications is not new news for large scale oil and gas operations. Major service providers have been utilizing satellite and telecom systems for decades to transmit drilling telemetry directly to the customer. However, until very recently, it wasn’t economically viable for smaller scale operations such as single well batteries (SWB) to leverage this technology.

With SMART you can now have the convenience of modern telecommunications added to all single-well operations, reliably and economically.

The current industry standard for production volume reporting is a float and cable attached to an external gauge board. The operator is then required to do daily visits, rain or shine to ascertain rough production levels. This creates several, yet easily solvable obstacles using SMART. 130 Saskatchewan Oil Report 2015

First, the sealed digital gauge eliminates all of the hazardous venting caused by traditional gauge boards thus keeping compliant with gas venting directive’s S-10 & S-20.

Secondly, the added convenience of daily text or email reports sent directly to the operator offers added site knowledge and therefore flexibility within their already busy schedules.

The highly accurate and consistently scheduled volume reports along with system health checks keep the operator apprised of site conditions.

Thirdly, the high level alarm (and optional pumpjack shutdown) eliminates any risk of high-levelling.

Last, but certainly not least, the solar powered components and totally wireless connections eliminate extensive onsite wiring, saving thousands of dollars in construction costs of traditional measurement and call out systems.

Since the successful conclusion of field trials in early 2014, Southeast and Quest have been actively mobilizing the technology for many large scale producers and single-well battery operations across southern Saskatchewan and southwest Manitoba, with very encouraging results.

cost savings and benefitS • Eliminate onsite wiring and construction costs associated to traditional monitoring and reporting systems which can cost upwards of $20,000 plus installation and decommissioning fees on SWB sites.

• Eliminate hazardous gas venting and high-level spillage keeping you compliant and in-check with regulations, neighbouring residents and environmentally sensitive ecosystems thereby reducing liabilities or any imposed operational sanctions.

• Increase operator safety and efficiency by significantly reducing daily travel time allowing for strategic daily site scheduling via the reliable and accurate remote site information.

• Increase operators awareness and site management when seasonal conditions do not allow site access. The system also offers peace of mind when it is entirely unsafe for travel.

How it works The Quest LEVEL-PRO float based digital gauge can be installed inside a production tank while in service directly through a standard thief hatch. From a totally sealed tank exit the system is connected to an external tank mounted wireless unit.

1

The external wireless unit takes measurements (accurate within +/-0.5 centimetres) and wirelessly transmits the data to the onsite solarpowered master unit operator display.

2

The master unit operator display not only visually displays the volume of up to four on-site tanks but also reports and relays tank levels, fluid temperatures, system health checks, high tank alarms via The Quest Satellite Messenger system to a historical online user accessible data base.

3

The satellite messenger system also transmits the daily production reports and any other vital information or alarms via text or email to multiple users, anywhere in the world.

Technology history One might quickly assume that a technological advancement such as this would have been developed in an oilfield technology metropolis such as Calgary or Houston. Proudly, however, it has much more humble origins. From the ground up, the product was conceived, researched, and developed in Saskatchewan by John Grimes and team. Grimes is a lifetime and current resident of Lampman, Saskatchewan where SMART was created. Leveraging his previous and continued successes with such inventions as the original GML/TPZ tank gauge, MESSENGER Simplex Satellite reporting unit, LEVEL-PRO fluid measurement system and many other ACUTEC/QUEST instrumentation systems. Grimes set out to provide a reliable and economic fluid measurement system for the production industry that was wireless, solar powered, highly accurate, self diagnostic and could provide communication and control all in one easy to use package. The result is the unique SMART system.

“With the SMART Rental, I get all my daily production reports for my books first thing in the morning and it single- handedly eliminated the gas venting we struggle with in this area.”

– Oxbow, Saskatchewan area operator “It’s great for new wells; I get to closely monitor it’s progress from day one and high-levelling has been eliminated.”

– Stoughton, Saskatchewan area production foreman “Getting the levels right on our phones before we even hit the field drastically decreases my crew’s daily mileage.”

– Virden, Manitoba area lead operator Promotional Through the Quest Measurement and Southeast Tank Rentals partnership the companies are strategically positioned to offer an economical “all in one” package. The SMART system comes preinstalled on Southeast Rental tanks and offers huge advantages and savings over traditional call out systems. v For more information, pricing and promotional offerings please visit southeasttankrentals.com or call James Sovdi at (306) 487-7411.

Saskatchewan Oil Report 2015 131

Safe and Sound

RCM Safety Services Ltd. offers high-quality health and safety service in Saskatchewan

Owners Curtis and Ryan Monette.

132 Saskatchewan Oil Report 2015

RCM Safety Services Ltd. began operations in the spring of 2012. RCM is a full-service medical, rescue, and fire standby company based out of Yorkton, Saskatchewan. Late in 2013 the company expanded services to also offer complete safety training. Owners Curtis and Ryan Monette sought to bring their nearly 20 years of experience as Advanced Life Support Paramedics with busy municipal EMS services to the industrial sector. With the addition of Ross Young as chief of fire/rescue operations, they have assembled one of the most “real world experienced” management teams around. Young’s background includes CRSP designation and 23 years as a municipal firefighter, before semiretiring as deputy chief and a fire investigator.

When asked what sets RCM Safety apart from other companies, Curtis says: “quality service backed by knowledgeable and experienced professionals. We provide higher skill sets, advanced equipment, and extensive work experience

Specializing in advanced medical services. while still maintaining competitive and flexible pricing options. We are extremely proud for being recognized for our contributions and improvements to industrial safety and emergency services.”

RCM Safety Services initial focus was providing primary care paramedics.

These paramedics receive approximately 41 weeks of training which includes: in class theory, “hands on” ambulance, and hospital emergency room practicum. This compares to two to three weeks of in-class training for EMR or OFA 3 certification. While RCM does have EMRs available if that is what the client wishes, there is a significant difference in procedures and treatment capabilities. Advanced care paramedics, registered nurses, and physician coverage for clinics or larger scale, high-risk operations are also available.

With a higher skillset offered, RCM also stocks all units with the required equipment to enable paramedics to use all the skills they are trained and licensed for. Advanced airways for non-breathing patients, intravenous access, medications to help treat various medical emergencies, and pain control for trauma are a few examples. Heart monitors are another major improvement RCM offers. While an AED is what would typically be a more common and cheaper alternative, they do not provide a paramedic the tools and information to perform their job to the fullest. RCM uses Lifepak 12 or 15 cardiac monitors – the same monitors that the majority of provincial ambulances utilize. These cardiac monitors allow staff to identify and rule out various medical conditions in addition to other diagnostic and monitoring capabilities that an AED does not provide; resulting in faster and appropriate treatments in the field.

“Another area we are very proud of is our fleet of medical units,” says Ryan.

“All of our units are full size, 4x4 ambulances. We have set up our fleet and staff to provide the same or higher level of care to our clients as a provincial ambulance would.”

Intercepting with the local EMS or STARS is much easier as the equipment is identical and interchangeable. This

“Your Complete On-Site Medical, Rescue & Training Solution”

Specializing in advanced medical services.

www.rcmsafety.ca

1-855-MUD-MEDX

• Manufacturer of Irontech Service Rigs & Pump Trucks • Repair & Total Rebuilding Services for Rigs, Pump Trucks & Associated Equipment • Complete Oilfield Fabrication, Mechanical, Machining, Certification, Engineering, Sandblasting & Painting Services

“We Build Your Rig” #11 Acheson Road, Zone 3, Acheson, AB T7X 5A7 Telephone: (780) 960-4881 • Fax: (780) 960-8840

irontech@irontechrig.com • www.irontechrig.com Saskatchewan Oil Report 2015 133

The units are also set up for rough and off-road terrain with towing capabilities for a trailer with a rescue toboggan and snowmobile/ ATV/UTV if required.

eliminates losing valuable time transferring a patient between stretchers and equipment. All units have on board electric suction, larger volumes of oxygen, ample space to provide treatment, power inverters, auxiliary heat and cold, and the ability to carry the supplies and space required to treat multiple patients at the same time. The units are also set up for rough and off-road terrain with towing capabilities for a trailer with a rescue toboggan and snowmobile/ATV/ UTV if required.

Together with diverse management and staff, RCM Safety Services looks forward to discussing how we can be involved in your company’s health and safety solutions. v 134 Saskatchewan Oil Report 2015

DEL

Communications Inc.

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: CREATIVE DESIGN ADVERTISING SALES TRADE PUBLICATIONS QUALIFIED SALES & EDITORIAL TEAM

Suite 300, 6 Roslyn Road Winnipeg, Manitoba R3L 0G5

www.delcommunications.com

PLEASE RECYCLE Service Matters trendon.ca

403.536.2770

Saskatchewan Oil Report 2015 135

Index to advertisers 24-7 Enterprises Ltd.........................................................................................................40 AGS Flexitallic, Inc............................................................................................................48 Adoil Inc...........................................................................................................................37 Affinity Credit Union..........................................................................................................4 Aggreko - Americas........................................................................................................OBC Anderson Pump House Ltd...............................................................................................84 Annugas Compression Consulting Ltd..............................................................................19 Big Country Energy Services Inc.......................................................................................26 Brandon Bearing..............................................................................................................68 Brandt Tractor..................................................................................................................67 CAPPA..............................................................................................................................12 CSL Hot Shot & Picker Services.........................................................................................22 Calroc Industry.................................................................................................................93 Canadian Linen & Uniform Service.................................................................................108 Canadian Western Bank...................................................................................................16 Cat-Tek Cathodic Services Ltd...........................................................................................51 Ceri................................................................................................................................. 60 City of Swift Current.........................................................................................................83 Colored Shale Products Inc.............................................................................................105 DSI Thru-Tubing Inc........................................................................................................109 D & G Polyethylene Products Ltd......................................................................................41 Days Inn - Swift Current...................................................................................................34 Department of Economy....................................................................................................9 Eagle Well Servicing.........................................................................................................71 Easy Rider Trucking Ltd...................................................................................................121 Elad Geological Consulting Ltd.......................................................................................102 Ener-Test Well Servicing and Rentals Ltd..........................................................................20 Essential Energy Services.................................................................................................23 Expose-All Hydrovac Ltd.................................................................................................109 Fast Trucking Service Ltd..................................................................................................50 Flexpipe Systems...........................................................................................................119 Foxtail Hauling...............................................................................................................105 Goodwater Machine Shop (1986) Ltd...............................................................................99 Got Mats?.........................................................................................................................39 Graham Construction...................................................................................................... IFC Great Plains College.........................................................................................................87 Hunt Hot Shot..................................................................................................................46 IFP Technologies Canada..................................................................................................87 IFR Workwear Inc.............................................................................................................13 Impact Oilfield Management Team Inc..........................................................................125 Import Tool Corp. Ltd........................................................................................................11 Irontech Rig Repair & Manufacturing Inc.......................................................................133 JJ Trucking........................................................................................................................18 Jay’s Welding Ltd............................................................................................................102 Kenilworth Combustion.....................................................................................................5 Kenosee Inn & Cabins.......................................................................................................31 Kramer Ltd.....................................................................................................................127 LD Allan Enterprises Ltd...................................................................................................57 Lakeland College..............................................................................................................15 Leader Inn........................................................................................................................96 136 Saskatchewan Oil Report 2015

Level Best Technologies....................................................................................................64 Meter-Man Flow Products Ltd........................................................................................125 Millennium Directional Service Ltd................................................................................115 Neptune Pumps Services.................................................................................................29 Neset Consulting Service..................................................................................................99 Noble Well Services Inc....................................................................................................94 Norbert’s Manufacturing..................................................................................................84 North Dakota Petroleum Council......................................................................................72 North West Regional College..........................................................................................135 Northern Factory Workwear.............................................................................................94 Park Derochie Coatings (Saskatchewan) Inc.....................................................................47 Petroleum Technology Research Centre...........................................................................73 Platinum Grover International Inc....................................................................................17 Praxair...........................................................................................................................104 Precision Well Servicing...................................................................................................69 Pumps & Pressure Inc.......................................................................................................34 Pyramid Corporation........................................................................................................71 Quality Mat Company....................................................................................................138 RAM Industries Inc.........................................................................................................103 RL Supervision Ltd./Prairie Storm Construction Ltd........................................................101 Racken Enterprises Ltd.....................................................................................................28 RCM Safety Services Ltd.................................................................................................133 Redhead Equipment.......................................................................................................IBC Roughrider Rigging Ltd....................................................................................................89 SMS Equipment...............................................................................................................53 S.E. Options Consulting....................................................................................................10 Sasktel...............................................................................................................................7 Select SAI Inc./Arcos Industries..............................................................................43 & 129 South East Electric Ltd......................................................................................................65 Southeast College..........................................................................................................117 Southeast Tank Rentals....................................................................................................35 Sterling Truck & Trailer Sales Ltd.......................................................................................33 Suburban Extended Stay Hotel......................................................................................123 Summit Liability Solutions.................................................................................................3 Sun Country Well Servicing..............................................................................................80 Suretuf Containments Ltd................................................................................................61 Swagelok Central Canada.................................................................................................27 Tranter, Inc.......................................................................................................................36 Tremcar Inc......................................................................................................................75 Trendon Bit Services.......................................................................................................135 TSL Industries.................................................................................................................107 Volant..............................................................................................................................62 Watson Land Services (1984) Ltd.....................................................................................21 Western Heritage.............................................................................................................97 Weyburn Regional Economic Development.....................................................................81 W.H. Coderre & Sons Construction Ltd............................................................................104 Zcl Composites Inc.......................................................................................................... 52

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ROCK drill site

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Q M A T. C O M 5-ACRE MAT DRILL SITE

MAT drill site

AFTER ROCK DRILL SITE

Disadvantages - Damaging native farm land - Lost work time due to unsafe work surface - Delays in drilling - Unable to access due to bad weather - Wasting unnecessary amounts of rock - Unnecessary extra cost - High reclamation expense

WORLDS LARGEST SUPPLIER

AFTER MAT DRILL SITE

Advantages - No reclamation cost - Reduce the environmental impact - Reduce the amount of rock on native farm lands - Minimize unnecessary accidents - Mats provide a safe and stable work surface - 24/7 all-weather access with no down time - Potential to drill one to two more additional wells per year - Reduce the amount of truck traffic on roads - No additional cost - Protect existing flowlines

MANUFACTURING SINCE 1974

LEASING AND RENTAL SOLUTIONS

Bring us your unique business situation and we will customize a solution for you.

Rental and leasing options from our Construction and Truck & Trailer Divisions give you the ability to be flexible with your budgets. Ask us today!

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ESTEVAN

LLOYDMINSTER

866.659.5866

800.535.0520

REGINA

SASKATOON

800.667.7710

800.667.9761

MELFORT

844.494.5844 SWIFT CURRENT

800.219.8867

PRINCE ALBERT

844.323.3003

Power Anytime. Anywhere.

Reliable, Flexible and Fast When access to utility power is limited in shale plays, or an operator has the ability to utilize field gas or stranded gas for power generation, Aggreko is your solution.

We have a wide range of natural gas generators customized to meet your unique requirements, while providing significant cost savings.

Aggreko offers full project planning, installation, commissioning, and operation supported by 24-hour on-site services and maintenance.

Aggreko, Power Specialists in Oil & Gas Aggreko Canada Inc 12030 28th Street N.E. Edmonton, T6S 1H4 T: 877.AGGREKO E: aggreko@aggreko.com Aggreko operates from over 200 locations throughout the world.

For the location nearest you, please go to: www.aggreko.com/contact