PIPELINE NEWS Saskatchewan’s Petroleum Monthly
Canada Post Publication No. 40069240
Volume 4 Issue 5
FIND A JOB IN THE OIL AND GAS SECTOR
Career Opportunities Page C33
Carson Sells To Flint Page A3
Political Leaders Talk Energy Policy Page A11
Lloydminster Facing Housing Crunch Page C1 Crews work on the exterior of this new rental development on the Saskatchewan side of Lloydminster. The city is on pace to set a new building permit record as all sectors of the city’s economy continue to attract new workers. See housing-related stories throughout paper. Photo by Geoff Lee
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PIPELINE NEWS October 2011
CAPP posts new frac guidelines
Horizontal drilling at a breakneck pace
By Geoﬀ Lee Pipeline News
A record 4,206 horizontal wells were drilled to the end of August, with operators across Western Canada most likely breaking through 2010’s year-end tally for horizontal holes in September. The 4,206 horizontal wells rig released at the eight-month mark represents a 41 per cent surge from 2,993 wells a year ago. A total of 4,960 horizontal wells were drilled in all of 2010. The horizontal well count is up in all four western provinces, with drillers in Alberta and Saskatchewan leading the charge. Operators rig released 2,401 new horizontal wells in Alberta to the end of August, up 61 per cent from 1,490 wells a year earlier. In Saskatchewan, 1,211 horizontal holes were sunk compared to 941 wells in the ﬁrst eight months of 2010, an increase of 29 per cent. Producers have rig released 7,801 wells across the country to August, up 10 per cent from 7,069 wells drilled in the January-to-August period in 2010. In Saskatchewan, rig releases to August climbed 34 per cent to 2,133 wells from 1,596 wells in the year-prior period, while Alberta operators rig released 4,968 wells, up six per cent from a year ago. Saskatchewan’s rig release total includes 254 outpost wells, compared to 218 in Alberta. There were 169 new pool wildcats rig released in Alberta to August versus 78 in Saskatchewan. In Alberta, west of the ﬁfth meridian, 224 wells were rig released in August, up from 137 a year ago. Meanwhile, in Saskatchewan, 343 wells were drilled west of the third meridian, up from 151 wells in August 2010.
Briefs courtesy Nickle’s Daily Oil Bulletin
Calgary – The Canadian Association of Petroleum Producers (CAPP) has come up with new guiding principles for hydraulic fracturing for shale gas development in Canada amid growing public concerns for the eﬀect of fracking ﬂuids on water quality. One of the latest protests involved the overnight arrest of three women in Standoﬀ, Alberta on Sept. 10. The women were jailed for refusing to move from the entrance of an oilﬁeld drilling site on the Blood Tribe First Nation over concerns about the environmental effects of fracking. The tribal energy company had previously granted Murphy Oil permission to drill wells and at sites on their reserve south of Calgary. Murphy says it may undertake fracking if the drilling proves successful. Fracking involves injecting a mixture of chemicals, water and sand into the ground to help release gas and oil. CAPP’s new guidelines announced Sept. 10 include improved water and ﬂuids reporting practices that apply to all CAPP natural gas producing members, large and small, operating in Canada. Last month, Southwestern Resources Canada put all seismic testing in New Brunswick on hold due to ongoing protests over shale gas development, where fracking is used. Quebec halted its ﬂedgling shale-gas industry earlier this year following recommendations in an environmental-assessment report that advised the province to conduct more studies on the ecological risks. “Protecting Canada’s water resources is fundamental to our social licence to operate and to grow,”
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said CAPP president Dave Collyer. “Canada’s upstream industry has a strong track record as a safe and reliable producer of natural gas. “With the increase in natural gas production from unconventional sources such as shale, Canadians have told us they want more information as to how industry uses and protects water. “We respect that request, and these CAPP principles articulate our water management objectives and water protection practices, as well as our focus
Protecting Canada’s water resources is fundamental to our social licence to operate and to grow
- Dave Collyer, CAPP president on improving our water performance over time.” The new guidelines commit CAPP members to support the disclosure of fracturing ﬂuid additives. CAPP will also continue to advance, collaborate on and communicate technologies and best practices that reduce the potential environmental risks of hydraulic fracturing. The guidelines include a commitment to safeguard the quality and quantity of regional surface and groundwater resources, through sound wellbore construction practices, sourcing fresh water alternatives where appropriate, and recycling water for reuse as much as practical. Another guideline calls for CAPP to measure and disclose water use with the goal of continuing to reduce our eﬀect on the environment. CAPP also pledges to support the development of fracturing ﬂuid additives with the least environmental risks.
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PIPELINE NEWS October 2011
Horizontal directional drilling is one area Carson Energy Services specialized in, but Flint did not, until now. File photo
CanElson Drilling running 100 per cent in Canada
Flint buys Carson Energy Services By Brian Zinchuk Pipeline News Calgary, Lampman - If you can’t beat them, buy them. That message was clear in the announcement that Carson Energy Services Ltd., one of the largest oilﬁeld services companies in southeast Saskatchewan, as well as one of the largest employers, has been purchased by Flint Energy Services Ltd. The expected closing date was Oct. 1. The terms of the deal include $112 million in cash paid on closing, the issuance of 2.1 million Flint common shares, and up to $30 million earnout over 36 months after closing. The approximate total value of the consideration is $165 million, based on the earnout and Sept. 1’s price of Flint shares. The additional $30 million of earnout is contingent on Carson achieving $40 million of EBITDA (earnings before interest, taxes, depreciation, and amortization) for each of the next three years, with each year’s earnout contingent on EBITDA for that year. Otherwise the value of the transaction is $135 million. Ron Carson told Pipeline News the key factor behind the sale was ﬁnding a suitable succession plan for the company. For more detail, see Page A8. Bill Lingard, Flint president and CEO, said in a conference call announcing the acquisition, “Flint is very excited about this strategic deal. It’s an excellent ﬁt for Flint and Carson. “It’s a great win-win.” Carson has 17 locations, 13 in Saskatchewan, three in Alberta, and one in Manitoba. There are over 1,300 employees and over 1,800 pieces of equipment. The company’s existing services include midstream pipeline and facilities construction, pipeline integrity
services, site prep and civil work, trucking and pickers, environmental, directional drilling, fabrication in the ﬁeld and in-shop, roustabout and maintenance services, and safety sales and services. “The services that Carson provides are very much like the services Flint provides in our production services group, with a small amount of what we do in our oilﬁeld services,” said Lingard. The horizontal directional drilling side for road bores and river crossings is a new service for Flint, he noted. “The concentration of the locations are right around the busy, active plays in Saskatchewan,” Lingard said. “When you look at the map, there is very little overlap. No direct competition with Flint in Carson.” Management remains “We’re going to maintain the entire management team of Carson. We’re going to run under the name Carson Energy Services. Ron Carson and his top 14-15 managers are all staying on. It’s going to be very complementary.” In Lloydminster, where both companies have operations, he noted Carson’s shop is primarily in fabrication, something Flint does not do there. “It gives us that bigger footprint, taking us into those strategic plays in Saskatchewan,” Lingard said, noting Carson’s extensive operations in the “very busy” Bakken ﬁeld. Indeed, the map of operations now covers just about every major oilpatch town in the Western Canadian Sedimentary Basin. Until this purchase, Flint had just a toehold in Saskatchewan compared to its Alberta and British Columbia operations. In the past year, it re-established a presence in Estevan after a hiatus of several-years. ɸ Page A6
CanElson Drilling Inc.’s common shares commenced trading on the Toronto Stock Exchange on September 13, and were delisted from the TSX Venture Exchange at the same time. President and CEO Randy Hawkings stated “Listing on the TSX was a logical next step given the rapid growth of CanElson from one rig in December 2008 to 33 rigs (36 by January 2012) today. We envision that the TSX listing will increase the liquidity of the company's common shares and provide greater access to capital.” As of Sept. 20, 100 per cent of CanElson's Canadian rig ﬂeet was drilling and during the ﬁrst two months of the third quarter, CanElson's Canadian rig ﬂeet has operated at 77 per cent utilization. The company's expectation for the remainder of the third quarter is full operating activity with all of the rigs contracted. Also as of the Sept. 20, 90 per cent of CanElson's U.S. rig ﬂeet was drilling and during the ﬁrst two months of the third quarter the rig ﬂeet operated at 75 per cent utilization. That level was negatively impacted by wet weather conditions in North Dakota. All of the rigs in the US are contracted and full operating activity is expected in west Texas as well as North Dakota for the remainder of the third quarter, subject to moving truck availability. Given the present market demand for CanElson's style of resource based drilling rigs, the company expects to continue to have strong activity levels for the remainder of 2011 and into 2012.
Landrose boosts Alberta Star Development Corp. has participated in drilling and completing one (0.5 net) well located on its Landrose property in west-central Saskatchewan. The well, situated in the company’s core heavy oil operating area, is located at 6-50-25-W3 and is expected to be on production this week. It is the second well brought onto production this summer on the Landrose property. This is the seventh successful well that the company has drilled in the area, which now accounts for approximately 50 per cent of the company’s heavy oil production. Alberta Star currently has interests in 840 (420 net) acres in the Landrose area, where there are seven (3.25 net) producing wells, all of which are producing from the McLaren or Sparky formations. Briefs courtesy Nickle’s Daily Oil Bulletin
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PIPELINE NEWS October 2011
Pipeline News Publisher: Brant Kersey - Estevan Ph: 1.306.634.2654 Fax: 1.306.634.3934
Mission Statement: Pipeline News’ mission is to illuminate importance of Saskatchewan oil as an integral part of the province’s sense of community and to show the general public the strength and character of the industry’s people.
Editorial Contributions: SOUTHEAST Brian Zinchuk - Estevan 1.306.461.5599 SOUTHWEST Swift Current 1.306.461.5599 NORTHWEST Geoﬀ Lee - Lloydminster 1.780.875.6685
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Published monthly by the Prairie Newspaper Group, a division of Glacier Ventures International Corporation, Central Oﬃce, Estevan, Saskatchewan. Advertising rates are available upon request and are subject to change without notice. Conditions of editorial and advertising content: Pipeline News attempts to be accurate, however, no guarantee is given or implied. Pipeline News reserves the right to revise or reject any or all editorial and advertising content as the newspapers’ principles see ﬁt. Pipeline News will not be responsible for more than one incorrect insertion of an advertisement, and is not responsible for errors in advertisements except for the space occupied by such errors. Pipeline News will not be responsible for manuscripts, photographs, negatives and other material that may be submitted for possible publication. All of Pipeline News content is protected by Canadian Copyright laws. Reviews and similar mention of material in this newspaper is granted on the provision that Pipeline News receives credit. Otherwise, any reproduction without permission of the publisher is prohibited. Advertisers purchase space and circulation only. Rights to the advertisement produced by Pipeline News, including artwork, typography, and photos, etc., remain property of this newspaper. Advertisements or parts thereof may be not reproduced or assigned without the consent of the publisher. The Glacier group of companies collects personal information from our customers in the normal course of business transactions. We use that information to provide you with our products and services you request. On occasion we may contact you for purposes of research, surveys and other such matters. To provide you with better service we may share your information with our sister companies and also outside, selected third parties who perform work for us as suppliers, agents, service providers and information gatherers.
A Àood of liquidity Over the past 19 months or so, there has been a wave of “liquidity events” in southeast Saskatchewan. That wave has been growing in size and frequency, and was culminated on Sept. 1 with the purchase of Lampman-based Carson Energy Services Ltd. by Flint Energy Services Ltd. In February 2010, Johnstone Tank Trucking of Frobisher sold to Gibson Energy. Last fall Greg Cousins Construction Ltd. of Carnduﬀ was snapped up by Site Energy Ltd., which would also added George Foord Construction of Macoun last spring. L & C Trucking of Estevan was purchased by Ironbridge Equity Partners of Toronto. Prairie Petro-Chem of Estevan and Plains Environmental of Melville were each sold. Petro-Chem went to Clariant, with oﬃces in Houston and HQ in Switzerland, while Rotex Energy of Red Deer bought Plains Environmental. Just last month we wrote about Alida-based Three Star Trucking selling two-thirds ownership to Provident Energy Ltd. This month came the big whopper, with Carson’s sale to Flint. Carson is one of the largest employers in southeast Saskatchewan, and the big kahuna when it comes to oilﬁeld service companies in the region. There has been a common pattern to these sales. In most cases, these companies were built from the ground up as family businesses. The owners are in their 50s or in some cases older (especially in cases of the original founders if the second generation is now running the show). There typically is not a clear line of succession within the family, and after three decades or more of running the business, they are looking for an exit strategy, and cashing out when times are good. Typically several oﬀers come to these owners, and the winner puts in a bid they can’t refuse. In almost all cases, the owners have signed on to continue running the company for three years after the sale. Several have noted a “big carrot” at the end of that term based on continued strong performance. For the owners who have worked hard to get to this point, it is a time of celebration. For their eﬀorts, they will be able to retire comfortably. Good for them, and congratulations. However, there is a worrisome note to this string
of sales. Noted above was the fact these companies were based in Frobisher, Estevan, Carnduﬀ, Melville and Lampman. These companies, and their owners, were very active in the communities, supporting local charities, helping out hockey teams, and providing good employment. One of the charms and strengths of the southeast Saskatchewan oilpatch has been its high concentration of local ownership. Individually, each of these sales doesn’t make much diﬀerence, but collectively, the local ownership content is quickly becoming hollowed out. There really aren’t that many sizeable players left in the service sector in southeast Saskatchewan that remain locallyowned, family businesses. It’s been that core of businesses that have, in many ways, held this region together through thick and thin. When the multinationals pulled out, they stayed. While the signs may not be changing for many of these businesses, once those three-year management terms are up, the leadership most likely will be. And there is a big diﬀerence between an owner and a manager. An owner may be more inclined during tough times (like this last spring) to keep their staﬀ on the payroll, even if the shop ﬂoor has been swept a hundred times over. They know the families, and know they are relied upon to keep food on the table. In several cases, multiple generations of the same family have worked for these owners. A manager, possibly a recent import from Alberta, may have much less connection. When Calgary calls and says Toronto shareholders want stronger quarterly results, will a manager be more inclined to lay oﬀ 20 people? Will they still purchase jerseys for the peewee hockey team? It was of no surprise that all the questions in the Flint/Carson news conference call were from investment ﬁrms focused primarily on earning potential and EBITDA (earnings before interest, taxes, depreciation, and amortization). They were not asking about community ties and hockey teams. Part of what has made these businesses attractive for acquisition has been their strong community ties, intricately linked to their success. Let’s hope that when the owners bid farewell, the managers that replace them will still have the same heart within them.
PIPELINE NEWS October 2011
Opinion Housing pressure continues to build From the top of the pile Brian Zinchuk
You probably thought you would pick up this paper and read about the usual – service rigs, pipeliners and the like. Instead of Pipeline News, you will ﬁnd for this month at least, it will read more like Realty News. That’s because housing is becoming a larger factor in Saskatchewan’s oilpatch by the day. As oil prices continue to remain high, and as the Saskatchewan economy continues to remain strong, the lack of available and/or aﬀordable housing is becoming not just an issue, but “thee” issue. That’s because people can’t work on that service rig, or build that pipeline, if they can’t get a roof over their head. It’s pressing all over the province – from Shaunavon, whose town administrators had to pull a rabbit out of their hat this summer to ﬁnd a place for a nurse to stay in order to keep the hospital open, to Lloydminster, where the mayor notes rents have gone up from $800 to $1250 per month, to Estevan, where
camps and hotels are springing up like daisies and there is nary an aﬀordable apartment to be found. I have to admit, I have been harshly critical of the situation in Estevan, the city I chose as my home three years ago. Even back then, I could recognize this community was going to be in a serious situation over the coming years with the pace of development and looming Boundary Dam Power Station project. Finally, in 2011, the city is making progress. Building activity is starting to pick up, with several multifamily units coming up, but precious few houses. The city ran out of developed land, and one builder told me they sat for two months this summer without any land to build on. While 120 acres is anticipated to be developed soon, I have yet to hear a scraper running on it. It’s more like crickets. And while this new land will supposedly have room for 3,000 people, the city grew by 1,576 people from 2009 to 2010 alone. Who knows what the 2011 number will be? There will be roughly 200 housing units started in Estevan this year, but I would conservatively say the city needs 400 to 500 more immediately, and similar numbers in the years to come. Perhaps Estevan should look to Lloydminster, which has built hundreds of units a year for much of the past decade. Nearly every business owner or manager I have spoken to in the southeast region recent months, indeed, over the past year, is looking to hire people. In some cases, it’s a lot – as many as 100 people in one
instance. During the Weyburn Oil Show, a senior executive with a major oilﬁeld services ﬁrm told me they wanted to have 160 people based permanently in Estevan, but could only ﬁnd housing for 12. As a result, these companies are turning to camps, and in at least one case, ﬂying in people from across the country to work on a rotational basis. Sounds to me like Fort McMurray Mark II. Oilweek had a poignant article in its September edition, talking about Fort McMurray’s massive shadow population. These are people who work in Fort McMurray, but live elsewhere. With little reason to care about a city that is not your home, the community suﬀers. This is my fear for many communities in Saskatchewan’s oilpatch. If cities and towns don’t respond quickly and forcefully on the housing front, their populations will become increasingly transient. That’s the problem, see? If you spend your nights alone by yourself in a rented basement bedroom or camp, your family is not with you, and cannot beneﬁt from the virtues of the community. You’re not happy, your family is not happy, and while the money may be good, everyone suﬀers. Communities are built around families, not guys renting a mattress for a small fortune each month. Let’s hope that that Saskatchewan’s oilpatch communities become even more proactive on the housing front, before worries become reality. Brian Zinchuk is editor of Pipeline News. He can be reached at firstname.lastname@example.org
Lakeland enrols Regina in “hire learning” The Lloydminster campus of Lakeland College is setting itself up to be a more important centre of “hire learning” for oil and gas jobs in Western Canada. Many of its plans under a new energy, entrepreneurship and Saskatchewan programming structure and director are based on a college-without-borders concept. This thinking recognizes that oil and job opportunities don’t stop at the interprovincial border between Saskatchewan and Alberta where Lakeland happens to be located. The aim of Saskatchewan programming is to help that province meet some its employment training and education goals without the border with Alberta being a technical barrier as it is now. Graduates of Lakeland’s heavy oil operations technician (HOOT) program write their fourth class power engineering exams with the Alberta Boiler Safety Association and can work anywhere. However, the HOOT program is not recognized by the Technical Safety Authority of Saskatchewan so students can only write Alberta exams. This type of bureaucratic barrier could be coming to an end given the realization the future success of the oil and gas industry depends on having a skilled workforce to meet the needs of industry. The petroleum industry in both energy driven provinces is facing signiﬁcant human resource challenges with an aging workforce, rapid technological innovation and increased competition for talent and growth in labour in demand. The increase in in-situ operations in the oilsands and the use of fracking technology to unlock shale gas and oil are also creating a need for new skills and
Lee Side of Lloyd Geoff Lee
knowledge in Western Canada. More thermal oil applications in Saskatchewan are also driving the need for third class power engineers. The job of developing closer partnerships with Saskatchewan falls on the desk of a new program director at Lakeland who understands the oil industry and the role educators can play to ﬁll the energy industry’s human resources needs. Saskatchewan programming will kick oﬀ this semester with the development of a pre-HOOT program for prospective Saskatchewan students from the Onion Lake First Nation. The program may include educational upgrading at the Lloydminster campus and at the Onion Lake First Nation to equip students there with the basic math and physics skills needed to succeed in the HOOT program. Campus enrolment is also likely to spike in the coming years with news the Alberta government committed $4.9 million in July toward the cost of a new $30 million lab and classroom at the Lloydminster campus. The new lab will allow the campus to more ef-
fectively train heavy oil operations technicians to the third class power engineer standard that the heavy oil industry demands. Beginning next fall, the campus will introduce the second year of a new two year diploma program and the ﬁrst year of the two year program for third class engineers in advance of the ﬁrst phase of lab construction. The diploma course will raise the education and training standard provided by HOOT from the current one year certiﬁcate program for fourth class power engineers. The HOOT program teaches students the safe and eﬀective operation and maintenance of industrial equipment such as boilers, turbines and internal combustion engines. Having a new lab and expanded programming will allow students from Saskatchewan and Lloydminster to live and study close to home and ﬁnd jobs in the booming regional thermal oil market. The new learning facility will also enable Lakeland to oﬀer more customized oil and gas programming including petroleum management training and short-term, just-in-time courses to address speciﬁc industry needs. Given the human resources challenges of the industry and Lakeland’s physical position in the heart of the heavy oil industry in Canada, it’s fair to ask why Lakeland didn’t follow this path years ago. Better late than never may be the appropriate response. The college is clearly looking to the future and not the past as it begins the new school year in 2011 with Saskatchewan enrolled as an honourary student of “hire learning.” Questions?
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PIPELINE NEWS October 2011
Carson largest oil¿eld services co. in southeast
This pipeline project for Enbridge in 2010 is just one of the many pipeline projects Carson Energy Services has tackled over the years. File photo
ɺ Page A3 “We, for quite some time, wanted a bigger presence in that active area of Saskatchewan. We’ve bid jobs as Flint. We tried to move in there organically. Carson usually beat us on most jobs, so we weren’t getting much of that work. They’re very good at what they do. They’re local and don’t have subsistence costs,” said Lingard. “They’re very competitive, and [it’s an] excellent way for us to enter the Saskatchewan market.” Lingard said he had spent time in the ﬁeld with Ron Carson and various managers, and found a very similar business philosophy. “Some of the quick synergies we see are they need equipment, and people. The Saskatchewan market is pretty tapped out as far as human resources. We have a big recruitment piece in Flint, and we can recruit from other provinces in Canada and move some people in as Carson needs them for ongoing work and new projects,” he said. Trucks are another area where Flint can help Carson out. “Carson was at a point where the growth could have been faster if they added more resources, and I think we’ll be able to speed up the growth because of that.” Lingard said Carson will provide a platform for Flint to expand into other service lines, such as rig moving and oilﬁeld hauling, as well as an expanded vac operation. “One of the big opportunities we see is on project side,” he said. Directional drilling and fabrication will be oﬀered up to Flint clients in Alberta. Lingard noted the top employees continuing on and signing non-compete agreements, plus their new shareholdings in Flint, as well as what they will make on the earnout is “great incentive for that team to grow the business. “ ɸ Page A7
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Earnout incentive for management to stay ɺ Page A6 Saskatchewan is expected to make up a third of the drilling in Canada over the next ﬁve years he said, providing the impetus for Flint to be in this province. New market opportunities include potash development, carbon capture and sequestration and facility infrastructure and maintenance. “We just won, as Carson, the ﬁrst pipeline project for potash,” he said. “The SaskPower opportunities are big,” he said. Pipelines for distributions systems of carbon dioxide is a “huge opportunity,” and Carson has experience in the Weyburn ﬁeld doing similar work. “We’re expecting to add $220 million in revenues in 2012, over $40 million in EBITDA.” “We’re excited about the Carson people, and having them part of the company ongoing.” Between $20 and $50 million will be booked for goodwill, based on the earnout. Asked why Carson has been so much more successful, Lingard said, “It’s a busy market, and Carson runs jobs very eﬃciently.” “They’ve done a good job protecting their margin,” according to Paul Boechler, executive vicepresident and chief ﬁnancial oﬃcer, Flint Energy Services Ltd. There may be some opportunities to bring assets and people from Alberta into Saskatchewan, he noted. “There’s an opportunity to expand their ﬂuid hauling right away.” “The company comes with the debt paid oﬀ. “ Less than 20 per cent of Carson’s revenue came from Alberta, and a marginal amount from Manitoba. Mechanical and pipeline account for 50 per cent of Carson’s revenue. For the majority of the senior staﬀ, about 15,
We for quite some time wanted a bigger presence in that active area of Saskatchewan. We’ve bid jobs as Flint. We tried to move in there organically. Carson usually beat us on most jobs, so we weren’t getting much of that work. They’re very good at what they do.
-Bill Lingard, Flint president and CEO
there are ﬁve year lockups, three years after they leave Flint, and they are signing employment agreements for a minimum of two years. The stock has a hold on it for one year, in escrow. The three-year average revenue for the Carson group was $190 million, with the three-year average EBITDA in the $33 to $35 million range. Flint suggested there was “huge potential for growth. “They’re going to have a very, very busy fall and winter,” Lingard said. Cenovus, Husky, Centre Point, and Enbridge were noted as major customers. Hard assets “Because we don’t overlap a lot, and because they have a very well deﬁned management structure, I don’t think there is a lot of cost cutting. We don’t see that as one of the opportunities here. We really see the opportunity to bring more services and help grow their revenue lines,” Boechler said.
One of Carson Energy Service’s key lines of business is pipelining. File photo
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PIPELINE NEWS October 2011
Ron Carson will continue to operate Carson Energy Services Ltd. as a division of Flint Energy Services Ltd. for at least three years. Photo by Brian Zinchuk
Succession was the key to Carson sale By Brian Zinchuk Lampman – After running Carson Energy Services Ltd. (formerly Carson Welding and Maintenance) since 1974, it was time for Ron Carson to seriously look at succession planning. That would lead to a $135 million sale to Flint Energy Services Ltd., plus a $30 million earn-out for senior management over the next three years. (See related story page A3). In an exclusive interview, Carson told Pipeline News, “At my age, rather than wait ﬁve more years, it’s best to get it done. “I can spend time with the company to see things through.” Carson is 68 years old. ɸ Page A9
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PIPELINE NEWS October 2011
Recent expansions into Shaunavon and Virden ɺ Page A8
Other options were considered. “We looked at a management buyout as much as four, ﬁve years ago,” he said. However, many of those managers are themselves getting closer to retirement age. “Most of our managers are 20 year employees, and have as high as 34 years,” he said. “It would be quite a burden for them to take over the company ﬁnancially.” Indeed, with a footprint so large, they might have been able to sustain the company, but would likely have had limited growth, he noted. Flint can handle growth. “I had pursued that. Those people were the reason we were successful. There’s an age factor as well. We knew it probably wouldn’t work. “We looked at equity partners, and that wouldn’t work as well. We wanted to go with somebody who would support growth as well as maintain the company going forward.” Carson said it was important for him to remain during the transition time over the next three years and make sure the company and its clientele are looked after. Carson Energy Service is one of the largest, if not the largest, employers in southeast Saskatchewan in the private sector, and easily the largest oilﬁeld service company in the region. As for family members taking it over, one son farms, another is an engineer in Calgary, and a third works within the company, heading up the safety division. Carson said they saw how hard he worked, and they were not so sure of taking on such a burden. “I still like doing what I’m doing. I would like to at least be able to take a holiday. I’m not looking to retire completely immediately or anything. Maybe down the road,” he said. Asked how the deal came about, Carson said, “We hired a couple of brokerage guys. They put the search out and came back with a lot of prospects. Flint was the one that looked the best to us.” Flint had been trying to break into the Saskatchewan market, speciﬁcally the Bakken area. Their CEO, Bill Lingard, noted in a conference call announcing the deal that Flint had a hard time competing against Carson Energy Services and its well-established operations. Now Ron Carson will become part of Flint’s senior management. “Flint has three regions in Western Canada. They’re going to make an eastern region, which will become Carson’s operations, and I’ll be regional manager,” he said. “We’re going to operate as Carson Energy Services, a division of Flint Energy Services, for some time.” Employees will remain in the same status. Indeed, Carson said it will take a
year to integrate the information technology and payroll systems of the two companies. Carson Energy Services had just recently established a presence in Shaunavon. “We just ﬁnished taking over Badger Construction there,” Carson said. “We see some growth patterns there.” That area will see assistance from their Swift Current branch. Indeed, Shaunavon was one of the few remaining oilpatch towns in Saskatchewan or Manitoba without a Carson’s presence. “We will expand in Manitoba,” he said. “On March 1, we acquired Sparks Oilﬁeld Construction in Virden. That’s moving along real well. “Manitoba and Shaunavon were our last places we wanted to be. “Shaunavon is deﬁnitely a target to expand on. The other target will be Regina.” Carson Energy Services has been building up its presence in White City, east of Regina, home to the horizontal directional drilling and mainline pipeline divisions. Flint is expected to assist with estimating and engineering work done out of Regina. ɸ Page A10
You know, myself, we have to keep a lot of people in slow times, and you suﬀer through it, because if you don’t keep them, you lose them. And when you need them, you suﬀer. - Ron Carson
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PIPELINE NEWS October 2011
Earn-out a retention tool for management Éş Page A9 Donâ€™t expect layoďŹ€s from this acquisition. Indeed, there is a need for more people. â€œWe cannot get enough people and equipment,â€? Carson said. â€œWe could do way more work if we had more human resources. They donâ€™t seem to be available.â€? He noted if Flint has any assets available, they will be supporting Carsons. â€œThat is one of the synergies,â€? he said.
â€œI would say we could put another 100 people to work in a heartbeat if we had them,â€? he said. â€œWe should have snapped up some more housing when it was available a few years ago.â€? The company has over 1,300 people across 17 divisions. Asked about the diďŹ€erence between owners and managers, Carson said, â€œYou know, myself, we have to keep a lot of people in slow times, and you suďŹ€er
Drilling on First Nations land Sundance Energy Corporation has completed drilling the ďŹ rst well in its southeast Saskatchewan drilling program. The well, Ochapowace 0605-18-3W2, was drilled, logged, cored and cased to a total depth of 895 metres. The logs and core information are currently being evaluated. The formations/zones being interpreted and evaluated are the Second White Specks, Bakken and Torquay. Results of the evaluations will be released when they are completed. The 6-5 well is located on the Ochapowace First Nation, ap-
proximately 15 miles northwest of the Wapella ďŹ eld. Sundance has a 100 per cent working interest and is the operator of the well. The Ensign Energy Services Inc. rig used to drill the 6-5 well has been released to another area operator for it to drill two wells. The rig will then recommence drilling for Sundance in early October and will complete three or four more wells on the companyâ€™s southeast Saskatchewan properties. The next well scheduled to be drilled by Sundance will be Lestock 05-03-27-15W2, located on the Muskowekwan First Nation.
The 5-3 well will be drilled on a 3D seismically deďŹ ned 2,240-acre structural closed feature. The 5-3 well will be targeting the Second White Specks, Mannville, Gravelbourg, Bakken, Torquay and Birdbear formations. The company will have a 100 per cent working interest and will be the operator of the 5-3 well. Sundance currently owns a 100 per cent working interest in approximately 70,000 acres in the southeast Saskatchewan First Nation project area. The company has shot or licensed approximately $10 million of 2D and 3D seismic data on the lands.
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through it, because if you donâ€™t keep them, you lose them. And when you need them, you suďŹ€er.â€? During lean times, Carson Energy Services kept largely active, compared to other companies, he noted. â€œWhen tough times came, weâ€™ve kept our market.â€? The sale does not include any of the real estate. â€œWeâ€™re leasing that,â€? he said. Explaining the $30 million earn-out over three years, Carson said that a major part of that will go to the 14 minority shareholders, who up until the sale held approximately 20 per cent of the company. â€œMost of it will be shared with people contributing to achieving the earn-out. Iâ€™ll get the least of it,â€? he said, adding that of that earn-out, he could earn as much as $8 million. â€œIâ€™m sharing the earn-out with the key people,â€? Carson said. Is it a retention tool?
"I still like doing what Iâ€™m doing. I would like to at least be able to take a holiday. Iâ€™m not looking to retire completely immediately or anything. Maybe down the road." - Ron Carson â€œDeďŹ nitely,â€? he responded. The important thing is to hit the designated EBITDA (earnings before interest, taxes, depreciation, and amortization) range, which can be averaged out if necessary. The payouts are after achieving the designated goals. In a prepared statement, Carson noted, â€œCarson Energy Services Ltd. did not get where they are today solely because of Ron Carson, and we need to recognize that our long term management and staďŹ€ â€™s commitment and eďŹ€ort all contributed to our success. Without these people, too numerous to mention, Carson Energy would not have been as successful as it is today. We have many long-term employees, 93 over ten years, nine over 20 years, ďŹ ve over 25 years, and eight over 30 years. This alone shows our culture is respected. We will strive to continue as such.â€? Carson will continue to be involved in the Saskatchewan Oil Show, of which he has served two terms as show chair. And heâ€™s going to keep going with the business for at least three years. â€œI still enjoy doing what I do,â€? Carson concluded.
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PIPELINE NEWS October 2011
Leave current royalties in place: Lingenfelter By Brian Zinchuk Regina – In mid-September Pipeline News spoke one-on-one with the leaders of the Liberal Party, New Democratic Party and Saskatchewan Party, asking them the same questions about their energy policy platform for the upcoming election. These are New Democratic leader Dwain Lingenfelter’s responses: Pipeline News (PN): In broad strokes, what is your party’s energy policy platform for this upcoming election? Dwain Lingenfelter (DL): The energy strategy on oil and gas is very much a continuation of the policy we had in place in ’07 when we left, when we went into opposition. It has virtually not changed under the present regime. It’s a policy that I think got us to record numbers of wells drilled in 2006-07 in oil and gas. The policy we would continue would basically be the one we had in place when we were in government in 2007. ɸ Page A12
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CORRECTION: On page A10 of the September Pipeline News, a story entitled Husky warms to thermal, emerging plays, an incorrect version of the story was used. It read, “Husky Energy Inc. nearly quadrupled its second quarter profits compared to the same period in 2010 with higher production coming from its emerging oil and gas plays in Western Canada.” The correct version is “Husky Energy Inc. increased its proﬁts by 274 per cent in the second quarter compared to the same period in 2010 with higher production coming from its emerging oil and gas plays in Western Canada.” Pipeline News regrets this error and any confusion it may have caused.
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PIPELINE NEWS October 2011
Sovereign wealth fund explained ɺ Page A11 PN: The current royalty regime was put in place by the Calvert NDP government and left alone by the Wall Sask Party government. In the meantime, Alberta has repeatedly and substantially altered its royalties. Should the next administration continue on the current path, or look at shaking up royalties? DL: Our intent is very much to leave the royalties in place that were there when we were in government. The wells drilled in 2007 were 3,400, which was near a record number. It’s dropped oﬀ a bit. I think last year there were 2,700 wells drilled, but that had more to do with the price than the royalty structure. I don’t blame Brad Wall for a reduction in the number of wells drilled. I think it’s more the price of gas. It’s really cut into our production. Our production is much lower than ’07. I’m not blaming the government, but I’d like to know what the Sask. Party opposition would say about an NDP government if gas wells had dropped by this number if the reverse were in place. I don’t think they would be quite as generous as I’m being with them. It’s phenomenal how much production and the number of wells drilled have gone down under the Sask. Party administration in the area
of gas. We are now, as I understand, a net importer of gas. PN: Does Saskatchewan need a sovereign savings fund, like Norway’s or Alberta’s? Will you implement such a thing, and if so, what form should it take? DL: The Bright Futures Fund is something the people of Saskatchewan very much support. The belief is we have the responsibility to put away a little money every year for future generations. What I compare it with is a family that has a new child, a little boy or girl, and when they are born, they have to make a decision: do we start putting away a little money every month in order to pay for their university in 20 years? I know how hard that is for families to make that decision, because they could use that money right now. The fact of the matter is, through compounding interest and good investment, if you put a little bit of money away every year, by the time your child is 18 or 20, you’ve got a pretty good fund built up in order for them to attend university. I think it’s an idea the people of Saskatchewan not only want a government to do, but expect the government to do. We’ve got very, very positive comments from the public at large, and from a number of diﬀerent groups who have contacted us said, “Look, this is something we should be doing, and probably should have done a long time ago.” I got this idea from having worked in Norway, where I met with their sovereign wealth fund and got an in-depth report on how it worked. While I was working for the energy company, Nexen, we were in the bidding process in Norway, so I had an opportunity to be in Oslo and meet with many government oﬃcials on various things – taxation, royalties, including their sovereign wealth from. It’s not an exclusive idea. Norway’s had theirs for 30 years. It would certainly be diﬀerent than the Alberta model. [With] the Alberta model, as I understand it, the government can go in and use the money for dayto-day debt reduction, if they so please. I think the real need in the province is a plan that would be more like Norway or Alaska, where the money is put away for future generations. It takes a small stream of your royalties at the present time and puts it away for those children, grandchildren and great-grandchildren who will be here when the oil and gas and uranium are depleted or there’s much less production than there is at the present time. I’m not giving out the number of the percentage of the royalty, but it would be a small stream. You don’t have to put a very big percentage of the new royalty [away]. I want to leave that to the new cabinet to debate and to make that ﬁnal decision, whether it’s 10 per cent or 15 per cent. That would be left to the cabinet on an annual basis. The idea of taking a small stream of money out of royalties is something there’s general consensus on. The exact details of the plan would be left to professional individuals who understand investment. My own view is it would be a combination of investments in Canada and in other parts of the world, similar to the Norwegian fund. I’m not sure the experts would decide none of the investment could be in Saskatchewan. I don’t see that all of the investment happening here. Those details have to be left to the experts. If I do dictate to them, then it’s the premier, and it is political. I think there has to be all-party consensus on the membership of the new group. I don’t want it to be said this is a Sask. Party group or an NDP group, and then the board changes after every election, depending on who gets elected. ɸ Page A13
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No politics in running fund ɺ Page A12 I don’t want any politics in this. In order for this to work, and I know it can work, as it has in other jurisdictions. You have to do everything you can to keep politics out of the whole setup, management and investment side. It has to be done on a business basis, not what’s good for one political party or the other. PN: What do you see happening in Saskatchewan’s energy sector over the next four years, and what would your government do to encourage growth? DL: My bet is, as it relates to oil, the drilling as we’re seeing at the present time is likely to continue at its present pace, and even possibly increase a bit if oil gets up to $100. I think oil is pretty ﬁrm in terms of drilling and activity we will see for the next three or four years. Past that it gets a little more cloudy, because you’re more dependent on the world economy. Gas is a little bit diﬀerent, because there is a lot of gas ﬂoating around, with the new ways you can move gas from supply to areas where it is needed, with liquid natural gas, or LNG. It’s really changed the pricing model. At one time you could have a very high price in North America and a very low prices elsewhere. That has changed to a large extent with LNG and changed the price all over the world. With gas around $4 a unit, it probably isn’t going to change very much for the next 18 months or two years, and them hopefully start to pick up to hopefully $5, $6 dollars per cubic metre. After that you could ﬁnd some steady increases as we ﬁnd the lack of drilling in many parts of North America is going to get the balance much more in line. Right now, we have more production than consumption, not in Saskatchewan, but other parts of the world. This is why gas is so volatile. The price goes down, drilling stops. If you look at the numbers in Saskatchewan, it has stopped. It hasn’t gone down a little bit. Compared to the number of wells drilled in 2007 with Lorne Calvert, it’s now 15 per cent of that. Again, I’m not blaming that on the Wall government. I think it is price. PN: Saskatchewan’s drilling activity, primarily for oil, is running at or near historic highs. What are we doing right or wrong, and can we do better? DL: The big thing is to maintain the system we put in place in the period between 2000 and 2005. That system has been in place for some time and has been very, very eﬀective. I don’t see that you need to do a lot more to stimulate. I think the system we have in place is very good. One thing I would like to look at, that all western provinces are looking at, is how you add more value to products as they go through our hands, whether there are things we can do working in concert with Alberta adding value to the energy products we’re producing. There’s a huge debate in Alberta right now. Peter Lougheed got involved in it, saying he’s opposed to the pipeline to the United States for a very diﬀerent reason. His argument is not whether or not we want the products to go to the United States. We do. But he would much prefer a diﬀerent kind of export, not only upgraded, but reﬁned polyethylenes and all the things you could do in Alberta before it is exported. I agree with Peter Lougheed on that. I think we have to look, as we become more important, in the cycle, at doing more to our resource than pumping it out of the ground and putting it in a pipeline. There’s a lot more we could be doing. Even the fertilizer plant west of Regina was an important step in the process of using more of our natural gas to produce an end product. I think we need to be look at more of that on the oil side. PN: Natural gas development has essentially ground to a halt in recent years. A little while ago, the current government instituted an incentive for gas drilling, but without substantial eﬀect. Is there anything further than can or should be done? DL: You don’t want to give the gas away at a very low price. I think we’ve given as much incentive to drill for gas as we should. My bet is gas prices will come up fairly strongly in 18 months or two years. Once it gets back up to $5
If you have a booming oil industry, you have a booming service industry. Many of those people are at, or near, minimum wage. We need housing for everybody, right from the manager of the oil company in the area to the people who supply breakfast and make the lunches. We need a broad range of housing.
or $6, the drill activity on natural gas will be back. Rather than give it away at a very low price, because oil and potash are at a good price and we have good activity, I would, as owners of the resources, as we all are, then we don’t need to give it away. If we didn’t have any activity in potash, uranium or oil, we might be more pressed. When you’re the owner of the resource, whether it’s gas in the ground, or grain in the bins, and you don’t need the money right now, you’re going to be putting money in the bank anyhow. This is how Norway sees it. It’s stored quite nicely for millions of years where it’s at, or you can take it out and put it the bank at a very low price. When we don’t need it right now, I would just as soon leave it where it is and wait for the price to come back. PN: Housing for workers, or lack thereof, has been a major issue in the oilpatch, particularly in southeast Saskatchewan, but now in the Shaunavon area, too. What will you do to address this issue? DL: Housing is the second largest issue. Health care is No. 1. No. 2 is housing. We’ve announced a major housing program of aﬀordable housing that will be very helpful to communities right across the province, speciﬁcally in the oilbooming areas of southeast and southwest Saskatchewan. ɸ Page A14
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PIPELINE NEWS October 2011
Rent controls part of housing solution
Big tractor? First of all, that’s a big tractor. But it is dwarfed by the power poles behind it. This tractor could be found levelling land in and industrial park just off the Shand Road, east of Estevan, on Sept. 7. Photo by Brian Zinchuk
ɺ Page A13 It includes two major parts. One, a very big increase in the number of aﬀordable housing units built, and also rent control. In many of our areas, this is more to do with people on ﬁxed income or seniors. Rents are going up by more than 10 per cent a year, and people’s wages aren’t going up by that extent. That isn’t particularly true in the oilpatch. Most of those people are well paid. If you have a booming oil industry, you have a booming service industry. Many of those people are at, or near, minimum wage. We need housing for everybody, right from the manager of the oil company in the area to the people who supply breakfast and make the lunches. We need a broad range of housing. What’s mainly lacking is houses in the lower range – $200,000 to $250,000. Our rent control is what we call the “new generation rent control.” It would have a clause that would not apply to new construction for a period of 15 years. If you were to build a new rental unit in Estevan, Weyburn or Shaunavon, it would not fall under rent control for the ﬁrst 15 years. In Manitoba, where they have rent control, they exclude new construction. With rent control, their construction of new units was much higher than Saskatchewan, without rent control. We’d also have exclusion for rent over a certain amount, say $2,000 a month. If you can aﬀord that rent, you can aﬀord to buy a house. You have to use collaboration with local communities, provincial and federal government. It’s not just the responsibility of the provincial government. I’m also a big believer the government should be involved in the construction of new units with Sask. Housing. The quicker you can get people from moving from rental to ownership, the better it is for the individual and community. PN: Is there anything you would like to add? DL: I just want to reiterate the importance of the oil industry. It’s an industry I’ve been hooked to at the hip for many years, both as a farmer in the middle of the oilpatch, and as a politician setting the royalty rates we have today. I worked with Roy Romanow setting the rates we have today. I was instrumental at the time, having many, many meetings with CAPP (Canadian Association of Petroleum Producers). And I’ve been in the oil industry as a vice-president with Nexen, negotiating with governments around the world. It’s very close to me. A bit of my income comes from wells on our land.
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PIPELINE NEWS October 2011
Review, but not necessarily change, royalties: Bater By Brian Zinchuk North Battleford – In mid-September Pipeline News spoke one-on-one with the leaders of the Liberal Party, New Democratic Party and Saskatchewan Party, asking them the same questions about their energy policy platform for the upcoming election. These are Liberal Party leader Ryan Bater’s reponses: Pipeline News (PN): In broad strokes, what is your party’s energy policy platform for this upcoming election? Ryan Bater (RB): The province is booming because of oil and gas. The only concern I have right now is the province seems unwilling to look at our royalty and taxation rates. In terms of natural resources, that includes most of the energy sector. If there’s anything that came out of that potash debate last fall, it’s that our taxation structure needs to be reviewed and probably changed or tweaked slightly. We wouldn’t have had the argument about the loss of net beneﬁt for mining com-
panies if you were to change the taxation structure from a per-project basis to a per-company basis. I do support the review of royalties. That would be the biggest piece of that. A lot of what we are focusing on is more small-business related, as it relates to the service and supply industry in northwest Saskatchewan. PN: The current royalty regime was put in place by the Calvert NDP government and left alone by the Wall Sask. Party government. In the meantime, Alberta has repeatedly and substantially altered its royalties. Should the next administration continue on the current path, or look at shaking up royalties? RB: We should be reviewing them. I’m not saying shake them up. You have to do a review in order to do a cost-beneﬁt analysis for the needs of the province. So yes, we should absolutely doing a review. The principles of potash are the same. If there’s any good example of the need to review them, it would be that. ɸ Page A16
Ryan Bater is Saskatchewan’s Liberal leader. His strategy in this election is to get the leader elected, and then build from there. Photo submitted
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PIPELINE NEWS October 2011
Liberals suggested sovereign wealth fund three years ago ɺ Page A15 No responsible government would not do that review on at least a regular basis. The reason the Wall government hasn’t shaken things up, as you put it, is because of what happened in Alberta. PN: Does Saskatchewan need a sovereign savings fund, like Norway’s or Alberta’s? Will you implement such a thing, and if so, what form should it take? RB: Saskatchewan should absolutely have a sovereign wealth fund, like Norway. Despite the fact the NDP announced theirs last week, I announced ours in 2008. Not only did they swipe the idea from us, they stole the name, by calling it the Bright Future Fund. That part of their platform is nipped directly from ours, and I can provide evidence to support that. Since I became leader, that was the ﬁrst speech I gave, in August of 2008. In that speech I laid out my vision for a sovereign wealth fund for Saskatchewan. We cannot allow this province to continue spending one-time resource wealth as quickly as it comes in. Nothing is being saved for future generations, and it is completely unsustainable at its current rate. The way to implement that is to ﬁrst focus on debt elimination. Once the debt is eliminated, you devote a consistent percentage of all non-renewable resource revenue to a sovereign wealth fund. What that percentage is, is being worked on right now. I have been toying with the 50 per cent number, but a lot of that comes to the cost saving on debt reduction. You eliminate the debt ﬁrst. It’s like what I do
a big part of their platform, and that came from us, so obviously we have something to contribute to public policy in our province. Imagine what we could do if we had some seats next time around. PN: What do you see happening in Saskatchewan’s energy sector over the next four years, and what would your government do to encourage growth? RB: The sector will thrive as long as the oil is there, and the technology exists in the private sector to get it out. What we need to focus on is solutions for labour. We need to focus on housing to make sure communities are prepared to support that activity. There’s no question that communities directly next to a lot of oil and gas activity have housing and infrastructure issues. We need to prepare those communities. I would suggest Saskatchewan was largely unprepared for the economic activity that is happening now, which is why we have a myriad of problems. The problem is communities don’t have the tools they need. A lot of the bigger picture issue is the government doesn’t provide the kind of local support to address that stuﬀ. That’s what good economic development organizations would be doing, but we don’t have good economic development organizations because we have Enterprise Saskatchewan. It does not really act as well on a local level as say a smaller organization like a regional development corporations was able to do. Government needs to be changing its strategy from a broad regional focus to a more local strategy so communities can prepare themselves. ɸ Page A17
"We have this build, build, build mentality in Saskatchewan. Nobody’s stopped to think that we should let the private sector do the things it has to do, and if, and when, things slow down, that would be the appropriate time for more government projects." -Saskatchewan Liberal Leader Ryan Bater at home. Before I start putting money in my savings account, I pay oﬀ my credit cards, because I’m paying interest on that. Our plan calls on using all non-renewable resource revenues – those surpluses you hear about four times a year? One hundred per cent of that should go towards debt elimination. Once the debt is eliminated, we devote a consistent amount to a sovereign wealth fund. Good ideas are good ideas. If the NDP formed government and implemented it, I would support it. At the same time, they’ve just proved the legitimacy of the Liberal Party of Saskatchewan, because that’s
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PIPELINE NEWS October 2011 Saskatchewan Liberal leader Ryan Bater is seeking to re-establish the party's presence in the legislature. Currently there are no Liberal seats. Photo by Brian Zinchuk
Government shouldn't compete for labour ɺ Page A16 PN: Saskatchewan’s drilling activity, primarily for oil, is running at or near historic highs. What are we doing right or wrong, and can we do better? RB: I know from trade shows I used to do in Alberta as an economic development person, there used to be a real negative perception of Saskatchewan out there. A lot of it had do with we had what people called a socialist government. There’s no question the perception of Saskatchewan changed when the government changed. Perception’s a big deal. But really what’s changed in the industry is technology, to increase exploration eﬀorts. It’s obviously more cost eﬀective now to extract oil and gas. It’s also worth more now. That’s been playing in our favour. What we’re not doing well to encourage activity is labour and infrastructure solutions, so the industry has the ability to do the work they need to do. ɸ Page A18
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PIPELINE NEWS October 2011
Sask. to dependent on natural resources ɺ Page A17 PN: Natural gas development has essentially ground to a halt in recent years. A little while ago, the current government instituted an incentive for gas drilling, but without substantial eﬀect. Is there anything further than can or should be done? RB: Not really. We are at the mercy, when it comes to all of our natural resources, of the prices that are set internationally. We’re selling commodities. If they’re not worth very much, it doesn’t become cost eﬀective to extract them, and activity slows down. There’s not a whole lot we can do about that. We’re a price-taker on all this stuﬀ, which is why I’ve maintained since four or ﬁve years ago, our economy is entirely too dependent on natural resources. We need to broaden our economic engine, if you will, to include a more small business, and a more entrepreneurial culture, instead of simply an extraction culture. PN: Housing for workers, or lack thereof, has been a major issue in the oilpatch, particularly in southeast Saskatchewan, but now in the Shaunavon area, too. What will you do to address this issue? RB: No. 1, you have a lot of activity going on with natural resources and the private sector in general throughout the province. What’s happening simultaneously with that is you have a lot of big government projects, as well. You have, essentially, a government spending money and competing with the private sector for labour, for materials, and use of infrastructure. It would have been better to hold oﬀ on the big projects government is working on until things cooled oﬀ in the private sector, and do them at a later time when labour and materials are not only more available, but cost less. That’s sort of the trouble we’re in. We have this
build, build, build mentality in Saskatchewan. Nobody’s stopped to think that we should let the private sector do the things it has to do, and if, and when, things slow down, that would be the appropriate time for more government projects. In the Battlefords, we have two power plant projects being built, the multiplex at the same time, and now a new Saskatchewan Hospital. At the same time the private sector needs workers not just for oil and gas, but for building houses, building apartment buildings. Why do you think you can’t build an apartment building in Saskatchewan? All the contractors
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that are working are building government projects. PN: Is there anything you would like to add? RB: Saskatchewan is going through a boom right now. We have been for several years. It’s long overdue, and it’s very welcome. There’s a responsible way to manage that activity and growth, and an irresponsible way. I’m advocating a way that doesn’t slow anything down, but let’s use this one-time money responsibly, let’s invest it into a sovereign wealth fund. Let’s make sure government is not getting in the way of competing with business for labour and infrastructure. Government should not be doing that.
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PIPELINE NEWS October 2011
Stay the course, and pay down debt Wall: Â„ By Brian Zinchuk Swift Current â€“ In mid-September Pipeline News spoke one-on-one with the leaders of the Liberal Party, New Democratic Party and Saskatchewan Party, asking them the same questions about their energy policy platform for the upcoming election. These are Saskatchewan Party leader Brad Wallâ€™s responses: Pipeline News (PN): In broad strokes, what is your partyâ€™s energy policy platform for this upcoming election? Brad Wall (BW): Stability, ďŹ rst of all. Weâ€™re not going to be talking about a royalty review. The NDP are now kind of all over the place. First they said theyâ€™ll limit their review to potash, but thatâ€™s not what theyâ€™ve said in the past. In the past theyâ€™ve mused about oil and gas and uranium. I think even musing is unhelpful. Right now we have a bit of an advantage in the world. While weâ€™re not immune to whatâ€™s going on, we have economic strength here. What we donâ€™t need is talk of risky royalty reviews and 50 to 80 per cent increases, at least on potash. So principally, itâ€™s stability. In the long term, what we have been doing with our resource revenue as it comes in, for more than just energy, but potash as well, is pay $3 billion down on debt. Thereâ€™s a number of infrastructure investments weâ€™ve made as well, but weâ€™ve paid down debt. We ought to eliminate that debt, the general debt of the province of Saskatchewan. The talk of sovereign wealth funds, thatâ€™s not a bad idea I guess. We have an internal one we established early on with the growth and ďŹ nancial security fund. Itâ€™s certainly something we would consider, but ďŹ rst things ďŹ rst, we should pay oďŹ€ the debt with the proceeds of the resource revenue weâ€™re getting now. Weâ€™ve made a lot of progress; weâ€™ve paid oďŹ€ about 44 per cent of it. There will be a lot of discussion about these kinds of funds or other ideas in an innovation agenda to build our natural resource economy as it exists today into something for the next generation. É¸ Page A20
Saskatchewan Party leader Brad Wall spoke at the Saskatchewan Oil and Gas Show in Weyburn in June. File photo
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PIPELINE NEWS October 2011
Natural gas needs a price increase to get drilling going
ɺ Page A19 PN: The current royalty regime was put in place by the Calvert NDP government and left alone by the Wall Sask. Party government. In the meantime, Alberta has repeatedly and substantially altered its royalties. Should the next administration continue on the current path, or look at shaking up royalties? BW: The centerpiece of our resource policy is stability. We called for the changes the Calvert government made while in opposition because they thought they would attract investment, especially on the potash side, where we had the highest royalties in the world. We needed some temporary incentives to attract expansion. And it’s working. The previous administration implemented them, we tweaked them to provide an incentive for more corporate oﬃce jobs. But by and large they are the same, and if re-elected, they are going to remain the same. We think stability is part of the Saskatchewan advantage and we intend
I feel very encouraged and optimistic about the future, assuming we can avoid this talk of royalty changes
- Premier Brad Wall
to keep that stability as a centrepiece of our economic environment. PN: Does Saskatchewan need a sovereign savings fund, like Norway’s or Alberta’s? Will you implement such a thing, and if so, what form should it take? BW: The idea is one I talked about some time ago. We even talked about it in opposition. It’s a good idea for an economy that has a lot of resource wealth. But we have to pay oﬀ the debt ﬁrst. PN: What do you see happening in Saskatchewan’s energy sector over the next four years, and what would your government do to encourage growth? We have the opportunity for continued expan-
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sion. The same technology that is working in the Bakken and had really unlocked it over the last decade or so, maybe a bit shorter than that, the principle behind it will work in the Lower Shaunavon and in the Viking. I think there is a need for us to continue to be sensitive to industry that is pioneering these new technologies, these new approaches for enhanced oil recovery. I think you’ll hear us talk about that during the election. The Petroleum Technology Research Centre at the U of R is a strength for us, and we have oilsands potential. We’re going to continue to work with companies that are looking at developing the Saskatchewan side of the oilsands, even though our geology poses challenges. I feel very encouraged and optimistic about the future, assuming we can avoid this talk of royalty changes. We saw what that did in Alberta. I think we want to avoid that here in the province. PN: Saskatchewan’s drilling activity, primarily for oil, is running at or near historic highs. What are we doing right or wrong, and can we do better? BW: Those numbers are very encouraging, considering much of our very active oilpatch in the southeast has been inundated with water. Some of the rigs have stayed in Alberta or relocated to other parts of the province. There is a chance for us to continue to set even more of these records. I feel, in the terms of right or wrong, we’re obviously doing something right. The determinant here is the price. No government controls that, but the government can control the other elements; the royalty and regulatory environment. We have worked hard to make sure our turnaround times for permitting are the best you will ﬁnd in Canada. That’s our goal. Sometimes we’ve reached that goal, sometimes we’re second, but industry’s been very favourable about our eﬀorts to make sure turnaround time is key. They’ve been waiting in longer queues in other jurisdictions. We shortened them up. I told the minister of energy this: we’re seeking to reduce the size of government, but if we need more people to process the regulatory side of the industry, it’s paying for a lot of schools and hospitals. Let’s get those people in place. We’ve actually done that. That’s part of the advantage here. It’s a friendly place to do business. PN: Natural gas development has essentially ground to a halt in recent years. A little while ago, the current government instituted an incentive for gas drilling, but without substantial eﬀect. Is there anything further than can or should be done? ɸ Page A21
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PIPELINE NEWS October 2011
Advocate needed to ¿ght ‘dirty oil’ smear campaign ɺ Page A20 BW: You know, $5, $6, $7 a gigajoule would help, instead of $4 and lower. I think that’s the main determinant. With the shale gas proliferation in North America, it’s really changed the game. It’s understandable that at this price, companies are not queuing up anywhere to drill for gas. We’re ready for when that happens. At some place, with supply and demand, there will be a recalibration. We’re go-
ing to be ready, because we have that horizontal drilling incentive in place. It was really helpful on the oil side, and it’s now there and ready for a slight improvement at the price side to see some action on gas. These things cycle, but four bucks a gigajoule is not going to get it done. PN: Housing for workers, or lack thereof, has been a major issue in the oilpatch, particularly in southeast Saskatchewan, but now in
the Shaunavon area, too. What will you do to address this issue? BW: We have our ﬁve-point plan that’s now been implemented by the government. It combines a number of things; more money to social housing, to groups like Habitat for Humanity. It’s meant to provide an incentive for rental housing, and more entry level housing. It’s a $252 million initiative. There’s $200 million in something called Headstart on a Home, which provides
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incentive for developers, but only if they’re building entry level housing that’s aﬀordable for, oh, for people doing a job in the patch, for example, if they’ve just started out, for home ownership. We’ve also got incentives for every municipality. We’re prepared to partner with them for rental construction incentives on the education and municipal tax side of things. We’re forecast to create 2,900 new rental units for that. There’s about $14.5 million we’ve budgeted for that. There’s another affordable home ownership program we think is going to create another 600 entry level homes that’s about $3 million. We’ve also partnered with municipalities in providing something called the Saskatchewan Infrastructure Growth Initiative that allows them to open up new lots in places like Shaunavon.
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Yes, we’re talking about a lot of new homes in this, but there’s a continuum of housing that goes from social housing, low-income housing, rental property, student housing, ﬁrst-time ownership and the higherend housing. Anywhere you address that on the continuum will help the rest of it. If you encourage more new homes, you’re going to have more people moving out of rental accommodations, and you’ll have more rental capacity. We’re working with municipalities like Shaunavon to provide interest-free money to open new lots. It’s a multipronged approach. One area we diﬀer is we need increased energy supply for the energy sector, and I know the other party is talking about rent controls. In almost every jurisdiction where it has been implemented, it has restricted supply. There’s been a disincentive with rental controls for the construction of new units. We need to avoid that. You might be hearing more in the campaign. PN: Is there anything you would like to add? Part of our job in Saskatchewan is we have a responsibility now, as the second largest producer of oil in Canada and as a province with oilsands potential, to en-
gage in this debate about ethical versus dirty oil. I tried to do that a little bit last week and get some attention south of the 49th, and here as well. We’ve got to be aggressive here. We’ve got American interests who are ill-informed, like Al Gore, that need to know the inconvenient truth that their California heavy oil, from a CO2 standpoint, is as dirty, or dirtier, than Canadian oil. We need to lay that on the line down there. What are the alternatives? If not our oil, it’s going to come from a country that persecutes gay people, or denies basic rights to women and young girls, or that is simply not a democracy and doesn’t respect human rights. That’s the choice, yet there’s no protests lining up for oil coming from there. The Keystone pipeline is part of that, but it’s a bigger issue of trade. Peter Lougheed said the other day we need to be processing it more in our country than piping it. Whether we process it in Canada and pipe it, or not, we’re still going to get these conspiracy theories and myth-based protest about our oil, even if it’s carrying completely reﬁned oilsands oil, or bitumen. We better be proactive on that front, and we need a government in our province that’s prepared to ﬁght that ﬁght.
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PIPELINE NEWS October 2011 Petterson Point is a three building project underway in Estevan’s northeast corner. It includes two condo buildings and a rental apartment building.
What is needed? More of everything Estevan – With a new multi-family unit going up directly across the street from her oﬃce window, Estevan realty broker and city councillor Lynn Chipley says there is a need for a lot more. More multi-family apartments, more condos for seniors, more everything. Being the service hub of the southeast Saskatchewan oilpatch, Estevan is also seeing one of the more profound housing crunches in the region. There is strong demand in Estevan, but cautious buyers, because the market is high, according to Chipley. “We’re selling a lot of product. When people are buying, they’re really immediate. There is good demand, but prudent buyers.” Terry Germain, a realtor with Border Realty who has spent two decades in the business, said, “They all know sellers are out to make a dollar. Sellers are speculating, putting it on the market and seeing what they can get.” Rent on rental properties is also high, Chipley noted.
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Germain personally owns several downtown apartments. “They are constantly full. I get calls every day on rentals,” he said. Commercial property was slow for a while, but that has since changed. “Demand for land is high,” Chipley said. Looking at statistics for the year, Chipley noted it started oﬀ slowly, pronounced by the wet spring and corresponding slowdown in the oilpatch. It had caught up by the end of August, however. Sales in Estevan, Stoughton, Oxbow, Carnduﬀ, Torquay, Carlyle and Lampman had hit 219 by the end of July, on par with 220 for the same period in 2010. The dollar value is up on those sales, rising from $45 million to $50 million in 2011. After the spring slowdown, Germain noted, “Now we’re all out again.” He pointed out there were six sales on the ﬁrst day of August, and four more the following day. Rental houses are extremely scarce, he added. The ﬁrm is handling marketing for two multi-family developments under construction. One is the aforementioned townhouses in downtown Estevan – two fourplexes that include two- and three- bedroom units. Called Pittman’s Crossing, the roughly 1,000 square-foot units are going for around $230,000. “That’s as aﬀordable as you can get,” Chipley said. “A single family house in Estevan is going to be $310,000.” ɸ Page A23
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PIPELINE NEWS October 2011
Multi-family units under construction ɺ Page A22 The second is a three-building condo and apartment complex known as Petterson Point situated in the northeast corner of Estevan. The fourth ﬂoor was starting to take shape on the ﬁrst 39-unit building as of early September. Each of the three buildings will be 39 units. The ﬁrst two are condominiums, and the third is intended to be rental apartments. Ideally, a show suite will be ready in the initial building in October, which should help in sales. The second and third buildings’ schedules are dependent on the pace of sales for the preceding buildings. They are not anticipated to be ready until fall and late 2012, respectively. “It all depends on how quickly we sell this ﬁrst phase out,” Chipley said. Including underground parking, these apartment condos have one bedroom units starting at $169,000, and two bedroom units going from $196,000 to $225,000 each, plus GST. That’s what passes as “aﬀordable housing” in Estevan these days. The projected rental rates for the two bedroom apartments in the third building are projected to come in at $1,500 a month. “You’re better oﬀ buying a condo,” Germain said frankly. “Your payments are the same, but you get ownership. Mortgage rates are low and will stay low. “I really feel for the ﬁrst-time buyers. They are strapped.” Asked about younger people coming into town looking for a place to live when starting a new job, Germain noted they might have to look at Bienfait, or bunk up with a buddy. “You get the bigger companies buying a house for the men,” Germain said. “That’s what companies are doing to keep the men here. “I feel this city is behind three years, just on subdivisions and infrastructure work.” Chipley said that the City had been one-and-a-half years behind on such development, “We’re now three years behind. It is our problem, no one else’s,” she said, speaking from the City’s perspective. Tenders have been delayed, she added. There is a desire to “not let a Fort Mac happen here,” Chipley said. Fort McMurray has struggled with severe housing shortages for years at the oilsands continue to grow. Asked what is needed in Estevan, Germain responded, “We need low-income housing. That’s a gimme. Not everyone works in the oilﬁeld. We have started oﬀering aﬀordable housing with the Peterson Point condos.”
Realtors Terry Germain, right, and Lynn Chipley, are part of Estevan’s Border Realty, of which Chipley is broker and owner. Across the street from their ofÀce is a new townhouse development under construction.
As for priorities in the Estevan market, Chipley said, “No. 1 is apartments for the kinds of workers we have coming.” These people may be testing out Estevan to see if they want to permanently settle down, or have short-term jobs. New construction like this is simply not going to come if they aren’t subsidized, she said. Chipley said if there were more bungalow condominiums for seniors, that would free up older housing stock The third priority would be townhouse development. As for market housing, the more expensive detached single family dwellings, she said there an apparent need for that, too. There is a pressing need for private developers in Estevan. “If someone came in and just developed lots for private or developer purchase, that would go a long way,” she said. As for camps, she said, “People don’t like the concept.”
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PIPELINE NEWS October 2011
Enerplus donates $300K to STARS Weyburn – Now established in its new Weyburn ﬁeld oﬃce, Enerplus Corporation decided to highlight its grand opening on Sept. 15 with a major donation to the STARS air ambulance program. STARS, the Shock Trauma Air Rescue Society, will receive $300,000 over the next ﬁve years from Enerplus in support of its outreach program to educate health care professionals on the ground in Saskatchewan. STARS has mobile simulator units which go to rural communities to teach the latest emergency techniques to local medical staﬀ. The idea is to train them as a team. “The provincial government congratulates Enerplus on developing a strong corporate presence in southeast Saskatchewan,” Saskatchewan Environment Minister Dustin
Duncan said on behalf of Health Minister Don McMorris. “We sincerely appreciate their generous contribution towards STARS medical helicopter service in our province, so that patients will quickly receive high quality emergency medical care when they need it.” “This very generous ﬁnancial contribution will directly beneﬁt critically ill and injured patients in Saskatchewan,” said Andrea Robertson, president and COO of STARS. “We cannot thank Enerplus enough for their support.” “We’re starting in Regina in April 2012, and in Saskatoon in early fall 2012,” Robertson said. The service is in the process of launching in Manitoba, too. During her presentation, Anderson told a story of how one of their pilots described a memo-
rable instance to his kids. That pilot recalled how they were responding to a nine-year-old in dire need of medical attention. When the helicopter came into sight, the police cruiser blocked oﬀ traﬃc in one direction on the highway, the ambulance in the other, and within seconds of touching down, they had that child in the air and on its way to treatment. “It’s a privilege to provide this service,” she said. In welcoming Enerplus to Weyburn, the city’s mayor, Deb Button, said, “Enerplus is the very model of good corporate citizenship.” “We are very proud to welcome you to our city tonight.” Chief operating ofﬁcer and executive vicepresident Ian Dundas explained the company’s strategy in the region. ɸ Page A25
In launching its Weyburn Àeld ofÀce, Enerplus Corporation donated $300,000 over Àve years to the Shock Trauma Air Rescue Society, or STARS. Andrea Robertson, president and COO of STARS, left, accepted the donation from Enerplus chief operating ofÀcer and executive vice-president Ian Dundas. Photo by Brian Zinchuk
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PIPELINE NEWS October 2011
New Âżeld ofÂżce closer to operations Éş Page A24 Noting they had worked out of Estevan for decades, it was a diďŹƒcult decision for them to make to close that oďŹƒce. Moving forward, he said, â€œWeyburn has emerged as a hub of energy in southeast Saskatchewan. We see a bright future for our company.â€? Enerplus has over 140,000 undeveloped acres in the region prospective for multiple zones, and currently about 3,000 boepd production. Overall, Enerplus has approximately 75,000 boepd in production. â€œDespite our size, we operate diďŹ€erently than other large corporations, with a smallbusiness attitude.â€? Dundas said. â€œWe understand, I understand, our team understands, that our operations impact the community.â€? His own family has roots in the region. His great-grandfather homesteaded north of Weyburn. Dundas spoke of
how technology has allowed Enerplus to reduce its environmental footprint. He also addressed safety, saying â€œWe want our workers to return safely to their families at the end of the day.â€? Chuck Hignett, Enerplus area foreman for southeast Saskatchewan, said they moved into their new oďŹƒce in July. The oďŹƒce is just oďŹ€ Highway 39. â€œWeâ€™ve hired more staďŹ€,â€? he said, noting the company now has 12 people in the ďŹ eld and oďŹƒce. â€œWeâ€™re going to have an active drilling program. We have one rig working right now, and weâ€™re looking at a second in the fourth quarter.â€? The oďŹƒce move from Estevan to Weyburn was done in large part as a safety measure, reducing driving time to the companyâ€™s most active area, south of Radville, in the Freda Lake, Skinner Lake and Neptune areas. â€œThatâ€™s where the majority of the work is,â€? Hignett said.
â€œWeâ€™re actively drilling, pipelining, and doing facility work. Weâ€™re going full bore.â€? Part of the work is consolidated existing batteries into a larger battery. Completion is expected in November. â€œItâ€™s going really well. Weâ€™re establishing ourselves in the community. Weâ€™re slowly building some recognition,â€? said Jason Veness, stakeholder engagement co-ordinator with Enerplus. As for the grand opening, Veness said, â€œIt shows weâ€™re serious about the community. Weâ€™ve got a place to come if theyâ€™ve got questions. People need to know weâ€™re here and available. â€œHeadquarters is in Calgary, but the work is done here. These are the communities that matter to us,â€? he said. â€œThis is an important play for us. Itâ€™s a long-term commitment to the community here, and weâ€™re proud to be a part of it.â€? On the web:http:// starsinsaskatchewan.ca/
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PIPELINE NEWS October 2011
IEAGHG Weyburn/Midale project wins global award Beijing, China - On Sept. 21 the Carbon Sequestration Leadership Forum (CSLF) â€“ an organization dedicated to the development of improved, cost effective technologies for the separation and capture of carbon dioxide (CO2) for its safe, long-term storage â€“ awarded the International Energy Agency Greenhouse Gas (IEAGHG) Weyburn/Midale CO2 Monitoring and Storage Project a Global Achievement Award in recognition of its role in pioneering carbon capture and storage (CCS) at a large commercial scale. As the single biggest ďŹ nancial contributor to the Weyburn/Midale Project â€“ with over $15 million in funding â€“ the government of Canada was asked to accept the award at the CSLFâ€™s Leadership Forumâ€™s Annual Meeting in Beijing on Sept. 21 on behalf of all contributing researchers, funders and scientists. â€œThis award shows that Canada is a world leader in carbon capture and storage and, thanks in large part to the work done at facilities such as Weyburn/
Midale, we are in an excellent position to use this technology on a wide scale.â€? said Joe Oliver, minister of Natural Resources. â€œThe project is a successful example of what can be achieved when governments and private sector institutions collaborate to advance clean energy technologies.â€? Weyburn/Midale is a research and development project that measures, monitors and veriďŹ es the injection and storage of CO2 into two depleted oilďŹ elds in southeast Saskatchewan. In the past 11 years, scientists from over 40 independent organizations from around the globe have conducted research for the Weyburn/ Midale project, including researchers from Canada, the United States, Great Britain, France, Italy, Denmark, and Japan. Funding for the research has come from the governments of Canada (through Natural Resources Canada), the United States (through the United States Department of Energy), Saskatchewan and Alberta, as well as international contributions from Japan, the European Union and ten individual corporate sponsors.
Energy efÂżcient new homes rebate program continued Regina - The provinceâ€™s Go Green Fund will provide an operating grant of $500,000 to SaskEnergy for continued delivery of the Energy EďŹƒcient New Homes Rebate Program. The program was developed in 2007 to provide a rebate to homeowners who have built or purchased a newly constructed ENERGY STAR qualiďŹ ed, R-2000 certiďŹ ed, or an EnerGuide for New Homes rating of 80 or above home. â€œOur government is committed to helping Saskatchewan people Go Green,â€? Environment Minister Dustin Duncan said. â€œWe are continuing to fund the Energy EďŹƒcient New Homes Rebate Program because it encourages homeowners to build new homes to higher energy eďŹƒciency standards and reduces energy and water resource
use.â€? Homeowners are eligible for a rebate of $1,000 for building or purchasing a new home that is qualiďŹ ed or certiďŹ ed to these speciďŹ cations. New homeowners must complete the rebate form in full and mail it, along with the required documents, to SaskEnergy within 12 months of their new home possession date. SaskEnergy administers the program on behalf of Go Green. In the ďŹ rst four years of this program, 1,325 homeowners received rebates. To-date, approximately 3,675 tonnes of greenhouse gas (GHG) emissions have been reduced annually as each new energy eďŹƒcient home reduces approximately three tonnes of GHGs per year, compared to new houses built to the minimum building standard.
The Weyburn/Midale project is being conducted in conjunction and close co-operation with the commercial CO2 enhanced oil recovery operations by Cenovus Energy and Apache Canada. These operations, which use CO2 captured from coal gasiďŹ cation facilities in North Dakota and pipelined to Weyburn, have stored over 20 million tonnes of CO2 since the start of injection in 2000, which represents the single greatest amount of stored CO2 anywhere in the world. The amount is equivalent to taking 4 million cars oďŹ€ the road for one year. â€œWeyburn/Midale represents the most important research program in the world related to the safe and secure storage of CO2 in a depleted oil ďŹ eld,â€? noted Malcolm Wilson, PhD, the chief executive oďŹƒcer of the Petroleum Technology Research Centre in Regina, a not-for-proďŹ t research company managing the project. â€œWe are honoured to have this recognition from the CSLF, an organization that is striving to advance this very valuable science on a global scale. Like that organization, the PTRC and its partners within the IEAGHG Project are looking to share best practices in carbon capture and storage and plan to achieve that through the release of the projectâ€™s Best Practices Manual.â€? The project will be issuing this Best Practices Manual in early 2012, with a formal launch of the publication expected in late spring. It will be available to help all companies and jurisdictions hoping to transition CO2 enhanced oil recovery operations into long-term storage in a safe and eďŹ€ective way.
PIPELINE NEWS October 2011
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In just a couple of seconds, a loss of traction sent this skid truck into a spin, dust Áying and all. By jacking up the dolly wheels in front and back, the instructor can simulate loss of traction scenarios like ice or snow. The feeling is very similar to the real thing. Photos by Brian Zinchuk
PIPELINE NEWS October 2011
a few spins, literally By Brian Zinchuk Weyburn – Pylons ring a large portion of the Weyburn mall parking lot. In the centre, a white truck with what looks like training wheels can be seen burning doughnuts. These doughnuts are on purpose, however, as the instructor from Edmonton-based Canadian Traﬃc Education Centre (CTEC) manipulates the traction performance of the truck. Using a control box in the cab, the instructor selectively jacks up or lowers each of four bogey wheels around the Chev pickup. Two are in the front, on outriggers that bear a strong resemblance to the training wheels on a young child’s bike. In the rear, the bogeys are immediately behind the rear tires. All are on air shocks, driven by a compressor in the bed of the truck. “The whole design is for not-perfect pavement,” said David Richard, a senior instructor who spent many years in the military before becoming a driving trainer. “We get anybody who drives a company vehicle,” he said of his students. In this case, those students were all from Crescent Point Energy Corp., which has its ﬁeld oﬃce in Weyburn. Classes were put on all week, mixing classroom, skid truck and simulator training. Conrad Gervais put the skid truck into a spin as demonstrated in the time lapse photos, but it didn’t take much. “I didn’t turn into it. I just touched the gas,” he said. The instructor lifted the back axel, limiting traction to the rear tires. “I created oversteer. His little bit of input caused it,” Richard said.
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The students were taught techniques they likely didn’t learn in high school driver training, like placing their hands on the wheel in a lower position, so they don’t end up breaking their arms, or their face, in an airbag deployment. “Your watch is followed by your nose,” Richard said. “It does a lot of damage to your face.” This is important because after a deer collision, you still may need to drive away after the airbag has deployed. Some of the students noted they drive between
250 and 400 kilometres a day. Most were ﬁeld operators. “Whenever that phone rings, you go,” one said. Another noted previous defensive driving courses have been like driving in the city. “This was a lot more of what we deal with every day,” said ﬁeld operator John Scammell. Even the more experienced drivers picked up some pointers. Gerald Clarke, 61, noted, “I did learn some stuﬀ. I could really slam those brakes.”
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PIPELINE NEWS October 2011
PetroBakken boosts Salvation Army relief efforts Estevan – In response to the ongoing need for assistance for southeast Saskatchewan ﬂood victims, PetroBakken Energy Ltd. donated $20,000 to the Estevan Salvation Army on Sept. 8. PetroBakken has approximately 100 employees in southeast Saskatchewan, each of whom donated $100. The company then matched that, bringing the donation to $20,000. “All of our people want to do things in the community,” noted Clayton Leavitt, PetroBakken area manager for Saskatchewan. “Sometimes it’s not the money you give, but the time as well.” Leavitt asked Salvation Army oﬃcials of how PetroBakken could assist in a hands-on manner. Salvation Army Major Len Millar explained the church has been active assisting ﬂood victims in the southeast since June 19, when the evacuation took place during the fourth surge of water released from Boundary and Raﬀerty Dams. Residents of an Estevan trailer court returned home after ﬁve days, but 150 homes in the Souris River valley were evacuated. Many were destroyed, especially in Roche Percee. The Salvation Army in Estevan has recently acquired a warehouse to store donated items. Furniture stores have
PetroBakken Energy Ltd. made a $20,000 donation to Áood relief efforts in southeast Saskatchewan via the Salvation Army. From left are Daralee GrifÀn, PetroBakken donation committee; Major Len Millar, Salvation Army; Clayton Leavitt, PetroBakken area manager for Saskatchewan; and Jared Schlamp, PetroBakken production superintendent.
also donated furniture. “We continue to provide clothing, utensils, anything available at our thrift store, including furniture as well,” he said. “One thing we are short on is appliances –
washers, fridges, deep freezes.” They have 15 to 20 families coming in a week, Millar added. Of those evacuated families, some have purchased homes in Estevan
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or Bienfait, and others have gone as far as Midale. Some have chosen to leave, but most have stayed. A ﬁre that wiped out a large portion of Slave Lake, Alberta, has
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PIPELINE NEWS October 2011
Not easy to relocate to Estevan Colin Tyrer would like to set down roots in Estevan, but Ànds the local housing market overpriced. Photo by Brian Zinchuk
Estevan – It’s not that easy to relocate to Estevan. That’s what Colin Tyrer, a ﬁeld manager with an Estevan stimulation company has found. Tyrer is from Brooks, Alberta, where he and his wife still maintain a home a few kilometres east of town. “I’ve been working here since last September,” Tyrer said. He’s spent much of the past year looking for a place. “People want over $200 grand for a place you can’t even live in,” he said, noting such homes should be condemned. One “three-bedroom house,” he saw was in actuality three rooms – with the living room accounting for one of those supposed bedrooms. For that, the asking price was $185,000. “If I have to sleep in my living room as opposed to my bedroom, I’ve got a problem with that,” Tyrer stated. “Anything worth looking at, they want half a million,” he said. “There’s nothing worth bidding on, really. I don’t want to put out half a million for a house. I’m not going to buy a 1912 house for $300 grand. “My wife and I like Estevan. We want to live down here.” But as of early September, Tyrer noted, “I’m living in a camper, and my wife’s in Brooks. That camper is in the rented backyard of a coworker. “I was in the crew house last winter,” he said, referring to the fact that his employer, like many in the region, maintains its own housing for temporary accommodations until people get established. As for what they are looking for, Tyrer said, “It’s gotta be a house, because my wife’s got animals.” They will, however, have to sell their horses. “We like it down here. It’s more our style of living. Brooks has gone bad. “There’s a lot of opportunity for growth down here,” Tyrer said.
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PIPELINE NEWS October 2011
Revolutions follow this oilman Estevan – With a career that has taken him to wellsites all over the world, Clayton Leavitt has found himself most recently in Estevan, as Saskatchewan area manager for PetroBakken Energy Inc. Leavitt started out in the oilpatch working seismic, then on drilling rigs. He took a certiﬁed engineering tech course, and has since worked in operations, completions, workovers, drilling and management. “An assorted past,” he described it as, and that’s not the half of it. “I spent a few years in the Middle East,” Leavitt said. “I was in Libya, Iran and Tunisia.” Coincidentally, all of those countries have seen revolutions, two of which were right around the time he was there. For instance, he got to see the Libyan revolution ﬁrst hand. Not the 2011 version, mind you, but the one that installed Col. Moammar Gadhaﬁ as dictator in 1969.
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His father was a petroleum engineer working in the country. “The ﬁrst time I was in Libya, I was in junior high school and the king was still there. It was pretty tense. We were out of the country for just a couple of weeks when the revolution happened, and when we came back, we had to get new visas. “It was very interesting times, but also very stressful. There were so many restrictions,” Leavitt said. With Iran, he said, “We got out just weeks before the big revolution. I was working in operations and drilling.” Two decades ago he found himself in Tunisia. Leavitt has also spent time drilling in Oklahoma and Texas. PetroBakken Energy Ltd. area manager for “I’ve been all over the place,” Saskatchewan Clayton Leavitt has been he said. around a few revolutionary places. Leavitt is two courses away Photo by Brian Zinchuk from completing his petroleum engineering degree through the Southern Alberta Institute of Technology, providing something of a challenge given his distance from the school now. It turns out engineering is in the blood. With his father an engineer, and completing the program himself, two of Leavitt’s children are also engineers, but in the electrical discipline. It took Leavitt and his wife three months from the time they started looking for a house in Estevan to ﬁnd a place, but even then, it was no bed of roses. The new-build home needed some work, and they went right into a renovation. “It’s impossible to ﬁnd plumbers and carpenters,” Leavitt said. “I had friends in Calgary come to do the ﬁnishing work.” Leavitt had been working in the Calgary head oﬃce of AltaGas before taking up the position of PetroBakken’s area manager for Saskatchewan. “I went from head oﬃce back to the ﬁeld, which I really like,” he said. “We wanted to get out of the city and into a smaller community. My wife Cathy and I really like it. Everyone’s friendly out here,” according to Leavitt. In Calgary, his commute was half an hour to two hours, depending on the weather. In Estevan, it’s more like two minutes.
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PIPELINE NEWS October 2011
Houses prices and new starts to rise moderately Ottawa, – When it comes to buying a house in Saskatchewan, there may be no time like the present with average prices to climb to $248,000 in 2011 and $253,000 in 2012. That’s the word to the wise based on the Canada Mortgage and Housing Corporation’s third quarter national housing forecast released on Aug. 24. The new CMHC forecast expects the average Multiple List Service (MLS) price to rise along with an expected 5,000 new housing starts in Saskatchewan this year and 5,200 in 2012. Alberta will experience steady growth with 27,100 housing starts in 2011 and 29,800 in
2012 as the oil and gas economy continues to gain strength in that province. Buyers’ market conditions prevail in most Alberta locations, but month to month price gains in 2011 will lead to expected price gains of over two per cent in 2012. Another forecast for MLS home sales by the Canadian Real Estate Association (CREA) on Aug. 16 also supports the “buy now rather than later concept” for home buyers across Canada “While there had been some talk of potential interest rate increases, that hasn’t happened,” said Gary Morse, CREA president. “In fact, mortgage
interest rates have actually come down, and are now expected to remain low for the remainder of this year and into 2012. “It’s a great opportunity to purchase a property with financing at very favourable rates,” he said. CREA, however, expects the national average home price to rise 7.2 per cent in 2011 to $363,000 with Saskatchewan prices expected to average $255,000 in 2011 and $256,800 in 2012 – in line with CMHC’s estimates. CMHC expects housing starts to remain steady in 2011 and 2012 across Canada as well as in Saskatchewan. “Housing starts
Ceylon well producing Epsilon Energy Ltd. announces that a well drilled earlier in the year at its Ceylon project in Saskatchewan has been completed after delays due to weather and lease sales. It is a vertical Bakken discovery with initial production of 44 bbls of oil per day. The well is still stabilizing but appears to be settling at 25 bbls of oil per day with no water cut. This well produces from an unstimulated Bakken interval. Ceylon is a 13,440-acre block of contiguous acreage in which the company holds a 50 per cent interest. Spartan Oil Corporation owns the remaining interest and operates the project. The company believes much greater rates can be achieved in the project with horizontal drilling and fracture stimulation. A 3D seismic survey will begin shortly followed by a horizontal Bakken well prior to year-end. At the nearby Torquay project, Epsilon has tested a Midale discovery at an initial rate of 262 bbls of oil per day based on a 10-hour test. This Midale discovery was drilled oﬀ a proprietary 3D seismic survey. The survey shows multiple Midale and Bakken locations. Spartan is operator and owns 50 per cent of this well, with Epsilon Energy having the remaining 50 per cent.
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have been strong in the last few months, but are forecast to moderate closer in line with demographic fundamentals,” said Mathieu Laberge, deputy chief economist for CMHC. “Despite recent financial uncertainty, factors such as employment, immigration and mortgage rates remain supportive of the Canadian housing sector.” CMHC predicted housing demand in Saskatchewan will begin to pick up in the coming months due to a number of factors including higher commodity prices, improved oil and gas drilling and mining activity lead by the potash industry. Pressure to build more new homes will also be applied from continued population
gains and wage growth in the province and an unemployment rate of 4.5 per cent anticipated for 2012. Net migration to Saskatchewan is expected to surpass 12,000 in 2011 and 2012 adding further demand for new housing starts and MLS resales. Saskatchewan’s real gross domestic product is forecast to rise by 3.0 per cent in 2011 and by 3.5 per cent in 2012.
CREA forecasts national sales activity to reach 450,800 units in 2011, up less than one per cent from levels in 2010. CREA had previously forecast a decline of about one per cent for activity in 2011 nationally. National sales activity in 2012 is expected to ease seven-tenths of a percentage point to 447,000 units which is close to the 10 year average.
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PIPELINE NEWS October 2011
Chris Hawkes, Ph.D., is a University of Saskatchewan researcher looking into carbon capture and storage. File photo
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Saskatoon – The jury is still out on whether carbon capture and storage (CCS) is a viable option to help reduce harmful emissions from coal-ﬁred plants, but a new research project at the University of Saskatchewan hopes to have a verdict in three years. The project is being led by U of S engineering researcher Chris Hawkes, Ph.D., and will involve laboratory test-
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ing and the development of computer simulations to ﬁnd out how to inject carbon dioxide (CO2) deep underground and make sure it stays there. “What we have to do is emulate the conditions that exist in Earth’s subsurface,” Hawkes said. The project is supported by a $633,000 grant from Carbon Management Canada, a member agency of the Network of Centres of Excellence that supports research to radically reduce carbon emissions from the fossil energy industry. There are about 50 coal-ﬁred plants in Canada, each producing more than a million tonnes of the greenhouse gas per year. Oil companies in have been injecting CO2 into porous oil-bearing rock formations as an enhanced oil recovery (EOR) technique. With CCS, the aim is to use similar injection techniques to store CO2 underground indeﬁnitely, where it won’t contribute to global climate change. However, for this process to work, the porous rock needs to lie under a layer of impervious caprock that must remain intact. Hawkes and the U of S research group will
collaborate with other Canadian university researchers to help predict performance of these porous rock-caprock formations. “This unconventional approach brings together state-of-theart tools and methods from geomechanics and reservoir engineering and is expected to yield better, more powerful computer simulations,” Hawkes said. Hawkes’ work will involve studying rock samples collected from deep underground to see how they react to different conditions such as temperature change which can cause some rock types to crack. This information will form the basis for computer simulations to predict how injected CO2 might behave underground. These tools will allow assessment of potential CCS sites, from deep saltwater aquifers to mature oil reservoirs, and point to the most eﬀective injection methods. “These enhanced tools are badly needed to determine whether underground CO2 storage is a viable and secure option that can be scaled up to play a signiﬁcant role in managing global emissions,” Hawkes said.
PIPELINE NEWS October 2011
Saskjobs.ca visits set a new record in August Regina â€“ Saskatchewanâ€™s online jobs site, Saskjobs.ca should be included as a provincial tourist attraction. The site has become a job seekersâ€™ landmark with 834,172 visitors in August chasing a record 16,084 job postings that month. Since January 1, 2011, there have been more than 6.7 million visits originating from more than 215 countries and territories around the world. The site remains on target to surpass the record of 8.8 million hits in the 2010 calendar year. Jobs were posted in 349 communities with the single largest increase in job orders in the southeast corner of the province. Estevan landed 1,032 postings in August, an increase of 26 per cent from July 2011.
Of the 16,084 jobs posted to Saskjobs.ca in August, postings for trades, transport and equipment operators represented 32 per cent of all available jobs (95 per cent increase over August 2010). Thirty per cent of the positions posted were in the sales and service category and more than half of the positions posted were for vacancies outside of Regina and Saskatoon. The 16,084 jobs posted represent a 56 per cent increase from August 2010 and a 29 per cent rise over July's numbers. The August monthly total exceeded the previous all-time high of 15,449 position postings set in April 2008. More than 10,000 jobs in the August postings were for full-time positions.
â€œAugustâ€™s numbers mark another clear indication of our economyâ€™s strength,â€? said Advanced Education, Employment and Immigration Minister Rob Norris. â€œWith both the number of job postings and number of visits to the site increasing, Saskjobs.ca serves as a critical tool in connecting employers with job seekers, as we meet the needs of our growing labour market.â€? Saskjobs.ca is Saskatchewanâ€™s largest job-matching website. The site provides job posting services free of charge for employers across the province and free resumĂŠ posting services for job seekers around the world. In mid-September there are more than 10,000 jobs posted on the website.
Euros get birdâ€™s-eye view of oilsands Edmonton â€“ A 10-person European delegation recently spent a day visiting the Athabasca oilsands region by air, road transport and on foot. The visit was outlined in a Sept. 14 posting on the Alberta governmentâ€™s â€œYour Alberta Blogâ€? by International and Intergovernmental Relations. The delegation included members of the European Parliament (MEPs) from Hungary, Ireland, Luxembourg and Poland, and was part of a mission organized by the European Energy Forum, an organization that brings together MEPs and others who want to stay informed about energy-related issues. It was the second EU delegation and repeated the success Alberta has consistently had with allowing policy and decision makers to see the reality of the oilsands ďŹ rst hand. â€œWe learned a lot, thatâ€™s the most important thing in helping us make decisions,â€? said Edit Herczog of Hungary. The site visit began with an airborne approach to Fort McMurray. From 20,000 feet, the delegation had a panoramic view of the oilsands region in the context of acres and acres of boreal forest and lush greenery. Delegates landed at the Shell/Albian Aerodrome, and began their tour at the siteâ€™s truck shop, where they climbed aboard a 400-ton Caterpillar 797B heavy hauler truck. Then it was oďŹ€ to the Jack Pine and Muskeg River Mines, where production has grown from zero to 255,000 barrels per day in less than a decade. Following the visit to Shellâ€™s operations, delegates saw the reality of reclamation up close at Gateway Hill â€“ 104 hectares of green grass and forestry that
marked Syncrudeâ€™s ďŹ rst certiďŹ ed piece of reclaimed land. The ďŹ nal stop was ConocoPhillipsâ€™ Surmont Phase 1 in situ facility. The delegation received an overview of the process that in, a nutshell, uses one pipe to heat and liquefy the bitumen with steam, and another which collects pipe and brings it to the surface. Delegates had a lot of questions for their hosts in regard to this less invasive way to produce oil. â€œIt was extremely important to see these operations,â€? one delegate said. â€œItâ€™s the best way for us to legislate.â€?
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Fogo Energy inks deal with Onion Lake Calgary, Alta., Onion Lake First Nation â€“ Onion Lake Energy, an oil and gas entity of Onion Lake First Nation, has entered into a joint venture deal with Fogo Energy Corp. to begin oil and gas exploration on reserve lands located 50 kilometres north of Lloydminster. Calgary-based Fogo Energy joins Black Pearl Resources Inc., CNRL and Nuvista Energy Ltd. among the list of companies with oil and gas operations with the Onion Lake Cree. Fogo Energy is a privately funded oil and gas company whose primary focus is the joint venture with the Onion Lake Cree. â€œWe've partnered with industry to create opportunities for our membership and future generations. We are delighted to be partnered with Fogo Energy and look forward to many opportunities in economic development through this successful venture,â€? said Chief Wallace Fox in a statement to the media. Onion Lake Energy has been in operation since 2003 and has more than 400 producing wells to its credit.
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PIPELINE NEWS October 2011
Oilpatch support critical for Estevan’s new arena
Participating in the ribbon-cutting of Spectra Place are, from left: Kelly Lafrentz, reeve, RM of Estevan; Ed Komarnicki, MP, Souris-Moose Mountain; Bill Hutchinson, provincial minister of Tourism, Parks, Culture and Sports; Gary St. Onge, mayor of Estevan; Doreen Eagles, MLA for Estevan; Pastor Stewart Miller, Trinity Lutheran Church who gave the invocation and Roy Ludwig, councillor, City of Estevan and chairman of the Spectra Building Committee. Photo courtesy of Estevan Mercury
School children and the Estevan Bruins take to the ice at the new Spectra Place. Photo by Brian Zinchuk
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holding its grand opening on Sept. 16, one thing was clear – the support of the oilpatch was key to the success of the project. “Nothing happens in Estevan without the involvement of the community,” said Estevan city Councillor Chris Istace. “You had oil companies that allowed employees to volunteer their time in sweat equity.” The committee backing the rink was formed in 2006. Since then, they raised $8 million in funds. Com-
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bined with $5.1 million in federal funding and $8 million in provincial fundraising, the City of Estevan got a $23.5 million facility with just about one tenth of the total cost coming directly from local taxpayers’ pockets. That was a “small price to pay,” according to Estevan Mayor Gary St. Onge, in his remarks during the opening ceremonies. A good portion of that $8 million raised was through naming rights, most of which was raised from the local business community. Indeed, some of those business people, active in the oilpatch, could be found seeking out the seats with their names on them, after the ribbon-cutting. RM of Estevan administrator Greg Hoffort told Pipeline News the oilpatch’s support had a major impact. “From my perspective on the planning committee, it was huge,” he said. “It certainly helped achieve what we wanted to achieve.” One of the most successful fundraising efforts was the sports dinner committee, who were able to attract the likes of hockey greats Brian Burke and Steve Yzerman to attend their annual gala events. That committee was composed of Ray Frehlick, of Prairie Mud and Prairie PetroChem, oilpatch lawyer
Barry Bridges and Ron Areshenkoff, whose financial planning business is highly active in the local oilpatch. Kim Anderson, who headed up fundraising efforts, said oilpatch involvement was “absolutely critical. “Just the amount, and the ease of which, when requested for funds, the answer was yes,” he said. “Their intent was to have a facility in Estevan that would draw workers to Estevan,” Anderson said. Of the $8,150,000 raised, “better than 50 per cent was from the oilpatch,” he said. There are too many donors to name, for fear of missing someone. “It’s quite a list, from small to large,” he said. Of the 24 corporate boxes which have a $50,000 price tag for 10 years (but do not include event ticket prices), probably half went to the oilpatch. Regarding the sports dinners, whose auctions even included a pumpjack, Anderson said, “They not only brought funds, but really high profile individuals to the community Garry Bettman, Steve Yzerman, Brian Burke.” “I want to emphasize the appreciation for the oil industry and what they’ve done for this community and this area,” Anderson concluded.
PIPELINE NEWS October 2011
The day is done
things other than his work. Longfellow died in 1882 and I found it fascinating that 130 years after his death, we are still struggling with One Woman’s Perspective on the work/life balance. Life, Liberty and the Pursuit of Later that afternoon, Land Locations my husband surveyed By Nadine Elson the kitchen. “So what did you do today?” he It was pitch black That my soul cannot asked. He had ﬁgured outside. I had been up for resist: out that supper was not hours to make a delivery A feeling of sadness in the oven. to a lease more than 225 and longing, Defensively, I rekilometres from home That is not akin to plied, “Well, I wasn’t lyfor 6 a.m. It had been a pain, ing on the couch eating wet few weeks and this But resembles sorrow bonbons!” using an exday was beginning no only pression from my youth. diﬀerently. As the mist resembles It was a metaphor for After making the the rain. slothfulness. The poem delivery, I got into my I heard this so of- ﬂashed into my mind. truck for the return trip ten as a child that I too I would have liked to home. could recite it, and did have said to my husband The windshield years later, as an adult in the words of Longfelwipers whooshed out with my own family, as low: a comforting rhythm we approached our “vilCome, read to me some and, after 30 minutes of lage” on wet and stormy poem driving, the lights of the nights. Some simple and village ahead began to Hitting a pot hole heartfelt lay, sparkle through the dark in the road, my reverie That shall sooth this mist. Memories ﬂooded ended abruptly, and I restless feeling, my mind and I was im- returned to the present And banish the mediately transported with a thud. “I see the thoughts of day. back to my childhood. lights of the village…” Really! I would have We were making one of I began reciting. As I liked to have said that. our numerous trips by drove, I realized that But I didn’t. I looked car either to, or from, I knew nothing about at the Spanish proverb the family farm, a ﬁve these verses, as in who that hung on the fridge. hour drive north from had penned the words “How beautiful it is to our home in Estevan. and why. do nothing and then rest As such, we were nearly When I got home, afterwards.” always arriving there, or I did an internet search It had been an exhome, in the dark, and and found out that the ceptionally long day. It very often during a rain verses were part of a had started at 3 a.m. or snow storm. longer poem called The There was still house As the lights of our Day is Done by Henry destination pierced the Wadsworth Longfelwet darkness, my father’s low, an American poet voice would break the of the 1800’s. The poem silence, and he would describes the feeling of recite, dramatically, with fatigue and exhaustion the windshield wipers we feel at the end of a keeping time like a met- diﬃcult and trying day, ronome: and how the poet tries to I see the lights of the relax. Could I ever relate village to that! Gleam through the Longfellow speaks rain and the mist, in the poem of being And a feeling of sad- mentally spent and of ness comes o’er me his need to focus on
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PIPELINE NEWS October 2011
Build permits soar, feds chip in house money Regina – News that Saskatchewan’s latest building permit numbers for July 2011 skyrocketed 85.7 per cent over July 2010, the highest increase in Canada, follows on the heels of a $55 million federal-Saskatchewan investment program in new aﬀordable housing in the province. “Saskatchewan is leading the country as our construction workers are stepping up to build new homes for families and new spaces for entrepreneurs to do business,” said Enterprise Minister Jeremy Harrison about the permit numbers. “With more jobs available and high business conﬁdence, it’s not surprising to see such strong housing demand and construction activity in the commercial and industrial sectors.” Building permits were up by 11.6 per cent on a national basis on an annual comparison. Saskatchewan’s residential permits were up by 88.5 per cent and non-residential permits rose by 83.4 per cent over the same period. Regina ranked fourth among major Canadian cities as permits increased by 155.7 per cent between July 2010 and July 2011. Saskatchewan’s new $55 million aﬀordable housing agreement with the federal government stems from a recently announced Investment in Aﬀordable Housing 2011-2014 Framework Agreement between the federal, provincial and territorial governments. The housing agreement was announced Sept. 6 two days before the release of the building permit numbers for July.
The housing framework recognizes that a range of solutions – from existing programs to new approaches – is most eﬀective in meeting local needs and priorities. The province will cost-match the federal funding and deliver provinciallydesigned housing programs. The agreement provides the Saskatchewan government with the ﬂexibility to make investments to achieve the overall objective of the framework: to reduce the number of Canadians in housing need by improving access to aﬀordable housing. Initiatives can include new construction, renovation, homeownership assistance, rent supplements, shelter allowances, and accommodations for victims of family violence. Under the new agreement the Saskatchewan government will use the funds to create new and renovate existing aﬀordable housing for households in need.
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PIPELINE NEWS October 2011
PIPELINE NEWS October 2011
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PIPELINE NEWS Saskatchewan’s Petroleum Monthly
B-Section October 2011
Joan Gobeil, left, and Doug Rogers head up Terra Developments Inc. of Regina, a company which has an ambitious multifamily housing development in Weyburn, along with two in Yorkton. Behind them are eightplex rental apartments. Photo by Brian Zinchuk
Cities eager for multi-family development Story and photos by Brian Zinchuk Weyburn – New multifamily units are coming up quickly in Weyburn’s northwest corner. That’s possible because because these modular units are put together like Lego. Terra Developments Inc of Regina is behind the project. The company has $1.1 million in backing from PFM Capital Inc. (see story page B3), as well as a “group of others.” Doug Rogers and Joan Gobeil are co-owners of Terra Developments. “In Weyburn speciﬁcally, we’re doing some housing and rentals,” said Rogers. “We do similar work in Yorkton and Regina. In Regina, we do land development as well.” As for other communities, he noted, “It’s just the two of us. We can only handle so much.” The Weyburn development comes at a time when housing is in short supply in southeast Saskatchewan, especially rental apartments.
“We bought the parcel there two years ago,” Rogers said. “A friend of mine, who does a lot of work in Estevan, asked me to take a drive with him. We check out some land he had in Weyburn.” “We bought a former school site here in Weyburn, the former Elgin School site.” Buying former schoolyards has become something of a habit for the pair. They’ve also bought two in Yorkton, the former Fairview School and C. J. Houston Junior High properties. “They’ve got a shortage of housing in Yorkton as well,” he said. Asked why develop former schools, Rogers explained they typically have good availability of infrastructure around them and are surrounded by other housing. “Cities are more than willing to work with you if you’re building rentals,” he said. “The city of Weyburn is anxiously looking to get more multi-family. They’ve been nothing short of amazing.” Terra met with the city in September to discuss incentives for building, incentives the builder would pass onto buyers.
In Weyburn the former school is now a daycare. The playground around it has since become residential development. Two eightplex modular apartment buildings have already been completed, and two more are in the ﬁnishing stages. The third should be occupied in October, and the fourth in November. They went up quickly due to modular construction. Each building came in eight modules, although not in the way you would expect. Each module makes up part of two units. “They’re stacked, we put the roof on and shingle. It should take, in a perfect world, six weeks once they’re here.” “The reason we went to modular is it’s too difﬁcult to attract trades,” Rogers said, adding tradespeople are mostly centred in larger cities like Regina and Saskatoon. “These modules came from South Dakota,” Rogers said. “They’re now extremely busy in North Dakota.” ɸ Page B2
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PIPELINE NEWS October 2011
Oilpatch forced into housing market
The apartments include built-in microwave, fridge, stove, washer and dryer.
Left: Doug Rogers shows where two modules are joined inside an apartment under construction.
ɺ Page B1 As a result of that level of activity and frustrations bringing modules across the border, there has been an amicable parting of ways, and a new builder just north of Edmonton will be doing the next phase. “It’s a diﬀerent product. It’s actually an apartment block,” Rogers said on mid Sept. “We’ll be launching that in six to eight weeks.” That launch includes marketing and scratching dirt. “We’ll be putting up three 12-suite apartment blocks as condominiums, for a total of 36 units,” he stated. Each will be two bedrooms, with 850 square-feet. The ﬁnishing will be a little better quality as well. The average price will be $209,500 plus GST. “Phase 1 was designed as rentals. We
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thought our target market was two guys in the oilpatch, so we did two bedrooms and two baths. The condos will be two bedrooms, one bath.” Terra will be acting as landlord for the rentals. “We ﬁrst started as landlords 20 years ago. That’s all we were,” he said. Back then, banks would hire them to take over nearly derelict buildings and rehabilitate them. “All over Saskatchewan, wherever the banks said ‘go,’ we went,” Rogers said. As for renters interested in their properties, he said, “When they phone [asking] to rent, an amazing amount is from Alberta.” “A city can’t grow without rentals. When they show up, where are they going to be living?” While they thought oilpatch workers would be the obvious clients, the result has been more across the board, from service trades to health care workers, seniors, and yes, some oilﬁeld workers. There is a mixture of singles and families, but more singles in general. Most units are occupied with at least
two people. Some even triple-up. The rents for the eightplexes are set at $1,250 a month. “The investors say the Weyburn area as a good area with lots of growth. They see and feel there will be capital appreciation.” Indeed, Rogers said, “We could probably go into any centre in the province and build.” Century West Development is acting as builder on the project. The oilpatch is being forced into the housing market, Rogers said. “Business doesn’t always have to get into the bricks and mortar,” he said. On the eightplexes, for instance, he said, companies could guarantee the rents in exchange for right of ﬁrst refusal for employees. Rogers’ younger brother recently retired as a vice-president with Fort McMurray powerhouse Suncor. In explaining Suncor’s ﬂeet of aircraft that brings in workers to its operations, the brother said, “We’re not in the airline business because we want to be, but because we have to.”
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PIPELINE NEWS October 2011
Randy Beattie, president/CEO of PFM Capital. All photos submitted
Rob Duguid, vice-president of PFM Capital
Jason Moser, senior investment manager with PFM Capital
PFM invests heavily in Sask. oilpatch By Brian Zinchuk Regina - Regina-based PFM Capital Inc. is one of a select few players who operate a mutual fund in Saskatchewan for Saskatchewan residents. Such funds exist to encourage private equity investment, and as such, are very tax eﬃcient for individuals investing in these funds. SaskWorks Venture Fund Inc., PFM’s largest fund with over 22,000 Saskatchewan shareholders, in addition to
the normal RRSP deferral, is eligible for a 35 per cent tax credit (20 per cent provincial, 15 per cent federal). To keep the tax credit, investors must remain invested for eight years. Randy Beattie is president/CEO of PFM, while Rob Duguid is vice-president of investments and Jason Moser is a senior investment manager with a focus on energy. PN Who are you?
RB: PFM Capital Inc. is Saskatchewan’s largest private equity ﬁrm. We manage over $414 million amongst 6 funds. We manage a number of funds including the province’s largest labour sponsored fund (SaskWorks Venture Fund - Diversiﬁed and Resources share classes) and a number of private limited partnership funds (APEX being the one which is still actively placing capital). ɸ Page B4
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PIPELINE NEWS October 2011
Waste disposal, oil & gas producers, and real estate ɺ Page B3 PN: What do you do? RD: Through debt and equity instruments, we invest in Saskatchewan-based companies or companies with a signiﬁcant presence in Saskatchewan. Since inception we’ve placed $366 million in 87 portfolio
companies. We focus on providing capital for expansion/acquisitions/ growth, restructuring/ turnarounds or management buyouts. While not exclusively restricted to these sectors, we predominantly focus on the following sectors: oil and
gas, manufacturing, real estate and agricultural value added. Once invested, we continue to add value in many diﬀerent capacities; on the board, facilitating introductions to prospective clients/ customer, helping to secure senior debt ﬁnancing, strategic direction,
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ﬁnancials, acquisition support, etc. PN: What is your involvement in the Saskatchewan oil patch? JM: We help facilitate start-ups, acquisitions and turnarounds and have been in the sector since the ﬁrm’s inception. In many cases we are the sole institutional investor involved in the investees that involvement provides capital required to implement a drilling program for producers, expand the number of drilling/ service rigs for drillers, or pursue internal/external expansion for other service providers. With many of our investments in this sector and others, we very often do follow-on investment activity which allows for subsequent expansion if required to continue creating value. Collectively we’ve had direct and indirect exposure to the sector in previous work experience as well. PN: How much of your portfolio is in oil and gas, i.e about 30 per cent and or dollar value? Why that level? RD: Thirty-three per cent of our portfolio is in the oil and gas sector and $68 million at cost/$91 million at market. Aside from SaskWorks Resources – our other funds are diversiﬁed so this allocation allows us to provide capital to other sectors in the province and allows investors/shareholders exposure to oil and gas along with these other sectors.
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CanElson Drilling Inc. has seen a total of $6 million invested into it by PFM Capital.
SaskWorks has two diﬀerent share classes – diversiﬁed and resources. Diversiﬁed has exposure to oil and gas along with exposure to all the other sectors we are invested in (real estate, manufacturing, agriculture, etc.) whereas the resources class has exclusive exposure to the resource sector. The end result has been positive for both investees and shareholders of our funds as collectively we have realized $63.6 million of gains on $89.3 million invested. PN: Which sectors of the patch service, producers, etc.? About how much is your investment for each in dollars? RD: Oil and gas production is $36 million (at cost). Oil and gas services is $23 million, with alternative energy at $7 million and retail energy at $2 million. PN: Which companies for example? JM: Rotex Energy Ltd., which has a $6.0 million total investment is our ﬁrst exposure to the oilﬁeld waste disposal sector and an area we have had interest in for some time. We like the existing economics of the sector and see those continuing for some time. Our investment into Rotex
fuelled its continued growth, and allowed for its acquisition of Plains Environmental. This investment allowed us exposure to an established entity with a 10 year track record, Plains Environmental, which has one of the only disposal caverns in the province, coupled with exposure to a newer facility in the most active corner of the province. That is the full service terminal at Willmar, Saskatchewan. There is much potential for internal and external expansion, we believe Triwest Exploration Inc., which has a $6.0 million total investment and is a southeast Saskatchewan-focused exploration and producer company, is another. This was our ﬁrst investment with the management team – although the fund manager was familiar with the team from involvement with other investments. The management team has a solid track record and is well regarded in the province. Predominantly growing through the drill bit, but also coupled with strategic acquisitions, they have created signiﬁcant value since inception. All assets are in the southeast corner of the province. ɸ Page B5
PIPELINE NEWS October 2011
Succession strategies needed for retiring owners ɺ Page B4 TriWestern Energy Corp., is a west central heavy oil producer which we have $4.06 million total investment in. The improved diﬀerentials have made the economics of heavy oil attractive. The short horizontal wells allow for good returns on less capital which means value can be created on relatively small equity raises vs. what is now typically seen in southeast Saskatchewan, approximately $15 million to $30 million. PFM introduced the CEO to the other members of the management team and we’re happy with the prospects of this company. PN: What are your thresholds for investment, i.e. percentage ownership, ownership structure, minimum and maximum investments, timeline? RB: We don’t have explicit ownership percentage targets, but typically we’ll be less than 50 per cent which allows for management and other investors to have a meaningful stake in the company as well. Twenty to 40 per cent would be an approximate range we’re often in. If the situation dictates that greater than 50 per cent is required at inception, we’ll often try to create an earn-up structure for management so that if certain performance hurdles are met they can earn us down. We like to invest on the same terms as management and create incentives to reward them on the back end of a successful exit or liquidity event that has beneﬁted all shareholders. We will not be involved in day-to-day operations but will offer our assistance when required and will have board representation when our collective investment warrants and/
or we can bring value to the company. Our bite size is from $1 million to $20 million, although we’d generally look at an initial investment below that ceiling if there is a likelihood of follow-on activity. We are fairly patient investors and have an exit horizon ﬁve to seven years out, although typically most E&P producers will pursue a liquidity event within two to four years. PN: When an oilpatch company comes to you for an investment, what are the most important factors in your decision to go/no go with them? JM: Regardless of sector, likely the most important factor is the strength and breadth of management. We like to see a track record of success through various phases of a commodity cycle and continuity with the same team. We’ll also want to see management have a meaningful investment in [the company] alongside us, at similar terms. Some producerspeciﬁc things we would look at are the competency of the entire team (land, engineering, geophysical, operational, and ﬁnance), economics of the particular play they are involved in, land availability, and ultimately, if it possesses the characteristics that we think will appeal to prospective buyers. Some service speciﬁc things we would look for is the depth of management (ensuring that the revenue is not totally reliant upon one or two individuals), as much client diversiﬁcation as possible (recognizing there is a small number of producers that dominate production and drilling in some areas of the province), and the ability to attract and retain employees.
It is important to note that just because we may decline a particular investment at a particular point in time does not mean that the situation could not evolve and an investment could ultimately be consummated. That has occurred with several investees over the years as we took the time to follow the progress of the company and maintained the lines of communication. PN: Do you get a lot of oilpatch interest? RD: We do have a fairly steady stream of oilpatch deal ﬂow either from investment banks, brokers, through existing/past investees, and just through direct inquiries. We welcome any inquiry and will take the time to thoroughly assess each prospect and get back to prospective investees in a timely manner with a response. PN: What sort of exit strategy, if any, do you look for? Have you exited any oilpatch companies yet? How did that work out? JM: Depending upon the situation, we may explicitly implement a put/call provision which enables us to exit the company within speciﬁed time frame and management to buy us out, or we may not implement an explicit exit mechanism and will collectively decide with management/other shareholders the optimum time frame to exit. We and our investees realize that an exit is a fairly ﬂuid timeline – it’s a function of market dynamics and the current/future prospects of the company. If a company can continue to create value and access the capital required to create that value then
everyone is happy continuing the investment. In virtually all cases, operating as if the company will exist in perpetuity is a good strategy and a sale will materialize if things are run properly and the market conditions are favourable. Where we haven’t implemented a put/call provision – the typical acquirer would be a public oil and gas producer or service provider. We have exited numerous oil and gas companies and collectively have realized substantive returns for our funds. Some of the most recent exits we’ve had in have been public oil and gas companies whose stock we acquired when previous investees were sold, i.e. Crescent Point and Legacy. PN: Housing, or lack thereof, is a major limiting factor for the oilpatch in recent years. Are you involved in housing investments or developments? RN: We do have a sizeable exposure to real estate amongst our funds. We are invested in Elgin Developments LP which has completed the construction of Phase 1 (32 units) of a condo de-
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sector we like (liquidity, quality and quantity of prospective deals/management teams, good risk adjusted returns, and macro outlook for the sector) and therefore we anticipate being active in the space for a long time. RB: We have successfully implemented management buyouts recently and believe there could be a large number of independently owned service providers retiring shortly, so we encourage those owner/operators to think about succession planning and contact us if they’d like to discuss it further.
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velopment in Weyburn. Terra Developments is the managing partner of this project. We are interested in similar developments throughout the province. (See story on page B1) PN: Is there anything you would like to add in conclusion? RD: We think our involvement in the sector has been mutually beneﬁcial to both investees and our investors and we believe we have helped create a lot of wealth, employment and other economic activity in the province. JM: There are a lot of attributes about the
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PIPELINE NEWS October 2011
Researchers to test new system for monitoring CO2 Capturing and storing carbon dioxide underground is seen as a viable way of reducing the levels of atmospheric carbon and researchers are working on new methods to verify that the compound is securely stored. In a lab-to-ﬁeld collaboration headed by Peter Wild, an engineering professor at the University of Victoria, researchers are pioneering the ﬁrst ﬁbre-optic system designed to monitor CO2 at underground storage sites. Monitoring, measuring and verifying what becomes of injected CO2 over the long term is diﬃcult because of harsh environmental conditions, combined with the deep location and size of the storage sites. Since salt water and other ﬂuids stored underground are aﬀected by the presence of stored CO2, Wild plans to use arrays of specialized ﬁbre-optic sensors to measure this impact. “Through this method we hope to better determine if CO2 is being stored safely or if it’s moving or leaking,” he said. The three-year project will begin in the lab, then shift outdoors for ﬁeld tests of the sensor system, ﬁrst in shallow ground, then in deeper environments. The goal is to create a system that could be placed underground near CO2 injection sites or overlying storage formations. The project is supported by a $983,578 grant from Carbon Management Canada (CMC), a Network of Centres of Excellence that supports game-changing research to eliminate carbon emissions from the fossil energy industry. The grant is part of CMC’s Round 2 competition, which saw 18 projects in Canada receive a total of $10 million. University of Calgary geophysicist Don Lawton is the CMC lead for Secure Carbon Storage projects and a collaborator on the CO2 sensor project. “Veriﬁcation of secure storage is in the public interest and will be required for commercial projects before a closure certiﬁcate will be issued by the government,” he said. In designing a new system to monitor CO2 concentrations, Wild and his collaborators will make use of patented ﬁbre-optic technology, developed at UVic, as well as patented techniques to measure CO2 ﬂuxes, developed by the St. Francis-Xavier University’s “Flux Lab,” which is headed by David Risk, an
assistant professor in the university’s Department of Earth Sciences. Collaborating with Wild’s own ﬁbre-optics research group at UVic’s Institute for Integrated Energy Systems (IESVic) are experts in environmental monitoring, nanofabrication and micromachining, as well as petroleum engineering. Mechanical engineer David Sinton, formerly of UVic but who now works at the University of Toronto, is one of Wild’s collaborators. UVic investigators on the team include mechanical engineer Martin Jun as well as UVic students. “It’s a complex problem with lots of dimensions to it,” said Wild, stressing that only an interdisciplinary approach could make the project a success.
LandSolutions secures geothermal rights LandSolutions LP announced Sept. 21 that it continues to expand its land services through a recent project associated with DEEP Earth Energy Production Corp. as it relates to geothermal energy production. LandSolutions will be providing land expertise for a new geothermal project that DEEP plans to develop in southeast Saskatchewan over the next two to three years. “The power generation potential is enormous and we are happy to be the company of choice providing our services to a leading-edge company such as DEEP,” Ron Vermeulen, president of LandSolutions, said in a release. This is the ﬁrst project of its kind in Saskatchewan and one of only a few projects being developed in Canada of this size. DEEP has entered into a memorandum of understanding with an intermediate oil and gas producer for exclusive rights to explore deep (i.e. Winnipeg and Deadwood formations) non oil-bearing hot brine aquifers in southeast Saskatchewan for potential geothermal resource development.
PIPELINE NEWS October 2011
A one-two punch for housing By Brian Zinchuk Estevan – The company that began making shipping containers into camp accommodations is now getting into providing camp services as well. 3twenty Solutions Inc, which came to prominence after an appearance on CBC’s Dragon’s Den early this year, has teamed up in a joint venture with Summit Living Solutions to tackle some of the housing shortage issue in Saskatchewan. But perhaps more importantly, Summit Living Solutions’ strategy isn’t just temporary accommodations, but a one-two punch combination. They start with a quick jab of camp accommodations, followed by a right hook of permanent condominiums. It appears they have landed their ﬁrst big punch in Estevan, where the RM of Estevan gave approval on Sept. 19 for a new camp, subject to their receiving a development permit. “3twenty is in the business of selling camps. We realized there’s a huge need for servicing and providing world-class food and hospitality service, along with the best beds and accommodations,” said Bryan McCrea, president of 3twenty. After meeting with two other companies, Summit was born. Peter Molander is the CEO of Summit, while McCrea is the chief ﬁnancial oﬃcer. Addressing the “shadow population” issue, which has become so prevalent in Fort McMurray, has become the basis of their business model, according to Molander. First they use a camp to deal with an inﬂux of workers, but then take on a more permanent solution. “Looking at Fort McMurray is a really good example of what not to do,” Molander said. “How do you ﬁx this problem?”
Their solution lies in working with the energy play, but building a portion of the accommodations into permanent, multi-family housing. “It creates a future,” Molander said. For instance, the construction phase of a project may require accommodations for 300 men. But once it is in operation, only 50 to 75 permanent units may be needed. In Fort McMurray, for instance, housing for construction ends up being production housing. But that also means that these permanent production workers don’t bring their families, and don’t put down roots in the community. They become the shadow population. This is the case in the Imperial Oil Kearl project (see related story, page C23), where the workforce is anticipated to be a camp population for the decades the mine is in operation. Molander points to a September 2011 article in Oilweek, in which Regional Municipality of Wood Buﬀalo Councillor Dave Kirschner said, “We want to attract those people to live in our community. Those work camp people come into Fort McMurray and use our services, such as bars and restaurants, but they also put a strain on our justice system and leave litter behind. If you don’t live in a place, you don’t have a stake in its future.” “These guys should be living in their own homes, with families,” Molander said of the Fort McMurray situation. Permanent housing is also attractive to municipal governments, as it provides an immediate tax base for the community. “Most of these towns are broke,” Molander said. ɸ Page B9
Bryan McCrea displayed the exterior of a 3twenty Solutions module, made out of a shipping container. File Photo
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PIPELINE NEWS October 2011
Security, paved road access favoured by RM ɺ Page B7 The solution can be a combination of ready-tomove modulars or stick-built housing, he explained. It’s something they’ve already done. The company is just ﬁnishing up 14 condo units in Leroy, Saskatchewan, near the new BHP Billiton Jansen Lake mine. It’s the closest town to the minesite. From a lending perspective, Molander pointed out it’s hard to get banks to fork out money for short-term construction activity. “They’ll only base them on production people, so you can’t ﬁnance it,” he said. McCrea said, “There is a need for temporary accommodations to accommodate peak numbers, but let’s help satisfy peak and permanent needs. “It creates a sense of permanency in a town,” Molander added. Estevan camp Summit’s ﬁrst big project is lined up for Estevan. It’s what McCrea termed a “worker village.” The RM of Estevan recently turned down an application for another camp, and initially turned down Summit’s proposal. But they revised it, addressing the RM’s concerns on road maintenance and security, and have now received conditional approval. In particular, the location, being on the paved Shand Road in the Frontier Peterbilt Industrial Park, means the RM will not have to deal with beat up roads, as has occurred with the other camp in the area, according to RM administrator Greg Hoﬀort. Having a security presence goes a long way to addressing policing concerns with such a large inﬂux of people at a time when the RCMP in the area already “spread too thin.” “They’ve come up with a pretty good plan,” Hoﬀort said. This new camp will be substantially diﬀerent than the existing camp run by a major competitor, according to McCrea. He forecast it would be “a new level of camp experience.” “We’ve got people involved with resort living,” he said, noting they produce “world class” meals for a lodge in Fernie, B.C. In particular, each unit will have its own private bathroom. In addition to on-site security, there will be an on-site emergency medical responder. The plan is for 250 beds, composed of approximately 125 modules built by 3twenty Solutions. It will have a central dining and recreational area, although McCrea noted the common areas may not necessarily be containers. Even so, this is the biggest order by far for 3twenty Solutions, which recently moved into a larger production facility. McCrea forecasts they will need to add another 10 production people, up from their total staﬀ of 15 right now. Molander said of the camp, “By spring we’ll see
Bryan McCrea shows off the bed in a display model of the 3twenty Solutions’ modular housing units at the Weyburn Oil Show. File photo
the doors open.” McCrea said they will be talking to all the big local players around Estevan, and in particular, SNCLavalin and its subcontractors. SNC is the general contractor for the SaskPower Boundary Dam Unit 3 carbon capture project, which is expected to require over 600 workers at peak times of construction.
“Now that our plans are being formalized, we’re ﬁrming up our contract for the guests of our worker village,” McCrea said. The next step is to approach the City regarding condominium development and to identify potential land, the follow-on component to their business strategy.
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PIPELINE NEWS October 2011
Estevan responding to housing crunch By Brian Zinchuk Estevan – The explosive job growth in Estevan and area is fuelling a housing crunch in the Energy City, where aﬀordable housing is extremely diﬃcult to ﬁnd, rentals are at a premium, and developed land ready to build on is in short supply. It’s something Estevan city manager Jim Puﬀalt is keenly aware of. “There are 1,200 jobs on the SaskJobs website. I know there’s another 500 to 600 jobs that aren’t advertised. There’s no place to live. It’s limiting the growth in the area,” he said. “It’s an issue right across the board. Anyone in the oil and gas area is tough sledding,” Puﬀalt said of other communities in the region. As the service hub for southeast Saskatchewan and southwest Manitoba’s oilpatch, Estevan is not only the centre of the action, it is also
The City of Estevan will develop this area, behind the hospital, into residential lots.
feeling the most pressure when it comes to housing. Numerous recent arrivals have told Pipeline News of their diﬃculties in ﬁnding housing, from electricians, engineers and frackers to senior management.
“We just opened up 24 lots. We sold 18 in the ﬁrst day. There’s certainly pent-up demand,” Puﬀalt said. The City has been working closely with a developer, Essex Developments of Edmonton,
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to develop 120 acres on the northwest corner of the city, just north of the hospital. The concept plan for “The Meadows,” as the developer’s website calls it, includes 600 single-family dwelling residential lots, another 100 multi-family lots, and 20 commercial lots. The northern part of the area is planned for “more aﬀordable” housing. There will be room for approximately 3,000 people, according to Puﬀalt. Based on the most recent available Saskatchewan Health numbers, Estevan’s population grew by 14 per cent from 2009 to 2010, from 11,304 to 12,876, an increase of 1,572. There has been 21 per cent growth since 2006, Puﬀalt said. “We need to build at least 50 single family and 100 apartment units per year, easily,” Puﬀalt
said. There are 120 lots planned for The Meadows next year, but as of mid-September, dirt had not yet been scratched on the project. It’s the city’s ﬁrst private developer, Puffalt noted, and City Hall wants them to be successful. They are looking to have 26 lots available for later this year, if they can get them up, he said. “If he’s in the ground and successful, he brings a lot of production into place,” Puﬀalt said. Infrastructure had been a limiting factor, but the City will soon be building a new water reservoir and sanitary trunk sewer on its west side. That will eventually allow, in turn, another quarter section of land to the west with 140 acres to be developed. It could likely ﬁt 1,000 or so lots, according to Puf-
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falt, plus 50 to 60 commercial lots. The City will also be developing some lots on the backside of the hospital property, across the street from The Meadows. Along Highway 47 to the north, the City is looking at developing multi-family land, possibly next year, Puﬀalt said. That depends on demand for rental accommodations, of which he said there is no question demand for apartments is high. “We need to ﬁt [in] the multi-family. There are lots of entry level positions. They need the opportunity to ﬁnd out if they love the place. Most people do,” Puﬀalt said. He noted the typical life/housing cycle, where adults start out in rentals, get married, have kids, buy a small house, then a larger house, then ﬁnally downsize, often into a condominium. “We have about 200 units under construction right now,” Puﬀalt said of current housing starts. As for incentives, Puﬀalt said any construction gets full property exemption for the year of construction and the following year. Rental accommodations get ﬁve years abated. The province also has a $5,000 per door rental incentive for new construction, he said. The City matches this through the tax abatement. ɸ Page B12
PIPELINE NEWS October 2011
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PIPELINE NEWS October 2011
New hotels to spread like wildÂżre Éş Page B10 The City has had a moratorium on condo conversions since 2009 due to a lack of supply. The City was fearful of taking any rental units out of production, PuďŹ€alt said. Of one three-building apartment complex, two buildings are designated for condo sales, and the third is for rentals. â€œWe said one of those had to be rental,â€? PuďŹ€alt said. On Kensington Avenue, the City is working on another 76 unit rental complex, to be built on City land. Discretionary land use is one of the Cityâ€™s tools to shape development. â€œTheyâ€™ll be snapped up for condos in seconds. We said, â€˜no, they have to be rentals,â€™â€? he said. â€œThe free market dictates itâ€™s easier to build a condo, sell it, and youâ€™re done.â€? â€œWe have limited tools â€“ land and taxes,â€? he said of the cityâ€™s abilities to encourage rental housing development. â€œWeâ€™ll help out as much as we can. If weâ€™re to grow, we need to take a lead role.â€? Pointing to The Meadows, he said, â€œThis is enough for 3,000 people. If we have to go further, we will. Itâ€™s not an instant thing.â€? Asked about concerns that City Hall may be one of the holdups for development, PuďŹ€alt said. â€œWeâ€™ve done everything we can with the tools we have. Weâ€™re doing whatâ€™s possible with our resources. If people have questions, they should phone us and talk to us.â€? Up to ďŹ ve new hotels In the past two years, two new hotels have been built in Estevan, and a third, extended stay hotel, is nearly complete. But there are as many as four more on
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the horizon, according to PuďŹ€alt. â€œWeâ€™ve sold land for two more hotels, and weâ€™re in discussion with the developer for another extended stay hotel, plus another developer on King Street,â€? he said. Including the Suburban Extended Stay Hotel scheduled to open in October, that could be as many as seven new hotels since 2009. PuďŹ€alt expects construction to start on one hotel, a Microtel, this fall, and another next spring. â€œEverybody needs hotels,â€? he said. â€œYouâ€™re seeing a lot of activity in that area.â€? There are no camps in the city limits, but PuďŹ€alt noted at least two or three companies are looking in the area. â€œI think itâ€™s a necessary part of growth,â€? he said, but added itâ€™s more of an RM issue, due to the amount of land needed. Already there is a 200-bed Atco Lodge camp east of Estevan, and another 250-bed facility by Summit Living Services is planned nearby. On the commercial side, the Glen Petterson Industrial Park is about half sold. â€œThere should be stuďŹ€ happening this fall,â€? PuďŹ€alt predicted. The city is already in discussions with developers for the next phase.
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PIPELINE NEWS October 2011
Multi-family development the edge of Estevan. Most of the industrial buildings are truck or welding shops, pri-
marily for the oilpatch. On the residential side, the focus is on multi-family buildings.
â€œWe do condos and apartments. Very seldom do we do houses. É¸ Page B15
Take a break from your Bunk Bryan Hirsch stands before the new apartment condominium building Hirsch Construction is putting up.
Â„ Story and photos by Brian Zinchuk Estevan â€“ As a longestablished builder in one of the hottest markets in Saskatchewan, Hirsch Construction of Estevan is running full tilt. Hirsch Construction Ltd. is a family operation. It is owned by Garry Hirsch, and managed by his brother Bryan Hirsch. The two are partners in the companion business, Redriver Lumber, a local lumber yard. Bryan said they are very busy. â€œThereâ€™s lots of calls I have to turn away. I canâ€™t take them all. â€œWe do residential, commercial and industrial. The biggest part is
residential. Weâ€™re doing a 36-unit apartmentstyle condo.â€? â€œWeâ€™re about onethird residential, onethird commercial, and one-third industrial. Itâ€™ll change from year to year,â€? he said. The commercial crew is currently working on building a new Humptyâ€™s restaurant. The company also has its own strip mall on King Street, developed from a defunct school. They have adjacent property available for future development. They also have people working at Boundary Dam Power Station. â€œWe supply carpenters and labourers for the clean coal project for the
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PIPELINE NEWS October 2011
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PIPELINE NEWS October 2011
Former school site developed
Lyndon Kolke, left, and carpenter Mario Vilbrandt move a table saw in an apartment condominium building being built by Hirsch Construction.
ɺ Page B13 The 36-unit condo building, known as Hillside Condominium, is completely sold out, but in a unique fashion. It didn’t sell door-by-door, but rather ﬂoor by ﬂoor. “We sold one ﬂoor to a group of people, a second to another group, and the third to another group.” The intent of each of these groups of investors is to rent out the condos as apartments. Rents are expected to run in the $1,300 to $1,500 range per month. Two of those groups are local, and one is from Red Deer. There are one-, two- and three-bedroom suites available. If they had sold separately, Hirsch said the price would have been in the $130,000 to $160,000 range. Each unit has its own air conditioner and heater, as well as built-in appliances. “Every unit has its own washer, dryer, dishwasher,
fridge, stove, microwave/range hood built in,” he described. “To do these projects, they have to be feasible. Five years ago, you couldn’t get enough in rent to build these buildings. It’s the increase in rent that’s made them feasible,” Bryan said. City incentives for building deﬁnitely help the economic picture. “It makes it more attractive to investors,” he stated, adding it removes some of the caution. “It helps them make their mind up easier. “I think without incentives, we’d still be building. It makes it more attractive to do, however. The need is here, deﬁnitely.” Three decades ago the company built three different apartment buildings in Estevan and acted as landlords. They were eventually sold oﬀ. “It was enough,” Bryan said. “We went through a lot of years sitting at 40 to 50 per cent vacant. Everybody from Saskatchewan was going to Alberta. There wasn’t the demand. It’s changed now.” SaskPower and the local coal mines are constants, but the growth in the oilpatch is what has brought on the increase in demand. One of the company’s strengths is its long-term workforce. Ed Sinclair, Harold Tisdale and Garry Turner have been with them for over 30 years, for in-
stance. But they are feeling the strain of labour shortages, like nearly all businesses in the community. “Yes, we could use more, if you could ﬁnd them for us. I just hired a new guy a week ago. He graduated in June. He wants to be a carpenter. Not everyone wants to work on the service rigs,” Bryan said. There is deﬁnitely a shortage of building tradespeople, Bryan said. It helps to have strong relations with local subtrades, because that helps Hirsch in getting priority. The Hillside project is part of a larger development, where the company bought an old school ground and subdivided it. Other developers have taken part, building starter homes and duplexes, as well as another apartment building. Hirsch Construction held onto a portion for their own building. “We went in as partners with Century West in Regina. We demolished the school and split the land between us. We got 57 per cent.” The shortage of accommodations in Estevan was underscored by a visit to the Humpty’s site. Superintendent Harold Tisdale noted the roofer drove back to Regina that day, because they could not ﬁnd a hotel room. This was despite the fact the site is a stone’s throw from two new hotels.
Estevan Office: Phone: (306) 634-2681 Fax: (306) 636-7227
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PIPELINE NEWS October 2011
PIPELINE NEWS October 2011
New developments in Stoughton and Lampman
Rents for new apartments range from $1,500 â€œWeâ€™re getting a fairly nice mix of to $1,700 a month, Pylychaty noted. both new and existâ€œThere is overcrowding. There has to be, but ing residents. There I havenâ€™t seen it ďŹ rst hand,â€? she added. As for speciďŹ cs on whatâ€™s needed, Pylychaty are deďŹ nitely a lot said, â€œI think we need townhouses with a bit of a of new families.â€? While Realtors yard. AďŹ€ordable housing right now is $190,000 are primarily in the to $250,000. Ten years ago, $190,000 was conbusiness of selling sidered the max [for aďŹ€ordable housing]. Regarding camps, she said, â€œCamps are a housing, she noted, â€œWe get a number touchy subject. â€œWeâ€™ve been working with some companies of phone calls every week looking for as well, looking for a location. They have to work rentals. We point with the City and RM. Can the infrastructure them to landlords handle it?â€? Modular apartments could be an option for and revenue propthe community. erty owners.â€? Estevan â€“ â€œWe deďŹ nitely need more lots,â€? Pylychaty is involved with marketing severThose landlords are very busy, Pylychaty noted Lorna Pylychaty, owner and broker of al lot developments in southeast Saskatchewan pointed out, with phones ringing â€œlike crazy.â€? Estevanâ€™s Re/Max Progressive Realty. â€œThe new â€œSome apartment buildings I know have a communities. â€œIâ€™m working with a developer in city lots that opened yesterday, they sold 18 on Stoughton,â€? she said. waiting list.â€? the ďŹ rst day.â€? That project has gone through StoughPylychaty said it is very common to have a Two weeks later, there were only ďŹ ve lots number of people sharing accommodaleft. tions while working on rotations. â€œItâ€™s staying very busy. Prices seem to be stayâ€œWe need new housing. We need ing strong, but level,â€? she said of house sales. the high end, $5-$6-$7-$800,000, to â€œItâ€™s a mixed market, not favouring buyers or attract executives. But we also need the sellers right now. Some see it as a good time to middle of the road, blue-collar workers get out, but where will they go? in the $350,000 to $400,0000 range,â€? â€œThereâ€™s not a whole lot on the market availshe said, referring to new construction. able for condos except a new development not One local contractor has built apartavailable for possession yet,â€? she said. ments that will be available soon, she Asked who comes in her door, looking for noted. Another company built an adjahousing, Pylychaty said, â€œMostly young families cent apartment building, both of which coming in, looking of the $250,000 to $325,000 are on an old school site. â€œThose are goâ€˘ New & Remanufactured range.â€? ing to ďŹ ll up fast,â€? she said. â€œIf weâ€™re goWellhead Equipment & Valves The majority are people who are working ing to get as busy as the forecast is, we in the oilďŹ eld or with oil-related service comneed more rental accommodations.â€? panies.
We need new housing. We need the high end, $5-$6-$7-$800,000, to attract executives. But we also need the middle of the road, blue-collar workers in the $350,000 to $400,0000 range. -Lorna Pylychaty
ton town council, and is now at the Municipal Board. It involves 44 lots for duplexes and smaller homes, and a further 14 larger lots. An additional two multi-family lots at two acres each are also in the mix. The plan is for 2012 availability. Pylychaty is the sales agent for the private developers â€“ people originally from the Stoughton area, but now in Edmonton. If the demand warrants, the plans call for four times as much development as followon phases. There is also additional land to the south. A few miles down the road in Lampman, Pylychaty is working with another developer. â€œWeâ€™ve got lots available now. Weâ€™ve got a lot of room to grow as well.â€? This developer, Icon Investments Ltd., is Estevan-based. There are about 70 lots in the project. Three of of the 10 currently available lots has been sold as of early September. â€œA lot of these small communities are growing,â€? Pylychaty said.
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PIPELINE NEWS October 2011
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PIPELINE NEWS October 2011
Builder tackles housing in Estevan, hotels elsewhere By Brian Zinchuk Estevan, Carlyle, Redvers – A builder originally from Calgary is making its presence known in southeast Saskatchewan, building hotels, multi-family units and top-end single family houses. Royal Oak Custom Homes started with a hotel project in the northeast corner of Estevan. Since then, the company has built a number of upper-scale homes in Estevan and nearby. “We did 10 homes in Estevan last year,” said Gary Brar, general manager. “We have ﬁve to seven homes in the new subdivision. We have six lots there.” “We started when I built a hotel for my friend in November 2009. With the housing, we were looking for a major centre to set up, so Estevan was our choice.” Those homes have ranged from $450,000 to as high as $1.2 million for a custom-built acreage home. The usual range is $500,000 to $600,000. There was some hesitance at ﬁrst to accept a new builder in town, he noted, but added, “Now people are starting to trust us.” A substantial number of their builds have been spec homes, all on the east side of Estevan. The company has up to 30 people, including sub-trades, working for them oﬀ and on. However, keeping them busy this summer has been problematic, because the City of Estevan ran out of developed lots to build on. “We sat for two to three months. We couldn’t build anything because there were no lots available,” Brar said. In the meantime, the overhead for maintaining a place to stay for his workers in Estevan is pricey, and that in turn drives up building costs. Indeed, the company plans on demolishing several existing older homes in Estevan and putting up three new duplexes, at 1,800 square-feet per side. “We’d like to do more duplexes, if there was land available. “I’m going to do a duplex just to keep my own workers in there instead of paying rents,” Brar said. They would occupy both sides. Brar said it is very hard to get local tradespeople. “There’s not enough building in town to keep them going in town. If there was enough building [going on], they can stay in town. “It’s very expensive to build here. It is diﬃcult to convince people to come here for two to three months. You have to pay for meals and accommodations. Compared to a bigger city, they come from home to work. It deﬁnitely adds to construction costs.” In addition to the duplexes, there’s a two-building, 13 unit townhouse development underway on the south side of Estevan. “We started the foundations already. There are two buildings, side-by-side,” he said. Those will be what is considered more aﬀordable housing, but even so, the prices will probably be in the $329,000 range each. Asked about the economics of building starter homes versus larger market homes, he said, “If we had enough lots and buyers, we’ll do starter homes, too.” He said the limitations are a combination of land and building trades availability. ɸ Page B20
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PIPELINE NEWS October 2011
Carlyle and Redvers both see new hotels rise A house with a three car garage is being built by Royal Oak Custom Homes in Estevan.
ɺ Page B19 “We get a few people coming in, inquiring now. Even in the new subdivision, we have a couple already sold. If everything goes well, we can have a house up and ready for possession in four to ﬁve months.”
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“We like to do at least ﬁve to six spec houses at a time,” he said. That’s because crews can go from one project to the next in short order. Carlyle, Redvers hotels In addition to homebuilding, Brar represents the investors on two hotel projects going up in southeast Saskatchewan, one in Carlyle, and a second in Redvers. Of the two hotels currently going up along Highway 13 in Carlyle, theirs is the one on the west side of town. Each of the identical two-storey hotels will have 65 suites. “We’re just starting the drywall,” Brar said on Sept. 20 of the Carlyle property. “We’ll probably be completed close to Christmas.” Occupancy is anticipated in early January. The Redvers hotel is in the framing stages. The target is to have it up in February, to take advantage of the tail end of the busy winter season in the oilﬁeld, prior to spring breakup. The hotels will run under their own, independent banner, of “Western Star Inn & Suites.” “We have, in the past, built hotels for the last four years. We’ve built 10 hotels in northern B.C. and Alberta,” Brar said. “After building all these ﬂags (hotel chains), we came to the conclusion you don’t need brand name hotels.” The majority of the units will be built with extended stays in mind. “These oilpatch boys need kitchen units, bigger rooms, and hot breakfast,” Brar said. “About 80 per cent are going to be kitchen units, with full fridge, stove and big microwave, and two queen beds. Kings will still have a fridge and microwave.” They also require ample truck parking, with both locations will providing space for 15 to 20 trucks per hotel. That should make it a lot easier for frac crews, one of the most frequent users of hotel space in the region.
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PIPELINE NEWS October 2011
Uptown Hotel is updated
The most noticeable external renovation to the Uptown Hotel has been the new peaked roof.
Stoughton, Saskatchewan Raj Singh has been working on renovations to the Uptown Hotel.
Estevan â€“ Estevanâ€™s Uptown Hotel & Bus Depot is getting a facelift. Indeed, they are raising the roof. â€œWeâ€™ve been doing renovations,â€? said, Raj Singh, manager of the hotel and part of the family ownership group. Singh, his father and brother purchased the hotel almost three years ago, after purchasing a hotel in Davidson. â€œI moved here from Vancouver to Davidson. That was the ďŹ rst hotel we purchased,â€? he said. â€œNine months later, this came to our plate.â€? His father and brother are running other facilities. â€œAbout a month ago it was slow because road bans were on,â€? Singh said in early September. â€œWeâ€™re pretty much full,â€? he said. The hotel has 31 rooms on two storeys. The lobby and hallways have been renovated. The rooms are seeing new ďŹ‚ooring, a change in furniture, new paint, and
updates where necessary. More signiďŹ cantly, a peaked roof has been installed overhead. While renovations are improving the current property, Singh has bigger things in mind. â€œIâ€™m looking for land so I can build a hotel. Itâ€™s hard to ďŹ nd land in town. If you do ďŹ nd it, city zoning comes up.â€? With a number of other hotel projects in the works for the city, Singh noted, â€œIâ€™m concerned. I think itâ€™s going to be overbuilt â€“ too many rooms, and everybodyâ€™s going to have to drop their prices.â€? As a smaller hotel, he noted â€œWe donâ€™t get big companies who pay for the rooms. We do have some customers that have been coming here for 30 years.â€? Those older customers are quieter, and pay their bills, he noted. In the meantime, heâ€™s actively building multi-family units in Estevan. â€œI built a fourplex
last year. Iâ€™m living in one,â€? Singh said. Another threeplex is under construction in north central Estevan, on the site of a former school playground. He would like to do more residential development, â€œWhatever I can get my hands on,â€? Singh noted. â€œItâ€™s hard to ďŹ nd land right now.â€?
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PIPELINE NEWS October 2011
These two new fourplexes in Carnduff will soon be joined by an 18-suite apartment building. Photo by Brian Zinchuk
Carnduff gains multi-family units Carnduff – Flying over Carnduff on the way to a rig move in August, Dennis Day pointed out a new street and two new fourplexes in the southeast corner of Carnduff. They would soon be joined by a three-storey, 18-suite apartment building. Day, general manager of Fast Trucking Service Ltd. of Carnduff, has found it necessary to
get into the housing business. Acting as developer, Day had the street built and underground utilities installed. Twelve of the apartments will be three-bedroom suites, while six will have two bedrooms. The building will also be equipped with an elevator. Asked why he would get into housing, Day
joked, “For something to do.” More seriously, he noted, “No one was doing it. We needed some. “I wanted to build some. Housing is tight in town. You can’t keep good people if they don’t have a decent place to stay.” The accommodations will be available for the general public to rent.
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PIPELINE NEWS October 2011
PIPELINE NEWS October 2011
Habitat's camp laundry cleans up for charity Bonnyville, Alta. – Have trucks – will pick up and deliver laundry to any legal subdivision (LSD) location in northern Alberta. That’s the basic function of Habitat Laundry and Linen that provides remote camp laundry services, commercial dry cleaning of coveralls, repairs and alterations and clean mat rentals from their base in St. Paul, Alberta. “We provide laundry services for remote camp sites, everywhere from Chauvin, south of Lloydminster to Grande Prairie and Fort McMurray and everything in between,” said Gunner Erickson, director of production and marketing. “We do all the work camps – sheets and blankets and pillow cases and bedding. We also do entrance mats and coveralls and workwear, from cleaning and servicing, to things such as repairs. “We also rent and sell coveralls, but our main business is cleaning.” Habitat Laundry is a division of St. Paul Abilities Network (SPAN), a nonproﬁt society to support persons in that community with developmental disabilities. “We provide every kind of support from residential services to lifestyle development, vocational training and recreational training,” said Erickson. “All of the money that Habitat Laundry and Linen generates goes into the SPAN programs in the community 100 per cent. “The laundry business enables us to reduce our requirement for external fundraising. We are able to earn a lot of money that we need to provide the programs that we provide.” Habitat Laundry provides high volume cleaning and quick turnarounds at more than 150 remote camp locations in Alberta that range from a ﬁfth wheeler to 4,000 man camps at Fort McKay in the Alberta oilsands. “We also go to rig sites. You never know where they are going to be. All we need is the LSD and we will show up,” said Erickson, who was manning a company booth during the Bonnyville & District Oil and Gas Show in June.
“We bring everything back to St. Paul and everything is run through state of the art laundry and dry cleaning processes and re-packaged ready for shipping back.” The Habitat Laundry complex uses an environmentally friendly process for washing with phosphate-free chemicals and provides a variety of dry cleaning options with static reduction. Habitat Laundry employs a staﬀ of about 50 people including some workers with disabilities. “It depends on their functionality,” explained Erickson as to what jobs they can do. “We have one lady in a wheelchair who can’t speak and she has serious MS so she can only move a little bit. “She puts napkins on the feeder belt and she loves it. She does a great job. She has a worker that works beside her and together they make up a very productive team.” Erickson said that fact the business is owned by a non-proﬁt charity doesn’t make it any easier to generate new business with potential customers. “I wouldn’t call it easy to sell. With some disabilities there is a bit of a stigma about reliability and productivity, and that kind of thing, so it’s more of a job to sell than just a regular company,” he said. “The end result is the key. We have a good list of references.” Erickson said the oil show in Bonnyville was an opportunity for him to talk with customers whom he has never met, and generate new business leads. “We took part in a couple of learning programs here. We had a meet and greet with some of the oil companies – procurement people and it’s been a great experience,” he said at the show. Habitat Laundry is eyeing expansion of its services with new oilﬁeld camps popping up all the time. ɸ Page B25
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PIPELINE NEWS October 2011
Coverall cleaning, rentals and sales ɺ Page B24 “Cleaning, renting and selling coveralls is our main focus as far as expanding the business,” said Erickson. “The coverall part of the business is something we really want to promote and develop. We have the capacity to process coveralls right now. That’s why we are promoting this. “We have been doing it for 27 years, but we are looking to expand and take part in some of the growth that’s occurring in the oil industry.” Erickson said Habitat Laundry doesn’t receive any sponsorship dollars from oil and gas companies but notes SPAN is close to being self-suﬃcient.
“We get some funds from disabilities services from Alberta and we do some fundraising through other charities like the Lions, for example. For the most part we earn our money,” he said.
Gunner Erickson from Habitat Laundry and Linen manned a booth at the June Bonnyville & District Oil and Gas Show to promote the remote camp laundry services of the non-proÀt company based in St. Paul, Alberta. The company services more than 150 work camps in Alberta. Photo by Geoff Lee
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PIPELINE NEWS October 2011
Prairie Moon may know you by name Unity â€“ The build it and they will come business concept doesnâ€™t usually apply to new motels and hotels that have to earn their keep with clean, comfortable rooms, welcoming staďŹ€ and ďŹ rst rate customer service. Thatâ€™s the slow and steady path taken by the Prairie Moon Inn & Suites since it opened in Unity two years ago, and the formula for success is working. Occupancy rates are up to 55 per cent today from 37 per cent in 2010-11, with many satisďŹ ed repeat customers including oilďŹ eld workers who like the homeaway-from-home ambience of the place. â€œYou have to go out and get your customers,â€? said manager Peter Keller. â€œWe feel once we get them to come to our place, they are going to come back. Once we get them here weâ€™ve got
them. Our service is next to none. â€œWe are getting people from the oilďŹ eld as oil encroaches from Alberta into Saskatchewan. We are only about 40 kilometres from the Alberta border.â€? The Prairie Moon is ideally located at the junction of Highways 14 and 21 in Unity with 64 air conditioned rooms including executive suites, Jacuzzi suites and family rooms with kitchenettes. Amenities include a full continental breakfast, large screen televisions, wireless Internet access, microwaves, minifridges and a 24-hour business centre with two computer workstations. Prairie Moon is beginning to draw more business from the Kerrobert area 35 minutes to the south from oil workers as far away as Coleville who like the service they get from the hotel staďŹ€ in Unity.
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â€œWe have excellent in-house people â€“ probably some of the friendliest you have ever met,â€? said Keller. â€œThe amenities in the room are really quite good. This is like a city hotel in a rural setting. You can go to Lloydminster to get the same amenities, but you still donâ€™t get the same service. â€œGuests are starting to call us by our ďŹ rst names, and we are calling them by their ďŹ rst names.â€? The Prairie Moon was quick to establish a reputation for friendly service in December 2009 when they hosted 2010 world junior hockey championship teams from Latvia and Austria who played an exhibition game in Unity before the competition began in Saskatoon. â€œThey were the ďŹ rst group that we had and, of course, ďŹ lled us up for a few days,â€? recalled Keller. â€œIt was the ďŹ rst Hotel manager Peter Keller says business is picking up after a slow spring time we were full. We breakup with renewed oilĂ€eld activity in the area and the hotelâ€™s reputation brought food in and ca- for friendly service and business amenities. Photo by Geoff Lee tered them.
Cell numbers: 483-8024, 483-7024, 483-8148 Home: 486-2143 â€˘ Fax: 486-4855
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â€œWe still get letters from some of the players that were staying here. Last yearâ€™s world juniors one of those teams didnâ€™t make it back into the tournament, but we still get stuďŹ€ from them. It was one of the most interesting experiences that we have ever had here. â€œIt helped us get a
lot of kinks out of the place. We didnâ€™t know how to handle that stuďŹ€, but now we do.â€? Each winter, the Prairie Moon hosts several players from the Unity Oilmenâ€™s Bonspiel, and organizers usually buy a room as a tournament prize to bring players back to town the following year. É¸ Page B27
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PIPELINE NEWS October 2011
New wells anticipated to keep hotel busy ɺ Page B26 The Prairie Moon is under the ownership umbrella of the local Ramada Inn that has 52 rooms and a full service restaurant. Keller says the Prairie Moon relies on word of mouth marketing and their web site which features photos of the rooms and facilities, along with the full menu of amenities and services. “We do oﬀer a business centre that is free to use so you can get your e-mail and Internet. We have wire and wireless Internet,” said Keller. “We also have oilﬁeld meetings. Diamond Energy uses it quite reg-
ularly. They are just one company, but they have here quite a bit for sales meetings and all sorts of things.” Keller expects the hotel will attract more oilﬁeld business in the coming months with new oil wells slated to be drilled in the Reward area north of Unity. “After the seismic and surveyors have been out the scuttlebutt is there will be a lot of wells in the area and also north toward Winter and little bit further to the east,” said Keller. “Everything is coming into our area more and more.” Keller plans to leave
his post at the hotel at the end of September to pursue other opportunities in Unity with some good memories from his time behind the front counter. “We had some Trican guys here and I ran across some of them. They were golfers too. I went out, had a few beers – I just to know them pretty good,” he recalled with a grin. “Meeting people is really a big thing, eh?”
Happy housekeepers (L-R): Jackie Boser, Karah Fischer, Estelita Caipang, Anna Larson and Kristine Boser took time out from their coffee break to pose for a group photo. Photo by Geoff Lee
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PIPELINE NEWS October 2011
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PIPELINE NEWS October 2011
Lakeland to offer third class power engineering in 2012 Lloydminster – The Lloydminster campus of Lakeland College is poised to become a much bigger educational training centre for oil and gas careers with the onset of new programming and partnerships to meet the needs of students and industry in Western Canada. The hiring of Kara Johnston in August to the new position of director, energy, entrepreneurship and Saskatchewan programming sets the wheels in motion for a new strategic focus. “With the formation of the school of energy, entrepreneurship and Saskatchewan programming – what they’ve done is basically taken the heavy oil out of the trades and technology department,” said Johnston. “The goal is to make it more of a focus on the Lloydminster campus. “Our goal is to expand the programming and offer third class power engineering, and also expand our heavy oil operations technician (HOOT) program which is currently just a one year certiﬁcate.” A new HOOT semester began on Aug. 30 with classroom and lab instruction in the operation and maintenance of boilers, turbines and combustion engines leading to an industry practicum and a fourth
Kara Johnston heads up a new oil and gas energy department at Lakeland College in Lloydminster. The purpose of the department is a focus on strengthening educational partnerships with the Saskatchewan government and Aboriginal students.
class power engineering exam. “We are developing a two year diploma program,” said Johnston. “Our goal is to launch the second year of the two year as well as the ﬁrst year of the two year program in the fall of 2012. “I’m very excited. It’s a big undertaking. We are currently writing our submission for (Alberta) Advanced Education because they need to approve it for us by next spring. “We have good people in place to help us develop that curriculum so we can be on the ground running in the fall,” she said. “The two year program really is the standard right now. We are making sure we get ourselves to that place. “We lose students because they go to NAIT or SAIT to take their two year program. To be able to take it here right at home is wonderful. There is a big demand for it,” Johnstone said. News of the two year diploma program for 2012 follows a $4.9 million commitment from the Alberta government in July toward the cost of constructing the ﬁrst phase of a new $30 million HOOT lab to educate and train third class power engineers. Construction could begin next spring to expand the northeast wing of the campus for the new oil and gas training facility with a new water testing room, an operations control room, an operations lab and simulation and gas process labs. Classrooms, lecture theatres, a student lounge, a computer lab and faculty oﬃces will be added in the second phase of the project.
“The fundraising is not my mandate, but part of my role is to be in the community and be visible and also get feedback from industry on what it is they need and what we can provide them,” said Johnston. “What we can provide industry is a skilled labour force. I know right now there is a huge demand for third class power engineers. They just don’t have enough. “Fourth class used to be the standard, and now it’s more the third class, so we need to meet that industry demand.” Work is also proceeding on the development of what Johnston calls a pre-HOOT program for Aboriginal students as part of her Saskatchewan programming mandate. “Saskatchewan programming is a lot of work with the Saskatchewan government and their mandate – a lot of that is with the Aboriginal community,” said Johnston. “We will be working very closely with Onion Lake (First Nation) to develop a pre-HOOT program. “We would bring them in and set up times with them onsite at the reserve to give them some courses, and get them prepared for a HOOT class. “Right now, I think a lot of our Aboriginal students when they come in, they are overwhelmed. “The pre-HOOT program is an opportunity to give them a taste of the HOOT program and give them the basics of power engineering, and the math and physics background, so they can be successful in that program,” said Johnstone. ɸ Page B30
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PIPELINE NEWS October 2011
Strong demand for third class power engineers Éş Page B29
Saskatchewan programming also involves strengthening Lakelandâ€™s partnerships with the Saskatchewan government with an eye to gaining recognition of the HOOT program from Saskatchewan. HOOT grads can only write Alberta exams certiďŹ ed by the Alberta Boiler Safety Association and Alberta Advanced Education. â€œWe live on the border so why wouldnâ€™t we oďŹ€er our students the option to write exams in either province?â€? said Johnston.
â€œWe need to strengthen our partnerships with Saskatchewan to drive forward some of their mandates and just to have a higher proďŹ le there. â€œRight now, we have a higher proďŹ le in Alberta than we do in Saskatchewan. Part of my goal is to strengthen those Saskatchewan relationships.â€? Lakelandâ€™s new focus on interprovincial oil and gas career training based in Lloydminster is in keeping with its evolving strategic plan and a new look to the Lakeland College board of governors in
Raelean Hickson, co-ordinator for continuing education, energy, welcomes the new 2011 class of HOOT students to Lakeland College at the Lloydminster campus. Next fall, the campus will offer a two year diploma course to qualify students as third class power engineers. Currently, the campus offers a one year certiĂ€cate in fourth class power engineering.
2011. â€œWe have a new chairman of the board, Milt WakeďŹ eld, and the board right now is really making that shift, and has mandated this is going to be a focus â€“ letâ€™s put our money where our mouth is,â€? said Johnston. â€œLetâ€™s get the programming to where we
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are ďŹ lling that need in the community. Our HOOT program is just one step.â€? The college also offers a range of learning and pre-employment courses for jobs in the oilďŹ eld through its continuing education department. â€œOur goal is to update our lab, expand our lab and have the facility that is indicative of our programming,â€? said Johnston. â€œWe have great instructors and we have a really great team.â€? Johnston grew up on a family farm north of Maidstone and joined Lakeland in August
2010 as a business facilitator and instructor. She is pursuing an MBA to go with her bachelor of commerce degree from the University of Saskatchewan, and brings a solid business and community relations background to her position. Her resume reveals she owns and operates a Booster Juice franchise in Lloydminster and has seven years of experience running an oilďŹ eld service company in Maidstone that she is no longer involved with. As for her new job at Lakeland, she says it has been very busy since her ďŹ rst day at her desk
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PIPELINE NEWS October 2011
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PIPELINE NEWS Saskatchewan’s Petroleum Monthly
C-Section October 2011
A crowd of builders and home buyers gathered at the scene of a new subdivision development in Lloydminster to keep track of progress. By the end of July, new residential housing permits in the Alberta and Saskatchewan sides of the city topped the $44 million mark.
Lloyd housing market in “a crunch” By Geoﬀ Lee Lloydminster – Lloydminster Mayor Jeﬀ Mulligan says oil and gas companies in the area are telling him the industry is “just shy of red hot” right now. That’s in sync with the city’s housing market that Mulligan refers to as being “closer to a crunch” than a crisis. “When somebody can increase an $800 a month rental unit up $1,250, and still be fully occupied, it tells you the law of supply and demand is really at play,” he said. “We are seeing low availability in the rental markets. “The entry-level to mid-level housing supply in Lloydminster is adequate, but we have got some things under way with the Saskatchewan government and Synergy Credit Union that might accelerate some entry level housing.” Mulligan says a lot of families with incomes in the $52,000 to $75,000 range are having a hard time saving the down payment for a home because they paying monthly rents of up to $1,500. “We’ve got to be able to open the rental housing by moving the $52,000 to $75,000 family income people into owned housing. That’s my priority focus as it is the Saskatchewan and the Alberta governments,” he said. The Saskatchewan government announced ﬁve housing programs in its Saskatchewan Advantage Housing Plan last March.
The budget included more than $200 million over ﬁve years to build a minimum of 1,000 new entry level houses in the Headstart program that Mulligan referred to. The government of Alberta reported on Sept. 8 that it has built 27 aﬀordable housing units in Lloydminster since 2007 with a province-wide goal to develop more than 11,000 aﬀordable housing units by 2012. Mulligan says housing has replaced health care as the number one issue talked about at Saskatchewan and Alberta union of municipalities’ conferences, but he advocates private sector housing solutions for municipalities. “I think industry and developers are probably going to solve their immediate needs faster,” he said. “What would government do? Government can stimulate some ‘point in time’ things, but enduring housing solutions will be derived by business. “For a city of our size, we are very fortunate to have progressive- and innovative-minded developers, and we are very fortunate to have a large suite of professional builders. Most cities our size don’t have that. “You can go to a lot of cities that are our size, and the city is the sole body responsible for development. That’s not the case here. We have professional developers, and that’s stimulated a good housing construction marketplace,” said Mulligan. In fact, Lloydminster is on pace to set a record in
2011 for building permits with a value of more than $108 million at the end of July, threatening to shatter the 2005 year-end record of $122 million. “I think there is a good chance depending on what goes on, we will be very close to a record in the last 10 years,” said Mulligan. “From a pure housing perspective, we are very close to $45 million. The record for residential housing in Lloyd is $51 million in a given year for residential, single detached.” Those residential permit numbers included $25 million on the Alberta side of the city, and $19 million in Saskatchewan, a balance that hasn’t been seen until recently. “We are delighted to see that residential housing starts on both sides of the border are almost equal,” said Mulligan. “The requests for land and the number of lot sales that we’ve had in the city have been almost equal on both sides of the border. “That was not the case until about two years ago, with the new government and some of the new business and economic prosperity in Saskatchewan,” he said. Institutional and industrial development is still weighted in Alberta’s favour, but Mulligan says most of the industrial lots in Saskatchewan are sold. “I think we can thank Husky for some of that,” he said. ɸ Page C2
PIPELINE NEWS October 2011
Engage, energize, execute, evolve
Crews work on the exterior of this new rental development on the Saskatchewan side of Lloydminster. The city is on pace to set a new building permit record as all sectors of the cityâ€™s economy continue to attract new workers. Lloyd3:
Mayor Jeff Mulligan says more attainable housing is needed to accommodate retail/hospitality types of workers who support the booming oil and gas industry in Lloydminster.
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Éş Page C1 â€œPlacing their building on the Saskatchewan side is a stimulus for growth over there â€“ but also itâ€™s due to some good work by our planning department at the city and by industry as a whole.â€? The city is also working on student housing options with Lakeland College that has a full residence this year with high enrolments. Another student housing squeeze is expected next year with the start of a new two year diploma in the heavy oil operations technician program and the phase one expansion of a new $30 million heavy oil lab and classroom facility. â€œThe college has a record this year. They need 50 or 60 homes in excess of their residences in Lloydminster,â€? said Mulligan. â€œThey are working very hard with government to get that ďŹ rst phase of expansion. They will have some more students next year, but the big impact will be two years hence. â€œWe are working closely with the college to determine if we need to build more residences. Is there space for that? How are we going to accommodate this?â€? The city is also working on several key planning documents at once including its strategic municipal plan for managing long term growth called e4 (engage, energize, execute, evolve) to be released in the spring of 2012. â€œWe will be able to put out deďŹ ned benchmarks and objectives and be able to report on our progress,â€? said Mulligan. â€œI like talking about growth issues. How we going to keep the infrastructure up to speed? How we are going to provide housing for people? â€œThe biggest impact with the oilďŹ eld, and the new people coming to our city is they all want to have all the services and the amenities â€“ restaurants, hotels all of those things. Itâ€™s the people who work in those areas where the real impact is,â€? Mulligan said. â€œWeâ€™ve got to make sure that we put that support in place, so that those people can have a good lifestyle here and support the industry.â€? É¸ Page C3
PIPELINE NEWS October 2011
Making sure housing is attainable A total of 255 residential housing permits have been issued up to the end of July in Lloydminster, mostly for single detached homes. Permit totals for all types of construction topped $108 million at the end of July, putting the 2005 yearend permit record of $122 million in jeopardy.
ɺ Page C2 Mulligan says the housing solution for that group of people is to build what he calls attainable housing. “I don’t think we need to artiﬁcially subsidize or that we have to artiﬁcially drive the price down. I think we have to make sure housing is attainable and reasonable,” he said. Luxury housing is also in demand in Lloydminster to accommodate high income professionals who relocate to from larger centres for jobs in the area. “In those cases, they are expecting amenities and housing and supports that aren’t what people would align with entry level housing at all. They are not really looking to rent either,” said Mulligan. Lloydminster has traditionally been one of the fastest growing cities in Saskatchewan with research studies citing the city has a breeding ground for business and innovation in heavy oil. “If you look at the validated independent studies of Alberta Venture, CFIB (Canadian Federation of Independent Business), and the Bank of Montreal – all of these studies say we are one of the 10 best places to do business, and one of the 25 best places to do business in Western Canada,” said Mulligan. “When you start looking at all of that, it comes down to the cost of living and the amount of discretionary income that you will have left after you pay your bills. “Our cost of living and our tax regime when you put it all together, we always rate quite favourably,” he said in conclusion.
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PIPELINE NEWS October 2011
Kindersley aims to accommodate oil boom By Geoﬀ Lee Kindersley – Strong oil and gas activity in the Kindersley area has put housing on the front burner for town oﬃcials, developers and employers. Kindersley recently released its Housing Task Force Report that highlights the need for rental accommodation and low cost housing to keep pace with the housing demand from new oilﬁeld recruits and their families. “The report was very well received. It was a very in-depth report. It gave us an indication of what we already knew,” said Mayor Wayne Foster. “The number one priority is attainable aﬀordable housing. Aﬀordable means someone who is on minimum wage – a rental property they can aﬀord. An attainable house would be moderate to below moderate income. “We have worked with a lot of entities on attainable housing. That’s something we have been kind of missing in our community. Even the cities are having problems with it.” Foster says a developer has stepped forward to construct a new rental complex in the Rosedale subdivision and may be eligible to apply for capital assistance from the Saskatchewan Housing Corporation’s (SHC) Rental Development Program. SHC is requesting proposals by Sept. 30 for subsidized development of four to six rental units in Kindersley to help ﬁll the gap in low to moderate income housing.
Saskatchewan and the federal government are investing a combined $55 million is attainable housing in the province in a cost matching program announced on Sept. 6. The new housing program includes SHC funding assistance for rental housing in Kindersley. “That’s going to be the biggest beneﬁt to our community – the attainable housing in the $600$700 a month rental range as opposed to $1,200 for accommodations,” said Foster who noted construction will begin in Rosedale as soon as a development permit is issued. New hotels and motels are also on the town’s development wish list with not enough rooms currently available to accommodate the inﬂux of workers and visiting sports teams. “I know of one consultant who gets up at 4 a.m. and drives to Dodsland, and when he’s done, he drives back to Swift Current because he can’t ﬁnd a place to stay here,” said Foster. The demand for housing and short-term accommodations is reﬂected in strong sales of industrial land as Kindersley ﬂexes its muscles as the regional hub service hub for the oil and gas industry. “For new development, we have probably sold more lots in the last couple of months than we have for the last 20 years,” said Councillor Tom Geiger. “It’s just the activity in the oilpatch. It’s ramping up. A lot of the horizontal drilling is spilling oﬀ into service industry businesses in Kindersley. We don’t expect it to stop any time soon. ɸ Page C5
Councillor Tom Geiger stands in front of Caleb Village, a fairly new assisted living complex for seniors in Kindersley. In 2010, the town issued a total of 51 building permits valued at more than $9.3 million. With continued construction growth, 2011 is expected to keep pace with the booming oil and gas market in the area.
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PIPELINE NEWS October 2011
Camp seen as short term solution Éş Page C4
Bill Larocque, broker for Royal LePage in Kindersley says sales of industrial lots owned by the town are strong with new oil and gas service companies locating to the area. The average selling price of an MLS home in the area was $184,057 at the beginning of September.
Kindersleyâ€™s new $12 million multi-use recreation facility is to due to open this January, two years after the townâ€™s rink burned to the ground. The planned expansion of a performing arts theatre and aquatic centre bringing the total facility price tag to $36-$40 million.
active, and we have a lot of activity in the inâ€œThe demand for dustrial area â€“ enquiries lots is from service in- from outside of the area dustries and the spinoďŹ€s â€“ some from Alberta, from the oil industry. and some from Estevan We are kind of the ser- and Lloydminster lookvice centre hub of the ing for shop space and region. or property to build on,â€? â€œIn the last ďŹ ve said Larocque. years, we have had a â€œWe have diďŹ€erent steady increase in build- companies looking for ing permits. Itâ€™s almost larger areas to put prodskyrocketed to what we uct on i.e. 20 acres. We had four or ďŹ ve years also have quite a few enago. quiries on multi-family â€œWith the province residential right now.â€? growing as fast as it is, Larocque considers we expect to be part of the housing real estate that growth for the next market to be balanced number of years,â€? said or steady despite strong Greiger. activity in the oilďŹ eld, Sales of industrial with an average number land have been particu- of houses for sale and an larly brisk lately for re- average number of buyalty ďŹ rm Royal LePage ers. in Kindersley, in sync â€œThe demand with what broker Bill is mostly for single Larocque calls â€œvery ac- homes,â€? he said. â€œWe get tive oil and gas activityâ€? a few calls for condos in the region. and there are a few on â€œRight now, the oil the market, but mostly and gas sector is quite single homes are the big
issue right now. â€œThere has been quite an increase in the cost of purchasing a home. As well, there has been a growth of rental space in as far as the need for rental space,â€? Larocque said. â€œThe building of rental space hasnâ€™t kept up, so we are short. That puts the price of houses up.â€? Larocque expects the market for housing and commercial and industrial land to stay strong for another
couple of years, but after he says he doesnâ€™t have a crystal ball. Rick MacDougall, who owns Ravens Cross Energy Ltd., a Kindersley based small independent oil and gas producer, sees continued growth for the industry throughout the west central region. Ravens Cross has about 20 wells in the area producing a variety of light oil, heavy and natural gas with drilling activity picking up. É¸ Page C6
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PIPELINE NEWS October 2011
Horizontal drilling drives Kindersley growth Éş Page C5 â€œIn the last few years activity levels have really escalated â€“ where we used to see maybe one or two rigs a year â€“ I donâ€™t know what the rig count is in the region today, but we are probably looking at 10 or 11,â€? he said. â€œThe area is booming. Weâ€™ve always been fairly steady. DeďŹ nitely, the whole region from Unity south all the way down to the Elmrose/Forgan ďŹ eld and Eston country â€“ thereâ€™s lot of new players in the area, and itâ€™s been very, very active. â€œThereâ€™s no question at all that light oil volumes have increased substantially. We are starting to hear of pipeline apportionments and other constraints on
the system. â€œHorizontal drilling has deďŹ nitely been a driver, and I think many of the companies have large land positions acquired now or they had them historically â€“ but I mean certain other players are developing it,â€? said MacDougall. â€œItâ€™s been a renewal for the whole west central region, thereâ€™s no question.â€? MacDougall said he is in favor of the proposed work camp for new workers that town council is scheduled to consider at its Sept. 26, but he views the project as a short term solution to a long term problem. â€œThe housing crunch is something that I donâ€™t think the town or the municipality is in charge of
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solving,â€? he said. â€œI think if the demand is known, and with the new sense of optimism in Saskatchewan, I think we will see some developers and other investors coming in with apartments and diďŹ€erent types of housing models that will address some of that,â€? MacDougall said. The pending completion of a $12 million multiuse facility this January, just two years after the townâ€™s rink burned to the ground, could also bring more people to the area looking for housing. â€œAny time you add something else to the community, itâ€™s just another reason for people to move here,â€? said Foster. â€œWe are quite pleased with how itâ€™s progressed.â€?
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PIPELINE NEWS October 2011
Kindersley trumpets work camp plans
Kindersley plans to rezone some commercial land to allow for the establishment of a work camp similar to this mobile camp located in nearby Kerrobert.
By Geoﬀ Lee Kindersley – The Town of Kindersley may have to pass an applause bylaw to limit cheering following a
public hearing on Sept. 26 to amend a zoning bylaw to permit a proposed temporary work camp. Public support for the amendment to permit a work camp as a discretionary use on commercially designated land is very strong, according to Mayor Wayne Foster in a Sept. 2 interview in Kindersley. Foster says he expects the amendment to pass with little or no objections given the demand to accommodate oil and gas workers in the Kindersley area. The work camp proposal follows the release of the Housing Task Force Report in June that identiﬁed a variety of solutions to ease the town’s housing shortage as oilﬁeld activity in the area accelerates. “It will all hinge on how temporary is temporary. We will have to put some parameters around what temporary means,” said Foster, noting the town’s
long-term priority is to develop attainable, aﬀordable housing. The pending work camp follows news of an upcoming development of new low-cost rental units in the Rosedale subdivision with capital assistance from the Saskatchewan Housing Corporation. “When you have permanent housing, people are going to stay, hopefully,” said Foster. “If they went ahead with the work camp, that will allow people to have more interactions with our community, and after that, they may purchase a home or ﬁnd one of these rental units.” A work camp would typically include a number of mobile units to provide sleeping, dining and other basic living facilities for workers employed by various contracting companies. ɸ Page C8
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PIPELINE NEWS October 2011
Hours of work regs make camp a reasonable solution
Kindersley is on the cusp of constructing its Ă€rst temporary work camp. Councillor Tom Geiger says the camp, similar to this one will help the town overcome its shortage of attainable and affordable housing, and free up motel and hotel rooms to accommodate tournaments and special events.
Éş Page C7 â€œThe developer said they would like to do this to accommodate the oil and gas people and take pressure oďŹ€ the motels and hotels, so the town could rent them to people who want to come for
tournaments,â€? said Foster. â€œWe also have somebody else who owns property and wants to do the same thing. Itâ€™s to handle the load of oil and gas people that have inďŹ‚uxed to our community in the last year. â€œCouncil will hold a hearing to amend a bylaw to regulate zoning and development. It will be an amendment, but it has to go to a public meeting ďŹ rst,â€? Foster said. Foster was not willing to release the site location of the camp or the name of developer until a development permit is issued, but he did say the developer is suggesting a 100 person camp. Councillor Tom Geiger says the application for a camp underscores how fast the Kindersley area has developed and where itâ€™s heading. â€œIn 2006, we had a bunch of houses on the market that we wondered if we would be able to sell,â€? he said. â€œNow weâ€™ve gone the opposite where we donâ€™t have enough hotel accommodations.
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â€œJust the number of service companies that are planning to be here in the next ďŹ ve years is the biggest reason for the camps. â€œI think the industry learned a lot from Fort Mac that some of the temporary accommodations will actually work better than building up an infrastructure and cause almost an over boom,â€? Geiger said. Geiger says the camp will be an adequate place for workers to stay so they do not have to travel 6070 kilometres to ďŹ nd a hotel room as some oilďŹ eld workers do now. â€œIf the industry is centered around here, we might as well the base it as close as possible,â€? he said. â€œItâ€™s better economically to have them located locally instead of coming in from miles away.â€? Rick MacDougall who owns Ravens Cross Energy Ltd., a local oil and gas producer, is expected to be among the cheerleaders for the work camp amendment at town council. â€œI think itâ€™s a short-term answer to a longer term problem, but something has to be done,â€? said MacDougall, who has lived in Kindersley since 1976. â€œI would like to see a variety of housing. I think thatâ€™s the only answer because not everyone comes in and starts out in a $200,000 house. â€œSomebody has to start oďŹ€ renting, and you are working your way up the real estate chain, but thatâ€™s just the way itâ€™s always been. â€œA work camp deďŹ nitely solves some of the typically single employee accommodation. With new rules â€“ a number of things coming into the industry â€“ hours of work for travel and distance and everything else, I think we need to think of Kindersley as a much more regional centre from which a number of diďŹ€erent houses are supplied.â€?
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PIPELINE NEWS October 2011
Sask. top in economic growth By Geoff Lee Toronto – Cash crops have a new meaning in Saskatchewan this year. The province is expected to lead the country with an economic growth rate of 4.3 this year and 4.1 per cent in 2012, thanks to gains in agricultural and potash production. Alberta’s economy is also no laggard with a forecast growth of 3.7 per cent in 2011 and 3.9 per cent in 2012, stimulated by a red hot energy sector. These rosy economic forecasts are contained in the latest Provincial Economic Outlook Report released Sept. 13. RBC reported solid demand for natural resource products is contributing to the growth in manufacturing output in that province, although there was no specific mention of the oil and gas sector in a news release. RBC said agriculture in Saskatchewan improved considerably in the second quarter due to favourable weather conditions this summer. The harvest of Saskatchewan’s three largest crops is estimated to be up 20 per cent this year compared to 2010. “Global prices for grains and oilseeds are up by 40 to 50 per cent compared to mid-year last year,” said Craig Wright, senior vicepresident and chief economist, RBC. “As agricultural
producers in other major growing regions attempt to boost output to capitalize on higher prices, demand and prices for potash have also increased.” RBC expects potash production in Saskatchewan to rise by 20 per cent this year. Still, this dramatic increase does not keep pace with the 100 per cent growth in 2010, when potash production rebounded from severely depressed conditions caused by the global recession in 2009. The reports expects Saskatchewan’s manufacturing sector to return to double digit gains in the second quarter, compared to the same quarter last year with continued
demand for the province’s natural resource products. Despite weakening employment growth, retail spending in Saskatchewan has also accelerated in the second quarter, doubling to six per cent from three per cent in the first quarter on a year-over-year basis. The report noted that the strength in prices for commodities such as grain, oil and potash may be providing support to incomes to help pay for this rising expenditure. Wright said 2011 is shaping up to be a golden age for Saskatchewan’s economy, as it rides the tidal wave created by strong global demand for its various
natural resources. “We expect to see a positive ripple effect on incomes and capital spending in the province,” he said. Alberta’s buoyant economic forecast for 2011 could have been even stronger, if it weren’t for the devastating forest fires in May that disrupted oil and gas activity. The wildfires forced widespread shut-downs in late-May and caused oil production to plummet in the weeks that followed. “We expect that the negative economic impact from the wildfires will be short-lived, as most facilities were able to resume operations fairly quickly after the fires subsided,”
said Wright. “The economic loss associated with this disaster should be largely recovered in the second half of 2011.” Solid investment in Alberta’s energyrelated sector is the key driver of economic growth at play in the province. Oil and gas producers are slated to spend more than $24 billion in 2011, an 18 per cent increase over 2010. “Continued strength in energyrelated sectors will support a slight acceleration in economic growth to 3.9 per cent in 2012, maintaining Alberta’s status as a growth powerhouse,” said Wright. “This has had a
positive impact on employment, as more than 77,000 jobs were added to the Alberta economy in the first eight months of this year, which was the strongest gain ever recorded over this period in the province.” The report indicated that strong employment helped to boost retail sales growth. In the first half of the year, consumer spending at retail stores ramped up to a brisk six per cent year-over-year pace. Big ticket items like vehicles remain top of mind for consumers, while housing has been placed on the back burner. Home construction to this point has been somewhat tepid in 2011.
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PIPELINE NEWS October 2011
BAR marks 30th with cake for clients Â„ By GeoďŹ€ Lee Lloydminster â€“ You can have your cake and eat it, too. BAR Engineering accomplished that feat with servings of cake celebrating their 30th anniversary on Sept. 15 at the Lloydminster oďŹƒce. The celebration event, aimed at appreciating valued customers, doubled as an early birthday and retirement age party for manager and mechanical engineer Doug Gilby who founded the company in 1981 with former partners Ron Wilhelm and Barry Ranger. While Gilby is stepping full-time into retirement this year, he took time to marvel at BARâ€™s business anniversary milestone accomplished through many economic booms and busts over the years. â€œSeveral times we didnâ€™t think we would survive 30 hours, but it has worked out well beyond our wildest expectations. We have put 30 good years behind us,â€? said Gilby. Today, BAR Engineering has become a major multi-discipline engineering
ďŹ rm in the Lloydminster business landscape, but back in 1981, it was basically a three-man operation hungry for growth. â€œAt the time we were mainly doing rig supervision in the service rig area, and we were doing a small amount of production engineering for one ďŹ rm,â€? said Gilby. Today, BAR has 72 employees and an organization chart loaded with engineering divisions led by oil and gas along with buildings, municipal, utilities and rigs, and cranes divisions. â€œWe started in the oil and gas business, and to this day it is still the largest component of our business,â€? said Neil Noble, senior manager and principal engineer. â€œThe other areas are developed and moving along as well, but oil and gas has been our primary focus.â€? Noble joined BAR in 1997, and is one of three major partners in 2011 along with Gilby and Kent Smith, the managing director. The oil and gas division specializes in facilities and pipeline design led by Noble, who is also president of Center Force Technologies Ltd. It is a subsidiary of BAR formed to market the liquid/liquid separation technology of the CANMET hydrocyclone technology to heavy oil clients. The hydrocyclone, developed by Natural Resources Canada, ďŹ ts in well with BARâ€™s facility work with its ability to remove residual oil from produced water and convert slop oil into a marketable product. â€œIn our diversiďŹ cation, we have the licence to market and sell and build hydrocyclones,â€? said Noble. â€œWe are excited about that. We have a test unit out back, and we are starting to do some testing in the ďŹ eld. Thatâ€™s a big area of growth, we believe.â€? As for other growth plans, Noble said BAR is always looking for diversiďŹ cation opportunities with a cautious approach. â€œWe are even looking at growth in our existing businesses,â€? he said. â€œItâ€™s something we have to be careful with the current economic climate still somewhat uncertain.â€? During the last downturn period in 2008-09, BAR purchased PFM Engineering in Lloydminster to further diversify into structural engineering. â€œThat was our ďŹ rst outside purchase, where rather than develop from within, we went outside and saw an opportunity,â€? said Gilby. â€œOne of their principals was getting ready for retirement so we thought it was a good time to step out and make that move.â€? É¸ Page C11
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PIPELINE NEWS October 2011
The only thing BAR Engineering hasnâ€™t designed since its inception in 1981 is this anniversary cake celebrating 30 years in business. Major partners Kent Smith, left, Doug Gilby and Neil Noble marked the companyâ€™s milestone with a client appreciation day, Sept. 15, at the Lloydminster ofĂ€ce. Photo by Geoff Lee
Ultra-conservative to ultra-aggressive Éş Page C10 The strategy to diversify along with a conservation approach to growth are keys to BARâ€™s longevity in boom bust oil markets over a 30 year period. â€œWhen you have an industry where the oil price can go from $30 a barrel to $5 a barrel over a period of two months, if you can survive those pullbacks â€“ the ďŹ rst thing that goes is any expansion plans by the operating companies,â€? said Gilby. â€œSince you are doing the engineering work for them, you are the ďŹ rst people to be cut. We have been fairly conservative over the years, but we have been able to weather those ups and downs.â€? Customer appreciation for supporting BAR over the good times and the lean times, led the company to order an extra large cake in keeping with their lengthy client base. â€œToday, we are having a quiet appreciation for our customers,â€? said Noble. â€œI guess the biggest thing is we want is to celebrate our 30th anniversary. We want to thank them for the work. We appreciate them. â€œI also want to thank our employees. We are going to be something with them on another day. Mainly, the event is just to say thank you to the people who got us to where we are.â€? Gilby says all BARâ€™s divisions are ďŹ‚at out busy today, but further growth is constrained by a competitive market for skilled employees. â€œWe mostly try to promote from within for the senior positions, but we have to been able to hire some good senior people along the way. I think the opportunity is there,â€? he said. â€œWe have people who are ultra-conservative, people who conservative, and
people who are aggressive and ultra-aggressive. â€œIn our company, we make decisions carefully, and thatâ€™s one of the sustaining features of the whole thing â€“ it is a partnership.â€?
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PIPELINE NEWS October 2011
SAGD Injector – With Steam Splitters
Traditional SAGD Injector Design Traditional SAGD steam injection leads to an unpredictable dog-bone pattern in a thermal oil reservoir. Image submitted Injection string 114 .3 mm
Circulation and /or Injection string 60 .3 mm
A steam injector control device with multiple steam splitters can create a more uniform steam chamber in a reservoir and improve oil recovery and steam-oil ratios. Image submitted
Steam Distribution Device Injection string 114 .3 mm Injection string 114.3 mm
Production Casing 339 .7 mm
Production Casing 244 .5 mm
Production Liner 244 .5 mm
Production Liner 177 .8 mm
Steam injector control devices boom By Geoﬀ Lee Lloydminster – The use of steam injection control devices (ICDs) has skyrocketed in 2011 as the technology improves steam-oil ratios, boosts oil recovery and improves the overall economics of a thermal heavy oil project. Those are the key selling points of ICD products as assessed by Chris Palmer, business development manager at Weatherford at the 18th annual Technical Heavy Oil Symposium in Lloydminster Sept. 14-15. “I think the industry has been concerned about their steam-oil ratio and has been for a long time,” said Palmer who specializes in completions and liner systems for Weatherford in Calgary. “They are trying to address and improve (reduce) steam-oil ratios through a number of diﬀerent ways – this is just one.” Palmer says the problem with the typical dual point, toe and heel steam injection on a horizontal SAGD well pair with a steam injector well above a
producer well, is the unpredictable steam distribution pattern in the reservoir. “Traditional SAGD steam injection leads to a dog-bone pattern in the reservoir,” said Palmer. “Thermal proﬁles are unpredictable and all over the place. “We are trying to improve steam-oil ratios. There has been enough data collected to show that this dog-bone eﬀect of having all the steam either all at the heel or all at the toe, that is more or less an accepted situation.” Palmer says tubing deployed passive ICDs with multiple injection points can signiﬁcantly improve steam distribution in the reservoir, and generate uniform steam chamber growth with the potential to reduce the steam-oil ratio. Steam splitters, easily installed as part of the injection string, allow for multiple injection points and more eﬃcient wellbore designs. Splitters are designed with no internal threads or welds and come with straight oriﬁce steam ports.
“The actual cost of these steam splitters is relatively low,” said Palmer. “The modelling implies that we are going to get quite signiﬁcant good results from it.” Weatherford created a computer simulation for an optimized wellbore design with a four-point injection system using its own gravity drainage accessory (GDA) steam splitter. “The four-point injection was an optimum design to demonstrate with the modelling, what the beneﬁt would be,” said Palmer. “Every formation is diﬀerent. Every wellbore is diﬀerent, so the modelling exercise is to choose whether it is one, two, three, four or ﬁve point. “The four-point happened to be an optimum for the data that we collected for a generic wellbore.” There are currently more than 700 installations of tubing-deployed passive ICDs with a very small market share for tubing-deployed active, and linerdeployed passive and active control devices. ɸ Page C13
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PIPELINE NEWS October 2011
Improved steam ratios with ICDs ɺ Page C12 The advantage of a tubing-deployed ICD is that is can be recovered or reused or reconﬁgured if it is deployed in a high water saturation zone. Active ICDs are more complicated, but can provide greater control and monitor real time temperature and pressure monitoring. A liner deployed ICD comes with wire wrapped screens and ﬂow control devices. Some steam splitters support an instrument line and some are equipped with a shutoﬀ sleeve for greater steam control. Palmer said use of ICDs initially developed for thermal oil projects in 2005 has jumped 300 per cent this year, and he expects similar gains for the next two years, but he calls the paradigm an evolutionary one. “This has been developed since 2005, and has rapidly increased just as a result of improved modeling capability,” he said. “More data and more measurement are available now and we’ve had time to analyze it.” One of Palmer’s overhead slides showed improved steam-oil ratios and above industry average production rates with ICDs deployed at four SAGD projects operated by Devon, EnCana and Suncor. The data collection ranged from
costs per SAGD well pair. Savings come from reduced wellbore size and payback from improved oil recovery and lower steam-oil ratios. Despite the soaring demand for ICDs this year, Palmer said he doesn’t expect to see any corresponding increase in thermal production in Western Canada. “I think we are looking at improvements in steam-oil ratio in the order of perhaps 15 to 20 per cent and improvements in accumulative recovery perhaps as high as 10 per cent,” he
said. “I think this is part of a gradual improvement process. It’s just happened all at one time.” Palmer said the sudden spike in demand for injection control devices has the entire industry, including his own company, scrambling to supply the market. “We have been caught oﬀ guard,” he said. “We have a manufacturing issue because of the very increase in demand, and we know our competitors are in the same situation.”
Chris Palmer, who specializes in completions and liner systems at Weatherford in Calgary, assessed a range of steam injection control devices (ICDs) at the Technical Heavy Oil Symposium in Lloydminster in September. Sales of ICDs have soared 300 per cent in 2011, and will be just as strong in the coming years as producers seek to reduce costs and steam-oil ratios. Photo by Geoff Lee
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PIPELINE NEWS October 2011
Noralta nGauge to boost Ă€uid logistics Â„ By GeoďŹ€ Lee Lloydminster â€“ Noralta Technologies Inc., based in Lloydminster has developed a new product called nGauge that utilizes technology to measure interface levels of sand, water, oil, foam and gas in production tanks and process vessels. The technology is in the ďŹ nal stages of certiďŹ cation, but Noralta president and CEO Cam Zarowny provided a sneak peak of its operating principles and cost saving beneďŹ ts to potential clients during the 18th annual Technical Heavy Oil Symposium in Lloydminster Sept. 14-15. The topic was introduced as a technology developed to maximize eďŹƒciency and minimize environmental risk while reducing the total carbon footprint of each barrel of oil produced. It is also a technology developed by Noralta in Lloydminster to meet the demands of heavy oil producers for better data.
â€œItâ€™s a great decision making tool for ďŹ‚uid logistics,â€? Zarowny said. â€œThe more you know exactly what youâ€™ve got for levels in the tank can help you optimize and manage your production better. â€œYou are deďŹ nitely not surprised when you go to haul, expecting a load of oil, when itâ€™s actually half water. You know that even before you send your trucks out. â€œIt maximizes eďŹƒciency of your ďŹ‚uid logistics.â€? Noralta developed nGauge as a combination hardware/software system with the ability to distinguish ďŹ‚uid levels based on a number of diďŹ€erent temperature proďŹ les within tanks and vessels. The temperature proďŹ les are derived from the speciďŹ c heat of the products and their density, thanks to a sensor strip with a high density array of temperature sensors installed on the exterior of the tank. É¸ Page C15
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Cam Zarowny, president and CEO of Noralta Technologies Inc. based in Lloydminster, provided a technical sneak preview of this companyâ€™s new nGauge technology. Monitors tank Ă uid interfaces in production tanks and vessels. His presentation was at the 18th annual Technical Heavy Oil Symposium Sept. 14-15.
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PIPELINE NEWS October 2011
Exterior sensors detect heat convection and conclusion ɺ Page C14 The sensors also detect heat convection and conduction within the tank or process vessel. The hardware includes an electronic processor to convert analog signals to a digital format and an electronic processor for algorithm computation. The hardware communication ports can be integrated into existing SCADA systems for continuous 24/7 interface level monitoring by system software. Interface data can be displayed locally or remotely with SCADA, and programmed to alert on high sand level, high water level, high foam level and low oil level for safe and eﬃcient operation. Zarowny said nGauge will prevent water levels rising above the ﬁretube leading to steaming and corrosion of the ﬁretube. It will also prevent sand levels from rising dangerously close to the ﬁretube. “That can cause a lot of damage – catastrophic damage” said Zarowny. “It can take the lid oﬀ and cause really structural damage.” “It just increases your carbon footprint if you are not maximizing your fuel by heating those emulsion layers. “You are going to maximize your burner life, and you are going to use less fuel doing it with nGauge.” The ﬁrst ﬁeld installations of nGauge were made in August 2009, with numerous case studies since then to validate data recorded by nGauge in all types of weather and process conditions. “We have tested it over multiple years, proving that on the case studies, what we are seeing is real and consistent, and we have done that time and time again, whether it was the sand or the water cut or the foam density,” said Zarowny. “It is the ﬁnal stages of certiﬁcation so it is not commercially saleable yet, but we are very excited about it.
“The main advantage for producers is dependent on their speciﬁc operational needs, but ﬂuid logistics is a big one. It costs to move ﬂuid. “There is an environmental impact when you are driving trucks on the road for no reason because you don’t know what’s at that tank or you are surprised hauling sand before or after it’s required. There are a lot of reasons why this makes sense. “Sometimes the water is above the burner levels. Sometimes they are sending out oil trucks, and they face a whole load of water to haul, so it deﬁnitely impacts their operation. “Eﬃciencies increase dramatically when you know what’s in the tank.” The nGauge can help producers to minimize
fuel requirements for heating ﬂuids, enhance all current practices of well optimization, and improve the management of chemical treatment programs. The nGauge comes with the promise of a nonintrusive installation, no freezing, no sanding oﬀ, and no moving parts. The environmental impact is also reduced with no releases during sampling. Leaks are also minimized and test cocks are plugged. The nGauge is the latest innovation in a string of leading edge technologies developed by Noralta for the energy industry with the focus on reducing costs, improving performance and enhancing safety. Noralta has ﬁeld oﬃces throughout Alberta and Saskatchewan.
New subdivision Lloydminster contractors complete new utility infrastructure work for a new subdivision extension on the Alberta side of the city in a booming house market. Photo by Geoff Lee
PIPELINE NEWS October 2011
Time, money running out for Oilsands Quest
The western edge of Oilsands Quest’s initial holdings, seen here, may be up for sale. This graphic shows the company’s holdings before it relinquished licenses in Saskatchewan and the southernmost permits at Raven Ridge in Alberta.
Calgary – Time and money are running out for Oilsands Quest Inc. to continue to explore and develop its oilsands permits and licences at Axe Lake in Saskatchewan and at Raven Ridge and Wallace Creek in Alberta. The company is pinning its hopes in a third party interest to purchase the Wallace Creek assets. Oilsands Quest cancelled its $60 million share oﬀering Sept. 12 in receipt of a letter of intent to purchase the asset.
The company may conduct a new, smaller, rights oﬀering in the event that the letter of intent is executed. The proceeds from any agreements entered into with the letter of intent and any new rights oﬀering will be used to continue with the delineation and development of the Axe Lake assets and for general corporate purposes. The U.S. traded company expressed fears in a Sept. 14 quarterly report for the United States Securities and
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Exchange Commission that it could run out of money at the end of October if further ﬁnancing is not forthcoming. “Management anticipates that the company will be able to fund its activities at a reduced level through October 2011 with its cash and cash equivalents as at July 31, 2011,” said the report. “Accordingly, there is substantial doubt about our ability to continue as a going concern, and without additional funding, we may not be able to maintain operations beyond that date. “Additional ﬁnanc-
ing will also be required if our activities are changed in scope or if actual costs diﬀer from estimates of current plans. “Our development strategy will also consider other sources of ﬁnancing, asset sales or seeking partners on a joint venture basis,” the report said. Lack of ﬁnancing led Oilsands Quest in pursuit of strategic alternatives in August 2010 to boost shareholder value in the company with the decision to continue development to remove uncertainty for potential buyers or partners. ɸ Page C18
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PIPELINE NEWS October 2011
PIPELINE NEWS October 2011
Insuf¿cient capital for development ɺ Page C16 Additional funding will allow the company to execute its steam assisted gravity drainage (SAGD) pilot at Axe Lake starting with a pilot at Test Site No. 1. This would include the drilling of a new SAGD well pair in close proximity to the existing wells at Test Site 1 to build on the company’s growing knowledge of the reservoir and cap rock characteristics and test the commercial viability of SAGD at Axe Lake. The test plan would use one 100 metre long horizontal well pair, with the upper well placed ﬁve metres below the top of the interface between the
overburden and the oilsands, and would also make use of the existing surface facilities. Following the successful completion and interpretation of the initial steam test results, the company may seek to submit an application to continue the test for up to six months in order to further evaluate injection pressures to help determine the optimal operational pressure for designing a commercial project. Oilsands Quest is also conﬁdent the Wallace Creek project area could support a commercial SAGD project based on drilling results and knowledge of regional geology. Further seismic work or delineation drilling is
required to conﬁrm this potential and retain certain portions of these permits. Oilsands Quest however, reports it does not currently have suﬃcient capital resources to carry out the exploration and development plans described above. Earlier this year, the company relinquished all its other licences in Saskatchewan and its southernmost permits at Raven Ridge in Alberta to focus all Saskatchewan activities on Axe Lake. The company also received approval from the government of Saskatchewan to convert portions of the Axe Lake permits to two 15-year leases – the ﬁrst oilsands leases in the province.
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PIPELINE NEWS October 2011
Minor Keystone XL prep work underway
Construction of the Keystone XL pipeline could begin this January pending receipt of a U.S. presidential permit. TransCanada built this extension of a header system for its main Keystone pipeline in Hardisty, Alberta in 2009. The new XL line will run from Hardisty through Saskatchewan and into Montana and South Dakota to Nebraska where it will join a new extension of the main Keystone line to Oklahoma with more new XL construction south to the U.S Gulf Coast in Texas. File photo
By Geoff Lee Calgary, Alta. – Construction of the Keystone XL oil pipeline could begin simultaneously in Canada and the United States in January if a U.S. presidential permit is issued in December as expected. The proposed 2,673 kilometre pipeline to transport crude oil from Hardisty, Alberta to delivery points in Oklahoma and Texas received an environmental clearance on Aug. 26 with the release of the Final Environmental Impact Statement by the U.S. Department of State. The U.S. portion of the project is under a 90day comment period to determine if the pipeline is the national interest of the U.S. The $7 billion pipeline could transport up to 830,000 bpd of crude and generate $20 billion of economic stimulus to the U.S. during the construction phase. If construction begins early in 2012, the Keystone XL is expected to be operational in 2013. While no construction can begin in the U.S. without the go-ahead from the Department of State, TransCanada is doing some preliminary work in Saskatchewan since the National Energy Board of Canada approved the project in 2009. “We are conducting some construction activities in Saskatchewan – some of the pre-clearing and all that,” said spokesperson Terry Cunha. ɸ Page C20
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Ready to go right after approval ɺ Page C19 “We are just doing some very minor – nothing signiﬁcant – just doing some ‘winter’ cleaning which would allow us to move towards full construction once we get the permit in the United States. We will not actually be laying pipe in the ground or anything like that. “We are just continuing to work with our suppliers to ensure we have our contracts in place that
would allow us to begin construction as soon as possible after receiving our presidential permit.” “It will be a good day once we get approval. The project has now been under review for three years, so it has taken a long time to proceed with construction. “Now we are just waiting for Department of State to make their ﬁnal decision.” The Keystone XL will extend from Alberta and
Saskatchewan through Montana and South Dakota to Steele City, Nebraska where it will connect to a new extension of the main Keystone pipeline to Cushing, Oklahoma that became operational in February 2011. Keystone XL construction will continue from Cushing south to existing terminals in Nederland, Texas. ɸ Page C21
Framed sketch Chris Palmer, business development manager for Weatherford’s completions and liner systems division in Calgary, holds up a framed sketch of a moose. The artwork was presented to him as a gift from the Lloydminster SPE for his presentation on steam injection control devices at the 18th annual Technical Heavy Oil Symposium in Lloydminster Sept. 14-15. Photo by Geoff Lee
Research scientist, Jose Alvarez from Alberta Innovates Technology Futures kicked off the list of presenters at the 18th annual Technical Heavy Oil Symposium held in Lloydminster Sept. 14-15. Alvarez spoke about the theory and mechanisms of waterÁooding for heavy oil recovery. Photo by Geoff Lee
PIPELINE NEWS October 2011
Camps needed for pipeliners ɺ Page C20 “Construction is going to take place in both phases of the project so we can get toward the Gulf Coast as soon as possible while still building that line into Canada,” said Cunha. Work camps will be the order of the day during construction, but the locations in Canada and numbers of crews in each camp has yet to be determined. “We are still working on ﬁnalizing all those details,” said Cunha. “I don’t yet how we are going to be preceding on who the camp people are. “We are trying to do a lot of construction here in the next two years, so I don’t if we have to go with multiple contractors or work with one.” The pipeline construction is expected to generate at least 20,000 jobs, but it’s also too early to tell how many of those jobs will be generated in Canada. “I am working on a complete analysis right now to determine how many people will be working in each section of the pipeline,” said Cunha who was contacted on Sept. 12. Cunha says the reaction from small towns and communities on the pipeline route from Hardisty to Monchy, Saskatchewan where it will continue into Montana is positive, in expectation of the economic spinoﬀs during construction. “All the towns in Canada are very excited about it,” he said. “It’s not just the fact we are going to hire some local people, but they are also thrilled by the fact – because we are going to have hundreds of contractors on site – there are going to be numerous beneﬁts. “More people are going to be eating at the restaurants and more people are going to be spending their money at the local bar or hotels.
“They are going to see that trickledown eﬀect which will help stimulate the local economy. When guys have some free time, they will be spending their money around the community,” Cunha said. TransCanada is expressing conﬁdence at their Calgary headquarters that the Keystone XL will be viewed in the national interest of the U.S., as a safe and secure access to a stable and reliable source of oil. “We believe we are getting the permit, but we are still waiting for the Department of State to conclude with their public hearings which begin at the end of September, and they will make a decision by year end, and we believe it will be a positive one,” said Cunha. “The project is completely funded by the company. There is no government subsidy in anyway. It will put a lot of people back to work. “It’s also going to be carrying that crude oil out of North Dakota and Montana to the Gulf which has been an issue as well because a lot of those producers there are paying high costs to get their crude to the Gulf. “That’s why they want this project built. It will help remove some of those added costs and ensure their crude is selling at the true value instead of being sold at a discount.” Cunha says the Keystone XL will also allow Canadian producers to get their oil to the point of sale quicker and open up new markets for Canadian crude. “The Gulf Coast is where the majority of this crude is needed, and this ensures that’s where it gets to instead of ending up in just the Midwest,” he said. “Now, they will have a whole new market to get
their crude oil to.” Some celebrity demonstrators who joined a 10day August protest in Washington, D.C. against the Keystone XL project continue to lobby the U.S. government to nix the project, but Cunha doesn’t think their voice will carry much weight considering the beneﬁts of the project. “There is a lot of hypocrisy with these Hollywood stars questioning the value of this project and yet did any one ask them how they got to Washington and how much carbon their jet took up?” said Cunha. “These are actors and actresses are not experts in pipe manufacturing or crude oil physics or anything of that nature. “Until they have the training and the degree to back up their claims you can’t really take too much of what they are saying to heart.”
Packed The Golf view Trailer Park in Kindersley was Àlled with oilÀeld workers camping at the beginning of September. The town is set to amend a zoning bylaw to allow for a temporary work camp as oil and gas activity in the area booms along with a housing shortage. Photo by Geoff Lee
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PIPELINE NEWS October 2011
Technical Heavy Oil Symposium Photos by Geoff Lee were taken at the 18th annual THOS in Lloydminster Sept. 14-15
Charles Huard from Harvest Energy, left, and Ted Tryhuba from Kudu Industries focus their attention on a point made by Jeremy Plamondon from Kudu at the Kudu booth.
Above: Travis Minish, a business development manager for Champion Technologies in Lloydminster presented about the use of chemical technology to stimulate heavy oil with an oil-in-water dispersion.
Right: Dr. Ken Chong from Core Laboratories Canada in Calgary holds up a vial of what looks like heavy oil, but is actually light oil with a high wax content. Chong delivered a talk on the challenges of characterizing Áuid samples in the lab.
Above: Ron Sawatzky, centre, a researcher with Alberta Innovates Technology Futures is all smiles. His colleague, Hart Golbeck, waits for the lensman to shift focus his way.
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PIPELINE NEWS October 2011
Kearl project a camp-based oilsands operation Â„ By GeoďŹ€ Lee Fort McMurray â€“ The Kearl oilsands project that is located 70 kilometres north of Fort McMurray, and which is jointly owned by Imperial Oil and ExxonMobil Canada, will function as a long term ďŹ‚y-in, ďŹ‚y-out camp-based operation. Currently, there are more than 3,000 workers on-site constructing facilities and infrastructure for the Phase 1 startup by late 2012. Kearl has an initial production target of 110,000 barrels of day of bitumen in an open pit mining operation. Most of those workers, and more to come, are housed at Wapasu Creek Lodge operated by PTI Group Inc., set up near the Kearl airstrip at Firebag about seven km from the construction site. PTI plans to expand its Wapasu lodgings by an additional 672 rooms, bringing total capacity to 2,942 rooms
at the facility. The additional dorm-style rooms will accommodate clients from several projects in the northeast area of the Athabasca oil sands region in Alberta. Imperial said the decision to establish an encampment close to the oilsands project was a deliberate one in order to recruit and retain workers throughout the 40 year life of the mine site. â€œThere is road access, but the Kearl site is about 70 kilometres north of Fort Mac, and with traďŹƒc conditions and transportation conditions, itâ€™s about a 90 minute commute one way,â€? said Imperialâ€™s spokesperson Pius Rolheiser. â€œThe people are working a 12-hour rotational shift. If you add three hours to that for commuting, it makes for an awful long day. Itâ€™s more eďŹƒcient, and itâ€™s better for workers to live closer to the site. â€œIt will be a year-round camp op-
eration. We made that decision for the same reason â€“ given the commuting time from Fort Mac to the Kearl site â€“ that would prove more challenging for people to work, and it could aďŹ€ect peopleâ€™s choice whether or not they want to work for Kearl. â€œIt will be a ďŹ‚y-in and ďŹ‚y-out operation. We are still working on the details of the permanent operations once construction is done. â€œWe will have a permanent workforce when our operations begin, of about 500 people.â€? The job of hiring construction
crews is managed by the major project contractors onsite including corporate names like Fluor, AMEC, K2, Kiewit, PCL and Horton CBI. Crews have already completed a 240-kilovolt power line to the mine site, along with a river water intake and water pipeline to allow volumes to be withdrawn from the Athabasca River and stored on-site. Recycled water will be the main source for the operations once the system is ďŹ lled and a steady state is reached. É¸ Page C24
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PIPELINE NEWS October 2011
This aerial photo of the Kearl oilsands project, taken this past summer, shows the wide scale of construction going on for the Ă€rst phase startup in late 2012 with an initial target to produce 110,000 barrels of bitumen a day. More than 3,000 workers are housed at Wapasu Creek Lodge. Kearl is located 70 km north of Fort McMurray. Photo submitted
Fly-in, Ă€y-out eliminates daily commutes Éş Page C23 â€œCurrently, just about everything is under construction,â€? said Rolheiser. â€œWe are in the midst of building the froth treatment plant and the separation plant.â€? Kearl will use Imperialâ€™s proprietary paraďŹ nnic froth treatment technology (PFT) to process bitumen on-site to where it can be blended with natural gas condensates to create a diluted bitumen product called dilbit. Dilbit will be shipped by pipeline to Hardisty, Alberta to eliminate the cost and environmental footprint of building an onsite upgrader. Bitumen ore will be crushed and mixed with
water for slurrying at the on-site facility. The slurry will then be transported by pipeline to a bitumen extraction facility where bitumen will be separated as froth. Froth is a mixture of bitumen, water and ďŹ ne solids that will be further treated at the PFT plant to produce bitumen suitable for blending. â€œWe are quite excited about PFT in that it produces a better grade of bitumen which doesnâ€™t need reďŹ ning or upgrading at site,â€? said Rolheiser. â€œSo that way, you basically only have to reďŹ ne it once. It goes directly from bitumen to a reďŹ ned product rather than starting with bitumen then upgrading to synthetic crude, and then having to be reďŹ ned again into a gasoline jet fuel or diesel, and
that sort of stuďŹ€. â€œWe are quite excited about that in that you only have to upgrade once rather than twice which puts the greenhouse gases associated with Kearl on par with conventional crudes in North America,â€? he said. The Kearl project has regulatory approval for up 345,000 barrels of day of bitumen production from a resource of 4.6 billion barrels of recoverable bitumen. The project will be developed in two phases instead of three as originally planned. â€œWhen we ďŹ rst proposed the project, we proposed it in about three phases of about 110,000 barrels each,â€? said Rolheiser. É¸ Page C25
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PIPELINE NEWS October 2011
Up to 5,000 workers at peak construction Éş Page C24 â€œLast year, we reconďŹ gured the project execution plan based on our construction experience. Now, we are going to build an initial development which will be 110,000 barrels a day with full startup at the end of 2012. â€œFollowing the initial development, we believe because of the capacity, the PFT will enable us to ratchet it up to 170,000 bpd within the ďŹ rst several years. â€œWith the subsequent expansion phase, we would basically double it, and bring it up to licensed capacity which is 345,000 barrels per day over a
20 year timeframe,â€? Rolheiser said. During peak construction in 2012, the project could employ up to 5,000 people counting camp construction workers, and engineers and planners at Imperial Oilâ€™s oďŹƒce in Calgary. The camp-based operation at Kearl isnâ€™t something new to Imperial Oil, but itâ€™s the largest camp that Rolheiser could recall. â€œSome of our operations initially, like our Norman Wells expansion project in 1985 (Northwest Territories) was a camp, even though the camp was in the town of Norman Wells,â€? he said. â€œIt was basically a ďŹ‚y-in, ďŹ‚y-out camp-based operation where we had a
rotational workforce. â€œSlowly, we evolved that to where all of our employees live in Norman Wells, and we hire as many Aboriginals from the north as we can recruit and train.â€? Asked if he had ever worked at camp, Rolheiser said no, but shared his most memorable camp story from years past. â€œI have stayed in rig camps, but I remember one day when another guy and I were up in Tuktoyaktuk in March,â€? he said. â€œWe were drilling a well on lands
south of Tuk. The rig camp was full that night, so we moved into an old Esso camp in Tuk itself. â€œThere was a caretaker. It was a 75 person camp. It was just the caretaker and one guy and I. We were the only three people there. It was positively creepy. â€œThere was a long hall that goes into a really tight ďŹ t bend, and you could see we were the only people here. It was kind of strange,â€? Rolheiser said. By contrast camp, life at Wapusu has all of the comforts of home as noted on the PTI web site.
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PIPELINE NEWS October 2011
RTMs for oil and gas workers
Electrician Lance Gardiner hooks up wiring for a set of external pot lights on an RTM house under construction at Homes To Go in Lloydminster.
Lloydminster â€“ Homes To Go is expanding their prime Highway 16 frontage west of Lloydminster to meet the growing demand for their custom built, ready to move (RTM) homes from oil and gas workers who seek immediate and well built family housing. â€œWe have four acres and we just bought an additional four acres next to our yard. We will move over there slowly as we need it to meet the demand,â€? said Gilles Jean, who owns a stake in the company along with Grant Cochrane and majority owner Chris Benoit. â€œThis year would be our busiest ever. Itâ€™s been steady all year. Thereâ€™s a big demand. â€œThere are people from all over inquiring about it. People are having trouble ďŹ nding trades to go out of town, and they are ďŹ nding this an easy way to go.â€? Jean says about 75 per cent of RTM buyers are employed in the oil and gas industry, followed by farmers and retirees, all of whom want to build a home quickly on a rural acreage or lot in a small oilďŹ eld town. Jean doesnâ€™t check the price of oil every day like some of his clients do, but he said, â€œItâ€™s just
been good. The oilpatch is busy. Everybodyâ€™s been busy and very positive, and interest rates are low.â€? He also says an RTM home is comparable in price to a site built home, but the main advantage of buying one is the convenience factor. â€œYou donâ€™t have a bunch of trades coming in and out of your yard and garbage ďŹ‚ying all over the place,â€? he said. â€œNew sites generally start without power. You can also get theft out in the acreages. â€œA lot of those people on acreages that are doing it themselves â€“ weâ€™ve heard some stories that it might a year to two years to get a home,â€? said Jean. The turnaround time at Homes To Go is just six months from the order date with only four months needed to construct the home. Home building at Homes To Go is based on an assemblyline process with tradespersons able to work on as many as 12 houses at once. Winter is the busiest time as this is when most customers order homes for spring delivery. â€œIf we were to build one in the country, you are out running
around getting materials delivered and checking things over,â€? said Jean. â€œItâ€™s just a lot more eďŹƒcient to do a lot of houses at once in one yard, rather than one in a farm location. â€œThereâ€™s a shortage of trades. They are busy enough in town, so why would they go out of town to do any work? â€œIf they do go out of town, they would charge more money for that. Thatâ€™s where we come in,â€? said Jean. â€œItâ€™s more of a controlled environment. The trades like working here because everything is here. The power and the materials are always ready to go â€“ nobodyâ€™s waiting for anything. â€œWe have a number of different trades that are all sub contractors â€“ framing crews, plumbers, electricians, siding installers, dry wallers â€“ painters. â€œIt is all subbed out â€“ all people who are living in the Lloydminster area are working here. â€œItâ€™s more eďŹƒcient for them. They are not running around trying to ďŹ nd work or moving their tools around â€“ nothing gets stolen,â€? Jean said. É¸ Page C28
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PIPELINE NEWS October 2011
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PIPELINE NEWS October 2011
Customer responsible for basement ɺ Page C26 Homes To Go can build and move houses ranging from 648 sq.ft. to 2,500 sq.-ft. with a maximum width of 36 ft. and 90 ft. in length including attached garages. The company has more than 60 diﬀerent designs to choose from with the capability to design from scratch.
The three owners have more than 90 years of combined building experience. “I price out all the homes, order all the materials and answer a lot of questions from the trades,” said Jean about his role. “Grant Cochrane looks after all the trades and Chris Benoit does a lot of the paperwork.”
Jean says the RTM homes at Homes To Go are popular with oilﬁeld customers who can pick and choose a menu of design and construction options in one location. “They would come in and choose their house. They would pick everything in it – meaning cabinets, ﬂooring, siding, colours and all that,” he said.
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“With all of the inspections being done, the home is well constructed. We can guarantee timelines on when the house will be delivered on site. “A lot of people we build for will come and check on their home once a week or once every two weeks. They can check their home while it’s being built. That’s an advantage as well,” Jean said. Homes To Go customers are responsible for building their own basement foundation and securing the required heating, ventilation and air conditioning systems along with plumbing and electrical in preparation for delivery of the home. “A lot of people seem to ﬁnd it easy to get a basement done, and know someone who does plumbing and electrical,” said Jean. “We work with them. We get the beams engineered, the posts engineered and I always check out the basement
before the house comes – and go from there. “There is a lot of extra framing and gluing to keep it a lot stronger for moving. It’s a very well constructed home for moving,” said Jean, who relies on K&R Building & Trailer Movers in Lloydminster to deliver and roll the home onto the foundation. “They are one of the best moving companies in the country. They have been around for 40 years. They do a really good job and there’s no damage,” said Jean. “We have moved homes to Melfort, Saskatchewan to Drayton Valley, to Fort MacMurray and Grande Prairie and Edson in Alberta. “We do a lot locally to Vermilion, Wainwright and Cold Lake – a lot of those small towns.” Homes To Go is one of three home building companies owned by the business partners including Elite Homes and
Value Master Homes for the site built market. Jean says Homes To Go has been growing by about 15 per cent a year during the company’s ﬁve year history led by word of mouth and dropin customers who see the homes being built from the highway. Homes To Go has carved a niche for itself oﬀering customers higher energy eﬃcient homes with up to R34 walls and R60 ceilings and triple glazed R8.2 windows in addition to choosing high quality construction materials and local contractors. “We pride ourselves in good quality work and customer service,” said Jean. “If there are any problems after the move, that is taken care of. “We have built homes that we have been told couldn’t be built as RTMs. We have really worked to getting the customer what they want.”
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PIPELINE NEWS October 2011
Kenworth Lloydminster - A Division Of Edmonton Kenworth Ltd. 6101 - 63 Avenue, Lloydminster, AB T9V 3C1 Tel: (780) 871-0950 Fax: (780) 871-0926
Pre-Owned Premium Unit 67,000 kms 2009 Kenworth T170 - Daycab - 300 HP, 6 speed manual transmission, 8K front suspension, 13.5K rear suspension, hydraulic brakes. Comes equipped with Colins 18' Dry van body and Maxon Pro 2500 Lift gate, tilt steering, power windows & cruise control. Will be sold Unit with or without van body & electric tailgate. Pre-Owned
2011 Kenworth T170 Daycab - 260 HP, Allison 5speed, 8K front suspension, 13.5K rear suspension, Hydraulic brakes. Comes equipped with Full Tilt Fassi 80 knuckle boom picker / deck package, tilt Steering, cruise control, power windows, work station, high back driver seat, heated mirrors & 3 year steering axle limited warranty.
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2011 Kenworth T370 Extended Cab - 260 HP, Allison 5 speed Transmission,
12K front suspension, 22K rear suspension, Hydraulic brakes, Tilt steering, power windows, cruise control, heated mirrors, high back driver seat, full bench seat in extended cab (can be removed), rear axle lockup, 3 year steer axle limited warranty.
2012 Kenworth T800 - Extended Daycab - 525 HP, 18 speed, 20K front
suspension, 46K rear suspension, Air brakes. Comes equipped with Ft. Garry steel 15' gravel box. Available for Sale Mid
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PIPELINE NEWS October 2011
Trican acid blend stimulates SAGD wells Lloydminster – Trican Well Service Ltd. used the occasion of the 18th annual Technical Heavy Oil Symposium held in Lloydminster Sept. 14-15 as a dry run for an upcoming presentation speciﬁcally prepared for the Canadian Unconventional Resources Conference this fall in Calgary. The topic paper titled: Formulation of an Emulsiﬁed Thermal Acid Blend for SAGD Applications in Eastern Alberta is based on an acid blend stimulation of three producer thermal wells in the Bolney/Celtic area near Paradise Hill, Saskatchewan. Trican petroleum engineer Chris Lalchan and environmental chemist Chris Wiggins, who both hail from Calgary, shared details of the project objective to provide a uniform cleanout of scaling and organic deposition along the production well slotted liner. The goal was accomplished but not without overcoming many technical challenges noted by the speakers.
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“We are dealing with operating temperatures that are in excess of up 190 C,” said Lalchan about the project wells. “It’s very diﬃcult to come up with an acid formulation that can maximize the amount of scale that is removed, but also adhere to the corrosion guidelines so we don’t signiﬁcantly erode the liner in place. “The ﬁrst process is identifying the damage mechanisms that are damaging the well. “Once we ID the mechanism through a water analysis, solids analysis and an acid compatibility, wax and asphaltene analysis, we can then select our acid and solvents to target that damage and remediate the well,” said Lalchan. Tests showed that the main damage mechanism causing downhole screen plugging was calcium carbonate scaling and organic deposits. It was Wiggins’ turn to explain some of the testing and solids analysis that led to those conclusions. “We received solids from all three candidate wells,” said Wiggins. “What we did for that analysis was to perform an XRD which stands for X-ray diﬀ raction analysis and an XRF which means X-ray ﬂuorescence. “The XRF, for example, is very good at giving you the amount of each element in the sample.” The analysis indicated the sample was made of 87 per cent silicon, four per cent calcium, three per cent iron and six per cent other elements. “It did indicate silicon based scaling,” said Wiggins. “The purpose of analyzing water samples was to identify the types of elements responsible for scaling. “We are looking speciﬁcally for calcium, silica bicarbonates, and sulphates – those kinds of things that commonly cause scales.” The water analysis proved scaling of calcite increases with increased temperatures as the solubility of calcite decreases. A drop in pressure near the wellbore was also found to increase the deposition of calcite which leads to further pressure loss and rapid oil production decline. The other damage mechanism was the deposition of organic material in a heavy oil emulsion with characteristics similar to having solid ﬁnes present in the ﬂuid. The wax and asphaltene analysis indicated the crude oil contained 10 per cent wax and 30 per cent asphaltenes (fractions of oil). ɸ Page C31
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PIPELINE NEWS October 2011
Trican testing ɺ Page C30 “There deﬁnitely was the potential for the asphaltenes and possibly the waxes to be dropping out of solution in the near wellbore area,” said Wiggins. One of the most important tests considering the high operating temperature of the SAGD well was the corrosion test that Lalchan put into perspective. “If we corrode that liner in place, the operator may have sand controls issues, and we may not be working in stimulation if we turn their liner into Swiss cheese,” he said. “It’s very important that we do that corrosion test. “Once we have a blend that adheres to corrosion standards, we can recommend that blend for remediation.” Previous treatments on SAGD wells using one per cent HCl (hydrochloric acid) or ﬁve per cent acetic acid worked to remove scaling but the issues with the heavy oil emulsion remained unresolved. The Trican solution to both deposition problems was a ﬁve per cent acetic acid blend. The blend was emulsiﬁed with a wax and asphaltene solvent blend along with a liquid organic acid corrosion inhibitor and an emulsifying surfactant. The proof is in the pudding, or in this case the substantial heavy oil production gains in the three test wells. The ﬁrst test well realized a 79 per cent gains in production rate in the 90 days following treatment and continued to exceed the pre-treatment rate for 10 months. The second well had a production rate increase of 127 per cent for 90 days with improved production for seven months. The third well produced to a high, but brief production peak, before falling to a rate similar to prestimulation.
Dustin Fallscheer, left, presents Trican Well Service speakers Chris Lalchan and Chris Wiggins with an art gift for their presentation on an emulsiÀed acid stimulation on SAGD wells in the Lloydminster area. Previous use of conventional emulsiÀed acids to treat scale and organic deposits was restricted to conventional reservoirs, but the Trican project has helped to prove that an emulsiÀed acid system can be used to stimulate thermal heavy oil reservoirs.
PIPELINE NEWS October 2011
Lloyd work camp possible Lloydminster â€“ A temporary work camp near Lloydminster is not out of the question the next time a large scale work project comes this way. City Mayor JeďŹ€ Mulligan says talk of a work camp ďŹ rst surfaced in the fall of 2010 during
the major Lloydminster Husky Upgrader maintenance turnaround that took place at the same time as the heavy oil show. â€œThere are about 900 to 1,100 hotel and motel rooms between here and 50 kilometres of here,â€? he said.
â€œThose were fully occupied during the turnaround and, of course, we ran into the oil show at the same time. That created a problem, but you canâ€™t build capacity for a once every three to ďŹ ve year event, so I think we are okay.â€? Mulligan says a
work camp would have to be done in conjunction with one of the regional municipalities or counties if the need arose. â€œIn the RMs and the county they are able to pretty quickly service land, and it would be in close proximity to the
city,â€? he said. Mulligan aďŹƒrmed the possibility that a camp could be established during the next major turnaround at the upgrader. â€œIf we were to look at something like that, it would probably be in the county or the RM
and quite likely if itâ€™s going to be by the upgrader, itâ€™s going to be in the RM (of Wilton),â€? he said. â€œWe would provide a lot of supports to it. We donâ€™t have the land in the city limits as it exists today to be able to build that.â€?
Lloyd Lavigne â€˘ Kirk Clarkson Owners/Managers 5315 - 37th Street Provost, AB T0B 3S0
6506 - 50th Avenue Lloydminster, AB
Phone: (780) 875-6880
Phone: (780) 753-6449
Fax: (780) 875-7076
24 Hour Service Specializing in Industrial & Oilfield Motors
RICK CORMIER Manager
Box 609 Carlyle, SK S0C 0R0 www.truetorq.ca
Bus: (306) 634-8084 Cell: (306) 577-8833 Fax: (306) 453-6075 email@example.com
TERRY DODDS (24 hrs.) (306) 634-7599 Cell. (306) 421-0316
General OilďŹ eld Hauling
M.E.T. OILFIELD CONST. LTD.
Lyle Leclair Cell: 306-421-7060
â€œAll Your Construction and Maintenance Needsâ€? SPECIALIZING IN: ENGINES, PUMP UNITS, UNIT INSPECTIONS, PIPE FITTING, TREATERS AND PRESSURE TICKET WELDING Box 1605, Estevan, Sk. S4A 2L7 Cell. (306) 421-3174, (306) 421-6410, (306) 421-2059 Fax: (306) 634-1273
a l t u s g e o m a t i c s . c o m
Specializing in well site and pipeline surveys Yorkton 306.783.4100
Swift Current 306.773.7733
Medicine Hat 403.528.4215
Grande Prairie 780.532.6793
firstname.lastname@example.org www.aspentrailer.com Aspen Custom Trailers 6017-84th Street S.E. Calgary, AB T2C 4S1
Lance Wotherspoon Regional Sales Manager
[T] 403 236 2244 [F] 403 236 8829 [C] 403 813 6319
[Toll Free] 877 236 2244
JUSTIN WAPPEL - Division Manager Box 208
461-8471 â€˘ 461-8472 â€˘ 461-8473 Call: Clinton Gibbons
Canada's leading distributor of industrial, Ă eet and safety products.
Proud to provide selection, quality and excellence to our customers.
LAMICOIDS & metal cable tags EfĂ€cient Service
Call Linda for more information
Estevan Trophy & Engraving 516 Nesbitt Drive, Estevan â€˘ 634-2631 (Behind Power Dodge)
Phone: 634-6005 â€˘ Fax: 634-6405 Email: email@example.com
401 Hwy. #4 S. Biggar, Saskatchewan PO Box 879 S0K 0M0 Ph (306) 948-5262 Fax (306) 948-5263 Cell (306) 441-4402 Toll Free 1-800-746-6646 Email: firstname.lastname@example.org www.envirotank.com
PIPELINE NEWS October 2011
Career Opportunities 6XUH)ORZSURYLGHVWKH+LJKHVW9DOXH6NLOOHG3URIHVVLRQDOVWRWKH2LO *DV,QGXVWULHVPRVW$JJUHVVLYH2SHUDWLQJ&RPSDQLHVDQGUHTXLUHV LQGLYLGXDOV WKDW WDNH SULGH LQ WKHLU ZRUN SRVVHVV H[FHOOHQW VDIHW\ OHDGHUVKLSVNLOOVDQGKDYHWKHWHFKQLFDOH[SHULHQFHWRFRPSHWHZLWKWKH EHVWLQWKH,QGXVWU\ 'XHWRWKHVLJQLĂ€FDQWJURZWKZHDUHH[SHULHQFLQJWKURXJKRXW:HVWHUQ &DQDGDZHDUHSUHVHQWO\VHHNLQJDSSOLFDQWVIRUWKHIROORZLQJIXOOWLPH SRVLWLRQVLQ6DVNDWFKHZDQ$OEHUWDDQG%ULWLVK&ROXPELD
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Calfrac has grown from a small oilfield services company to an international leader in fracturing and coiled tubing well services.
Rotational Opportunities Weâ€™re hiring rotational employees for our Western Canada operations. 3-weeks-in, 2-weeks-out field positions:
2-weeks-in, 2-weeks-out maintenance positions:
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PIPELINE NEWS October 2011
Small family business looking for a:
Handyman - Carpenter
Company Drivers For oilfield hauling and service work in Weyburn, Estevan and surrounding area We require: â€˘ 1A License with clean abstract â€˘ Pre-screen drug & alcohol test (provided) â€˘ Current safety tickets a definite asset but can be provided We provide: â€˘ Top hourly & hauling rates â€˘ Paid shop time for all maintenance on Company equipment â€˘ Scheduled days off that includes 2 weekends/month â€˘ Benefits package available For details call Scott at (306)634-0070 or Fax resume to (306)634-0071
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CREW FOREMAN/ PIPELINE FOREMAN Wage negotiable depending on experience and qualifications. Safety certificates required (H2S, Confined Space, First Aid/CPR, TDG, Ground Disturbance Level 2). Minimum 5 years oilfield experience.
EQUIPMENT OPERATOR Class 1A license would be an asset. Applicants should be familiar with oilfield work/construction. Applicants must have safety tickets H2S, Confined Space, First Aid/CPR, TDG. In this position you will operate trackhoes, backhoes, graders, cats, etc.
Interested applicants can apply in person, mail or fax resumes to:
McGILLICKY OILFIELD PARTNERSHIP #6 Hwy 39 East, Box 843, Estevan, Sk. S4A 2A7 â€˘ Fax: 634-4575 No phone inquires please.
Interested applicants fax 306-636-1537 or e-mail to email@example.com
Horizontal Directional Boring Locators willing to relocate to SE, Sask Needed ASAP. Company willing to train knowledgeable persons. â€˘ Must be familiar with Directional Boring â€˘ 1A licence an asset but not necessary â€˘ Complany Health plan, wages negotiable, $30/hr range â€˘ Overtime after 40hrs â€˘ Estimated annual wage - $70- $110,000 depending on economy. Send resumes for both positions to:
firstname.lastname@example.org or fax: 306.482.5232
Is hiring for the following positions at our Weyburn SK location:
BRENT GEDAK WELDING LTD. Full-Time Positions Available IN ESTEVAN
>Journeyman Insulators >Pressure Welders (no rig required) >Insulator Labourer >Welding Labourer Valid driverâ€™s licence, H2S Alive & CPR / 1st. Aid saftey tickets required
Coil Operators Coil Helpers Essential Coil & Stimulation Services is a company recognized for safety and excellence within the oil & gas industry. We currently provide services throughout Alberta & Southern Saskatchewan. Class 1 driverâ€™s license is preferred, but all class of drivers are welcome to apply. Previous oil Ă€eld experience & valid tickets are an asset. Essential offers above average wages, job bonuses, employee savings plan, group beneĂ€t plan, scheduled days off & training will be provided for the right candidates.
Join our highly skilled and friendly team!
Great employees are Essentialâ€Ścome see what we have to offer!
Fax, email or drop off resume to:
Fax, email or drop off your resume & current drivers abstract
email: mail: email@example.com jjsc schu hult hu lte@ lt e@bren @brentg ntg ged edak akwe ak weld we ldin ld ing g.co
firstname.lastname@example.org Fax: 403-580-8906
1A, 3A Drivers/ Owner Operators
Brady Oilfield Services LP. Weyburn, Halbrite and surrounding area. OilĂ€eld Safety CertiĂ€cates an asset but not necessary. BeneĂ€ts package available.
Also looking for experienced:
A vibrant & growing company
126 26 Lamoro Lamo moro oro St. Stt. S
Must have Class 1A drivers license, clean drivers abstract & valid safety tickets Competitive wages & beneĂ€ts
â€˘ Building projects â€˘ Rental property repair â€˘ A willingness to help in other company areas.
For details call Scott at (306)634-0070 or Fax resume to (306)634-0071
Competitive wages & Health Benefits Package
â€˘ Bed Truck Operator â€˘ Swamper
For oilfield hauling and service work in Weyburn, Estevan and surrounding area We require: â€˘ 1A License with clean drivers abstract â€˘ Pre-screen drug & alcohol test (provided) â€˘ Current safety tickets â€˘ Truck must be equipped with up to date fluid pump & positive air shut-off We provide: â€˘ Sour sealed trailers with scrubber â€˘ Top hourly & hauling rates â€˘ Scheduled days off that includes 2 weekends/month â€˘ Benefits package available â€˘ In house shop rate
LABOURERS Wages negotiable. Safety tickets required (H2S, Confined Space, TDG, CPR and First Aid)
Full or Part time position depending on experience.
Forward Resume and Drivers Abstract
P.O. Box 271 Midale, Sask. S0C 1S0 Fax: (306) 458-2768 email@example.com firstname.lastname@example.org
Pipeworx Ltd. has immediate openings for
Fitters, Labourers, Welders, Welders Helpers, Human Resources Person & Quality Control Person for facility construction.
Only candidates with prevoius experience will be considered. 0XVWSDVV' $7HVW Please email resume to:
LQIR#SLSHZRU[FD with copies of any safety certiďŹ cates you currently hold
PIPELINE NEWS October 2011
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7LFNHWVDQ$VVHW Pumping & Stimulation Services Is currently accepting applications for:
Class 1 & 3 Drivers With Experience in:
Acidizing Remedial Cementing Nitrogen Pumping For our : Grande Prairie / Dawson Creek Branch Red Deer Branch Saskatchewan / Manitoba Branch With some of the newest equipment in the industry and Technicoilâ€™s commitment to its employees, we offer room for advancement, excellent wages & benefits. If this opportunity interests you and you have a current H2S Alive, First Aid and PST, please submit your resume with a 5 year Driverâ€™s abstract, to: Phone: FAX: E-Mail:
403-314-3090 403-309-3320 email@example.com
L & C Trucking â€œServing the Oil Patch for 54 Yearsâ€?
TRUCK DRIVERS â€˘ SWAMPERS PICKER OPERATORS Competitive wages, health plan, safety tickets an asset, but will train. Apply in person with resume or fax or email to:
24 Hwy 39 E Estevan Attention: Norm Mack Fax: 634-8699 Email: LCNorm@sasktel.net Resumes held in strict confidence
Construction Supervisors!!! Jerry Mainil Ltd is an oilĂ€eld construction company that services Southeast Saskatchewan, and is currently looking for a CONSTRUCTION SUPERVISOR We are looking for a team oriented employee who has a clear understanding of facility construction and/or pipelining. This employee would be responsible for: - Leading a team of crews, operators, and labourers - Liaising with customers to determine their needs and requirements - Ensuring our employees adhere to company and customer rules, policies, and procedures - Ensure all work is performed safely and Regulations are being adhered to The successful candidate would have: - Experience in pipeline construction and/or facility construction/ maintenance - Strong organizational skills to align manpower, tools, equipment, and project resources - The ability to multi-task. - Understanding of the Saskatchewan Boiler Branch regulations and Z662 would be an asset.
We will offer a wage based upon experience and ability, a charge out bonus, as well as a group beneĂ€ts package and pension plan. You will also be home every night, along with a rotating weekend schedule. If youâ€™re interested in applying for this position, please email your resume to firstname.lastname@example.org, or fax (306) 842-6560. You can check out our website at www.jerrymainilltd.com
PIPELINE NEWS October 2011
Career Opportunities (PSOR\PHQW2SSRUWXQLW\
HUNTING ENERGY SERVICES (PIPE DIVISION) LTD. Hunting Energy is currently looking for a dynamic individual to fill the position of
THREAD/CONNECTION SUPERVISOR Candidate must work well with people, have good communication skills, can multi-task in a fast pace environment, 24 hr.â€“7 day/week. Previous experience with tongs, thread inspection, and thread supervision.
Hunting offers competitive salary, plus day rate, and benefits package. Fax: 780-955-8764
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Outside Shipper & Receiver Full time outside shipper & receiver required. Forklift and lumber experience would be an asset. Company benefits. Salary based on experience. No phone calls. Fax resume to Brian at Wood Country at 634-8441 or email resume to email@example.com
WOOD COUNTRY 407 Kensington Avenue, Estevan
Titanium is currently looking for dedicated, responsible:
Mechanical Engineer P.Eng
Choose a CAREER with us in the vibrant oil industry! â€˘ Accepting applications. â€˘ Always focused on safe work. â€˘ Wages well above industry standard. â€˘ Health benefit plan (paid for by IWS). â€˘ Steady work with scheduled days off. â€˘ Room for advancement.
TO JOIN OUR TEAM Email your resume to firstname.lastname@example.org Fax (306) 634-2607 - Ph (306) 634-2336 Box 490 (477 Devonian St.) Estevan, SK S4A 2A5
The ideal candidate will have excellent interpersonal skills and be able to work as an integral part of a multi-discipline design team. The individual must have extensive component and system design experience, good materials and fabrication knowledge, and be results driven. The candidate should have 3+ years ďŹ eld/design experience. Skill with Solidworks an asset. Titanium offers excellent starting wages, beneďŹ t packages, scheduled days off and excellent opportunities for advancement. Experience preferred but we are willing to train the right candidate. Please forward resumes attention: Pat Potter Email: email@example.com Fax: 780-875-5249
P.O. Box 2062 Lloydminster,Alberta, T9V 3C3 Or call: Pat at 780-875-1395 780-871-3802
Driven Energy is a progressive busy oilďŹ eld service company offering pressure truck and vacuum truck services to the Midwest area. The â€œDrivenâ€? team takes great pride in the quality of service offered and is dedicate to maintaining that stadard. We at â€œDrivenâ€? are looking for experienced:
pressure truck and semi-vac operators who have that same frame of mind. We offer top wages, new eqipment, scheduled days off, beneďŹ ts and a great atmosphere to work in.
To Apply: Call: 780.205.0780 Fax resume: 780.875.7847 Email: firstname.lastname@example.org Quality Driven / Experience Driven / Saftey Driven / Driven for Excellence
PIPELINE NEWS October 2011
Concord Well Servicing is looking for experienced service rig hands for work across Alberta. Minimum QualiÀcations: · Previous service rig experience. · H2S. · First Aid. · Class 5 Drivers License (air brakes an asset). · Travel and accommodation assistance available.
Apply Now Email: email@example.com or Fax 1-780-948-3058
Hydrovac Operators and Swampers • Offering excellent wages • Excellent beneÀt package available • Willing to train if necessary • Safety tickets an asset • Operators must possess class 3A driver’s license • Living accommodation available
For more information call: Trevor at: 306-483-7777 or Kim at: 306-483-7722 Email resumes to: firstname.lastname@example.org or fax to: 306-483-2082 KUDU Industries Inc. is a world leader in the technological advancement and manufacturer of progressing cavity pumping systems for the oil and gas industry.
“Pipeline on Wheels” ®
Sub-Contractors Wanted Do you have a Class 1 license and a professional attitude? Do you own your own truck with Áuid pump and positive air shut-off? Heavy Crude is looking for you! We offer our sub-contractors: • Assigned Trailers • Regularly Updated Fleet • Regular Trailer Maintenance • Spare Trailers
• Safety Courses Available In-House • Scheduled Days Off • 24/7 Field Support
For more information or to apply, please contact us.
KUDU currently has a job opening for Pump Technician at our Estevan location. This position will report to the Store Manager. This position does require travel and some on call work on weekends and evenings. Key Responsibilities • Delivering and testing pumps • Preparing orders as needed • Maintaining shop inventory • Responsible for shop cleanliness • Repairing tools • Ensure compliance with KUDU’s Health and Safety policies as well ensure that safe work practices are used • Ability to work with a team or independently with minimal supervision • Ability to work overtime as required • Travel to customer Àeld locations Minimum Requirements • Mechanical ability • Field experience in the oil and gas industry would be an asset • Knowledge of artiÀcial lift, drilling and production operations would be an asset • Class 5 operator’s license Desired Skills • Computer skills • Professional with solid communication and customer service skills • Lean Manufacturing skills would be an asset • Demonstrate an initiative to develop and learn new skills
Lloydminster, AB • Tel: 780-875-5358 Fax: 780-875-5825 • Toll Free: 877-875-5358 email@example.com • www.heavycrudehauling.com
If you are interested in this position please forward your resume to aron_dahl@KUDUpump.com or fax to (306) 634 – 2192 by October 15, 2011. We appreciate all interest but only those contacted will be interviewed.
Journeymen Electricians and Apprentices PowerTech Industries Ltd. in Estevan is seeking Journeymen Electricians and Apprentices for work in the Southeast Saskatchewan Oil & Gas Industry. Experience: 1 year (preferred) Safety Certificates are needed. 1st Aid/CPR, H2S, WHMIS. Applicants must have a valid driver’s license. Oilfield background preferred. Full benefits packages and RSP plan. Duties: Day to day electrical construction and maintenance in the oilfield. Wage/Salary Info: Depending on experience & qualifications. To Apply: Fax: (306) 637-2181, e-mail firstname.lastname@example.org or drop off resume to 62 Devonian Street, Estevan, SK.
PIPELINE NEWS October 2011
is an industry leader in Safety Services and is currently seeking
Safety Personnel to keep up with increasing customer demands.
General Shop / Yard
If you are interested in becoming part of the Target Team and enjoying our growth with us, let us know!
Please forward resume with copies of tickets to: email@example.com or fax to 780-870-5359
Pason Systems Inc. is the worldâ€™s largest provider of rental oilĂ€eld instrumentation systems.
FIELD SERVICE TECHNICIAN WEYBURN, SK AREA We are seeking an energetic, personable and self-motivated individual to work the front line and provide outstanding service to our customers in the installation and ongoing support of our products on drilling and service rigs in the Weyburn, SK area.
Maintenance Person Required DUTIES INCLUDE: &ODVV $ +HDY\ 'XW\ 7RZ 7UXFN 'ULYHUVIRUWKH/OR\GPLQVWHUDUHD )XOO WLPH 3HUPDQHQW 3RVLWLRQV :LOO7UDLQ$EVWUDFW5HTXLUHG Call John or Ginette 1-888-875-8111 or Send Resume to Fax: 780-846-0005 Email: firstname.lastname@example.org
Experience with oilĂ€eld drilling and service rigs as well as instrumentation is an asset.
southĂ€email@example.com with â€œField Service Technicianâ€? in the subject Ă€eld Please note, this is a permanent position in the Estevan, Oxbow and Carnduff areas We thank all applicants in advance, however, only those selected for an interview will be contacted. Visit our web site for more information about Pason at www.pason.com Pason promotes a safe and healthy work environment and applicants for this position will be subject to our alcohol and drug testing program.
is seeking a
MACHINIST / CNC OPERATOR Irwinâ€™s Machining & Welding is a progressive, growth orientated company located in Oxbow, (southeast) Saskatchewan that provides manufacturing and repair services to the oilĂ€eld and agricultural industries.
* Competitive Wages & Commission * Comprehensive BeneĂ€ts Package: Life & Disability Insurance, Medical including Prescription drugs, Dental & Eye coverage. * RRSP retirement plan * Annual Fitness allowance * Quality focused & Team environment * Performance based bonus system * New CNC machines to work with
* Minimum Level 2 Apprentice; Journeyman an asset. * Pipe cutting & CNC experience preferred * Valid Driverâ€™s licence We require people who possess a positive attitude, excellent work ethic and are able to problem solve and use critical thinking skills in a team orientated environment. Interested candidates submit resumes with references by October 14, 2011 to: Human Resource Manager
kag Ă€t pac & bene
Send resume to: firstname.lastname@example.org or fax: 306-634-6738
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We provide the training and on-going support required to be successful as well as all necessary tools and equipment including a Ă€led service vehicle. We offer a competitive base salary, discretionary performance bonus, and a comprehensive beneĂ€t program. Forward your application to
â€˘Pressure Washing of Trucks & Equipment â€˘Shop & Yard Upkeep â€˘Occasional Hotshot â€˘ Drivers License Required
NOW COME JOIN OUR TEAM!
Weâ€™re hiring for various Pipeline construction projects in the Regina area. Over 50 years strong, Arnett & Burgess Oilfield Construction Limited safely provides quality pipeline construction, facility installation, pipeline integrity, custom fabrication, maintenance and related contruction services to the energy industry.
All positions require previous experience in Pipeline Construction. Previous experience on Pipeline Integrity projects is an asset.
â€˘ PIPELINE LABOURERS â€˘ FOREMEN â€˘ SUPERINTENDENTS â€˘ HEAVY EQUIPMENT OPERATORS
For more details and other career opportunities please visit: www.abpipeliners.com For Inquiries please call: 403.290.7800
Compensation: Highly Competitive wages Overtime Daily Subsistence
Preferred Certifications H2S Alive Standard First Aid & CPR
Required Certifications Driverâ€™s License Ground Disturbance â€“ Heavy Equipment Operators only
Please submit your resume to : email@example.com
PIPELINE NEWS October 2011
Career Opportunities Province lags Alberta
Coil Well Servicing Is currently accepting applications for:
Senior Operators Operators 1 & 2 Trainees Class 1 or 3Q Driver’s License Required For our Operations in: Grande Prairie / Dawson Creek / Fort St. John Central & Southern Alberta Saskatchewan / Manitoba With some of the newest equipment in the industry and Technicoil’s commitment to its employees, we offer room for advancement, excellent wages & benefits. If this opportunity interests you and you have a current H2S Alive, First Aid and PST, please submit your resume with a 5 year Driver’s abstract, to: Phone: FAX: E-Mail:
403-314-3090 403-309-3320 firstname.lastname@example.org
Regina – In a 12-month tortoise versus hare race for jobs growth, Alberta beats Saskatchewan despite news the latter economic competitor posted the country’slowest employment rate of 4.5 per cent in August. Saskatchewan is actually a third cousin to Alberta and Ontario when it comes to employment growth over the long term. Alberta has the highest year over year employment growth rate above the national average at 4.2 per cent followed by Ontario at 1.5 per cent. However, neither Alberta nor Ontario gained much ground in August with unemployment rates unchanged at 5.6 per cent and 7.5 per cent, respectively. Saskatchewan’s unemployment rate in August dropped 0.4 percentage points to 4.5 per cent as fewer people participated in the labour market, but that rate was achieved with the loss of 3,000 jobs in the month. Employment levels in the province were down 0.5 per cent compared with 12 months earlier. The national unemployment rate edged up by 0.1 per cent to 7.3 per cent in August. In the past 12 months, national employment has grown by 1.3 per cent, primarily in Ontario and Alberta, and among private sector employees. In August, employment in construction fell by 24,000 nationally, but compared with 12 months earlier, employment in construction showed a gain of 3.0 per cent. In transportation and warehousing, employment declined by 14,000 jobs. Despite the loss in August, this industry posted the highest growth rate of all industries at 6.3 per cent in the past 12 months. Employment in natural resources declined for the second consecutive month in August, down by 12,000. With these recent declines, employment was 26,000 below its level of August 2010. In health care and social assistance, employment rose by 50,000 in August, more than oﬀsetting the decline in July. This industry has grown by 2.9 per cent over the past 12 months, continuing a long-term upward trend. Employment in manufacturing was little changed in August. Over the past 12 months, employment in the industry has risen by 2.3 per cent or 40,000 jobs.
PIPELINE NEWS Saskatchewan’s Petroleum Monthly Saskatchewan’s Petroleum Monthly
November 2011 Focus
CRANES & PICKERS
Contact your Sales Rep to be a part of the focus edition
SE Sask. & SW Man. Cindy Beaulieu Sales Manager
Glenys Dorwart email@example.com
SE Saskatchewan & SW Manitoba Ph: 306.634.2654 Fax: 306.634.3934
NW Saskatchewan and NE Alberta
SW Saskatchewan Ph: 306.773.8260 Fax: 306.773.0504
Doug Evjen Sales Manager firstname.lastname@example.org
Stacey Powell email@example.com
NW Saskatchewan Ph: 780.875.6685 Fax: 780.875.6682 Email: firstname.lastname@example.org Daniela Tobler Sales Manager
PIPELINE NEWS October 2011
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ABSA Registered â€¢ Conforming to ISO and API Standards â€¢ 24hr Service
780 - 875 - 6535 www.metaltekmachining.com