DECEMBER 2009 � $6.00
Keeping readers regionally informed
FRAC FREEZE & FLOOD PULSE
Canadian Publication Mail Product Agreement #40069240
Made-in-Alberta innovations can draw more crude from conventional oil reservoirs
Tanks Single & Double Wall
Calgary Sales 403.264.6688 Redcliff Direct 403.548.5567 TOLL FREE
30-50-100-200-400 750-1000-1500 BBL
1.888.745.4647
PLATINUM Energy Services Corp.
Flat, Slope or Cone Bottom
PLATINUM Energy Services Corp.
Pumpjacks Sales Service Rentals Rebuilds Installations Machining Tearouts
Primemovers Pads Accessories Parts Component Exchange Replacement Assemblies
Calgary Sales 403.264.6688 Lloydminster Direct 780.875.7145 Provost Direct 780.753.8400 Drayton Valley Direct 780.621.1453
www.platinumenergy.net
TOLL FREE
1.888.745.4647
ENGINEERS, FABRICATORS & CONSTRUCTORS FOR OIL & GAS PROCESSING
GAS COMPRESSION / GENERATION / PROCESSING EQUIPMENT FOR SALE / RENT / OR LEASE DEHYDRATORS (NEW) Tower Size Design Pressure 12” to 36” Sweet & Sour 1,310 - 1,480 psig HEATERS (NEW) 2 MMBtu/hr Heat Duty, 1500# Preheat Coil AMINE SWEETENING PLANTS (NEW) Plant Size Amine Circulation Rate 15 MMscf/d AMINE 45 USGPM of AMINE SEPARATOR SKIDS (NEW) Separator Size Design Pressure 16” & 24” Sweet 1,440 psig LPG RECOVERY PLANTS (NEW) Plant Size Refrigeration Compressor 6-10 MMscf/d GAS 100 hp Mycom 8-12 MMscf/d GAS 150 hp Mycom 10-15 MMscf/d LEAN GAS 200 hp Mycom 20-30 MMscf/d RICH GAS 450 hp Mycom TURBO-EXPANDER PLANT (USED) 25 MMscf/d EXPANDER C2 OR C3 RECOVERY POWER GENERATION UNITS (NEW) G-300-KW-Dual
Waukesha F18GL
300 KW Generator
G-400-KW-Dual
Waukesha H24GL 400 KW Generator
GAS BOOSTER COMPRESSORS (NEW) C200-S20B 200 Caterpillar G3306 TAW
Sullair PDR20 Gas Booster
C400-S25B 400 Caterpillar G3408 TAW
Sullair PDR25 Gas Booster
C400-S25B 400 Caterpillar G3408 TAW
Sullair PDR25 Gas Booster
C630-A282 630 Caterpillar G3508 TALE Ariel RG282 Gas Booster C1265-A357 1265 Caterpillar G3516 TAW
Ariel RG357 Gas Booster
GAS COMPRESSORS (NEW) Model # hp Engine
Compressor
Model #
C145-JG-2
145
Caterpillar G3306NA
Ariel JG-2 Throw
C810-JGH-3
C195-JGA-2
195
Caterpillar G3306TA
Ariel JGA-2 Throw
W1250-JGK-3 1250 Waukesha 5774 LT
Ariel JGK-4 Throw
W400-JGA-3
400
Waukesha F18CL
Ariel JGA-4 Throw
W1445-HOS-3 1445
Waukesha 5794 LT
Dresser HOS-4 Throw
W400-JGA-3
400
Waukesha F18CL
Ariel JGA-4 Throw
W1445-JGK-3 1445
Waukesha 5794 LT
Ariel JGK-4 Throw
C630-JGJ-3
630
Caterpillar 3508 TALE Ariel JGJ-4 Throw
W1445-JGK-3 1445
Waukesha 5794 LT
Ariel JGK-4 Throw
C630-JGJ-3
630
Caterpillar 3508 TALE Ariel JGJ-4 Throw
W1680-JGK-3 1680
Waukesha 7044
Ariel JGK-4 Throw
C630-JGJ-3
630
Caterpillar 3508 TALE Ariel JGJ-4 Throw
C1775-JGC-3 1775
Caterpillar G3606 TAW Ariel JGC-4 Throw
C810-JGH-3
810
Caterpillar G3512 TALE Ariel JGH-4 Throw
C1775-JGC-3 1775
Caterpillar G3606 TAW Ariel JGC-4 Throw
hp 810
Engine
Compressor
Caterpillar G3512 TALE Ariel JGH-4 Throw
Propak Compression is a distributor of Dresser-Rand & Ariel compressors. Propak Compression is set up to sell units, service and supply parts for reciprocating and rotary screw gas compressors. See our Web Site for detailed specifications for the stock production equipment. Phone Sales: (403) 912-7000 Fax: (403) 912-7011 E-mail: sales@propaksystems.com Web Site: www.propaksystems.com
PILING
D R I V E N & SCREW PILE
BRIDGES
P E R M A N E N T & R E N TA L S
P U M PJAC K
I N S TA L L AT I O N & M A I N T E N A N C E
1-877-539-9222 • www.northstar-inc.com SERVING WESTERN CANADA FROM FO RT ST. JOHN • GRANDE PRAIRIE • CALGARY • REGINA
ALL SAGE COMPRESSORS COME WITH A TEAM OF SAGE EXPERTS. When you deal with Sage you get more than a high quality gas compressor, you get a team of experts with deep industry experience who are committed to your project.
Discover the difference at Sage. www.sageenergy.ca Calgary: (403) 250-8810 Grande Prairie: (780) 830-1002 Red Deer: (403) 343-7845 Fort St. John: (250) 785-8509
Table of Contents
Keeping readers regionally informed
F E A T U R E S
12
Freeze-frac and flood pulse by Graham Chandler
Made-in-Alberta improved oil recovery techniques can draw more crude from conventional reservoirs
18
Knocking out NOX
33
One billion barrels and counting
by James Menzies
In 2010, heavy truck engines will be cleaner thanks to a pair of competing technologies—but which choice is best for the oilpatch?
Imperial Oil just produced its billionth barrel of bitumen from its Cold Lake project, a historic achievement
With all the uncertainty about the economy, look for our Recession to Recovery logo for coverage on how companies are handling the downturn, preparing for the rebound, and, in some cases, even thriving. 6
DECEMBER 2009 • OIL & GAS INQUIRER
Table of Contents
R E G I O N A L
25
N E W S
British Columbia
41
• B.C. land sale takes in $370M, the sixth-
• Drilling days per well rise despite
largest bonus on record
steep overall activity downturn
• Pipeline companies and contractors
• Oilpatch lenders work with junior
appear in court over 2007 oil spill
31
49
44,500 boe
Northeastern Alberta
• Saskatchewan's October land sale
• Husky prepares to drill new wells at its Tucker oilsands project • Epcor and Suncor sign water deal
nets $32.4M
53
Quebec electric car battery plant
• Alberta extends its bitumen royalty-inkind program
Central Canada • French company invests $120M in
Central Alberta • Berens Cardium well tests 270 barrels
Saskatchewan • PetroBakken pushes daily output to
generate meager revenue
37
• Electric cars may end oil age
55
East Coast • Korea’s KNOC buys Harvest for $4.1B,
per day
including Atlantic refinery
57
International • Royal Dutch Shell cuts 5,000 as Q3 net profit falls by 62 per cent
I N
from all the staff at
producers to get through the downturn
Northwestern Alberta/Foothills • Alberta’s Crown land auctions in October
33
Southern Alberta
Merry Christmas
E VE R Y
I S S U E
10 Statistics at a Glance
61
Tools of the Trade
Completions data, spot gas prices, gas
Phoenix Heli-Flight of Fort McMurray
storage, drilling activity, and more
deploys several state-of-the art safety
• SMART DEADWEIGHT AND PRESSURE HOUND PRODUCTS • ECHOMETER SALES AND SERVICE • PORTABLE CUSTOM DATA ACQUISITION SYSTEMS • PRESSURE AND FLOW CALIBRATION TRACEABLE TO NATIONAL STANDARDS • INSTRUMENT RENTALS • COR CERTIFIED
#1, 1815 - 27 Avenue NE Calgary, AB T2E 7E1 Phone: (403) 291-3535 Fax: (403) 291-3585
1-888-SYSTECH www.systechinst.com
and management systems across its
59
fleet of modern helicopters.
On The Job JoAnn Weiss, who runs a safety services operation in Grande Prairie, has been
62
Political Cartoon
named Canadian Energy Person of the Year by the Association of Desk and Derrick Clubs.
Cover Design: Aaron Parker
OIL & GAS INQUIRER • DECEMBER 2009
7
piling
r pen e De w O
d No e R nch a
Br
Piledriving Pile Supply Screw Piles Pile Pre-drilling Cranes & Pickers Hydrovac Service CCTV & Flushing Oilfield Hauling
ASTM A252 structural piling made to order. DFI manufactures piling from 4½” to 16”, up to .500 wall thickness, and made to exact length. Save steel. Save money.
www.dfi.ca 1.877.334.7453 Edmonton • Red Deer • Edson • Bonnyville • Brooks • Grande Cache • Peace River • Rycroft • Fort St. John
Editor’s Note Vol. 22 No. 1 President & ceo Bill Whitelaw | bwhitelaw@junewarren-nickles.com
Mike Byfield | mbyfield@junewarren-nickles.com
Publisher Agnes Zalewski | azalewski@junewarren-nickles.com
Recession to recovery, really
Associate Publisher Chaz Osburn | cosburn@junewarren-nickles.com Editorial director Stephen Marsters | smarsters@junewarren-nickles.com EDITORIAL Editor
Mike Byfield | mbyfield@junewarren-nickles.com INTERIM ART DIRECTOR
Ken Bessie | kbessie@junewarren-nickles.com Editorial Assistance
Marisa Kurlovich, Kelley Stark proofing@junewarren-nickles.com Contributors
Graham Chandler, Richard Macedo, James Menzies Creative Print, Prepress & Production Manager
Michael Gaffney | mgaffney@junewarren-nickles.com Publications Manager
Audrey Sprinkle | asprinkle@junewarren-nickles.com Publications Supervisor
Rianne Stewart | rstewart@junewarren-nickles.com CREATIVE SERVICES Supervisor
Tina Tomljenovic | ttomljenovic@junewarren-nickles.com Graphic Designer
Aaron Parker | aparker@junewarren-nickles.com Creative Services | production@junewarren.com
Rachel Dash-Williams, Alanna Staver Sales
DIRECTOR OF SALES
Rob Pentney | rpentney@junewarren-nickles.com SALES MANAGER, MAGAZINES
Maurya Sokolon | msokolon@junewarren-nickles.com ACCOUNT MANAGERS
Jerry Chrunik | jchrunik@junewarren-nickles.com Nicole Kiefuik | nkiefuik@junewarren-nickles.com David Ng | dng@junewarren-nickles.com Michelle Vacca | mvacca@junewarren-nickles.com AD TRAFFIC COORDINATOR—Magazines
Elizabeth McLean | atc@junewarren-nickles.com For advertising inquiries please contact adrequests@junewarren-nickles.com Marketing Senior Marketing Coordinator
Alaina Dodge-Foulger | adodge@junewarren-nickles.com Marketing / Trade Show Coordinator
Ryan Mischiek | rmischiek@junewarren-nickles.com Marketing designer
Cristian Ureta | cureta@junewarren-nickles.com OFFICES Calgary Downtown 300, 999 – 8 Street S.W. | Calgary, Alberta T2R 1N7 Tel: 403.209.3500 | Fax: 403.245.8666 Toll-Free: 1.800.387.2446 Calgary North 300, 5735 – 7 Street N.E. | Calgary, Alberta T2E 8V3 Tel: 403.265.3700 | Fax: 403.265.3706 Toll-Free: 1.888.563.2946 Edmonton 6111 – 91 Street N.W. | Edmonton, Alberta T6E 6V6 Tel: 780.944.9333 | Fax: 780.944.9500 Toll-Free: 1.800.563.2946 SUBSCRIPTIONS Subscription Rate
In Canada, 1 year $49 plus GST, 2 years $69 plus GST Outside Canada, 1 year $99
Low natural gas prices and new completions technology are driving deep changes in the western Canadian patch. The freeze-frac and flood pulse techniques highlighted in this month’s cover article represent that trend. At long last, we’re seeing an effective push to draw a higher percentage of conventional crude from known reservoirs. In fact, oil and gas opportunities of many types may well prove richer than ever before within the fairly near future. What do I, or anyone else, know for sure? Frankly, nothing. But here are some enticing signals that can be heard these days from pretty credible sources: Virtually all producers are gradually girding themselves to tackle thousands of known oil and gas pools, applying multi-stage fracs to horizontal wells along with other refinements. Although they’re hurting financially due to low gas prices and misgovernment, these firms will continue to milk value from the wealth of public data available for the Western Canadian Sedimentary Basin. Decline rates from horizontal wells in some American shale gas plays are rumoured to be more discouraging than initially expected by many producers. These are early days, when a lot of wells remain on tight-hole status, but the reports are persistent. Producers who’ve bought large oil-prospective acreage in Saskatchewan (i.e. the Bakken and Shaunavon plays) typically must drill that land within two or three years. Oil prices have recovered nicely, drilling rigs are available, and capital spending is being quietly expanded. I’m told it’s hard to raise even modest capital for promising new petroleum technology. Why? Because many experienced service and supply investors believe that the share values of existing companies will inevitably spurt upward within a year or two. Why gamble on unknown technology when easier pickings are everywhere? Historically, natural gas prices usually go against the trend expected by most producers. The reason is simple and ironic. If most producers anticipate a long spell of low prices, they drill less. When producers don’t drill, gas supply tightens. Prices then rise more quickly than expected. If I have a long-term concern, it’s the barriers to recovery in Alberta’s shallow gas and coalbed methane sectors. The burden of provincial royalties and regulations needs to be reviewed and reformed to whatever degree proves necessary. Politically, the Stelmach Conservatives who made the mistakes in the first place are not likely to undertake these corrections with much enthusiasm. JuneWarren-Nickle’s Energy Group—Canada’s primary publisher in the petroleum business—has been producing articles under its “Recession to Recovery” theme. Recovery will happen, and hopefully we’ve already bottomed out. As Bill Andrew, CEO of Penn West Energy Trust, likes to predict, a generation of unprecedented energy opportunities is shaping up in western Canada.
Subscription Inquiries
Telephone: 1.866.543.7888 Email: circulation@junewarren-nickles.com Online: junewarren–nickles.com
N E X T
I S S U E
Oil & Gas Inquirer is owned by JuneWarren-Nickle’s Energy Group and is published monthly. GST Registration Number 826256554RT. Printed in Canada by PrintWest. ISSN 1204-4741 | © 2009 1062810 Glacier Media Inc. All rights reserved. Reproduction in whole or in part is strictly prohibited. Publications Mail Agreement Number 40069240. Postage Paid in Edmonton, Alberta, Canada. If undeliverable, return to: Circulation Department, 800 - 12 Concorde Place, Toronto, ON M3C 4J2
Industry outlook for 2010
If you know an admirable person to profile in
After producers and service companies slogged
On The Job—he or she may be a veteran or
through an exceptionally tough 12 months in
apprentice, field or shop, wise or a little crazy—
Made in Canada The opinions expressed by contributors to the Oil & Gas Inquirer may not represent the official views of the magazine. While every effort is made to ensure accuracy, the publisher does not assume any responsibility or liability for errors or omissions.
2009, industry analysts are weighing the impact
please give me a call at (780) 944-9333, or
of higher oil prices, ongoing weakness in the
email mbyfield@junewarren-nickles.com.
natural gas market, and new technologies over
In fact, feel free to sound off about any
the coming year.
concern at all—that’s a personal invitation.
OIL & GAS INQUIRER • DECEMBER 2009
9
Stats
FAST NUMBERS
$350 million
AT A GLANCE
Capital spending budgeted by EnCana Corporation for the Horn River Basin in 2010
$400-500 million EnCana’s 2010 capital budget for the Cutbank Ridge/Montney play
Alberta Completions
WCSB Oil & Gas Completions
Source: Daily Oil Bulletin
Source: Daily Oil Bulletin
MONTH
OIL
GAS
OTHER
T O TA L
MONTH
OIL
GAS
D RY
SERVICE
T O TA L
Nov 2008 Dec 2008 Jan 2009
273 496 156
1,075 1,793 606
136 200 96
1,484 2,489 858
Nov 2008 Dec 2008 Jan 2009
594 917 248
1,313 2,380 813
142 173 70
45 137 47
2,094 3,607 1,178
Feb 2009 Mar 2009 Apr 2009
116 321 111
899 979 344
120 317 140
1,135 1,617 595
Feb 2009 Mar 2009 Apr 2009
269 433 111
1,060 1,121 342
113 165 61
36 86 12
1,478 1,805 526
May 2009 Jun 2009 Jul 2009
71 36 79
187 143 178
53 42 77
311 221 334
May 2009 Jun 2009 July 2009
71 177 79
187 211 31
46 45 6
35 27 3
339 460 119
Aug 2009 Sept 2009 Oct 2009
101 146 132
212 155 160
80 78 77
393 379 369
Aug 2009 Sept 2009 Oct 2009
250 146 331
267 155 196
36 45 32
37 9 12
590 355 571
Wells Drilled In British Columbia
Wells Drilled In Saskatchewan
Source: B.C. Oil and Gas Commission
Cumulative to November 6, 2009 Source: Saskatchewan Energy & Resources
MONTH
WELLS DRILLED
C U M U L AT I V E *
Nov 2008 Dec 2008 Jan 2009
61 79 125
840 919 125
Feb 2009 Mar 2009 Apr 2009
117 75 33
242 317 350
May 2009 Jun 2009 Jul 2009
26 19 34
376 395 429
Aug 2009 Sept 2009 Oct 2009
36 38 25
465 503 528
* from year to date
OIL
GAS
OTHER
D RY
T O TA L
Vertical Wells
Lloydminster Kindersley Swift Current Estevan
340 72 35 45
6 29 175 0
24 6 3 18
8 29 9 38
378 136 222 101
33 16 61 502
0 0 0 0
0 0 0 0
0 0 0 0
33 16 61 502
373 88 96 547
6 29 175 0
24 6 3 18
8 29 9 38
411 152 283 603
Horizontal Wells
Lloydminster Kindersley Swift Current Estevan Total Wells
Lloydminster Kindersley Swift Current Estevan
“Industry Leading Quality & Service Since 1987” Specialists in internal & external coating applications Epoxies • Metallizing • Fibreglass Linings • Plural Spray Pipe • Tanks • Vessels • Towers • Valves 6150 - 76 Avenue, Edmonton, AB T6B 0A6 Phone (780) 440-2855 Fax (780) 440-1050
• 100% Canadian Owned • www.brotherscoating.com 10
DECEMBER 2009 • OIL & GAS INQUIRER
S P O T P R I C E S at AECO trading hub in Alberta
GAS STOR AGE
Source: Natural Gas Exchange Inc.
Source: U.S. Energy Information Administration
5.0
in the United States
4.00 $3.77/GJ Total vol.: 1,921 TJ Transactions: 199
4.5 4.0
3.75
3.83 Tcf Year ago: 3.49 Tcf 5-year avg: 3.41 Tcf
3.5 3.0
Oct 21
Oct 28
Nov 4
Nov 11
3.50
Nov 18
Oct 16
Oct 23
Oct 30
Nov 6
Drilling Rig Count by Province/Territory
Drilling Activity: Oil & Gas
Western Canada November 13, 2009 Source: Rig Locator
Alberta October 2009 Source: Daily Oil Bulletin
AC T I V E
DOWN
T O TA L
(Per cent of total)
Western Canada Alberta British Columbia
Manitoba Saskatchewan WC Totals Northwest Territories
AC T I V E
177
409
586
30%
36
74
110
33%
3
4
7
43%
70
65
135
52%
286
552
838
43%
0
2
2
0%
OIL WELLS
Alberta
GAS WELLS
Oct 09
Oct 08
Oct 09
Oct 08
Northwestern Alberta
19
114
31
379
Northeastern Alberta
9
31
0
16
95
132
24
255
9
37
105
284
132
314
160
934
Central Alberta Southern Alberta TOTAL
Service Rig Count by Province/Territory
Drilling Activity: CBM & Bitumen
Western Canada November 13, 2009 Source: Rig Locator
Alberta October2009 Source: Daily Oil Bulletin
AC T I V E
DOWN
T O TA L
AC T I V E
Western Canada 316
443
759
42%
British Columbia
18
20
38
47%
Manitoba
7
2
9
78%
115
65
180
64%
456
530
986
46%
0
2
2
0%
Saskatchewan WC Totals Northwest Territories
C OA L B E D M E T H A N E
Alberta
Alberta
Nov 13
BITUMEN WELLS
Oct 09
Oct 08
Oct 09
Oct 08
Northwestern Alberta
0
0
1
16
Northeastern Alberta
0
0
9
29
Central Alberta
6
66
61
58
Southern Alberta
0
49
0
0
TOTAL
6
115
70
103
OIL & GAS INQUIRER • DECEMBER 2009
11
BLANK PAGE FOR DUPLEXING
Feature
Freeze-frac and FLOOD pulse Made-in-Alberta improved oil recovery techniques can draw more crude from conventional reservoirs by Graham Chandler
N
orth America’s largest recorded earthquake hit Alaska 45 years ago. As expected, the quake briefly but significantly stimulated oil and gas production in the Western Canadian Sedimentary Basin. But Tim Spanos, a physics professor at the University of Alberta, noticed an unusual timing in the increased output. Based on rates of wave propagation, “you should have seen the changes in Alberta 24 to 48 hours after the quake, not three or four days,” says Brett 12
DECEMBER 2009 • OIL & GAS INQUIRER
Davidson, CEO of Edmonton’s Wavefront Technology Solutions Inc. After several years of researching this phenomenon, Davidson and Spanos teamed up with Maurice Dusseault, a geological engineering professor, to create an improved oil recovery process called Powerwave. Improved recovery technologies of this calibre, notably multiple-stage hydraulic fracturing in long-reach horizontal wells, have already shaken up the natural gas industry and brought tight oil reserves
within reach. Field innovations may soon dictate re-evalutions of classic oilfields as well. According to the Canadian Association of Petroleum Producers, western Canadian conventional oil reserves stood at a little under three billion barrels at the end of 2007. That estimate, however, is based largely on vertical drilling technologies and simple secondary recovery through waterflood. Wavefront’s Powerwave technology is not fracing, but it serves a similar purpose:
Feature
opening up more of a formation in order to get more oil out. Usually employed with traditional waterfloods, Powerwave pulses the water at the end of its injection stream, at sub-hertz frequencies, sending out waves at velocities of 80 to 300 metres per second to expand pores and increase permeability. “What we’re introducing is this big fluid wave, much like your heartbeat,” explains Davidson. “Your heart beats, it sends out this large volume of fluid at a high rate, and that allows our vascular
[blood vessels] to dilate [i.e. expand].” Another analogy the Wavefront CEO uses is a garden hose. “You have a steady stream coming out of the end. When you put a kink in it, the flow stops,” he says. “You are storing energy; the hose acts like an accumulator.” When the hose is unkinked, the water flow will surge for a while, then settle back to its normal stream rate. Powerwave essentially provides a more even distribution of the injected fluid in
the reservoir to increase sweep efficiency. “Water travels the path of least resistance,” says Davidson. “So when I inject it in the ground it doesn’t go in as this wall of water; it goes in as discrete ‘fingers.’ Those fingers are the path of least resistance.” Again applying the physiological analogy, he says if you open up your hand and saw your fingers, “in between your fingers is the oil that’s missed by the water I’m injecting.” The pulse momentarily expands the pore spaces to accept the accelerated fluid. OIL & GAS INQUIRER • DECEMBER 2009
13
Feature Photo: Triple D Technologies
Darrell Kosakewich, president of Triple D Technologies (inset), has built a horizontal well bore frac technology powered by the expansion of water when it freezes.
A frac permanently alters the reservoir rock. In contrast, Powerwave is “open, close, open, close,” Davidson says. “You are allowing that fluid to push the oil out. You’re getting to stranded oil.” In fact, waterflood pulsing is seldom combined with traditional fracturing methods. “When you frac, you’re really adding in an extreme path of least resistance. Most fluid will want to go up that frac and it will be even harder to divert water away from it,” the Wavefront co-founder explains. The earliest field-wide application of Powerwave for production enhancement was undertaken at Isley, Alta., with Wascana Energy Inc. about 10 years ago. The pilot project succeeded. “Oil production increased by about 37 per cent while water cuts were lowered by as much as 20 per cent,” says Davidson. Since then, Powerwave has been effective over a broad range of reservoirs including carbonate rocks, unconsolidated sand, consolidated sands, oil shales, and diatomites says Davidson. The pulsing technology adapts to differing permeabilities according to bleed off rates. “The bleed-off 14
DECEMBER 2009 • OIL & GAS INQUIRER
rate in the high permeability is much faster than the low,” Davidson says. “So basically you have to design your implementation with that in mind.” It has been applied to previously fractured systems; and demonstrated in viscosity ranges from 8°API to over 40°API. Some companies have asked Wavefront to improve recovery from natural gas wells. “Our technology will work in a gas stimulation, but it won’t work for a field-wide gas stimulation,” Davidson says. “Methane is so compressible that, if I pressurize a field, I’m really just compressing the gas [rather than dilating the reservoir rock pores].” Typically, Powerwave is applied when water cuts start increasing. “We’re dealing with water cuts of upwards of 98 per cent per barrel of fluid produced. That means for each barrel of fluid produced you have 98 per cent water and 2 per cent oil,” says Davidson. “Using the results from the eastern Alberta Powerwave project, the nominal cost per barrel of incremental oil recovered is $4.48.” The technology added about 10 years to the field’s productive life.
Powerwave is catching on. “We currently have programs running in Alberta [a recent addition was the Pembina field, which after 55 years has produced just 20 per cent of oil in place], Alaska, Michigan, Ontario, Mississippi, Texas, California, and Saskatchewan,” says Davidson. Wavefront recently signed a deal with Pemex, Mexico’s state-owned petroleum monopoly. Next may be steam f looding, says Davidson, which has its own unique considerations. “When it comes to injecting the steam, it too goes the path of least resistance. If you can pulse the steam, you are going to get better uniform coverage of the reservoir.” Wavefront is talking to potential clients now—there’s no shortage of possibilities, thanks to the popularity of steam assisted gravity drainage (SAGD) in the deeper oilsands. F r o m s t e a m t o i c e . Tr i p l e D Technologies, another firm based in Edmonton, has come up with a groundbreaking technology that harnesses the nine per cent expansion of water as it freezes. This immense force not only
Photos: Triple D Technologies
Feature
Triple D has used Technicoil's hybrid rigs to insert a carbon dioxide–driven freezing loop downhole, generating 5 to 10 metres of radial fracturing around the well bore.
bursts water pipes but routinely carves slabs of rock off mountain sides. Darrell Kosakewich, Triple D’s president, came up with the brainwave when he froze a lump of coal and found it shattered. Four years ago, the company allied itself with Pace Industrial Inc., designing and testing downhole refrigeration technology. Their method uses concentric coiled tubing,
Temperatures of -45.5 degrees Celsius at 105 pounds per square inch gauge generate compressive forces from the ice expansion estimated at about 2,400 to 4,000 pounds per square inch. To avoid breakage of the well casing, the freezing is applied through a slotted liner or a perforated zone. The Triple D president says the CO2 mechanism is
[Triple D Technologies] pegs its frac cost at about 25 per cent of traditional frac methods. or jointed pipe and coiled tubing, to circulate liquid CO2 along a water-filled horizontal wellbore. The CO2 flows through a central refrigerant tube, then boils off and returns to surface through the annulus. As the water freezes in the wellbore, its expansion cracks the rock formation. The process typically fracs between 5 and 10 metres radially around the wellbore, Kosakewich says, “and 85 per cent of your production is near the wellbore.”
normally placed between packers at the liner perforation point, enabling the operator to freeze that section. “Typically on a workover, we would move Technicoil’s hybrid rig on a hole to pull out the existing tubulars and then run in our closed loop string of 2 7/8 inch,” says Kosakewich. “We’d fill the hole with produced water. Without moving the service rig off, we would run in our refrigeration coil with our bottomhole assembly.”
Then the liquid CO2 is pumped down, with vapour returns either flared or recirculated. “This process runs continuously for 24 hours, or intermittently if multiple freeze thaws are required,” continues Kosakewich. “Once the frac is complete, the four-hour thaw cycle starts, either naturally or through hot oil circulation.” Once thawed, the installation is reversed and the production string is reinstalled. Field applicat ions to date have included fracing a coalbed methane well, with a disappointing result. After the frac, water production increased, normally a precursor to increased gas flow in a coalbed methane well. In this case, however, a frozen flow back line went unnoticed, which choked off the water flow pre-maturely. “This stoppage may be the reason why gas production didn’t increase,” Kosakewich says. Typically, he says, “the presence of water in a formation is our friend—mature fields, coals and sandstones and shales.” Substantial interest remains, however: the next test will be on a non-producing well in an undisclosed white shale location. OIL & GAS INQUIRER • DECEMBER 2009
15
Photo: Triple D Technologies
“The white shale has the same characteristics as Horn River formations,” says Kosakewich. Before-and-after logging of the test well should reveal much about how the freeze frac would perform there. “Horn River wells are expensive, and I don’t think anyone wants to experiment with them [directly],” the Triple D CEO notes. His company pegs its frac cost at about 25 per cent of traditional frac methods. Equally encouraging, freezing can be used as an initial frac. “A hydraulic frac afterwards would really drive it hundreds of metres from what we’ve done,” Kosakewich says. He thinks freeze fracs could significantly enhance SAGD production in northern Alberta. “The McMurray formation is interlaced with various strata of shale, which basically caps your ability to migrate the steam right through the
“Our cost is down to around $600,000 from $800,000 a well. That saves almost $200,000. We’re approaching the same costs as for a vertical well.” — Steve Sugianto, CEO, Galleon Energy Inc.
reservoir,” Kosakewich says. “If we frac that shale, it would provide the permeability for the steam to migrate.” Because the shale layers are very thin, he reckons freeze frac could crack entire layers from top to bottom. Any reservoirs with high water content are natural homes for freeze fracs. “When you’re five per cent oil and the rest water, it works perfectly,” says Kosakewich. Longexploited formations like the Pembina, Leduc, Viking, and the Peace River Arch are all good candidates, according to Triple D. Outside the oilsands, the hottest play in Alberta these days is the Pembina Cardium, where producers are applying horizontal fracs to Canada’s largest onshore oilfield. Galleon Energy Inc. says the same technology has immense potential further north in the Peace River Arch, where it holds the largest contiguous land block. Steve Sugianto, Galleon’s CEO, says, “A lot of our present production has been through traditional drilling, so 16
DECEMBER 2009 • OIL & GAS INQUIRER
Galleon Energy sees opportunities to apply multi-stage horizontal frac technology in the Peace River Arch.
applying horizontal wells improves our recovery.” Galleon has moved quickly in this direction with its northwestern Alberta operations. “For example, in the Eastern Montney, 90 per cent of our drilling and production is horizontal right now. We only need verticals to look at delineations and define where to expand out,” Sugianto says. “We see at least a doubling of recovery [of the total oil in the ground]—and compared with the older technology, the incremental cost is only 50 per cent.” With 400 wells scheduled for that project, Galleon expects the combination of higher recovery volumes and lower average recovery costs to boost its bottom line significantly. On a highly encouraging note, exploration and development costs continue to decline as drilling crews gain experience
with horizontal multi-frac technologies. “We’re down to about 8 days now from 12 [to complete a well]. For a horizontal well, that’s huge,” Sugianto enthuses. “Our cost is down to around $600,000 from $800,000 a well. That saves almost $200,000. We’re approaching the same costs as for a vertical well.” Galleon thinks its Eastern Montney economics can now compete with the Barnett and Marcellus shale gas prospects in the United States. Further down the road, Galleon will examine cutting-edge improved recovery technologies like freeze fracturing and waterflood pulse. “Those technologies may be applied to more mature projects, and much of ours isn’t even drilled at this point,” Sugianto says. “In the future, especially in the oil part, we will do enhanced recovery, but we’re not there yet.”
THE PRODUCTS THAT FUEL ANOTHER CANADIAN WORK DAY. Industry in Canada never stops and neither does Acklands-Grainger. With over 100,000 products, 165 branches across Canada and 5 distribution centres, we’re Canada’s largest supplier of industrial, safety and fastener products. So rest assured if you’ve got a job to be done, we’ve got the products to get it done right. From coast to coast to coast.
11:07
AM
1:59
AM
Halifax:NS
:industrial welding
Fort McMurray:AB :oil refinery
• welding helmets • cutting tools • mig packages
8:39
PM
Yellowknife:NWT
:industrial fire containment
5:43
PM
Windsor:ON :roadwork
• high heat clothing • respiratory protection • SCBA’s
Official Supplier of Industrial Safety and Material Handling Supplies
• hard hats • traffic clothing • signs
1.888.602.0000 acklandsgrainger.com
® ™ The Acklands-Grainger logo is a trademark of W.W. Grainger Inc., used under license by Acklands-Grainger Inc. © Acklands-Grainger Inc. 2009. All rights reserved.
• coveralls • hearing protection • fasteners
Knocking out NOX In 2010, heavy truck engines will be cleaner thanks to a pair of competing technologies—but which choice is best for the oilpatch?
by James Menzies
H
eavy-duty truck operators who have not been paying attention to the U.S. Environmental Protection Agency’s (EPA’s) impending emissions restrictions will be sticker shocked when they purchase their next rig. A Class 8 truck built after Jan. 1, 2010, will cost up to $10,000 more than today. In most cases, the increase will be applied as a “nonnegotiable” emissions surcharge. The good news is that 2010 engines will operate cleaner—and more efficiently—than they do today. But that cleanliness comes at a cost. Like the EPA did in 2002 and 2007, the American agency is mandating lower emissions from all on-highway heavy-duty truck engines. The latest targets are oxides of nitrogen (NOX), which must be slashed to 0.2 grams per horsepower-hour—about a 90 per cent reduction from today’s levels. NOX particles can directly damage lung tissue as well as aggravate existing 18
DECEMBER 2009 • OIL & GAS INQUIRER
conditions like bronchitis, emphysema, and even heart disease. In 2007, the EPA restricted particulate matter emissions. The solution proved to be diesel particulate filters (DPFs), which will remain a mainstay on 2010 trucks. In that case, all North American engine manufacturers chose similar technical paths to complying with the EPA standards. With respect to NOX particles, in contrast, new truck buyers will have to choose between two vastly different solutions. Most engine manufact urers (Cummins, Detroit Diesel, Mack, Paccar, and Volvo) will be using an exhaust aftertreatment system known as selective catalytic reduction (SCR). Already widely deployed in Europe, SCR consists of an
SCR catalyst and requires the addition of diesel exhaust fluid (DEF)—a urea/water mixture that’s housed in a separate tank. The DEF is dosed in small amounts into the exhaust stream, creating a chemical reaction within the SCR catalyst that converts NOX into harmless nitrogen and water vapour. SCR will be used in conjunction with exhaust gas recirculation, or EGR (adopted in 2002 to comply with the first round of EPA emissions standards). Since SCR eliminates NOX downstream in the SCR catalyst, exhaust gas recirculation rates can now be reduced. This allows manufacturers to create more NOX within the cylinder and focus on better tuning engine parameters for optimum performance and fuel economy—SCR’s strongest
On an SCR NOx reduction system, the driver or maintenance manager must monitor and ensure that the DEF tank (shown in inset) is topped off.
selling point. (This marks the first time engine manufacturers have had the opportunity to improve fuel economy while complying with EPA standards rather than suffering a loss.) In fact, engine manufacturers using SCR are touting a three to five per cent net fuel mileage improvement even after the added expense of the DEF urea/water mixture, which is expected to cost about the same as diesel and will be burned at about a one per cent ratio. (To put that in real-world terms, a highway truck with a 13-gallon DEF tank will be able to travel the equivalent of New York to Los Angeles and then back to Denver before running out of DEF, according to Dave McKenna, powertrain products marketing manager with Mack.)
Initial concerns about DEF availability seem to be unfounded. A distribution network is already taking form at North American truck stop fuel islands and the urea/water mix should be available in tote jugs of various sizes at truck stops as well as truck and engine dealers. That being said, the fluid does freeze at 12 degrees Fahrenheit, which is no doubt unsettling for truckers operating in the Canadian oilpatch. Fortunately, the DEF tank is heated and will almost instantly thaw enough of the fluid upon engine start-up to allow the driver to be on his or her way unhindered. EPA 2010 engines will be equipped with sophisticated on-board diagnostics that will read the truck’s tailpipe emissions and detect whether or not the system
is functioning and DEF is being used as required. If the truck runs out of DEF on the road, engine power will be downgraded and eventually the driver will be unable to start the engine until the DEF is topped off. While SCR is new to North America, it has been widely used around the world and extensive field testing has been conducted here as well. Detroit Diesel recently announced it has completed more than 25 million miles of real-world testing for its BlueTec SCR system in North America. “The 2010 BlueTec technology will be one of most extensively tested emissions technology systems in our company’s history,” says David Siler, director of marketing with Detroit Diesel. OIL & GAS INQUIRER • DECEMBER 2009
19
Feature
For the first time, however, EPA emissions compliance will require operator involvement. The driver or maintenance manager will have to monitor DEF levels and ensure the fluid is periodically topped off. That’s part of the reason Navistar decided to take a different path. This manufacturer will ramp up EGR levels, avoiding exhaust aftertreatment altogether. “Emissions [compliance] with SCR is not passive,” says Tim Shick, director of business and product strategy, big bore engine business for Navistar. Speaking from the company’s engineering facility in Melrose Park, Ill., Shick comments, “[SCR technology] requires customer involvement and driver involvement, and all things being equal, we thought that customers would prefer not to be involved.”
While its competitors have strong European connections and already had SCR experience under their belts, Navistar decided to take a “clean sheet approach” to 2010. “We weren’t drawn to SCR by prior experience; we had no investment in it,” Shick notes. Instead, Navistar will be employing the same technology it uses today, only on a broader scale. In its simplest terms, EGR refers to the removal of oxygen from the cylinder by displacing it with exhaust gas, which is inherently hot. The exhaust gas must first be cooled before being circulated into the cylinder—hence the term “cooled” EGR. The process reduces the temperature of combustion and discourages the formation of NOX in the cylinder, but at the same time, cooling the combustion temperature also causes inefficiencies. “The challenge with EGR is, how do we get that efficiency back?” Shick explains. The answer, Navistar has concluded, comes
in the form of a high-pressure common rail (HPCR) fuel system that allows it to boost fuel pressure beyond 30,000 pounds per square inch. The higher pressure makes fuel more burnable. HPCR fuel systems also discourage the formation of soot, Shick points out. The challenge with advanced EGR is that with every increase in EGR flow rates, the engine’s parameters must be re-tuned to gain back the corresponding loss of efficiency. It’s a fine balance that requires constant engineering. Fortunately for Navistar, it has earned EPA credits for exceeding previous emissions targets. Navistar will cash in some of those credits to buy some breathing room and as a result will only reduce NOX to 0.5 grams per horsepower-hour on Jan. 1, gradually dialing NOX levels down to the mandated 0.2 grams by the time its credits run out (expected to occur sometime in 2012).
The DEF is dosed into the exhaust stream, creating a chemical reaction within the SCR catalyst that converts NOx into harmless nitrogen and water vapour.
20
DECEMBER 2009 • OIL & GAS INQUIRER
Feature
Cummins Aftertreatment System Diesel Oxidation Catalyst
Diesel Exhaust Fluid (DEF) Dosing Valve
Wall-Flow Filter
Cummins Particulate Filter
The process of ramping down to 0.2 grams from 0.5 grams should be seamless to the customer. Shick says Navistar will increase EGR flow rates by more than 10 per cent compared to today’s levels and will cope with the extra heat rejection by increasing the cooling system by about one frame size. (For instance, a 13-litre EGR-only engine in 2010 will require the same cooling capacity that a 15-litre engine needs today.) In summary, SCR is a proven technology that will be adopted by all but one engine manufacturer. It will improve fuel
Decomposition Reactor
SCR Catalyst
Slip Catalyst
Selective Catalytic Reduction (SCR) Catalyst
economy, but will also require bulky new components, a separate tank to house DEF, and some degree of driver involvement. Navistar’s advanced EGR on the other hand, is the devil you know, but it raises the question, how much is too much EGR? Navistar will ramp EGR flow rates up to unprecedented levels, but is confident it can recapture any loss of efficiency through the constant modification of engine parameters and the use of a highpressure common rail fuel system. Its main selling points are that it requires no driver interaction, keeps frame rail space
free and clear of additional components, and alleviates concerns about the availability and cost of DEF—particularly in remote regions. Naturally, there’s a lot at stake for engine manufacturers heading into 2010. There’s been a flurry of rhetoric, mudslinging, court challenges, and lawsuits in the months leading up to the rollout of these products. The best advice for customers is to familiarize themselves with both options and make an informed decision. James Menzies is Executive Editor of Truck News and Truck West magazines.
What’s it going to cost? The following are the price increases for trucks with EPA 2010-compliant engines. (Noticeably absent is Caterpillar, which has been effectively chased from the on-highway engine market by the challenge of meeting the world’s most stringent emissions standards to date.) In most cases, the premium will be applied as a non-negotiable emissions surcharge (all prices in U.S. dollars):
Daimler Trucks North America:
Volvo Trucks North America:
Freightliner and Western Star trucks with the Detroit Diesel DD13, DD15, and DD16: Freightliner trucks with the Cummins ISX15:
$9,000 $9,000
International trucks with the and MaxxForce 13: (Note: International trucks will not be available with EPA 2010-compliant Cummins engines.)
22
DECEMBER 2009 • OIL & GAS INQUIRER
$9,600
Mack Trucks:
Navistar International: International MaxxForce 11
Volvo trucks with the Volvo D11, D13, and D16, as well as the Cummins ISX:
$8,000
Not yet announced, but expected to be in the same ballpark as parent company Volvo.
Not Announced
Paccar (Kenworth and Peterbilt): Pricing for trucks with Paccar’s new MX 12.9-litre engines not yet announced.
Not Announced
Singletouch, the leader in One Time Data Entry Singletouch builds software that can be deployed by any major industrial contractor or oil and gas company. Singletouch Collector is a paperless data collection software application that can be used by oil and gas producers; it tracks production and maintenance data related to wells, compressors, tanks and other field equipment on laptops and intrinsically safe handheld devices. Singletouch Collector is an application within the Singletouch Enter Data Once product range.
Call today for a free product DVD 403-648-3930 rly Formeilfield O Quicklutions So ilfield
O Quick
S O N U T I S O L
/Jul OGI/Aug
Singletouch Canada Inc. Suite 300, 110-8th Avenue, SW Calgary, Alberta T2P 1B3 See the website for contact details www.singletouch.com
2010
PSAC Spring Conference April 13 & 14, 2010 Capri Hotel & Convention Centre Red Deer, Alberta
How much do you want to learn? With the Transportation and Human Resources streams now scheduled on separate days, you can decide how much you want to learn. Choose one day or both with PSAC’s new streamlined format. You save either way, with single-day pricing or a combined conference cost specially priced for 2010.
Day One – April 13, 2010
Day Two – April 14, 2010
Transportation
Human Resources
Topics to be covered include:
Topics to be covered include:
• Risk Management
• Conducting Performance Reviews
• Fatigue Management
• Using Low-cost Intangible Rewards
• Sling & Cable Testing
• Engaging Employees
• IRP #23 – Lease Lighting
• Stress & Conflict Management
• Hours of Service
• Managing Substance Abuse • Rebuilding the Workforce
Sponsorship opportunities available! The PSAC Spring Conference is a great opportunity to introduce your company’s products and services to your customers, in targeted, one-on-one conversations. Contact PSAC today for sponsorship information.
Media Sponsor: To register, sponsor or request more information, contact the Petroleum Services Association of Canada: Web: www.psac.ca Email: info@psac.ca Phone: 403-264-4195
www.psac.ca
British Columbia
B.C. land sale takes in $370M, the sixth-largest bonus on record by Richard Macedo
Land sales revenue reflects the ongoing strength of B.C.'s non-conventional gas plays.
British Columbia hit a home run in the Montney formation with its October land sale, which now has the province firmly head and shoulders above its western Canadian neighbours in auction revenues, even though 2009 has been a year of weak natural gas prices and strengthening oi l pr ices. T he prov ince produces mainly natural gas, while Alberta and Saskatchewan benefit from substantial oil production as well as natural gas. B.C. hauled in $370 million in bonus bids ($5,625 per hectare), its sixth-largest sale on record, bringing the calendar year total to $700.6 million. By comparison, Alberta has collected $268.9 million year-to-date, while Saskatchewan’s auctions have produced $83.2 million. To the same point last year, B.C. had accumulated $2.5 billion in bonus bids for a per-hectare price of $3,656. Three parcels were responsible for roughly $265 million, or over 70 per
cent of the land sale total. Most of the land was picked up near the Altares area, with one parcel scooped up by broker Canadian Coastal Resources Ltd. going for $117.3 million for two tracts at 94-B-8 and 94-B-9. In all, 32 parcels in the general area earned the majority of tender bonus for the sale, a government spokesperson said. Daily Oil Bulletin records show Talisman Energy Inc. is the busiest operator in the Altares area with the Montney formation being the most frequent target. Others licensed in the area include Northpoint Energy Inc., Canbriam Energy Inc., and Progress Energy Resources Corp. The land sale results had the brass at Canadian Spirit Resources Inc. (CSRI) grinning from ear to ear as the megabucks plunked down were near the company’s sandbox. Through two joint ventures, CSR I is eva luat i ng t he produc t ive
capability of both its shallow Gething play (Shell Canada as operator) and its deeper Montney play (Canbriam as operator). Both of these plays are located on the company’s principal resource property at Farrell Creek. “We’re very pleased with the amount of money that’s being spent on the land sale because we have a significant position in the Montney,” said CEO Don Gardner. A licence in B.C.’s October land sale went for $60.9 million ($16,315 per hectare) and was picked up by Basm Land & Resources Ltd. The southeastern corner of the 3,738-hectare parcel is directly adjacent to the northwestern corner of the company’s west block, Gardner said. Canadian Spirit recently announced that Canbriam, operator of the Montney project, spudded a vertical well at the Farrell Creek b-17-I location targeting the Montney formation. It was anticipated that the well would be drilled and completed by Canbriam by late November and is part of a multi-well program planned for the area. Canbriam will fund the cost of this well pursuant to a joint-venture agreement. Immediately north of the company’s lands, Talisman is in the process of completing several horizontal wells and is constructing an expandable central sweet gas processing facility with a capacity of up to 30 million cubic feet per day. “Talisman is one of the major players in the area,” Gardner noted. “There are a number of other possible larger players as well. I think the Montney activity in northeast B.C. has been moving in a northwesterly direction. This sale has certainly confirmed that Talisman and other players appear to have a very high regard for the Montney potential in this area. Somebody’s spending an awful lot of money.” — DAILY OIL BULLETIN
BRITISH COLUMBIA WELL ACTIVITY
OCT/08
OCT/09
OCT/08
OCT/09
OCT/08
OCT/09
WELL LICENCES
165
82
WELLS SPUDDED
30
53
WELLS DRILLED
60
30
Source: Daily Oil Bulletin
OIL & GAS INQUIRER • DECEMBER 2009
25
British Columbia
Quicksilver sees Horn River Basin as its next big development project Quicksilver Resources Inc. has not disclosed total Canadian capital spending planned for 2010, the company has announced that it will invest about US$50 million in British Columbia’s Horn River Basin, including infrastructure costs. Also included in that figure are two wells planned for the basin in 2010. As for possible joint ventures in the Horn River area, the jury is still out, although the company has had discussions on that score in recent months. “It’s all about value,” says Glenn Darden, Quicksilver president and CEO. “We’re not in a big hurry…. We don’t have to do anything. The more we learn about the Horn River, the more we like it. Obviously, a lot of activity is happening around us, which makes us even prouder of our position. If we can get the right structure and the right price, we’d be willing to do something, but at this point, there’s not a big hurry to do that.” Despite budget cuts, the company’s Horseshoe Canyon gas volumes in Alberta grew nine per cent this year, to 63 million cubic feet per day. Yet, the biggest news from Canadian operations was progress on the Horn River play, Darden says. “One of
our goals in 2009 was to convert this prospect into our next big development project. We are well on our way to doing this,” he said, noting that the company’s D-50A well averaged 10 million cubic feet per day in the first month of production, from a 3,300-foot lateral well drilled in the Muskwa shale. “Later this month, we’ll begin completion on a second well, three miles east of the initial well. The C-60D well will be completed in the Lower Klua section of the shale,” Darden says. “Although still in the
says, adding, “We’re beginning to put infrastructure in place for long-term development,” he added. “The [Horn River] project could be several times larger than our current reserve base. We can grow production organically at 20 per cent over the next several years, and stay well within cash flows. We will keep pushing.” In Alberta, the company drilled four (three net) operated coalbed methane wells in the Horseshoe Canyon formation in the third quarter, and expects to drill
“...We firmly believe [the Horn River] will be a world-class production basin." — Glenn Darden, President and CEO, Quicksilver Resources Inc.
early stages, we firmly believe [the Horn River] will be a world-class production basin. Our 127,000 net acres is now surrounded by significant production from other operators.” Over the next three years, Quicksilver has to drill eight more wells to convert its exploratory licences to leases. It then has 10 to 12 years to develop its entire acreage. The company has secured firm transportation agreements that will ramp up volumes over the next five years, Darden
three (two net) operated coalbed methane wells in the rest of 2009. The company now expects to participate in a total of 145 (42 net) wells in Alberta in all of 2009. Total Canadian gas production rose to 67.8 million cubic feet per day in the third quarter, from an average 62.5 million cubic feet per day in last year’s quarter, while natural gas liquids production rose to three barrels per day from nil in the 2008 period. — DAILY OIL BULLETIN
Pipeline companies and contractors appear in court over 2007 oil spill Kinder Morgan says it will defend itself against charges stemming from a 2007 rupture of its pipeline in the Vancouver area. On Oct. 5, representatives for Kinder Morgan, Trans Mountain Pipeline, and two contractors appeared in provincial court for the first time in this case. “Kinder Morgan Canada believes the charges have been inappropriately laid against it and intends to defend the regulatory charges vigorously,” the company said. Its own investigation into the rupture concluded that “it resulted from the actions of a third-party contractor working on behalf of the City of Burnaby.” Kinder Morgan has launched a civil case against the city and the excavation contractor. Kinder Morgan and Trans Mountain Pipeline each face seven counts and the 26
DECEMBER 2009 • OIL & GAS INQUIRER
two contractors each face six. The charges, which carry maximum penalties of $1 million apiece, were laid in July, but this was the first court appearance for the group. They will appear again on Jan. 13. Some 234,000 litres of crude oil gushed out of the underground line leading to a waterfront shipping terminal. The resulting 15-metre-high geyser coated neighbouring yards in thick, black crude, while more oil seeped into nearby Burrard Inlet, soaking a number of birds. The Transportation Safety Board concluded earlier this year that a 50-year-old pipeline map combined with lax construction procedures triggered the eruption. The charges include introducing waste into the environment and unlawfully carrying on work that resulted in the harmful
alteration, disruption, or destruction of fish habitat. The safety board report concluded the pipeline rupture wouldn’t have happened if National Energy Board rules and the agreement with Kinder Morgan had been followed. The contractor digging the new sewer line assumed the 1957 map showing the pipeline route under the roadway was accurate, when in fact in some places it was out by several metres. The mechanical digger struck the oil line five times before puncturing it twice. The accident forced 250 people from their homes, with damage serious enough to 11 of the homes that the families had to move temporarily. There are 26 lawsuits outstanding as a result of the accident. — CANADIAN PRESS
British Columbia
Photo: Joey Podlubny
Husky tests two shale gas wells in northeastern B.C
Husky CEO John Lau
Husky Energy Inc. says it has completed and tested two promising exploratory wells to evaluate the shale gas potential in the Montney and Doig formations in northeastern British Columbia. The Calgary-based integrated oil and gas company said on Oct. 29 that the drilling results were “very encouraging.” Husky said one well flowed gas from the Doig formation at a rate of 2.9 million cubic feet per day. Another well produced 5.4 million cubic feet per day from the Montney play and 2.9 million cubic feet per day from the Doig formation. The land position covers an area of about 4,600 hectares close to Husky infrastructure and has all-season access. “The recoverable resource potential from these wells are substantial and among the best vertical tests from the Doig/Montney play,” Husky president and chief executive officer John Lau said in a release. “These results are encouraging for Husky to expand its strategy in unconventional resource play development in this area.” Husky plans to drill the first horizontal well on this land in 2010. The pace of development depends on well test results and the market conditions of natural gas. In another development, Husky said it acquired another 5,000 hectares of land in the Doig Montney play, raising the company’s exploration property in the area to more than 9,600 net hectares. “The acquisition enhances Husky’s position in the Doig/Montney play, which has become one of North America’s most promising plays for natural gas development,” Lau said. OIL & GAS INQUIRER • DECEMBER 2009
27
British Columbia
EOG Horn River well achieves record initial production Planning a “slow but steady” ramp-up in activity, EOG Resources, Inc. expects to drill 12 shale gas wells this winter in the Horn River basin of northeastern British Columbia. Over the summer, the company completed seven wells drilled last winter in a program focused on improving operations and completion techniques along with determining optimum spacing. Mark Papa, EOG’s chairman and CEO, said three wells in one pattern had initial production of 23.4 million cubic feet (MMcf), 19.3 MMcf, and 17.2 MMcf per day while four wells in the second pattern tested at rates of between 16 MMcf and 18 MMcf per day. EOG plans to produce the wells throughout the coming winter to evaluate the performance of each pattern. “We believe the three high rate wells are among the best in the play, topping our 16 MMcf per day well completed last year,” he said. The company also was able to reduce its drilling days by 42 per cent and well costs by 35 per cent over 2008 levels and has set cost targets for each area that provide attractive rates of return.
T he B.C . gove r n me nt r e c e nt ly approved EOG’s application for royalty incentives for a significant portion its acreage, which is a big step forward in making this play competitive with other shale plays, said Papa. In the third quarter, EOG also signed a memorandum of understanding with Kitimat LNG to supply 200 MMcf per day of gas for its proposed liquefied natural gas (LNG) export terminal. Every year between 2010 and the targeted terminal 2013 start-up date, there will be a slow ramp-up in production with the aim of at least 200 MMcf per day of production by that date, said Papa. “But it’s fair to say…we are in the very early stage in learning how to best deplete this asset,” he said. “Our strategy is we are going to slowly increase our activity and really not just get in a big hurry on this asset, similarly to what we are talking about in the Marcellus [shale]…particularly in a gas market that has been uncertain for us right now.” In the third quarter of this year, EOG’s Canadian production averaged 42,200 barrels
of oil equivalent per day in the third quarter, up slightly from 41,444 barrels of oil equivalent a day in the third quarter of 2008. Sales included 219 MMcf per day of gas, down from 224 MMcf per day a year earlier. Although EOG won’t finalize its 2009 capital budget until early 2010, it expects that at least 60 per cent of its North American budget will be allocated to oil activity. “EOG is successfully transferring its technical expertise in drilling horizontal natural gas wells to unconventional oil and liquids rich reservoirs,” said Papa. The forecast 50 per cent growth in liquids in 2010 will come primarily from the Barnett Combo in Texas, the North Dakota Bakken, and Waskada, Man. horizontal plays. “For the past year we have been telling people that horizontal drilling in unconventional rock is a game changer and our 50 per cent annual growth rate provides solid evidence,” said Papa. EOG reported positive well results from crude oil drilling activity in its North Dakota Bakken areas where it is operating a five-rig program. In the Bakken Core, two wells commenced
Looking Back... ST TRUC FA
LTD. CE
NG SERVI KI
1954 GMC
Looking Forward...
1966 International
2007 Kenworth
28
DECEMBER 2009 • OIL & GAS INQUIRER
British Columbia
production at rates of 880 barrels of oil per day and 1,150 barrels per day, respectively. The Bakken Lite step-outs beyond the core area are continuing to yield good results, said Papa. In addition, EOG drilled and tested its first wells in the Three Forks formation to determine the prospects across its acreage position. Initial results from the first two wells indicate encouraging pressure and flow rates in a portion of its acreage. “We are very encouraged to find that the pressure that exists in the Three Forks did not indicate pressure depletion from the core,” he said. “There is certainly a strong indication that we may have another oilfield below our core oilfield.” In 2010, EOG plans to operate a 14-rig drilling program in North Dakota, focusing on the Bakken Core and Bakken Lite, as well as further drilling and testing of the Three Forks. “We continue to believe the Bakken and the Three Forks will be big long-term plays for both EOG and the industry and we’ll have a significant part in the infrastructure,” said Papa. In Manitoba, the Waskada horizontal oil project is performing better than expected with forecast 2010 production
of 6,000 barrels of oil per day net. EOG expects to increase that to over 12,000 barrels per day in 2012. On the North American gas side, the company has a 2010 growth target of three per cent in 2010 with flat production in the first half of the year and then a six per cent increase, mainly from the Haynesville shale. “We don’t see any economic rationalization for growing gas production in adverse markets,” said Papa. EOG expects North American gas prices to begin improving in mid-2010 and continue to strengthen through the second half of the year as supply tightens due to reduced production and normal declines. Given a year-end 2009 gas rig count of 740, EOG estimates that North American production will be down 3.2 billion cubic feet per day in December of this year and down five billion cubic feet per day by June 2010 relative to the end of 2008, he said. The forecast reflects a projected 800 MMcf per day decline in Canada, offset by increased LNG imports of one to two billion cubic feet per day. — DAILY OIL BULLETIN
West sets $60M capital budget After three quarters of 2009 in which it l i m ited c apit a l e x pend it u re s to within cash f lows, West Energy Ltd. has increased its fourth-quarter capital budget to $25 million as it accelerates spending on its Cardium light oil resource play. The light oil focused company plans to drill eight horizontal wells by year-end and establish its Montney light oil project at Two Rivers in northeastern British Columbia, where it will spud its first horizontal well. With the Two Rivers drilling results in the fourth quarter of this year, West also has plans for f ur t her Mont ney horizontal drilling activ it y in 2010. In 2010, West anticipates spending appr ox i m ate l y $6 0 m i l l ion on a n exploration and development program on existing properties. The program will include 24 Cardium horizontal oil wells, 3 Pembina Mannville oil wells, and any Pembina Nisku wells when licences are obtained. — DAILY OIL BULLETIN
Technology Inc h
Reliable Performance Dependable Service
• BONNYVILLE • LLOYDMINSTER • MEDICINE HAT • FARMINGTON NM • BRISBANE AU • OIL & GAS INQUIRER • DECEMBER 2009
29
WE MAKE
SIGN BASES Our Customers Told Us!
USED GLYCOL PROCESS FEE
Reducing G-House emissions
403-343-9555 Red Deer, AB For more bases and uses visit our website:
WWW.PEDESTALSUPPLY.COM
T&E Pumps Ltd. Crude Oil • Water • Acid • Condensate Fluid Transfer • Recycle Pumps • Skim Pumps
Call us in Consort
for the dealer nearest you:
(403) 577-3825 or visit our website at
www.tepumps.com Bonnyville, Brooks, Drayton Valley, Edmonton, Edson, Grande Prairie, High Prairie, Hinton, Lloydminster, Medicine Hat, Peace River, Spruce Grove, Strathmore, Swift Current, Taber and Westlock E-mail: tyler@tepumps.com Fax: (403) 577-3813 “The Environmentally Friendly Solution”
30
DECEMBER 2009 • OIL & GAS INQUIRER
Ask about our “trade-in” option on replacement glycols!
Northwestern Alberta/Foothills
Alberta’s Crown land auctions in October generate meager revenue
Low Crown land sales, reduced drilling, and high inventories continue to dog Alberta.
A lberta’s t wo land sales in October yielded $32.8 million in bonus bids, including $10.9 million from the sale on Oct. 28 and $21.9 million on Oct. 14. To date, the province has raised $279.9 million in revenue in 2009. Alberta’s lowest land sale total over the past decade was $501.5 million in 2002, and this year’s total appears likely to be lower. T he Oct. 28 land sale generated $193.88 per hectare (ha) on 56,691 ha, with most of the money plunked down in the province’s northern region. Broker Scott Land & Lease Ltd. produced the land sale bonus high, paying $1.5 million ($1,138 ha) for a 1,280 ha licence at sections 26 and 34 at 48-20W5 and sections three to five at 49-20W5. Daily Oil Bulletin records show operator activity in the Minehead area by Tourmaline Oil Corp. The company rig released a well in September for gas at
11-9-49-20W5 with the Poker Chip shale as the projected zone. Several sections located to the northeast at 49-19, 50-19, and 50-20W5 have been posted for the Nov. 18 land sale. In the Foothills region, Canadian Coastal Resources Ltd. paid $795,924 for a licence at sections 23 to 25 and 34 to 36 at 62-12W6. The 1,536 ha parcel went for an average of $518.18 per ha. Second Wave Petroleum Inc. produced the lease high, paying $416,000 ($1,625 per ha) for a 256 ha parcel at section 36 63-10W5 for petroleum and natural gas below the base of the Bluesky-Bullhead. Oilsands parcels generated $657,168 in bonus bids during the late October sale on 4,224 ha. Bristol Land & Leasing Ltd. paid the bonus high of $181,027 ($2,828 per ha) for a parcel at 54-6W4 in the Cold Lake oilsands area. Centennial
Land Services Ltd., meanwhile, plunked down $179,747 ($351.07 per ha) for a parcel in the Athabasca oilsands area at 77-25W4. Year-to-date, revenue from oilsands leases has plunged to $6.7 million versus $275.4 million for the same period last year. The Oct. 14 sale produced a perhectare price of $203.88 for 107,470 ha of rights sold. In Alberta’s mid-October sale of 2008, bids totalled $38.7 million in revenue on 117,707 ha at $328.92 per ha. Scott Land & Lease Ltd. paid the bonus high at the mid-October land auction, picking up a 768 ha lease for $1.4 million. The broker acquired one tract at the northern half and southeastern quarter of section 14 and sections 16 and 22 at 26-3W5. The second tract was located in the southwestern quarter of section 14. Plunkett Resources Ltd. produced the per-hectare high of $3,932 for a 256 ha lease, a total bonus of just over $1 million. The company picked up two tracts at 47-10W5. Tract one included the southern half and northwestern quarter of section nine, while the second was for the northeastern quarter of section nine. Tract one includes petroleum and natural gas to the base of the Rock Creek member, while the second tract is for petroleum and natural gas below the base of the Cardium formation and to the base of the Rock Creek member. Daily Oil Bulletin records show Baytex Energy Ltd. spud a well in the Pembina area at 6-20-47-10W5 in January targeting the Nordegg member. Windfall Resources Ltd. paid $1.03 million—the licence high—for sections 18, 19, 30, and 31 at 112-21W5; section 6 at 113-21W5; and sections 21, 25, 27, 28, and 34-36 at 112-22W5. The parcel totalled 3,072 ha. — DAILY OIL BULLETIN
NORTHWESTERN ALBERTA/FOOTHILLS WELL ACTIVITY
OCT/08
OCT/09
OCT/08
OCT/09
OCT/08
OCT/09
WELL LICENCES
348
216
WELLS SPUDDED
277
119
WELLS DRILLED
269
106
Source: Daily Oil Bulletin
OIL & GAS INQUIRER • DECEMBER 2009
31
Oilfield Buildings • Pipe Insulation • Utilidors Tank Insulation • Barrel Docks • Noise Barriers
YEAR ROUND INDUSTRIAL & COMMERCIAL INSTALLATION
A DIVISION OF TRANS PEACE CONSTRUCTION
_\O^RKXO ZKXOV]
Urethane Injected Panels Extruded Aluminum Channels Sheet Metal
• Chain Link Fence and Gates • Electric Gate Operators & Access Controls • Pre-Manufactured/Portable Site Enclosures • Industry Leading Health, Safety & Environmental Program
We also offer Safety Fence, T-Posts, Ornamental Fence & Vinyl Fence EDMONTON
(780)447-1919
12816 - 156 St. Fax: (780) 447-2512 edmonton@phoenixfence.ca
1-800-661-9847
• NEW COMPRESSION EQUIPMENT • • NEW & REBUILT ENGINES • FROM 20 HP - 4,500 HP • • SALES, PARTS, SERVICE, RENTALS • CUSTOM DESIGN AND PACKAGING OF
6900 - 112th Avenue SE Calgary, AB T2C 4Z1
(403) 235-5877
(780) 488-9309
#100, 11312 - 98 Avenue Grande Prairie, AB T8V 8H4
#12 - 901 South Railway Avenue Drumheller, AB T0J 0Y6
Fax: (780) 513-0804
Fax: (403) 823-3610
Fax: (403) 272-7749
(780) 513-0313 SULLAIR
32
Fax: (780) 488-9383
(403) 823-8411
For our locations in Medicine Hat, Red Deer and Saskatchewan, please call our toll free number.
Certified Warranty Depot and Authorized O.E.M. of:
PROCESS AND GAS COMPRESSORS
5403 Roper Road Edmonton, AB T6B 3L6
1-877-724-3355
Toll Free: E-mail: bidell@bidell.com • Web Site: www.bidell.com
DECEMBER 2009 • OIL & GAS INQUIRER
CALGARY
(403)259-5155
6204 - 2nd St. S.E. Fax: (403) 259-2262 calgary@phoenixfence.ca
1-888-220-2525
Northeastern Alberta
Photo: Joey Podlubny
Imperial produces its one billionth barrel of crude oil at Cold Lake
Cold Lake is Canada's first in situ oilfield to produce more than one billion barrels.
More than four decades after Imperial Oil Limited broke ground for the first thermal in situ field pilots at Cold Lake in northeastern Alberta and 25 years after the first commercial production, the project has surpassed one billion barrels of cumulative production. Only three other fields in Canada have achieved that milestone and Cold Lake is the only in situ project to have done so, said the company in reporting thirdquarter results. Over the years of operation, technological advancements have tripled recovery rates while reducing fresh water use and surface land disturbance. In September, Imperial filed amendment applications for the Cold Lake Nabiye in situ expansion project, which had received regulator y approval in 2004. The project, if sanctioned, will add about 30,000 barrels a day of production from a new plant. The expansion will
access 250 million barrels of previously undeveloped resource at Cold Lake. Further north, the Kearl oilsands mining project has been proceeding with detailed design, procurement, and construction activities with a current workforce of about 3,000 employees and contractors. Kearl will be developed in three phases and could ultimately produce more than 300,000 barrels of bitumen per day before royalties. The first phase of the project is expected to start up in late 2012. Imperial holds a 71 per cent interest in the project and is the operator in the joint venture with ExxonMobil Canada. Earnings from both upstream and downstream operations at Imperial Oil Limited took a hit in the third quarter of 2009, with net income down 61 per cent from the third quarter of 2008. Net income for the three months ended Sept. 30, 2009, declined to $547 million from
a record $1.39 billion in the comparable period a year earlier. Lower oil and natural gas prices resulted in a $560-million reduction in upstream earnings to $439 million from $999 million in 2008, while downstream earnings slipped to $62 million from $270 million due to lower demand for products, which translated into lower margins. The chemicals segment also was off sharply to $27 million from $82 million per year earlier primarily due to lower margins for polyethylene products. In the third quarter, capital and exploration expenditures increased to $575 million from $360 million in the same period in 2008. For the first nine months of 2009, capital and exploration expenditures were $1.6 billion, an increase of 72 per cent. Total production averaged 303,500 barrels of oil equivalent in the quarter, down from 309,500 barrels of oil equivalent per day in the comparable 2008 period. Heavy crudes make up most of the company’s output. Its gross production of conventional crude oil averaged 25,000 barrels per day in the first nine months of 2009, essentially the same as the corresponding period of 2008. Gross production of Cold Lake heavy oil averaged 145,000 barrels per day compared to 143,000 barrels in the same quarter last year. The cyclic nature of production at Cold Lake and lower maintenance activities contributed primarily to the increase. The company’s average realizations for Cold Lake heavy oil were down about 40 per cent in the third quarter of 2009 compared to 2008, although the decline was less than the 43 per cent decline for lighter crude oil due to the narrowing price spread between light crude and Cold Lake heavy oil. — DAILY OIL BULLETIN
NORTHEASTERN ALBERTA WELL ACTIVITY
OCT/08
OCT/09
OCT/08
OCT/09
OCT/08
OCT/09
WELL LICENCES
138
105
WELLS SPUDDED
76
78
WELLS DRILLED
78
89
Source: Daily Oil Bulletin
OIL & GAS INQUIRER • DECEMBER 2009
33
Northeastern Alberta
Husky prepares to drill new wells at its Tucker oilsands project With improving crude oil prices, Husky Energy Inc. is developing plans to drill a number of new infill and replacement wells to increase production at its Tucker oilsands project in northeastern Alberta over the next year. In releasing its third-quarter results on Oct. 22, the company said it continues to pursue operational strategies to achieve full implementation of the steam assisted gravity drainage (SAGD) process in this reservoir. The majority of the wells in the project are in steady state SAGD operational mode, and production rates were approximately 4,300 barrels of oil equivalent per day at the end of the quarter. In a report, Peters & Co. Ltd. says the company hopes to be producing nearly 10,000 barrels per day by the end of 2010 from the facility designed for 30,000 barrels per day. The report said Husky now expects a steam to oil ratio of four to one compared to the initial target of three to one. “More importantly, this new plan will require the drilling of more wells, additional steam generating capacity, and upsizing of all the facilities, including the water treatment plant,” said Peters &
Despite earlier development troubles, Husky is pressing ahead with its Tucker SAGD project.
Co., which estimates this will cost about $250 million. Husky expects to complete front-end engineering design (FEED) by the end of this year on its Sunrise integrated oilsands thermal project it is developing with partner BP plc (50 per cent) north of Fort McMurray, Rob Peabody, Husky
COO, said in a conference call to discuss its third-quarter financial results. The plan is to move the project into f ull engineering, procurement, and construction phase next year, he said. “We had anot her meeting w it h our partner the other day and I think both partners are very aligned on the way
cker installation... IT PAYS i u q , s e ric p r e Low
34
DECEMBER 2009 • OIL & GAS INQUIRER
LE B I X E L TO BE F
.
Northeastern Alberta
forward on Sunrise and very committed to the project.” Bitumen production of 60,000 barrels per day from the first phase is expected to begin approximately four years after project sanction planned in 2010 with total gross production currently planned to increase to 220,000 barrels per day, subject to project sanction and market conditions. Work on optimization to simplif y its scope and take advantage of t he r e c e nt e c onom ic dow nt u r n i n t he demand for goods and services is progressing on schedule with FEED about 60 per cent complete. At the third quarter, Husky had spent $1.49 billion of its 2009 upstream capital budget of $2.09 billion. The company has budgeted $725 million for oil and gas in western Canada and $65 million for oilsands. Another $800 million is allocated for the east coast of Canada and $500 million for international operations. At Bullmoose-Sukunka in northeastern British Columbia, the Burnt River c-A61-A (55 per cent working interest) and the Sukunka a-27-F (20 per cent working interest) wells have been tied in and are capable of producing at rates in excess of 30 million cubic feet per day
from the Belcourt formation. Both wells have commenced production. Husky is finalizing negotiations with a partner to participate in another Belcourt formation test that is expected to spud later this month. During the first nine months of 2009, Husky spent $53 million primarily on the Mizzen exploration well in the Flemish Pass off the coast of Newfoundland. An application has been submitted to the Canada-Newfoundland and Labrador Offshore Petroleum Board for a significant discovery licence based on the results of the December 2008 Mizzen exploration well in which Husky has a 35 per cent working interest. Offshore Greenland, Husky continues to evaluate a 7,000 kilometre 2-D seismic program acquired in the third quarter of 2008 on Blocks 5 and 7. A $55-million airborne gravity and magnetics acquisition was completed in the second quarter of 2009 and is currently being evaluated. Husky has completed acquisition of the first of two 1,000 square kilometre 3-D programs over Block 7 and is currently working on the acquisition of a second 1,000 square kilometre 3-D program over Block 5.
Epcor and Suncor sign water deal Epcor Utilities Inc. will become the primary provider of potable water and domestic waste water services at Suncor Energy Inc.’s oilsands operations under a new deal announced on Oct. 20. Under the agreement, Epcor will acquire potable water and waste water facilities under a sale lease-back agreement at Suncor’s Steepbank, Firebag, and Borealis sites for about $100 million, and will take over some waste water operations at the Suncor Base Plant. As a result, Epcor is providing potable water and domestic waste water services to more than 6,000 Suncor oilsands workers. Lease payments will be made to Epcor over 20 years. The deal, which closed Oct. 8, includes operations and maintenance of three waste water treatment plants, two water treatment plants, and various collection and distribution systems. Epcor will perform upgrades as part of regularly scheduled maintenance to the facilities over the next year.
— DAILY OIL BULLETIN
— DAILY OIL BULLETIN
Toll Free:
888-FLX-PIPE (888-359-7473) www.flexpipesystems.com
Flexpipe MAKES Cents. TM
OIL & GAS INQUIRER • DECEMBER 2009
35
Safehouse are world leaders in the supply of pressurized habitats for use in zone 1 & 2 areas. Safehouse habitats are EX/ATEX certified. The habitats are typically used for: • Welding of pipe work and steel structures • Housing of non I.S.Equipment
For more information visit our website or contact Blaire Lancaster on projects@safehousehabitats.com
Tel: (403) 515-6078
www.nait.ca www.safehousehabitats.com
Fluid Flow Meters & MoNitors. ACCurAte. durABle. eCoNoMiCAl. Meter sizes from 3/8” to 10” with flow ranges from 0.3 to 5,000 gpm (10 to 172,000 bpd).
t t t
t
t
Microprocessor based monitor with easy front panel programming.
User friendly turbine flow meters Easiest flow monitors to program in the business Performance equal to or better than the competition Costs less than what you are accustomed to paying Ships faster than all others on the market
Pembina Controls, Inc. Edmonton, Alberta/Calgary, Alberta
www.pem-controls.com
CAll toll-Free 1-877-PeMBiNA (736-2462) 36
DECEMBER 2009 • OIL & GAS INQUIRER
education for the real world. Maximize your success in the classroom with NAIT’s Becoming a Master Instructor program. Sharpen your adult teaching skills, build confidence and refine your abilities as a presenter. You will discover the context of an adult learning environment and the unique strategies and styles of delivery used in adult education. Strong interpersonal skills are essential and through hands-on training and interaction with other professionals your skills will grow, helping you find success in the classroom.
Learn more about NAIT’s corporate training options. Contact us today. ph (780) 378.1230 email cittraining@nait.ca
corporate and international training
Central Alberta
Photo: Joey Podlubny
Alberta extends its bitumen royalty-in-kind program
Alberta has provided two more preparation years for firms planning to process royalty bitumen.
When the Alberta government’s bitumenin-kind initiative was first announced in July, any upgraders hoping to process that crude were required to be up and running by 2016. But on Oct. 19, the Alberta government said it had decided give participants until 2018. Under the bitumen royalty-in-kind program, the province will take its royalty payments from producers in bitumen rather than in cash. The province would then supply up to 75,000 barrels per day of that raw product to an Albertabased project, which would process it into value-added products like gasoline or diesel. It’s seen as a way to ensure oilsands processing jobs and investment stay in the province, rather than flow south of the border, where many refineries have been retrofitted to handle the heav y crude from northern Alberta.
If anyone wants to see Alberta’s oilsands upgrading industry get a boost from the government as quickly as possible, it’s businesses in Alberta’s Industrial Heartland, just outside Edmonton. But the executive director of Alberta’s Industrial Heartland Association acknowledged on Oct. 20 that there are good reasons for the province to start up its bitumen royaltyin-kind initiative two years later than originally planned. “Obviously we’d like to see construction sooner than later, but we also want to make sure it’s the right project, and the best project for the region,” Neil Shelly said. It takes about two years for a new project to go through the regulatory process in Alberta. And if it’s a large development, construction could take three or four years. “The initial timelines they initially had on this one were a little more constrictive on that, and it kind of
eliminated a whole group of potential new players that couldn’t invest in the region,” Shelly said. “It would have made it more difficult if not impossible for these new entrants to apply to the program.” That’s not to say there won’t be downsides that come from the delay. Shell Canada Ltd. is currently the only company building a major project in the region. Once the expansion to its Scotford upgrader wraps up some time next year, there may not be any reason for skilled labourers, who were so scarce during the boom, to stay in the area. “We spent a long time building up that skills base,” Shelly said. “If there’s no projects on the go in the area after next year, we potentially could lose that skills base and it we’ll be back at square one again when the projects are ready to go in 2016 or 2018.” Potential participants in the program have until Jan. 27, 2010, to file their applications, and a decision on which projects will be approved would likely be made toward the middle of the year, Alberta Energy spokesman Jerry Bellikka said. “If you want to get to full capacity and use 75,000 barrels per day, it’s going to take some time, longer than first estimated, in order to bring those projects in,” he said. The royalty-in-kind program fell short even before the province announced the delay, said the president of the Alberta Federation of Labour (AFL). “The fact that they’re pushing it back another two years, frankly, doesn’t surprise us,” said Gil McGowan. “And given the paltry effort that the program provides, it’s really not going to change the big picture.” “For those who are not familiar with the oilsands industry, 75,000 barrels per day may sound like a lot. But it’s really little more than a drop in the bucket,” McGowan said. — CANADIAN PRESS
CENTRAL ALBERTA WELL ACTIVITY
OCT/08
OCT/09
OCT/08
OCT/09
OCT/08
OCT/09
WELL LICENCES
339
209
WELLS SPUDDED
344
175
WELLS DRILLED
337
168
Source: Daily Oil Bulletin
OIL & GAS INQUIRER • DECEMBER 2009
37
Central Alberta
Berens Cardium well tests 270 barrels per day Berens Energy Ltd. says its Pembina Cardium horizontal oil well located at 01-14-48-11W5 tested the equivalent of 270 barrels per day of oil at the end of a 48-hour period. The well was scheduled to be placed on production by early November. Berens operated the well and has a 50 per cent working interest. The well was drilled to a horizontal length of 600 metres. Drilling was terminated short of the original design length of 1,000 metres as a result of isolated drilling
and reservoir conditions on this well. The well was subsequently completed with a five-stage frac treatment. A second horizontal oil well (Berens’ 60 per cent working interest) is currently drilling at 15-21-50-12W5 with initial test results expected in midNovember. Four additional Pembina C a r d iu m hor i z ont a l oi l we l l s a r e planned for the first quarter of 2010 to assess the extent of this resource play across the Berens’ lands.
A successful first-quarter 2010 program has the potential to establish a significant inventory of horizontal Cardium oil wells on existing lands to add to an already stron- inventory of natural gas wells in the Pembina region, according to Berens. It holds a total of 68 sections (38 net) of Pembina Cardium rights on the west flank of the existing Pembina Cardium oilfield, much of which is expected to be prospective for this emerging oil resource play. — DAILY OIL BULLETIN
Stealth receives downspacing approval for shale gas play Stealth Ventures Ltd. has received spacing approval from the Alberta Energy Resources Conservation Board (ERCB) to proceed with eight wells per section on two sections of land in the Wildmere area. Currently the ERCB allows four wells per section drainage on all Stealth lands in Wildmere. After months of analysis, a regulatory approval precedent has been set for
Lo Tech® Manufacturing Inc. 7719 - 69 St, Edmonton, Alberta T6B 1V4
Desiccant DehyDrator Typical Specs: ❖ 8” Diameter ❖ 48” Height ❖ 285 PSIG ❖ 1” or 2” Manifold ❖ Hammer Union Closure Comes Complete With: Prebed & Initial Salt, Bypass Manifold, Vent & Drain.
Office: (780) 440-5064 Fax: (780) 440-5172 www.lotech.ca
38
DECEMBER 2009 • OIL & GAS INQUIRER
sections 10-50-6W4 and 29-49-5W4 to allow for eight wells per section from the current four within a holding. Fekete Associates Inc. completed extensive rate transient analysis on location 15-1050-06W4, which had over two years of production data and showed ultimate well density will approach 18 wells per section (36-acre spacing) to ultimately
drain t he resource before inter ference is found. An additional 17 sections are currently awaiting decision by the board with the remaining Stealth acreage (107 sections gross) in process with Fekete. With full spacing approval, Stealth noted it will have hundreds of locations available to the company for development.
Central Alberta
Imperial Oil reviews security after environmental protests Imperial Oil Ltd. is looking at security after several high-profile occupations of Alberta oilsands projects by environmentalists, the company’s CEO said on Oct. 15. Greenpeace protesters who took over a Shell plant near Edmonton and blocked production at a Suncor Energy (TSX:SU) upgrading refinery near Fort McMurray
that may be changing our thinking somewhat,” he said. RCMP officers were called in and 16 Greenpeace protesters were arrested after demonstrating at the Shell oilsands upgrader plant near Edmonton earlier in October. Break-and-enter charges were laid in that instance. Mischief charges were laid
“I think we’re generally concerned that it’s occurring and wish that organizations like [Greenpeace] would be able to participate in a manner that’s a little more constructive."
— Bruce March, CEO, Imperial Oil Ltd.
have changed the way companies think about protecting their sprawling projects, Bruce March told reporters following a speech to Calgary’s business community. “I think what we’ve seen with the Greenpeace excursions are elements that are very well planned out, they’re very well prepared, they’re effectively executed, they’re very organized, and
after a Sept. 30 attempt to block production at Suncor’s upgrader near Fort McMurray. March said Imperial has always had security in place to keep trespassers out, primarily for safety reasons, but the latest incursions mean Canada’s largest oil producer and refiner may have to rethink its strategies. As many companies expand Canadian oilsands projects and planned pipelines
to carry heavy crude to U.S. refineries, environmentalists have raised the pressure on the industry, warning that the rapid growth will harm the environment, produce more greenhouse gases, and deplete water resources. “I think we’re generally concerned that it’s occurring and wish that organizations like [Greenpeace] would be able to participate in a manner that’s a little more constructive,” March said. However, he acknowledged that such tactics by environmental groups have been very successful at positioning the oilsands as an international climate change menace. But he added he’s convinced that the world will be willing to listen to a different story from industry and the Canadian government when it comes to the upcoming climate change conference in Copenhagen. “We think we have a pretty good story to tell around our development, and we’re not concerned about getting an equal chance to view those things at all,” March said. — CANADIAN PRESS
PRESSURE VESSELS BY
Over 11,000 Vessels Built to Date • • • • • • • • • • • •
5715-56 Avenue, Edmonton, AB Fax: (780) 436-1467 Email: info@penfabco.com Web: www.penfabco.com
(780) 434-0222
Separators Dehydrators Treaters FWKOs Scrubbers Swab Vessels Line Heaters Steam Splitters Coil Rolling Drip Pots External Level Cages Filter Vessels
microbial solutions WWW.DPSMICROBIAL.COM
CONTROL & ELIMINATE PARAFFIN, IRON SULPHIDES AND ASPHALTENES IN OILFIELD PRODUCTION AND INJECTION WELLS .
THE ENVIRONMENTALLY FRIENDLY ALTERNATIVE.
Red Deer, AB
403.990.1582
Calgary, AB
403.686.7020
Frobisher, SK
306.486.2110
OIL & GAS INQUIRER • DECEMBER 2009
39
advertise today listings start at only $242 for a full year of exposure Est.
Est.
CeleBrating 1980
Vertigo Theatre thanks its corporate partner
Vertigo Mystery Theatre Season Sponsor
In our business, you need a good accomplice
“Captivate a new audience!”
Unique sponsorship opportunities are available contact Development at (403) 260-4759
CAUGHT IN THE ACT “GET www.vertigotheatre.com ”
30 Est.
1980
1980
years of
Est.
1980
Business
With over 12,000 listings in 1,900 categories, we more than double the nearest competition in qualified oil and gas listings, making us the most comprehensive oilfield directory in Canada.
Cossd.CoM the Buyer’s guide for the Canadian oil & gas industry 1-888-563-2946 ext:144
Oilsands, Oilweek, Oil & Gas Inquirer 7.0625w x 4.625h Color Advt 2009:Half Page Horizontal Advt.qxd 10/19/2009 4:01 PM Page 1
C L E A N
H A R B O R S— E N V I R O N M E N T A L ,
E N E RGY
A N D
I N D U ST R I A L
S E RV I C E S
Eveready Joins Clean Harbors • Decoking/pigging services • Chemical cleaning and decontamination • High pressure waterjetting • Catalyst technologies • Downhole production services • Transport production services • Vacuum and hydro-excavation services • Directional boring • Seismic drilling, line clearing and surveying • Dredging and dewatering • Hazardous and non-hazardous waste disposal • Drill site bin services • Lodging services
The combined strength of the companies–– our commitment to health and safety, strong track record with customers, broad service offerings, geographic reach, and leading edge business systems–– provides a great platform for building one company committed to delivering superior services. -Alan S. McKim, Chairman, CEO and President, Clean Harbors
Clean Harbors Energy and Industrial Services • 800.661.6689 • www.cleanharbors.com 40
DECEMBER 2009 • OIL & GAS INQUIRER
Southern Alberta
Photo: Mostar Directional Technologies Inc.
Drilling days per well rise despite steep overall activity downturn
In order, Canada’s busiest drillers during 2009 have been Precision, Ensign, Savanna, and Trinidad.
Precision Drilling Trust was the most active drilling contractor in Alberta during the first nine months of 2009, completing 1,248 wells drilled and 1.71 million metres of hole. In Saskatchewan, Ensign Drilling Inc. ranked first with 336 wells and 452,290 metres. Trinidad Drilling Inc. was the most active contractor in both British Columbia (102 wells and 302,644 metres of hole) and Manitoba (83 wells and 195,790 metres). Overall, Precision was the top contractor in Canada for the first three quarters of 2009 with 1,607 wells and 2.32 million metres drilled. Its biggest customers were Canadian Natural Resources Limited (338 wells), EnCana Corporation (185 wells), and Devon Canada Corporation (143 wells). Precision increased its market share slightly to nearly 27 per cent this year from 25.35 per cent in the first nine months of 2008.
Ensign ranked second with 1,462 wells and 1.64 million metres of hole. Its biggest customers were EnCana (286 wells), Canadian Natural Resources (244 wells), and Enerplus Resources Fund (101 wells). Savanna Energy Services Corp. ranked third place (1,142 wells and 1.09 million metres) and Trinidad Drilling ranked fourth place (375 wells and 861.208 metres). Savanna’s biggest customer was EnCana (628 wells), while Trinidad’s number one client was Manitoba operator Tundra Oil & Gas Partnership (82 wells). While the number of wells drilled by contractors plunged this year to only 5,987 from 11,562 a year earlier and operating days fell 38 per cent to 41,032, the average number of drilling days it takes to drill a well continued to rise, mainly because of the growing use of horizontal wells and the collapse in shallow gas drilling.
In western Canada, it took on average 10.16 days to drill a well in the first nine months of 2009, up 20 per cent from last year and the most since 1991. B.C. was at a 20-year high of 26.88 days per well, 29 per cent above last year, while Saskatchewan drillers took on average 8.08 days, up from 6.9 days in the same period of 2008. In the third quarter of 2009, contractors only booked 13,851 operating days, down 50 per cent from the same period last year. Only two contractors experienced more operating days this year (to the end of September) than in 2008—Partner Drilling Ltd. with a 15-day increase to 420 days and Panther Drilling Corp. with a one-day increase to 366 days. The highest rig utilization numbers for the first three quarters of 2009 were posted by smaller contractors, with Panther Drilling leading the way with a 67 per cent utilization rate for its two rigs. Eagle Drilling Services (51 per cent utilization for its five rigs) and Partner Drilling (39 per cent utilization rate for its four rigs) ranked second and third. The same three companies had the highest metres drilled per rig for the nine-month period. Partner Drilling, a Vancouver-based contractor using rigs built in China, was the leader in average wells drilled per rig with 26.5 wells drilled on average by its four rigs. Partner Drilling finished 106 wells in the first nine months of 2009, 83 of which were drilled by Husky Energy Inc., controlled by Hong Kong billionaire Li Ka-shing through his holding company Hutchison Wamphoa. Partner Drilling and Advance Drilling Ltd. (which also uses Chinese rigs) have the same head office address in Vancouver and the same president. Advance Drilling owns 10 rigs and drilled 104 wells to the end of September. Bonanza Drilling Inc. ranked second by average wells per rig with nearly 21 wells drilled by each of its five rigs. — DAILY OIL BULLETIN
SOUTHERN ALBERTA WELL ACTIVITY
OCT/08
OCT/09
OCT/08
OCT/09
OCT/08
OCT/09
WELL LICENCES
681
251
WELLS SPUDDED
624
108
WELLS DRILLED
624
109
Source: Daily Oil Bulletin
OIL & GAS INQUIRER • DECEMBER 2009
41
Southern Alberta
Oilpatch lenders work with junior producers to get through the downturn Low natural gas prices and tighter credit are making for lean times, but Canadian lenders are trying to work with junior producers rather than forcing insolvency. “By and large, we’re not getting heavyhanded,” said Bruce Edgelow, Energy Group VP for ATB Financial Services, who believes his approach is in line with those of other lenders to the junior sector. S p e a k i n g a t t h e P l a y m a k e r ’s Symposium in Calgary, he acknowledged the current environment, mainly due to low gas prices, has stretched juniors who tend to have more gas than oil production. “Are we having tough discussions? Yes, but the banking community is not going to get heavy-handed and [trigger] receiverships unless we are driven to it through other unsecured pieces,” Edgelow told the conference in October. “We are hunkering down and working with our clients.” Juniors are a sector of the industry that’s been under severe pressure, Bill Sembo, vice-chairman of RBC Capital Markets, told a Calgary conference last
April. In a more recent interview, he said the situation has not changed much since last spring. “I think we’re still probably in the same situation as before, in that certain [producers] were probably at the upper limit of their borrowing capacity,” Sembo said, adding that for those companies, securing more credit could be problematic. In addition to challenges securing credit, the cost of credit is higher this year. “On average, I would say the cost of borrowing has gone up by 100 to 150 basis points,” said John Swendsen, VP of energy lending for the National Bank of Canada, although he estimated that change has occurred over the past two years, from the time the credit squeeze began in mid2007. “If [companies] borrowed at the [Bank of Canada] prime rate plus one half [percentage point] two years ago, they’re probably paying more like prime plus one and a half or thereabouts today.” Banks base their loans to producers on the value of their reserves in the ground,
Storage Solutions ExpEriEncE thE advantagEs of Meridian’s Exclusive Baked on powder coating, heavy duty Built construction, Workmanship and customer service.
42
DECEMBER 2009 • OIL & GAS INQUIRER
adjusted for additions and revisions. While some producers are assessed annually, most juniors are evaluated twice yearly. Things could get more difficult early next year, when loans are reviewed with the annual reserves determination since many producers have cut capital spending this year and aren’t replacing production with new reserves. That coupled with a lower gas price forecast could materially reduce borrowing capacity. In reality, Swendsen said, lenders talk to their clients in the junior sector almost monthly. “We have ample opportunity to say, ‘Listen, you’re getting close to the top of your [credit] lines and if gas prices contract, you’re going to have some challenges, so let’s start looking at it now,’” he said. In reviewing reserves, evaluators assume a certain gas price. That figure can have a huge effect on the value of the reserves and on how much credit the junior can qualify for. One lender said this is where the industry was cut some slack,
Southern Alberta
since the gas price applied on this year’s evaluations was higher than it could have been. “The 2009 marketplace got a bit of a bump because the reserves analysts gave them a bit of a reprieve on the price being used, [but] I’m not sure that that’s going to carry forward into 2010,” said ATB’s Edgelow. “We think 2010 [prices] might be even tougher.” With companies stretched, some will be forced to sell properties to raise cash despite current lower gas prices. Gary Leach, president of the Small Explorers and
Celtic Exploration Ltd. “You definitely would not be fetching the best price today. If I had to pick one of the two, I think people would be more inclined to raise [equity].” “It ’s up to the management and boards of companies to ask themselves, ‘What are we going to do?’” said John Rossall, president and CEO for ProspEx Resources Ltd. “Do they sell assets to reduce debt, hunker down, or seek some sort of merger? There are a number of alternatives in those situations.”
With companies stretched, some will be forced to sell properties to raise cash despite current lower gas prices. Producers Association of Canada (SEPAC), cited specialists in the asset divestiture business who say business has not been as brisk as expected, given the pressures producers are under. As well, he said more management teams could move to recapitalize existing, weaker juniors, as happened recently with Eagle Rock Exploration Ltd. “It’s a nasty time to be selling natural gas properties— or any others,” said David Wilson, president and CEO of
As for mergers, one issue they raise is management entrenchment, accordi ng to ba n kers. Two ju n iors m ight agree to merge, for example, but differ about who should step aside to make it happen. Rarely do executives from both sides land on their feet in such scenarios. Those considering a merger therefore know that without it, they at least have a job and a salary. With it, they might have neither.
“Management entrenchment is huge,” said ATB’s Edgelow. “[Executives] are concerned that…they cannot go out and start another company if they sell the current one, and they’re not sure they’ll be able to find a job…. So, the entrenchment is real, and we have to deal with it.” “As far as juniors go, I think bankers have tried to demonstrate a fair bit of flexibility,” said Leach. “They understand there is not much to be gained by trying to push companies into [insolvency]. If they can help them restructure, assist in asset dispositions, mergers, or acquisitions, that will help restructure balance sheets.” Bruce Edgelow’s closing comments at the Playmaker’s Symposium echoed that view. “We do not want a fire sale, whether it’s E&P companies or oilfield services. That gets us nowhere,” he told the audience. “These are tough times, but we’re working alongside our clients to make sure we can hang in there as best we can. The discussions are getting longer, more protracted, and we’re having to work harder than ever, but there’s a huge resolve to make sure we come out of this on the other side.” — DAILY OIL BULLETIN
Eliminate Freeze Off! RTS Services is now the exclusive distributor for Trinity Injection Systems Methanol • Chemical • Soap The most efficient Chemical Injection System available
www.rtsservices.ca EFC_ADVERT_oil-and-gas-Inquirer4.indd 1
Toll Free 1-888-511-0554 11/13/2009 9:36:31 AM OIL & GAS INQUIRER • DECEMBER 2009
43
Southern Alberta
Nabors reports Q3 loss in Canada and plans to reduce costs Nabors Industries Ltd. reported an operating loss of US$10.4 million in Canada in the third quarter as business didn’t improve coming out of the seasonally slow second-quarter spring breakup. The company is aiming to reduce costs north of the border. Nabors lost US$13.5 million during the comparable quarter last year. Rig years for the three months ended Sept. 30 dropped to 12.3 in 2009 from 35.8 in 2008. Canadian well servicing rig hours fell to 31,686 from 67,141 for the respective periods. Rig Locator records show only 57 wells drilled by Nabors in Canada during the three months ended Sept. 30, 2009, down from 190 wells for the same period last year. For the first nine months of 2009, the contractor’s well count fell to 225 from 515 a year earlier. Its two biggest customers over the first nine months of 2009 were Royal Dutch Shell (53 wells) and Apache Canada Ltd. (50 wells). “Third-quarter activity was essentially flat with an average of 12 rigs operating at an average margin per rig day of $8,248, compared to 11 rigs at $10,156 in the
A full range of power and force measurement transducers, protection relays, needle and manifold valves, pressure switches, diaphragm seals and thermometers.
second quarter,” noted Gene Isenberg, Nabors’ chairman and CEO. “In the fourth quarter, we expect to realize further cost savings plus an increase in rig activity that should be sufficient to achieve at least a return to break-even operating income. There is very limited visibility for fullyear 2010. However, we think that firstquarter results will be in line with the
finding out what they are,” Isenberg told analysts. “The shallow singles drilling…is [going to be] much less important down the road than it is now. We not only have the rigs that work in, say, the British Columbia shales… [but] we own a ton of acreage there.” Isenberg said in a statement that the quarter likely represents the low point for the U.S. Lower 48 drilling, U.S. offshore,
"...we own a ton of acreage there [in the B.C. shales]." — Gene Isenberg, Chairman and CEO, Nabors Industries Ltd.
first quarter of 2009, reflecting further cost reductions and the seasonal high in activity.” Cost reductions Nabors has had elsewhere in the company “have not yet occurred to the same degree in Canada but they shall,” he said in a conference call, although no specifics were provided. Most of the increased activity will be in the further delineation and development of the Horn River and Montney shale plays in northeastern British Columbia. “The enormous potential of the British Columbia shales, we’ve only scratched the surface in
We stock and supply a wide variety of current, voltage, control power and specialty transformers, indoor and outdoor class from 600V to 34.5KV. We carry shorting blocks, selector switches, lockout relays, test switches, circuit protectors and capacitor trip devices.
Canadian, and other operating segments, leading to a bottoming out for its consolidated operating income. “One reason for our optimism is t he higher for ward prices for cr ude and gas, which currently are over $85 a nd $7, respec t ively, i n 2011,” t he company CEO said. Nabors reported a net income of US$42.5 million for the third quarter, down from $194 million a year ago. Nine-month profits fell to $317.9 million from $582.4 million for the same period in 2008. — DAILY OIL BULLETIN
A complete line of analogue and digital meters, transducer indicators and gauges.
Specializing in power and force inStrumentation #125, 11769-40 St. SE, Calgary, AB T2Z 4M8 | p: 403.257.3080 | f: 403.257.6657 ricks@cromptonwci.com | www.cromptonwesterncanada.com
44
DECEMBER 2009 • OIL & GAS INQUIRER
Southern Alberta
Nine-month well count declines by two-thirds from peak year 2006 Northeastern Alberta and Manitoba were the only bright spots in a dismal third quarter, which saw only 1,966 new wells drilled in Canada, down 63 per cent from 5,293 wells a year earlier. For the first nine months of 2009, industry drilled 5,719 new wells, off 53 per cent from 12,053 rig releases to the end of September 2008. This year’s count is the lowest since 1992, when only 1,118 wells were finished through September. The peak year was 2006, when 17,747 wells were finished at the three-quarter mark. W h i le a l l prov i nce s saw sha r p declines from last year, British Columbia and Manitoba fared relatively better with the former province showing a drop of 30 per cent to 458 wells this year, while the latter province had a 31 per cent decline to 163 wells from 236 in the first nine months of 2008. Operators in Alberta drilled 3,922 wells through September, down 52 per cent from 8,227 wells in the first three quarters of last year.
Industry rig released 1,163 new wells in Saskatchewan over the first three quarters of 2009, 60 per cent below the 2,922 wells drilled the previous year. September brought only 711 new wells drilled, according to Daily Oil Bulletin records. That is the most since Febr uar y t his year, but 59 per cent below the 1,733 wells rig released in September 2008. Metres drilled last mont h dropped 50 per cent to 1.11 million metres as the average depth per well climbed to 1,565 metres from 1,294 a year earlier. Manitoba was the only province showing an increase in activity last month with 32 wells drilled, up from 27 a year ago. During the third quarter, Manitoba drilling held steady with 94 wells, down only one well from the same three months in 2008. The only region that showed an increase compared to last year was northeastern Alberta where 224 wells were finished, up from 172 in 2008.
Central Alberta and southwestern Saskatchewan were the worst hit regions in the third quarter with only 129 wells in the former area, off 77 per cent from 549 last year (the peak was 2005, when the region saw 1,194 wells) and only 126 wells in the latter area, down from 797 wells a year ago. (Southwestern Saskatchewan is the gas drilling region of the province.) Producers rig released only 213 wells targeting natural gas in Saskatchewan over the first nine months of 2009 compared to 919 last year. In Alberta, wells targeting conventional natural gas fell to only 1,950 from 4,782 last year. During the peak gas drilling years, the count was over 9,000 wells. Producers also rig released 578 wells targeting coalbed methane to the end of September. That compares to 956 last year and a 2006 peak of 1,649 coalbed methane wells. — DAILY OIL BULLETIN
#5, 53016 Highway 60 Acheson, AB t7x 5A7 Ph: (780) 962-0103 Fax: (780) 962-2404 www.provmfg.ca
Design AnD mAnuFActure: ASME sec. VIII div. 1 pressure vessels ASME B31.1 & B31.3 pressure piping Field maintenance and construction
CWB Certified National Board Certified ASME “U” Certified Manufacturer
1.866.962.0103
“Quality & Service is the heart of our business” OIL & GAS INQUIRER • DECEMBER 2009
45
Southern Alberta
CNRL tops EnCana as most active operator in third quarter EnCana Corporation was easily the dominant operator of new wells drilled in the first nine months of 2009 even though its effort was much reduced from last year. The company chopped its drilling by 706 wells or 37 per cent compared to 2008. But in the third quarter of 2009—a period marked by very low drilling due to miserly natural gas prices—Canadian Natural Resources Limited was the number one operator with 315 wells, almost all targeting oil or bitumen deposits, with EnCana second at 237 wells. For the first three quarters of 2009, EnCana was the most active operator with 1,196 wells, followed by Canadian Natural Resources’ 579 wells. EnCana dominated southeastern Alberta drilling (837 wells but way down from 1,361 a year earlier) and northeastern British Columbia (85 wells versus 163 last year). Canadian Natural Resources was most active in eastcentral Alberta (238 wells) and northeastern Alberta (147 wells). Husky Energy Inc. ranked third to the end of September with 297 wells with Devon Canada Corporation fourth on 235 wells.
For both the third quarter and ninemonth period, the four companies with the largest year-over-year decline in drilling were EnCana, Husky, EOG Resources Canada Inc., and Enerplus Resources Fund. EOG was very active in southwestern Saskatchewan last year but cut backs affected its shallow gas
(656,487 metres), ConocoPhillips Canada Limited (350,863 metres), Husky (254,996 metres), and Devon (257,874 metres). Ranked by exploratory metres of hole drilled, the top five operators were EnCana, Talisman Energy Inc., Canadian Natural Resources, ConocoPhillips, and Shell.
No one came close to Tundra Oil & Gas Partnership in Manitoba. drilling program this year while Enerplus reduced its southwestern Saskatchewan activity to only 71 wells this year from 278 in the first nine months of 2008. There were few companies increasing their drilling activity this year, but some of the more prominent ones were StatoilHydro Canada Ltd. (34 wells t his year), Shelter Bay Energ y Inc. (up 32 wells to 41), Progress Energy Resources Corp. (up 22 wells to 34), and Tourmaline Oil Corp. (12 wells this year, none in 2008). Ranked by metres drilled, the top operators of the first three quarters of 2009 were EnCana (1.48 million metres), Canadian Natural Resources
By prov ince, EnCana, Canadian Natural Resources, and ConocoPhillips dominated in Alberta while EnCana, Shell, Murphy Oil Company Ltd., and Talisman were the most active operators in British Columbia to the end of September. In Saskatchewan, TriStar Oil & Gas Ltd. headed the Daily Oil Bulletin’s list with 163,840 metres drilled, followed by Crescent Point Energy Corp. (140,746 metres), Petrobank Energy And Resources Ltd. (109,593 metres), and Husky (99,124 metres). No one came close to Tundra Oil & Gas Partnership in Manitoba where it drilled 192,504 metres of hole with 83 wells at an average depth of 2,377 metres. — DAILY OIL BULLETIN
Infosat Communications LP 3130-114 Avenue, SE Calgary, AB T2Z 3V6 Canada tel: 403.543.8188 toll free: 888.524.3038 fax: 403.289.8133 www.infosat.com
Infosat Communications LP is a full service provider of mobile and fixed satellite solutions for all types of voice and data communication requirements. As one of North America’s leading providers and integrators of satellite communication solutions, Infosat offers a comprehensive range of fixed, mobile, and transportable wireless options including options suitable for SCADA applications. Infosat’s range of solutions includes both simple to use, do-it-all solutions and systems engineered for the unique challenges facing your business. All Infosat services are backed by a wealth of experience, reliability, coverage surpassing cellular and other terrestrial modes of communication, and 24/7 customer support.
46
DECEMBER 2009 • OIL & GAS INQUIRER
Southern Alberta
CERI says oilsands will boost American jobs and GDP As oilsands investment on new projects ramps up in Canada starting in 2013, demand for U.S. goods and services will expand to an estimated $40.4 billion in 2020 and $42.2 billion in 2025. Those figures are included in a recently released study by the Canadian Energy Research Institute (CERI), which pegs the capital investment and operating costs needed during the 2009–2025 period at $379 billion. Entitled Canada’s Oil Sand s and Economic Impact on the United States’ Economy, the study was commissioned by the American Petroleum Institute. Alberta’s oilsands could bring an estimated 343,000 new jobs to the United States between 2011 and 2015, and $34 billion to its gross domestic product by 2015, the expected peak year for oilsands capital spending. The CERI study covers the period from 2009 to 2025. The production forecast envisions raw bitumen production slowly climbing from current levels of about 1.2 million barrels per day to around 4 million barrels per day in 2025.
The probable range of oilsands production—highly dependent on oil prices and increased liquidity in capital markets—is widening with CERI estimating 1.9 million to 2.9 million barrels a day in 2015 and an even wide range of 3.5 million to 5.1 million barrels per day for 2025. Total investments on new oilsands projects to 2025 are estimated at $218 billion under its low-case economic slowdown scenario. “What is often not clearly understood is that the large investment in the oilsands industry contributes to increased economic activity in the rest of North America by stimulating demand for goods and services across a wide range of industries,” said the CERI report. While manufacturing—such as production of the huge trucks used in oilsands mining—will gain the most, finance and insurance sectors also benefit. Professional, scientific, and technical services in the United States alone are expected to see an average US$4.2 billion a year increase in output. The economic benefits of oilsands development and production do not fall to one industry but are broadly
shared across many industrial sectors. This is because oilsands development requires a large quantity of inputs from broad segments of the manufacturing and service sectors of the Canadian and U.S. economies. On average, U.S. output of goods and services increases by $62 billion per year over the period of analysis, 2009–2025. Steel products that would generally be manufactured in western Canada from scrap steel include casing, tubing, and other welded pipe; I-beams; tubular beams; and other simple structural components. More sophisticated and metallurgically altered steel products would be imported from the United States (primarily the upper Midwest) and overseas, or else manufactured in Ontario from steel produced in Ontario using metallurgical coal imported from the United States (primarily Appalachia). Some of the manufactured products that are likely to be sourced in the upper Midwest include trucks, shovels, dump hoppers, conveyer equipment, pumping equipment, tanks, and some boilers and chemicals. — DAILY OIL BULLETIN
Professional Helicopter Charters
• Sightseeing • Construction • Air Ambulance • Firefighting • Survey • Passenger & Cargo Transport • Single & Twin Engine
Fort McMurray, Alberta • (780) 799-0141 OIL & GAS INQUIRER • DECEMBER 2009
47
■ 16 lots for sale in Estevan, SK. ■ SW 29-2-7-W2 New Bypass Industrial Park New Truck ■ Re-zoned for commercial / Route opening in light industrial lots front of quarter ■ Lot sizes vary from in 2010 4.2 acres to 27 acres
You only have so much time,
don’t waste it.
Let Crimtech help. ■ Project Engineering ■ Field Verification ■ Design Drafting
Directions from Estevan Hwy 39 – 1 mile North or 1½ miles East of Estevan
N New Truck Route
■ Redline Drafting ■ Drawing Maintenance
11
9
10
8
7
6
2 5 3
1
Estevan Town Limits – 1½ miles east to property
4 4
1
5
■ Fabrication/3D Modelling ■ Metering Schematics
3 2
1 1
Hwy #39 – 1 mile north to property
For more information please contact Gary at 780-305-9255 1174365 Alberta Ltd. Operating as Gar-Lin Investments garymbr@telus.net
A leader in innovation, we offer a complete line of mechanical, electrical, instrumentation and structural designs. Crimtech’s diverse team is ready to design and build your next project. 1-800-993-9958 www.crimtech.com engineering | drafting | custom fabrication
Going the extra mile since 1957! Servicing the pipe industry with tridem deck and pole equipment
HEAD OFFICE ; CAMROSE, AB
1-800-316-2856 www.hiway13.com
48
DECEMBER 2009 • OIL & GAS INQUIRER
We are capable of handling casing, bare, or coated pipe—lengths up to 80', and a diameter from 2" to 48". Transportation can be arranged to and from our yard.
Saskatchewan
Photo: Brian Zinchuk, Pipeline News
PetroBakken pushes daily output to 44,500 boe
PetroBakken has a fleet of 13 drilling rigs working in southeastern Saskatchewan.
PetroBakken Energy Ltd., the spinoff of Petrobank Energy and Resources Ltd.’s Canadian business unit and TriStar Oil & Gas Ltd., said pro forma production averaged 41,526 barrels of oil equivalent (boe) per day during the third quarter. The newly formed company, which began trading on the Toronto Stock Exchange on Oct. 6, 2009, said it continues to add production from both the Bakken and Mississippian reservoirs in southeastern Saskatchewan through horizontal drilling and that it is now producing approximately 44,500 boe per day. During the third quarter, the pro forma PetroBakken entity drilled 89 (67.3 net), including 71 (51.4 net) Bakken development wells. The result of the expanded drilling program was an increase in production from the company’s non-Alberta assets to 32,448 boe per day,
and currently these assets are producing approximately 35,500 boe per day. “Our non-A lbertan production is expected to continue to increase through the fourth quarter with 13 rigs now working in southeast Saskatchewan, compared
figure that includes PetroBakken’s anticipated Alberta asset sales. Production from the company’s Alberta assets averaged 9,078 boe per day in the third quarter. But PetroBakken plans to sell the majority of its Alberta production to focus on high-netback light oil and highimpact resource plays, such as the Bakken play in southeastern Saskatchewan and Montney and Horn River plays in northeastern British Columbia. The company said proceeds from the contemplated disposition will be used to further solidify its balance sheet. The sale process is underway with data rooms open enabling interested parties the opportunity to review the assets. Results of the process are expected to be known later this year. The company said its Bakken drilling program has shifted to drilling primarily bilateral horizontal wells with 15-stage fracture stimulations per horizontal leg, for a total of 30 stimulations in each well. With 30 fracture stimulations per well, the company said that more time is required to completely recover the load fluid from the fracture stimulations, which creates a situation where oil rates increase as the load fluid is recovered. Recently, 10
The company has more than 500,000 undeveloped acres which provide a development inventory of over 350 drilling locations. to only five rigs in June 2009,” the company said in its third-quarter release. “Activit y and production growth through the balance of 2009 is expected to remain strong as we complete the inventory of wells awaiting completion and maintain our new drilling pace on our Bakken and conventional Mississippian pools.” As a result, the company said it is well positioned to exceed its exit 2009 production guidance of 37,000 boe per day, a
bilateral wells were put on production at initial rates between 250 and 300 barrels per day with relatively flat to increasing production rates. Through the application of leading edge technology to over 1,300 identified Bakken drilling locations, the company said the Bakken is expected to provide strong organic growth for years to come. PetroBakken is also strongly posit i o n e d i n v a r i o u s s o ut h e a s t e r n
SASKATCHEWAN WELL ACTIVITY
OCT/08
OCT/09
OCT/08
OCT/09
OCT/08
OCT/09
WELL LICENCES
455
261
WELLS SPUDDED
478
190
WELLS DRILLED
485
192
Source: Daily Oil Bulletin
OIL & GAS INQUIRER • DECEMBER 2009
49
Saskatchewan
Saskatchewan conventional oil plays in the Midale, Frobisher, Alida, and Tilston formations. Current production of approximately 10,000 boe per day from these Mississippian aged reservoirs provides a stable platform of low-decline production. The company has more than 500,000 net undeveloped acres of land in the area which its says provides a low-risk development inventory of over 350 locations and the opportunity for seismically driven step-out and exploration drilling. Addit iona l long-ter m g row t h is expected to come from PetroBakken’s large land position within the Montney and Horn River natural gas resource plays. The company has 17 sections of land (100 per cent working interest) with
Montney potential in the Monias area of northeastern British Columbia, with a further 97 (84 net) sections north of Fort Nelson in the Horn River Basin. PetroBakken said it is well positioned to develop these unconventional resource plays given the experience of its technical team, having successfully drilled and operated over 450 horizontal wells with multi-stage fracture stimulations. At Mon ias, t he compa ny ’s f i r st Montney horizontal well was drilled in the fourth quarter of 2008, adjacent to its five million cubic feet per day gas plant. Based on the success of that well, a second well was drilled during the third quarter of 2009 and is currently being completed. The new well is a dual-leg horizontal well with high-density fracture stimulation
designed to continue to increase production rates and expected ultimate gas recoveries. The company’s first horizontal well in the Horn River Basin was drilled in the first quarter of 2009 in an area that offers multi-season access due to proximity to roads. Based on the successful results obtained from that well, PetroBakken plans to tie the well in this winter. It also plans to drill a second well in the area later this year. “Our immediate operational goal for both of these prolific resource plays is to identify optimal technology applications that lower the gas price required to provide a competitive rate of return that will ultimately allow us to initiate major fullscale developments,” the company said.
Saskatchewan's October land sale nets $32.4M Saskatchewan’s October provincial land sale drew $32.4 million—the highest of the year so far—with an average per-hectare price of $524.24 for 61,828 hectares. The 2008 sale during the same month attracted $223.4 million on 192,368 hectares at an average of $1,161 per hectare. Despite the meteoric drop in revenue, the province remains optimistic. “This shows we continue to be on the right track,” said Energy Minister Bill Boyd. “Revenue from the October sale is over double that received from the August sale. This is a clear message from industry that Saskatchewan continues to be an attractive place to invest.” In a similar trend to its western neighbours, Saskatchewan’s land sale revenues this year lag badly from 2008’s record pace,
with $83.2 million rolling into government coffers so far this calendar year compared to just over $1 billion collected in the same period last year. October’s sale included three petroleum and natural gas exploration licences that sold for $3.8 million and 273 lease parcels that attracted $28.6 million in bonus bids. The Lloydminster heav y oil area received the most bids with sales of $13.3 million. The Weyburn-Estevan area was next at $12.1 million, followed by the Kindersley-Kerrobert area with bonus bids totalling $4.6 million and the Swift Current area at $2.4 million. The highest price paid for a single lease parcel was $3.03 million for the southeast portion at 25-8-10W2. Windfall Resources Ltd. acquired this 57.47-hectare lease parcel,
located 42 kilometres east of Weyburn. This parcel also had the highest price on a perhectare basis at $52,847. Broker Scott Land & Lease Ltd. paid $3 million for a 129.09-hectare lease for the southern half of 24-6-11W2. Daily Oil Bulletin records show several producers targeting the Bakken formation in the Midale area. O & G Resource Group Ltd. paid the bonus high for an exploration licence, acquiring a 1,619-hectare block for just over $2 million for sections 21-23, the northeast portion of section 26 and sections 27, 28, and 36 at 39-24W3. The next sale of Crown petroleum and natural gas dispositions will be held on Dec. 7. — DAILY OIL BULLETIN
Glamis buys Saskatchewan light oil properties for $108M Glamis Resources Ltd. has agreed to buy the core assets of privately held Connaught Energy Ltd. as well as partnership interests from a private company. Glamis said it is getting high-quality, high-netback, light oil assets focused in its southeastern Saskatchewan core area for $108 million in cash and 88.3 million Glamis shares. The producing properties are mostly operated with high working interests and control of key producing infrastructure, and 50
DECEMBER 2009 • OIL & GAS INQUIRER
are associated with a light oil-prospective undeveloped lands. The acquisitions provide Glamis with conventional high-netback light oil assets and a dominant position in an emerging high-impact Bakken light oil play, adding to the company’s Bakken exposure. Current production of the combined assets is 1,500 barrels of oil equivalent a day (96 per cent light oil). The deal includes 3.3 million barrels of oil equivalent of reserves with a reserve life index of six years. It also
includes 63,625 net acres of undeveloped land, 25 square miles of seismic data, and 185 (137.4 net) drilling locations, including 131 (98.3 net) Bakken locations. Glamis agreed to buy Connaught Energy for $60 million in cash and 83.3 million Glamis shares. Unspecified non-core assets of Connaught will be distributed to current Connaught shareholders as part of the deal. — DAILY OIL BULLETIN
now is the time TOP QUALITY AT UNBEATABLE PRICES
COMMERCIAL BUILDING
GARAGE/WORKSHOP
TRUCK STOP
WAREHOUSE
Norsteel Buildings are ideal for:
A little slow now? It’s not going to last! Rig & sub design, modification, inspection, certification or equipment issues? You won’t have the time when it gets busy again, so contact us now!
• Equipment Storage • Office/Shop • Aircraft Hangar • Riding Arena • Industrial Condo • Truck Garage • Recreation Facility • Workshop
The possibilities are endless! Simply the fastest, easiest, building solution available at the right price!
STANDARD BUILDINGS FOR QUICK DELIVERY - 5 WEEKS OR LESS! 30'x40' 40'x60' 50'x80' 60'x120' 80'x200'
HUGE SAVINGS CALL NOW!
780.483.3436 2nd Flr, 17510-102 Avenue, Edmonton, AB T5S 1K2 email: sales@arneng.ab.ca www.arneng.ab.ca
Call for a free brochure, current specials or a free estimate with drawings!
1-866-822-4022 91
EXT
or fax toll free: 1-866-279-9797 or visit us at: www.norsteel.com
ENVIROVAULT™
IN
3D
Check out the new
envirovault.Com 1-888-945-0172 info@envirovault.com
Launching December 1, 2009
OIL & GAS INQUIRER • DECEMBER 2009
51
Custom Manufactured
1000 denier Cordura® Nylon Gear Bags – Company & Personalized Silk-screening.
We work for you to make the perfect bag.
Various sizes from 14”x9” to 40”x20” and everything in between.
We have hundreds of patterns to choose from or we can design a bag to suit your needs.
Ph: (250) 494-7400 Fx: (250) 494-7403 Email: kangabags@shaw.ca Website: www.kangabags.ca
Kangabags | Custom Bag Manufacturer | 102-14209 Robinson Rd, Summerland, BC V0H 1Z1
GIFJK8K< :8E:<I
><K @K <8ICP
KXcb kf pfli [fZkfi XYflk pfli i`jb f] gifjkXk\ ZXeZ\i% 8k X^\ +'# Xjb pfli [fZkfi ]fi X Y\eZ_dXib GJ8 k\jk% @] pflËi\ fm\i +,# `ej`jk k_Xk pfli [fZkfi [f\j X gifjkXk\ \oXd Xe[ GJ8 Xj gXik f] pfli XeelXc Z_\Zblg%
GifjkXk\ ZXeZ\i `j ZliXYc\ `] [\k\Zk\[ \Xicp 8 gifjkXk\ \oXd ZXe jXm\ pfli c`]\%
nnn%ZgZe%fi^
nnn%gifjkX`[%fi^
COMMUNICATION MADE SIMPLE Glentel’s wireless SCADA solutions offer reliable high-speed connectivity for voice, data and video communications, enabling a broad spectrum of fixed and mobile network applications. Using the latest terrestrial and satellite technology available, we are able to provide the widest range of coverage for SCADA applications. Beyond SCADA, Glentel offers turnkey wireless communications solutions that are customized to our clients’ needs. We also offer in-house installation, maintenance and repairs for all our solutions. Contact Glentel today. www.glentelbusiness.com
S A L E S / R EN TA L S / SER V I C E / 1. 8 0 0.G L EN T E L 52
DECEMBER 2009 • OIL & GAS INQUIRER
Central Canada
French company invests $120M in Quebec electric car battery plant Electric cars may end oil age
he added. “Such a technology is not good for a big quantity of energy,” said Bolloré, who indicates there’s no risk of overheating with his technology. “For a car, of course, it would be very dangerous.” Bolloré Group plans to hire 200 new workers—on top of the facility’s 70 employees—to build batteries for his company’s electric car, BlueCar, and its 22-passenger Microbus. Both vehicles are produced in Italy. Automakers around the globe are racing to advance technology to extend the range of electric vehicles and to lower the price. At last month’s Frankfurt auto show, almost every major carmaker unveiled an electrified vehicle. The world’s lithium-ion battery market is expected to surge from $31.9 million this year to $21.8 billion by 2015, according to business consulting firm A.T. Kearney. Bolloré, listed by Forbes last year as worth an estimated US$1.4 billion, expects his cars to eventually be priced for the general public. “It will be a popular car—that’s what I think, but time will tell,” he said.
Deutsche Bank is the latest organization to predict that world oil demand will fall as greater efficiency of automobiles will effectively end the oil age. The bank has issued an analysis titled The Peak Oil Market, that concludes world oil demand will reach a peak in 2016 and then begin to decline due to increased efficiency, and particularly the rapid growth in electric cars. Transportation is the last major market where oil dominates as a fuel and it is now under threat in its biggest market, the United States. The report said “disruptive technology” like the hybrid and electric car will likely have a far greater positive impact on oil efficiency than the market currently expects. Recently, IHS Cambridge Energy Research Associates predicted that emerging markets like China will drive world oil demand recovery as the recession eases but demand from Organization for Economic Co-operation and Development (OECD) countries is unlikely ever to return to its 2005 high. IHS added that the peak of OECD oil demand does not mean that the end of the oil age in developed economies is imminent. The size of the decline in oil demand from the peak year of 2005 to 2030 is expected to be fairly modest. A chief economist of the International Energy Agency (IEA) recently said that the demand for oil, gas, and coal should peak by 2020, provided there is an agreement reached at the Copenhagen Climate Change Conference later this year. Deutsche Bank, meanwhile, found that by 2020 the global average mile per gallon (mpg) of newly purchased light vehicles will have increased by a bit more than 50 per cent compared to 2009, from roughly 29 mpg to about 44 mpg. The impact will be concentrated in U.S. gasoline, the largest single element of global oil demand (12 per cent) and will be dramatic enough to cause the peak of global oil demand around 2016.
— CANADIAN PRESS
— DAILY OIL BULLETIN
Manufacturers around the world are striving to create electric cars that go farther and cost less.
A French billionaire who’s in the thick of the global rush to mass manufacture affordable, reliable electric cars says he has the battery power to win the race. Vincent Bolloré announced on Oct. 27 that his company, Bolloré Group, will invest $120 million in a battery-producing factory east of Montreal. The facility, purchased from HydroQuebec by Bolloré in 2007, already churns out a few hundred electric-car power plants a year. With this investment, he aims to boost production to 15,000 annually. The batteries will be built using lithium-metal-polymer technology, which give his cars a range of 250 kilometres and a top speed of 130 kilometres per hour. Bolloré said his company is a leader in the technology. “It’s the first big factory in the world for [lithium-metal-polymer batteries],” he said. He added that his product is safer than the lithium-ion batteries that major automakers, such as General Motors and Nissan, are counting on to propel their soon-to-be-released lines of electric cars. Lithium-ion batteries, often used in laptops and mobile phones, have been known to overheat and even catch fire,
OIL & GAS INQUIRER • DECEMBER 2009
53
PUMP SALES - NEW & USED
SKID MOUNTING / UNITIZATION AVAILABLE
24-HOUR SERVICE
RECONDITIONED PLUNGER PUMPS OILWELL: WHEATLEY: A316 P200A “WE BUY & SELL” A336/A346, 336P/346P, 316P P300, P323 NEW & USED OILFIELD A536/A348 GASO: EQUIPMENT C323, D323, C523 3211, 3364 PUMPS A324, A334, A344 ENGINES NATIONAL: NEW J30, J60, J100, TULSA TRIPLEX: J165 TT-100, TT-150 TT-250, TT-350 DISTRIBUTOR FOR COORSTEK PLUNGERS RECONDITIONED GAS ENGINES DURABLA PACKING LISTER: HR2, HR3 STANDARD VALVES HERCULES: G3400, G4800 KUBOTA: 1600, 3200
4609-92 AVE T6B 2J4
EDMONTON AB
“SERVICE FOR”
Pumps Engines Pump Jacks Hot Shot Service General Maintenance Contractors Picker Equipped Units
(780) 438-3332 FAX: (780) 436-5025
Deploy Hydraulic and Electric Submersible Pumps Simplifies intervention & reduces costs
Impermeable to all oilfield solvents Oilfield abrasion resistant
Suitable for horizontal wells
Bonding process for extreme depths
Eliminates rod and tubing wear
www.cjsflatpak.ca Phone: (403) 562-7600 Fax: (403) 562-7676 boilers1@shaw.ca BOILERS dicksboiler.ca 14700-13 Ave., STAINLESS STEEL Frank, AB ALUMINUM
INDIRECT FIRED AIR HEATERS Sizes from 280,000 b.t.u. to 5m/b.t.u. Heat exchanger…100% stainless steel No carbon monoxide discharge Burns #1 and #2 fuel Skid mounted, trailer mounted, stationary or portable With or without generator Indirect fired Used on drilling rigs, construction sites and confined areas
PORTABLE WATER HEATERS Burns #1 and #2 fuel Used to build ice roads, well fracing, environmental clean-up
METAL FABRICATION AND WELDING AIR HEATERS GLYCOL HEATERS
WATER HEATERS BOILERS Sizes from 15 h.p. to 200 h.p. HEAT EXCHANGERS 3 pass design Burns #1 and #2 fuel Trailer mounted, skid mounted, truck mounted, free standing or housed
BOILER BUILDING Built to your requirements GLYCOL HEATERS Designed and built for construction sites, drilling mud curing and thawing frozen ground Burns #1 and #2 fuel SNOW MELTER Designed for environmental cleanup where oil contaminants have occurred; no exposure to flammable materials…no flash fire threat All units are C.S.A. approved…controls are C.S.A/U.L. approved. North American or European electrical system. Designed and manufactured in Alberta. Tested and proven to withstand the harshest weather conditions.
54
DECEMBER 2009 • OIL & GAS INQUIRER
East Coast
Photo: Harvest Energy Trust
Korea’s KNOC buys Harvest for $4.1B, including Atlantic refinery
A Korean acquisition of Harvest Energy could revive expansion plans for the Come By Chance refinery.
St a t e - o w n e d K o r e a N a t i o n a l O i l Corporation (K NOC) announced on Oct. 21 that it will acquire Har vest Energ y Trust for C$4.1 billion in a deal that enhances its North American growth strategy while securing oil and gas reserves for the country’s importdependent petroleum needs. About a year ago, Harvest shelved a $2-billion expansion to its refinery at Come By Chance in eastern Newfoundland. With KNOC at the helm, the odds of that project going ahead are greater, said Harvest CEO John Zahary. “That’s something that is certainly much more in the realm of possibility…but that’s something we have to look at down the road,” he said. The refinery was started in the 1960s by U.S. entrepreneur John Shaheen with the hope of importing Middle Eastern crude and refining it into fuel for the North American market. A succession of losses and owners, including the provincial government and Petro-Canada, ensued. In 1987, the refinery was reopened by Bermuda-based Newfoundland Energy Ltd. Harvest bought it three years ago. The trust had been searching for a partner to
help fund a planned major expansion to handle 190,000 barrels per day, up from 115,000 barrels per day currently. The expansion was shelved last year due to the economic downturn. Under the agreement, KNOC will buy all the issued and outstanding trust units of Harvest Energy for a total cash consideration of approximately $1.8 billion plus the assumption of $2.3 billion in debt. “Korea National Oil Corporation is excited about this acquisition and believes Har vest is a perfect fit for KNOC’s North American growth strategy. KNOC has ambitious plans for future growth and is committed to a long-term investment strategy in Canada,” said Young-won Kang, president of KNOC. “We are very pleased to be joining forces with a Harvest team that has such a deep and rich experience as well as a proven track record of success.” Harvest Energy said the deal—which equates to $10 per Harvest unit—represents a 47 per cent premium over the 30-day weighted average trading price of the units on the Toronto Stock Exchange up to and including Oct. 20, 2009. The
trust’s share prices were over $35 earlier this decade. Zahary said Harvest’s portfolio of opportunities includes large oil in place assets coupled with production and throughput expansion opportunities in the upstream and downstream segments respectively and that “continued investment by KNOC will supplement this growth.” In addition to its conventional oil and gas properties in western Canada, Harvest has holdings in both the Peace River and Cold Lake regions. In 2006, KNOC bought an oilsands lease near Cold Lake, Alta. from Newmont Mining Corporation for $270 million. At the time, KNOC said it planned to produce 30,000 to 35,000 barrels of oil per day, for 20 years, from the site and that initial production was expected around 2008, with full-scale operations to begin in 2010. However, that project has since been deferred. Har vest produced an average of 52,745 barrels of oil equivalent in the second quarter of this year, down from 55,574 barrels of oil equivalent per day in last year’s period, with heavy oil volumes dropping 14 per cent, and light oil production slipping about 4 per cent from prioryear figures. The trust’s year-end 2008 proved-plus-probable reserves were 219.9 million barrels of oil equivalent. K NOC said t he transaction w ill increase South Korea’s self-sufficiency rate—the amount of oil its companies produce versus its demand—to 8.1 per cent from 6.3 per cent. It will now own 3.02 billion barrels of proved oil reserves. Peter Tertzakian, chief energy economist at Calgary-based ARC Financial Corp., told the Daily Oil Bulletin that the KNOC-Harvest deal is indicative of what he believes is a growing trend as emerging economies look to meet their growing energy demands. “Economies, like Korea, that continue to industrialize, mobilize, and urbanize at a fast pace over the long-term recognize that they need to scramble for the world’s strategic energy assets,” he said. — DAILY OIL BULLETIN and CANADIAN PRESS OIL & GAS INQUIRER • DECEMBER 2009
55
Visit www.oilpro.ab.ca Equipment catalogue updates every 6 min.
GLOBAL OIL & PIPE INC.
✔ Pumpjacks (sizing
✔ Treaters ✔ Lineheaters (sizing
help available)
✔ Arrow engines,
We’re specialists in shipping your order around the world! New casing & tubing Used & surplus Production tools Bulk oil sales
storage bullets, 12,000 – 60,000 USWG
help available)
gensets and fuel gas scrubbers/volume bottles
✔ Dehydrators ✔ Tanks: single/double,
✔ Gas plants: sweetening/choke/ mech. refrigeration
50, 100, 210, 400, 750, 1,000 and 1,500
✔ Low and high pressure separators
✔
✔ Propane/butane
✔ Compressors
✔ Tank heating
FKO drums and flarestacks
(boosters: recip. and screw units)
systems (HotRod, Envirovault, Firetubes, etc.)
✔ Free water knockouts
New pricing in effect Looking for good quality surplus equipment OILF
Contact us for more information:
I EL D PR O D U C T I O N
Ph: 403-581-1712 EQ UIPM ENT
OilPro Oilfield Production Equipment Ltd. www.globaloilandpipe.com
403·215·3373
Fax:
403·216·1571
Toll Free:
888·4·OilPro
Top Fill Tank Adaptor VENT LINE - CAN BE EITHER FLEXIBLE OR RIGID - CAN BE ROUTED TO VIRTUALLY ANY LOCATION MPI’S “TOP FILL” TANK ADAPTOR
PROUDLY SERVING THE OIL & GAS INDUSTRY SINCE 1985
NOW OFFERING CHILLERS, PUMP TANK STATIONS, COOLING TOWERS, FILTRATION, RTDs, THERMOCOUPLES, ELECTRIC HEATERS, AND HEAT PIPES
INNER TANK OUTER TANK
SIGHT GLASS - VIRTUALLY NO LAG IN LEVEL INDICATION HOLES IN STINGER TO ALLOW DRAINING OF FILL LINE BY REVERSING THE PUMP & ELIMINATING SYPHONING OF TANK FILL STINGER
FILL LINE - CAN BE EITHER FLEXIBLE OR RIGID - CAN BE ROUTED TO VIRTUALLY ANY LOCATION
TOLL FREE : 1.800.461.2788 TEL : 403.239.3477 FAX : 403.241.0148
56
DECEMBER 2009 • OIL & GAS INQUIRER
SHUT-OFF VALVE
Marmit Plastics Inc. has a safe method for filling tanks in the oil and gas industry. Our TOP FILL TANK ADAPTOR has revolutionized the task of delivering chemical products into plastic and steel tanks. The design features our patent pending design that includes an inlet and vent all in one fitting. The fitting presents an important improvement when considering the safe filling of methanol or inhibitor into tanks. Attach a fill line and a valve to the fitting that is accessed from ground level and the operator has a safe method for filling tanks. A stinger attached at the bottom of the fitting eliminates splash filling, while apertures located near the top of the stinger allow the operator to reverse the fluid pump without disconnecting any fittings. The tank is consistently filled to the same level every time. Retro fit many different styles of tank to achieve the industry’s highest level of safety or order the complete tank, tank stand and TOP FILL TANK ADAPTOR direct from MPI
www.marmitplastics.com
100% Canadian
888-868-2658
Box 366, Grande Prairie, AB, Canada Phone: 780-532-0366 Fax: 780-532-0540
International
Royal Dutch Shell cuts 5,000 as Q3 net profit falls by 62 per cent
— ASSOCIATED PRESS
— ASSOCIATED PRESS
Photo: Royal Dutch Shell
“In comparative terms, Shell was a lway s goi ng to h ave a mou nt a i n t o c l i m b f o l l o w i n g B P ’s s t e l l a r performance earlier in the week,” said analyst Richard Hunter of Hargreaves La nsdow n in a note. (BP is Shel l’s largest European rival.) “Unfortunately, these numbers leave it some way short of the summit.” Shell pumped 2.93 million barrels of oil per day in the third quarter, f lat from a year ago. The company’s earnings from production fell 82 per cent to $1.54 billion, ref lecting the fall in oil prices. Shell sold oil at $63 per barrel in the third quarter from $111 a year ago. Henry said the recent recovery in oil prices to around $78 per barrel is speculative. “Fundamentally, we don’t see demand turning yet and there’s plenty of supply available,” he said. Shell’s refining earnings fell 47 per cent to $1.29 billion, including a gain of $536 million because of a rise in the estimated value of inventories. Shell said refining margins worsened due to lower demand.
Exxon Mobil Corp. reported on Oct. 29 that oil production is bouncing back with crude prices. However, the world’s largest publicly traded oil company cautioned that a worldwide glut in petroleum supplies may still cool the latest surge in oil, squeezing refiners and keeping profits in oilpatch well below their peak last year or even the past several years. Exxon Mobil reported that profits from July to September dropped 68 per cent, to US$4.73 billion. The results were the best of the year so far, but they’re less than onethird of what Exxon earned in the same period of 2008, when crude prices spiked above US$147 per barrel. In fact, excluding the previous two quarters of this year, Exxon has not reported quarterly profits this low in at least the past four years. The company, based out of Irving, Texas, gets most of its income from oil and gas production. In the third quarter of 2009, it increased production by three per cent to 3.69 million barrels of oil equivalent per day. Yet the returns are not as good because crude fetched an average of $50 less per barrel when compared with the year-ago period. Exploration and production, or Exxon’s upstream business, saw earnings drop 63 per cent to $4.01 billion in the third quarter. Its oil refining business posted a loss of $203 million in the United States compared with a profit of $978 million in the same three-month period of 2008. Exxon has operations around the world, including Canada, where it owns about 70 per cent of Calgary-based Imperial Oil Ltd., Imperial announced that its net profits fell to C$547 million from nearly $1.4 billion in the same period last year. Imperial said its operating revenue was $5.55 billion.
Shell, whose global assets include Norway’s Ormen Lange gas field (above), may have to cut more jobs.
Royal Dutch Shell PLC reported a 62 per cent fall in profit for the third quarter of this year due to lower oil prices, and said it plans to cut 5,000 jobs. Shell said net profit was US$3.25 billion (2.21 billion euros), down from US$8.45 billion in the same period a year ago. Sales fell 43 per cent to $75 billion. Shell CFO Simon Henry said the company is not expecting a swift economic recovery and this year will cut around five per cent of its workforce, some 5,000 jobs, primarily in middle management. “In Europe there are few if any signs of demand recovering…. In the United States, if anything, there’s some bottoming, improvement in one or two subsectors, but not yet firm enough to call a recovery,” Henry said. The job cuts come on top of 500 layoffs among senior management earlier this year. Around 15,000 employees will also be forced to apply to keep their jobs, and cuts among the rank and file are possible in 2010, he said. He said the company will take a restructuring charge of “several hundreds of millions” in the fourth quarter.
Exxon Mobil boosts production in Q3, but profits fall with crude prices
OIL & GAS INQUIRER • DECEMBER 2009
57
This is what we do.
Custom solutions… Better than anyone else! Phone: (403) 279-6615 Fax: (403) 236-4249 Toll free: (800) 708-7453 CompassBending.com Additional Services: • Insulation, taping and coating, including YJ bends • 3D and 5D bends • 10” and 12” bends
From a custom manufacturer. 1-888-227-4923
Experience, Quality & Service. 7320 30 Street S.E. Calgary, Alberta T2C 1W2
Phone: (403) 227-7799 Fax: (403) 227 -7796 E -Mail: sales@bilton.ca W ebsite: www.bilton.ca
JuneWarren-Nickle’s Energy Group Announcement JuneWarren-Nickle’s Energy Group is pleased to announce the appointment of Michelle Vacca of Red Deer as our first regionally based sales representative for Oil & Gas Inquirer.
Your #1 Source for Hard to Find Electrical Material
• Circuit Breakers • Motor Control • Industrial Lighting • Explosion Proof
• Transformers • Electrical Supplies • Contactors & Relays • Wire & Cable
Michelle Vacca Account Representative Oil & Gas Inquirer
5838-87A Street Edmonton AB T6E 5Z1
Fax: (780) 468-1181
Ph: (780) 466-8078 1-800-661-8892
Web: www.falvo.com Email: sales@falvo.com
WANTED
ELECTRICAL MATERIAL 58
DECEMBER 2009 • OIL & GAS INQUIRER
We welcome Michelle to the team and wish her continued success.
Before joining JuneWarrenNickle’s Energy Group, Michelle worked in Lloydminster, Canada’s heavy oil capital. From her new base in Red Deer, she will keep her finger on the pulse of the patch in Central Alberta. When you have a story to tell or for all your advertising and marketing needs, contact Michelle at 403.314.4214 or email mvacca@junewarren-nickles.com.
On the Job
onthe
JOB Careers in the Oilpatch
JoAnn Weiss
Age: 48 going on 38 Title: Parts Person, Safety Auditor, Entrepreneur Companies: Kinetic Safety Consulting Inc., Mechanics In Motion, and Safety Auditing & Services Inc.
What was your introduction to the oilpatch? I received my journeyman parts ticket with R. Angus Caterpillar in Grande Prairie and then got into service rigs. At Beta Well Service, I worked as the Girl Friday. For Cenalta Well Servicing, I did everything from office work and hotshot driving to safety support, which helped get me into my present businesses.
What’s your simplest tip for avoiding strain and stress injuries? Let’s say a crew drives three or four hours to get to a lease site, and then the boss is in a hurry to get his guys unloading tools, rigging in, and whatever’s needed to get the job underway. In that situation, just a few minutes of stretching makes a big difference. In fact, stretching before work or when you’re stiff will reduce overall workplace injury rates by 25 per cent. Lifting technique is also critical. Mechanics In Motion teaches several different types of lifts and stretches. Our four-hour program blends classroom, field video review, and practical hands-on with the client’s equipment, customized for each customer.
Why did you focus on safety in particular? I grew up on a farm in this district, which meant hauling slop pails, throwing hay bales over fences, and other heavy work. Years later, I tripped in a pothole while jogging. When I went for treatment, the physiotherapist explained that farm work had damaged my lower back and hips from improper lifting. It’s so much better to prevent these problems rather than ignoring the risks until you’re actually in trouble. I believe oil and gas safety training should extend from how an oilfield worker moves bags of cement through to evading that deer when it pops up in front of your headlights. You run three small businesses—how do they connect? Oil and gas workers move objects that are heavy, awkwardly shaped, in low or high placement, and so on. Our custom training program Mechanics in Motion reduces severity of soft tissue injure from pushing, pulling, heavy lifting, handling, and repetitive work. Kinetic Safety employs three retired police officers who instruct the Proactive Driving Course candidates on how to remain safe and avoid being involved in collisions in all situations. Safety Auditing and Services does conventional safety audits to help reduce injuries in the workplace.
How does Kinetic Safety’s driver training work? Our Proactive Driver Training Course enables candidates to practice skid avoidance and recovery utilizing a Swedish skid system mounted on a pickup truck. Our 16-point Commentary Drive exercise shows how a driver must drive to avoid a collision. There’s quite a bit more as well. Although it’s fun and we have passionate instructors, we’re very serious about accident avoidance. Why did the Desk and Derrick Club name you Canadian Energy Person of the Year for 2009? I’ve been active in the club for 22 years, along with the Grande Prairie Petroleum Association. I’ve help organize the association’s golf tournaments and bonspiel for many years, along with Clay Shoot and Hockey tournament. I’ve done other volunteer and charity work in the community. I love this industry—in my experience, it’s got more than its share of genuine, down-to-earth, honest people.
OIL & GAS INQUIRER • DECEMBER 2009
59
• patent & trademark searches • (filings in Canada, the U.S. & elsewhere) • intellectual property litigation •
While some economists have declared the recession over, the painful recovery is expected to drag well into 2010. JuneWarren-Nickle’s Energy Group’s new Recession to Recovery initiative will help you navigate these uncertain times.
• securities law • (including cross-border financing) • licensing & trade secret agreements • • joint venture mergers & acquisitions • • employment law & breach of confidence •
EDMONTON
CALGARY
2200, 10155 102 St
2000, 530 8 Ave SW
Ph: (780) 497-4800
Ph: (403) 232-8300
Fax: (780) 424-3254
Fax: (403) 232-8408
We’re increasing our editorial content with stories and columns focusing on how companies are handling the downturn, preparing for the rebound, and, in some cases, even thriving. They’ll be easy to find. Just look for the special Recession to Recovery logo in each issue of Oil & Gas Inquirer.
www.brownleelaw.com
22 21 20 19LESS 18ARD 17 16 15 14 122 PETITOT 13 12 11 10 9 BISTCHO 8 7 6 5 4 3 2 1 23 22 21 20 19 18 17 16 MARL 12 OWE 1 CABIN 15 14 13 12 11 10 9 8 7 6 5 4 8 TATE 25 Kwokullie 18 Ou 12 ZEU taanetdey Lak 0 ES LOUIS e HELMET E Lake Cornwall DIZZY PEAK 119 SHEK 4 MEL Lake ILIE 3Kotch PEGGOWEST SHEKILIE PESH118 o 2 KOTCHO CREEK Lake TOOG 1 LAKE A + Gas Plants 6 2 11 7 YOYO + Refineries 23 KOTCHO LAKE 24-25 116 EAST 13 + Major Pipelines 14 11 5 15 AMBER VIRGO + Compressor Stations 21-23 16 SEXTET POMME Riv SIERR KIL11 SAHTA A IE 4 + GasSHEPlant / Compressor Station Elevations NEH er 2 Wentzel Zama Hay 12 Lake Lake 113 Margaret + Batteries FIRE 11 EKWAN 10 Lak HAY RIV e ER Lake 11 + Bitumen Mines 2 9 HUTCH SOUSA Ekw JUNIO R BLACK Scale Locations + Weigh 111 94I Lakean + Permanent Work Camps HIGH LEVE 110 L Baril 6 e Lake 58 + Well Disposal Sites Peac 7 BIVOU 8 109 STEEN AC RAINBOW + Updated Road Systems 58 Lake Claire 108 TIMBERWOLF Mamawi Lake 16 + Major Interchanges RAINBOW SOUT KAHNTA 107 H 3 H RIVER 13 + Emergency Contacts 2 SHETLAND 1 10 River 6 RING + Yukon Territory Richardson PYRAMID Lake 105 + Northwest Territories ETTHIT HUN BOYER 14 104 + Western Canada Town Maps Peace CHARM 88 15 EttLakhithun HARO e 16+10 Alberta British Columbia First Nations 3 FON& SHIPPING AND GST NOT INCLUDED TAS + Alberta, British Columbia &TANG Saskatchewan Municipalities HE 102 16 MEGA + Township VENUS & Range Road Guide 11 REDEYE 1001 To order, call 1.800.563.2946 10 ME + Water / Land Feature Index SILVER RCURY 9 99 94HLAPP or atlas@junewarren-nickles.com + Parks &GUTAProtected Areas H ZAREMB SNOW FALL A DAHL BIG ARROW 98 MARTIN + Mapping Terminology CHIN CHAG A 6 NORTH 97 BOTHA 7 CHINC ARGEN EDRA HAGA HAMBURG 8 ELM RIV PICKE ER LL CHINCHAGA 96 HUNTE VELMA BEATTO R NAYLOR N RIVER WOLVERINE WEST BE 7 ATT MILLIG MILLIG AN CR RIVER ON AN CR Gardiner 95 KAHNTAH EEK WE EE K ST 3 MIKE WILLO Lake TAR CRANBERRY 2WIWWOLDODRUSHDRAKE LADYFE94 MEARON McClelland BRITS Lake FIREB MINT 1 RN Namur IRD OU HARPER Lake 56 T T LAKE 93 WEAS EL PANNY HOTCHKISS DOIG RAP ELLS TRAC Y IDS OSPREY BEAVER DARWIN Bison DAM 92 BISON LAKE BULR 1CR4EEK PEEJA BUICK Lake ROSSBEAR 10 13 1ST5 PEEJACRY USH1 USH 91 Y WE 6 BEAVER WOLF CLEAR TAIL STOWE PRAIRIE DOIG CURRAN CURRAN 90 T 21 RAMBLING WEST T SENEX BUICK LIEGE COLORADO DEADWOOD 89 RIGEL BOUN OSBORN CHARLIE SQUIR LAKE DARY 90 REL GOODFISH RTH LAGARD NO88 KIDNEY 63 CLEAR HILLS WORSLEY 9T 4MONTANEMUYSKRASIPTOAK SIPHON EASTBOUNEDA87RY 88 EXPANSE EUREKA TROUT HON LAKE OWL 20 OGSTON FORT ODDA NORTH PINE RT PLUTO 86 r McMURRAY GOPH SOUTH FLATROCK WE BEATON te ER ST PARA OTTER DISE wa HILL DIXONVILLE Peerless 84 FLATR ar OC 85 MONTAG EQUISETUM Lake ORCHID 4 EAGLE EAGLE K Cle HINES GOLD EN WEST Riv EVI AIRPORT Graham 64 LUBICON 84 LAKE BOUNDARY WILDER er FORT ST JACK CECIL CADOTTE Lake . JOHN FLOOD FORT ST FORT SOUTH ce ST JOHN PICA 29 ALCES SOUTHEJOHN KITTY Pea JOSEPHINE AST TW LOST O RIVER83 er ROYCE Gord RED EARTH S OAK CLAYHURST Riv LOON BALSAM L SALESKI EARRING LEDDY Card SEPIT PA IMUS inal 82 DOE RKLAND FAIRVIEW MULLIGAN Lake NAMPA TURN 7 2 TOWER SLAVE LAKE MICA SUNSET BONANZA ATIKAMIK GEORGE 64 81 GOODLOW PRAIR GAGE GRIMSHAW IE BLUEBERRY DOE FARM 2 ON GROU HANGING STONE DAWS HARMON NDBIR ON PINGEL WHITELAW 80 POUCEINGT CH CREEK BILAWCHUK er VALLEY COUPE BERWY Riv SUNRISE N GRANOR BRIAR HAMELIN SEAL CREEK WILLOWB DUNVEGAN SHOAL 1 RIDGE TANGENT 79 ROOK UTIKUMA MIRAGE RINGS GODIN North LAKE 59 DAWSON SANDY DIVIDE RESDELN BELLOY HOWARD HOUSE Wabasca BOUCHER NIPISI HOOLE GORDONDALE DAWN 78 Lake 2 KIMIW EAGLESHA ROLLA POUCE COU AN M NORTH BREMNER 49 PE SOUTH 13 BISSE BRASSE TTE CR NEWBY Y 77 EEK BELLOY CULP SPIRIT RIVER NORMANDVIL 10 DESMARAIS LE Utikuma Kimiwan SW CORNER 9AN 76 GLA PROGRESS RYCROFT Lake LAKE South Lake ROXANA CHARD CINDY CIER WINAGAMI 49 SHANE Wabasca GRAHAM TUPPER Swan Sandy HEART RIVE SADDLE R BARNEY Lake CREEK EAGL MISTA GIFT ESHAM HAE HILLS PEERLESS Lake 75 Lake THORNBURY PORTAGE PEORIA SUNDOW 60 LITTLE HORS Winagami RER PELICAN E MARTEN Lake 7INE N CUTBANK D74E C E M B E R1052 0 0 9 • O I L 2& G A S I N Q U I River JACKP RANDELL GIROUXVILLE DOUC MCMULLEN 47 ETTE EAST 8 WEBSTER DRIFTWOOD GROUARD 59 88 MCLEANS CREE 73 HARDY LEISMER SALT CREEK K KAKUT 39 2 SINCLAIR HYTHE MANNY 2A PUSKWASKAU NOEL WEMBLEY CLAIR CLYDEN 7
94P
19
7
Order
Ha
y
ZAMA
LARNE
250
River
2 0 10 - 2 0 11
ca Wabas
PEDIGREE
Riv
er
LAPP
At
ha
ba
sc
a
n
to
at Be
Riv
er
SUTTON
Pea ce
JOAN
NINA
RIGEL EAS OSBORN T
REDFISH
SAWN LAKE
River
Riv
er
MUSKWA
VALHALLA
KNOPCIK
tle
Lit
WOKING
h
At
ke
Chinchaga
AB7 $
EIGHTH EDITION
LA GLACE
River
yOUr ATLAS TODAy!
KYKLO
La
DESAN
River
6
Slave
THETLA ANDO A THETLA AN SOUTHDOA
5
y
ok
Sm
R
Tools of the Trade
TOOLS
Who is Phoenix Heli-Flight? Operating since 1991, Phoenix Heli-Flight is a locally owned helicopter charter operation serving the Fort McMurray and northeastern Alberta region. We utilize seven of the newest Eurocopter single and twin turbine engine heli-
OF THE TRADE
copters for both passenger and cargo transport to support many business
A LOOK AT NEW TECHNOLOGIES
Helicopter Flight Data Management or HFDM is a safety management system
sectors requiring vertical lift or operating in remote areas. How does Helicopter Flight Data Management improve performance? that uses onboard sensors to gather information about every movement the helicopter makes. The data from the helicopter is then analyzed to verify that the pilot is flying within limits set by the company and the helicopter manu-
Phoenix Heli-Flight Fleet
facturer. A 3-D computer graphic playback of any flight lets the company use the visual presentation as a training aid for all pilots. What is Outerlink? Outerlink is a satellite-based tracking and communication system that, unlike most other tracking systems, uses a geostationary satellite to bounce signals rather than connecting via orbiting telephone satellites. The advantage is affordable accuracy as Phoenix receives four times the position reporting data for 25 per cent of the cost of a satellite telephone–based system. This system also provides two way voice messaging and it automatically sends electronic messages to our managers if the helicopter is having any mechanical problems. What is Heli-Flight’s Safety Management System? In 2009 Phoenix Heli-Flight implemented a Safety Management System (SMS). The SMS documents provide the structure and performance measurement tools to ensure that the company’s safety and quality assurance goals are being met by auditing and documenting all areas of company activity. Beyond safety, what are your company’s most important priorities? Personnel and aircraft. Our helicopter fleet is the most modern in Canada. We have a great team of veteran bush pilots who are factory trained on our machines as well as highly experienced in virtually every aspect of helicopter operations in this region.
Answered by Paul Spring, President and Owner of Phoenix Heli-Flight
OIL & GAS INQUIRER • DECEMBER 2009
61
Political Cartoon
Advertisers' Index 1174365 Alberta Ltd . . . . . . . . . . . . . . . . . . . . . . 48 Acklands-Grainger Inc . . . . . . . . . . . . . . . . . . . . 17 Allan R. Nelson Engineering (1997) Inc . . . . . . . . 51 All Weather Shelters Inc . . . . . . . . . . . . . . . . . . 27 Annugas Compression Consulting Ltd . . . . . . . 21 Bear Slashing Ltd . . . . . . . . . . . . . . . . . . . . . . . 30 Bidell Equipment LP . . . . . . . . . . . . . . . . . . . . . 32 Bilton Welding and Manufacturing Ltd . . . . . . . 58 Black Sivalls & Bryson (Canada) Ltd . . . . . . . . . . 11 Brews Supply Ltd . . . . . . . . . . Outside back cover Brother’s Specialized Coating Systems Ltd . . . 10 Brownlee LLP . . . . . . . . . . . . . . . . . . . . . . . . . . 60 CJS Coiled Tubing Supply . . . . . . . . . . . . . . . . . 54 Compass Bending Ltd . . . . . . . . . . . . . . . . . . . . 58 Crimtech Services Ltd . . . . . . . . . . . . . . . . . . . 48 Crompton Western Canada Inc . . . . . . . . . . . . . 44 Dean’s Pump Service Ltd . . . . . . . . . . . . . . . . . 39 Delta Industrial Valves Inc . . . . Inside back cover DFI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Dicks Boiler Ltd . . . . . . . . . . . . . . . . . . . . . . . . . 54
62
DECEMBER 2009 • OIL & GAS INQUIRER
Diversified Glycol Services Inc . . . . . . . . . . . . . 30 Double S Oilfield Services Ltd . . . . . . . . . . . . . 54 Enviro Vault Ltd . . . . . . . . . . . . . . . . . . . . . . . . . 51 Eveready Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Falvo Electrical Supply Ltd . . . . . . . . . . . . . . . . 58 Fast Trucking Service Ltde . . . . . . . . . . . . . . . . 28 Flexpipe Systems . . . . . . . . . . . . . . . . . . . . 34/35 Glentel Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Global Oil & Pipe Inc . . . . . . . . . . . . . . . . . . . . . 56 Hi-Way 13 Transport Ltd . . . . . . . . . . . . . . . . . . 48 Infosat Communications . . . . . . . . . . . . . . . . . 46 Joule Technical Sales Inc . . . . . . . . . . . . . . . . . . 56 Kangabags . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 LJ Welding & Machine . . . . . . . . . . . . . . . . . . . . 38 LoTech Manufacturing Inc . . . . . . . . . . . . . . . . .38 Meridian Mfg Group . . . . . . . . . . . . . . . . . . . . . 42 MPI-Marmit Plastics Inc . . . . . . . . . . . . . . . . . . 56 Norsteel Buildings Ltd . . . . . . . . . . . . . . . . . . . . 51 Northern Alberta Institute of Technology . . . . 36 Northstar Energy Services Inc . . . . . . . . . . . . . . 4
Oil Lift Technology Inc . . . . . . . . . . . . . . . . . . . . 29 OilPro Oilfield Production Equipment Ltd . . . . 56 Pedestal Supply . . . . . . . . . . . . . . . . . . . . . . . . 30 Pembina Controls Inc . . . . . . . . . . . . . . . . . . . . 36 Penfabco Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Petroleum Services Association of Canada . . . 24 Phoenix Fence Inc . . . . . . . . . . . . . . . . . . . . . . . 32 Phoenix Heli-Flight . . . . . . . . . . . . . . . . . . . . . . 47 Platinum Energy Services Corp . . . Inside front cover Propak Systems Ltd. . . . . . . . . . . . . . . . . . . . . . . 3 ProstAid Calgary Society . . . . . . . . . . . . . . . . . 52 PRO-V MFG. INC. . . . . . . . . . . . . . . . . . . . . . . . . 45 RTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 SafeHouse Habitats . . . . . . . . . . . . . . . . . . . . . 36 Sage Energy Corp. . . . . . . . . . . . . . . . . . . . . . . . . 5 Singletouch . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Systech Instrumentation . . . . . . . . . . . . . . . . . . 7 T & E Pumps Ltd . . . . . . . . . . . . . . . . . . . . . . . . 30 Trans Peace Construction (1987) Ltd . . . . . . . . 32 Vertigo Theatre Society . . . . . . . . . . . . . . . . . . 40
Electrical Supplies when you need them
Automation
Brews Supply Ltd. – offering a broad range of electrical products, in stock and ready to ship!
Wire Handling
With over 80 years in business, Brews knows what the oilpatch needs from an electrical supply company.
Distribution Equipment
Heating Equipment
ew
s 24 h
Industrial Control
Need it Fast?
hot
vi ce
r
r
B
Safety
Ask About our “Hot button” Service
b
ut r ton se
Utility Products
Enclosures
Meet the Newest Member of Your Crew Brady’s high performance wire ID materials are now available in an easy-to-use, economical printer – the BMP™21 Portable Label Printer. Simple to operate and quick to print, the BMP™21 label printer creates clear, legible labels that stick and stay stuck - even in the harshest environments. Easy one-handed operation with magnet accessory • Continuous Permasleeve Wire Markers • Continuous Self-Laminating Labels up to 1.5” • For more information visit www.brewssupply.com
BREWS Supply Ltd. Toll Free 1.800.661.6884 www.brewssupply.com Calgary (Head Office) 12203 40th St. S.E. PH 403.243.1144 Edmonton 18003 111th Avenue N.W. PH 780.452.3730