PIPELINE NEWS Saskatchewan’s Petroleum Monthly
March 2017
Canada Post Publication No. 40069240
FREE
Volume 9 Issue 10
Things are looking up in
ARCOLA Canadian Plains Energy Services launches A2 Proposed refinery seeks contractors A3 IWS safety stand down A8
Noble Well Services of Arcola has been hiring, as have several Arcola businesses. Service rigs are among the first sectors to see a labour crunch in this recovery. Here is Noble Rig 5, working southeast of Carlyle. If you look close, you can see derrickhand Julian Major working high above the ground. The rest of the crew is made up of rig manager Matt Annis, operator Kenny Proden, and floorhands Shawn Tufnell and Phil Bates. Photo by Brian Zinchuk
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PIPELINE NEWS March 2017
Canadian Plains Energy Services fires up By Brian Zinchuk
Energy Services locations being vacated. These locations remained of great interest to Ziegler and his team as the cornerstones for a renewed focus on energy services for southern Saskatchewan. “We started hiring some people and going back to work with locations in Carlyle and Regina to start with.” Ziegler said. “We will be operating in Virden, Manitoba, very soon.” The Regina location is located northeast of the Consumers Co-op Refinery. The Carlyle shop will seem familiar to locals as it’s the old Carson shop, on the north side of Highway 13, near the golf course. Launching a new company is not a simple task. On top of the various registrations necessary to incorporate a business, energy and mining clients require stringent quality and health and safety certifications to properly and safely execute work. To assist and expedite this process, Canadian Plains
Roland Frecon, Canadian Plains Energy Services shop manager in Carlyle. Photo by Brian Zinchuk
has partnered with another recognized oilfield service and construction company, Strike Group LP (formerly known as Strike Energy Services). This partnership gives Canadian Plains access to established and registered programs for equipment, health and safety, and quality while Canadian Plains creates its own brand for these programs. “We welcome our affiliation with Strike,” Ziegler said. “Strike is an
experienced company and working together means that both organizations can leverage off of each other’s strengths in order to provide our clients with the best quality services,” Ziegler pointed out. “We believe we had a good model for customer service at Carson, and we aim to copy that.” Canadian Plains initial operations include a mainline pipeline division along with production service divisions that
provide small diameter pipeline construction, facility work and general oilfield maintenance. Experienced staff Overall, Ziegler said, “The work is out there, we just have to go out there and execute. The people at Canadian Plains is what will bring the work, not the name on the door or the side of the truck. We don’t have any green people, not one. The management Page A7
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Carlyle – January saw the launch of a Saskatchewan based oilfield services company, Canadian Plains Energy Services, and while it’s a new company, there’s not one green hand in the bunch. Canadian Plains opened their doors in Carlyle and Regina, and this is a company with many years of experience under its belt. Canadian Plains is already on a tremendous growth curve with plans to hire dozens more people, and open additional locations soon. “It’s a lot of former Carson Energy Services employees who joined together to create Canadian Plains,” Dale Ziegler, president of Canadian Plains Energy Services told Pipeline News at their Carlyle shop on Feb. 8. “The response from clients has been phenomenal. To see a local company and the people who have served them for several years has been extremely well received.” Most of the new
team of field workers and management have their roots in Carson Energy Services (CES) and after five years with Flint Energy Services and its successors, Ziegler decided that the time was right to launch a new company, with a focus on southern Saskatchewan. It seems many of his “old” Carson colleagues shared his view. Ziegler’s history with Ron Carson is a long and significant one. “I took over Ron’s position following the sale to Flint, and was responsible for operations in Saskatchewan, Manitoba, and the Lloydminster and Wainwright areas of Alberta.” Ziegler said. The former Carson employees have been through many changes in the last five years. After buying Carson Energy Services in 2011, Flint itself was bought by URS who was then sold to AECOM, all in a fiveyear period. The downturn and resulting cost containment measures have resulted in many of the former Carson
PIPELINE NEWS March 2017
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Hopeful contractors pack the room for proposed refinery ■ By Brian Zinchuk
together, complete civil, all the underground and above ground structure, and achieve first oil in 29 months. To do that, we’re looking at a craft staff of basically 24 hours a day 180 guys for 24 months to get it done.” That roughly 180 workers will change in makeup as the project progresses through its various stages. “The schedule seems pretty tight, I don’t disagree. But we have commitments for first oil for 2019. The longer we drag this out, the more pressure there is on operations to get this done.” There would be six management staff on site plus the engineer of record. In plant operations, there would be three 20-person shifts, with management. Civil contractors would be looked at initially for road work, laydown yard prep and the like. He would like to start moving dirt in late 2017. “Everybody’s probably wondering, ‘Why Stoughton?’ We looked at it to do our land evaluation. It’s a very critical thing for long-term investors to make sure that we’re doing the right thing, we’re making the right decisions. “One of the land evaluations was, first of all, transportation in and out, regional support, water and product. That’s why we chose Stoughton. All the identified risks in the risk assessment came back that Stoughton would be the prime location because it has the four main ingredients – water, power, land and supply.” The clay is good, but they haven’t done hydrology or CPT testing yet.
Keith Stemler, CEO of Dominion Energy Processing Group Inc., spoke to prospective contractors in Weyburn on Feb. 15. Photo by Brian Zinchuk
He specifically referred to processing Bakken sweet crude, which means it requires a less robust kit to process. It would be a 42,100 bpd facility at 95 per cent efficiency, producing unleaded gasoline, diesel, jet fuel and other products. There would be a minimum of 200,000 bbl. of storage tanks for the upstream portion of the facility and four downstream tanks of about 100,000 bbl. each. The site would include ice-free ponds for process water and firefighting water storage. There would be 450,000 cubic metres of water storage on site. Dirt from the pond construction would be used for other parts of the facility. He also mentioned rail car facilities, but did not say whether that
meant building a spur line from Stewart Southern Rail’s shortline which terminates at Stoughton, or if pipelines would be built to the rail line and if a loading facility would be established there. For the off-take, he said, “We prefer the rail method.” Stemler noted they might end up building a pipeline south to the Canadian Pacific mainline which runs through Weyburn and Estevan. He asked that people not go on the property as “I do not own it at this time 100 per cent.” Stemler spoke of a one-team approach, right from the minister’s office to the local mayor. “Have we hit any walls that are going to stop the project? Not yet. We’re very comfortable, as owners and developers
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of this project, that we are going to continue on this path of success. But, as you know, with any proposed project, we’re going to have those walls we hit. We’re going to find the doors that are closing. Now, we’re at those tipping points of discussion, we’re starting, not to see resistance about the development, but we’re seeing more questions to development,” he said. In one email, he was presented with 117 questions. On the job, he wants no barriers between craft and management. This was a key point in several of the questions from the contractors, several of whom expressed concerns that large, unionized general contractors would get the Page A17 ▲
Weyburn – To say there was strong contractor interest in the proposed Dominion Energy Processing Group Inc. Stoughton refinery would be an understatement. The contractor meeting, held in Weyburn’s McKenna Hall on Feb. 15, was nearly full save the first couple rows of seats. Executive director of Weyburn Regional Economic Development Twila Walkeden pegged attendance at around 300. Keith Stemler, CEO of Dominion, spent nearly an hour describing the $600 million proposal, and took another hour answering numerous questions from the contractors present, a who’s-who of Saskatchewan oilfield construction firms. He was accompanied by Adil Kaderi, who is looking after engineering. After a brief discussion on the emphasis on safety, and specifically, not using cellphones while driving, Stemler launched into his presentation. He emphasised, “This project is in proposal stage,” and there was a lot that had to be done to get to project status. Stemler talked about policies on spills and drips, and other environmental procedures. He said the design will reduce emissions and will be well-maintained. “We will own and operate this facility,” he said, adding they will have contracts for things like vac trucks and snow clearing. Stemler spoke about a triple bottom of social, economic and environmental benefits. On the environmental side, the
site will have an emergency dump pond or tanks, and will not use a disposal well. “Everything will be contained above ground,” he said. The site will have segregated internal and external drainage systems. For the social aspect, he spoke of developing and supporting the local community. Roads into the site will need to be looked at, with huge modules expected to be brought in. There will be one or two more town hall project updates in Stoughton, as well as meetings with neighbouring First Nations. Economic benefits include things like usage of local hotels for paid accommodations. Education for plant operators has been broached with Southeast College. “We want to look at local hire first before we bring in external help.” “We’re looking at long term. The plant is scheduled for 90 years of operation, that’s the feedstock supply we’re working with currently. This isn’t a one- or two-year project, this is 90 years of development,” he said. Turnarounds would happen every few years for 21 to 28 days. Stemler also spoke of expansion in 2021 which would run until 2025, adding a second train. “I can’t disclose what that is at this time, but this is a large development that would be progressing to 2025.” Meat and potatoes Getting into the “meat and potatoes” for the contractors, Stemler said, “Based on schedule, we have 29 months from the time we receive the permit to the time of first oil. I feel we can do this – put the kit
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PIPELINE NEWS March 2017
PIPELINE NEWS
EDITORIAL
Mission Statement: Pipeline News’ mission is to illuminate importance of Saskatchewan oil as an integral part of the province’s sense of community and to show the general public the strength and character of the industry’s people.
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A whirlwind of good news Wow, this month has been a whirlwind, and more importantly, it’s been fun. Why fun? In the last six weeks this paper has seen more excitement, more enthusiasm and more good news than we’ve seen in the last two years. It started in January, with our focus on Carnduff. Many, but not all, companies there were telling us they had seen the bottom and had started to hire people again. This month the focus has been Arcola, and again, it was nearly all good news. Business is picking up. People are hiring. Noble Well Services has been bringing on people, but qualified ones have been hard to find, as so many service rig hands have left the industry. Gibsons, formerly Littlehawk Enterprises, is in the process of hiring several people. Flying G Trucking could put three qualified picker operators to work. It appears the service rig business is the first to feel a real crunch for people. Saskatchewan’s active drilling rig count
peaked at 68 around Valentine’s Day, according to sister publication Rig Locator. That’s the highest level seen for almost exactly two years. But with more drilling rigs firing up, some service rig hands shifted gears and moved to the drilling rigs. The result is a shortage of service rig hands. We’re now even seeing billboards seeking to hire service rig hands. For the first time in a long time, we’re starting to get numerous calls saying, “Hey! Come and do a story on us! We’ve got a new thing going!” One of those is Quinn ALS, a new reciprocating rod pump shop in Estevan which opened at the beginning of the year. It’s one of the first, if not thee first, new shops we’ve seen in a very long time in Estevan. Canadian Plains Energy Services fired up in the New Year as well, with operations in Regina and Carlyle, where they inhabit the old Carsons shop. That’s fitting, because Dale Ziegler, president, took over the running of Carson Energy Services
(which has had various names through multiple sales) when Ron Carson retired. All their 30 staff on board used to work with Carsons, and Ziegler expects to grow that number to 60 in a few months time. By later this year, he’s aiming for 150. Another thing we have not seen in a long time is companies investing in new iron. For Canadian Plains, they have a fleet of brand new crew trucks, in addition to their yellow iron. R French Transport in Arcola just acquired four new trucks. Saskatchewan’s oilpatch is eager to get back to work. That was evident by the roughly 300 people who attended an initial contractors meeting in Weyburn on Feb. 15 for the proposed Dominion Energy Processing Group Inc. Stoughton refinery. That project is still in its early stages, but they are hoping to scratch dirt by the end of the year. February has been the most positive month we’ve seen in nearly 2.5 years. Let’s keep this train rolling.
PIPELINE NEWS March 2017
The big question is when can vendors raise their rates? Often when I am out and about doing interviews, I find there’s a common question that I will ask everyone that month, usually reflecting on the current state of the industry. Over the last two months, the question has revolved around oilfield services companies raising the rates they charge oil companies. For almost everyone I’ve spoken to since the New Year, the past six weeks have been the busiest they’ve seen in the last two years. Companies are hiring again. Some have had to bring up their formerlyreduced wages in order to attract workers again, but most are still working at reduced wages. Everyone is working at reduced rates. In late November, 2014, Saudi Arabia indicated it was going
to open up the taps and let oil prices drop. Oil prices fell off a cliff and haven’t reached anywhere near that level since. Two weeks later, Canadian oil companies sent letters to their vendors demanding cuts in their rates. Since then, as oil dropped from the US$75 per barrel range to the US$26 per barrel level by January and February of 2016. We were used to US$100 oil for several years prior to that. Over that time, many oilfield services segments saw multiple rounds of cuts. Four is not an uncommon number, but I think a few saw even more than that. Oil companies ground their vendors hard as they no longer had much in the way of cash since their product was now down up to 75 per cent in value. I’ve even heard of oil companies demand-
ing their vendors show the oil companies their books. One person told me that was “obscene.” Those oilfield service companies reduced expenses every way they could. Of the people I’ve spoken to over the past year, a typical number is they’ve reduced their staff by about half compared to 2014 peak levels. Those who remained saw little or no over time and most had their wages cut. These companies have been in survival mode for a long time, and a few didn’t make it. Of the survivors, most are now operating with their rates at a level set when oil was floating around the US$30 per barrel mark. The thing is, oil has been sitting above the US$50 mark for three months now. This is key, as many people have said we would need oil at
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OPINION
FROM THE TOP OF THE PILE
By Brian Zinchuk
this level for a sustained period to get the activity level to pick up again. So the oilfield services companies may be working again, and they may be hiring again, but most are a long ways from making any sort of real money again. They have two years of depleted capital to make up for; two years of oftendeferred maintenance. For many trucking firms, if a unit had a significant breakdown, it was parked beside the fence and the license plate was pulled. Next to no one has spent money on new capital purchases for more than two years. Only in the last few weeks have I laid eyes on brand new equipment being purchased and put into the field. These oilfield service businesses are all chomping at the bit to raise their rates again. They’re
not expecting the heydays of the boom leading up to 2014. But they would at least like to dial back the last round or two of rate cuts. The oil companies have benefitted from the increase in oil prices, and the vendors want to see some of that benefit, too. The difficult thing is how to go about it. If you are in a sector where there is lots of competition, it’s going to be mighty hard to be the first to tell an oil company, particularly a big one, that you are reducing your discount. They may just go to someone else. The first nail sticking up might get hammered down, and leave the company in a worse position than it was before. For the oil companies, there’s not a lot of incentive to encourage their vendors to charge a little more. If those
vendors are working for rates appropriate for US$30 oil, and your oil company is now getting US$52, then you get to improve you balance sheet significantly. Will we see a change after spring breakup? Time will tell. Some people told me they don’t expect to be able to raise their rate this year at all – which would extend the downturn for them to three full years. That’s brutal, and unfair. Most people seem to think we’ve been through the worst of this down cycle, and they would like to be able to breathe a little bit. They’re absolutely right. The tough thing is how to go about doing it, without losing the work you already have. Brian Zinchuk is editor of Pipeline News. He can be reached at brian.zinchuk@sasktel.net.
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PIPELINE NEWS March 2017
Oil a key factor in Wall’s speech to SUMA Saskatoon - The impact of the oil sector on the provincial economy and government revenues factored large in a speech made by Premier Brad Wall to delegates of the Saskatchewan Urban Municipalities Association convention in Saskatoon on Feb. 6. This was especially important as he explained how the province is now looking at a $1.2 billion deficit this year, and that, as a result, the municipalities would be getting less money. In the opening of his speech, Wall said, “For nearly three years now, and sometimes I think we’ve lost track of just how long it’s been, for three years, we’ve been battered and bruised and buffeted by a stubbornly long down cycle in commodity prices. It’s been a perfect storm for Saskatchewan. It’s affected oil, significantly affected oil and the energy sector. But also potash, and also uranium, and that storm is still blowing a little bit. We aren’t out of it by any means.” He added the economy is resilient and more diversified than it has ever been. Unemployment rates are lower than the national average, and the province’s population has continued to grow. He spoke about a neighbour of his in Swift Current who has been waiting to go back to work for 18 months. Businesses have failed. Wall said, “There are hopeful signs. There are optimistic signs …
Specifically in oil, with oil at now above $50 a barrel West Texas, we’ve seen companies like Husky announce a billion-dollar capex program for our province, almost exclusively here in Saskatchewan, as opposed to the province where their head office is. Crescent Point has announced an increased capital investment plan for Saskatchewan. About 80 per cent of that will be in this province, versus the province where their home office is. “Raging River is another example of that, another company that has announced increased capital expenditures. We’re hearing, anecdotally, in Weyburn, I think there was a story in the news about a company that’s actually struggling to find the workers it needs as things start to pick up. “The number of wells drilled this year is forecast to jump by 20 per cent in Saskatchewan. Companies are hiring again,” Wall said. He noted the Fraser Institute has now ranked Saskatchewan number 4 in the world for sub-national jurisdictions to invest in for oil. “We see hopeful news in pipeline approvals. I want to acknowledge and thank Prime Minister Trudeau and his government for the recent approvals they have made. They are important because they will help us decrease the differential, the
discount at which we’ve been selling our oil for a long time,” he said, referring to the higher rate that can be obtained for Brent oil at tidewater. He touched on environmental impacts of pipelines, but added they represent hundreds of jobs in Saskatchewan and new revenue for municipalities. EVRAZ in Regina also depends on this sort of work for pipeline customers. Agriculture, and related food industries, have been strong, he noted. No bounce back But the provincial budget is a cause for concern. “Government revenues have dropped precipitously in the last number of years. There is no immediate bounce back coming to the higher levels we would hope, on the resource side of the equation. Oil has recovered to some degree. Analysts, though, believe ceiling for that, at least now and for the mid-term, is about $60. That’s the ceiling. Because as the price increases, so will production. Shale oil in the U.S., has been a game-changer, for us.” He wanted to set expectations straight, saying, “I don’t think we should be on, or plan on, or won’t plan on $100 a barrel, $80 a barrel, or $70 a barrel any time soon. That’s the reality. But at least prices of oil are off their historic lows. We can’t say the same for potash. We can’s say the same for uranium.
Those prices are still at historic lows, with little expectation that will change. “I remember when the down cycle started. Three years later, we’re all better at hindsight, especially those in politics on both sides of the aisle. There wasn’t an analyst I was reading that forecasted lower for longer, at least as long as it has been, and is likely to continue. “It means our resource revenue for the province is down and down significantly. This fiscal year, non-renewable resource revenues are down about $1.2 billion from 2014 levels. That’s eight per cent. “What would you do as a local government, if, year-over-year, your revenue was down eight per cent, and it didn’t look like there was a chance for recovery, in the immediate future?” Wall asked. The resource slowdown has impacted general revenue on income tax and PST. An additional expense, crop insurance claims are up over a quarter billion dollars. Thus, Wall said he had the unhappy duty of telling them the deficit will be about $1.2 billion. His plan had been to balance the budget in 2017-18. “This is the goal we are still working towards,” he said. The government is wary of shocking the economy, or gutting the public service, Wall noted, adding, “But you need to know, that as we deal with the fiscal
imbalance, everything is on the table.” He touched on austerity measures already enacted including reduced travel, less training, hiring freezes and more, but that still hasn’t closed the gap. Across government, $7 billion is spent on human resources salaries. “Friends, we will have no success on bringing order to our finances unless we can contain our payroll costs,” Wall said, implying that should carry over to municipalities, school boards, health care and universities. “Our minimum expectation is we will freeze the HR costs in government for this year, and potentially for a few years down the road.” A rollback of public sector wages has been looked at. One budget scenario would see small tax increases, but cuts resulting in 4,900 job losses in healthcare, as well as layoffs in education. “It’s on the table still, it has to be, until that final deliberation happens later this month,” he said. He noted it is not “cruel austerity,” depicted by some. “Those of us taking part in this decision should be careful about debasing the language, because real austerity, has been what’s happening to my neighbour a few doors down, on Conlon Drive. “He’s been out of work for 18 months. That’s real austerity.” Similarly, Wall said real austerity happened when jobs were lost
at the Rabbit Lake uranium mine, and the rollback there was 100 per cent. “That’s real austerity,” he said. As a result, municipalities will be getting less money. As for rhetorical question of “where the money went?” Wall spoke about spending $8 billion on infrastructure, increased revenue sharing, reduced taxes across the board and paying down operating debt. PST exemptions and education property tax are two items that will be addressed, he noted. But infrastructure investment will remain a key component of spending as will innovation in things like carbon capture and storage. Wall warned about the impacts of a carbon tax on the Saskatchewan economy. Most other jurisdictions in Canada are not having this discussion on deficits, he pointed out, referring to it as “collective amnesia, what happened decades ago, where we can indeterminately deficit finance, and some government down the road will have to deal with the very traumatic impact for ignoring it for too long.” “It’s like history repeating itself. Well, this is Saskatchewan, and we learned from our history. And I don’t think we kick the can down the road on major problems. When it comes to the finances of the provinces, we cannot afford to do that.”
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Experienced staff, new equipment, lots of growth ▲
Page A2 group is very strong. I’m 33 years in the business, and most of our leadership group has over 20 years.” Canadian Plains Energy Services’ growth plans are unlike anything seen in southeast Saskatchewan in many years. “We’ve got 30 employees. By early spring, we’ll be double. By fall, I hope we’ll be peaking at 150 employees. The morale is like I’ve haven’t seen in years – nothing but positive” said Ziegler. “Everyone here came from the same place. The people are who we are. Our people are our number 1. That’s all there is to it. If we look after our people and clients, we’ll be successful.” New equipment
Another thing not seen much over the last two years has been a company buying new iron. They’ve got 12 brand new 5500-series trucks equipped with knuckle booms. There’s seven deck trucks and six crew cabs. The heavy equipment includes two nearly-new dozers, three brand new excavators, and five D5, D6 and D7 sidebooms. Among the few things that aren’t new are two large warehouse vans and some small job vans but they are tooled up and ready to go to a jobsite. Roots So where has Ron Carson been during all this? “We’re getting back to our roots,” said Ziegler. “Ron has been at my side
through all my decisions. He’s been my mentor and there is no one in this oil and gas business I would have as a mentor other than Ron Carson. He has no ownership in the company, but he does have a seat on the board of directors and I couldn’t be happier.” Indeed, Ziegler laughs, while Carson has accompanied him in drumming up business, Carson makes a point of telling people he’s not looking for a job. Good time to grow “I think the industry was ready for a new direction, a correction if you will,” said Ziegler. “While the market is tough, we really felt we could pull together the ‘A-Team.’ There are lots of factors working against
Canadian Plains Energy Services’ new fleet includes brand new trucks. Dale Ziegler, President, Canadian Plains Energy Services, stands beside one.
us but we believe the industry has hit bottom and is starting to move back in a positive direction.” He concluded, “We believe we can take
advantage of that and provide an experienced team who will give great service to our customers. When the industry recovers, we want to be ready to jump on growth
opportunities, but for now, while everyone else is downsizing, we will be focussing on our new business, our new customers and growth for the future.”
Quinn ALS opens a pump shop in Estevan By Brian Zinchuk Estevan – After over two years of downturn
and businesses closing, a new oilfield venture has popped up in Estevan. Quinn ALS fired up on
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sell new pumps and service and repair used pumps. Quinn ALS stands for Quinn Artificial Lift Services. This is a separate entity from Quinn Pumps, which was sold to Lufkin in December 2011, and then GE, and still maintains its own shop in Estevan. The Quinn ALS group is from the legacy Quinn, and have brought their experience and knowledge to this new venture. The Quinn family history in pumps goes back over 50 years. Shane Latoski, general manager of Quinn ALS, explained on Feb. 17 that Quinn’s Production Services started up three years ago, manu-
facturing reciprocating rod pumps, components and accessories. Those products were sold at the wholesale level. In December 2016, Quinn ALS was launched as a way for them to sell directly to the end users. “Our specialty is and always will be as a manufacturer of reciprocating rod pumps and components. That will always be our focus,” Latoski said. They are an API certified manufacturer of reciprocating rod pumps and components. Their factory in Red Deer, Alta., has largely new equipment. “We made a significant invest-
ment in state-of-the-art machines to produce the highest quality product on the market,” he said. “Our goal is to be a significant player in the artificial lift segment, specifically reciprocating rod pumps,” Latoski said, adding they will expand into other areas that complement their core product. “That’s our big thing – made in Canada. It’s a rare thing to see,” Donovan said. Donovan left Weatherford last July and filled the summer doing concrete work. He got a call from a former boss Page A15 ▲
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the first week of January in the former Logan Completions shop on the south side of the Energy City. Three people are working there so far, with Reece Donovan as branch manager and Thomas Glab and Bradley Leptich as pump technicians. “We all will be turning wrenches,” Donovan said on Feb. 6. Glab and Donovan had worked together at Independent Pump Co., which was purchased by Weatherford. Leptich used to work with TS&M Supply. Between them they have around 18 years experience with reciprocating rod pumps, Quinn ALS’ specialty. The company will
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PIPELINE NEWS March 2017
Be a coach to each other: IWS safety stand down By Brian Zinchuk Estevan – It was a packed house in the Southeast College Estevan campus auditorium on Feb. 7, as Crescent Point Energy brought in all its service rig contractor field staff in the area to take part in Independent Well Servicing’s second annual safety stand down. David Sarkus, self-styled as The Safety Coach, was brought in as the motivational speaker for the event which had roughly 275 people in attendance. Brian Crossman of IWS introduced Sarkus by saying, “You guys are the reason that we are making this commitment to your health and wellbeing.” He thanked Crescent Point for their participation and all the other
operating companies who attended. Curtis Swain, team lead for Crescent Point’s completions east, noted all their service rig fleet (from numerous contractors) was in one room. He noted that safety statistics have shown noticeable improvement. In January 2014, there were 20 incidents, and 116 for the year. January of 2015 saw 13 incidents, and 105 for the year. In 2016, there were five incidents in January, and 91 for the year. And in January 2017, there were three incidents. “We’ve been on the decline. You guys have been doing an amazing job,” he said, adding January had been one of the company’s busiest months in its history in southeast Saskatchewan. “The main thing for us is not the numbers. It’s that you guys come home
every day to your families, safely, and you continue to do that.” Sarkus has worked with NASA, TRW and United Airlines. He’s written five books and over 100 articles. Sarkus’ focus was on zero incident safety. He started by talking about being a coach for one another. He then talked about the importance of relationships and building a sense of team and family. He wrapped up focusing on the personal importance of working safely. “The sameness of our job can put us in a peculiar and comfortable situation,” he said. “Success brings about a dangerous side of the coin. The dangerous side is we get comfortable and complacent, and we need to stay within our process and do the right thing each and
To get an impression of how many people work on service rigs for Crescent Point, they brought in all their service rig crews for Independent Well Servicing’s second annual safety stand down. This picture only shows half of the crowd. Photo by Brian Zinchuk
David Sarkus, self-styled as The Safety Coach, got a room full of service rig hands on their feet. Then he told them to hug the guy beside them. Photo by Brian Zinchuk
every day because all this safety stuff is about you.” When we get comfortable with each other, he warned we take each other for granted. “The window we need to look through is the window of each others’ hearts, because tomorrow is not promised,” Sarkus said. “We need to help each other be safe and whole, by being a coach rather than a cop. Coaches bring about commitment. Cops bring about superficial compliance, meaning you do the right thing when somebody is around. Commitment is when you do things when nobody is around, at work and at home.” Sarkus talked of, “being a hero maker, not a heart breaker.” He spoke of small rewards for safety leading to a point where working safely becomes more meaningful than the
reward itself. “You need to encourage each other, every day,” he said. “Build them up, don’t break ’em down. Give them specific feedback to work more and more safely.” He listed several large companies who have gone as long as 12 years without a reportable incident. Noting the downward trend in incidents, he said, “You can continue on your downward trend when everyone steps up to be a coach for each other. Confirming in favour of correcting, but also correcting and redirecting as necessary. “It takes each of us being approachable,” he said, noting the Harvard Business Review said the best leaders are approachable and loveable. “If you are not approachable for one another, we can’t correct the bad stuff and get better. If we don’t want to listen to each other, with we’re
not approachable, we can’t protect each other,” Sarkus said. “Here’s the key. You have to be approachable for each other.” Sarkus stressed four principles: caring, coaching, collaboration and reconciliation. Talking about holding grudges, he said, “If you have a conflict, make it right. It takes a big person to say ‘I’m sorry.’ Our safety depends on it. “Conflict is bad. It’s destructive. Make it right, if you can.” Noting his father worked in a steel mill where if a man fell into a ladle of molten metal, production continued on, he said, “Our parents paid the price for us to be here today. Fifty, 60 years ago, meetings like this were unthinkable, at least in the States.” “How will you begin to lead each other, here, today?” Sarkus concluded.
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Reaction to refinery contractor meeting ■ By Brian Zinchuk Weyburn – Opportunity could be right next door. Danton Moorhead and Allscott Trach run Preferred Energy Inc., whose shop five kilometres south of Stoughton is one of the closest neighbours to the site of the proposed Dominion Energy Processing Group Inc. Stoughton refinery. Their company has been active building numerous gas plants and batteries in the region, and having a $600 million refinery proposal quite literally in their backyard is welcome news that they are eager to be a part of. “It’s a four-minute drive from our shop to their location,” said Moorhead. Their focus is facility construction. “We built Plant 4 expansion. I and Preferred Energy have been involved since the Plant 1 expansion, hence why we built our shop there,” Moorhead said, referring to Crescent Point Energy Corp.’s Viewfield gas plants located just
west of their shop and immediately adjacent to the proposed site for the refinery. They’ve built numerous facilities and construction of batteries for Crescent Point and Lightstream (now Ridgeback Resources Inc.). Moorhead said, “Having this built in our backyard, we didn’t expect it, but we’ll definitely be happy to have it there.” “As far as assembling full-scale, no, we’re not that size; as for assembling pipe racks, pipe fabrication, the maintenance contract, the small services to provide snow removal, welding; all that we are providing now. Obviously, we would grow to capabilities we can, but there’s no way one contractor in this room, other than maybe PCL, could handle a project of this size. It’s going to take a lot of contractors to put together something of this size, but they definitely have really good talent in the area to pull from,” Moorhead said. Trach said, “Our biggest project to date was
the Alameda gas plant for Steel Reef. We were the general contractor for that. We did everything from cut and cap piles to commissioning the facility.” He noted they built modules for Steel Reef ’s North Portal plant. Moorhead added, “That’s what’s got us really excited about this, being a module build. We have some experience in southeast Saskatchewan building modules. And being four minutes away, shipping is a lot cheaper for us than anyone else.” Trach said, “This is really good for the community, good for contractors in the area, and good for Saskatchewan.” They also have a small campground at their shop, which would be put to good use. Intec Controls Wes Orischuk, an account manager for Intec Controls Inc. came down from Saskatoon to attend the meeting. “It thought it was good, very informative. We’ve heard of this project coming up for a
Roughly 300 people attended the Feb. 15 contractor meeting in Weyburn for the proposed Stoughton refinery. Photo by Brian Zinchuk
while, but we didn’t know where the planning stage was at. It was good for us to learn about a timeline and process for how it’s going to happen. It would have been nice to find out about who the engineer of record is right now, but we’ll find that out soon enough,” he said. They’re definitely interested in bidding on the project. Orischuk said, “We are an instrumentation and control system distributor, so obviously we’d like to get some of our products in there, and even a little more piece of the pie. Siemens is our
main product. We are a distributor for the instrumentation, PLC systems, industrial computers and industrial control products.” PS Electric and WPS Harvey King, owner of PS Electric and Waterflood Production Systems, Ltd. of Estevan, was also there, keenly listening in the centre of the third row. PS Electric has a long history of industrial electrical installation and maintenance, including work on SaskPower’s local power stations and carbon capture facility. WPS builds skid packages for
the oilfield as its primary product. “I thought it was a very good presentation by Keith (Stemler) and others and a fine thing put on by the economic people in Weyburn as well,” King said. “What I thought was most appealing was they seem to have a good plan in terms of scale, location, marketing and appeal to the local contractors. It was a good turnout and well received.” Will he be bidding on it? “Definitely,” King replied.
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PIPELINE NEWS March 2017
‘Today, if I had 8 more drivers…’ R. French Transport returns to growth mode ■ By Brian Zinchuk Arcola – R. French Transport has done something not heard of very often for the past two years. “We bought four new trucks,” said Ralph French, who runs the business with his wife Colleen. “We just got them on the road here. Last week we got the last one rigged up and going.” “We’re trying to ramp for it to hopefully turn around. “One of our biggest hurdles, right now, is manpower, which I’m sure you hear from a lot of people. We’re steadily having ads out, looking for men. Any of the other companies or services I’ve talked to, they’re feeling the same thing. Since things have picked up, the drilling rigs are going again, the service rigs; everybody is looking for manpower.” Compared to the peak of the boom, R. French Transport had reduced its staff about 60 per cent. “We had a lot in Manitoba that have gone back. Since the slowdown, rates have been lower. In turn, the wages are lower. So people aren’t willing to travel far away from home for wages they can make at home, being home every
night. “It’s hard to attract good employment when you can’t offer them more than what they can sustain at home. We have a camp in our yard and everything. Free room, but not board, to try to attract employees,” Ralph said. Colleen said they have 24 on payroll now. “We had a lot of lease operators. Counting lease operators, we were closer to 50-55,” she said at peak. “We’ve been trying to stay with our own trucks and employees. We just brought on a few (lease operators) because we’ve started fracking again.” It’s been over a year that R. French Transport’s fracking operations have been idle. They have a frac water heating facility near Kisbey, with multiple frac tanks there. They’re hauling heated fresh water again from Kisbey facility. “We sell and heat water out of there,” Ralph said. The facility has been around for three years now, but was dormant last year until early January 2017. “Ralph worked on that pretty hard for a while,” Colleen said. The facility has five water tanks and an additional frac
tanks on site. The rest of their frac tank rental fleet is out with a client, a welcome development. That fleet is enough to support two frac spreads. “For the last year, we haven’t done any fracs until now,” Ralph said, “But we’ve been doing a lot of service water work.” “We’re still transferring oil and salt water,” Ralph said. Asked how many people they could put to work, if they could hire them, Ralph said, “Today, if I had another eight drivers…” “We’ve got trucks sitting with no drivers in them. We’re turning down work,” Colleen added. “We’ve turned down more work since Dec. 1 than I think we ever have, in our whole time being in business, only because we couldn’t supply the men,” Ralph said. “Our motto is to ‘Never say no,’ but we got to the point where we just had to, because we didn’t have the manpower to stay ahead. We’ve got our commitments that we have to look after. Anything extra is a bonus, and you always want to take those bonus jobs, but it got to the point where we had to start saying, ‘No,” which is
This is one of four new trucks R. French Transport recently put to work. It’s among the first new pieces of iron Pipeline News has seen since the downturn hit. Photo by Brian Zinchuk unfortunate. “We’ve noticed an increase in activity, for sure.” The rates they can charge have not yet rebounded. “When the crunch came, we were asked by pretty well all oil companies to give our rock bottom (rate) so we could all continue to work, and we’re pretty well still there.” “Hopefully the oil presses will stabilize, and people will be more confident in what will happen. Hopefully, in turn,
we’ll see some rate increases and some renegotiations so we can all carry on,” Ralph said. Spring break-up is usually when that sort of things happen and some contracts come due. “We’re not going anywhere, put it that way. Our company is here to stay. We’re hoping that we can start to show a little profit, which we haven’t for the last couple years. We’ve been looking after our core guys.”
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A11
Southern Exploration was drilling when others were sitting ■ By Brian Zinchuk
to over 500 bopd. “Before the end of 2014, we had drilled test wells in the Workman area and developed a plan for drilling horizontal wells. We drilled our first horizontal in August 2014. Production was good, but value of the product was dropping,” he explained. That summer and fall was the beginning of the downturn that eventually saw oil fall off a cliff in November and plummet to one quarter of its value roughly 18 months later. “We drilled five horizontal wells in 2015. In 2016 we drilled two, one in 2017, and we participated in two nonoperated horizontals late in 2016 and two more in 2017,” he said. Southern Exploration has sought conventional plays like the Frobisher formation, which don’t require expensive completions like hydraulic
Scott Hislop, left, and Greg Maher, are two of four partners that own Southern Exploration in Arcola. Photo by Brian Zinchuk
fracturing. “We believe that conventional wells are the only way to go to achieve payout in this low price environment,” Hislop said. All-in a well can cost
$850,000 to $1,000,000, depending on some of the typical variables. With the downturn, he noted, “Of course, it costs less to drill a well.” “I would say 25 to
30 per cent less.” Prices started to drop but not in step with where the oil price fell to. We consider recovery of drilling costs on a well-by-well basis. Page A12
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Arcola – Arcolabased junior oil producer Southern Exploration has followed a build-and-sell model for many years now, and its most recent divestment was timed just right, just before the oil crash of 2014. Now the company is on another build program again. On Feb. 1, Pipeline News spoke to Scott Hislop, chief financial officer and one of the partners in the operation. Blair Maher and Greg Maher are also partners. Southern Exploration has been focusing on the Workman area south of Carievale. They have recently drilled three wells in the area, one of which was completed this January and has already been put on production. They also participated in the drilling of four wells with another producer, all of which are now on production.
They have constructed one battery in the area, at 14-5-2-31-W1 which was operational in January 2015. Produced gas is delivered by pipeline and processed at the Nottingham gas plant, a valuable component of Southern’s asset when going to market. That’s important, because taking their asset to market is on the horizon. “We sold out to Torc in April 2014,” Hislop said. “It was good fortune that we were able to complete a sale just before a major decline in the industry. It would be nice to take credit for good management but an element of luck is always a factor.” The production sold totalled in the 650 to 700 bpd range. Some was in the Workman area, but the bulk was in the Wordsworth area. Now the company has, conservatively, rebuilt its numbers
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PIPELINE NEWS March 2017
They remember who was too busy service provider Pipeline News has spoken to in recent months has been chomping at the bit to start bringing their rates back up after numerous cuts. Asked if they are seeing a pushback from vendors to raise rates, Hislop noted that they benefited from larger oil companies pushing down vendor rates, but said, “We haven’t gotten much push back, because we never pushed hard on the way down. We got quotes and made sure that they
knew we were scrutinizing costs. We realize they have to be profitable and we want good service providers and competition in the area. “We would always ask for a quote, but we would never go back and ask them to take another $3,000 a day off.” It’s important to Hislop that the service companies survive, so that when things pick up, there’s choice in who they hire. He notes, with some irony, that some service
companies focused a lot on the larger players at the expense of smaller ones. “I realize we’re small. They have to look after the ones who are feeding them the most, but when the phone rings and the service companies are looking for work, I will remember those that were too busy looking after the bigger producers.” Experience has taught Southern Exploration to watch its
spending. “We’ve been through three downturns now. You know it’s not going to stay there forever. Be careful with your capital, for sure,” he said. “We are definitely pursuing the lowest risk targets. We’ve had some very good success in the Workman area. That is why, in 2015, we drilled somewhat more aggressively, even in the low price environment. We were still achieving reasonably quick payout,
Regina – While the return of oil to over US$50 per barrel has resulted in the highest activity levels seen in Saskatchewan in two years, the Feb. 7 public offering of Saskatchewan’s Crown petroleum and natural gas rights sure didn’t show it. It raised $1.7 million for the province, bringing the total for the 2016–17 fiscal year to $50 million. This was the last public offering of the current fiscal year, with the total surpassing the $43 million raised in the
previous fiscal year. “This is an indicator that a tough, forwardlooking industry continues to see opportunities for oil and gas development in Saskatchewan,” Energy and Resources Minister Dustin Duncan said in a press release. “Saskatchewan is considered one of the world’s top jurisdictions for petroleum investment. We continue to work on building that reputation and improving our capabilities to meet the needs of the industry to help
grow our economy.” The Feb. 7 public offering saw four leases located north of Lampman receive bonus bids totalling $537,079 for 583 hectares; these parcels are prospective for multiple targets including the Midale and Frobisher-Alida Beds of the Madison Group as well as the Bakken Formation. The top purchaser of acreage in the province was Stomp Energy Ltd., who spent $275,439 to acquire two lease parcels. The top price paid
for a single lease was $165,262, paid by Stomp for a 194.25 hectare parcel situated within the Viewfield Bakken Oil Pool, 10 kilometres north of Lampman. The highest bid per hectare was $3,202 for a 48.564-hectare parcel west of St. Walburg. Elk Run Resources Ltd. leased the parcel located three kilometres northwest of the Bolney Colony-McLaren Sands Oil Pool, 15 kilometres west of St.Walburg. The next public offering of petroleum and natural gas rights will be held on April 11, 2017.
Drilling activity, as seen here near an old church, south of Torquay on Jan. 19, has picked up. Land sales, however, most definitely have not. Photo by Brian Zinchuk
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Page A11 Having cashed out before the downturn, the company had some capital it could use. But that doesn’t mean that choice land was available, nor that the cost of land had fallen much. Major players had been investing heavily in land, Hislop noted, “So putting together smaller land packages with good prospects is tough and land costs are still quite high.” Pretty much every
a good return on the investment. As a private company operating on cashflow, that has to be our focus,” Hislop said. For 2017, he expects business as usual, with another two or three wells likely drilled in the summer or fall. But that depends a lot on weather, and the Workman area has some of the most snow in the region. “It costs too much to battle the mud. It can bring your costs up 20 to 30 per cent,” Hislop said.
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PIPELINE NEWS March 2017
A13
Flying G could use some experienced hands By Brian Zinchuk
Flying G Trucking picked up a tank for transfer on Feb. 8. Photo by Brian Zinchuk
ranch with 62 mares online. They have primarily Percheron and Percheron-cross-thoroughbred brood mares. One of their former horses even led the mounted police unit in the parade for President Donald Trump’s inauguration. Son Lane, 21, runs a picker, crane and winch truck. He’s a second year crane operator apprentice while another son, Cody, who is 16, helps with maintenance, cleaning and some swamping on pickers and crane. Tara Cure is the
company’s office manager. “At peak, we were running about 14 trucks a day. Included our leased, we were almost 20 people,” Johnston said. Now, they are at nine people, but they’re on the rebound. “We’re looking for
more picker operators now. I could use about three.” “We’re always looking for good drivers. Once we get into the big, big stuff, I like to say there’s nothing in this corner we can’t move. If we get bigger than what we have equipment for, we’re in line with some guys in Alberta that do the biggest heavy hauling there is,” Johnston said. “We don’t move rigs. We work with rig movers. We send pickers and winch trucks out for them.” “We could use some good, experienced winch hands, for sure, equipment haulers.” All-told, they could use around five people. “That’s the key, these days, finding the right people.” Johnston agrees with many of the oilfield managers Pipeline News has spoken to in the last two months who have said a large number of people have left the industry. “I think so. Things have picked up just a little bit, and there’s no people.”
“We’ve taken a lickin’ on the rate, for sure. We haven’t really changed the rate, yet. Our usage is a little bit higher now. We’re going out a bit more, so supply and demand. When we get to the point where we can start getting back a little bit …” “The companies need to understand also that, if we don’t survive, and they get busy, who is going to do it?” he questioned. He doesn’t know if there’s been a blurb of a few months of work or things will be going crazy after breakup. But with the amount of snow on the ground, Johnston says breakup is going to be scary. Last summer they did a fair bit of work outside of the oilfield to stay busy. “We never say no to any size, whether it’s a small job or a big job, whether it’s a complicated job, we like going out and doing the more complicated stuff where you have to really know how to do it. We enjoy Page A18 ▲
Arcola – If Greg Johnston of Flying G Trucking Ltd. could find three experienced picker operators, and a few winch drivers, they’d be put to work. Flying G Trucking, located between Arcola and Kisbey, is a small but very diverse crane and trucking operation. “This spring will be 20 years since I started running a picker. We’ve been on our own since July of 2013. I worked for various other trucking companies, service companies,” said Johnston, warming up in the cab of a picker while two swampers pried a tank loose, having frozen to the ground. “We do everything. Anything in the oilpatch, from the service side to the frac side to the production side. Right now we have two 45-ton pickers and a 100-ton crane, and we’re just picking up an 80-ton crossover in Edmonton,” he said. The last one is a crane, mounted on a truck chassis. “We’re going to bring it down here and see if we have some work for it. There’s no guarantees in the oilpatch.” They have a hydraulic tank trailer that moves big, tall tanks up to 2,000-bbl. in capacity.
When things were slow, it was useful for moving farmers’ grain bins. They also have a number of winch trucks. “We have a whole range of scissor-necks and floats for the oilfield, double-drops for tanks, buildings, compressors, any of that big stuff. We have a lowbed and jeep to haul Cats, trackhoes, coils, anything,” he said. The 100-ton crane sees a lot of facility work, setting tanks and coils on frac rigs. They’ve even moved rail cars for use as grain bins. It has 148 feet of boom with the jib. It’s a very diverse fleet for a small company. “We’re not a big company. We don’t have the big resources of other companies, but we have some guys that can do every range of what needs to be done," he said. They have been hauling a lot of agricultural equipment, including Saskatchewan-built air seeders units. “For trailers, there’s nothing we can’t haul,” he said. “Right now we’re running nine people,” but they could use more. It’s a family operation. Johnston’s wife, Teresa, works in the office as general manager and is active running their 150-horse pregnant mares’ urine (PMU)
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PIPELINE NEWS March 2017
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A15
Skilled pump techs will bring in business ▲
Page A7 and that led to his branch manager position today. “It’s exciting to be back doing what I was doing before,” he said, adding he worked with pumps for seven years. “We’re ready to rock now. We’re quoting customers.” While activity is slow out of the gate, he noted, “Our price is very competitive. With the guys we’ve got, it’s just a
matter of time.” The Canada/U.S. dollar exchange rate has come up in several conversations Pipeline News has had over the past month. To that end, making their pumps in Alberta should be an advantage. “With our manufacturing in Canada and our pricing, it’ll do well,” he added. “You don’t get hit by the exchange.” The company will
be delivering pumps and offering sucker rod designs. They are looking into carrying steel sucker rods in the future. “We carry all the API sizes,” Donovan said. They have inventory in stock. Quinn ALS now has locations in Drumheller, Drayton Valley, Bonnyville, Taber, Swan Hills and Grande Prairie, Alta., in addition to the new Estevan shop.
Reece Donovan, left, Brad Leptich and Thomas Glab look after the new Quinn ALS shop in Estevan. Photo by Brian Zinchuk
Rolling Rig That’s the derrick for Ensign Drilling Rig 650, on the back of an Integrity Oilfield Hauling truck, passing by Arcola on Feb. 1. Photo by Brian Zinchuk
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PIPELINE NEWS March 2017
Finding service rig hands has been a challenge: Noble By Brian Zinchuk Arcola – After more than two years of downturn, recent weeks have shown a demand for service rig hands. This has been the case for Noble Well Services of Arcola, where Chris Nidesh is area manager. “For a town as small as it is, it has always been a boom town. I got to Arcola the winter of 1999-2000. I came down to work for a company called Rainbow Well Servicing,” Nidesh said. “I came down as a roughneck, or floorhand, and worked my way up to toolpush, or rig manager, the technical term for it.” Noble’s been around for 10 years now. Their current shop, built in 2012 on the northeast corner of Arcola, is quite spacious compared to their former digs. “I had an office in Carlyle that was about the size of one of our bathrooms, and there were there of us in that. It was tight. This was a drastic improvement.” The company has eight service rigs overall, with six based in Arcola. Noble has two rigs in northern Alberta, at Red
Earth Creek. Diversifying their area allowed the company to keep more rigs active during the downturn. Nidesh said, “It got slow here, so we had to go interprovincial. We were the first Saskatchewan (service rig) to actually successfully infiltrate Alberta.” The first rig went west in May 2016. The second arrived in August 2016. They got some dirty looks in Alberta, with Saskatchewan license plates on their vehicles, as often it’s been the other way around over the years. “We’re well-connected with one of the investors in the company we’re working with,” he said, when asked how they were able to crack the Alberta market during a slow time. Each of their rigs covers the gambit of service rig work on any given week, from completions to workovers. Two rigs are regularly working for one oil company, and two rigs are regularly working for a second. Their range covers all of southeast Saskatchewan. They’ve done work in Manitoba in the past, but not currently.
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With six rigs in the region, they have 38 to 40 people. They frequently have five rigs running, but often one is coming back, resulting in a net of four working in the region. At peak a few years ago, before the crash, they were around 67 people. Like most oilfield service companies, they had significant cuts during the downturn. “Our office staff is now cut in half,” Nidesh noted. Their staff has also taken a couple of pay cuts. “We’re right at that time where it’s difficult. Oil hasn’t come back enough now for me to raise wages. I can’t go to the oil companies and raise rates yet. So I’m stuck at that point where I know the guys are expecting more money to do this job and I can’t do anything about it. Until oil goes a bit higher and I can start charging more for these rigs, I’m stuck trying to find people for less money. “Initially, when it started falling, you had guys accepting it. But now you’re trying to bring new people into this industry at lower rages. It’s tough. Our turnover rate is insane.
“We struggle with crew retention,” he noted. “We’ve been hiring like crazy.” From Dec. 27, 2016, until the last week of January, they were often shorthanded. Nidesh said he knows they are not the only service rig company in that situation. The impending spring breakup makes recruiting at the end of the winter season tough, especially since there’s a lot of snow on the ground in the region. “If it starts raining, it’s going to be a long breakup,” he said. “Everything about this reminds me of 2011,” he noted. That year was the big flood year, when parts of southeast Saskatchewan looked more like lake than land. “In 2011, I had a rig stranded north of Stoughton at Corning. It was on an island. We ended up staring at it for a month,” he said. The local rural municipality wouldn’t let them move it. The key, that year, was to keep working in areas that were dry, a lesson the oil companies and service rig companies learned. When the downturn
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hit, the first road ban, in spring of 2015, was the slowest time for the company as it adjusted to the new reality. Some rigs didn’t leave the yard until August that year. It’s quite a contrast to now, where activity has picked up, even if their rates haven’t. “If I got calls for two more rigs, it would take me two weeks to find the people, to fill those two rigs,” Nidesh said. Mobilizing additional rigs would be a challenge. Saskatchewan’s active drilling rig has risen to the highest level in
two years. They drew a lot of service rig hands to fill their slots. “That really hurt us,” he said. Nidesh has his fingers crossed for oil at US$65 per barrel. He thinks if the price stabilizes at that level the work will be steady and wages can come back. He hopes oil companies realize vendor rates will have to go up with the price of oil. “We’ve come through this downturn quite well. I’m quite happy with how Noble dealt with it,” Nidesh concluded.
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PIPELINE NEWS March 2017
A17
Contractors should have clean safety record firm. As a result, Stemler asked that those present leave business cards to they can be contacted, their disciplines identified and put on vendors lists. He noted he didn’t want to take home 350 pounds of binders at this time. The engineer or record would have online bidding and drawing systems for contractors. Stemler noted the importance of a clean safety record and being current with OH&S. A quality management system is also essential. “Our goals are to design this plant. Our goals are to complete this plant. Our goals are to operate the plant. There’s some speculation this is way out there. I don’t feel that it
is,” Stemler said. “From my perspective, as a director, I know what’s happening in the background, and I’m starting to get more and more comfortable all the time moving forward. Take that as it may, that’s my personal thoughts. All of this work over twoand-a-half years is not just smoke and dreams. We want to get this to the finish line.” Asked by one contractor if they had built a plant like this before, Stemler responded he had worked on projects from $2 to $6 billion in scope. Another question about cogeneration resulted in Stemler describing an 85-megawatt steam driven co-gen system using waste gas.
One person asked if Crescent Point is going to be their main supplier or if sales lines would come in from midstream companies. “Currently we’re in negotiations with several different feedstock suppliers. We’re not in any agreement stage at this point,” Stemler replied. Asked about structural steel, he noted a preference for Saskatchewan firms. Beyond that, he said, “On a local level, one of the things the plant needs is welders and machinists, all the time, 24/7. Is that a local opportunity? Absolutely.” Stainless steel welders and those with certification for double-jacketed steam pipe would also be
■ By Brian Zinchuk
oilfield services companies in southeast Saskatchewan have told Pipeline News their staffing levels had dropped about 50 per cent since 2014, Grimes said they had only dropped around 10 per cent, and remain there. “We’ve got enough work for everyone right now.” “Rentals are down, but we see a lot more purchasing,” he said. “Everything they used to rent, they buy instead of rent now. Why waste money on rent when they can own it, and they have the cash in place, I presume. I would say it’s 90 per cent buy, now and 10 per cent rent. We used
to be the opposite in busy times.” There are more rentals in test separators, but those are being bought as well. Eagle is moving lots of used pumpjacks, as well. “I have lots of clients that used to always run new running used now. The big companies to the small companies – everyone’s buying them.” Asked about the rest of the year, Grimes said they had lots of orders, as long as they all go through. “We’re starting to get new tanks from Kansas again. I think it’ll be pretty well the same. I think it will be better than last year, for
sure, but who knows? Time will tell.” “Everything is kind of going good. It seems a lot better than the slow years. It’s picking up. There’s lots of new small companies coming in, which is nice to see, which means things are starting to level out.” The big question for many oilfield services is when they can start bringing their rates back up. “The trucking game is really tough. There’s no question there. The rates are basically not there. I presume some guys are going to try right away, because it’s been long enough, and they’ve been hurting.
▲
Page A3 bulk of the work and that local, non-union contractors would be left out. Indeed, Stemler referenced the fact PCL had representation in the room, and Pipeline News noted a Graham Construction truck in the parking lot. To that he replied that the project will involve handling 460,000 tonnes of steel, and the contractors have to be capable of doing that sort of work. Dominion has not yet announced who its engineer of record would be, but that engineering firm would be doing the vetting and contracting out of the work as the engineering, procurement and construction management
in demand. “There will be an enormous amount of welding. An enormous amount of concrete, foundation work, piling work, civil work. We’ve probably 600,000 cubes of dirt to move. Those little pieces will probably be split up, outside the kit. And then once we buy the kit, basically that will be a fabrication outside of this area because we don’t have a fabrication shop in this area large enough to build a 200-foot tower. The reactors will probably come out of the States or overseas. The small pipe rack – there’s a lot of local kit that can be done,” he said. That said, the boiler would probably come from
Buying more than renting Arcola – Things are picking up for Eagle Oilfield Services Ltd. of Arcola. “We’re moving lots of used iron, moving some new iron,” said Micky Grimes, president, on Feb. 8. “Trucks are staying busy. It seems to be picking up. It’s not crazy.” “After the New Year it seemed to pick up quite a bit, with more of a steady oil price. Guys are getting a lot more hours. We haven’t really upgraded, people-wise, but we hadn’t downgraded a ton, either.” Whereas a lot of
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Mexico, the only one they could find large enough. They’ve had some suggestions for water supply, and are looking at a source north of Stoughton. The storage facility on site will be 450,000 cubic metres in size. With regards to any pushback, he noted the recent pipeline spill near Stoughton did not help. “To this point, no, we haven’t seen any resistance,” but the questions they are getting more specific. “Currently we’re in discussions with several groups in the province,” Stemler said when asked about where the refined product would go. Their market analysis says there is a market here.
The recent trend for Arcola’s Eagle Oilfield Services has been for oil companies to buy, rather than rent equipment. Photo by Brian Zinchuk We haven’t addressed it yet, ourselves. But I don’t think you’re going to get it this year. I don’t think you’re going to get much of an increase this year, to
be honest with you. The oil companies have had two bad years, and there’ll still be someone who will do it for that rate. It’s not that busy. That’s my gut feeling.”
A18
PIPELINE NEWS March 2017
Quick stop at the Arcola Co-op Arcola – There may be fencing supplies in the back for the local farmers, but the constant in-and-out of men in fire-retardant coveralls shows the Arcola Co-op is an important stop for oilpatch workers in the area. Indeed, they even carry those FR coveralls. The Arcola Co-op put considerable effort this past year into expanding its front store offerings. General manager Cindy Kolenz
said, “We expanded our convenience store offerings. We brought in fried chicken, tenders and wedges. It comes in fresh. We prepare it here.” The front of the store is now 15 feet wider, which makes room for things like the new slushies and coming espresso machine. They’re also carrying hot and cold Vern’s Pizza. The easy access off Highway 13 makes for a quick stop. “Easy access
is a big draw for us,” she said. The cardlock has four stations with seven hoses. Additional paving was done last year, and the site was cleaned up somewhat. Probably 25 per cent of their business is oilpatch-related. With the oilpatch coming to life again, Kolenz said, “It’s kind of a roller coaster just yet, up before Christmas, then down, then up, then down this week.”
Arcola Co-op general manager Cindy Kolenz, left, shows off some Vern’s Pizza, while convenience store manager Amber Metz gets some fried chicken ready. Both products are new to the Arcola Co-op. Photo by Brian Zinchuk
Flying G expands cranes fleet ▲
Page A13 that more than the common, everyday stuff. “We enjoy hauling the bigger loads, making the bigger lifts, knowing your math, your business, to be able to do that stuff,” Johnston said. Steamers and vacs Tim Erickson’s Classic Steaming has joined forces in the spring of 2016 with Flying G, working through
Flying G with three steamers and two semivacs. “They’re leased on with us,” Johnston said. Erickson told Pipeline News on Feb. 12 they are considering adding a third vac truck in the future. Classic Steaming has nine people on board, including Tim and his wife Tanya. “It became a good
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This is the current lineup of cranes Flying G now operates. The most recent addition, second from the left, is a new 80-ton crane. It’s an addition to their 100-ton crane and two 45-ton pickers. Photo by PA Photography
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PIPELINE NEWS March 2017
A19
‘We’re on the upswing now’ By Brian Zinchuk
Arcola – The stickers on the hydrovacs still say Littlehawk Enterprises, but the Arcola operation has been part of Gibson Energy since Feb. 1, 2015, when it was purchased from founders Graham and Ghislane Carter. Gibsons is starting to see a noticeable uptick in business in Arcola, enough to bring new people on staff. However, recent months have been spent dealing with the effects of the over-twoyear-long downturn. “We have amalgamated the Gibson Energy Frobisher branch and Littlehawk Arcola business unit effective Jan. 1, 2017,” said Brian Hagel, southeast Saskatchewan area manager. They began closing the Frobisher operation on Oct. 1, 2016. That operation was once Johnstone Tank Trucking, which was purchased by Gibsons in 2010. At the time of the purchase, Pipeline News reported, “Johnstone Tank Trucking is based in Frobisher, and primarily transports
crude oil and salt water, along with a little bit of fresh water.” The amalgamated operation now has branches in Arcola, Estevan and Weyburn. Hagel said, “With the decline in rates and business over the last two years, it was necessary. We still haul fluid, with a concentration on hourly services work and working with Gibsons’ environmental services out of Weyburn to give the customers a ‘One Gibson advantage.’” There was an auction Dec. 14, 2016, where old trailers, tractors and “body job” trucks were sold, as well as items not economical for them to repair. The Arcola branch of Gibsons has 13 hydrovac units. Hagel said, “We have stayed consistent. We stayed fairly busy during the downturn. It was slow, but we didn’t lose too many people. The buyout in 2015 did help Littlehawk. We reallocated assets to Hardisty and Edmonton. We sent three units to Hardisty and had a large expenditure in Edmonton.”
By spreading the fleet around, it meant there was enough local work for those units which remained. That said, they diversified as well, including doing some potash mine work. As for the rates they charge their clients, when the downturn hit two years ago those clients asked for, and received decreases at that time. Since the slowdown began, there have been several rate drops consistent with the industry. Asked when they might be able to increase them again, as oil has climbed to stay over US$50 per barrel for a while now, he replied, “I have no idea.” However, the market is changing. Upswing “It seemed to pick up in November 2016. We didn’t get busy, but we got steady,” Hagel said. “That’s when we noticed the change. “We hired two new
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Gibsons spread out its Arcola-based fleet of hydrovacs, but it kept working during the downturn. Photo by Brian Zinchuk
operators for the hydrovac. I’m in the process of hiring four new people for the fluid hauling and specialty service.” He added, “Another thing we noticed, especially in January, was the increase in acid jobs. Two (acid) units in Estevan have been busy, with calls every day or every second day, whereas these hardly turned a wheel in 2016.” Hagel’s words echo those spoken by most oilfield services manag-
ers Pipeline News has spoken to since Jan. 1. “We hit rock bottom and flattened for a long time. We’re on the upswing now. “I’ve been in the oilpatch for 23 years. This is the worst downturn we’ve seen. It’s the most rapid decline and longest slowdown I’ve seen. “Now it’s at the point you’re going to start to see people getting hired. It will be tough for businesses to
find experienced workers in oil and gas,” he said, noting many people have left the industry, possibly for good. “I know a pile of people who have left the business to pursue other industries. You’d be lucky to get 20 out of 100 back.” Gibsons has two rig shacks and two crew houses for staff accommodations. The shacks are full, but there’s still room in the houses.
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6. SW-29-04-05-W2 RM #34; FVA 61,700, 2016 Taxes $355.30, 2016 132 Acres Soy Beans, 132.11 Titled Acres, $2725.00 Surface Lease Revenue
3. SW-19-04-06-W2 RM #34; FVA 74,900, 2016 Taxes $431.31, 2016 145 Acres Canola, 160 Titled Acres, $3600.00 Surface Lease Revenue 4. SE-19-04-06-W2 RM #34; FVA 70,100, 2016 Taxes $403.67, 2016 135 Acres Canola, 148.65 Titled Acres, $10,000.00 Surface Lease Revenue (Sub-Divided Yard Site Does Not Sell!)
7. SE-29-04-05-W2 RM #34; FVA 61,600, 2016 Taxes $354.72, 2016 120 Acres Soy Beans, 160 Titled Acres, $3050.00 Surface Lease Revenue 8. NE-28-04-05-W2 RM #34; FVA 79,300, 2016 Taxes $456.65, 2016 135 Acres Yellow Mustard, 160 Titled Acres, $5775.00 Surface Lease Revenue
9. SE-28-04-05-W2 RM #34; FVA 69,800, 2016 Taxes $401.94, 2016 135 Acres Yellow Mustard, 159 Titled Acres, $7175.00 Surface Lease Revenue 10. SE-18-04-05-W2 RM #34; FVA 73,500, 2016 Taxes $423.25, 2016 139 Acres Wheat, 140.24 Titled Acres $8450.00 Surface Lease Revenue (Sub-Divided Yard Site Does Not Sell!)
1. SE-17-08-08-W2 RM OF TECUMSEH #65; FVA 69,500, 110 Cultivated Acres, 2016 Crop Yellow Flax, 2016 Taxes $301.57 *2 Storey Character Home; *26 x 32 Double Car Garage; Concrete Floor, Electric Heat; *50 x 100 Steel Quonset; Overhead & Sliding Doors; *40 x 54 Steel Work Shop; Overhead Door, Concrete Floor, Electric Heat, Bathroom; *40 x 60 Steel Quonset; * Hip Roof Barn With Lean Too & Copulas; *Livestock Watering Bowls; *Numerous Wood Outbuildings For Storage; *Steel Grain Bins on Cement Foundations 2. SW-17-08-08-W2 RM#65; FVA 79,300, 159 Titled Acres, 110 Cultivated Acres, 2016 Crop Yellow Flax, 2016 Taxes 343.25 3. NW-17-08-08-W2 RM #65; FVA 74,700, 160 Titled Acres, 120 Cultivated Acres, 2016 Crop Spring Wheat, 2016 Taxes $323.34 4. SW-16-08-08-W2 RM #65; FVA 81,400, 160 Titled Acres, 150 Cultivated Acres, 2016 Crop Chem-Fallow, 2016 Taxes $352.34 $7000.00 Surface Lease Revenue, 5. NW-09-08-08-W2 RM #65; FVA 78,600, 160 Titled Acres, 122 Cultivated Acres, 2016 Crop Canola, 2016 Taxes $340.22, $5600.00 Surface Lease Revenue, 6. NE-09-08-08-W2 RM #65; FVA 70,500, 158 Titled Acres, 115 Cultivated Acres, 2016 Crop Peas, 2016 Taxes, $305.16, $7200.00 Surface Lease Revenue, 40 x 80 Wood Arch Rib Storage, 28 x 60 Wood Grain Annex, Steel 2911 & 1350 Bushel Grain Bins
11. SW-17-04-05-W2 RM #34; FVA 82,100, 2016 Taxes $472.77, 2016 140 Acres Wheat, 159 Titled Acres, $6650.00 Surface Lease Revenue
7. SW-09-08-08-W2 RM #65; FVA 68,900, 160 Titled Acres, 125 Cultivated Acres, 2016 Crop Canola, 2016 Taxes $298.23
12. SE-06-04-05-W2 RM #34; FVA 76,500, 2016 Taxes $440.52, 2016 135 Acres Wheat, 159 Titled Acres
10. NE-10-08-08-W2 RM #65; FVA 78,600, 160 Titled Acres, 151 Cultivated Acres, 2016 Crop Spring Wheat, 2016 Taxes $340.22
Visit www.mackauctioncompany.com for sale bill and photos. Join us on Facebook and Twitter.
OLE PETEHERYCH 306-634-3540
AUCTION AT
8. SE-09-08-08-W2 RM #65; FVA 75,100, 160 Titled Acres, 115 Cultivated Acres, 2016 Crop Peas, 2016 Taxes $298.23 9. NW-10-08-08-W2 RM #65; FVA 77,000, 157 Titled Acres, Cultivated Acres, 2016 Crop Spring Wheat, 2016 Taxes $333.29, $2300.00 Surface Lease Revenue 11. SW-32-07-08-W2 RM #65; FVA 60,100, 193 Titled Acres, 152 Cultivated Acres, 2016 Crop Durum, 2016 Taxes $260.15 12. SE-32-07-08-W2 RM #65; FVA 58,000, 176 Titled Acres, 123 Cultivated Acres, 2016 Crop Canola, 2016 Taxes $251.05, $4800.00 Surface Lease Revenue 13. 312 DONNELLY STREET, STOUGHTON; 50’X 120’ Non-Serviced Commercial/ Residential Lot, Assessed Value 5,900, 2016 Taxes $311.04 (Lot 13, Block 3, Plan B3493) 14. 316 DONNELLY STREET, STOUGHTON; 50’ X 120’ Non-Serviced Commercial/ Residential Lot, Assessed Value 5,900, 2016 Taxes $311.04 (Lot 13, Block 3, Plan B3493)
ESTEVAN
DON BIETTE
306-461-4006 MONDAY, APRIL 17, 2017 10:00 A.M. — BIENFAIT, SK
7:00 P.M.
THURS., MARCH 30
Join Mack Auction Company on Thursday, March 30 for your chance to own six quarter sections of fenced pasture land in the North Portal/Northgate Sask. area. Lots 1 & 2 share a common water source and will be combined. This half section is located adjacent to the community pasture’s east corrals. 1. SW-22-01-04-W2 RM OF COALFIELDS #4; Pasture, FVA 32,200, 2016 Taxes $295.77 2. SE-22-01-04-W2 RM OF COALFIELDS #4; Pasture, FVA 32,400, 2016 Taxes $286.58, Abandoned Farm Yard With Power Service
Lots 3, 4, 5 & 6 will be combined. These four quarters are cross fenced and share water sources, valleys and coulees. 3. SW-28-01-03-W2 RM OF ENNISKILLEN #3; Pasture, FVA 47,700, 2016 Taxes $218.84 4. SE-28-01-03-W2 RM OF ENNISKILLEN #3; Pasture, FVA 51,800, 2016 Taxes $237.66, Seasonal Access Road & Low Level Crossing
5. NE-28-01-03-W2 RM OF ENNISKILLEN #3; Pasture, FVA 67,800, 2016 Taxes $311.07 Grid Road Access, Also Known As The Little Dipper Ranch Heritage Site 6. NW-27-01-03-W2 RM OF ENNISKILLEN #3; Pasture, FVA 64,200, 2016 Taxes $319.55, Grid Road Access
Box 831, Estevan, SK S4A 2A7
Ph: (306) 634-9512, (306) 421-2928, (306) 487-7815
Licensed, Bonded & Insured P.L. 311962
www.mackauctioncompany.com
DIRECTIONS: BIENFAIT 5.5 MILES DIRECTIONS: FROM FROM STOUGHTON GO GO 2MILES SOUTHNORTH ON HWY 47, WATCH FOR SIGNS **LIVE INTERNET BIDDING!** LAND 1. SW 01-04-07-W2 RM OF BENSON #35; FVA 74,200, 2016 Taxes $435.34, 2016 Crop 120 Acres Durum (SUBDIVIDED ACREAGE IS NOT INCLUDED IN SALE!) 2. SE 01-04-07-W2 RM OF BENSON #35; FVA 73,200, 2016 Taxes $429.57, 2016 Crop 130 Acres Durum TRACTOR CASE IH 9270 4WD TRACTOR; 4 Hydraulics Plus Return, 20.8-42 Duals, SN.JFF034036 VERSATILE 855 4WD TRACTOR (Raymond Aspinall 403-498-6747) JOHN DEERE 8440 4WD TRACTOR (Raymond Aspinall 403-498-6747) SEEDING & TILLAGE BOURGAULT 5710 SERIES II AIR DRILL & BOURGAULT 5350 TBH AIR TANK; 40 Feet, 10” Spacing, Triple Shoot, Mid-Row Banders, Steel Packers, 3 Compartment, Tow Behind Air Tank JOHN DEERE 1600 CULTIVATOR; 41Feet, Degelman Harrows MORRIS 35 FT CULTIVATOR INTERNATIONAL 6200 DISC DRILLS; 2 X 14 Feet MORRIS CP643 MORRIS 48 FT DT CULTIVATOR (Raymond Aspinall 403498-6747)
INTERNATIONAL 33 FT DEEP TILLAGE CULTIVATOR (Raymond Aspinall 403498-6747) MORRIS CP743 33 FT CULTIVATOR (Raymond Aspinall 403-498-6747) EZEE ON 21 FT OFF SET DISC (Raymond Aspinall 403-498-6747) MOTORHOME 2002 MONACO SIGNATURE SERIES MOTORHOME; 40 Feet, 2 Slides, Cummins 500 Hp Diesel Engine, Tag Axle, Automatic Traction Control, Onan Generator, SN.601994 COLLECTOR CAR 1958 EDSEL PACER 4DR CAR; V-8, Push Button Transmission, 36,000 Miles, SN.W8UF715636 GRAIN TRUCKS 2004 MACK VISION T/A GRAIN TRUCK; 13 Speed Eaton Fuller, CIM Ultracell Box, Roll Tarp, Air Ride, SN.1M1AEO7Y44N020360 FORD F-600 S/A GRAIN TRUCK; 4&2 Transmission, Steel Box, Roll Tarp, 50,000 Miles, SN.F60ECC53311 LIVESTOCK EQUIPMENT HIGHLINE 6000 BALE PROCESSOR; Left Hand Discharge, 1000 PTO JIFFY 900 BALE PROCESSOR; Left Hand Discharge, 1000 PTO NEW HOLLAND 352 MIX MILL
SHOPBUILT T/A GOOSENECK 6 x 20 STOCK TRAILER GRAIN ROLLER MILL WITH ELECTRIC MOTOR GRAIN STORAGE & HANDLING 3 – WESTSTEEL/VITERA 5000 BUSHEL HOPPER BOTTOM BINS 2 - GOEBEL 3500 BUSHEL HOPPER BOTTOM BINS 2 – 74 TON FERTILIZER BINS GRAIN GUARD 3 & 5 HP AERATION FANS WHEATHEART SA 10X71 SWING AUGER SAKUNDIAK 7 X 37 PTO AUGER MISC EQUIPMENT BRANDT QF 1500 FIELD SPRAYER; 90 Feet, PTO Pump, Chem Mixer, Foam Marker, Wind Cones CASE IH 1010 STRAIGHT CUT HEADER; 30 Feet, SN.JJCO200327 STRAIGHT CUT HEADER TRAILER DEGELMAN GROUND DRIVE ROCK PICKER JOHN DEERE 590 30 FT PTO SWATHER 2500 GALLON POLY WATER TANK 1600 GALLON POLY WATER TANK SHOP TOOLS CAROLINA 55 TON SHOP PRESS SHOPBUILT HYDRAULIC PRESS
Visit www.mackauctioncompany.com for sale bill and photos. Join us on Facebook and Twitter.