Pipeline news may 2017

PIPELINE NEWS Saskatchewan’s Petroleum Monthly

May 2017

Canada Post Publication No. 40069240

FREE

Volume 9 Issue 12

STOUGHTON Heart of the Bakken

Astec Safety sees an online future A2

Southern Bolt achieves 30 years in business, then sells A3

DFA Transport grew during the downturn A9

W.H. Coderre & Sons Construction Ltd., also known as Coderre Construction, has been handling aggregate so long in Stoughton, they predate the oilpatch. Their gravel is used for leases and roads in the oilpatch. The company has been around since 1945, and is still owned and operated by the same family. Del Coderre recalls when oil was first found north of nearby Forget. Just a few kilometres north of that discovery well is their Bell Pit, seen here. See story on Page A7. Photo by Brian Zinchuk

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PIPELINE NEWS May 2017

Astec Safety adapts with the times Mulligan explained, “We have licence agreements.”

They sold the assets and operations of their Provost and Bonnyville, Alta., branches to their respective owner-operators. The sales brought in capital so the company didn’t have to just rely on retained earnings. Myterra Ventures Inc. purchased Provost, under previous manager of training Ed Masson.

They had previously talked about growth strategies as far back as 2011 to expand across Western Canada, including Fort McMurray and points east.

In the Bonnyville area Primco Commercial LP, a division of Primco Dene, is the Astec Safety owner-operator. They own a casino and several local businesses around Cold Lake including a large oilfield camp services company. Primco was interested in Astec’s Bonnyville Branch. With a local presence in the market, Mulligan said it was a compelling reason to move forward. That happened in January 2016, the month the price of oil hit US$26 per barrel.

James Blackman is the CEO of the Primco group of companies.

Mulligan noted that during the last downturn, Blackman acquired companies.

Mulligan explained that during a downturn, you know your worst case revenue scenario, and companies can be purchased at a depreciated value.

“Those are the two we’ve done so far,” Mulligan said. The intention is to retain Lloydminster as a corporate location, at this time, and look for new opportunities in Alberta, Saskatchewan and British Columbia.

Astec also has eight active memorandum of understanding holders who are third-party trainers instructing Astec courses in their markets.

These include Lakeland College and trainers in

Grande Prairie, Fort McMurray, Calgary, Saskatoon, Regina, Vancouver and the Maritimes.

Online future Mulligan said the single biggest growth area is online learning.

Workplace Hazardous Materials Information System (WHMIS) is a good example.

“The biggest seller is ground disturbance,” he said of Astec’s online offerings.

The Alberta Common Ground Alliance is the keeper of the standard for ground disturbance. “You have to become an endorsed provider,” he said. They were the first to offer an online course, launched on June 15, 2015. Now there are a few other providers.

Roughly 80 per cent of their ground disturbance classes are taken

online.

Other courses now available online include confined space, hours of service and basic fire.

Some companies do practical training as well to create a “blended” model.

Astec Safety can provide learning management software and systems and create online portals for larger companies.

Mulligan noted that during a downturn, you can’t give up on safety training, so you have to look at how you can do it cheaper. “There’s now a lot of talk of blended learning – getting theory online, but perhaps having practical skills in person,” he said.

The ground disturbance course take 3.5 hours to do online, versus eight hours in person.

This is possible for Astec

Astec Safety first noticed an uptick in business last September in their shop. Here, Jeff Mulligan, one of the partners in Astec, poses with fire extinguishers that came in for servicing. Photo by Brian Zinchuk

Safety because the training is essentially one-onone.

“Basically, any class-

room course, you can cut (the time) in half,” he said of online courses.

Page A3 ▲

 By Brian Zinchuk Lloydminster – Astec Safety Inc. of Lloydminster is adapting with the times, both in having dealt with the downturn in the oil sector and changing how safety courses are taught. Now, with a solid grip on the online future, the company is forging ahead.

On Feb. 22 Pipeline News spoke to Jeff Mulligan, former mayor of Lloydminster from 2009 to 2013, who is now one of four partners behind Astec Safety. He joined in March 2016. The other partners include CEO Chris Johnston, who is also the chief innovation officer. Grant Klippenstein looks after sales and business relations. Vern Fallscheer takes care of the shop and service.

One of Astec’s new additions is a mobile live fire simulator, introduced last fall.

Formerly the CEO of Common Wealth Credit Union (19972009), Mulligan has an ownership interest in several other businesses.

He teaches leadership development training to CEOs and senior executives, for instance, and has been contracted by both the Saskatchewan Association of Rural Municipalities (SARM) and Saskatchewan Urban Municipalities Association (SUMA) to teach municipal leadership.

He spends most of his time with Astec, focusing on financial aspects and strategic planning.

Four years ago, Astec Safety moved into the former Peavey Mart building on the north side of Highway 16, on the west side of Lloydminster.

“We’ve seen the economic impact of the downturn,” Mulligan said. The company adapted by changing its business model. “We decided our growth strategy would be around a licensed branch model.”

They are not technically franchises according to Alberta regulations.

Run a great company, that’s your exit strategy Astec Safety Inc. partner Jeff Mulligan also provides leadership training to businesses and municipalities. Some of Mulligan’s business philosophy comes out when you ask him about the future.

He said, “The future in our business is in finding strategic partners. When we talk about survival, we talk about change. If we take a traditional view of how we grow our business, of how we fund our business, we will likely all fail, at some level. What I’m seeing, with the 30- to 50 year-old entrepreneur, is a way different view of what is proprietary, and what is eligible for partnering, and what is eligible for joint venturing and sharing. They’re not as protectionist. What you’re going to see is not just best-practice sharing. I think you’re going to see more partner work. I think you’re going to see more joint venture work. I think you’re going to see more people saying, ‘Well, I’m really specializing in this.

I’m not going to compete. We’re not going to eat each other’s margins.’

“I think we’ll see more of that consolidation and collaboration, because the next generation coming up wasn’t brought up with that protectionist (view): ‘I built it, I designed it. I’m going to manufacture it. I’m going to distribute it. I’m going to support it.’ They’re saying, ‘I just need a piece of that business, and I’ll do it very well. I’ll get the efficiencies I need, because I’ll create the volumes I need through partnering.’

“If anything good comes from these downturns, you find out how to run your company more effectively, more optimally and leaner.

“It’s almost an inevitable correction to affluence.

You get to a point where, you see some people cut half their staff. Others, like us, have cut three or four

306.421.2039

out of 18. But what you found out was you can run the company with less fixed costs, and you can create margins, and you can create more efficient processes.

So, as desperate as it felt in 2015, and the first part of 2016, what we take away from it is a company that much better understands its processes and has reengineered many of them,” Mulligan said.

“I think prior to the downturn, people were always looking for the home run, the one swing, one-hit wonder. I think people now realize that success is made up of a whole bunch of small successes, done very well. Rather than that one swing, I hit it out of the park, I sold the company and capitalized on this, I think what people are realizing now – they talk about succession, what’s your exit strategy. Well, shouldn’t your exit strategy be serving your customers well, providing value, and running a great company?

Then you have all sorts of exit options.

“I try to get people to quit talking about exit strategy. I get them to talk about what their strategy is to be a great business, and to be valuable to your customers. Then, you know what? You’ll have all the exit strategies you want when the times comes.

“A whole bunch of people, in the good times, were really running their companies towards some imagined exit strategy. ‘I’m going to leave this way.’

“Yes, you have to be cognizant of what your exit strategies might be, but the best medicine that’s come out of this is this: What we need to do is run a great organization, that adds value to the community and our partners. We won’t have to worry, because the best exit strategy is, 50 years from now, Astec Safety has great people running it, and does great things in the community,” Mulligan concluded.

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TOP NEWS

30 years for Southern Bolt Supply  By Brian Zinchuk Estevan – For 30 years, Southern Bolt Supply has grown through times thick and thin, and now, with that milestone under his belt, owner Randy Edwards is moving onto a new phase in his life.

The company has been sold to Bernie Bjorndalen and a group of partners, effective April 1.

“My brother-in-law, Wesley Walliser, started it in 1985 out of his cabinet-making business, selling a few tools and fasteners,” said Randy on April 11.

Walliser, who also ran the Turbo gas station in Estevan, took a transfer to Red Deer, Alta. “I took over the supply part and the building, then relocated three times,” Randy said.

A few years later he incorporated it. He had a partner for a time, but then took it over.

Currently Southern

Bolt is at 410 5th Avenue, its location since 2009.

It’s multiple times larger than the previous location on Kensington Avenue, and even that location had been expanded three times.

Seven years ago an offshoot business was formed – Redneck Chain and Rigging. It was originally in the main building, but it got its own building next door, at 510 5th Street, two years ago.

Redneck is not part of the deal to sell. “I’m going to stay on here for a period of time, and continue to operate Redneck,” he said.

Lisa Edwards, Randy’s wife of 21 years this June, got involved with the operation when Redneck started up. “It’s actually her business,” Randy said, adding he’ll be helping her out.

The oilpatch and its related businesses have accounted for about 60 to 65 per cent of Southern Bolt’s business. The

remainder has been made up by the two local power stations and coal mines, as well as agriculture. The company makes regular deliveries to supply onsite inventory to those major customers.

As its name suggests, Southern Bolt Supply’s product line focuses on a wide variety of fasteners. They also carry power tools and hand tools.

Over three decades of operation the company has seen the ups and downs of the oilpatch.

“The last few years have been down quite a bit, but they would have been worse without the power stations and coal mines, which we’re grateful for.”

“We stayed busy with what we were doing.”

He added there were no layoffs, and no downsizing. Five people work at Southern Bolt, and another three at Redneck.

The high points of 30 years in business include the satisfaction

of growing the business year-to-year, and being a trusted supplier for big construction projects that happened in the area.

He took over during the tail-end of the Shand Power Station project, and supplied product for the Rafferty and Alameda Dams, as well as the Boundary Dam Unit 3 project.

The low points included hearing of the oncoming slowdown as it gripped the oilpatch over the last three years.

“You just kind of roll with it, the ups and downs of the economy. We came out of with growth each year,” he said.

Having recently turned 60, and enduring a back injury not long ago, Randy felt it was time to do something else. He added the recent death of his brother-in-law, Wesley, was another factor.

A grand re-opening under the new ownership is planed for late spring.

Randy Edwards will be working with his wife, Lisa, at her business Redneck Chain and Rigging, now that he’s sold Southern Bolt Supply, his business of 30 years. Photo by Brian Zinchuk

Online courses growing in popularity ▲

Page A2 Mobile power equipment courses are all in class now, but that, too, is moving to an online environment. “I think blended learning is where that is going to land,” he said.

Some older industry people are skeptical of online training, Mulligan noted.

For testing, he noted, “We have an online proctored version which films and records you.”

The terminal must have a camera, i.e. a

webcam like those built into most laptops, to offer a proctored exam.

Orientation training is another offering they can provide, including site orientation as well as broader corporate orientation. This is particularly useful for contractors and turnarounds, he noted.

Workers can log in and do it (on their own time) and have it complete before arriving onsite for work.

Surviving the downturn Like nearly all oilfield services companies,

Astec Safety has spent the last few years enduring the toughest downturn in the oilpatch in generations.

As mentioned above, they sold off two locations. In Lloydminster, they reduced 3 ½ positions out of 18. Mulligan said, “We did reduce our use of contractors,” but he added they tried to maintain full-time personnel.

In terms of services and sales, they saw a reduction of around 30 to 35 per cent up to

September 2016, when things started to turn around. Training had also declined about 40 per cent by the time it hit bottom.

Their slowest period was in the spring of 2015.

Two to four people in every class was funded by government programs. By September of 2015, some of those people cancelled classes because they had jobs now.

By January and February of 2017, sales were down only about 15

per cent from their 2014 numbers, a substantial recovery. The shop recovered the quickest, with items like self-contained breathing apparatus, supplied air breathing apparatus and fall protection. He noted that gas monitor sensors have a lifespan, which drives some level of replacement and service business in spite of the economic downturn.

Fire extinguisher certifications came in, too.

“We’ll see a guy back up

a truck and trailer with 50 fire extinguishers,” Mulligan said. People are buying new breathing apparatus, too.

“Much of our growth has been east of Lloydminster,” he said, pointing out the Edam and Rush Lake areas, areas where Husky has been active.

Husky Energy is their largest client, so their talk of a new 30,000 bpd asphalt refinery on the east side of Lloydminster shows promise for the company.

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PIPELINE NEWS May 2017

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Stoughton is looking for the next big thing Back in 2008 a remarkable thing happened: Saskatchewan had more than a billion dollars in Crown land sales.

Most of that was around Stoughton, and much of it was driven by Crescent Point Energy Corp. Since that time, Crescent Point has grown from a junior oil producer to the largest oil producer in Saskatchewan, eclipsing even mighty Husky Energy, the powerhouse of Saskatchewan heavy oil. (That could change, however, if Husky keeps building their planned 18 sites of 10,000 bpd SAGD facilities, mostly in Saskatchewan.)

While naming conventions call it the “Viewfield Bakken,” most people would be hard-pressed to find Viewfield on a map. It’s not even a rail siding anymore.

Perhaps a more appropriate name for the biggest boom to hit Saskatchewan in a long time would have been the “Stoughton Bakken,” because, really, that small community has been the heart of the play.

While Estevan, Weyburn and Carlyle have serviced much of the Bakken Boom, Stoughton has really lived it.

It’s with that in mind this month’s focus has been on Stoughton. We spoke to many of the oilfield and oilfield-related businesses in Stoughton. In reality, it’s doubtful any business in Stoughton doesn’t see some spinoff from the oilfield except perhaps the local veterinarian.

Coderre Construction has been in business for 72 years, under the same family ownership. Many a road and lease have been gravelled with their aggregate. Gary Goudy of Goudy Transport had gotten out of the oil business in the 1990s, but he couldn’t stand seeing all the oil trucks rolling past his yard without being part of the action, so he got back in.

It was the high number of trucks rolling past Stoughton that inspired the Oil Drop Shop, a quick lube service for semi trucks as well as light vehicles.

Mustang Vac has begun hiring again, regaining a bit of the ground lost during the downturn with regards to staffing.

The intersection of Highways 13 and 47, truly the crossroads of the Bakken if there ever was one, saw the

construction of not one, but two new hotels: the Poplar Tree Inn and Western Star Inn & Suites. They’ve seen the boom, and they’ve worked hard to keep business during the bust.

Preferred Energy, just south of Stoughton, has spent several years building facilities in the region. It’s no coincidence they chose to be in the centre of the action, at Stoughton.

DFA Transport begat DFA Tire, a sister company that provides service not only to DFA’s fleet of 50 units, but to third parties as well. Despite a tough spring break up last year, DFA Transport has done something remarkable – it’s roughly tripled in size compared to a few years ago, during a period when many companies have cut their staffs by half.

So Stoughton has lived through the boom, and now the bust, and some are looking forward to what might be coming next This past December, Dominion Energy Processing Group Inc. announced its intention to build a new 40,000 bpd oil refinery just a few kilometres southwest of Stoughton. Dominion CEO Keith Stemler has spent a lot of time in recent months in southeast Saskatchewan advancing the project. If you’re wondering why there’s no story about it this month, we checked in with Stemler on April 12, and he said they don’t have any major project announcements at this time.

Last month we reported the 2017-18 provincial budget had included a $75 million Oil Processing Investment Incentive which would be applicable to both the Stoughton proposal and Husky’s proposed new 30,000 bpd asphalt refinery for Lloydminster.

If the Dominion project goes ahead, Stoughton will see another boom, in construction. But more importantly it should be a sustaining piece of infrastructure for the community for decades. Refineries often see expansions. They drive production that feeds them. It’s not too far a stretch to say the Lloydminster Upgrader is a key reason why the Border City grew by 10,000 people this century.

Will Stoughton see another boom? If the refinery goes ahead, things would be looking good.

PIPELINE NEWS May 2017

Was there any chance Brad Wall’s pitch to oil companies would work?

About a week after the provincial budget came out on March 22, Premier Brad Wall sent out letters to a number of oil companies, inviting them to come to Saskatchewan.

A letter to Whitecap Resources offered goodies like assistance with relocation costs, tax incentives, and help in finding a new office here.

Government office buildings were even offered.

Other companies were sent similar letters.

In defending the letters, Wall said, “This is my job, is to try and attract permanent new jobs to the province and try and improve our corporate presence.

“This budget makes Saskatchewan more attractive for these kinds of potential considerations.”

Indeed, Wall is correct in saying he’s been doing this for a long time, noting, “I’ve practised that doctrine since we started. I ask companies every time we meet with them if they will move their headquarters or increase their presence.”

In his speech at the 2015 Saskatchewan Oil and Gas Show he noted, “If you happen to be from the province of Alberta, you found us to

get here to the show. It’s really easy to find us on a more permanent basis.

We have some incentives in the provincial budget you might be interested in.”

I recall a conversation I had with him at that show where I asked him about recent budget measures meant to entice corporate head offices.

We were talking about how Crescent Point Energy Corp. had become the largest oil producer in Saskatchewan. At the tail end of our discussion, he said, “The only thing that would make it better is if they were headquartered in Saskatchewan.”

Has the premier been speaking to Crescent Point CEO Scott Saxberg about that?

Wall responded, “I think a lot of people in Saskatchewan have.

We understand Calgary is the oil capital, the energy capital. So you do business with your colleagues, with the other energy sector companies, the travel issue… I understand completely why you would want to be there, even if most of your activities are in Saskatchewan.

“But we’re always going to ask. You know, ye have not if ye ask not.

So we’re always going

to ask. In the budget, we have new growth tax incentives for the export business, which oil is.

We have tax incentives for those who bring new corporate office jobs here.

We’ve shared that with Crescent Point, and others. Maybe we’d be able to look at other things.

“I think Mr. Saxberg says Saskatchewan people are making the invitation on a regular basis. I hope they keep doing that. We have 1.13 million ambassadors, so that works out pretty good,” Wall concluded with a smile.

Will these efforts to recruit Alberta-based oil companies with significant operations in Saskatchewan bear fruit?

Sadly, likely not. If they hadn’t packed up and moved when the Rachel Notley NDP government was elected, they probably aren’t going anywhere. They’ve already toughed out a few years of NDP government. If she were to be re-elected, that might change.

A while back the buzzword in economic development was “clusters.” You had to build up a certain number of firms specializing in a field, and bring enough specialized people together

in order to create magic.

The most well-known are Silicon Valley and Hollywood in California, New York and London’s financial districts, and, in the oilpatch, Houston and Calgary.

The problem is Saskatchewan does not have the critical mass to support substantial numbers of oil companies in either Regina or Saskatoon, with Regina being the more likely place due to its proximity to both the southeast and southwest oilfields. In Calgary, if you need a geologist, or a geophysicist, or a drilling supervisor, they’re not hard to find. The same goes for a seismic firm, directional drilling company, or pretty much any conceivable oilfield specialty under the sun, be it individual or corporate. To relocate to Saskatchewan means a constant battle of trying to recreate that critical mass here, by drawing them from Calgary.

Let’s not forget the sheer number of deals that happen every day in downtown Calgary.

There’s a reason the Petroleum Club exists.

If Wall could convince a dozen companies or so to come here, all at once, and set up in Regina, you might have the

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start of that cluster. At bare minimum you would want Crescent Point, Husky Energy, Whitecap Resources, Tiene Energy, Raging River Exploration and Spartan Energy.

Those are most of the significant producers in this province. Husky and Crescent Point would be the prizes, but given the size of the tower

that bears Husky’s logo in downtown Calgary, they’re probably not going anywhere. And what happens if Crescent Point gobbles up the rest?

So Premier Wall will keep asking. Just don’t get your hopes up.

Brian Zinchuk is editor of Pipeline News.

He can be reached at brian. zinchuk@sasktel.net.

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PIPELINE NEWS May 2017

Intec Controls increases oil focus  By Brian Zinchuk Saskatoon – Intec Controls Inc. has increased its focus in the oilpatch in recent years.

Mike Swejda is president and owner. He noted the company, founded in 1994, is completely Saskatchewan-based, and always has been. “Our primary business has been as a sales agent for major manufacturers in automation and instrumentation,” he said.

Based in Saskatoon, Intec has five full-time employees. The company started out serving the mining sector, but the introduction of Wes Orischuk, who handles outside sales focusing on oil and gas, has picked up their presence in that market.

“I worked oil and gas construction for 12 years, primarily pipeline,” said

Orischuk. He started as a labourer and ended up as a technician on automated welders. He worked on both small- and big-inch projects.

The oilfield is about one-third of Intec’s business, and that has significantly increased in the last three or four years. Mining, utilities, water treatment and grain handling are other areas of their business, and include items like radar for grain bin levels, temperature sensors and slide gate monitoring.

SCADA and PLC systems are also offered by Intec.

For the oilfield, Swejda said, “Our main items are pressure transmitters, for wellheads and batteries, Coriolis flow meters on brine, injection and disposal wells.”

They do sell some

radar level devices and capacitance point level devices. Their fluid level measurement instrumentation can be a contact switch with works as a high level backup, but they also can do interface measurement.

The company works with local contractors in the Estevan and Coleville areas. In Saskatchewan, they carry the Siemens line of instrumentation. “We’re breaking into Lloydminster now, and we’re trying to break into Swift Current,” Orischuk said.

“We deal in all areas of the province; more and more in the Kindersley and Coleville areas,” he added.

“We need to align ourselves with a contractor in the southwest,” Orischuk said.

They noted it’s important to be competitive on price. “When the

17th Biennial

June 7 & 8, 2017

Exhibition Grounds • Weyburn, SK

Weyburn Review Photo Greg Nikkel

Show Highlights

Mike Swejda, left, owns and operates Intec Controls Inc. of Saskatoon. With him are his two future technicians, Ronan and Euan Swejda. Future tech Emmett wasn’t present at the time. Wes Orischuk, right, handles outside sales in oil and gas. pennies get pinched, this is an equally good product,” Swejda said.

While much of their Siemens product comes out of Europe, level and flow products are made in Canada. That line was made by Miltronics, a Canadian company that was purchased by Siemens.

Customers can go to Peterborough where they can get hands-on factory training.

“We inventory the product in Saskatoon,” he said, allowing for shipment within the province in short order.

Pressure transducers are their most common product sold, followed by

capacitance level meters, radar level meters and mass flow meters.

They noted that magnetic flow meters on high pressure systems tend to wear out, so while a mass flow meter may cost more, it has lower maintenance costs. These are primarily used in handling brine, but they are working on using it as a water cut meter.

Starting in late 2014, oil companies demanded vendors reduce their prices in almost every sector as oil prices crashed. Asked how they contended with this, Swejda said they lost one bid and went to the factory to get a better discount.

They had pricing specifically for oil and gas. “We gave bare bottom prices when oil was high,” he said.

Swejda added, “The supply market isn’t saturated. It’s specialty and technical. You can’t go to the corner store and pick up a Coriolis meter.”

Orischuk noted that larger quantity orders can get a better discount from the factory.

Essentially they act like a wholesaler.

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PIPELINE NEWS May 2017

A7

Supplying gravel for decades: Coderre Construction In the office is a mounted photo spread showing him as a child standing with his parents in front of a new truck, and a similar photo taken 65 years later. Other photos show the progression of the company and Coderre family over 72 years in operation.

Del Coderre owns and operates Coderre Construction with his brothers Randy, who

looks after the shop, and Kim, who is in charge of screening and concrete aggregate. The trio are the second generation to run the local, family business, which was founded by father Wilf and mother Lucy Coderre in 1945.

Lucy, who did the books for decades, passed away in August 2016.

Wilf, now 96, lived next door to their shops until

W.H. Coderre & Sons Construction Ltd.’s principal gravel pit is the Bell Pit, north of Forget. Del Coderre, seen here, runs the business with his brothers Randy and Kim.

just three months ago, when he moved into a care home in Fillmore.

The brothers’ twin sisters, Tammy Coderre-Kells and Lynne Morrison, were not involved in the business.

“It was a mom-andpop operation, no doubt, for a long time,” said Del on April 11. “When Dad first started, it was Coderre Transport. He hauled pretty well everything: gas, cattle, gravel, farm equipment and grain. It evolved more toward gravel later.”

In 1952, oil was discovered nearby, north of Forget, when Del was four. “Some of the guys working on the drilling rigs were boarding at my grandmother’s place in Forget,” he said.

Del pointed out the discovery well is along the road leading to their Bell Pit, one of three primary gravel pits that services their operations.

“Now they’re drilling some wells in exactly the same places,” he said.

Gravel and associated aggregates have been Coderre Construction’s primary business for most of these last seven decades, after picking up their first gravel pit about 11 kilometres north of Forget in the mid-1950s.

It was an old school site, 10 acres in size, in the middle of a Prairie Farm Rehabilitation Administration pasture just south of the Moose Mountains.

That gravel pit was still

seeing use up until about five years ago, and they still have some material there.

“We process and supply gravel, sand and rock products,” Del said.

Coderres haul gravel, too, and have six of their own trucks, but they will often use the trucks of their clients for transport.

Coderre Construction supplies six different aggregate products to Page A8 ▲

 By Brian Zinchuk Stoughton – “For the original shareholders to celebrate 70 years, it’s awesome.”

That’s how Del Coderre feels about the 70th anniversary of W.H. Coderre & Sons Construction Ltd., (also known as Coderre Construction) which was celebrated two years ago, when roughly 150 people attended the festivities.

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PIPELINE NEWS May 2017

Supplying gravel for leases and roads ▲

Page A7 redi-mix operations in the region. He noted they are in a central location to service Weyburn, Estevan, Carlyle and Kipling. They also work for the Ministry of Highways, RMs, towns and villages, supplying aggregate.

The company has a couple of excavators and does a little digging. “We demolish and dispose of buildings, dig dugouts for farmers and snow removal,” Del added.

Around 1960 the operation got its first screener, allowing them to make various screened gravel and rock products.

Del said, “In 1969 we got a crusher and started crushing gravel.”

“The RMs started asking for crushed gravel.

A big part of our work-

base is rural municipalities,” he said.

Now they have a jaw crusher, which reduces large rocks to roughly 13 centimetres (five inches) in size, and a cone crusher that will take it down to as small as 16 millimetres (five-eighths of an inch), if desired.

That equipment, plus a screening plant, will rotate between their three main pits. One pit is north of Arcola, another north of Forget and a third north of Stoughton. The Forget Bell Pit is the primary operation.

Those pits run in a string along the south side of the Moose Mountains, and are the result of glacial moraines depositing gravel as the giant ice sheets retreated to the north. “I think we have to thank the

Coderre Construction moves its equipment between gravel pits as needed.

glaciers for that, as well as stream outwashes and glacial lakes,” he said. “There is no end of gravel there.”

Gravel resources are becoming more scarce, however, in many areas.

He noted over time

This is Coderre Construction’s jaw crusher, which handles the larger rock.

that people are looking further and further afield for their gravel supplies.

The company was able to keep their staff during the oil downturn.

They moved into their new shop, beside their old shop, in 2015.

The oil industry has never been the bulk of their business, but oil production has definitely been important.

He noted oil companies are among the largest taxpayers in some municipalities, and they need roads for their sites.

Additionally, they supply gravel for leases and lease roads, tank bases, and sand for sandpadding pipelines. The company has a grader which is used for lease roads as well.

Coderre Construction benefited from the Bakken boom, which

centred around Stoughton. “About 2007, it got really busy in the oilfield,” Del said.

While the development of the Bakken has been of enormous importance to Stoughton and its businesses, a new prospect is on the horizon – a proposed 40,000 barrel per day oil refinery southwest of the community.

“That’s big news,”

Del said, adding he thinks it will go ahead.

“Everybody’s pretty optimistic. It’s huge.”

For a gravel company, such a large site could mean plenty of work, with many acres requiring coverage in gravel.

“We’re hoping to get our share of it,” he said.

“Hopefully everybody local gets their share.

What more could you ask for?”

Here’s some coloured rock after Coderre Construction’s jaw crusher got through with it.

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PIPELINE NEWS May 2017

A9

DFA Transport grew while most businesses shrank  By Brian Zinchuk Stoughton – DFA Transport of Stoughton and Weyburn has pulled off something remarkable during this downturn. It grew, and did so substantially.

As a rule of thumb, almost all oilfield services businesses Pipeline News has spoken to over the past year have seen their staffing levels shrink by roughly half compared to 2014, with only a few exceptions.

A few have been lucky

enough to stay static and keep all their employees. But DFA Transport grew by a factor of three during that time.

Brett Molde is the owner of DFA. He said, “We haul fresh water, produced water, flowback fluid and oil in a fleet of triaxle trailers.

“We do the fresh water on the completion side for fracking.

Then on the production side, we do wells before flowlining.

“You get only so

long hauling a well before they put it on line.

The nice thing is, they’ve been drilling.”

The company has 50 units, 25 company trucks, and 25 leased operators. In total, roughly 65 to 70 people are employed by DFA. In 2014, they had around 15 trucks. “We tried to focus on quality of service,” Molde said. “As others cut prices, they got to a point where it wasn’t feasible.

While some other

Brett Molde, right, owns DFA Tranport while Ryan Grant, left, is his partner in DFA Tire, which handles maintenance for the fleet as well as outside customers. Photo by Brian Zinchuk

companies parked units that needed significant repair and pulled their plates, DFA focused on their maintenance.

While they had a long, four-month spring breakup last year, he noted, “It really paid off after that.”

“Our quality, good guys stuck around. We maintained the iron.”

That was done through Molde’s other venture, DFA Tire, of which he is partners with Ryan Grant. DFA Tire is the maintenance arm of DFA Transport, but also does work for third parties. (See related story Page A10).

Things had slowed down for them. “It was scary,” Molde said. “It’s a mental battle, seeing other people’s iron going out.”

The company has been in operation since 2010, and operates between Stoughton and Weyburn. Their operations are concentrated in the Viewfield and Flat Lake plays.

They’ve been maintaining staff and preparing to be in a position so that when things did pick up, they were ready.

“The last few years have been steady. The last eight months, we

have been busy. We’ve been lucky.”

For this year, he said, “I hope it continues in the direction we’re going.

I hope we grow to keep up with demand.”

You can’t help but notice that Modle is a body builder. “I use the gym as my therapy, my

hour a day,” he said.

He lives in Weyburn with his wife, a public health nurse, and four kids.

“We feel very fortunate to have the customers we have and we look forward to working with them in the future,” Molde concluded.

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A10

PIPELINE NEWS May 2017

DFA Tire focus on heavy truck service “I’ve been doing this since I was 19.”

“I would take one or two more, for sure,” he said, referring to heavy duty and truck and transport journeymen.

“I’ve gathered together a well-rounded crew of technicians.”

Grant used to play hockey with Molde in Moose Jaw, where they were both from.

“When he started here, he was having a hard time finding a mechanic,” Grant said of Molde. So Molde called Grant.

Grant still lives in Moose Jaw. “We rent rooms down here. Three of my guys are from Moose Jaw.” They work four 12hour days in a stretch to allow them to spend time back home.

Back home, Grant’s wife, Odette, is a commercial accounts manager with a major bank.

They have two kids, seven and four years old.

The two-hour drive home allowed Grant to do courier service for the shop, picking up parts in

Peter Harris is a welder and mechanic with DFA Tire. Here he’s welding a drive shaft for a power take off. Photo by Brian Zinchuk

Regina as needed. He’s back and forth every other day.

DFI Tire does all the support work for DFA Transport, but roughly 40 per cent of their workload is for external clients. “That split will probably not change, but the volume will,” Grant said.

“We’re an SGIaccredited shop, too.”

That allowed them to do the required safety inspections and repairs on trailers once per year and trucks twice per year. They can also safety pickup trucks, but their focus is on heavy trucks.

As Grant put it, “Do one thing really well.”

During a tough spring breakup last year he noted they had to shift their focus and go after more local work for clients such as farmers. They also did a lot of work on the DFA Transport fleet which positioned the parent company to be ready for when things picked up.

“We both understood everything had to fire up, and when it did, it would become all or nothing,” he said, referring to his partner, Molde.

When it comes to tires, he said, “We’ll do truck tires, car tires. We don’t keep a lot on site.

Page A12 ▲

 By Brian Zinchuk Stoughton – DFA Tire started as an offshoot of DFA Transport.

Like the parent company, it too is growing.

It is owned and operated by partners Brett Molde and Ryan Grant. Their history goes back many years, and led to Grant being asked to head up Molde’s shop in Stoughton.

“I have some of the most qualified people in the province working here,” said Grant. “We’ll do complete engine rebuilds. We’ll rebuilt engines, transmissions, differentials; basically anything on a drilling rig for truck, we can rebuild and repair.”

DFA Tire has 12 people, and Grant noted they’re growing. “We just recently hired two more, and we’ll be looking to hire another four more shortly.”

They’re looking for qualified mechanics as well as apprentices.

Between their top four lead men, they have between 80 and 90 years experience, Grant said.

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PIPELINE NEWS May 2017

A11

Preferred Energy tackles mechanical construction and oilfield maintenance  By Brian Zinchuk Stoughton – Preferred Energy has set itself up right in the heart of the Bakken play, five kilometres south of Stoughton and just east of Crescent Point Energy Corp.’s principal battery and gas plant for the Bakken.

Danton Moorhead is part-owner and president of the company, while Allscott Trach is part-owner and general manager.

“We’re an oilfield construction and maintenance company. We do piping fabrication and structural fabrication,” said Trach.

They are a mechanical company specializing in the construction of

oilfield facilities including gas plants and oil batteries.

“We built the Alameda gas plant and did some modular pipe racks for the North Portal gas plant,” he said. “We’re completing a butane facility at Cromer, Manitoba.”

The project involves four butane storage “bullet” tanks, pump skid and truck unload metering skids. Preferred completes all mechanical work on the project from cutting and capping the pile foundations to the fabrication and installation of all process pipe and structural steel pipe racks and walkways.

Moorhead said, “Preferred Energy handles all

mechanical duties from start-to-finish on facility construction projects.”

At Alameda, they showed up once the pilings were done, cut and capped the piles, and continued on right through to commissioning.

“Alameda was a complete build out,” Trach said. “We’ve done the expansion on Plant 4 for Viewfield. Danton’s been involved with several expansions and turnarounds.”

Regarding their choice of their shop location on Highway 47, he said, “We were working for Crescent Point.

It made sense to be in the heart of the Bakken.

There’s more projects

Danton Moorhead, left, and Allscott Trach head up Preferred Energy of Stoughton.

They are standing before a recent, major addition to their shop – a robotic welder that is capable of handling pipe up to 42 inches in diameter.

today than a year ago, but last year’s projects were larger for us.”

Preferred Energy started out as a sole proprietor outfit for Moorhead nine years ago, and four years ago it grew into its current incorporated form. Trach came onboard in 2013.

“I’m a welder. I also ran a crew truck for a couple of years,” Trach said. He’s got his papers as a national certified safety officer and welding supervisor.

Moorhead began as a crew labourer and worked his way up to pipefitting.

The company has 10 crew trucks and a 40-ton knuckle picker.

“We’re talking about expanding to southern Manitoba or further west,” Trach said. Virden and Kindersley are both being considered. “It’s a question of when the right time is, if ever.”

Last year Preferred spent several months setting up and finalizing the welding procedures for a robotic pipe welder capable of handling up to 42-inch diameter pipe.

“It’s for all diameters, but it shines on large diameter pipe,” Trach said. It became operational on Jan. 1, 2017.

It involved months of training and setting up those procedures.

Moorhead noted, “It was a sizeable investment, we’ll put it that way.”

Dominion Energy Processing Group Inc. has proposed a 40,000-bpd oil refinery three kilometres west of their shop, making them one of the closest neighbours to the project.

“If the refinery was to happen, it would be a

great opportunity for us to be involved in some part of it,” Trach said.

Preferred has a 15spot campground on their site. If the refinery were to go ahead, they are considering expanding that campground to 30 spots.

It’s equipped with heated bath and shower facilities, and capable of full-year operation.

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A12

PIPELINE NEWS May 2017

Quick lube for semis and light trucks, and now tires as well at the Oil Drop Shop  By Brian Zinchuk Stoughton – The intersection of High-

ways 13 and 47 was so busy with semis and other oilfield vehicles

during the height of the boom, one could wait up to five minutes just to

DFA Tire won't wait for parts ▲

When he’s not hanging around, he’s a member of Stoughton town council. His history includes 25 years working on drilling rigs all over Western Canada and the United States.

“I was done with the oilpatch, and this is where I ended up,” he said. He had worked with Weatherford and Halliburton over the years. In Fort Nelson, B.C., he said, “I opened up and ran the Ketek for three years.”

Ketek is an oilfield rental outfit.

Now he’s involved

with the Oil Drop Shop.

Their focus is oil changes for semis and regular vehicles. There are two pull-through bays for semis and two drive-in bays for light vehicles, each equipped with pits that greatly simplify the oil change process.

“You can pull a fullsized Super-B in here.

It’s 100 feet long,” said Shiels.

For trucks, he noted, “It started off slow, but it’s definitely picking up.”

“We’re getting some bigger contractors,” he Page A15 ▲

Page A10 We do it more as a local service.”

So while the name is DFA Tire, they are primarily a service shop with tires as an additional service.

“We get two shipments a week, Tuesday and Thursday,” he said of tires. “Sometimes we’ll send guys to Regina to pick tires up.”

As for a partsrunner, he said, “If we need it, we’ll get it. We don’t wait for couriers.”

Grant said, “You have a goal and you don’t veer from that. The goal is to be one of the best shops around.”

cross Highway 13. With so much activity in the heart of the Bakken, it seemed like a good place to set up a quick lube location.

With a sturdy metal-frame building, the Oil Drop Shop opened for business in March 2015, as the oil downturn took hold.

Pipeline News paid a visit to the Oil Drop Shop on April 5, when shop foreman Brad Gall and shareholder Pat Shiels explained a bit about the business.

“I hang around here,” Shiels joked.

Justin Miller looks at a differential on a truck in the DFA Tire shop. He’s a journeyman truck and transport mechanic. Photo by Brian Zinchuk

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If an oil refinery is built south of Stoughton, you would be able to see it from the south side of the Oil Drop Shop.

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PIPELINE NEWS May 2017

A13

35 years for Goudy Transport Stoughton. It’s just south of Crescent Point’s crudeby-rail loading facility.

“There are some things we can’t buy in Estevan or Weyburn, but we support the local community pretty much any time,” Gary said. That includes currently helping a local family which is dealing with a medical issue in Edmonton.

He’s also the president of Weyburn Minor Hockey, and has sat on numerous boards.

Goudy Transport started in the agriculture sector, hauling feed, grain, bag feed and dry vans.

“We hauled a bit of everything, and had trucks running to the U.S. We got into hauling oil in the mid-1990s,” he said.

“I try to go where the money is. Oil was booming in the mid-90s.”

The company works as a fluid hauler, moving oil, produced water and emulsion.

“We had lots of oil in this area, Stoughton and Handsworth area,” he said. Handsworth is north

of Stoughton. “It was all local at that time.”

“There’s oil in our backyard. There’s always some kind of service work, like gravelling a road with 10 wells on it.”

Over those 35 years, oil has seen its ups and downs. Goudy wasn’t in the oil business for the 1986 downturn, but he sure was in the 1998 downturn. “We downsized the oil in 1998.

That’s when we went pretty well strictly to highway and remained with Weyburn Co-op Feeds.”

They shifted gears, to use a pun, to long haul and dry vans, as well as grain trailers. Much of that went into the U.S., and some of that work continues today. They got rid of most of their oil equipment at the time, switched out trailers and went to work.

Their diverse fleet also allows them to haul gravel, too.

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2006-07 for them to get back into the oil business substantially again.

“I couldn’t stand the oil trucks driving by every day. I had to get back in,” he said.

By this point the Bakken all of a sudden became one of the hottest plays in the oil industry, and they were smack dab in the centre of it.

“Petrobank was our first customer. Crescent Point was starting up, too. TriStar was another,” Goudy said. “In this area, Petrobank gave us our fair share of the work.”

“This was the only place we worked, right here. You could see almost every well from the yard.”

Most of their work was within a 25-kilometre radius of their yard. In 2009 Petrobank, in particular, did lots of drilling in their backyard, and they were lucky enough to get the work. They didn’t have as many trucks, but it was a very good year for them, • Gym on site • Located in Stoughton, SK at the junction of Highways 13, 47 and 33

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Around 2010 they began hauling oil from North Dakota into Canada, part of the trend towards putting crude oil onto rail cars at the time. The crude-byrail business saw tremendous decline in the recent oil downturn, so that business has largely dried up.

Curiously, a new pipeline in North Da-

kota, the Dakota Access Pipeline (DAPL), the poster child for antipipeline protests, could lead to work going the other direction for Goudy once it’s operational.

“Once DAPL get’s finished, we’ll be hauling lots of oil to the U.S. We have potential customers already lined up for that.

A lot can change, Page A14 ▲

 By Brian Zinchuk Stoughton – A look of realization crossed Gary Goudy, Sr.’s face when talking about the roots of his business, Stoughtonbased Goudy Transport Inc. It had been 35 years, in April, since he bought his first truck and went into business. That first truck, a 1982 Ford LT9000, soon became three, and Goudy Transport was born. He was 18 years old, and his father, Ed, helped him out.

“We hauled for Co-op Feeds at the time.

We worked there for 25 years,” Goudy said on April 10.

He emphasized the company’s commitment to being local, and supporting local. “Local is our first priority for everything,” he said.

And it doesn’t get more local than staying on the same site most of your life. Except for two years, Gary Goudy, Sr. has lived in the same house his whole life, on a farm a few kilometres northwest of

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PIPELINE NEWS May 2017

Long time focus on local ▲

Page A13 however. If oil goes back to US$30 a barrel, that could change,” he said.

Such diversity helped in the last few years when oil prices fell off a cliff and the industry ended up in the longest and deepest downturn since 1986. By the fall of 2015, just one quarter of Goudy Transport’s fleet was hauling oil.

The rest was working on long haul.

In an effort to keep employees, they had the option to haul grain or dry vans. “I have employees for 20 years, so it’s hard to say, ‘too bad,’” Goudy said.

“You have your core group of guys, you want to keep them going.”

“I have some customers from 30 years ago. I went to them in the fall of 2015. We went back to work, no questions. We sold some of the tanks and bought some grain trailers.

We shuffled equipment to make it work,” Goudy said.

The took some of those oil trailers to a Ritchie Bros. auction and sold them before the

prices on equipment took a tumble.

Goudy thinks there will be another correction. “A lot of people are spending their savings to survive.”

“When the crunch came, now, everyone had to lower their overhead.

We had to, too. Everyone was top heavy.”

The decline in the oil industry has been widespread across the economy.

He noted a lot of dry van freight has dried up as a result.

Around 2013 they peaked at around 100 trucks, hauling fluids, gravel and grain, and including leased operators.

Now, that number is down to around 50 in total, with the reduction primarily in leased operators.

Goudy noted that many people left when oil took a downturn. They had lots of people from Prince Edward Island and Nova Scotia. “Those guys went home when oil went down. Rates went down, too,” he said. They kept their local Saskatchewan workers.

Ed Goudy, left, Gary Goudy, Sr., and Gary Goudy, Jr., pose in front of one of their fleet of Freightliners. Goudy Transport has been in operation for 35 years this spring. Photo by Brian Zinchuk

Family business Goudy Transport has always been a family business. Gary, Sr.’s wife Andrea is co-owner and part of the management.

Son Gary, Jr., does a bit of everything in operations.

Their daughter Beth-Ann acts as gopher when she’s not in school. She’s just wrapping up her first year of business administration in Minot, N.D.

Their other daughter, Ashley Whitson, with her husband Colton, live in Minot where Colton is a welder. Ashley went to school there on a softball scholarship. When she was home, Ashley helped out on the other side of the family venture, the farm.

Up until 2005 the operation included farming, cattle and trucking. Gary, Sr.’s parents, Ed and Lois,

focused on the farm. Ed had been partners initially in the trucking business.

In 2005 they sold off their farm equipment and rented out the land.

When they’re not working, the Goudys can often be found racing stock cars. Nearly the whole family races except for Andrea. That includes Gary, Sr., Beth-Ann, Gary, Jr. and his fiancée Karen,

as well as well as Colton.

A brand new oil well was drilled this past winter directly across the road from their office on the farm, perhaps a sign of things to come.

“A lot of us have gone through tough times. You come out better on the other side,” Goudy said, “I’m an optimistic person.

It doesn’t matter how it gets.”

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PIPELINE NEWS May 2017

A15

Semi oil changes in about 40 minutes ▲

Page A12 said. That includes a frac company, grain haulers and a number of independent oil haulers.

It’s been a challenge.

“We opened the day road bans came on, and oil dropped the same day.”

A key component of their business is speed.

“From the time you’re in the door, we’re 40 minutes. That would be our average.”

That’s for a complete semi oil change, including fuel filters fluid level

checks and complete greasing.

They noted sometimes drivers come in and think it’ll take the afternoon, but before they’re settled in, the job is done. That’s important because it means a unit doesn’t have to be taken out of service for half a day.

“They don’t need to make an appointment,” Shiels said, but many will phone ahead.

“Let us work around your schedule,” he added.

Their offerings

include synthetic oil in addition to conventional motor oil. They also do bulk oil sales and complete driveline service. Rad flushes and transmission flushes are also offered, but in those cases it's best to book in and leave the unit for half a day. As Gall has his Class 1, he can also do local deliveries of finished trucks or pickups of units to be serviced.

They’ll also wash vehicles, for a charge.

Once a week Dun Rite Glass of Estevan

The staff of the Oil Drop Shop are, from left, Chelsea Pongracz, Codey Knoblauch, Brad Gall, Fran Payton and Pat Shiels. Photos by Brian Zinchuk

comes in, usually on Thursdays, to repair rock chips on windshields.

The company employs five people.

Tires recently added The initial plan included leasing out part of the building, but that hasn’t panned out. “If the refinery goes through, we are optimistic that we will be able to lease it,” Gall said.

One of the semi bays is now set up so that it can do tires or oil changes.

Tires are a new offering. Gall noted right now they have light truck and SUV tires in stock, but they can get passenger, semi or farm tires in overnight.

The Oil Drop Shop doesn’t have a mobile unit for tire changes in the field, like that used for farm equipment, but they have an agreement with Estevan’s Trent’s Tire. “They’ll supply the truck,” Gall said, and the Oil Drop Shop will supply the tire.

They can order all major brands. “If I order, it’ll be here by tomorrow.

I can pull from Trent’s Tire as well,” Gall said.

He noted they are new to the tire business, so they’re watching what tires come in with vehicles that need oil changes so they can determine what they should keep in inventory.

Green shop Shiels pointed out

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that the company has a green focus. For instance, they have two heaters upstairs that burn used oil to heat the building.

“We recycle the filters and jugs, cardboard – everything,” he said.

They are setting up as a recycling depot for those items as well.

The building was constructed with lowenergy LED lighting. As a metal frame building, it was built to last.

Refinery hopes If a proposed oil refinery does get built southwest of Stoughton, you will be able to see it from the Oil Drop Shop’s yard. Shiels said, “I hope it does come in.

It would be great for the area, great for us. This area needs a boost.”

Gall added, “We’re optimistic. It would be a huge boost to the southeast if it goes through, not just for Stoughton.”

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A16

PIPELINE NEWS May 2017

Mustang Vac has begun hiring again, a bit at a time  By Brian Zinchuk Stoughton – Mustang Vac Service tried out Alberta, but found Stoughton was the place to be.

A family outfit, Ron Lyke heads up the company, while son Shane Lyke manages operations.

Ron’s wife Sheryl is their office manager at their head office in Wolseley.

Ron’s brother, Doug, used to manage Stoughton until a year ago, when he retired and Shane took over. Shane has been with Mustang since the start.

“I farmed in Wolseley before for 37 years,” Ron said on April 11.

The farm was sold in 2009.

The company started with one truck in February of 2007. Initially they worked in Alberta for three months. “Then we came down here and looked around for work here. We actually went back to Alberta for another couple of months, then decided to move here and stay here,” Ron said.

“We bought four

other trucks in 2008 and another in 2009,” Ron said.

That was an eventful year. On Feb. 14, 2009, a fire consumed their shop and all but one truck burnt. Four units went up in flames. Everything in the shop burnt except the truck wash. They had insurance, but didn’t get it all back. “We were two weeks away from buying this shop,” he said.

They bought two trucks right away, and two more a month later to rebuild the fleet, bringing them back to five.

Over 2010-2011 they bought two combovac units.

“In 2014, a month before oil crashed, we ordered a semi-vac. It showed up in the spring 2015,” Ron said. “It was paid off, which was the only reason it survived.

Otherwise, it would have been down the road.”

They didn’t feel it was right to cancel the order. In its first year, that semi-vac only saw the odd job here and there.

The company’s staff

has followed the trend in the oilpatch with the downturn, and now the beginning of the recovery. “We went from 21 to eight, and now we’re back to 10. We hired two this past fall and winter.”

Ron said, “So many people got out of the oilpatch and went to a different job, a job that’s more secure, even if it’s not as much money.”

Shane added, “We’re hoping to be busy enough to hire another guy.”

The intent would be to bring one person on at a time.

Currently they have eight units – five vac units, two combo units and one semi. All the trucks are tri-drives.

Shane’s been living in Stoughton for 10 years. If they’re busy, he’ll run a truck, too.

Like other oilfield services companies, they’ve had to cut their rates as oil fell in price.

Asked when they should start increasing their rates, Shane said, “Following the oil price, that’s the reason (oil compa-

Ron Lyke, left, and Shane Lyke pose in front of a vac unit and semi vac. They run Mustang Vac of Stoughton.

nies) cut the rates. As oil comes back, and they’re making more money, so should everybody else.”

Ron agreed. “When are we going to start raising? It’s almost to the point where it has to be a uniform thing with everyone around.”

Shane noted some companies have inched up their prices a little bit, but those who raised too much lost their work. As a result, he’s a little leery

about touching rates.

“I’ve always thought, when oil comes up, we bring rates back up,” he said.

Ron noted, “A while ago, all you were doing was making payroll, if you were even doing that.”

He noted workers took a cut, too, and it would be nice to get them back to where they were.

A big issue for

Stoughton is whether or not a proposed oil refinery is built southwest of the town. Shane said, “I think it’ll be good for the community. It would bring a lot more jobs and an influx of money, which has been missing for a while. It would be nice to get a bit of work out of it.”

Ron added, “It’ll help out. It spreads out exposures to different fields.”

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PIPELINE NEWS May 2017

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Crown land sales only $1.3 million Regina – The April Crown land sale came in on April 11, and there’s really only one word to describe it: low.

Just $1.3 million was raised for the whole province. The results of the sale were announced on April 13.

Sales are held every two months throughout the year. This is the first of the new fiscal year.

Three parcels north of Eatonia received bonus bids totalling $321,794.55 for 777 hectares; these parcels are prospective for oil and gas in the Viking Formation. The highest dollar per hectare was $2,009.23 for a 16.188-hectare parcel south of Stoughton.

One exploration

licence was posted, but not sold. As for leases, 43 were posted, and 40 were sold, for a total of 5,973 hectares. The price per hectare was just $230.

Southeast Saskatchewan had the most leases sold, at 20, for a total of 2,444 hectares. Those leases garnered $570,988 in bonus payments. The price per hectare came in at $234.

Aldon Oils of Weyburn was the top purchaser of acreage in this area spending $179,778 to acquire eight lease parcels.

The top price paid for a single lease in this area was $72,431, paid by Spartan Energy Corp. for a

64.750-hectare parcel situated within the Steelman Midale and Frobisher Beds Oil Pools, 10 kilometres northeast of Lampman.

The top purchaser of acreage in the province was Millenium Land Ltd., who spent $214,571 to acquire two lease parcels.

The top price paid for a single lease was $215,488, paid by Vital Energy Inc. for a 1,036-hectare parcel situated within the Battrum Roseray Sand Oil Pool, 40 kilometres northwest of Swift Current.

The highest dollar per hectare in the offering was received from Scott Land & Lease Ltd., who paid

$2,010/hectare for a 16.188-hectare parcel located within the Viewfield Frobisher Beds Oil Pool, 10 kilometres south of Stoughton.

“This public offering comes as the province’s drilling activity for the first quarter of 2017 is double what it was during the same period one year ago,” Energy and Resources Minister Dustin Duncan said in a press release. “Increased activity of this nature is a positive sign of economic growth, enabled by the advantages that make Saskatchewan one of the highestranked jurisdictions in the world for oil and gas investment.”

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PIPELINE NEWS May 2017

A19

Built in the boom, making it through the bust  By Brian Zinchuk Stoughton – With drilling rigs all around the town of Stoughton as the Viewfield Bakken became one of the hottest oil plays on the continent, a group of investors with ties to Stoughton decided to act. The result was the Poplar Tree Inn, a 43room hotel built at the intersection of Highways 13 and 47.

Danielle Hoffman, general manager, has been there since Day 1.

“I opened the hotel with them in June 2010.”

It was the first new hotel built in the town in generations. A second, unaffiliated hotel was built next door a few years later.

The Poplar Tree thus saw the heights of the Bakken boom in its first several years, and for the last few years, has endured the deepest downturn in the oilpatch in generations.

“It’s definitely an adjustment. When you’re in the boom, you think it’s going to last forever. In a bust, you wonder when it will end,” she said on April. 10. “You definitely get creative.”

Those years of the boom saw a substantial build-out of hotels in the region, in Carlyle, Estevan, Midale and Weyburn in addition to the two new hotels in Stoughton. “The market is now flowed with hotel rooms,” she said. “You have to be one of the hotels of choice.”

Some of the new hotels in the region have kitchens included in some or all of their rooms, but the Polar Tree Inn does not. To respond, they offer suppers five nights a week for $12 extra. Clients can take leftovers for lunch the next day for an additional $6. They’ve been offering suppers for the last two years, initially for three days a week before expanding to five.

“It goes over quite well, not so much for extra income, but to offer an amenity,” she said, slicing up chicken for the evening’s stir fry.

The result has been Hoffman now finds herself back in the food business. With 14 years’ experience in restaurants, she used to run two Boston Pizza locations in Edmonton prior to moving to Stoughton.

When applying for the job to manage the hotel, she had asked if it had a restaurant attached. She thought she was out of food, but the necessity of offering meals to the hotel’s clientele changed that.

“I try to keep them healthy,” she said.

“Tonight we’re having chicken stir fry with rice. Tomorrow it’s shepherd’s pie with salad.

We had ham and scalloped potatoes this week.

All the staff are food-safe trained.”

Much of the Poplar Tree Inn’s clientele is oilpatch related. Hoffman,

who is both active with the town’s chamber of commerce and sits on its town council, acknowledges that Stoughton is not a tourism hotspot.

They do get weddings and reunions in the summer, but much of their customers are regulars, in the oilpatch.

“Ninety-five per cent of the people that stay here are regulars,” Hoffman said. One coil tubing crew, whose company name has changed several times, has stayed at the Poplar Tree Inn since it opened seven years ago.

In the early years

they were so busy, they had a waiting list all the time at least a page long, until the neighbouring hotel opened.

During those early years they averaged 69 per cent occupancy for the year. More recently that number has been closer to 30 per cent, but things have picked up since the new year. This year they’ve seen occupancy in the 50 to 65 per cent range during the

week, a definite improvement.

“You learn how you can save a buck,” she said. They went from four housekeepers to one.

Their total staff declined from around 15 people to seven. Front desk staff now take care of laundry and food prep.

If a proposed oil refinery is built nearby, Hoffman said it would mean “better times.”

“Obviously it would

be great for the business shareholders, staff and community.”

In the meantime, she said “We’re just looking for the new norm.”

Such a massive project would not be that new normal, as it would be a few years of intense activity.

“I think it’s really exciting for Stoughton,” she said, but added she’s not putting all her eggs in one basket.

Precision Drilling Stoughton Precision Drilling Rig 275 could be seen racked on the south side of Stoughton on April 5. The derrick was lowered shortly after this picture was taken. Photo by Brian Zinchuk

306. 842. 3454 Weyburn, SK www.cforentals.com Danielle Hoffman slices up chicken for the evening’s stir fry. Offering a hot supper has been one way the Poplar Tree Inn in Stoughton seeks to attract clients. Photo by Brian Zinchuk

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PIPELINE NEWS May 2017

Cross Country gets ready for pipeline projects  By Brian Zinchuk White City – With the oilpatch starting to come back to life and with major pipeline projects about to proceed, Jim Gutzke is working to be in the right position to supply those putting the pipe in the ground.

Gutzke handles sales and rentals with Cross Country Infrastructure Services, formerly Cross Country Pipeline Supply Co. “We are a supply and rental house feeding the pipeline industry,” he said in Estevan on March 3, on a day where he was visiting clients in southeast Saskatchewan. He’s based in White City.

The company rents everything from small, specialized pipeline tooling – clamps, bands, special torches, jeep detectors, and testers to large equipment, the “yellow iron.”

They carry internal clamps and bending equipment, too.

Gutzke grew up on a farm at Odessa, Sask. He planned on

going pipelining for a winter, then go farming. That was 27 years ago, and he’s still in the pipeline business today.

Back then, there was no future in farming for him.

“I started pipelining in 1991 at Conklin for Midwest,” he said.

“Dale Ziegler got me my first job, Jan. 2, 1991.”

Ziegler is now heading up a new operation, Canadian Plains Energy Services.

Gutzke bounced around initially, working on stringing, as a welder’s helper, general labourer, swamper on excavator and boom.

He was helping a welder on a job at Lac La Biche, Alta., and they needed someone to drive a propane truck. That lead to a job in the warehouse as a yard man.

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The very first job, I got a big taste of pipeline,” he said. That experience has been invaluable ever since.

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Much of his pipeline experience was with Midwest, Ledcor and Willbros. By 1997 he was running his own warehouse on a river crossing project and other specialty projects on big jobs.

Often he would jump on an excavator or sideboom as needed.

He went to school

in Regina at a private business college where he obtained a diploma in sales and marketing, but instead, as a warehouseman, he was buying instead of selling.

Gutzke was with Midwest until things got quiet in 2003, so he went to Vancouver to work for Ledcor on a challenging project.

“We went across the Fraser River,” he said.

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He ended up in Fort McMurray with Willbros, doing purchasing and eventually became equipment manager. Gutzke was in Fort Mac until 2008, when Willbros purchased Midwest.

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berta Clipper project, looking after purchasing orders.

By 2010 Willbros shut down their cross country pipeline unit and he got a call from Ledcor, where he was put in charge of the pipeline-side equipment. Gutzke’s kid pointed out that there were mainline digups occurring close to home, so why was he ▲

EQUIPMENT

Jeepers creepers, Cross Country Infrastructure’s Jonathan McKinnon at their White City shop shows off a “jeeper” which uses electrical current to detect faults in a pipeline’s coating. Photo by Brian Zinchuk

Page A22

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PIPELINE NEWS May 2017

Strategies Produced for Today and Tomorrow From volatile commodity prices to changing client spending plans to erratic weather, Oilfield Service companies face ongoing challenges. To increase profits in dynamic market conditions, MNP’s industry specialists help OFS business owners and management teams focus on the factors within your control. By optimizing the financial efficiency of your operation, we help raise profits and keep your opportunities flowing.

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A21

A22

PIPELINE NEWS May 2017

New warehouse in White City ▲

Page A20 working in Alberta?

That resulted in a transfer to Saskatchewan.

Midwest fired up again and he helped put together their warehouse and dealt with first calls.

“I knew there was something good coming up at home. I made the move in 2014,”

Gutzke said. That’s when he joined up with Pro Canada West of Midale. He was equipment manager, where he worked on building up their fleet.

In end of 2015 he joined Cross Country, a long-time supplier in the United States.

“I opened up officially in September of 2015,” Gutzke said.

“We had a tough time. This last year was super tough for Cross Country across Canada,” he said, in keeping with the downturn that hit the entire oilpatch hard. They were fortunate to pick up business on dig programs related to the Regina bypass. “That was a saving grace,” he said.

Cross Country’s

You need specialized pipeline welding clamps? Cross Country Infrastructure’s got them.

They even have the rare 34-inch size. Photo by Brian Zinchuk

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11,000 square-foot shop sits on 3.5 acres on the west side of White City. Their rental iron was in Alberta in early March.

“It’s been quiet for us in Saskatchewan this winter, but this summer coming up, there’s some new construction in the Regina area. For Line 3, we’re hoping to see something for late summer, early fall,” Gutzke said.

Enbridge’s Line 3 Replacement program, which recently got approval from the federal government, will be the largest pipeline project in Saskatchewan since 2009, when the same company built its similarly sized 36-inch Alberta Clipper. The Line 3 Replacement will go completely across the southern portion of Saskatchewan, from Kerrobert to Fairlight.

Shortly after his inauguration, President Donald Trump invited TransCanada to resubmit its application for the proposed Keystone XL pipeline.

He has subsequently granted a Presidential Permit for the project,

This specialized apparatus mounts a torch at a certain angle to cut a bevelled end on a pipe. It is on display at Cross Country Infrastructure’s White City location. Photo

by Brian Zinchuk

but TransCanada still needs permit approvals in Nebraska. Keystone XL would cut across the very southwest corner of Saskatchewan. Gutzke, like many others Pipeline News has spoken to in the industry, said, “I’m

thinking it’s a ways off, if it goes.”

Cross Country will be an exhibitor at the Saskatchewan Oil and Gas Show in Weyburn June 7-8. They will be hosting an open house in White City the following day, on June 9.

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PIPELINE NEWS May 2017

A23

Opportunity is Knocking!

See the bottom of this ad!

The Stoughton Western Star Inn & Suites location is right in the centre of where the Bakken boom took place. Photo by Brian Zinchuk

Built at ground zero  By Brian Zinchuk Stoughton – Stoughton was ground zero for the Bakken boom, and once that boom was firmly in place, new hotel properties started popping up in the area and Stoughton itself.

The Western Star group of hotels was the most aggressive, building seven hotels in the southeast Saskatchewan and southwest Manitoba oilpatch, and an eighth, under a different banner, in Regina during that time.

The Stoughton location opened in February 2013. It was the fourth Western Star property to open in rapid succession, following Carlyle, Esterhazy and Redvers.

Eventually similar hotels were built in Carnduff and Melita, Man., while a ‘signature’ hotel was completed in Estevan two years ago, and a Hampton Inn was built in Regina.

The Stoughton location has 63 rooms, many of which have kitchens included as part of the room. The kitchens proved so popular, that they were adopted for all rooms in the subsequent three hotels built.

“It was great in the beginning,” said Carla Eagan on April 11. She’s the director of operations for the Western Star group of hotels, and has been around since its inception. She noted things slowed down with them

when the downturn hit.

They cut staff, but never sacrificed their amenities. They continued to include breakfast with a stay, and when there are enough guests to support it, a supper is offered as well.

“This January it’s started to pick up. We’re hopeful for after breakup.

There’s a lot of talk it’ll be busy after breakup,” she said.

A proposed refinery project, whose site would be visible from the hotel, would be a big boost to local hotels, should it go ahead. Eagan said, “We would expect our Stoughton, Carlyle and Estevan locations would prosper.”

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RS A24

PIPELINE NEWS May 2017

JC Inspections sees things begin to rebound  By Brian Zinchuk Lloydminster – When it comes to pressure vessels, it is critical to monitor the thickness of the steel to ensure the vessel is able to continue to do its job safely. Such inspections are a key component of Lloydminster-based JC Inspections’ work.

“Dad started in 1984 as a welding company,” said Blair Collins, who is part of the family which owns and operates the company.

Jim and Karen Col-

lins are the owners, and their three children are part of the operation.

Bonnie Yaremy, Blair’s twin sister, is the quality control manager, while his brother Ryan is the shop manager.

“We got into Transport Canada inspections in the 1990s, for trucks – any truck going down the road that has a placard for dangerous goods.”

While the company has maintained its welding roots, it branched into vessel and boiler

ultants

ecialists

ng

CUSTOMS BROKERS

Blair Collins’ specialty is pressure vessel inspections and field construction. He’s part of the Collins family that owns and operates JC Inspections.

steam flood.”

Like most oilfield services companies, their staff count is about half of what it was before the downturn that hit in 2014.

“Right now, we’re running 38. Before the recession, we were 73 plus 12 contractors,” Blair said. “We’re slowly

increasing. In the last month, we added about six.”

“We diversified. We picked up work with a fertilizer company for anhydrous vessels,” he said. They picked up a maintenance contract with another major agricultural firm.

Page A25

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When Blair’s children were born, he reduced his on-the-road work and focused on local work.

“I’m the field construction manager for JC Inspections,” Blair said. Most of their work is for one large client, and it’s been ongoing for over 10 years. Much of it is new aboveground facility and above-ground pipeline construction.

“I control welders, pipefitters, picker operators and millwrights.

I’ve even got a machinist running around,” he said.

While there are numerous thermal projects in the region, Blair said, “All our stuff is cold oil.

We don’t do any of the

▲

inspection. That’s Blair’s specialty.

“We do ultrasound and magnetic particle inspection,” he said in their shop west of Lloydminster on Feb. 22.

“Why vessels, treaters and boilers were such a good fit is not only can we inspect them, but we can repair them as well,” he said.

“Naturally, you start doing the pipefitting on them, then pump repairs and heater repairs. So we’re basically a onestop shop when it comes to vessels and boilers.

Most of it is your high pressure vessels.”

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PIPELINE NEWS May 2017

A25

Inspecting tanks, vessels, trucks and more ▲

Page A24 Things are picking up with their primary oilfield client, doing wellheads, waterflood and compressor projects.

“It’s starting to pick up,” he said.

Their local work is on both sides of the borders.

“Everything we’ve been doing is a drive to make cold production more efficient. That’s been the trend for the last five years.”

Their inspection side inspects cranes, pickers, flushbys, service and drilling rigs. “We had two-three guys looking at drilling rigs steady.

That’s gone now. That took a nosedive to the point where you don’t see a drilling rig for years to inspect it.”

For service rigs, they do Level 1, 2, 3 and 4 inspections, but for drilling rigs, they do Level 1, 2 and 3. That’s because the drilling companies will often bring in their own key contacts they like to use.

Fuel tank inspections for drilling rigs are now covered by Transport Canada, so that they do those inspections as well.

When Blair started in the business, he was building service rigs, flushbys and tanks as a welder. At 38 years old, he’s a journeyman welder and pipefitter. That led to inspecting. He now holds several specialized tickets, including API 510 for pressure vessel inspections and API 653 for above ground storage

tank inspections. “Those two tickets are as high as you can go, for North America, minus working for a jurisdiction,” Blair said.

He noted there’s a distinction between examiners and inspectors. The people doing ultrasound and magnetic particle inspection are often examiners, but everybody calls them inspectors. “As far as code lingo goes, they’re examiners. The inspector has the ability to sign off on their documentation.”

There are only about five or six API 653 inspectors in Lloydminster, and three or four are working for oil companies, he noted.

The company began working on train cars five years ago, fixing

Labourer Shena Greupner works on a truck in the JC Inspections’ shop.

things like hand rails, but not running gear.

JC Inspections has three of its own welding trucks, plus contractors,

eight picker trucks (including knuckle pickers) and work trailers.

For 2017 he forecasts a steady incline in

business after breakup.

For 2018, Blair expects a strong year, as they are already working on engineering packages.

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A26

PIPELINE NEWS May 2017

First quarter a busy one in Saskatchewan for Spartan Energy Corp.

(Daily Oil Bulletin) Calgary – Spartan Energy Corp. had an active first quarter in the field, with three rigs operating in southeast Saskatchewan and an additional rig drilling its 2017 Viking program in west-central Saskatchewan.

On April 4 the company reported first quarter activity levels have been in line with budget and included 16.2 net open-hole, eight net frac Midale and 14.5 net Viking wells. All wells were on production prior to the end of the quarter, with the exception of nine net Viking wells and three net frac Midale wells which are scheduled to be completed and brought on production in the second quarter.

Spartan said 2016 represented the most successful drilling program in the company’s history.

Initial 90-day oil production rates for its openhole type wells exceeded its internal type curve by more than 30 per cent

while IP90 rates for frac Midale wells drilled at Alameda were approximately 23 per cent above type curve.

The first quarter 2017 drilling program has seen a continuation of those excellent drilling results with initial production above the company’s internal type curves, said Spartan. Thirteen (12 net) open-hole wells and three (three net) frac Midale wells brought on production in the quarter have 30 days of production history. Initial 30 day production rates for the open-hole wells averaged 159 bpd with IP30 rates for the frac Midale wells averaging 228 bpd.

Last year’s drilling activity and the accretive acquisitions completed during the year have resulted in a significant increase to its drilling inventory in its core plays in southeast Saskatchewan, said Spartan. It currently has a conventional Mississippian open-hole inventory (which includes

GMB SouthSask

the Frobisher, Midale, Tilston and Ratcliffe) of 1,469 (1,206 net) locations. The company also has an unconventional tight oil inventory (frac Midale and Bakken) of 227 (212 net) locations.

Spartan said the experience it has gained successfully drilling these plays for the past three years and the extensive geological and geophysical work it has conducted have continually increased its confidence in the overall depth and quality of its drilling inventory with locations supported by geology, core and DST analysis and 3D seismic.

Based on its 2017 forecast capital program, Spartan said it maintains a drilling inventory of approximately 12 years in both its core open-hole and frac Midale plays.

Spartan’s largely conventional asset base delivers some of the best returns in the industry. An open hole Frobisher well that achieves its internal type curve generates rates of return in excess of 100 per cent and payouts of less than a year at WTI

US$50 oil. Its frac Midale type curve also delivers attractive returns in excess of 75 per cent and payouts of less than 1 ½ years at WTI US$50 oil.

Acquisition update Spartan said its technical team continues to study and further evaluate the assets it acquired from ARC Resources Ltd. in December 2016.

It has completed a number of workovers on the properties and is in the process of licensing approximately 28 wells on the acquired assets, with drilling operations to begin in the third quarter of 2017. To date, base production from the assets has outperformed its budget expectations, said Spartan.

Unconventional Torquay/Three Forks light oil opportunity During the first quarter of 2017, Spartan continued to expand its land position in the Torquay/Three Forks light oil resource play in southeast Saskatchewan and currently holds approximately 40 gross (31.5 net) net sections of land in the

play.

During the first quarter, Spartan drilled two (0.8 net) Torquay wells (both non-operated). Industry activity continues to increase adjacent to its land holdings, de-risking its acreage, said Spartan, which plans to drill a further three net wells to test its Torquay resource in the second half of 2017.

Management said it believes that with success the Torquay/Three Forks could be a significant source of future growth for the company. Its land base has 160 (126 net) potential unrisked drilling locations (at four wells per section) that are prospective for Torquay/Three Forks production but no Torquay/Three Forks locations are booked in its independent reserves report.

Outlook Despite some weather-related downtime experienced during the first quarter, Spartan said it is on track to exceed its budgeted production target for the quarter as a result of better than expected base produc-

tion levels and the strong drilling results during the quarter. March average production is approximately 500 boe per day ahead of budget (based on field estimates), with an additional three net frac Midale wells and nine net Viking wells expected to be brought on production in the second quarter.

The strong start to its 2017 drilling program leaves it well positioned to exceed its annual production guidance, which is designed to deliver 11 per cent average production per share growth, said Spartan. The company is forecasting that this growth can be delivered within cash flow at a US$45 per bbl WTI oil price, with every US$5 per bbl increase in WTI pricing representing approximately $40 million in excess cash flow.

Plans call for excess cash flow to be invested in long term value projects such as waterflood initiation and expansion, land and seismic, as well as the pursuit of accretive tuck in acquisition opportunities, said Spartan.

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PIPELINE NEWS May 2017

Vital Energy plans seven-well drilling program in Pennant, Saskatchewan, area (Daily Oil Bulletin) Calgary – Vital Energy Inc. says it was successful at the April 11 Saskatchewan Crown land sale in acquiring four leases totalling 5,220 acres in southwest Saskatchewan.

The lease acquisitions more than doubled Vital’s current Pennant area project lands, bringing the total 100 per cent owned lands in the area to approximately 8,337 contiguous gross and net acres (13 contiguous sections).

A drilling program for up to seven wells (Phase 1) is expected to begin immediately after spring breakup with Vital as the operator. The primary target is medium gravity (21-degree API) oil.

Vital has entered into an agreement with a third party, Cerus Energy Group, which has committed to spend up to $10.5 million to, among other things,

drill, hydraulically fracture, test, complete and equip up to seven one mile horizontal test wells on one of Vital’s project areas in the first phase of a project that has identified an additional 27 drilling locations on project lands. Cerus has made its first cash advance of $360,000 under the terms of the agreement, said Vital.

The third party will be entitled to receive 80 per cent of the net profits generated by the sale of petroleum substances from the Phase 1 wells and their drilling spacing units.

Once the third party has recovered 180 per cent of its investment back from the 80 per cent net profits interests, it will convert from its net profits interest to a non-

convertible five per cent gross overriding royalty in the Phase 1 wells and their respective drilling spacing units.

Under the terms of the agreement, the third party will have the right of first refusal to fund additional phases of development drilling on the project lands, on the same terms and conditions as for the Phase 1 drilling program.

A27

CAREERS NOW HIRING Estevan, Shaunavon, Kindersley, and Lloydminster.

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(1) Shop Labourer (2) Picker Operator Helper’s Submit resume and drivers abstract to:

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Maintenance  Journeyman Heavy Equipment Technician

WE OFFER:      

Core customer base with steady work Excellent compensation and benefits Scheduled days off Chance to advance your career in a team environment Training and Mentoring Exciting and challenging work

 Previous optimization experience an asset  Previous oilfield experience a must Send resume to: inquiry@levelbest.ca ESTEVAN, SK

* Only those obtaining interviews will be contacted.

For more information or to view full job postings visit us at canyontech.ca

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PIPELINE NEWS May 2017