Pipeline News September 2018

PIPELINE NEWS SASKATCHEWAN’S PETROLEUM MONTHLY Canada Post Publication No. 40069240

September 2018

www.pipelinenews.ca

Vol. 11/4

Come to the

Lloydminster

Heavy Oil Show Sept. 12-13

JMAX Well Service Ltd. is a division of Classic Oilfield Service Ltd. of Lloydminster, with Rig 1 seen rolling down the road north of Lashburn on Aug. 16. Classic celebrates its 25th anniversary this month. See story Page A21.

Photo by Brian Zinchuk

Enbridge Line 3 working starts in earnest A2

Lloydminster Heavy Oil Show preview A3 & 6

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PIPELINE

NEWS

September

2018

Work on Enbridge Line 3 Replacement ramps up

By Brian Zinchuk White City, Vibank, Chamberlain – Enbridge’s Line 3 Replacement Program is rapidly ramping up in Saskatchewan, with portions on the western edge of the province and eastern side of the province soon about to hit a fever pitch as hundreds of pipeliners go to work.

The 36-inch pipeline project started last year and runs from Hardisty, Alta. to Superior, Wi. The bulk of the distance covered in Canada falls within Saskatchewan.

Much of the western portion of Saskatchewan was done last year, with just final cleanup underway in those areas. On Aug. 13 crews could be seen south of Chamberlain pulling piles and putting the last of the topsoil back.

It’s an entirely different story further to the east, from the Regina area to the Manitoba border get going. On Aug. 23 a herd of hydrovacs could be

What do you call a group of hydrovacs? A fleet? A herd? A gaggle? Whatever it is, there was one of these working near Vibank on Aug. 23.

Photo by Brian Zinchuk seen finding line crossings on the right-of-way east of Vibank. One truck was distributing portapotties at road crossings, and a picker was dropping off matting for roadway ramps.

Other crews were working

in earnest at the site of a greenfield pumping station at Richardson, just southeast of Regina. There a forest of pilings were in place and dozers could be seen doing dirtwork.

The tremendous

Dozers do dirt work on the new Enbridge pumping station at Richardson.

A new pumping station is under construction at Richardson, southeast of Regina, as seen on Aug. 23.

stockpile of pipe, just south of the new Richardson pump station, had not yet begun to be distributed, as stringing crews were not yet in action.

On Aug. 24, David Coll, senior communications advisor with Enbridge, gave Pipeline News a progress report.

“The ramp-up will be quick,” he said.

“It is getting busier everyday.”

As of Aug. 24, they were close to 300 people per spread, and that number was growing by the day. The number will ramp up to approximately 800 at each spread over time. But in late August the project was still very much in the early stages, with topsoil stripping underway.

The project is expected to be in-service in the latter-half of 2019.

The last major project of this scale in Saskatchewan was a parallel line to this project, on the existing Enbridge mainline right-of-way. That project was known as “Alberta Clipper,” and eventually became known as Line 67. Like this project, that one started in 2008 and work continued in 2009. It went into service in 2010.

Both Line 3 Replacement and Alberta Clipper involved 36-inch pipe.

This fall the construction contractors will have field offices in White City, Moosomin and Kindersley. OJ Pipelines is doing the Kinderley spread, while Banister Pipelines has the White City and Moosomin spread. In Manitoba, Banister is also working on the Brandon spread while SA Energy, which was doing

cleanup near Chamberlain, is doing the second Brandon spread and the Morden/Winkler spread.

Last year had favourable weather conditions and much of Saskatchewan this year has also been dry, again, favourable for pipeline construction.

“We are focused on safety,” Coll said, noting they are doing significant safety awareness work.

This is particularly important with the increased traffic on the roads.

Over the past three years Enbridge has run “Pipeline 101” training for Indigenous people. That program has now wrapped up, having graduated 260 people from the program along the length of the project in Canada. “Many of those are working or have already worked on the Line 3 project,” Coll said.

If a pipeline were a set of Legos, this is what it would look like when it came out of the box, before assembly. The joints of pipe will soon be heading out as the stringing crew places them along the right-of-way. The pipe was painted white to protect the coating from the sun, due to the length of time this pipe has been stockpiled.

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Sharing The Energy

PIPELINE NEWS September 2018

A3

Get in your truck and head to the Lloydminster Heavy Oil Show September 12-13

JASON KENNEY IS KEYNOTE SPEAKER FOR THE OPENING CEREMONIES BANQUET

By Brian Zinchuk Lloydminster –The Lloydminster Heavy Oil Show is coming up quick, taking place Sept.

12-13 at the exhibition grounds on the north end of the Border City.

John Stanyer, head of the organizing committee, said on Aug. 14 they’ve sold 74 per cent of their inside booths and 80 per cent of the outside booths.

The opening ceremonies banquet is starting to sell out, and most of the corporate tables are sold. The opening ceremonies take place on Tuesday, Sept. 11. The keynote speaker for the opening ceremonies is Alberta United Conservative Party leader Jason Kenney.

The theme of the show is “Opportunity and Innovation,” Stanyer said.

Two years ago approximately 5,000 people attended. Stanyer said, “The public is welcome, but you have to register to get in.

You must have a badge.”

There will be a social night on the Wednesday

The Lloydminster Heavy Oil Show will be a chance to see all the latest and greatest in the heavy oil industry. File photo with comedian Tim Nutt providing entertainment.

The Society of Petroleum Engineers will be having technical presentations on the Wednesday morning.

Lloydminster Mayor Gerald Aalbers extended

an invitation to come to the oil show. He said on Aug. 14, “I’ve had the opportunity to attend the oil show for a number of years, being in the industry. This is my third time to sit on the board of directors. I think it’s

a great opportunity to highlight heavy oil production and oil production in Western Canada.

We do it well. We do it environmentally friendly. And we’re very safe.

Those are all important things to take into mind.

“I encourage people to come into the oil show to see the technology. Talk to the people. These are the people, that, in some cases, have just entered the industry to people that are veterans. They’ll share with you what we do well.

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PIPELINE

NEWS

PIPELINE NEWS

September

2018

EDITORIAL

Publisher

Rick Sadick - 1.306.634.2654 Editor

Brian Zinchuk - 1.306.461.5599 Advertising Sales:

1.306.634.2654 Deanna Tarnes - Advertising Manager Teresa Hrywkiw Kimberlee Pushie Production:

Fay Bonthoux

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To submit a stories or ideas: Pipelines News is always looking for stories or ideas from our readers. To contribute please contact Brian Zinchuk at 306-461-5599.

Subscribing to Pipeline News: Pipeline News is a free distribution newspaper, and is now available online at www.pipelinenews.ca Advertising in Pipeline News: Advertising in Pipeline News is a newer model created to make it as easy as possible for any business or individual. Pipeline News has a group of experienced staff working throughout Saskatchewan, Manitoba and parts of Alberta, so please contact the sales representative for your area to assist you with your advertising needs.

Published monthly by the Prairie Newspaper Group, a division of Glacier Ventures International Corporation, Central Office, Estevan, Saskatchewan.

Advertising rates are available upon request and are subject to change without notice.

Conditions of editorial and advertising content: Pipeline News attempts to be accurate, however, no guarantee is given or implied. Pipeline News reserves the right to revise or reject any or all editorial and advertising content as the newspapers’ principles see fit.

Pipeline News will not be responsible for more than one incorrect insertion of an advertisement, and is not responsible for errors in advertisements except for the space occupied by such errors.

Pipeline News will not be responsible for manuscripts, photographs, negatives and other material that may be submitted for possible publication.

All of Pipeline News content is protected by Canadian Copyright laws. Reviews and similar mention of material in this newspaper is granted on the provision that Pipeline News receives credit. Otherwise, any reproduction without permission of the publisher is prohibited. Advertisers purchase space and circulation only.

Rights to the advertisement produced by Pipeline News, including artwork, typography, and photos, etc., remain property of this newspaper. Advertisements or parts thereof may be not reproduced or assigned without the consent of the publisher.

The Glacier group of companies collects personal information from our customers in the normal course of business transactions. We use that information to provide you with our products and services you request. On occasion we may contact you for purposes of research, surveys and other such matters. To provide you with better service we may share your information with our sister companies and also outside, selected third parties who perform work for us as suppliers, agents, service providers and information gatherers.

How will Lloydminster manage the transition to thermal?

Four years into this oil downturn, Lloydminster is something of a paradox. The retail and service sector seems to be growing by leaps and bounds, both on the west end of town and in the centre. There’s a new Hyundai dealership as well as a casino under construction on the Saskatchewan side. A stroll through the mall finds that, unlike other malls throughout Saskatchewan, nearly every bay was filled. There was even a La Vie en Rose lingerie store. That may not mean much to the typically male readership of this paper, but when we asked our female staff about this, they were quite surprised to hear that.

Lloydminster’s 2016 census data shows a population of 31,400 (two years into the downturn), up from 27,769 in 2011, when things were rocking. That’s an increase of 13.1 per cent, in down times, no less. Most communities would give their eye teeth (and numerous tax incentives, including perhaps for eye teeth) to have such growth at any time. And in 2001, that population was just 20,988.

There are even two Edo Japan locations in Lloyd, one in the mall, and a new one in the new retail development in the centre of town, just as a few blocks away. There’s new restaurants and new stores everywhere.

But a drive through the north end of Lloydminster finds street upon street of empty oilfield shops, victims of the downturn.

These are shops that have not been filled by growth in the industry.

The mayor of Lloydminster, Gerald Aalbers, is a rarity in that he has spent a lifetime in the oilpatch, and is well aware of its realities. While positive on the community’s prospects and future, he is also keenly aware the community is not out of the

woods yet. By his count, there are 35 racked drilling rigs in the community.

A large number of these are in the B&R Eckels yard. Of those, a significant number of those are singles, drilling rigs whose time is long past. It’s obsolete technology. The next time most of these rigs move, it will likely be in pieces as they are cut up. So just like one wouldn’t expect a farmer to use a three-tonne truck to haul grain anymore, similarly one shouldn’t expect many conventional singles to drill another hole.

There’s lots of talk about the huge price differential between West Texas Intermediate (WTI) and Western Canada Select (WCS) - US$26.75 as of Aug. 23, for an implied oil price of US$41.11 per barrel. While that is a huge implication, there’s another that we’ve been writing about for years – the transition from cold production to thermal production.

Specifically, we’re talking about the transition in the region from cold heavy old production with sand (CHOPS) to thermal, i.e. steam assisted gravity drainage (SAGD).

While Husky has far and away been the biggest mover in this regard, we’re also seeing Black Pearl Resources do the same at Onion Lake and Sarafina at Edam and Meota.

Husky likes to make their cookiecutter project 10,000 barrels per day in size. The rough numbers we estimate with that much CHOPS production might employ around 400 people, give or take, and upwards of 500 wells. That’s everyone from the field operators (and their relief ) to grader operators, a couple service rigs running about, a flushby unit, some vac trucks cleaning out sand, pump shops to maintain all those pumps, a drilling rig continually drilling new

holes, etc. That list isn’t anywhere near comprehensive. A 10,000 bpd SAGD thermal project employs, in total, less than 100. We’ve checked these numbers with numerous people in the industry in Lloydminster and there’s pretty broad consensus, among those we’ve spoken to, that these numbers are pretty close to reality.

Two years ago, when we discussed this scenario with people in the industry around Lloyd, some agreed with it, while others were skeptical. Now, that skepticism seems to have vanished.

If that is the case, the Lloydminster region may continue to see substantial increases in oil production. But that does not necessarily mean a lot more jobs in the patch. Indeed, there used to be four drilling rig moving companies in Lloyd.

Now there is one. In part due to walking rigs or skidding those rigs on pads, it’s not nearly as busy as it once was when there were CHOPS wells being drilled by the hundreds each year. Since the downturn hit, extremely few CHOPS wells have been drilled in the Lloydminster area.

This is significant because much of the Lloydminster oilpatch, since the 1980s, has been built around CHOPS. But few, if any, CHOPS wells are being drilled anymore. With significant CHOPS decline curves, it means the nature of the Lloydminster oilpatch isn’t just changing, it has changed. Will the differentials have to tighten up significantly for CHOPS to get any more love? Will it need oil at US$100 per barrel? Or, like those single drilling rigs, is it an old technology that has seen its best days in the rear-view mirror?

That’s the biggest question facing the Lloydminster oilpatch in the coming years. How will the community, and its oil industry, deal with this transition to thermal? Perhaps at this upcoming oil show, we will find out.

PIPELINE NEWS September 2018

Woke up to another merger deal in the patch I woke up this morning, and unlike Tony Soprano, I did not get myself a gun. But I did get an email which indicated there was yet another merger in the works.

Merger, acquisition, buyout, hostile takeover – same difference. But there’s been a lot more of them in the oilpatch recently.

In this case, Ensign Energy Services Inc. was making an offer directly to the shareholders of Trinidad Drilling Ltd. These are two of the biggest players in the Canadian drilling industry, and they play on a global scale.

Trinidad had, as of May, 68 rigs in Canada, 66 in the U.S. and overseas, and another five in a joint venture with Halliburton. They work in Mexico and the Middle East.

But their share price, compared to its heyday, is peanuts. The offer from Ensign, a 20 per cent premium over the recent Trinidad price, is roughly

one-seventh, per share, of what Trinidad was trading for in early 2014, before the oil downturn hit.

I take particular interest in this deal because it involves some local content I’ve spent the last 10 years writing about. When I first came to Estevan, I spent a lot of time writing about Eagle Drilling, which was building new rigs as quick as they could. They built eight yellow rigs before they sold to CanElson Drilling, whose corporate colour is tan. At the same time, Totem Drilling sold its six orange rigs to CanElson. Then a few years ago Trinidad Drilling, green, bought CanElson. Now Ensign Drilling, dark blue, is seeking to buy Trinidad. By the time this is all said and done, Ensign may end up with a Skittles-fleet.

Good thing I know a guy who sells industrial paint.

I hope he makes a killing.

More seriously, though, it has been the

evolution of small drillers where the management knew all the staff to companies where the employees would simply be a number.

And that’s kinda sad.

What’s also sad is that Trinidad’s board, for all intents and purposes, threw in the towel a few months ago by announcing one of those corporate strategic reviews, where it basically told the market, “We give up, come buy us.”

They got no takers, at least no takers that were worth announcing, from Trinidad’s board’s perspective. So they said they’d keep plugging along. Ensign then came in and made a offer, which Trinidad’s board didn’t seem too keen on. Ensign put out its press release on Aug. 13 appealing directly to Trinidad’s shareholders. In other words, it became something of a hostile takeover of a company that had just recently said, “Come buy me.”

Ironically, if Ensign is

A5

OPINION

FROM THE TOP OF THE PILE

By Brian Zinchuk

successful, they will gain another 13 rigs based in southeast Saskatchewan.

A little over two years ago, the company cut up 13 of its own, admittedly older rigs in Oxbow and Carnduff. And for these new rigs, they will be paying an average price of $6.8 million per rig.

That price is across the entire Trinidad fleet, which includes a lot of much bigger, more advanced and more capable rigs, many of which are AC-powered. So maybe it’s not fair to say they would be paying $6.8 million each per telescopic double (teledouble) rig in Saskatchewan. Maybe they’re paying more like $11 million a crack elsewhere, and a lot less here.

The reason this is significant is that much of the southeast Saskatchewan teledouble drilling rig fleet has been gobbled up by Matrrix Energy in the past year. They’ve scooped up either the company or the assets of

Vortex Drilling, Stampede Drilling, D2 Drilling and Red Dog Drilling, and the price per rig was only in the $1.4 million to $3 million range, for rigs that were $8 million and up to build. Sure, there’s depreciation involved, but that’s a hell of a lot of depreciation. Does the Ensign offer for Trinidad improve the value of rigs in Saskatchewan today?

Maybe it does. Maybe it doesn’t. Time will tell.

These mergers are not a sign of health in the oilpatch, or of recovery. They are a sign that many companies simply can’t hold on any longer. We are a very long way from a healthy industry. Even US$65/ bbl. oil has not been enough to revive them.

A rising tide may float all boats, but either the tide has not risen enough yet, or the boats had too many holes in them.

Hopefully the companies that are doing the purchasing will be strong enough to grow, now,

with these additional assets. Otherwise, I can expect more early morning emails announcing mergers in the future.

Brian Zinchuk is editor of Pipeline News. He can be reached at brian. zinchuk@sasktel.net.

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PIPELINE

NEWS

September

2018

USTOMS ROKERS Lloydminster Heavy Oil Show coming soon ◄ Page A3

shows are run by volunteers, staffed by volunteers, organized by volunteers,” he said.

Aalbers has personally manned a booth in the past. Asked about that, he said, “It’s very interesting. We have people from offshore, outside Canada, that come to the show. We have people that come locally.Some have been here a long time and want to know what’s new in the technology.

He noted there are those who are simply outsiders or bystanders to the industry, and others who will do business at the show, talking with customers.

For more information, go to lhos.ca.

The Fieldtek booth at the Lloydminster Heavy Oil Show had good food in 2016. File photo

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PIPELINE NEWS September 2018

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Torc completes acquisition of Villanova 4 CAPITAL BUDGET SEES SMALL BOOST AS A RESULT

(Daily Oil Bulletin) Calgary – TORC Oil & Gas Ltd. has completed the acquisition of Villanova 4 Oil Corp., a private oil company with complementary high quality, light oil assets in southeast Saskatchewan.

The strategic acquisition of V4 includes over 1,000 boepd (80 per cent light oil and liquids) of high netback, light oil producing assets which are primarily focused in the emerging unconventional Midale play. The assets enhance TORC’s high quality inventory in this play along with providing infrastructure synergies. Aggregate consideration for the acquisition is comprised of the issuance of 2.1 million TORC common shares and $46.5 million in cash.

Villanova 4 had been incorporated in June 2012, and was based in Regina as part of the Keystone Group of companies.

Craig Lothian, was, up until recently, the executive chairman and acting CEO of Villanova 4. When asked via email by Pipeline News if there would be a fifth Villanova, Lothian

responded, “As for a Villanova 5, we don’t currently intend to create another Villanova E&P company.

If we do, it would be as a subsidiary of Keystone.”

Capital program With the closing of the latest acquisition, TORC is increasing the company’s 2018 capital budget to $185 million from $180 million previously. The 2018 capital program will remain concentrated on the company’s primary core areas in southeast Saskatchewan, focused on both conventional and unconventional opportunities, and the Cardium play in central Alberta. TORC continues to focus on operational efficiencies with a goal of achieving results that exceed budget expectations.

Based on current commodity prices and budgeted cost structure, TORC said it expects to achieve significant free cash flow in 2018 while growing production and paying the current dividend.

TORC has undertaken an active commodity hedging program to further protect its core capital

spending requirements and dividend policy and currently has 4,750 bpd of oil production hedged through the remainder of 2018.

Increased production guidance TORC is increasing the company’s 2018 average production guidance to 25,100 boepd from 24,700 boepd previously and 2018 exit production guidance to 28,000 boepd from 27,000 boepd previously.

The company reported record quarterly production of 23,059 boepd, up from 22,894 boepd in the first quarter of 2018 and 20,775 boepd in the second quarter of 2017.

TORC generated cash flow of $75.3 million relative to $64 million in the first quarter of 2018 and $52.5 million in the second quarter of 2017. Net income in Q2 2018 surged to $13.3 million from $2.5

million the previous year.

The company successfully drilled eight (7.0 net) wells and completed seven (6.25 net) wells.

During the second quarter, TORC declared dividends of $12.9 million of which $3.8 million was paid under the share dividend program.

The company achieved a payout ratio (excluding acquisitions) of 52 per cent in the second quarter and 61 per cent for the first half while still growing production (exclusive of acquisitions).

On June 27, TORC successfully closed the strategic acquisition of approximately 3,200 boepd of light oil focused production in the company’s southeast Saskatchewan core area for aggregate consideration comprised of the issuance of 13.5 million TORC common shares and $125 million in cash, prior to closing adjustments.

Subsequent to the closing, the 13.5 million TORC common shares issued cleared through a successful block trade. As part of the block trade, TORC’s major share-

Torc plans on increasing its capital budget slightly, now that it has competed its acquisition of Villanova 4 Oil Corp. File photo holder, the Canada Pension Plan Investment Board, increased its ownership position from approximately 24 per cent to 28 per cent currently.

TORC exited the quarter with net debt of approximately $367 million with $324 million drawn on the company’s $500 million credit facility.

A8

PIPELINE NEWS September 2018

4th Annual

Saskatchewan Oil & Gas Supply Chain Forum Hear from and talk face to face with procurement staff representing oil-producing and pipeline companies including:

Husky Energy . TransCanada . Crescent Point Energy Teine Energy . Baker Hughes Federated Co-operatives Limited . Schlumberger Keynote presentation by Brad Bechtold - National Director O&G Mining Transformation for Cisco Systems on “Digitisation�

Oil & Gas Supplier Tradeshow is sold-out Visit 50+ Saskatchewan suppliers at the forum

October 4, 2018 | Regina, SK For event details and to register visit, simsa.ca

PIPELINE NEWS September 2018

A9

Get your elevator pitch ready FOURTH ANNUAL SASKATCHEWAN OIL AND GAS SUPPLY CHAIN FORUM COMING OCT. 4

By Brian Zinchuk Regina – This Oct. 4 will be the fourth Annual Saskatchewan Oil and Gas Supply Chain Forum, and the Regina event has been growing every year.

This year’s event will again take place at the Regina Delta Hotel.

Last year was the first time they held a trade show. This year they expanded, and it sold out. So they expanded it again, and it, too sold out. Now, according to organizer Eric Anderson of the Saskatch-

ewan Industrial & Mining Suppliers Association Inc. (SIMSA), they will have basically double the number of booths for the trade show compared to last year.

But there’s a limit as to how far they want to go, as Anderson stressed the importance of putting buyers and suppliers together.

They had considered moving to a larger venue, but are very hesitant to do so. If the trade show is too large, then the buyers won’t have the time to get to see all the vendors. That face-to-

Trevor Goetz, left, of Estevan’s Smart Power Systems spoke to Dwayne Romansky of Teine Energy during the speed networking portion of the 2017 Saskatchewan Oil and Gas Supply Chain Forum.

face contact is important.

“The success and growth of our show is based on bringing buyers and sellers face-to-face,” he said.

And that’s the key focus of this event. As opposed to a typical trade show where companies have booths and hope a buyer comes by, this event has the big companies in the business – the largest oil companies and pipeline companies in Saskatchewan, present and explaining in their presentations what they are looking for. Husky, TransCanada, Crescent Point Energy, Enbridge, Teine Energy, Baker Hughes, Federated Co-operatives Limited (refinery and oil extraction), Stantec, and Schlumberger have already confirmed their participation, and Anderson said on Aug. 27 the are talking to a few more.

“We have more participation from the Tier 1, Baker Hughes and Schlumberger.

They’ll buy from our membership,” Anderson said.

Next year they will seek to add more engineering firms, companies that are often important in

The trade show portion of the Saskatchewan Oil and Gas Supply Chain Forum will double this year compared to last year’s show. the procurement process.

If you are attending, it’s time to get your elevator pitch polished. The speed networking event is a huge draw for the event.

Each of the major players has a table, and several will have multiple people there to speak to. Participants get five minutes (strictly timed) to make a pitch to that oil or pipeline company. They can pitch a product, or perhaps ask who it is they need to speak to within the organization. When the time is up, it’s time to get going and let the next

person make their pitch.

“It’s an amazing piece of five-minute conversations,” Anderson said. “You can figure out if you have a hope with a company.”

They’re expanding the length of time for speed networking to nearly two hours this year so there are plenty of opportunities for people to get in on the action.

“Frankly, that piece is worth more than everything,” Anderson said. They did it at previous shows like this, and also had it for SIMSA members at this past June’s Global Pe-

troleum Show in Calgary.

Several of the same companies, the biggest players in the Saskatchewan oilpatch, took part in June.

The keynote presentation will be by Brad Bechtold, national director of oil and gas mining transformation for Cisco Systems. His presentation will focus on digitization, and how that works in oil and gas. Anderson pointed out Cisco is a globally leading company in this regard.

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PIPELINE

NEWS

September

2018

An opportunity to talk directly to procurant people

There were two lineups to speak to procurement people from Crescent Point during the speed networking portion of the third annual Saskatchewan Oil and Gas Supply Chain Forum in 2017. File photo

◄ Page A9 bird registrations, and $400 each after Sept.

21. Those fees generally mean all in attendance will be active in the industry, as opposed to the general public checking things out.

Anderson said the tradeshow booths, at $500 a pop, are roughly onethird the price of those at competing events.

“It’s the business focus, what projects are coming up, what they are

buying, and who you want to talk to,” Anderson said of highlights of the forum.

The Government of

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PIPELINE

NEWS

September

2018

First Trinidad couldn’t find a buyer, now Ensign makes an offer

By Brian Zinchuk Calgary – If a blockbuster deal goes through, a baker’s dozen of drilling rigs in southeast Saskatchewan will need new signs, and possibly new paint.

Ensign Energy Services Inc. announced on Aug. 13 it was making a $947 million offer to purchase Trinidad Drilling Ltd. for all of the issued and outstanding common shares of Trinidad, at $1.68 per Trinidad common share. That’s a 20 per cent premium to the to the volume weighted average price of the common shares of Trinidad (on the TSX) for the trading days between August 1 through August 10, after Trinidad announced on Aug. 1, 2018 the end of its strategic review process.

In that announcement, Trinidad, which had been seeking strategic options including a merger or sale, said it had come up dry. The company said in a release on Aug. 1, “After a comprehensive public process, the proposals that Trinidad received did not fully reflect the value of the company. The board has determined that the best alternative to improve shareholder value is to

pursue Trinidad’s revised five-year strategic plan, capitalizing on the company’s operational excellence, strong customer base, geographic diversity and solid financial position. A number of strategic changes made over the past year are now beginning to be reflected in Trinidad’s financial results.”

Ensign’s proposed deal would include Including Trinidad’s estimated outstanding net debt of $477 million as at June 30, 2018, the total value of the transaction is approximately $947 million. Ensign already owns 9.8 per cent of Trinidad’s common shares.

In an Aug. 13 press release, Ensign said, “Following Trinidad’s announcement on August 1, 2018 of the unsuccessful conclusion of its comprehensive public strategic review process, Ensign approached Trinidad's board of directors with a proposal to enter into negotiations regarding a fully-funded all-cash transaction which would provide Trinidad shareholders the opportunity to realize an immediate premium and liquidity for the

Ensign Drilling has offered to purchase Trinidad Drilling in a cash deal that, while at a premium of its current stock value, is just one-seventh of the price per share Trinidad was trading for in early 2014. This is Trinidad Drilling Rig 427, in early 2016. File photo Trinidad common shares at a compelling value.

After having advised the Trinidad board of our offer and willingness to negotiate a Trinidad board-supported transaction, we believe the best course of action is to make the offer directly to Trinidad shareholders.”

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had been as high as a little over $2 in April, but took a nosedive in July. In the first half of 2014, the company was trading over $12 a share before taking an 18 month decline to flatten out in the $2 range since then. The current offer is one-seventh per share compared to what Trinidad was trad-

ing at in early 2014. Ensign’s press release points this out, noting destruction of shareholder Value and stating, “Trinidad has failed to create meaningful shareholder value over the long-term as the current price of the Trinidad common shares is close to both the 52-week and all-time low share price.

We strongly believe that our offer is a far superior alternative to the risk of further value destruction as Trinidad seeks to implement its ‘future plan’ over an elongated time period of five years.”

Ensign also pointed out their offer is fully financed and has a “high ► Page A13

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A13

Lowball offer made for drilling competitor ◄ Page A12 likelihood of completion.”

They also said there is an “extremely low likelihood of a competing offer.”

In addition to offering a premium to the current market price and “full and fair value to Trinidad shareholder,” Ensign noted the offer provides “certainty of value and immediate liquidity,” in other words, a chance to cash out. In revealing this is not a friendly offer, the press release took a swipe at Trinidad management by saying, “The standalone alternative of Trinidad is highly uncertain and relies on successful execution of key initiatives over a lengthy period of five years. Initiatives which we strongly believe should have already been part of Trinidad’s corporate strategy versus being a ‘future plan.’ In particular, Trinidad’s initiative #3 ‘culture of high performance and shareholder alignment’ and initiative #1 ‘commitment to financial discipline and generating free cash flow’ should be core corporate principles, not aspirational initia-

tives. Trinidad shareholders face a highly uncertain future and an unpredictable share price. The offer provides 100 per cent cash consideration for the common shares, giving Trinidad shareholders certainty of value and immediate liquidity.”

Trinidad responded later that day, saying in a release, “Trinidad first received Ensign’s proposed offer of $1.68 per common share on the evening of Saturday, August 11, 2018. In the afternoon of Sunday, August 12, 2018 after consultation with its financial and legal advisors and having regard to the extensive analysis conducted, financial advice received, and feedback received from industry participants during Trinidad’s very recently completed strategic process, the board determined that Ensign’s proposed offer was not acceptable as it was not in the best interests of Trinidad or its shareholders, and communicated that to Ensign. However, Trinidad offered to continue discussions with Ensign and provide

Ensign with additional information, on customary confidentiality terms, to better allow Ensign to understand the value of Trinidad and its business. Ensign again rejected this opportunity and instead announced its intention to make an unsolicited offer earlier today.”

The company said it advises shareholders not to take any action until they have received further communication from Trinidad’s board of directors.

New signs, again?

Should the deal go through, it means yet another sign for several rigs in southeast Saskatchewan. The eight former Eagle Drilling and six former Totem Drilling rigs came together when they were purchased by CanElson Drilling banner. A few years later, Trinidad Drilling bought out CanElson.

Those rigs were reduced by one in the region, as it was dispatched elsewhere, bringing the local count to 13, but not counting the Trinidad rigs that had been servicing, and continuing to service, the Manitoba oilfield.

Two years ago, Ensign cut up 13 rigs in southeast Saskatchewan. Now, if this deal goes through, it will have 13 more rigs in southeast Saskatchewan. File photo Coincidentally, during the depths of the downturn, Ensign Drilling dramatically reduced its presence in southeast Saskatchewan, to the point where in early 2016 they cut up 13 rigs at Oxbow and Carnduff for scrap. Should the deal go through, they will regain precisely that number of rigs in the region.

As of Aug. 13, sister publication Rig Locator (riglocator.ca) showed seven Ensign rigs working in Saskatchewan, three in the Kindersley area, one near Onion Lake, one at Oun-

gre, one at Pinto and one at the Esterhazy potash mines. (A reader informed us there are three rigs at Esterhazy, but only one shows up on Rig Locator).

Another rig was working in Manitoba in the Daly field. A total of 22 rigs were working in Canada, while 32 were listed as down. Of those down, three were in southeast Saskatchewan, four in west central Saskatchewan, and one near Lloydminster.

Trinidad Drilling showed 33 rigs down throughout Canada, including eight in southeast

Saskatchewan and one in Manitoba. It had 35 working in Canada, with one in near Maidstone and five in southeast Saskatchewan. Another three were working in Manitoba.

In May, Trinidad had 68 rigs in its Canadian fleet, 66 rigs in its U.S. and international fleet, and five in a joint venture with Halliburton.

Trinidad Drilling was founded in 1996 by Mike Heier, originally of Estevan. He was, until July 3, the chair of the board, and had been CEO from 2000 to 2008.

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PIPELINE NEWS September 2018

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PIPELINE NEWS September 2018

A15

Lloydminster, an oilpatch town surrounded by transition

By Brian Zinchuk Lloydminster – Lloydminster Mayor Gerald Aalbers spent his career in the oilpatch, but these days he’s heading up one of the key oilpatch communities in Saskatchewan and Alberta.

Asked how Lloydminster is doing, he replied, “I think Lloydminster is doing okay. We face challenges, being a biprovincial city. Two provincial policies and directives of governments have a lot of effect. Our heavy oil is renowned as the best heavy oil in the world for asphalt, and that’s why we have an asphalt refinery. The challenge we have is that our lifting costs and operational costs tend to be higher than areas of Estevan, Swift Current, Kindersley, traditional other oil areas of Saskatchewan.

“Our recovery has not been as speedy as I’d like to see. I’d love to drive out and see six or seven drilling rig derricks standing. We see a few service rig derricks, and there are some drilling rigs in the area, but not as prominent as I’d like to see,” he said.

The Lloydminster area has seen a substantial transformation, from cold heavy oil production with sand (CHOPS) to thermal recovery. Asked how that is affecting the community, he said, “It’s two parts, in my opinion. CHOPS has a place. Now, it depends on the return on investment, just like any oilman will tell you, from my experience. If there’s enough money in CHOPS, they’ll make it work. The problem we have is, as you alluded to, if you’re selling that oil from cold oil production, or CHOPS, it is challeng-

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Lloydminster Mayor Gerald Aalbers counts 35 racked rigs in town, many of which can be seen in the B&R Eckels yard, east of the city. ing because of differential for heavy oil. In the case we have, we are fortunate to have an upgrader and a refinery, that both use

heavy oil, produced locally, plays a huge factor in it.

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A16

PIPELINE

NEWS

September

2018

NATIONAL

The last rig mover l

By Brian Zinchuk Lloydminster – There used to be four rig moving companies working out of Lloydminster. But four years into this oil downturn, there’s only one left standing, B&R Eckels Ltd. Ron Brooks has been manager of B&R Eckels’ oilfield division in Lloydminster for nearly two decades. The Bonnyville-based company also runs a freight division out of Lloydminster, but that’s run separately from the oilfield division.

“In Lloydminster we are primarily rig moving and pipe yard storage,” he said.

That includes pipe hauling.

“Since June, we’ve been steady. It’s not busy like three years ago,” Brooks said on Aug. 16.

Then again, with the manpower available right now, it would be a challenge to attain those boom-era levels of activity.

“Our average age is probably around 45, and there’s no young guys coming up. That’s a major problem,” he said.

It’s not so much that there are no applicants, it’s that the applicants are lacking real experience.

“Nobody applies to drive a winch truck who has any experience,” Brooks said. “We can’t just draw from the driving schools.”

He noted rig moving is not like running up and down the highway.

Working as a rig mover starts from the bottom, working as a swamper. He pointed out that back in the day, if you got a job, you kept it. More

recently, new workers might quit after working a weekend they didn’t want to cover.

“A lot of our drivers are 55 years old and over,” Brooks said. “Rig moving used to be all young guys. It was kinda crazy out there.

Now, its 45 to 60 years old.

I think the youngest guy I have on rig moving is 43.”

Brooks is 56 years old.

He noted three other companies were in the same business in Lloydminster, but they’ve since pulled out.

“The bigger guys got tired of working for nothing.”

B&R Eckels’ saving grace has been a long-term contract with a major player in the region, one that was just recently renewed. Beyond that contract, most of the other companies are bidding out their work, and the rates are so competitive, it’s difficult to make much on them. Brooks noted if they had to bid all their work in a similar manner, it would be tough. “A lot of guys bid stuff just to work their equipment,” he said. “We’re lucky with this contract.”

Those bids were down 30 to 40 per cent compared to what prices were a few years ago. When rates are that low, he expressed concern that those companies can’t be doing it right.

“Rates go down quick, but don’t come up,” he said.

There’s been a price recovery of seven to eight per cent, but that’s after a 30 per cent drop.

“Every crash in the oilpatch, rates go down quick, but it takes years to come back,” he said, based on his long experience. He’s

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Ron Brooks has been running B&R Eckel’s Lloydminster oilfield division for the better part of two decades. Behind h been with B&R Eckels for 18 years, and has worked in the business for a long time prior to that. He took over running the Lloydminster shop 17 years ago.

“There’s a lot of guys carrying a lot of debt that need cash,” Brooks said of the current environment.

The downturn of 200809 didn’t affect them very much. “We were still going every day. This one, the rigs came in and didn’t go back out. Some sites, rigs went back to, but three years later,” Brooks said.

Compared to 2014, he said their staffing level is now half of what it was then. “I could use more drivers, but there’s nobody out

there. A lot left,” he said.

That includes people from Eastern Canada who went back home. They’re advertising for people, and have tried recalling some of those who went back home, to the east, but those people have largely moved onto other things. “A lot of them don’t want to come back out here. In five to 10 years, I don’t know what this industry will look like.”

Housing shortages used to be a continual issue in the boom, to the point where Brooks said they had a couple trailers in the back where they let workers stay for free because there was nothing available to rent.

“Four years ago, you

couldn’t get a place to rent, let alone buy,” he said.

But now there are plenty of houses for sale in Lloydminster, and landlords offering rent incentives just to bring in tenants.”

During the boom there were some people he had who were overly ambitious in their spending when the times were good, and that caught up with them.

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A17

L TRUCKING WEEK SEPTEMBER 2 - 8, 2018

left in Lloydminster

Leased operator for 33 years, and moving rigs for 45 years

him, and the two pickers, is the Husky Lloydminster Upgrader. Photo by Brian Zinchuk 23-year-old who ended up with a half-million dollar mortgage, boat and fifthwheel camper. He needed to work 100 hours a week, consistently, to support all that. When things dried up,

oving rigs and moving pipe. rd.

he lost it all, learning the hard way about the cyclical nature of the oilpatch.

Brooks knows of guys from Newfoundland who drove their pickup to the airport and left their keys in the ignition, having abandoned their trucks.

Their current capacity is they can move one rig at a time, whereas that used to be 2 1/2 to three rigs. The difference is primarily due to the reduction in manpower.

They’re busy enough to keep their current staff going. There’s 20 right now in the oilfield division in Lloydminster. They used to have around 45.

As of mid-Au-

gust, Brooks said they were looking after seven drilling rigs, and three more for casing.

The adoption of thermal projects over cold heavy oil production with sand (CHOPS) has had a significant impact on the rig moving market. With CHOPS, a rig move involved a crew of 15 to 20 trucks putting in a full eight hour shift to move the rig a few miles down the road. Now, thermal projects are done on pads.

If they have walking rigs, the rig essentially moves most of its components itself. Some pad projects are done by skidding the rig over to the next

Dave Wiser walked across the B&R Eckels Ltd. yard to see who the branch manager was showing around the property. It turned out, it was a reporter, armed with a camera and notepad.

Wiser is a leased operator with B&R, and has been for “33 years, only,” he said, having started in 1985.

He’s their only leased operator left in their oilfield division in Lloyd.

Right now he’s considering getting a different truck. “I want something that’s mechanically friendly,” he said. In other words, he does not want one of the most recent engines, with all its emissions controls. He’s looking for something with an engine prior to 2007, with Tier 2 emissions.

“I can fix old ones. These, I can’t,” he said of the newer trucks. So he planned on heading to Edmonton to find an older unit.

“Every day you turn around, these things are in the shop, hooked up to a computer,” he said.

Wiser has lived in Lloydminster all his life, and has had the same wife during all that time, something that’s not that common from someone whose spent a career in the oilpatch. He’s home every night.

“I was driving a sow when I was 17 years old. I’ve got 45 years working in the oilfield, all rig moving,” Wiser said, adding, “I’ll never quit.”

“B&R is good to work for. They treat you well. You can talk to the owner any time.

hole. That only involves a bed truck and two tractors for three to four hours.

On the day of Pipeline News’ visit, there were no rig moves scheduled.

That’s a big change from when B&R Eckels used to take care of 300 to 400 CHOPS wells and their associated rig moves a year.

“Thermal has affected us, big time,” Brooks said.

A rig will be skidded six or seven times before being moved, for instance. ► Page A18

Dave Wiser is in the market for a new, old truck. He wants one without the newfangled emissions controls, so he’s looking for an older unit with a Tier 2 engine. Wiser has moved rigs for 45 years.

Sometimes I wonder why they put up with me,” he said.

Things have changed over the years, he noted. Back in the day, it was possible to put in 500 hours in a month. Not so, now, with current hours of service rules.

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A18

PIPELINE

NEWS

September

2018

Finding young workers to move rigs seems all but impossible

◄ Page A17 However, it does take less time to drill a well now. Where a typical well used to be 10 to 12 days, now it’s five to seven.

There are some smaller companies doing cold wells, but not many. And they are starting to drill.

In the back of their yard is probably the largest collection of racked

rigs in Saskatchewan, likely even more than those in Fast Trucking’s yard at Carnduff. Brooks said they had up to 30 racked rigs parked there. Many are old, conventional singles, whose time is passed. Parts have been sold off some of them, and they are happy to clear out an old rig when it sells at auction, sometimes to farmers for whatever reason.

There’s a lot of rigs racked in the back of B&R Eckels’ yard. Many are singles.

Akita Rig 14 was stood up in the yard, to be looked over.

Companies store their pipe in the B&R Eckels yard for eventual usage.

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Lloydminster mayor talks about CHOPS to thermal affects community ◄ Page A15 ensuring water reuse. So that’s an important factor that needs to be considered,” Aalbers said.

To produce an equivalent amount of oil – 10,000 bpd, from CHOPS and SAGD, Pipeline News’ rough estimates, corroborated by many of the people in the industry we spoke to in Lloydminster, indicate a roughly 75 per cent reduction in people, from around 400 to less than 100. Asked about that, Aalbers said, “Absolutely. There’s no question. I came from the industry before becoming mayor, and had the opportunity to work in the area for 13 years in cold heavy oil production. It is certainly labour intensive, when you bring up sand and that much water. And then, it again depends on each well. You quoted 400 people, making 10,000 barrels. On an average company, I believe that would be a fairly reasonable number, because some wells are great wells, and some wells are ‘dog wells,’ two per cent oil and 98 per cent water. It really comes down to where that number of economics fits.

“SAGD is certainly

producing a lot more oil with a lot less people.”

Several Lloydminster oilfield companies confirmed Pipeline News’ observations that, compared to 2014, their staffing had dropped by roughly half and total payroll, due to reduced pay and the disappearance of overtime, was down by about 75 per cent. Asked how this has affected Lloydminster’s economic activity and housing, Aalbers said, “It certainly brought a new equilibrium. That’s the factor that’s come into play. We have a lot less housing starts today than we did four years ago, five years ago. We’re looking at 67 new constructions for homes in the last year. So it’s down significantly from where it was in the 300 to 600 (housing starts) range.

“Certainly the number is reflective of the market. We have houses for sale on the market today. We have rental accommodations available.”

“The challenge we’re seeing is we’re seeing a change. The economy has changed in the oil and gas industry and it’s reflected, as you’ve indicated. You can drive through the

Lloydminster Mayor Gerald Aalbers stands before the border markers, indicating the dividing line between Saskatchewan and Alberta. Fittingly, an oilfield truck passes eastbound behind him. Photo by Brian Zinchuk industrial parks and find lots of vacant property, and properties to rent or for purchase. So I call it a rebalance. Having the opportunity to be in the oil and gas business for 25 years before moving into municipal politics, I’ve seen the highs and lows. I lived in Weyburn, Saskatchewan, when oil was $10 a barrel in 1998.

I won’t forget that very easily, because I gave my house away in 1999 when my company that I was working for moved us.

“So there’s certainly been changes throughout. We’re going to see that cyclical thing happen. We all hope, very patiently, that the price does come to a reasonable level where it equals out, where investors see value in investing. I think with the technology changing continuously, and watching the industry for 25 years, and people who have been it a lot longer than that, will talk about that. From drilling rigs to completions to refining. Where

that’s going to lead us, I’m not sure. But we’re wellpositioned, because heavy oil, and asphalt, especially asphalt. Husky Energy has indicated there’s opportunities here and they’ll explore those opportunities in the future.

We have got the right mix.

“Will it be SAGD, will it be CHOPS? Who knows. We know there’s a lot of work being done with solvent recovery,” he said.

Aalbers pointed out the failed attempt at toe-to-heal air injection (THAI) project at Kerrobert, but as a sign of progress. “Again, technology continues to lead. So I look to the industry and researchers to say, ‘Hey, there’s another way to get that oil out of the ground.’

We’re not getting it all today, even with SAGD.” Mayor hopeful for proposed refinery In early 2017, Husky was holding open houses about a possible second asphalt refinery for Lloydminster, to be located adjacent to the upgrader, on the Saskatchewan side.

When Husky bought a refinery at Superior Wisconsin, that put the brakes on the Lloyd-

minster project, for now.

“I think it is going to come back,” Aalbers said.

“If you follow Husky’s actions after that point, that refinery came open in Superior, Wi., the numbers I read and talking to the people I know, they were basically able to buy a refinery for half price compared to building a refinery here. It’s located along Enbridge’s Line 3.

They’re able to put their own product into the line and, in essence, get their own down the line and put it into their refinery.

Great integrated plan.

“At the same time, we see the amount of asphalt being used and we know, in the municipal world, roads aren’t getting any newer. We continue to need to update. So there’s going to be a demand for asphalt. In talking with people from Husky that I chat with, they tell me we can expect to see that refinery down the road. As always, there’s no commitment. That’s a decision the board of directors are going to have to make for that commitment. There’s a lot of legwork to be done.

I understand they know it would be good value here, ► Page A21

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A21

25 years for Classic Oilfield Service in Lloydminster

By Brian Zinchuk Lloydminster – Sept.

1 marks 25 years for Classic Oilfield Service Ltd., and it’s been quite a ride over this last quarter century for the family-owned and operated company.

Adam Johnstone is the

president of the company, which has seven partners, all family. They include brothers Adam, Gordon and Tom, their brothersin-law Doug Swyripa and Glen Blize, and Glen’s son’s Mike and Scotty.

And if that’s not

enough family for you, several more family members work within the diversified outfit, something they see as a strength, according to Adam, who spoke to Pipeline News on Aug. 15.

Their divisions include rentals of service

◄ Page A19 to integrate it into the upgrader facility, using utilities that are existing and tying in those kind of things, the pipelines that are here. We’re right in centre, it’s the perfect business case. The problem is, it’s always the economics that need to line up, but I think we’ll see that when Husky’s ready,” Aalbers said.

Asked if a third refining facility in the community would make up for some of the decline in jobs mentioned above, Aalbers said, “It will. I think you’re going to see a shift in some of those jobs. Of course, the construction of a new facility always brings in an influx of people. We certainly have a lot of welders and pipefitters that would like to stay at home and work.

Do we have enough of them? Not likely, so we’ll see an influx of workers on a major project.

“Then, the resulting project will have some operational staff and see people that will possibly transition from production to refining. Or you’ll see people, like from our Lakeland College which continues to produce power engineers, so there’ll be opportunities for those graduates.”

He added there will also be a need for ensured production of heavy oil to fill that refinery, when the time comes.

Aalbers worked in

the supply store and then chemical side of the industry, then in the integrity and corrosion side.

It’s definitely an advantage when being a mayor of an oil town, being able to talk turkey with those in the industry.

Lloydminster has roughly 31,500 people, split roughly 60/40 in favour of Alberta. He noted there had been a high transient population during the boom, with people living on couches. “Certainly, that transient population has moved. And people that weren’t able to continue on with their service rig jobs, water hauling and oil hauling, it was just the reduction in production.

“The community is stable. We’re not seeing buildings boarded up. We’re seeing grass cut and maintained.”

Lloydminster has grown, especially in the service sector and retail side, despite the oil downturn. Asked about this, Aalbers said, “I think that we have certainly evolved as a regional centre. Certainly, we have the size, and the business atmosphere,” he said, pointing out the advantage of the PST-free status of the city.

The city has been growing on both sides of the border. The new casino is expected to open later this year, as is a Hyundai dealer, both on the Saskatchewan side.

“We are seeing growth.

We’ll continue to see growth. I think that’s the attraction – be it health care, shopping and retail that we have, employment opportunities and education opportunities,” Aalbers said.

Mayor Gerald Aalbers spent his career in the oilpatch

rig-related equipment; downhole tools including packers, bridge plugs, retainers and mud motors; cased-hole fishing; picker trucks and a hotshot, as well as wellsite supervision consulting. Additionally, they have two of their own service rigs, operated as JMAX Well Service.

Adam and Glenn each have a background in service rigs. Doug’s specialty is trucking. For Adam, it’s downhole tools and fishing.

The next generations have been brought in, and even some grandkids are now involved.

Dave Heck, who does sales with Classic, thinks the large

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“I started running tools with Endiem Oil Tools from 1984 to 1987.

Then Site Oil Tools bought them. Canadian General Capital bought both and merged them,” Adam said.

That was when a significant downturn hit the oilpatch, similar in scale to the current one.

But Adam said he stayed busy back then, with 22 service rigs working at Esso’s Cold Lake project.

At the time the Johnstone’s owned a service rig outfit called Silversands Well Service, established in 1986. It was sold in March 1998. It’s time overlapped

with the establishment of Classic on Sept. 1, 1993.

In March 1998 they bought another service rig and called the new venture JMAX, which stood for Johnstone and their late brother, Max, who died in 1978.

The initial service rig was purchased used. “We totally rebuilt it,” Adam said. They put a new carrier under it in 2015.

JMAX added a second rig, a new unit, in 2008.

While it’s common in other parts of Saskatchewan to have service rig fleets numbering around 10, the Johnstones are content with ► Page A22

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PIPELINE

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September

2018

Broad diversification key to Classic’s success ◄ Page A21 their two rigs.

“It works for us,” Adam noted, saying there are synergies with the rest of Classic. Those rigs have their regular customers. One could be seen two days later driving north of Lashburn, heading onto its next job.

“It’s been said we’re into too many different things,” Adam said, but the family’s varied backgrounds works well with that. He noted there’s a good fit of expertise to be in all these diverse areas.

It allows for each person

to have their own specialty.

In the summer of 1994, Classic bought Ram Oilfield Rentals, a line of service rig equipment.

That came with one 7.5 ton picker. In 1996 they bought a new picker, and since then they’ve consistently had two pickers.

In 1999, they picked up Double R Oilfield, also a rental outfield.

Completion tools started in the mid-1990s, and they were initially a Baker Hughes distributor.

It was a bit tough carrying that line, however, due

Lenny Young is a picker operator with Classic Oilfield.

He’s been with the company eight years, and got his journeyman ticket three years ago.

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to the prices Baker wanted, so eventually Classic bought out the inventory that was on consignment to them. Since 2015, they use Canadian suppliers as opposed to American, due to the unfavourable Canadian dollar exchange rate.

When it comes to fishing, it’s not a service you can really plan for, as in most people aren’t looking forward to calling in fishing to fix something. Asked how they market that service, Daniela Tobler, who does sales for the fishing and tool shop, said it’s important to remain top of mind.

“You need to know you’re calling the people who have the experience. The people you’re sending with those tools and have their backs.”

For Adam, his experience in the oilfield goes back 44 years, starting out with running tools and fishing. With enough years in, one builds a specialized knowledge of the areas you work in, such as Pike’s Peak, one of the first thermal projects in the area.

• Links to all Class 1 railroads in North America via interchange with BNSF Railway

When it comes to downhole, he’s truly gone downhole, as in underground. Adam worked on the AOSTRA project at Fort McMurray which involved the government building an underground mine shaft into the oilsands, 600 feet deep. This was long before directional drilling became commonplace. So instead of build section curving the well, this project involved going horizontal by drilling horizontally from an underground gallery, which was in a limestone formation under the oilsands. “The longest pipe you could work with was 10 feet,” he said.

Adam ran tools underground off and on six times. The project led the way on development of what is now commonplace steam-assisted gravity drainage, or SAGD. Over the years, they’ve seen the ups and downs of the oilpatch. Regarding the downturn of 1998, Adam said, “We didn’t start to feel it until June, and by Decem-

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Adam Johnstone, president of Classic Oilfield Service Ltd, gazes at several decades-worth of photos of working in the field, and for a while, deep under that field. The company celebrates 25 years in business this September. ber, it was rolling again.”

The 2009 downturn hurt a bit more than the 1998 one, but they didn’t lay anyone off before the recovery restored activity. But the downturn that started in 2014 and hit hard in 2015 has been the most significant Classic has been through to date.

“We went into it in a good position. We had 55 people,” Adam said. Now they’re around 30, having brought a few people back after bottoming out at 27. Their staffing levels mirror what most oilfield service companies have told Pipeline News they endured through this downturn – a cut of about half from peak levels.

To weather the storm, administrative staff went on a workshare program, three days a week. One service rig sat for the better part of the year, but they held onto the senior staff. It’s now back at work, he noted. “It’s been working steady for

1 1/2 years,” Adam said.

Heck noted that various rates they charge clients have dropped 30 to 35 per cent in the industry, having gone through two significant rounds of cuts. Rates have not come back yet.

Things are improving now. “We’re still, revenuewise, about 70 per cent of what we used to do.

At the very worst, gross revenue was about half.”

Classic saw things start to turn around in August 2017.

Activity levels have improved.

They’ve started to recapitalize a bit, buying a few new items here and there.

The oil price differential between West Texas Intermediate and Western Canada Select has been a huge factor for the Lloydminster area. On the day of the interview it resulted in an inferred price of US$36.84 per barrel. Seeing that differential improve would make a huge difference, according to Adam.

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Dave Heck does sales for rentals, including these BOPS for service rigs.

PIPELINE NEWS September 2018

Suretuf is secondary containment, made in Canada

By Brian Zinchuk Lloydminster – Lloydminster-based Suretuf Containments Ltd. has weathered the downturn, and things are starting to pick up, according to owner Clayton Gessner.

He spoke to Pipeline News on Aug. 14.

Suretuf ’s secondary containment system focuses on simplicity and speed in assembly. Instead of being bolted together, it’s assembled by sliding the legs in and pinning the wall segments together.

Suretuf is a sister company of C’s Oilfield Consulting & Construction Service Ltd., which often does the installation of the Suretuf units.

The Suretuf secondary containment system is manufactured at their plant located southwest of Lloydminster. About half of C’s work is Suretuf-related.

“We own the patent and manufacture it,” Gessner said. “It’s all done in house. C’s Oilfield provides the service crews for setting it up, in-field.

He started out with C’s. One of the issues with secondary containment in the area was there were other manufacturers in Lloydminster, but they didn’t have field crews for installation. “You could order them, but you couldn’t get them set up,” he said.

“So I bought this containment company and patent. The company used to be called Dale’s Welding. I bought it and redesigned it into galvanized,” he said That was in 2007.

The initial design was very heavy and had three legs per panel. The panels were also painted. The redesign approval was done by local engineering firm Barr Engineer-

ing, and resulted in one leg per panel and much lighter, galvanized steel which eliminated the need to paint the panels.

“All of our stuff is professional engineer-stamped, designed, and meets or exceeds North American guidelines,” he said.

When assembling the containment unit, first you slide in the leg into the flanges provided while the panel is laying down. Then you stand it up and pin them together, with three pins per joint.

The liner is then put in as a “top mount.” That liner goes over the top of the panel wall, and is secured by a plate which is secured by self-tapping screws from the top.

A layer of gravel screenings is put inside, on top of the liner bottom. The assembly usually is done in the shape of a “U”, allowing the skid steer access to put the gravel in the bottom.

Once that’s done, the last wall goes up, the liner is secured on its top, and the unit is complete. The system has options of sting doors and crossover stairs.

The slotted design of the legs allows them to have a bit of give should the ground settle or frost heave.

The welding and fabrication of the liners are all done in-house.

When a liner gets to a certain size, it has to be done in the field. They also do field repairs and containment expansion.

“We’ll go out to an existing two-tank site and turn it into a five-tank site,” he said. “We supply them the extra wall and weld in the extra liner.”

A typical dual 750bbl. or dual 1,000-bbl. installation will take about half a day, but there are

lots of variables that affect that, especially the ground condition and how level it is. “Everything is shot with a transit and the ground is levelled up before the package goes down.”

They also supply geotextiles to protect the liner from rock punctures. The entire system is designed for zero ground disturbance.

They typically build tank pads and tank rings, set planks and tanks.

The large pickers used

to set tanks are usually whoever the prime contractor wants, on their approved vendor list.

“A lot of times we just do the containment work, but a lot of times we do the containment work and the complete setup. Our big claim to fame is we save time in setup. We have slide-in legs, and a pin-together system. There’s no bolting or screwing, while others do have to do all that,” ► Page A25

Pictured is a jig for making Suretuf secondary containment panels.

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A25

Slide-in legs and pin-together design makes installation easier ◄ Page A23 Gessner said.

Gessner pointed out they have “no dead stock.”

Other secondary containment systems changed bolt patterns over the years and can have incompatibilities between their different models.

“Ours have always been the same three drop pins. You can take the very first panel manufactured by Dale’s Welding or Suretuf, and you can come here and get another panel that will fit today.”

Five people work on the Suretuf line. When the product was made of mild

steel and needed paint, that number was 12 to 15.

They have a distribution warehouse in Williston, N.D., and sell through several distributors throughout Western Canada and the northern United States.

Gessner is not immediately concerned about the trade wars going on between Canada, the United States and other nations about steel tariffs. He was fortunate enough to lock in quite a bit of supply, in Canada, before this all came to be. But if the tariffs don’t resolve soon, it will have an impact. “If

it continues, I’ll have to pass it onto the end user.

Twenty-five per cent is a pretty good hit. It’s not just galvanized steel, but hot rolled steel as well,” he said.

Shops There are several buildings on the site. The primary building is for C’s. The second building is the factory for Suretuf.

North of it is a former riding arena converted into cold storage. And north of that is a partially completed building that was meant to be a clone of the original C’s shop, and the eventual future home for Suretuf. However, it

This load was heading out to Peace River, Alta. for a new water disposal site. Clayton Gessner owns Suretuf Containments and C’s Oilfield Service.

remains uncompleted, and may for some time.

“I got it going and the market crashed, and I just archived it,” Gessner said, joking that with threephase power and excellent well water, it could make a good location for a marijuana grow operation, when that product becomes legal.

Work stopped in 2015.

“It’ll be a very nice shop some day. It’s basically a carbon copy of this one,” he said.

Before the downturn, Suretuf had been busting out of its seams, which drove the construction of that shop.

Things have picked up some recently. “Everyone’s out in the field. We’re steadier right now,” he said.

There was a trailer loaded with a used Suretuf product ready to go out to St. Paul, Alta, with a fourman crew. “We’re supplying a new liner, and all the parts that are missing. We tore it down, we sorted it for them, we hauled it for them and now we’re going to install it for them.”

Another trailer was loaded with another containment unit going out the same day to Peace River, Alta., for a big water disposal. This unit also

Clayton Gessner demonstrates how a leg quickly slides into a Suretuf panel. The panels are then pinned together quickly and easily. had a four-man crew. Each of those installations were expected to take the better part of a week due to their size and the number of pile boots involved.

“We supply, we service, we haul and install,” Gessner said.

C’s is a full-service oilfield construction company, which includes welding and pipefitting, as well as the associated quality control. They work throughout Western Canada.

The fleet maxed out at around 12 units, but is down to six now, all picker-equipped. There’s plenty of ancillary equipment like skid steers and tampers. The staff is down to 10 now. At peak that

number was 40. “The price differential on heavy oil is great. It seems to me that there’s not a whole lot going on around here. It’s definitely declined from what it was,” he said. “I don’t know if it will ever be back to what it was.”

The two companies have definitely felt the downturn. Gessner used to joke that the “C” in C’s stood for “cheap,” but these days, it means “careful.”

Suretuf is doing okay, but he’s not planning on buying a yacht anytime soon.

“I never expand unless I pay cash, period.

I’ve been criticized for that. I’m glad I stuck with my guns now, I tell you.”

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A26

PIPELINE

NEWS

September

2018

Transform Crane grows from 2 to 22 in a short time, and is still growing NO DOOM AND GLOOM HERE

By Brian Zinchuk Lloydminster – When the downturn hit, nearly all oilfield service companies put the brakes on capital spending, especially on new equipment like trucks. Now, four years into this downturn and with some recovery in oil prices and activity, some of those companies just can’t wait anymore to field new iron, and demand is growing. And that’s where Transform Crane of Lloydminster comes in, having launched in time to start fulfilling some of that need.

Lee Steinbring is partners with his brother,

Emil. Cory Bourassa is manager of the new supply division. Steinbring and Bourassa spoke to Pipeline News in their facility on Aug. 15.

Transform is a Fassi and National crane dealer; all truck mounted cranes, and their specialty is building the service bodies to go under them.

Steinbring said their work includes “Right from ground-up builds. You can bring the cab and chassis, or we can supply the cab and chassis. We build custom decks, rigging, air compressor systems, hydraulics. Custom cabinets, we build on site.”

This new unit at Transform Crane is just about ready to go out.

This is another kick at the can, so to speak for Steinbring, who ran and built up a similar company and sold it. They’ve decided to start over.

In 1.5 years, they’ve seen tremendous growth. “We’ve grown from two guys to 22,” Steinbring said.

Bourassa said, “We’re one of the busier places in town.”

Steinbring added, “We’re already expanding the shop another 5,000 square feet.

The need for recapitalization in the industry is precisely where Transform Crane comes into play. “We’re replacing iron. In our last year, we sold 70 brand new units.”

Those units are going across Western Canada, from Manitoba to British Columbia. “This truck we’re finishing is going to B.C.,” Steinbring said.

“Because we have such good staff and good people, and everybody wants to be part of growing this new business, everybody is engaged.

They want to be here,” Steinbring said. “People

Lee Steinbring, left, partner with his brother Emil (not pictured) in Transform Crane.

Cory Bourassa, right, looks after the supply store end, a recent addition to the growing business. Here they show off some of the rigging in stock. see that and they want to come on board. The people are our biggest asset.”

Bourassa said, “The employees that are here, want to be here.”

“People had seen doom and gloom everywhere, and they want to be part of that team that’s going in the right direction,” Steinbring said.

Bourassa said he and the Steinbrings have been in the oilfield for more than 30 years, and their staff recognize that. “That’s what they want to join.”

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“It has been tough. In the last four years, in my industry, supply, it hasn’t been easy,” Bourassa said.

Pipeline News has long been writing about a recapitalization crisis looming over the industry, and Transform Crane is seeing exactly that. Steinbring said, “It doesn’t matter what industry, everybody held back. It just wasn’t economically feasible to go buy new iron. So you run your iron longer, and at the end of the day, it’s getting to the point where it’s nickle and dime, and so if you’re going to continue on, you have to make that next step and reinvest and get a new one.”

He noted that companies are making small strides at this point, as it’s

a big jump to put out all new iron out there. “But you can only run that truck so long before its costing more in repairs than swapping it out,” he said.

It’s a mix of both chassis and bodies wearing out. “I think, this coming year, you’re going to see more swaps (of chassis) than new. The average guy is just going to change the chassis and run the service body or the deck longer, whereas somebody whose got a better forecast for the long term is going to swap the whole unit over,” Steinbring said. “It’s a big financial decision.”

The bulk of their service bodies and decks, roughly 80 per cent, end up with pickers attached.

Transform also has a ► Page A27

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A27

Recapitalization has been driving business as tired iron needs replacement ◄ Page A26 full heavy duty mechanic shop as well. “You’ve got to service what you sell,” he said, noting cranes need yearly service.

The downturn has meant they’ve been able to get a highly experienced workforce for a young company. Nearly every person on staff is a journeyman, from welders and mechanics to parts people.

It’s important to have inventory available.

“I keep chassis on order,” Steinbring said. “We have a ton of Dodges on order. I also work with Kenworth, Peterbilt, Freightliner.

They’re all bringing us trucks to build and have on their lots. We work hand-in-hand with those dealerships, to be ahead of this curve, when they need iron. A Dodge truck takes seven to nine months to come in. I’ve got to be ahead of that curve. If you win a bid today, and I tell you it’s going to take eight or nine months, you go, ‘Whoa – I just won a bid! I’ve gotta work!’”

At this point forecasting to be ahead of the curve is very important.

“The deal-

Erik Van De Nieuwegiessen works on a new deck at Transform Crane. The company builds both new decks and service bodies, and sells factory-made units. Most end up equipped with a picker. ers are trying to get ahead, too,” he noted.

It’s a big gamble, but Steinbring said, “It’s a roll of the dice, but if I don’t have it, I can’t sell it.”

Transform Crane is a dealer for a number of service bodies. IMT Bodies is one of the lines.

“We started to manufacture our own to shorten timelines,” Steinbring said. “We custom-build whatever you want. We don’t just do package A, B or C.” An example might

be a Texas bed with cabinets. They do quite a bit of maintenance units for the oilpatch.

A large sale to a startup oilfield maintenance company came just at the right time.

It involved many cabinets, decks and pickers.

Supply Bourassa joined about five months ago, bringing with him a background in oilfield supply over in Lloydminster over the last 30 years, the last 20 of which in service

rig supply. As a result, Transform Crane is now providing oilfield and rig supply. They have two

people working on supply and parts, and another three on oilfield and service rig industry supply.

This includes the typical rope, soap and dope, but Bourassa said, “We also specialize in service rig overhead equipment – tubing tongs, rod tongs. We do in-house hydraulics,” He noted they sell locally, but also to Estevan, Weyburn, Manitoba and even Ontario.

While service rigs are the focus, flushby and coil tubing units are also part of the market.

“We sell lots overseas, to Australia, for service rigs,” Bourassa said.

Examples would be tubing tongs, rod elevators and BOPS. Most of that product

is shipped by air, while some does go by seacan.

“We’re experts at finding the tough items that others won’t even try – drawworks parts, tong parts,” Bourassa said.

“Why they deal with me is we can put whatever they need into one package.”

“The past four years have been tough on the service rigs. This year is picking up, where if they went direct to a vendor, they’d be shipping 20 things. I put it all together, supply one invoice, and ship it all together.”

He added, “We’re the exclusive distributor in Lloydminster for RNE Equipment (Red Neck Equipment). It’s a line of engineered service rig equipment, handling equipment, etc.”

Custom software fits your needs, not everyone else’s Lloydminster – When it comes to the software integral to running your business, one size definitely does not fit all.

That’s the general idea behind custom software, and to which Dynasoft Communications Inc. has built their business. Wally Rolfes handles sales in Western Canada.

Like much of the oilpatch, he noted the Lloyd area has seen staffing levels down as much as 30 to 50 per cent compared to 2014. And that’s where custom software can be a big help. “We’re saving them money in the sense

of streamlining their processes,” he said on Aug. 14.

“For what we do, administrative costs have always been a loss leader. No one considers to streamline them, that expense is always just there,” Rolfes said.

“For all my years in the oilpatch, so much focus has been in the field, getting oil out of the ground quicker, faster and cheaper,” he said.

“Most companies focused on how to streamline field operations while the concept of streamlining administration was often overlooked.

“A lot of today’s companies still don’t know the ► Page A29

As their name suggests, cranes are a big part of Transform Crane. On the left is Cory Bourassa and on the right is Lee Steinbring.

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PIPELINE NEWS September 2018

A29

Online ordering firm launches for diesel engine parts

By Brian Zinchuk Lloydminster – In a world where online ordering can bring you almost anything, why not engine parts?

That’s the premise behind Lloydminster-based Engine Parts Canada (EPC), a new outfit that set up in Lloydminster in the fall of 2017. Its web portal is enginepartscanada.ca.

The company carries heavy duty engine parts; new aftermarket parts for Cat, Cummins, Detroit, Mack and Paccar. The brands carried include PAI Industries, Interstate McBee and FP Diesel, to name a few.

Many of the products they carry are used in engine rebuilds. An example is an in-frame kit, which would include pistons and liners, bearings, the gasket kit, etc. And those parts can be shipped anywhere in Canada. An early-August order went to Newfoundland, for instance.

“With this online ordering, I’m getting calls from the Manitoba/Ontario border, all the way to Oregon

and Virginia,”said Toby Culham, manager, on Aug. 22.

These parts are often used by self-sufficient independent repair shops.

Others are owners who will rebuild their engines themselves. It could be a cylinder head or turbo heading to a farmer, for instance.

“Right now I’m shipping a lot of Caterpillar in-frame kits from PAI out the door. They’re coated for lower friction and able to retain the heat in the combustion chamber,” he said.

There’s also a front desk for their warehouse in Lloydminster, located on 52nd Street, on the Saskatchewan side of the border, but that accounts for maybe five per cent of total sales.

They can ship overnight to Calgary, EdmonThe parts on this top shelf are just some of Engine Parts Canada’s offerings. ton, Fort McMurray, Saskatoon, Regina, Winnipeg The inventory num- tunity for EPC, as clients It’s got a few em“We’re starting to and other areas in Western bers over 300,000 items, don’t have to wait sev- ployees right now, fulfill- slowly get into some of the Canada, and two-day ship- according to Culham. eral days for a part to be ing online orders and staff actual oilfield maintenance ping to other regions. They The downturn in the sourced from the U.S. Sev- answering phones. The side. We’re supplying some use Purolator or LTL (less oilpatch has meant many eral dealers also carry parts website has messaging parts for the smaller 8.3 than truckload) freight for dealers have lowered their from EPC. The company functions and email, and litres, gensets and commost of the shipping, em- in-stock inventory. That is already turning a profit the warehouse is open 8 pressor engines for some ploying several LTL firms. has provided an oppor- after only a few months. a.m. to noon, and 1-5 p.m. companies as well,” he said.

Software built for you; not the other guy ◄ Page A27 advantages of using a custom software program to streamline their operations.”

With the current slowdown and slimmer margins, companies have more time to research better options, he noted.

“We custom-build software,” he said. “Off the shelf software is typically built generic to cover some operations performed by that sector or like business.”

As an example, he said, “We have five different vacuum/hydrovac clients with 5 completely different applications.”

Off the shelf soft-

ware typically is missing one or more aspects that a company would want or need, according to Rolfes.

“We can put that all together,” he said.

“We build specifically for that company.”

A prospective client may ask if we have provided software for their type of company.

He responds, “We have, but what do you want?”

Secondly, there is often a licensing fee associated with most off the shelf software applications. The more users, the more licenses, the higher the overall expense. Small to medium size companies often don’t have

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“We can give them an affordable, custom program, that fits their budget without those fees,” he said.

Custom-built software is fundamentally a database, with custombuilt interfaces (what client sees and operates), along with the program itself to process all actions performed on the interface. “From phone call to invoice, what do you want to cover?” he posed.

Connecting field op-

erations and office administration with an application can have great benefits to any company. The information that is gathered on a typical field ticket is used for so many departments once it arrives at the office. In most cases payroll, costs, and safety are all derived from the information gathered in the field.

“It is not simply spreadsheets,” he emphasised. “It is a full database of all the information gathered, that allows our clients to data mine

that information to complete normal administrative actions such as payroll and invoicing.”

Other streamline advantages he mentioned was being compatible with typical accounting software programs that companies are using such as Sage or QuickBooks. “That compatibility can drastically cut down double data entries, and extra administrative time,” he stated.

Some of the areas that Dynasoft focuses on the most for the oil

patch include: dispatch, ticketing, safety management, inventory control, as well as employee and equipment management.

Rolfes has worked in the oil and gas sector for almost 25 years, 10 of which he ran his own company.

“With my experience over the years, along with running my own company, it is very important to stay updated with the times in order to stay viable and competitive,” he states, “Keep your core values, but update your operations.”

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A30

PIPELINE

NEWS

September

2018

Using dry ice to clean up

By Brian Zinchuk Lloydminster – The colder something gets, the more it shrinks.

That simple principle is the concept behind Scormac Ice Blasting of Lloydminster. It’s an industrial cleaning process that can be used for things as varied as flanges to oilseed handling equipment. Barrie Scora is the one-man-band in Scormac, but he hopes to have more some day.

“I have people give me a hand, but I’m not busy enough to keep them.”

Things are getting better, he said, but there’s not enough work to warrant another person fulltime, yet.

“The process has been around since 1988, but has not been promoted,” said Scora on Aug. 16.

He’s been using it now for three years. Others have used ice blasting in the area over the years, but have not carried on with it. “In Saskatchewan and Alberta, there’s probably a dozen different companies,” he said.

“There’s no water or chemical used. There’s virtually no cleanup when

I’m done. It’s basically the same principle as sandblasting, only I use dry ice.”

While he has to wear standard personal protective gear like gloves and a full face shield, in most instances he doesn’t have to suit up like a sandblaster which wears an outfit that looks like it came from a 1950s science fiction movie. The heavy duty gear is required for tight spaces, though.

The dry ice is shot out of a wand at a temperature of -78 C. Scora said, “The ice hits it and instantly freeze it and it then contracts. When it gets smaller, it releases.”

The dry ice (frozen carbon dioxide) is blasted by a sizeable air compressor. “I run a fairly large compressor,” he said.

The size of the ice is varied as needed, and it is metred to determine pounds of ice per minute.

“It hits, freeze it, and once it gets to the flange, then it has a base where I can get under it and I can get a piece off this big,” he said, holding the lid to a coffee cup. From there, a broom and shovel are used to clean up the debris.

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Showing pictures of various industrial items he’s cleaned, Scora noted it may look bad when dirty, but usually there’s not actually a lot of volume of material.

“Most of it is just straight oil that’s dried. The drier it is, the better,” he said.

He’s used this process at the major industrial sites in Lloydminster, including the upgrader, refinery and canola crushing plant. But he’s also used it with the local car club, cleaning cars.

For a single well battery, he said, “I’ll clean the rods on the skid engine, and you don’t have to shut it down.”

Poplar fuzz in radiators cleans up nicely.

“I can clean electric motors while running. It’s frozen air. There’s nothing to conduct electricity,” he said. Still, he uses a grounding clamp to take care of static electricity.

This type of cleaning is often a once-a-year affair.

As for activity level, he said it can be busy for three or four weeks, then slack off. Turnarounds are a key thing for him,

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and every one of the new thermal plants has regular turnarounds. Summers are busy, and he recently did a turnaround in Edmonton.

The work sometime means cleaning the inside of vessels. Cleaning reactors can be “an ugly mess.”

It requires supplied air to breathe and a safety watch.

One limitation is epoxy coatings. “I can’t do epoxy coating. Epoxy is too hard. I can clean epoxy, but I can’t remove it.”

Scora gets his dry ice in 250 kilogram totes from Fort Saskatchewan, Alta. It’s a perishable item, so if a job is cancelled, the client is billed for what they’ve ordered.

His timing in firing up the business came just after the downturn hit.

“I started this at the perfect time. When everything went in the toilet.

I’m serious,” he insisted.

The reason for that is he can clean cheaper than current methods. So when the boss leaves instructions to find savings, ice blasting can be one of those.

It’s been a hard fight to get established. “I spent a lot of time doing demos,”

Barrie Scora uses dry ice to clean, in a process similar to sandblasting, but without the grit.

Scora said, and on those, he didn’t make a dime.

Slowly but surely, people started coming along.

“Last year was better than the year before. This

year is better than last,” he said optimistically.

He’s got his eye on cleaning big fin fan coolers. “I’ve tried a few, and it works really well,” he said.

PIPELINE NEWS September 2018

A31

HSE Integrated established Lloydminster shop in early 2018

By Brian Zinchuk Lloydminster – HSE Integrated opened a new Lloydminster location this past January, according to branch manager Braden Hermus.

The region had previously been covered by their Fort Saskatchewan, Alta., branch, but there was enough work in and around Lloydminster to establish a location there.

HSE has been doing a lot of work in the development of thermal (steam assisted gravity drainage, or SAGD) in the area.

Hermus said on Aug. 15 they have 20 local staff and more coming in all the time. As for where they will top out, he said, “Thirty is a good number for us.”

It’s a totally new base for the company which has locations across Alberta,

Braden Hermus is the branch manager for HSE Integrated’s new Lloydminster station. The air trailer he’s standing in front of is a key service they offer in Lloyd.

Saskatchewan, Manitoba, southern Ontario, Atlantic Canada and Texas.

The new Lloydminster base services an area from Vegreville to the west, north to Onion Lake, south to Kindersley and as east into Saskatchewan as far as needed.

In addition to being on-hand for drilling rigs, they also provide breathing air and gas monitors.

At any given time they will have five to seven workers focused on drilling and completions. The rest of their crew is working on the thermal plants, providing high angle and confined space rescue, breathing air and safety watch.

Hermus noted it was nice that they had existing work in the area prior to establishing the base.

They’ve pulled in help from other stations as needed.

There’s been a couple of transfers, but quite a few new hires, mostly from the competition. They picked

Mark Gantly, a service tech with HSE Integrated, performs an air “Posichek” on an air pack mask. up some from a job fair.

“We’re still actively hiring,” he said.

With all the plant work, it’s a more consistent work year compared to other areas of the oilpatch.

“We don’t get a spring breakup as much,” he said.

That might mean working on massive shutdowns in Fort Saskatchewan and Edmonton, but it keeps people working.

Asked if things are picking up, he said, “I think so. We see a steady increase, steady growth. We’re still new.”

The Lloydminster location is an authorized Scott air pack service centre.

“We’re doing well at what we do,” he said.

Hermus has spent 18 years with HSE and its predecessors. He started with Splash and Dore,

two safety companies that joined. “I came in around 2000,” he said. SDS Safety was another successor, and they were all eventually purchased by HSE. His background is in air quality work. Hermus is not a medic or firefighter. He rose through the ranks including stints as shop foreman and dispatcher, and has an industrial safety background.

“We’d stock him up every morning,” Patrick said. “He’d head out to work and he’d have a box.”

While Barry has since retired from the pipeline business, the pipeline business had not retired from Vibank. Every 10 years or so a new pipeline is built along the Enbridge mainline, which runs west to east, just south of down.

The current Enbridge Line 3 replacement project is just getting going across the highway, a short dis-

tance from the butcher shop. “We watch it out the window. Lots of guys there stop,” Patrick said.

They have long sold it in $10 and $20 bags, and it’s quite easy to go through a bag on a long trip. But being so chewy, you might find your jaw sore if you get too far into a $20 bag in one go.

“Even now, we’ve probably got 150 pounds in stock. We have it on hand at all times, and never run out,” Patrick said.

The jerky is a bit pep-

pery and quite sinewy.

Asked what cut it comes from, Patrick said, “It’s all off the round steak.”

Chris said, “We slice it thin on the slicer, marinate it and smoke it.”

Patrick said it was a secret recipe. “That’s why you can only get it here.”

With several hundred pipeliners working on that right-of-way this fall, they’re going to have their work cut out for them, so to speak, to keep up with the demand.

Pipeliners know this as probably the best jerky you can find: Vibank Meat Market

By Brian Zinchuk Vibank – If you’ve worked on big inch pipeline projects in southern Saskatchewan, particularly on the Enbridge mainline, there’s a pretty good chance you’ve had an opportunity to try beef jerky from the Vibank Meat Market. And if you have, you’ll probably never forget it, either.

The jerky is legendary in the pipeline community, and still ends up being distributed on pipeline projects all the way into Alberta. One long-time pipeliner told us the jerky, several hundred dollars worth at a time, will be sold out before the engine cools on the pickup of the guy who brings it out to a job.

The Vibank Meat Market is a multi-generational family business, owned by Patrick Gerein.

He took it over in 1990, when his father passed away.

“Dad bought it in 1974,” he said on Aug. 23, deftly slicing up round steaks with his brother, Chris.

They are part of a large family, seven boys and seven girls. Two of those brothers ended up as pipeliners.

One, Bob, for a short time, and the other, Barry, made a career out of it as a long-

time pipeliner and purchasing agent. He would frequently bring large boxes of jerky to pipeline project yards, quickly selling out.

“We shipped it all over the place,” Patrick said.

Chris added, “Wherever the pipeline was, he was, and that was where it went.”

(306) 462-2130 nankivelltruckingltd@signaldirect.ca nankivelltrucking.ca Patrick Gerein, left, owns the Vibank Meat Market, source of beef jerky that is legendary in the pipeline community. His brother Chris is cutting steaks with him. Their brother Barry, who was a long-time pipeline purchasing agent, would take large boxes of jerky out to the various sites he worked at over the years. Photo by Brian Zinchuk

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$249,000 stk# 941012

C/w 2007 Advance 16 m3 tank, TC406-crude spec, no tank cert. Only hauled water, 4 top hatches, T&E Load pump, shaft driven, s/n 2AESTHB047S000142, rear spray bar, hoses, tool boxes, pindle hitch, ready to go to work, A/C Condition: Good, Differential Lock, State DOT, 6x4, Wet Kit

1996 KENWORTH T800 C/w Online flushby unit, 42 ft. mast slant compatible, 50,000 lbs rating, 3x5 gardner denver triplex pump, namco drop box, Wabash 60 bbl TC306 spec tank,HL25 pullmaster working winch, PL5 pullmaster catline winch, Trico rod hook, 25 ton, 25 ton travelling blocks, new level IV inspection, no tools, Wet Kit, Differential Lock, Turbo

2015 INTERNATIONAL PAYSTAR 5900

$395,000 stk# 071764

C/w 2003, Refurbished in 2015, Western Fab Ltd. flushby unit, s/n 03-09-1008, 50 Ft. Mast height, 50,000 lb. pull rating, free standing, 3x5 Gardner Denver triple pump s/n 12493, Namco drop box, 1995 Wabash 10m3 two compartment tank, re-certified in 2002, Pull master model HL-25 working winch, PL-5 catline winch, Cranesmart crown saver, weight indicator, Plumbed for BOP’s, power tongs, Fassi model M30A.13 crane, s/n 0304, working floor, fall arrester, rod handling tools, hand tools, tool boxes, hoses, fittings. All certifications are up to date.

2015 WESTERN STAR 4900SA

$1,250,000

C/w Celtic pride 72 ft telescoping mast, 50,000 lb rating, 48,000 lb Celtic pride injector, rod board, 2014 Fassi Model M30A picker, 2013 Maxistad picker, Fassi Model MA30A picker, rod tongs, rod handling tools, over shots, misc. tools, tool boxes, 2015 Ford F350 4x4 c/w coil tubing welder.

5 complete reels, All certs up to date and ready to work. Complete package in excellent condition, A/C Condition: Excellent, Differential Lock, State DOT, 6x4, Turbo, Wet Kit

NEW LOCATION! Corner of Hwy. 16 & Upgrader Road, Lloydminster

You Call We Haul 24 Hour Service BOX 123 KISBEY, SK S0C 1L0

A32

PIPELINE NEWS September 2018