Professional Documents
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Well Construction Journal - March/April 2015
Well Construction Journal - March/April 2015
PLUS
OIL ON THE TRACKS
An update on rail
transport in 2015
WELCOMING WORKERS
Alberta program helps
women enter the trades
PM#40020055
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MARCH/APRIL 2015
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12
DEPARTMENTS
4
PRESIDENTS MESSAGE
10
11
17
25
26
21
FEATURES
12 A BRIGHT SPOT
STUDENT PROFILES
HELP WANTED
Can Saskatchewans
promising Torquay maintain
its potential?
MEMBER PROFILE
BY THE NUMBERS
DRILLING DEEPER
18
21
23
STEPPING UP SAFETY
23
march /april 2015
Presidents
MESSAGE
I
Dan Schlosser
CADE President
One call to Global Steel provides customers with comthe job site. Global Steel currently maintains 18 inventory
stock points strategically located across Canada. Each
stock point is supported by veteran trucking companies
service.
An unwavering focus on operating and service excellence
is what separates Global Steel from everyone else. It is a
commitment that shows in our products and services. At
Global Steel we are focused on your business.
E: INFO GLOBALSTEELCA s WWW.globalsteel.ca
The Drawing
BOARD
E D I TORS N OT E
Embracing Uncertainty
CADE Executive
Team 2014/2015
President
Dan Schlosser
Vice President
Education Chair
Linden Achen
lachen@westpetro.com
Membership Chair
Andy Newsome
andyn@xitechnologies.com
Social Chair
Kristy Hysert
kristy.hysert@shaw.ca
Treasurer
Cecil Conaghan
conaghan.concepts@gmail.com
WCJ Editor
Christian Gillis
christiang@hawkeyeengineering.ca
Sponsorship Chair
Craig Joyce
craigj@xitechnologies.com
Sponsorship Chair
Brooke Needer
Brooke.needer@cadecanada.com
IT Chairman
Matt Stuart
matt.stuart@surgeinc.com
Secretary
Tammy Todd
tammy.todd@taqa.ca
Communications
dschlosser@ncsfrac.com
M EM B E R S C OR N E R
WELCOME NEW MEMBERS
JARED ALVEY
CHUKWUEBUKA KENNEDY ANYAEJI
CARLOS BARRIOS
PATRICK BAYO-PHILIP
OLUWATOFUNMI CAULCRICK
EMRAH CEBECI
JOE FISHER
JEFF GERLITZ
JOHN HAYES
PETER IDOGA
FRANK ISEH
PAUL MATTHEWS
JONATHAN MCGREGOR
NICOLE MEISSNER
CANDACE MENGER
MICHAEL NEEDHAM
ALEXANDRU NISTOR
JULIAN NUNEZ
ASEKIRIBEKE STANFORD OKUMGBA
KERRI OLSON
TOLULOPE OLUBAJO
FRANCIS PATRICK ONOJA
MUHEEZ OPEBIYI
RICHARD PEARCE
DANNY PROCTER
YOUNUS RASHAN
MUHAMMAD ADREES RAZA
DOMINIQUE ROCH
SABA SADIQ
JOHN SHAFSHOLT
EVE SURIYASRI
KASHIF SYED
MICHAEL UGHANZE
JONAH URTON
LONG VONG
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The Drawing
BOARD
N EW S AN D N OT ES
TEC H N I CA L LU N C H EON S
Save the Date: March 18, 2015
Topic: Deep Casing Tools A Smart Solution for Reducing Well
Costs and Risks
Presenter: Mike Chomack
Deep Casing Tools unique and patented technology provides a
step change in the process of running casing and liners, and can
be used on any rig or well in the world without the need of special
equipment. In this presentation Mike Chomack, a petroleum technologist with over 35 years of industry experience gained while
working for both service companies and operators, will address
how deep casing tools are a solution for reducing well costs and
risks. Chomack established the Deep Casing Tools operation in
Canada in April of 2013, and in May of the same year was promoted to the position of Vice President.
DurabandNC
THE WoRLDs MosT TRUsTED
HARDBAnDIng
Luncheon Tickets
MEMBERS:
NON-MEMBERS:
FULL TABLES OF 10:
STUDENT:
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Hardbanding Support
ImProvIng STandardS
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Student
PROFILE
Young Talent
Highlighting tomorrows best and brightest
J
Julian Nunez
Oil and Gas Engineering Program
University of Calgary
Muheez Opebiyi
Petroleum Engineering Technology
SAIT
Women Building Futures notes that this is often the case with First
Nations people who want to become apprentices. Afterwards, the
program provides support during the apprenticeship stage, including help seeking out scholarships to complete their training.
The provincial government offers a number of scholarships to
Albertans that are interested in learning a trade, and there are also
grants available from the federal government for those who complete their training.
DRILLING SLANG
If you want to walk the walk on a drill site, it helps to talk the
talk. Here are some terms and phrases often heard out in the field:
NON-DARCY FLOW: Fluid flow that deviates from Darcys law, which
assumes laminar flow in the formation. Since most of the turbulent
flow takes place near the wellbore in producing formations, the
effect of non-Darcy flow is a rate-dependent skin effect.
www.cadecanada.com
11
Special
REPORT
SASKATCHEWAN
REGINA
MANITOBA
MONTANA
SOUTH DAKOTA
12
By Robin Brunet
Bright
Spot
www.cadecanada.com
Can Saskatchewans
promising Torquay
maintain its potential?
13
Special
REPORT
FAST FACTS:
only 151 million barrels of technically recov- the oil business, analysts are careful to temper
erable crude. Crescent Point Energys president their enthusiasm at least publicly. Weve
and CEO, Scott Saxberg, has publicly stated that tried to be deliberately conservative in our foreTorquay, has the potential to be the equivalent casts, in that we dont want to overblow where
size of our Viewfield Bakken play, which pro- its going, CAPP vice-president of oil sands and
duces 70,000 boe/d.
markets Greg Stringham told Alberta Oil magaT h is reassessment has caused ot her zine in September 2014.
organizations to adjust their predictions of
Saskatchewans total oil production. The T O R Q U AY S T R E TC H E S across North Dakota,
Canadian Association of Petroleum Producers southeast Saskatchewan and southwest Manitobelieves production in that province will grow ba. As is the case with Middle Bakken, it has a
from 486,000 bpd to
number of distinct hydroThe size of the prize is just too big
607,000 bpd by 2030 a
dynamic systems. Though
to ignore. Investors made fortunes
substantially brighter foreits name implies three paywith the Bakken in its early years,
cast than its estimate two
zones, Torquay consists of
years ago that production and a similar investment scenario may four stacked oil-bearing
would peak sometime this
formations that are cumunow unfold. Keith Schaefer
decade. Much of the excitelatively 250 feet thick (the
ment over Torquay stems from Crescent Point USGSs dramatic increase in yield estimates is
developing its outcomes in the Flat Lake area partly due to the survey including the upper
of southeast Saskatchewan from zero to over layer, which alone is about 50 feet thick).
5,000 boe/d, by drilling 36 low-decline, high
Torquay
consists
of
interbedded
rate of return wells that pay out in less than sev- grayish-green dolomitic mudstone, pink silty
en months This is a remarkable achievement, dolostone and anhydrite. Its part of the
considering investors typically look for 12 to Sinclair Field, which had been explored in the
15-month payouts.
1960s but whose pay was overlooked during
But, perhaps mindful of how quickly a Next that time (reserve discovery came in 2004, and
Big Thing can turn into Yesterdays News in the field was designated the following year).
14
As with the Bakken, oil is produced from Tor- tubing units have also benefited Crescent Point
quay using both horizontal drilling technology operations, the former positively impacting the
and hydraulic fracturing. Between 2008 and companys cash flows by lowering production
2013 alone, approximately 450 million boe declines and improving rates of return on prowere produced from the Bakken and Torquay ducing wells. Meanwhile, Legacy has designed
its own frac plans and conducts real-time monin the U.S.
In April 2014, after Crescent Point itoring rather than passing over the task to serannounced the outcome of its 36 wells drilled vice companies. This has allowed the company
in Torquay, the company acquired CanEra to optimize the efficiency of well completion
Energy for $750 million. This gave it an extra and better cope with unforeseen geological
680 square kilometres of acreage in the region, challenges. Additionally, because it already has
gathering systems in place
and Crescent Point spent
the rest of the year devel- The Canadian Association of Petroleum for oil and natural gas due
oping the play (to the tune Producers believes production in that to prior drilling in the Bakof $200 million). This province will grow from 486,000 bpd ken and Midale Formations,
Legacy can rapidly increase
summer it is initiating its
to 607,000 bpd by 2030.
production from early stage
first waterflood pilot.
Continental Resources and Vermilion Ener- to full-field development as can Crescent Point
gy are monitoring Crescent Points work close- and Vermilion, for the same reasons.
But for all the recent interest in Torquay, anly. The former, a longtime Bakken player, has
drilled exploration wells in the three deepest alysts are reluctant to discuss production potenTorquay zones. The latter has meaningful ex- tial. Energy Aspects turned down Well Construcposure in the Torquay, according to director of tion Journals request for an interview, stating it
investor relations Dean Morrison, but it is al- doesnt have anyone looking closely at the play.
lowing industry to progress the play further Petrel Robertson Consulting and even Tundra
before investing in development (when con- Oil and Gas (the latter regarded as having contacted to discuss opportunities in Torquay, in- siderable knowledge about the formation), also
vestor relations analyst Andrea McCormick de- declined to be interviewed.
This may be due to the fact that, despite
clined to participate, stating that Vermilion is
not actively drilling the Torquay at this time.) Crescent Points well successes to date, the TorFor the record, Continentals assessment of quay remains largely unexplored and given
the Torquay states that the inclusion of the the predominance of the Bakken, there hasnt
deeper parts of the formation boosts the total been much incentive until now to drill deeper
amount of oil originally in place from 577 bil- and determine the specific challenges of the forlion barrels to 903 billion, with as much as 45 mation. That would explain why, when asked
in September if Torquay as a commercial rebillion barrels being technically recoverable.
Legacy Oil and Gas has also explored the source will affect CAPPs crude oil forecasts for
Torquay: in 2011, it drilled a well just north Saskatchewan, Greg Stringham replied, Its
of the Saskatchewan border with reportedly a bit too early to say that its going to make a
modest results. It commenced further drilling substantial change.
In a piece he wrote for his Oil and Gas Investin 2014 in the Flat Lake and Taylorton areas.
Legacy continues to evaluate and increase its ments Bulletin newsletter in June 2014, analyst
potential in the Taylorton and Pinto areas, Keith Schaefer points out that, although the Torwhere Torquay oil is sourced by the overlying quay has invigorated the Canadian side of the
Bakken and caused industry to leap-frog estiBakken shales.
Torquays success depends on the type mates in the U.S., Its important for investors to
of technology used for development. Cres- remember that Torquay/Three Forks is still in its
cent Point, for example, continues to refine early stages, and different areas and formations
its 25-stage cemented liner completion tech- may respond differently.
Still, Schaefer concedes that, The size of
niques, which uses up to 45 per cent less water
than previous completion methods and results the prize is just too big to ignore. Investors made
fortunes with the Bakken in its early years, and a
in decreased well costs.
Waterflood programs and the use of coil similar investment scenario may now unfold.
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15
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CONSTRUCTION DRILLING COMPLETIONS
Member
PROFILE
By Martin Dover
The Possibilities
are Endless
Troy Taddeo finds a world of
promise in his switch to sales
www.cadecanada.com
17
Economic
REPORT
market prices led to major changes across industries. As of February, a number of energy companies have announced plans to rein in spending and
exploration in order to survive the recent dip in oil
prices. BHP Billiton, Total and ConocoPhillips are
just a few of the companies who have announced
plans to cut expenditures on North American shale
oil exploration in 2015.
The Torquay region in southeastern Saskatchewan has won attention from investors and companies looking to gain access to North Americas
next big shale play over the last several years. The
play is an extension of the Three Forks shale gas
formation located in North Dakota. In contrast to
Well Construction Journal
By Lisa Catterall
capital expenditures budget by 28 per cent in
order to accommodate falling oil prices.
One of the things they have is almost 50 per
cent of their oil hedged through the end of this
year at $93 a barrel. Thats huge. Oil is below $50,
but theyre getting $93. Most companies dont
have hedges like that, so Crescent Point reaps the
benefit when their price is set higher. That, plus
their already strong balance sheet is a big help,
says Bruce Campbell, president of portfolio management at Torontos Campbell, Lee and Ross.
Last year alone, the company drilled 41 horizontal wells, including 11 step-out wells, in the
Torquay play. It aims to expand on the regions
2014 growth by drilling 44 net wells this year. As
Canadas largest driller of horizontal wells, Crescent Point has planned for expenditures of $188
billion in the Torquay (Flat Lakes) in 2015, which
accounts for approximately 13 per cent of the
companys budget. The budget not only allows for
continued drilling and traditional exploration of
the area, but in mid-2015 its also looking to begin
the first waterflood pilot in the area.
Low break-even prices for current operations
in the Torquay and Bakken have meant that
even with lowered oil prices, Crescent Point still
retains an advantage. With a break-even point at
just below $50 per barrel, the company stands to
continue its success even in the current economic
environment.
The main focus for the companys spending will
be technology, which reduces production costs
the part of the Three Forks resting south of the while increasing output. This method has been
border, Torquay has presented lower capital costs successful in lowering decline rates and increasing
and higher rates of return from wells, making it a recovery factors over time across Crescent Points
lucrative development area.
activities in Canada.
The potential of the play has been of great
In a January 6, 2015, press release, Crescent
interest to Crescent Point, one of the biggest Point president and CEO Scott Saxberg said, Our
players in the area since 2007. Between then commitment to technology is a key value-driver
and now, the company has
for the company. TechnoThis time, we know its not going
logical advancements such
acquired more than 960
to be five years, its not going to be as our 25-stage cemented
net sections of land in the
three years; you can wait it out and
liner completion techniques,
area. Now, with oil prices
cut
costs and do whatever you can to waterflood programs across
at less than $50 per barrel,
Crescent Point is faced with survive and then live to fight another all major plays, and the use
of coil tubing units provide
the dilemma of cutting costs
day and itll be 2016.
us with a clear advantage
while maintaining its strong
Bruce Campbell
that has direct impact on our
position in the Torquay.
Though the companys initial budget for the cash flows and, ultimately, our bottom line.
One of the things thats helping is that theyre
year is conservative, its bottom line is cushioned
somewhat by hedged prices, which will protect going to the drillers and asking for cuts in the fees
the companys development plans in Saskatch- that are paid in order to drill a well, says Campewan. This year, Crescent Point has reduced its bell. Like a lot of other companies, theyve cut
www.cadecanada.com
19
Economic
REPORT
Transportation
REPORT
By Jacqueline Louie
FAST FACTS:
www.cadecanada.com
21
Transportation
REPORT
FAST FACTS:
Safety
REPORT
By Samus Smyth
Stepping Up Safety
New Canadian technologies are playing a significant role
in making pipelines safer
and smart pigs are some of the latest instruments being used by Albertas pipeline
leaders to ensure the oil and gas industry
plays it as safe as possible.
The dialogue surrounding pipeline safety in Canada is charged. Because they carry and transport some
of our most lucrative natural resources through our
countrys most delicate terrain and environment,
pipeline concerns take a prime seat when it comes
to natural resource extraction debates. And while
yes, companies have been motivated to advance
their technology due to environmental concerns,
its also the large volumes of men and women that
have careers in the pipeline business that has made
www.cadecanada.com
23
Safety
REPORT
the province. Aptly named the Frac Room, it
ATCO, for one, hasnt been underestimating the
has four television sets documenting its hydraulic
work they have cut out for them when it comes
fracturing projects, ensuring optimal attention to
to upgrading old pipelines and regulating news
detail.
ones. Its a suite of things, says Hahn, about
Further north, Edmonton-based C-FER Technolwhat the company takes on in this regard. From
ogies has been researching and testing methods
field inspections to your inline inspections, to the
to utilize fibre-optic sensors and hydro-carbon
revealing of the maintenance records, they are all
detecting cables to enable them to detect notable
part of managing the risk of pipelines to the lowest
temperature changes and leaks more rapidly in
possible number. We want safe, reliable, sustainpipelines. Brian Wagg, C-FER Technologies direcable service thats our pipeline goal.
tor of business development, and his team have
All of this comes at a cost. CEPAs Frison says the
actually created a testing ground for spills via a
pipeline industry spent $1.4 billion on pipeline
massive tank, which boasts a 24-foot pipe with the
safety in 2013. She points to a number of factors
ability to purposely leak through leak ports. Its one
as playing significant roles in the improvements,
of C-FERs many ways of offering vendors the most
but says nothing trumps the research and work of
futuristic and optimal equipment.
post-secondary institutions across the country.
What Wagg views as the most significant inCanadas universities have the highest propornovation in the pipeline industry has been the
tion of pipeline researchers in the world, and our
industrys ideological movement from qualitative
industry works hard to support them to ensure we
data to quantitative data. In the past, the methods
continually develop new technologies to advance
were semi-quantitative or
our safety practices, says
There is a push by the regulators and Frison. A number of collabsemi-qualitative, based on exthe operators to use hard numbers to orations between competing
perience and opinions of the
characterize the risk on the pipeline
people with experience. But
companies in the name of
there is a push by the regulaand to evaluate where they should be safety have also given Frison
tors and the operators to use
hope that pipeline safety has
spending their money.
hard numbers to characterize
set a bold, new standard.
Brian Wagg
the risk on the pipeline and
CEPA members have also
to evaluate where they should be spending their
established their own program to take their pracmoney, Wagg says. How you are processing that
tices to the highest level going beyond regulation
info, whether it be by using engineering models,
and coming together as an industry to demonevaluating that data and entering data to assess the
strate their commitment to acting responsibly and
impact, doing a repair or even doing a survey, now
in Canadians best interests. Safety is one of the
you are confident in identifying the features on the
key focus areas of the program, and the industry
pipeline.
collaborates to improve and advance their safety
ATCO President Brian Hahn says the company
practices to reduce the risk of pipeline incidents,
has had pipeline monitoring stations for as long
with a goal of zero incidents, she says.
as he can remember. Stations are manned at all
In 2013, all CEPA members signed the Mutual
times and on all days throughout the year, and
Emergency Management Agreement (MEAA),
have served as invaluable methods of gathering
which formalized the industry practice of sharing
data. All have pre-determined notice levels and
resources between companies in the event of
alarm levels that help the monitors make sure they
a significant incident. And in September 2014,
working within the operating parameters that are
CEPAs members took part in a joint emergency
set, he explains.
management exercise to test this agreement and
A new technology that stands out for Hahn is
strengthen the industrys ability to work together
pipeline inspection gauges, otherwise known as
in the event of an emergency she continues.
smart pigs. They have been used to determine
Its this internal teamwork that has the pipeline
the overall health and condition of a pipeline by
industry confident about the future, including
gauging the thickness of pipes and checking for
ATCO president, Hahn. Industry collaborating
corrosion. Theyre called pigs for a few reasons
and sharing best practices, this is how industry
its an acronym (which stands for pipeline inspecworks on a journey of continuous improvement
tion gauge) and also references the squeal created
and sharing their experiences and so everyone can
when making its journey through a pipeline.
be a beneficiary, he says.
By the
NUMBERS
Stats at a Glance
Canadian Rig Counts
February 13, 2015
Drilling
Down
Total
Utilization
Alberta
231
309
540
43%
B.C.
54
24
78
69%
Manitoba
16
44%
New Brunswick
Newfoundland
Northwest Territories
Quebec
100%
Saskatchewan
55
84
139
40%
Totals
348
426
774
45%
Active
Rigs
Active
Total
78
194
24
37
72
20
33
102
15
32
49
Encana Corporation
12
30
60
12
Source: CAODC
January 2015
January 2014
YTD 2015
YTD 2014
$31.8 million
$39.1 million
$31.8 million
$39.1 million
$163.07
$245.80
$163.07
$245.80
$139.047
$1.2 million
$139.047
$1.2 million
$38.12
$183.03
$38.12
$183.03
www.cadecanada.com
25
Drilling
DEEPER
By Robbie Jeffrey
PRECIPITOUS DIVE IN OIL PRICES MEANS upwards of $1 billion, income people were
the Conference Board of Canada is earning in Alberta, going back to other provnow doing double duty as both a re- inces, says Burt.
search organization and a harbinger
The slowdown in the oil patch in Alberta
of doom. In January, it forecasted a reces- will likely increase the supply of skilled worksion in Alberta after benchmark oil prices ers in the rest of the country, adds Richard
dropped more than 45 per cent between June Truscott, vice-president of B.C. and Alberta
and December of last year. Cash flow, busi- at the Canadian Federation of Indepenness confidence, long-term investments dent Business (CFIB). But that does little to
its all under fire, according to a report it offset the effects of the cuts in the short
published on the impact of low oil prices. term, which are deep: in January, Baker
Alberta, responsible for 77 per cent of Cana- Hughes, Schlumberger Ltd. and Weatherford
das conventional and oil sands production, all announced between 7,000 and 9,000
will bear the brunt
job cuts. Halliburton
of the $5.2-billion
announced plans to
This year is shaping up to be a pretty
loss in provincial
lay off between six
rough ride. If we dont see a rebound
government reveand eight per cent of
soon, its going to be a dark year
nues on top of job
its global workforce.
for Alberta.
losses in the tens of
Pengrowth Energy
Richard Truscott
thousands, accordcut its capital spending to Kevin Hebner
ing platform by 74
of JPMorgan Chase & Co., whose company per cent from last year, Shell announced a
warned Canadians, There will be blood. In $15-billion spending cut, Civeo laid off 30 per
Alberta alone, says the Conference Boards cent of its Canadian workforce and Cenovus
report, Total business investment could be cut $700 million from its 2015 budget and
down by $12 billion this year.
halted expansions. Suncor, Canadian Natural
And the effects of the slump will ripple Resources and Husky have all cut their budacross the country. There are two strong links gets or halted expansions, or both.
between Alberta and the rest of the provStill, there is a bright side if you look hard
inces, explains Michael Burt, director at the enough just not for most Canadians. There
Conference Board of Canada. One is through are provinces that will be better off, on net,
the supply chain, the firms providing goods says Burt. Ontarios GDP will actually imor services that are used by oil companies in prove by about 0.7 or 0.8 per cent in 2015,
Alberta. This supply chain represents every- due firstly to the weaker dollar making exports
thing from metal products to transportation more cost-competitive but also to lower prices
services, to financial services or engineering, at the pump. But these small benefits arent
he says. Out-of-province employees are the enough to mitigate the 0.4 per cent reduction
other: about 3,000 people from Newfound- in Canadas GDP, the $4.3-billion drop in
land were working in Alberta in 2014, and the federal government revenues and the eight to
numbers for B.C. and Saskatchewan arent far 10 cents that low oil prices have shaved off
behind. Very conservatively, we estimate the loonie, says Burt.
26
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