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December 2009 Volume 10, Number 6 www.oilgas.

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Publication Mail Agreement No.: 40039458

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December 2009 Volume 10, Number 6

Contents
5 Face-to-Face with the Media
Publication Mail Agreement No. :
40039458 6 A Year in Review
7 Drilling Expected to Be Flat Through 2010, Says PSAC
PUBLISHER

John Robertsen 7 Albertans should be concerned about downturn in


natural gas industry
8-9 Ziff Energy Publishes 1st SAGD & Delineation Wells
EDITORIAL ASSOCIATES Drilling Benchmarking Study
David Coll
10 Imperial Oil helps SAIT students soar to success
Seema D Dhawan
Joni Evans 10 Oil and Gas Industry Survey of Public in “Operational”
Elizabeth Hak Areas Yields Surprising Results
Joe Perraton
11 Canadian Operating Costs Continue Rise in ‘08; No
Drop in 9 Months ‘09
DESIGN & LAYOUT 12 Facing financial challenges as gas hits seven year low
millstonecommunications.ca
14 The ‘Ups & Downs’ of Natural Gas Prices
amanda@oilgas.net
14 BJ Services Bolsters its Process and Pipeline Services
with New Bases in Canada
ADVERTISING SALES 15 Nexen logo unveiled on STARS helicopter in recognition
John Robertsen of $500,000 contribution
403.503.0460
jrr@oilgas.net
15 Moyno® 2000 Model G2 Progressing Cavity
16 Oil Demand from Developed Countries Has Peaked
16 IHS CERA: Oil Supply Set to Grow Through 2030
OIL & GAS NETWORK
with No Peak Evident
Suite 300, 840 6th Ave SW
Calgary AB T2P 3E5 17 Singletouch Labor Monitor report shows real-time
Phone: 403 503 0460 productivity, percentage complete
17 World First Installation of a Fibre Optic Acoustic Sensor
SUBSCRIPTIONS AND ADDRESS for Reservoir Monitoring
CHANGES
www.oilgas.net/subscriptions.htm
18 Wireless technologies bring the office into the field
or email subscriptions@oilgas.net 20 Taking charts to the next level
20 Control Microsystems Releases the Accutech TM10
Return Undeliverable Canadian
Addressed to:
Wireless Turbine Meter Totalizer
OIL & GAS NETWORK MAIL 21 H2S Measurement Applications
2 - 1450 28th Street, N.E.
23 Dresser Waukesha Introduces 12-Cylinder High
Calgary, AB T2A 7W6
Performance Engine for Gas Compression Applications
23 High Performance Rod Guides for Tubing Wear
Oil & Gas Network is published six
Prevention in Progressing Cavity Downhole Pumping
times a year. Reproduction in whole or
Applications
in part of any material in this publication 24 Challenging the shallow gas status quo
without the express written permission
25 XACT Downhole Telemetry Inc. Announces Industry
of the publisher is prohibited. Firsts for Acoustic Telemetry
The publisher of Oil & Gas Network
25 Iridium Provides Data Links for Underwater Monitoring
is not responsible for errors or emissions Systems
printed, and retains the right to edit
26-30 2009 Product in Review
all copy.

Opinions expressed in the editorial content


of Oil & Gas Network do not necessarily
reflect the views of the publisher or
Oil & Gas Network.

Printed in Canada by Calgary Colorpress

Cover photograph courtesy of Fibersapr

Oil & Gas Network, December 2009 3


Coll’s

Corner
Face-to-Face
with the Media
Some tips you may find useful,
should you find yourself in the media spotlight
By David Coll

f memory serves, it was back in 1996 or 1997. I had just embarked on a new career

I path – the transition from muck-raking oilpatch journalist to placid PR practitioner had
just begun. One of my first tasks was to draft a speech on, of all topics, the downstream
petroleum industry in Quebec and, in particular, gasoline prices.
I charged ahead with research and when my first draft was in the hopper, one of the
conclusions I’d reached was that politicians love to attack the petroleum industry because
it wins votes and puts them in touch with their constituents -- onside with the proverbial
man in the street. At the time, yet another gasoline pricing enquiry had been called for by
a central Canadian MP.
I reported a great statistic on the many enquiries that had been called for, none of
which had unearthed any substantive evidence of price collusion among the majors. In
light of that, my draft speech went on to criticize the media for jumping all over this lat-
est ‘non-event’ enquiry. As I submitted my 26-page draft to the CEO for review, I was feel-
ing like I’d really nailed this one. “It cooks,” I told myself smugly.
However, a week later, when the CEO returned the draft for the inevitable revisions, it
was a mess of red ink. On the last page, he’d scribbled a tidy summation: “Never pick a
fight with someone who buys ink by the barrel.”
It was some sage advice (even if the saying is from Mark Twain) and, in the dangerous
minefield of oilpatch Public Relations, where reputations can be ruined via an inaccurate
or ill-spoken newspaper quote, I’ve certainly tried to live by those words ever since.
Now no one wants to pick a fight, except pit bulls like Bodog, but I thought it would
be useful for readers to consider some of the points below should you find yourself deal-
ing face-to-face with the dreaded fourth estate.
The following is adapted/abridged from a document I came across some time ago and
I still find it useful. Hopefully, you will too . . .

• Before each question, ask yourself: what would the public’s point of view be?
• Predetermine one or two major points you want to get across. Try to condense these
into a headline/soundbyte.
• Directly answer the questions - it’s fine to push your own agenda but doing so too overt-
ly arouses the reporter’s professional skepticism.
• Be positive. Never criticize the competition and yet don’t be afraid to frame an issue,
which may lead the reporter to question a competitor.
• Short answers are better than long ones
• Use colorful, informal language.
• Put a human face on the story. Tell stories.
• If a reporter interrupts you, pause, let the reporter finish and then continue your an-
swer. If a reporter continually interrupts, there may be a reason. Don’t run off with the
interview.
• If a reporter asks several questions at once, you might reply “Well, you’ve asked several
questions there. Let me respond to your main point first…”
• Don’t hesitate to rephrase a question, gently, if you think it is too vague.
• Don’t repeat a reporter’s terminology unless you want to.
• If a reporter wants information you can’t release, state matter-of-factly that you can’t
release it, and explain why.
• There’s no such thing as “off the record.” Anything you say can be used – and most likely
will be.
• Don’t feel obligated to accept the reporter’s facts or figures, or to answer hypothetical
questions.
• If you don’t know the answer to a question, say so, but offer to find out – make sure the
reporter sees you taking notes to that effect – and make sure you follow through.
• At the formal end of the interview, the reporter will put their pen away and close their
notebook. That doesn’t mean the interview is over. Anything you say until you part com-
pany is fair game.

Oil & Gas Network, December 2009 5


A Year in Review
T
2009
here was a sense of bleakness about 2009 in the energy industry, but enough changes are
occurring to signal a promise of better things. Oil prices have crept back up since January,
optimism is returning to the oilsands industry and the Alberta government offered cuts
and drilling incentives due to the economic climate. On the flip side, drilling numbers were still
down, unemployment in some areas remained high and environmental activists applied pres-
sure on industry.
For many, one of the best things about 2009 is that it’s almost behind us, says Greg Stringham,
Vice President, Markets and Oilsands, for the Canadian Association of Petroleum Producers
(CAPP).
“2009 was a really tough year for industry,” he says. “The natural gas industry is still really
struggling with relatively low prices. It was one of the bleakest years we’ve seen.”
The Petroleum Services Association of Canada (PSAC) continued to update its 2009 Canadian
Drilling Activity Forecast throughout the year and confirms that drilling has been declining
since 2008.
The year-end forecast for 2009 is a total of 9,500 wells drilled across Canada. Projections show
that 6,265 wells will have been drilled in Alberta this year — a 46 per cent decrease from 2008
levels.
The new well incentive program offers a maximum five-per-cent royalty rate for the first year of
production from new oil or gas wells.
In March, the Suncor Energy acquisition of Petro-Canada created a new $43 billion giant. The
presidents of the companies said the deal will allow them to cut $1.3 billion in annual costs.
The deal has so far proven to be a good one. Suncor reported third quarter 2009 net earnings
of $929 million, up from $815 million in the third quarter of 2008.
“The integration work we’ve completed in just a little over three months is already yielding
some significant efficiencies,” says Rick George, president and chief executive officer.
In other mergers,Athabasca Oil Sands Corp. (AOSC) entered into an agreement with PetroChina
International Investment Co., to give it a 60 per cent working interest in AOSC’s MacKay River
and Dover oilsands projects for $1.9 billion.
Big news in the oilsands industry included Imperial Oil’s announcement in May to invest
more than $8 billion in its previously stalled Kearl oilsands project. Production is estimated at
110,000 barrels per day and scheduled to start in 2012.

Due to low drilling numbers, the Alberta government extended two programs in hopes of
keeping Albertans working in the energy sector during the economic slowdown. Eligibility for
the programs will be extended to March 2011.
“When we introduced these programs we said that we would make adjustments if needed,”
says Energy Minister Mel Knight.
The one-year extension affects the drilling royalty credit. This program provides a $200-per-
metre-drilled royalty credit to companies on a scale based on their production levels from 2008.

In contrast to the good news stories of 2009 for the oilsands, there were some bumps in
the road.
Greenpeace activists were charged with breaking and entering and mischief after allegedly
locking themselves to three stacks and a crane at the expansion site of Shell Canada’s Scotford
upgrader in Fort Saskatchewan. Their lawyer said they plan to plead not guilty in court Dec. 2.
Greenpeace activists also announced they shut down two conveyor belts at Suncor’s oilsands
site in September.
Syncrude continued to spend time in 2009 dealing with the aftermath of the ducks that died
when they landed on a tailings pond the previous spring.The company entered pleas of not guilty
Sept. 14. The trial is scheduled to begin in March, 2010.
The incident brought tailings pond issues into the forefront for all oilsands operations that use
them. Suncor submitted a regulatory application for changes that target significant improvement
in the speed of reclamation of oilsands tailings.
The past year of challenges has set a foundation for companies to build upon in the future.
And while it’s expected to take time, there is hope of better days.
“There is guarded optimism for 2010,” Stringham says.

6 Oil & Gas Network, December 2009


Albertans should be concerned about
Drilling Expected
downturn in natural gas industry
I
ndustry expert sees much more than price behind Alberta’s diminishing gas impact on the province’s economy is very real. AJM’s
to Be Flat Through production.Calgary -based oil and gas consulting firm AJM Petroleum
Consultants warned that, without some decisive and proactive interventions
Vice President of GeoScience Dave Russum, summa-
rizes the overall decline of production across Western
2010, Says PSAC to encourage natural gas production in Alberta, the potential for negative Canada and points to specific conditions in Alberta –
other than the current decline in the natural gas price –

T
he 2010 Canadian Drilling Activity Forecast, that may be accentuating Alberta’s drop in production.
released in early November 2009 by the “Reduced production during a time of low gas
Petroleum Services Association of Canada prices is understandable,” said Mr. Russum.“But there’s
(PSAC), forecasts a total of 8,000 wells drilled (rig been a general downward trend for more than ten
released) across Canada for 2010.This is in line with years, regardless of price and number of wells drilled.
the expected final tally for 2009, also of 8,000 wells And in each of the last two years,Alberta has been shed-
drilled. ding production at an alarming rate of greater than
“Drilling activity levels are plateauing as we ride 1bcf/d. Current production is about 3.3 bcf/d, or 20
out this recession,” said Roger Soucy, President of per cent, below the peak production levels of the late
PSAC. “Last year at this time, we were expecting to 1990s.”
see more than 16,000 wells drilled in 2009. But Even if natural gas prices do climb, Mr. Russum said
activity slowed substantially throughout the year as Alberta producers would be hit with higher royalties
the recession dug in and commodity prices col- as determined by changes to Alberta’s Royalty Program.
lapsed. We are now at a much lower activity level – Furthermore, while unconventional gas is showing
a level we think will be sustained in 2010.” promise in other jurisdictions, the dispersed nature of
On a provincial basis for 2010, PSAC estimates Alberta’s unconventional gas deposits and difficulties
5,095 wells drilled in Alberta and 630 in British with extraction make Alberta plays less attractive than
Columbia, representing a decrease of five per cent those promoted in other parts of the world.
in Alberta and an increase of seven per cent in BC “Natural gas has been the strength of the Alberta
over expected 2009 drilling levels. Saskatchewan’s economy for more than 30 years,” continued Mr.
drilling rate in 2010 will see a 10 per cent increase Russum. “In terms of the future, it is a much easier sell
to 1,935 wells. Drilling in Manitoba will see a 22 per than coal or oil sands to an environment-conscious
cent increase to 300 wells. world. We need to re-assess natural gas royalties to
Commodity prices are the biggest influence on reflect the maturity of Alberta’s natural gas industry and
oilpatch activity. PSAC is basing its 2010 Forecast on the real costs and rewards of doing business here. We
average natural gas prices of CDN$5.00/mcf (AECO) need to take the initiative, as neighboring provinces
and crude oil prices of US$72.00 barrel (WTI). have done, to fund research into new natural gas op-
“We all know that oil and gas activity is predi- portunities. And we need to encourage risk-taking,
Photo by Chris Beeger

cated on price,” continued Mr. Soucy. “In 2010, oil experimentation and entrepreneurial spirit in the nat-
prices will be adequate to sustain conventional oil ural gas industry by providing appropriate tax, royalty
activity. As a result, we are forecasting an increase in and other incentives.
drilling in oil areas like Saskatchewan and northeast Without some significant changes, the negative im-
Alberta. Gas pricing, on the other hand, remains rel- pact will be felt province-wide.”
atively low and we are not expecting any significant
gas price turnaround in 2010. That, combined with
industry’s focus on shale gas drilling, has led us to
forecast a 16 per cent drop in gas drilling overall and
a 30 per cent drop in the conventional shallow gas
drilling area of southeast Alberta, compared to 2009.”
For the first time since the Leduc era, PSAC is
expecting more oil wells drilled than gas wells in
2010, with a prediction of a 56:44 per cent split of
oil versus gas.
“Despite recently improving oil prices, we are
effectively moving into the third year of a down-
turn,” said Mr. Soucy. “The economic recovery is
going to be long and slow, and that will continue to
affect energy demand from the United States, Canada’s
largest energy customer. The result of all this is that
2010 will be a difficult year for the petroleum serv-
ices sector. Companies have been trying to hold
steady, but now we’re going to see some consolida-
tion as the industry strives to remain profitable.”
An interesting note that was discovered in PSAC’s
forecast research is that any reasonably sudden
increase in activity demand would likely be very dif-
ficult to meet, because of the retrenchment compa-
nies have done to date. Mr. Soucy commented:“Such
a bump in demand is not likely an issue for 2010, but
is certainly something the industry needs to be
aware of for the future. Our industry is nothing if not
resilient. We’ve been in downturns before and we
know that eventually demand will bounce back.
When it does, we need to be ready with skilled peo-
ple and innovative technology to take advantage of
the upswing.”

Oil & Gas Network, December 2009 7


Ziff Energy Publishes 1st SAGD & Delineation Wells Drilling
Benchmarking Study
Z
iff Energy Group has completed its 1st Steam Assisted Gravity analysis is especially important as the Oil Sands today are one of the few picture of the geology. The Cored and Non-
Drainage (SAGD) Drilling Benchmarking Study which provides positive economic drivers of the Alberta economy. Cored wells are both drilled to Total Depth
an independent detailed analysis of the Drilling and Completions The first part of any SAGD project involves the drilling of many hun- while obtaining Chip samples at 5 meter
costs on SAGD and Delineation Wells for Oil Sands properties in the dreds of Delineation wells, which are relatively shallow vertical wells increments and ultimately obtaining Electric
Western Canadian Sedimentary Basin for the 4+ year period, from late ranging from 200-600 metres deep – which aid the companies in prov- wire well logs. Once a given area has been
2004 to Fall 2008. The study assessed 159 SAGD well pairs and 1,833 ing the reserves. Delineation wells are grouped as Cored or Non-Cored. thoroughly “mapped” for the anticipated pay
Delineation wells, with total dollars (as spent) of $1.04 Billion. Clients Cored wells involve the drilling and cutting of wellbore cores, usually zone, companies can design the specific pat-
of the study included 5 International and 2 Canadian operators. This through the anticipated pay zone, which contributes to a more complete tern for the SAGD drilling program.

What are SAGD Oil Sands Projects?


SAGD is an “In-Situ” process (a Latin term
for “in place”); one common method to pro-
duce the oil from bitumen which is too deep
to mine. This method is far more environ-
mentally benign than oil sands mining. The
approach involves drilling two parallel hori-
zontal wells – one above another with a typ-
ical 5 metre separation – as a well-pair. A
well-pair consists of a top well, the (steam)
Injector, and a bottom well, the Producer.
Anywhere between 4 and 20 well-pairs are
drilled on a particular section of land, or pad.
All the well-pairs will be drilled parallel to one
another (about 100 metres apart), with half of
the well-pairs oriented in one direction, and
the other half of the well-pairs typically ori-
ented 180° in the opposite direction – to max-
imize reservoir coverage. The 5 meter
separation has been proven to be the optimal
gap which allows for maximum reservoir pro-
duction due to the most effective impact of
the injected steam.
The study found that although the separa-
tion between Injector and Producer wells is
planned for 5 m, some wells had as high as 8-
9 metre gaps at some points, reducing pro-
duction capability from that particular zone.
Well quality is a design metric incorporat-
ed into the study, and shows that average stan-
dard deviations across the horizontal wellbore
resulted in the Flatness of the wells to be
about 0.3 metres, and the average standard de-
viation across the wellbore resulted in the
Straightness of the wells to be about 0.5 me-
tres, which illustrates that the flatness of the
wells appears to be a more important metric
for wellbore quality than straightness.
The sequence for drilling the well-pairs,
generally is a batch process, with all of the
Producers on the pad being drilled first, fol-
lowed by all of the Injectors. Operators drill
the Injectors with the assistance of “ranging
tools” which aid in exactly tracking the well-
bore of the lower Producer. It is this method
that helps to maintain the 5 m spacing. Steam
is injected into the Injector, through the
Horizontal Section of the well, heating the pay
zone as it penetrates into the formation cre-
ating a steam chamber. The steam heats the
bitumen in place, reducing its viscosity and
increasing its ability to flow. The oil then
drains downward due to gravity and is pro-
duced out of the ground through the
Producer well by means of a down hole
pump. The horizontal reach from heel-to-toe
(i.e. the start of the horizontal section to the
end) ranges from 600-1,000 m. The SAGD
process requires about 1,200 cubic feet of nat-
ural gas to heat the water to produce one bar-
rel of bitumen. Canada’s National Energy
Board (NEB) estimates the capital cost is
Cdn$18 – $22 to produce a barrel of bitumen
via the SAGD method. A main component of
the operating cost is gas used to create steam.

8 Oil & Gas Network, December 2009


Figure 1 illustrates the SAGD process. provided practical insight to drive down the costs of future
SAGD Projects are attractive to Producers (as compared to SAGD Drilling programs. By minimizing drilling costs and fo-
Oil Sands mines), as the SAGD process can access deeper for- cusing on performance, profitability rises for SAGD projects.
mations and can be developed on a smaller scale (and in phas- Comparing Unit Drilling Cost to Penetration Rate (ROP)
es), which sharply reduces the capital at risk, and the identifies an interesting and unexpected trend. Figure 4 shows
engineering and construction risk. Therefore, far smaller pro- that once a cer-
tain ROP is
gained, returns in
terms of Unit cost
diminish. Drilling
faster might not
have the positive
effect on Unit
Drilling Costs that
an Operator may
By comparing Unit Drilling Cost (excluding fixed material expect, and well-
costs such as casing and cement) vs. Total Depth, as in Figure bore issues could
3, Operators can clearly see that as depth increases, unit costs increase. High unit costs identify an opportunity to improve,
generally decrease. In this example, we can see 2 distinct pro- but the reduction will likely be non-ROP related (i.e. wellbore
grams, one with considerably higher unit costs, which may be instability, fishing, losses, etc.). A low ROP virtually guarantees
a function of well location (i.e. outside wells tending to cost much higher drilling costs, so a threshold minimum ROP rate
more than internal wells, due to well profile). must be achieved.
Paul Ziff, CEO of Ziff Energy, says “It is very important for
operators to understand SAGD drilling performance so opera-
ducers can undertake a SAGD project, and there are many more tors can focus on achieving cost control in their spending.” As
SAGD projects than mines. SAGD production will overtake min- this is the first ever comparative SAGD Drilling and Cost
ing production by 2030 (Source: Ziff Energy Gas Services Benchmarking Study in the world, the SAGD participants have
Group). been keen to discover how efficient their In-Situ programs are
This initial study provides valuable insight into both SAGD and what they can learn from the Ziff Energy Analysis. General
Producer and Injector well costs and drilling performance, with feedback has been very positive, and has led to one Executive
similar insight for the Delineation Programs (Cored and Non- to declare that the results “were very timely for our future plan-
Cored wells). In fact, of the $1.04 Billion spent, over half was ning and provided great value.”
spent on the Delineation programs – quite substantial! The Study brings together some of the most experienced
Benchmarking the performance and cost structure of SAGD minds in SAGD and allows other participants to leverage past
Drilling allowed study participants to: knowledge and experiences while managing their costs effec-
• directly compare their drilling cost performance to peers Rig Time and Performance go hand in hand. Figure 4 illus- tively. Strong Canadian technical expertise is provided by the
• learn technical best-practices to capitalize on prior les- trates that relative to the Average, if you were to target being Ziff Energy team.
sons learned, thereby gaining efficiencies in the Top Decile (43% less than Average) or the ‘Leader Third’ The project is now complete, however companies inter-
• gain the important component to benchmarking – unbi- (36% less than Average), that should amount to substantial cost- ested in participating may submit their data and play a key part
ased cost comparison. savings. However, if your wells are in the High Cost Third, they in further contributing data to this unbiased Benchmarking
would incur a 37% cost premium! Study.
By measuring Drilling and Completions (D&C) costs rela- For more details, call Scott Jones, Canadian E&P Client
tive to similar programs (by geographic regions & well design), Representative, at (403) 234-4298 (scott.jones@ziffenergy.com)
D&C teams gain factual data that pinpoints high cost areas, or Paul Ziff, CEO, at (403) 234-4276 (paul.ziff@ziffenergy.com).

Figure 2 shows the relative distribution of Unit Costs


for the Cored Delineation wells. The ability to maintain
a relatively low Unit Cost ($/metre) while at the same
time running a tight and predictable distribution of costs
over the programs illustrates how Operators are running
efficient programs with respect to costs. In this example,
Company C would be considered the “Best-in-Class” as it
keeps its unit costs very low while maintaining a very
tight distribution of well cost performance.
This sector will account for billions of dollars of fu-
ture spending, and the volatility of world oil prices, com-
bined with the non-volatile cost inflation in the oil sands,
means that maximizing efficiency of front end capital is
critical for high returns. Because the study covered the
4-year timeframe from 2004-2008, and because of rapid
inflation in the SAGD sector of the oil & gas industry, Ziff
Energy Group designed an Inflation Index model, in-
volving client input and statistical indices, to normalize
all costs to 2008 dollars, thereby providing fair cost com-
parisons to all study clients.

Oil & Gas Network, December 2009 9


Imperial Oil helps SAIT students soar to success
S
AIT Polytechnic has received a corporate jet valued at $8 mil- annually in SAIT’s Aircraft Maintenance Engineers Technology, activities, download the 2008 Corporate Citizen-
lion from Imperial Oil. The Bombardier Challenger 601-3A was Avionics Technology and Aircraft Structures Technician programs. In ship Report or view the Summary Report.
presented to SAIT for use in its School of Transportation’s air- addition to the aircraft, Imperial also donated associated ground sup- SAIT Polytechnic has maintained close associ-
craft maintenance, avionics and structures programs. port equipment and spare parts inventory. ation with business and industry to ensure grad-
“This donation will serve to benefit both students and indus- “We are pleased to provide SAIT students with tools to enhance uate success since 1916. SAIT offers 67 certificate,
try,”said Irene Lewis, SAIT’s President and CEO. “With thanks to their learning experience about aviation mechanics, maintenance and diploma, and applied degree programs as well as 30
Imperial Oil, the Bombardier Challenger will enable our students to instrumentation,” said Bruce March, Imperial's Chairman, President apprenticeship programs, 300 distance education
train on an aircraft with modern avionics and be even better pre- and CEO. “This contribution reflects our commitment to support courses and 1,800 continuing education and cus-
pared when entering the workforce.” education in technology, including supporting reliable air service to tomized corporate training courses. SAIT offers train-
The jet, which is no longer required to meet Imperial's corporate northern communities across Canada.” ing in 15 countries around the world and last year
travel needs, has been de-registered and is now ineligible to fly in Canada. To view photos of the Challenger and from today’s news confer- had 79,000 course and program registrations. SAIT
It will provide on the ground training for more than 250 students ence, visit our photo library.To learn more about Imperial's citizenship is a proud member of Polytechnics Canada.

Oil and Gas Industry


Survey of Public in
“Operational” Areas
Yields Surprising
Results

A
n Ipsos-Reid survey, conducted on behalf of
the Petroleum Services Association of
Canada showed that the public in areas with
high oil and gas activity has a relatively positive
overall view of the oil and gas industry, citing job
creation, economic benefits and community serv-
ice as key positives. Almost three-in five survey
respondents (58%) had a positive overall opinion
of the oil and gas industry and over three-quarters
(79%) said that communications from the oil and
gas industry in their community are believable.
While the survey results were more positive
than expected, they also pointed to some key areas
where the industry can improve, notably protect-
ing the environment, maintaining the quality of life
associated with small communities, and communi-
cating with local residents.
The purpose of the survey was to establish what
people living in and around areas of oil and gas
activity really think of the industry, and help in-
dustry better understand areas of concern.“This sur-
vey was a large undertaking for us,” said Roger
Soucy, PSAC President.“It’s an important way for us
to show that we’re listening and that we want to do
a better job of responding to public concerns.”
The telephone survey covered 12 oil and gas
regions encompassing over 135 communities
across western Canada, including Bonnyville,
Drayton Valley, Edson, Grande Prairie, High Prairie
/ Slave Lake, Lloydminster / Vermilion, Medicine Hat
/ Brooks, Peace River, Red Deer and Rocky
Mountain House in Alberta, as well as northeast
British Columbia and southern Saskatchewan.
“We were pleasantly surprised to see the over-
all positive views on the industry,” continued Mr.
Soucy. “The results showed a pretty stark contrast
to what one typically hears in the media. At the
same time, we recognize we have some work to do
in terms of communications, livability and envi-
ronmental issues in the communities we work in
and around.”
The public survey was the first step on the com-
munication front, enabling PSAC and its industry
counterparts to listen to what community mem-
bers had to say about oil and gas activities in their
regions. Now PSAC is responding to that feedback,
by releasing the overall survey results, as well as
highlights from every one of the regions consult-
ed. In addition, PSAC is building a public website,
scheduled for release in early 2010. The website
Continues >

10 Oil & Gas Network, December 2009


Canadian Operating Costs Continue Rise in ‘08;
No Drop in 9 Months ‘09
Production Reliability – New Analysis

Z
iff Energy Group has released its 2009 Improving Field Performance (WCSB) Study which
assesses upstream operating costs and production reliability.The study analyzes 210 fields Ziff Energy’s Operations Performance study now includes oil and gas Production Reliability
and 26,800 producing wells, operated by E&P companies and Trusts, which produce 3.3 (‘Uptime’) assessment (i.e. how high actual production is compared to the realistic potential).
Bcf/d of gas and 160 MBbl/d of conven- Ziff Energy developed a unique methodology to evaluate Production Efficiency, Mean Time be-
tional oil. Annual operating costs total tween Incidents, Mean Time to Recover, and a proprietary Reliability Index. This methodology
$2.3 Billion. The study found that oil & compares operations for different operators and identifies production improvement opportu-
gas field operating costs in Western nities. This year’s study results show production efficiency of assessed oil and gas fields range
Canadian Sedimentary Basin continued from a very low 75% to a “best
to rise sharply in 2008. (The wide vari- in class” 99%, presenting sig-
ance on a BOE basis (about 2:1) reflects nificant opportunities for vol-
the much lower price gas receives com- ume maximization. Figure 2
pared to the notional 6 Mcf = 1 barrel identifies Leader performance
conversion.) Weighted average unit costs at 96% Uptime; however, a ma-
increased 13% to $1.10/McfE for gas jority of Canadian oil fields are
fields and by 15% to $13.70/BOE for oil only achieving 88-93%
fields. Main drivers of the cost increase Uptime, losing many millions
were the higher processing fees, mainte- in revenues in the current
nance services, and higher energy costs. year. Reducing production in-
The ‘big 4’ gas costs are Lease Fuel Used, cidents and downtime not
not costed by most producers (23%); only increases the revenue,
Figure 1 Processing Fees (21%); Surface Repairs but also reduces unit operat-
& Maintenance (14%); and Purchased ing cost.
Energy (11%). For Oil Fields the ‘big 4’
costs are Surface Repairs & Maintenance
(18%), Purchased Energy (16%), Well Trends
Servicing (12%), and Contract Services • Continuation of significant overall cost inflation - the main goal of the operations study is
(11%). to compare fields of similar type. On average, the potential operating cost reduction opportu-
The detailed makeup of average gas nities are 20% of total adjusted operating costs.
and oil costs in 2008 is shown in Figure • Significant cost improvement opportunities are generally available within the following
1. In the 1st 9 months of 2009, average cost classifications (some of these areas involve contract renegotiations):
operating costs were virtually flat com- - Energy, particularly Lease Fuel consumption - Well Servicing
pared to a year ago. However, the range - Processing Fees - Labour & Field Supervision
of operating company performance was - Surface Repairs & Maintenance
wide, with 3 companies decreasing costs
by over 10% but 7 companies seeing • Some companies are seeing the benefits of cost reductions in 2009; however, an equal
OpEx costs rise by over 10%! number are not!

will answer the most commonly asked questions


about oil and gas, and provide an open line of com-
munication for citizens to provide feedback.
To address the quality of life issues identified in the
survey, PSAC, in conjunction with other industry
groups, is developing tools and information to help
field employees conduct their operations with greater
respect for residents and their property. A toolkit will
encourage and support “good neighbour” habits such
as closing gates when crossing property lines, dis-
posing of garbage properly, slowing down to reduce
dust and noise, driving safely, and scheduling opera-
tions to limit extra traffic at peak times.
“We expect these industry-wide initiatives to have
a positive impact on the communications and quali-
ty of life issues identified by survey respondents,” con-
tinued Roger Soucy. “But we know this can’t be a
one-time shot. PSAC, along with our industry partners,
will continue to collaborate on programs that
strengthen our communication with the public and
protect that quality of life small communities are
known for.
“Environmental protection is a more complex
issue.The fact is, our industry is already working hard
to reduce its environmental footprint, but we haven’t
been saying much about that. We are going to start
communicating more proactively about our environ-
mental initiatives, while we continue to conduct en-
vironmental research, develop and use advanced
technologies, and implement best practices.”

Oil & Gas Network, December 2009 11


Facing financial challenges as gas hits seven year low
equity or debt,” says Brooke Valentine, an associate part-

A
slowdown in exploration, production and capital spending a major component of the province’s economy and yet changes in
is hitting the energy sector, which benefited from strong oil prices dominate headlines. But today, with the price of natural ner at PricewaterhouseCoopers Corporate Finance
earnings from 2005 through mid-2008. The cash generated gas dropping to a seven-year low and inventories reaching a record (PwCCF) Inc. in Calgary.”
from those earnings is dwindling and some companies are now high, the situation has changed, especially for firms more weighted It’s not just the natural gas firms that are hurting,
running out of available cash. towards gas. but the energy services companies are also feeling the
The downturn is also exposing a truth about the Alberta econ- “As a result, those junior gas companies are encountering effect.
omy that often gets overlooked. Natural gas production represents financial challenges in terms of raising additional capital, be it “The challenge there is not that they don’t have
much work, they have no work,” explains Stephen Kent,
a managing director at PwCCF in Edmonton. “A lot of
the work they did came from the gas sector, which may
take some time to recover.”
This is a critical time for the sector. Companies with
a large exposure to natural gas must find ways to be-
come better-capitalized to thrive in order to survive.
Borrowing is a great option as interest rates are near
record lows.The problem is actually borrowing because
it’s harder to get loans. Banks are more cautious today
than they were a year ago.
“If a company gets a loan, the covenants it has to
comply with are stiffer than they were a year ago.
Those lucky companies have a low interest rate,” says
Valentine.“For the others, the low interest rate is of lit-
tle benefit because they can not borrow more or bor-
row at all or risk heavy fees for renegotiations on
covenant breaches.”
If borrowing isn’t an option, companies can search
for alternate sources of capital. Private firms can try a
private placement, but they’re difficult in today’s mar-
ket, particularly for smaller companies. Public com-
panies can look at selling additional equity “but most
of them are trading at historically low valuations so it’s
very dilutive,” according to Kent. “They really don’t
want to do it.”
An easier way to shore up the balance sheet is to
go after receivables already on the books in order to
convert that to cash. Selling assets that are non-core
to the business is another option. The sale and lease-
back of property is also something that is becoming
more common. If a company owns its own real estate,
it can sell it and lease it back, helping to provide a
cash infusion into the business.
PwCCF recommends that companies take a proac-
tive approach with their lender. This includes provid-
ing a lender with dynamic financial forecasts that
allow for sensitivity analysis.“Lenders tend to be more
accommodating to borrowers that engage in open and
frank discussions,” says Valentine.
For companies in better shape and a strong bal-
ance sheet, Valentine and Kent say now may be the
best time to consider growing through acquisitions.
“We think there’s a lot of upside potential in that
kind of activity. You can buy a lot of market share at
an attractive price,” Valentine says. “Geographic ex-
pansion is another thing I think they should be pur-
suing. There are some signs that the Alberta oil and gas
sector may be comparatively weaker than elsewhere,
particularly the United States.”
A strong balance sheet will also make it easier for
companies to purchase competitors with financial
problems at an attractive price.
“There are lots to be picked off but they don’t
seem to be doing it yet. They’re sitting,” says Kent.
“They should definitely be trying to diversify but
they’re not.”

12 Oil & Gas Network, December 2009


The ‘Ups & Downs’ of Natural Gas Prices BJ Services Bolsters
Paul Ziff, CEO
f all the kings’ men had challenges putting Humpty Dumpty back together after his great fall, I wonder what the
its Process and Pipeline
I outlook will be after the great fall of natural gas prices? As we peel back the layers of an onion, peeling apart the
underlying factors shows that natural gas is way undervalued compared to oil at $70/Bbl. In one word, ‘discon-
nected’. Just a few months ago, the ratio of oil value to gas value was 8 to 9, whereas since September the ratio has
Services with New Bases
in Canada
skyrocketed to 18 to 20 in North America, and in the North Sea too.
J Services Company announced that it has opened two new opera-
My earlier white paper1 (publicly available on
Ziff Energy’s userfriendly website --- www.ziff
energy.com) concluded that producers are ex-
B tions bases in Canada. The new bases are dedicated to delivering
process and pipeline services to customers throughout Canada.
A new Canada process and pipeline services headquarters was recently
opened in Edmonton, Alberta and features training facilities, conference
periencing massive value destruction for share-
rooms and offices for approximately 30 staff members. The facility houses
holders for each Mcf of gas produced, and that
management, engineering, sales, accounts, safety and training departments
shrinking gas fortunes will continue unless
for process and pipeline services in Canada. “This expansion reflects the
operators take action.
company’s confidence in—and commitment to—Canada. We look forward
In addition to the ideas shared in the white
to continued growth of our business across the country,” said Gordon
paper of how to off set the value being lost, Ziff
Bradbury, BJ Services Company, business unit manager – process and
Energy provides these suggestions to the vari-
pipeline services for Canada. “This new facility is a key element of BJ’s
ousparticipants in the gas value chain:
process and pipeline services’ plans to expand throughout Canada, as well
• Producers should defer annual gas plant
as our aggressive
maintenance to the Aug 1 to Oct 31 time period;
growth strategy in
and benefit by getting“spring” gas prices for their
the Americas,” he
gas production, and lose lesswhen gas prices are
added.
traditionally lower in the fall (due to filling gas
In addition, the
storage).
company has opened
• Producers & Royalty Owners - since gas
a new facility in Fort
reserves are fi nite, it is better to leave gas in the
McMurray, Alberta. BJ
ground until prices recover
Services will provide
• Industrial Consumers can perform plant
a wide range of plant
maintenance in early Spring, not in the fall. This
and pipeline precom-
helpful step reduces the industrials overall gas
missioning and maintenance services, including oil flushing, nitrogen serv-
supply cost as gas supply prices are often high-
ices, chemical cleaning and pipeline services. “This base will make it
er in the spring and lower in the fall
possible for us to better support our many customers in the Fort McMurray
• LDCs may wish to reduce their summer gas
area by cutting our response time. In addition, it offers related cost reduc-
storage injectionsin the early spring and inject
tion benefits to our clients, and illustrates our continued commitment to
larger volumes in the fall. Natural gas prices
the Fort McMurray area,” said Bradbury. “To support the base, we have in-
today are turbulent, and ‘business as normal’ has
vested heavily in capital equipment. We look forward to continuing the
become a hazardous approach. We recommend
success that has become synonymous with BJ Services’ process and
more active management of risk and portfolio
pipeline services in Canada,” he added.
on a value basis.

14 Oil & Gas Network, December 2009


Nexen logo unveiled on STARS helicopter
in recognition of $500,000 contribution
N
exen Inc.’s logo was unveiled today on a STARS helicopter in recognition of Nexen reaching a $500,000
donation milestone in cumulative giving. Nexen President and CEO Marvin Romanow and STARS
Foundation Vice President Phil Levson, (Levson on the left and Romanow on right in the attached pho-
tograph) took part in the event alongside STARS crew members. Nexen’s donation milestone was achieved after
a recent pledge renewal of $150,000, which brings Nexen’s cumulative gift total to $500,000.
“Nexen’s long-standing partnership with the STARS Foundation is important because it serves not only our
remote operations, but citizens in many Alberta communities,” said Romanow. “STARS supports our approach
to safety as it provides access to critical care and delivers safety programs and education throughout our
province. We are ver y
pleased to continue our
support of STARS.”
The Nexen logo was
placed on all five STARS
BK117 helicopters which
operate from bases in
Calgary, Edmonton and
Grande Prairie, with serv-
ice areas covering ap-
proximately 94 per cent
of Alberta’s population.
“Nexen is a key sup-
porter and partner of
STARS,” said Levson.“Their
very significant contribu-
tion supports STARS’ life
saving work in communi-
ties across Alberta.”
In 2009, STARS re-
sponded to over 100
work sites across Alberta for critically ill or injured patients, and assisted with the coordination of medical re-
sponse, referral and resources. On average, up to 3,000 work sites are monitored daily by the STARS Emergency
Link Centre (ELC) Site Registration Program.
The Alberta Shock Trauma Air Rescue Society (STARS) is a non-profit, charitable organization providing air-
borne intensive care to critically ill or injured patients. Patient care and transport, emergency medical com-
munications, education and research, fundraising and community partnerships are the pillars of the STARS
program. Since it began in 1985, STARS has flown more than 18,500 missions.

Moyno® 2000 Model G2


Progressing Cavity
M
oyno, Inc. offers the Moyno® 2000 Model G2 Progressing Cavity Pump. This versatile, high-per-
formance pump features an open throat hopper design with an auger for positive product feed when
handling semi-dry or high solids content sludges.
The 2000 Model G2 Pump features Moyno's crown gear-type universal joint - the heaviest duty drive train
configuration available in the industry. It is capable of accommodating exceptionally high torsional and thrust
loads. Patented joint seals effectively protect the gear joints from pumpage contamination. The Moyno 2000
Model G2 Pump offers flow rates to 400 gpm and pressure capabilities to 350 psi.

Oil & Gas Network, December 2009 15


Oil Demand from Developed IHS CERA: Oil Supply Set to Grow
Countries Has Peaked Through 2030 with No Peak Evident
W
orld oil demand is poised for recovery driven by emerging markets but
demand from OECD countries is unlikely return to its 2005 high Oil

A
boveground drivers, not the amount of belowground resources will be crucial factor to flow
demand in developed countries—currently 54 percent of all oil of supply in the coming decades Global oil productive capacity will grow though 2030 with
demand—likely reached its all-time peak in 2005, according to a new research no evidence of a peak of supply before that time, according to a new report by IHS Cambridge
report by IHS Cambridge Energy Research Associates. While world oil demand is Energy Research Associates based on analysis of more than 10,000 projects around the globe.
now set to grow as the world economy moves from recession to recovery, the The report, The Future of Global Oil Supply: Understanding the Building Blocks extends IHS
demand lost in 30 developed countries that make up the Organization for CERA’s global oil outlook through 2030 and expects global oil productive capacity to grow to as
Economic Cooperation and Development (OECD) is not likely to ever be regained, much as 115 million barrels per day (mbd) through that period from the current level of 92 mbd
the report finds. – a 25 percent increase. Post-2030 supply could struggle to meet demand but this would take the
“The economic downturn has been masking a larger trend in the oil demand form of a decades-long “undulating plateau” rather than a sharp fall, the report says.
of developed countries,” said IHS CERA Chairman and Pulitzer Prize-winning “There is more
author of The Prize, Daniel Yergin. “The fact is that OECD oil demand has been than an adequate in-
falling since late 2005, well before the Great Recession began.” ventory of physical
The key factor making it unlikely for OECD demand to ever return to its 2005 resources available
peak is that petroleum demand in the transportation sector—which accounts for to increase supply
60 percent of OECD petroleum demand—is likely to flatten out after years of to meet anticipated
steady growth. Oil demand outside the transportation sector has already been rel- levels of demand
atively flat since 1980. Now the conjunction of several long-term factors is doing through 2030,” says
the same to transportation: Peter Jackson. “It
Demographic and socioeconomic changes – Vehicle ownership rates in devel- would be easy to in-
oped countries have reached a “saturation” level while aging populations with low terpret the market
to negative population growth suggests a flattening of demand for mobility. The and oil price trends
growth of women’s participation in the labor force is also leveling off, meaning from 2003 through
the flattening of another source of demand growth. 2009 in isolation to
Stronger governmental and consumer push for passenger vehicle fuel econo- support the belief
my gains – Energy security concerns and climate change initiatives have led OECD that a peak in glob-
governments to tighten fuel economy standards. The rise in energy prices over al supply has passed
the past several years has pushed consumers to value increased efficiency and or is imminent. But
the auto industry through a major reorientation toward greater efficiency. this only illustrates
Greater penetration of alternative fuels and vehicle technologies – that the market con-
Governments across the OECD continue to favor mandates that increase tinues to act as the
the share of shock absorber of
major volatility.”
Sixty percent
of the more than 1,000 fields examined in detail for the study were found to have production
levels that were either steady or climbing. When taking into account the production
of these fields the global aggregate decline rate of all fields currently in pro-
duction is estimated to be 4.5 percent, the study finds.
“Supply evolution through 2030 is not a question of resource avail-
alternative fuels in the transportation ability,” Jackson added.“The crucial issue lies not belowground. It is the
sector. New technologies such as plug-in hybrid electric vehicles aboveground factors that will dictate the ultimate shape of the sup-
and next-generation biofuels could also have a greater impact in the future. ply curve.”
“Petroleum for transportation has been the single driving force behind OECD Key aboveground factors such as global economic growth,
oil demand for the past two decades,” said Aaron Brady, IHS CERA Director, Global the capability of the upstream oil industry, costs, government
Oil.“After the oil crisis of the early 1980s the nontransportation sector turned to and policies on access to reserves and taxation, the evolution
readily available substitutes like coal, gas or nuclear power. Now we are seeing produc- of renewable alternative energy sources and the effect
the tempering of the last significant driver of oil demand in developed coun- tion invest- of climate change issues on policy concerning the use
tries—petroleum for transportation.” ment, of fossil fuels will have a major impact on the shape
Future world oil demand growth will be driven almost exclusively by emerg- exploration and of supply, the report finds.
ing markets.The latest IHS CERA World Oil Watch expects oil demand to increase field upgrades have “A radically different oil markets landscape
from 83.8 mbd in 2009 to 89.1 mbd in 2014. 83 percent (4.4 mbd) will come from tended to replace has evolved in the past year,” says Jackson.“A
non-OECD countries. China alone is expected to account for 1.6 mbd of cumu- global production of 30 drop in demand caused by the economic
lative growth. Just 900,000 bpd of growth is expected to come from OECD coun- billion new barrels (bnb) recession has provided a supply cushion
tries, just a fraction of the 3.7 million bpd of demand lost over the course of 2005 per annum in recent years. that has moved supply concerns to the
to 2009. Despite recessionary pressures backburner for the next few years.”
But the peak of OECD oil demand does not mean that the end of the oil age in the first three quarters of 2009 While the economic reces-
these developed economies is imminent, the report finds. The size of the decline have produced discoveries with col- sion has also driven a reduc-
in oil demand from the peak year of 2005 to 2030 is expected to be fairly modest, lective reserves more than 8bnb. This tion in exploration
says Brady, assuming that some demand rebounds over the next few years. does not include the revisions and exten-
“The reason for a modest decline is that although the potential for demand sions which are so important to reserves
growth has diminished so has the potential, at least in the short to medium term, growth. Multi-billion barrel discoveries, such as
for large-scale substitution away from petroleum,” he said. “Today’s alternative those of the Subsalt Brazil, as well as those in
fuels and technologies can only gain market share slowly owing to the slow Offshore West Africa and Offshore East Africa, con-
turnover of the cars, trucks and airplanes that use petroleum. Petroleum will still tinue to emerge. And new giant discoveries in Iraq also
be the dominant fuel for transportation 25 years from now, although other sources create the potential for that country to double its capacity
of energy will likely have captured a growing foothold in transportation.” by 2020, the report finds.
Regardless if the decline is modest, the peak of OECD demand will have major The peaking of global oil demand—rather than scale and deliverability of
implications, the report finds. Peak demand will dampen the rate of increase below ground resources—could have a major impact on the flow of supply, the report finds. IHS
in dependency on oil imports. It likewise could also help make economic growth CERA’s analysis finds that oil demand has already peaked in developed countries.
in those countries less susceptible to oil price shocks. Finally, peak OECD “So much will happen between now and 2030 to affect demand—from changes in the auto-
demand could counteract the expected rapid demand growth in the developing mobile engine and the electric battery to changes in demographics and values,” says Jackson.“Peak
world. demand may ultimately prove to be the main driver of long-term supply.”

16 Oil & Gas Network, December 2009


Singletouch Labor Monitor report World First
shows real-time productivity, Installation of a
percentage complete Fibre Optic Acoustic
Sensor for Reservoir
C ustom report shows actual hours to date by cost code,
enabling contractors to create accurate estimates, exe-
cute on budget and control costs
code, forecast labor hours to complete the cost code, and un-
derstand the productivity for each cost code.
With accountability becoming a major focus in an industry
Monitoring
I
Singletouch Corporation (www.singletouch.com), a devel- where tenders used to be decided on price, resumes and safety nternational Leader in fibre optic sensing systems Fotech
oper and marketer of a real-time data-capture platform for con- record alone, customers now expect more visibility into cost Solutions has installed the world’s first dedicated down-
overruns and productivity. With the Labor Monitor tool, con- hole distributed acoustic optical fibre system using the
tractors, today announced a new feature called the Labor
company’s new and unique Helios monitoring solution.
Monitor tool, reporting functionality that shows productiv- tractors can provide specific information about issues that
The Helios distributed acoustic monitoring system was in-
ity and percentage complete by cost code, which enables may have impacted productivity; in some job environments,
stalled in a coal-bed methane well in Scotland for Composite
contractors to estimate jobs more accurately, execute on weather may play a role, cost of materials may change sud-
Energy Ltd of Stirling, UK.
budget, manage cost overruns and be more accountable to denly, labor rates may change, or there may be other dynamic
The easily-installed Helios system can be deployed in a range
their customers. market factors.This instantaneous reporting functionality is rev-
of applications in the global oil and gas industry including reser-
Electrical, mechanical and other contractors working in en- olutionary for the contracting industry.
voir surveillance, production monitoring, integrity assurance,
vironments where they need to capture and report on materi- “I have literally had prospects gasp when they saw the in-
flowline movement, flow assurance and leak detection.
als and labor can use Singletouch to instantly send details telligence displayed by the Labor Monitor tool,” said Marty
The system was installed in August 2009 and has already pro-
collected in the field to head office, where that data is seam- Hilsenteger, Singletouch CEO.“I like to refer to this function as
vided valuable data including:
lessly integrated into backend systems, expediting payroll, the ‘holy grail’ for contractors because this industry has always
• Downhole pump condition monitoring,
accounting and project-reporting processes, and eliminating sought a user-friendly, real-time reporting tool that enables con-
• Location of water level,
the paperwork headaches that beleaguer the contractor in- tractors to create accurate estimates and execute jobs on time • Flow profiles across the production intervals,
dustry. Once data has been entered, project managers and of- and on budget while controlling costs. • Vibrations at the wellhead,
fice administrators can use it for invoicing and reporting, even “Often, customers offer bonuses to companies that can • Gas flow
before the team has returned from the site. deliver 1.0 productivity, where the job matches the estimate
Accurate details are entered only once, at the time and point exactly. Until now, it has been very hard to gain real-time visi- Other potential benefits of the system include:
where the transaction occurs, and delivered instantaneously to bility into percentage complete on jobs due to the lag between • Monitoring of, and locating sand production
all stakeholders, eliminating the logjams and errors tradition- information gathered in the field and when the data is input into • Casing/tubing integrity
ally associated with the filing of paperwork and subsequent re- back-office systems. With the Labor Monitor report, all the • Cross flow
entering of details to create invoices and reports. information is available quickly and easily, facilitating decision-
making for the contractor and providing peace of mind to the The system comprises two elements – a simple low cost
A new feature of the platform is the Labor Monitor report,
customer.” telecoms grade optical fibre cable; and the Helios interrogator
a custom report generated by the Project Control module. By
The names of actual companies or products mentioned here- which is the heart of the system. Helios effectively provides
combining budget data, actual data such as time tickets, and
in may be the trademarks of their respective owners. acoustic or vibration information along the entire length of the
the field survey, the Labor Monitor report assists a project man-
installed optical fibre to provide multiple-event information,
ager in managing workforce efficiency and productivity in the
event characterisation and highly accurate event location. An
field.
acoustic signal is recorded for each metre along the fibre. The
The field survey, typically conducted either daily or
system can therefore detect and position an event to an accu-
weekly, allows the project manager to capture
racy of one metre and can distinguish separate events more
exactly which items have been installed on-
than two metres apart. It also has remote control capa-
site and, through a simple calculation,
bility. The fibre can be laid near a pipeline or
determine the percentage com-
installed in a borehole.
plete for that item. Project
Don Sharples, technical manager,
managers can then
Composite Energy, said:
course correct if
“Initial results from the
necessary to
Fotech fibre are
very encour-
aging.

The Fotech Distri -


buted Acoustic technology col-
lects data which is not available from
increase other downhole sensors and will give
productivity or Composite the ability to determine which coals
stick to estimates. are producing in any given well.”
Within the Labor Alan Piesse co founder and Executive Vice President of
Monitor report, cost codes for Fotech Services said: “Our vision for Helios was to provide sound
the project, each of which will at the speed of light and its successful deployment has really
have a materials, services, labor, changed the game in the global monitoring sector.
subsistence and direct job expens- “We see a strong future for the system in monitoring gas flow in
es (DJE) budget amount associated Coal Bed Methane wells and other applications For the first time flow
with it, are documented and useful sta- can be seen and heard entering and moving in the well and quantified
tistics determined against each code. in real-time. We hope to continue monitoring Composite Energy’s CBM
These statistics enable the project manager wells and look forward to a close working relationship with them.”
to understand the percentage complete by cost Website www.fotechsolutions.com

Oil & Gas Network, December 2009 17


Wireless technologies bring the office into the field
By Roland Labuhn, VP, Energy Solutions, TELUS

A
ccording to Industry Canada, more than 230,000 people rely heavily on voice communication and paper forms which For example, GNR
work in the Canadian energy industry. Almost 70 per need to be processed manually. These processes can be ex- Corbus, a natural resources
cent of these workers spend their days away from the pensive and can slow productivity. With traditional systems, company with 80 employ-
office – in the oil patch, on rigs and on the road. Keeping val- field workers often need to make multiple trips back to the of- ees, traded in their mobile
ued employees safe in these high-risk environments while mak- fice to pick up new work orders and schedules and drop off phones and pagers and
ing sure they can also be productive off-site are critical to reports. Instead of waiting for forms to be filled out by hand replaced them with hand-
business success. and delivered to the office, wireless work orders provide an al- sets equipped with Push-
Using wireless technologies to bridge the communications ternative that speeds up communication, is cost-effective and To-Talk functionality. GNR
gap between head office and workers in the field is one of the reduces the potential for human error. Using wireless work or- Corbus found that switch-
most effective ways to achieve both these business goals. In ders, field workers spend less time circling back to the office ing not only reduced mo- Roland Labuhn
fact, for small businesses in the energy sector, wireless tech- and more time in the field. As a result, they can complete more bile phone usage and
nologies should be considered an essential piece of indus- tasks in a work day. long-distance charges, but
try equipment, just like hard hats, tools and other safety also improved communication between team members. The
equipment. company’s accounting department estimates they save more
Here are five ways wireless solutions can help small busi- than $5,000 each year as a result.
nesses stay competitive by improving productivity and keep-
ing their workers safe. Improve cash flow
Maintaining a healthy cash flow is always top-of-mind for
Organize off-site activity Canadian small business owners and an investment in wireless
In 2009, the Enterprise Council on Small Business (ECSB) technology can provide significant returns by reducing oper-
found that productivity was a main concern for Canadian small ating costs and optimizing productivity.
business owners. One of the ways businesses can drive pro- Using a wireless work order solution ensures small busi-
ductivity and make the most of an employee’s time is gaining nesses are paid faster upon job completion, instead of having
better visibility into field worker activity. For example, fleet to wait for an invoice to work through traditional processes.
tracking solutions allow dispatchers to supervise a driver’s
speed, location and time, as well as the position of workers.This Help keep workers safe
helps companies efficiently manage all equipment in the field, Safety is always a top priority in the workplace, especially
as well as dispatch any available workers to other jobs without in the oil and gas industry. Employees in the field often work
needing them to check in to the office to get their next as- alone in remote locations in extreme weather, near hazardous
signment. Not only does this enhance productivity, it also helps machinery, toxic chemicals and even wildlife, putting them at
companies achieve cost savings by reducing delivery time and Stay connected – for less increased risk of injury. Being able to report hazards quickly is
monitoring vehicle usage and wear. Small businesses in the oil and gas industry rely on mobile crucial to protecting employees. Alberta’s Work Alone legisla-
devices to stay in touch with their crews in the field. Improving tion, for example, requires employers to protect their workers
Do more in less time the way field workers communicate with each other and head by identifying and eliminating safety risks and refining com-
As the economy recovers and demand ramps back up, many office can help small businesses cut costs. Push-to-Talk net- munication among workers to better enable them to report
small business owners in the energy sector are still focusing on works allow workers to connect with individual team members hazards.
finding ways to cut costs while keeping up with growing cus- or an entire crew in seconds with the push of a button. These For small businesses with field workers, increased visibility
tomer demands. As such, many companies have started evalu- handsets work like a two-way radio, eliminating the delays and into field operations is integral. GPS solutions, like remote fleet
ating their work flow processes and communications. frustration of voice mail and phone tag at a fraction of the cost tracker can help small businesses improve field worker safety
Traditional paper-based work order and invoicing systems of traditional mobile devices. by giving dispatch staff the ability to track worker activity.This
makes it easy for workers and dispatch staff to call for help,
while meeting the Alberta Work Alone standards. Additionally,
dispatch staff can monitor field worker and vehicle locations
as well as driving speeds in real-time to make sure safe busi-
ness practices are being followed.
In the event of an emergency, fleet tracker dispatchers can
locate employees in the field, immediately tracking the location
of the accident to ensure help is on the way. As part of the re-
mote fleet tracker system, it features an intrinsically safe ‘no
motion’ sensor, which notifies head office staff or an emer-
gency call centre agent of a worker’s status and location if a
worker is down or unconscious on the job.

Staying connected to boost efficiency


In business, success is achieved through efficiency. Ensuring
staff are given the proper tools they need to conduct their jobs
safely and quickly can mean the difference between getting
the job done properly and falling short. Small businesses in the
energy sector need to consider wireless technology as one
way to enhance their business by improving productivity and
safety, and reducing unnecessary costs.

For more information on wireless solutions that can help


improve productivity, reduce costs and ensure the safety of
energy workers in the field, visit www.telus.com/fieldservices.
While you are there, be sure to check out TELUS Wireless
Solutions Roadmap. This easy-to-use tool is designed to pro-
vide a personalized assessment of your business’s wireless-
solutions needs.

18 Oil & Gas Network, December 2009


Taking charts to the next level Control Microsystems Releases
the Accutech TM10 Wireless
Z
edi Inc. recently announced the integration of Zedi TrueChart™ with Zedi Access™ (for-
merly Smart-Alek.com). The integration signifies a leap forward for oil and gas producers
with the ability to view both gas chart and electronic flow measurement (EFM) data
through one secure web portal.
Turbine Meter Totalizer
The convenience is more than using Zedi Access as one online access point. The automated

A
ccutech, a division of Control Microsystems, today announced the launch of the TM10
integration of chart and EFM data sets a new standard in the management of gas field produc- Turbine Meter Totalizer, the latest battery powered wireless instrumentation product
tion. Key functionality already enjoyed with EFM products on Zedi Access is now offered with that offers precise flow rate and total accumulated flow volume data for standard tur-
charts.This includes data exports, daily production volumes and the ability to create custom pro- bine meters.
duction reports and graphical representations that make comparisons and trending, across an The TM10 field unit measures the volumetric flow rate of liquids or gases by detecting the
entire field, simple and flexible. frequency of pulses generated with a standard turbine meter and applying a user-configured
In addition to enhanced visibility of production, producers can strengthen their business proportional “K” factor. A 22-point correction curve is used as a final offset or for custom cal-
processes and documentation, a key factor in the ERCB’s upcoming Enhanced Production Audit ibration of the turbine meter as required.There are two principal outputs providing flow rate
Program (EPAP). For example, digitized daily production volumes provide straightforward doc- and totalized flow measurement.
umentation for audit purposes. And the reduction of manual errors with the electronic, seam- Easy to use and install, the TM10 features a 1” female NPT connection for quick
less integration of chart data to Zedi’s field data capture system, Zedi Vital™, is another proactive removal, installation, and replacement of turbine meters that use magnetic sensor pickups at
measure that reduces the risk of non-compliance. frequency range of 1Hz to 10KHz.
Having critical information from different sources, all accessible in one place, simplifies “The TM10 is yet another of our innovative battery powered wireless instruments, this one
operations, saves valuable time, eliminates errors and reduces costs. Everybody from the field to boasting flow rate accuracy to ± 0.01% of reading,” says Steve Goodman, Vice President of
head office can make smarter decisions about daily workflow activities or future operational Accutech. “Like all our instruments, the value proposition centers on cost of ownership and
direction. reliability. These instruments work simply, allowing field operations to deploy monitoring so-
“Zedi strives to deliver an experience that positively addresses our customers’ business needs, lutions fast while forgoing to prohibitive costs of wire line installation”.
regardless of their field device choice,” explains Jeff Jewitt, Zedi’s Surveillance Product Manager All Accutech field units automatically report field data to a centralized base radio over dis-
and project lead for the integration project. “Providing chart and EFM data in one spot simply tances of up to 5000ft (1524m). Each unit is self-contained, featuring an integrated 900MHz
gives producers faster, easier access to accurate data and provides new capabilities that helps frequency hopping, spread-spectrum transceiver, antenna, and a long lasting battery for years
them better manage their operations and compliance requirements.” of maintenance-free operation.
Zedi TrueChart is Zedi’s high resolution image analysis software that fully automates the pro- The TM10 is rated for industrial use at -40F to 185F (-40C to 85C) and has CSA C/US certi-
duction of daily readings from charts and delivers the most comprehensive coverage of events fication for intrinsically safe installations (Class I, Div 1 and 2, Groups A, B, C, and D).All Accutech
available at the meter site today. Emerging from the acquisition of OAS Oilfield Accounting field units are protected by an industry-leading 3-year warranty.
Service Ltd. in October 2008, Zedi TrueChart complements the full range of Zedi’s EFM moni- www.accutechinstruments.com.
toring systems - Smart-Alek®, Zedi EFM Walk-up™, Zedi SCADA™ and Zedi Connect™.

20 Oil & Gas Network, December 2009


H2S Measurement Applications
E
nvent Engineering Ltd is a manufacturer of analytical
measurement equipment focused on the natural gas in-
dustry. Our experience allows us to offer cost effective
solutions for field measurement of H2S, CO2, moisture, O2 and
BTU (gas composition). A combination of proven technology
near off the shelf delivery, and field service enable us meet
industry demands. This article will outline some common, and
perhaps not so common applications involving H2S measure-
ment.

H2S Measurement Technology


Monitoring sales gas to ensure it meets a tariff limit of 16
ppm of H2S or less at receipt and sales points on the trans-
mission line is essentially mandatory in the natural gas indus-
try. There are also numerous sites with continuous H2S
monitoring on field scavenger treated gas systems where the
target is 1 to 1 or 2 ppm. The industry work horse for these
low level applications is the lead acetate tape analyzer. It is spe-
cific to H2S and cost effective compared to other technologies.
When you really have to know your H2S levels with low ppm
sensitivity, it is the only technology on the market you can ab-
solutely trust.This is why major transmission companies by and
large rely on this technology. Other technology manufacturers
push the fact there are no tapes to change and their technolo-
gy is faster and less maintenance. This is outdated information
at best, if not creative sales misinformation. Current tape ana-
lyzer will monitor the status of the tape 15 times a second and
response times to alarm are in the 10 to 20 sec range which is
as fast as any technology on the market. Tape changes are nor-
mally limited to once every 6 to 8 weeks. It should be noted,
there is no calibration drift in the tape analyzers built by
Envent. Other technology manufacturers in their sales pitches
fail to acknowledge total increased cost of ownership over a
of years of service because of higher initial capital costs and
increased maintenance costs or the costs associated with un-
reliable measurement. An example is UV based systems where
the cost of yearly or less lamp changes, are more than double
than that of the consumables for a tape analyzer. In the case of Stronger H2S sensing Combined H2S and CO2 Measurement
UV based systems, increased costs, marginal sensitivity, slower tapes, pioneered by There are times when users require CO2 as well as H2S in
response times, background matrix effects, and cross interfer- Envent is another im- their measurement application. Envent produces a combina-
ence from other sulfur compounds contribute to erroneous provement for our ana- tion H2S and CO analyzer by adding the infrared based M90
measurement risk. Another technology is solid state sensors, lyzers which has provided CO2 monitor with the H2S sample system or integrating the
which is essentially using sensors designed for ambient moni- increased reliability in CO2 sensor into the spare input channel of the H2s analyzer
toring where occasional levels of H2S are present in air, for older competitive tape electronics.This is a very cost effective solution for both meas-
continuous monitoring in natural gas. Envent manufacturers a analyzers as well. Like the urements.
system utilizing a solid state sensor but we would caution users internal combustion en-
to only use this when the measurement is not critical, other in- gine, lead acetate is an Total Sculpture Measurement
terfering sulfur compounds are minimal and the background mature but practical Lead acetate tape analyzers are the only practical way to
gas composition is static. technology, but when combined with precision machined measure total sulfur in process and pipeline gas. The system
parts, and advanced electronic technology, increased reliabil- combines the sample and Hydrogen (H2) in a reaction furnace
ity and horse power is the result. Below are typical sales gas heated to 1000 deg C or higher . All of the sulfur compounds
analyzers for use in Class 1, Division 1 and Class 2, Division 2 are converted to H2S and read by the tape. The system pro-
configurations. vided by Envent will switch between H2S and Total Sulfur
based on an user configured time table. The system will also
Higher Level H2S Measurements conserve H2 consumption by turning off H2 when measuring
There are many applications measuring higher levels from H2S only.
100 ppm to 1% H2S for pipeline permitting or even higher lev-
els from a few % to 50% H2S for sulfur balance and pipeline Portable and Transportable Systems
blending. Over the last few years, Envent has successfully Envent provides a transportable platform for their Division
implemented permeable membrane technology which extends 2, analyzers for temporary installations as well as a battery pow-
the continuous useful range of 0 to100 ppm to percentage lev- ered portable general purpose unit that can provide short term
els. This offers users a low power (12-24 volt at less than 3 watts) testing and or serve as a field calibration and/or verification
and cost effectiveoption for field measurement where power unit for other field H2S analyzers. Both units have built in data
options are limited.The permeable membrane utilizes a dry car- loggers.
rier gas, such as sweet fuel gas or N2 or instrument air to pick
up a proportional amount of H2S from the process stream in di- H2S in Water and Liquid Hydrocarbons and LPG
lution ratio of 5:1 and up to 5000:1. An explosion proof air H2S in hydrocarbon liquids and other liquids can be meas-
pump for dilution gas is also developed when another carrier ured by sparging the liquid with a dry carrier and measuring
gas is not available. There it at times, a need to measure high the H2S in the gas. Envent has provided a number of success-
range H2S at where there is no convenient place to vent the ful customized sparging systems combined with permeable
sample post dilution. Envent has developed an integral high membranes measuring H2S approximately 1 to 5 ppm by
pressure dilutor which will allow users to measure H2S levels weight. Because of the multiplying effect of liquid to gas vol-
in the process at pressure with no sample venting.This requires ume, the system is quite capable of detecting below 50 ppbw
a flowing pressure input to correct the analyzer reading. in liquids.

Oil & Gas Network, December 2009 21


Dresser Waukesha High Performance Rod Guides for Tubing
Introduces 12-Cylinder
High Performance Wear Prevention in Progressing Cavity
Engine for Gas Downhole Pumping Applications
Compression
R
&M Energy Systems recently

Applications launched a new line of rod


guides for progressing cavity
downhole pumping applications.

D
resser Waukesha, a leading manufacturer of The New Era ® Pathfinder™ High
natural gas engines that deliver clean, cost- Performance Rod Guides extend the
effective power, has introduced the 12-cylin- life of the rods and tubing, reduce pres-
der 12V275GL engine, the latest in Dresser Waukesha’s sure drop and premature wear from
275GL™ Series, a new generation of high-performance sand, increase production and
engines for gas compression applications. reduce costs.
The new 12V275GL engine is rated at 3375 bhp at The unique spin-thru design of the
1000 rpm – eight percent higher than its predecessor, New Era Pathfinder rod guide allows
the 12-cylinder ATGL®. With design and engineering fluid to easily flow through four dis-
updates as well as an enhanced engine control sys- tinct channels that are molded direct-
tem, the new engine is designed to maximize effi- ly into the rod guide sleeve. This flow
ciency and minimize fuel costs while greatly path reduces pressure drop by allow-
simplifying and improving packaging, operation and ing fluid to flow through the rod guide
service. At the same time, the new 12V275GL engine rather than limiting flow to the space
retains the robust construction and reliable operation around it. In sandy applications, this
for which its predecessor ATGL model is known. active flow path keeps solids from em-
bedding between the rotating sleeve
and the stationary guide to reduce pre-
mature rod guide wear.
New Era Pathfinder rod guides also reduce the torque that is prietary SanGard material increase guide life
generated by the mechanical and hydraulic friction of conven- R&M Energy Systems can recommend the proper rod guide
tional rod guides that are fixed to the rotating rod string. design, material, spacing and auxiliary equipment for both beam
Additional features and benefits include: and progressing cavity pump applications using its proprietary
• Spin-thru design consisting of a four-channeled inside sleeve and Rod Guide Advisory Program (RGAP™) <http://www.rmener-
a separate, three-fin stationary outside sleeve gy.com./literature/tubing_wear/rgap.pdf> software along with
• Fits rod sizes from 5/8” to 1” and tubing sizes from 2-7/8” to its years of well monitoring and performance tracking. Wellbore
3-1/2” deviations, dynamometer readings, workover histories, well op-
• Handles temperatures to 180°F erating conditions, completion information and production data,
• Ideal for sandy well conditions are all used to properly select the most effective New Era rod
• Extra material added to offset channels and R&M Energy’s pro- guide design, material and spacing for each well.
“Based on my experience with this engine plat-
form and the ESM control system, the new 12V275GL
will deliver improved load response, fuel tolerance,
and starting capability,” said Ron Delisle, director of
compression sales and engineering, Propak Systems
Ltd. “When you combine these performance en-
hancements with the higher power rating and the
packagability upgrades, I believe Waukesha has creat-
ed a world-class natural gas engine.”
Standard on 275GL Series engines is an enhanced
version of Waukesha’s reliable, easy-to-use total engine
control system, the Engine System Manager (ESM®).
ESM optimizes engine performance and maximizes
uptime by integrating spark timing control, tur-
bocharger control, speed governing, knock detection,
start-stop control, diagnostic tools, fault logging, en-
gine safeties and air/fuel ratio (AFR) control. ESM is fac-
tory-mounted, calibrated and tested to minimize
on-site set-up requirements.
Engines in the 275GL Series also are equipped with
factory-mounted lube oil and cooling systems, which
reduce the time and cost required to design, fabricate,
and integrate the engine into a compressor package.
Other features include an upgraded oil filtration sys-
tem with plate-type oil cooler and spin-on disposable
lube oil filter elements, and quick disconnects for
ignition coils and thermocouples. In addition, im-
provements to the fuel and exhaust systems of the
12V275GL create a more standardized platform be-
tween the 12 and 16-cylinder models.
More detailed information on Dresser Waukesha
275GL Series engines is available using these links
to Dresser Waukesha’s website: www.dresserwauke-
sha.com

Oil & Gas Network, December 2009 23


casestudy

Challenging the shallow gas status quo


Zedi collaborates with producer on creative approach for shallow gas applications

P
roducing gas in the Western Canadian Sedimentary Basin (WCSB) inevitably means operat- do monthly five-minute flow tests that exceeded the regulatory requirements for individual well
ing a group of shallow gas wells, notorious for very low flow rates and challenging eco- flow rate testing.The challenge the producer was having with these wells, even with this frequency,
nomics for development and long-term production. Typically the wells are group-metered was that they struggled with the timing and length of the flow test to provide sufficient data to
to keep completion and surface facility costs as low as possible. impact their completion, optimization and production operation needs.”
But even in typical situations, creative applications and individuals willing to try new things, What is a portable Smart-Skid™ and how was it used in this project? The Zedi Smart-Skid is a
can result in more effective production operations and impact to their company’s bottom line. portable metering facility that contains a Smart-Alek®, a metering computer that measures and
To challenge the norm, Zedi Inc., a production operations company based in Alberta, joined monitors gas flow, and an eTube™ flow measurement device enclosed in a weatherproof shack.
up with a producer1 operating approximately 2,500 shallow gas wells in southeast Alberta. All it The Smart-Alek captures all test data electronically and sends it through a cellular or satellite net-
took was the determination of a bright, young engineer to prove there was a better way, an en- work to Zedi’s secure web portal, ZediAccess.com.This well information can be viewed instantly,
thusiastic team at Zedi, and a fleet of 35 portable Smart-Skids. at anytime, using an Internet-enabled computer.
Together, their vision was to build a fleet of portable, electronic flow measurement (EFM) sys- Installation and implementation is simple:
tems that could be used in a series of mini projects to gather accurate field data, but in such a hook the Smart-Skid up to proving taps, run
way that was more cost-effective than using permanent EFM gear on every well. the required testing for as long as required,
That vision resulted in a project that provided insight to a number of problems, including: communicate the location, and move to the
1. How to effectively determine the optimal cleanout frequency for each well next well. Once testing is done, the data and
2. How to determine the effectiveness of alternative completion strategies, and trends can be viewed and analyzed when it’s
3. What is the production potential from the various optimization techniques that could be convenient.
applied to wells or a group of wells For this project, a Smart-Skid was temporar-
Evan West, Zedi’s Director of Production Optimization, comments on the project.“Compliance ily installed on a group of wells, and when suf-
wasn’t the driving force for this producer,” explains West.“They already had a process in place to ficient data was gathered, the Smart-Skid was
moved to a different group of wells. By imple-
menting this process, they were able to find the
relationship between the accurate, high resolu-
tion data and the monthly production tests.The
character of each well, or group of wells, was
extrapolated which helped direct changes that
were implemented in a number of operations, optimization and completion decisions. This data
facilitated a statistical approach to solving many of the producer’s problems for effectively man-
aging these assets.
Here are their findings for each of the three problems identified.
Effectiveness of well cleanout
Most of the wells did not have sufficient economics to warrant continuous or artificial lift to
keep them dewatered, so they are periodically cleaned out with swabbing or coil tubing rigs.
With 4000+ cleanouts per year on 2,500 wells, management of the frequency and method of
cleanout required for each well was difficult. The producer picked a group of wells and installed
the portable Smart-Skids over a three-to-six month period. The accurate and reliable high resolu-
tion data collected, was used to improve on the allocation of the cleanout budget.
The results were clear. They quickly had a better idea of which wells warranted what fre-
quency of cleanout. While some wells showed positive production results from the cleanout, oth-
ers indicated that longer times between cleanouts were possible. From the data, the producer could
reassess the current routine cleanout schedule and create a more effective schedule based on the
existing budget.
Effectiveness of completion strategies
The producer compared the results of two hydraulic fracturing (frac) techniques and initially
concluded based on well testing that the higher-cost frac was also the most effective. Using the
fleet of Smart-Skids, six new pairs of side-by-side wells were monitored closely for their per-
formance (at the same time of year, with a consistent dewatering procedure, but fractured differ-
ently) to test this previous conclusion.
As it turned out, the experiment proved that the higher-cost frac technique did not actually
provide better results for this particular set of formations – the group of wells fractured using the
lower-cost technology actually had better performance. Due to the short-term production impact
of dewatering these wells, this conclusion would have been difficult (if not impossible) to obtain
without empirical data. As a result of enhanced monitoring approach, the frac strategy was revis-
ited to favour the technique that provided the best results.
Effectiveness of continuous de-watering
A number of wells were tested to see the impact of very frequent cleanouts (effectively sim-
ulating continuous optimization techniques).They proved that over a three-month test period, some
wells, with continuous liquid removal, performed as well as a new drill, and therefore economi-
cal enough to consider permanent artificial lift solutions.
The project is summarized by a stakeholder as such, “The project using Zedi Smart-Skids has
provided an understanding of our group-metered wells that we previously did not have.” He con-
tinues, “There’s a preconceived notion in the industry that shallow gas wells aren’t worth the time
of day. But an asset is an asset, and through some inventive ideas, we’ve proved that there is a bet-
ter, more effective way to manage your operational budgets. Who can argue with that?”
For more information on Zedi or to read the full case study, visit www.zedi.ca or contact solu-
tions@zedi.ca

24 Oil & Gas Network, December 2009


XACT Downhole Telemetry Iridium Provides Data Links for
Inc. Announces Industry Underwater Monitoring Systems
Firsts for Acoustic Telemetry
F
astwave Communications has received a contract from Chevron Australia Pty Ltd to sup-
ply a water quality monitoring system for the Gorgon offshore gas project based on
ACT Downhole Telemetry Inc. has announced the suc- Iridium satellite data links provided by Iridium Communications Inc.

X cessful provision of its acoustic telemetr y


Measurement While Drilling (“MWD”) service in
air drilled horizontal gas wells for Equitable Resources
The system will provide monitoring of turbidity levels arising from dredging and spoil
operations in waters near the gas processing plant location on Barrow Island.
The Fastwave system consists of underwater instrumentation modules positioned on the
sea floor around the dredging and spoil disposal sites. Each subsea module contains turbid-
Inc. XACT Downhole Telemetry Inc.
ity sensors, data loggers, an Iridium short-burst data (SBD) modem and rechargeable battery
The XACT system is automated, solid state, and packs.They are connected to small moored buoys which relay the data packets through the
incorporates a full throughbore design. The tool can Iridium satellites to an environmental monitoring system onshore.
easily be operated by rig crews without the need for “We designed our underwater monitoring systems to take advantage of Iridium’s global
full-time MWD operators on location. It is capable of coverage, high network quality and low-latency, two-way SBD links, providing a robust so-
transmitting data from downhole to surface at over 20 lution capable of working reliably under extreme environmental conditions,” said Nick Daws,
baud giving it the fastest commercially available wireless Director, Fastwave.
update rate in the industry. The system has advantages Protection of the marine environment is a key priority for the Gorgon project and this
over mud pulse systems as it does not rely on the pres- will include a program of water quality monitoring using the Fastwave system. The system
ence of non-compressible fluid in the pipe or the use of the has all electronics and instrumentation packages in waterproof, hardened subsea capsules
rather than in surface data buoys, providing extra protection from the cyclones that prevail
mud pumps to generate the signals to the surface. XACT’s
in the region.The modules are designed to function at depths up to 50 meters with endurance
acoustic system is indifferent to formation type and can be used with-
of at least four months between battery recharges.
in close proximity to active coal mines or other nearby electromagnetic (“EM”) telemetry systems, “Iridium’s fast-growing machine-to-machine (M2M) data business is being driven largely
giving it distinct advantages over conventional EM telemetry systems. In addition, sensor nodes by the innovative and creative solutions being developed by our Value-Added Partners such
can be installed along the drillstring enabling the use of distributed measurements while drilling as Fastwave,” said Patrick Shay, vice president of Iridium’s data division. “Iridium offers a
and tripping as was demonstrated on the Equitable wells. unique value proposition for remote M2M asset monitoring and tracking, providing reliable,
“We are very pleased to have the support of companies such as EQT who recognize the in- low-latency data communications anywhere in the world, on land, in the air, on the sea and
herent advantages of our acoustic MWD system for their applications.This has led to the very suc- even under the sea.”
cessful completion of a 4 well trial in Kentucky for EQT. These 7600 ft MD, air drilled horizontal
wells, were drilled with a three node distributed acoustic MWD system (a primary tool located
in the BHA plus two distributed stations in the drillstring). This is an industry first for MWD sys-
tems and marks significant advancement within the MWD industry.“said James Neff, President and
CEO of XACT Downhole Telemetry.

“EQT is very excited by our use of the XACT MWD system to date.The full throughbore makes
the tools very driller friendly. Also, the very fast toolface updates with auto decoding, the ability
to recharge the tools onsite between wells, and the remote communications capability all trans-
late into real benefits for EQT as we strive to drill directional wells quicker, safer and with fewer
personnel on location. Additionally, the distributed measurement nodes allow the acquisition of
both real-time and recorded pressure data that assists with drilling optimization. We are excited
to have an alternative to EM MWD and wireline steering for systems that work in air.” said Rod
Vogel, Director of Drilling and Completions Engineering for EQT.
XACT Downhole Telemetry Inc. is a private Canadian company with two shareholder groups,
the majority holder being Shell Technology Ventures Fund 1 B.V. (the “Fund”). The Fund, managed
by Kenda Capital B.V. (“Kenda”), is a unique large scale investment fund focused at reducing the
cost of energy by accelerating the development and deployment of new technologies. Kenda and
the Fund have a solid energy sector expertise, fostered through a unique technology relationship
with the Shell Group. Major investors in the Fund are the Royal Dutch Shell Group, Coller Capital
and the Abu Dhabi Investment Authority.
More information can be found on www.kendacapital.com.

Oil & Gas Network, December 2009 25


2009 Control Microsystems Announces the SCADAWave Ultra
Product in review
KR20 Integrated Data Radio
T
he KR20 is conveniently mounted within a
SCADAPack controller lid with little change
to the overall dimensions, making it the ideal
solution when adding or retrofitting wireless com-
munication into cramped enclosures.
The KR20 uses the same advanced radio tech-
nology as the SCADAWave KR50 and shares many
of its features including high speed data throughput
up to 256Kbps, repeater functionality, multiple data
streams and network bridging. Like other
SCADAWave radios, the KR20 radio is fully pro-
grammable, locally or remotely.
“For customers requiring full featured radios, the
Ultra KR20 provides an advanced solution in a tight
package”, said Dale Symington,VP Product Strategy.
“The product uses a secure, unlicensed 900MHz
spread-spectrum design offering innovative colli-
sion-avoidance and long range capability”.
www.controlmicrosystems.com

R&M Energy Systems’ SENTRY® Closure


Features Innovative One-Piece Sea
R
&M Energy Systems of-
fers its latest, most
technically advanced
solution for pipeline and ves-
sel closures. Marketed under
the SENTRY® brand name,
this non-threaded, internal
door closure now features an
innovative one-piece seal.This
seal provides many features
and benefits that are not avail-
able in other types of clo-
sures. The SENTRY closure’s
one-piece seal:
• Is molded in all sizes
with no vulcanized splices
• Is available in FKM
(Viton), EDR FKM (Viton),
NBR, or HNBR low tempera-
ture materials (other com-
pounds are available upon
request)
• Features an anti-extrusion spring molded directly into the seal for easy installation and to ensure secure sealing
Installation of the one-piece replacement seal is quicker than ever resulting in reduced maintenance time and lower incurred main-
tenance costs.
All pressure-retaining components on the SENTRY Closure are manufactured from ASME SA designated materials. An improved hinge
arrangement and a unique means of holding the locking segments in the open position, make operation of the SENTRY Closure smooth
and easy. The innovative method of securing the Closure’s locking components to the door also helps to prevent the possibility of in-
jury during pipeline or vessel servicing.

EliminX(tm) Extreme by Silex


S
ilex has introduced the new EliminX(tm) Extreme - a state-of-
the-art combination silencer / catalytic converter that virtu-
ally eliminates noise and emissions. The combination unit
can be equipped with either round or square catalyst for both
rich and lean burn engine applications. The advanced hous-
ing design makes catalyst installation and inspection quick
and easy. The silencer is also engineered to eliminate both
radiated shell noise and surface heat. Silex offers a full range
of single and dual inlet configurations to suit any type of
installation.

26 Oil & Gas Network, December 2009


OneWireless Flir Announcement
H
oneywell’s updated version of its OneWireless™ in- Manufacturers have been asking for a secure and reliable

F
LIR Systems Ltd. is pleased to announce
dustrial wireless network equipment is designed to multi-functional wireless network that can handle the thou- the addition of JFC Solutions of
be compatible with the end-user driven ISA100.11a sands of devices they use within their plants. Until now, the only Burnaby, BC as manufacturing agents
industrial wireless communication standard. The latest way to do so was with proprietary systems. The ISA100.11a for FLIR infrared cameras and Extech
OneWireless release is the process industries’ first mesh net- standard will allow OneWireless users to achieve this vision Instruments for Electrical/MRO distribu-
work with ISA100-ready hardware. The network can be easily using a standards-based network. tion from Ontario west to British
upgraded to the ISA100.11a standard, when it is completed, The new version also extends Honeywell’s product line of Columbia.
through an over-the-air software update. transmitters with a new XYR™ 6000 Digital Input wireless FLIR acquired Extech Instruments
transmitter. OneWireless supports a broad range in 2007.The tremendous momentum
of both wired and wireless transmitters, of both its’ proprietary test and
including corrosion, gauge pressure, differential measurement products and the glob-
pressure, high-level analog input and tempera- al-leading infrared systems in distribu-
ture transmitters. As a single network support- tion has necessitated an expansion of it’s
ing both sensors and IEEE 802.11-based already, extensive customer support offer-
applications, OneWireless also supports mobile ing. JFC Solutions, with over 13 years
worker devices, such as Honeywell’s IntelaTrac experience exceeding expectations as a
PKS and Experion Mobile Station, and can manufacturer’s representative, has been
improve plant safety by helping customers added to
quickly locate employees. support
In addition, the latest OneWireless release FLIR’s
expands the interface capabilities of the system, national
supporting the HART protocol. HART is com- distribu-
monly used by asset management applications tion partners;
such as Honeywell’s Field Device Manager. EECOL Electric, Acklands
OneWireless system management software Grainger (T&M) and Wesco
makes any XYR 6000 transmitter communicate Distribution.
to existing HART-enabled applications in the
same manner as to a wired HART device.This
continuous evolution of the OneWireless plat-
form highlights the multi-protocol capabilities
of the Honeywell system.
For more information about Honeywell’s
OneWireless solution, visit http://hpsweb.hon-
eywell.com/Cultures/en-US/ Products/wire-
less/default.htm.

New SWT series


MSA’s new Workman™
D
ynalco, a Crane Co. company, announces a brand new SWT
series of speed switches for the monitoring and protection of
rotating and reciprocating machinery. The SWT series of speed
switches are DIN rail mountable for easy installation and are fully iso-
Fall Protection Kits
lated for compatibility with existing systems.
The SWT-2000, a 2 Channel Speed Switch/Transmitter, contains two
combine safety,
isolated speed switches in one package. The SWT-2000 is able to moni-
tor and protect two separate machines or processes simultaneously, with sep-
quality, economy
arate 4-20 mA proportional outputs. It also contains (4) relay setpoints and

T
hese all-in-one kits are designed specifically for the con-
(2) open collector outputs with a variety of configuration options. struction industry. The kits come complete with every-
Applications would include dual turbocharger protection and redun- thing workers will need to keep them safe and secure.
dant protection for critical operations. Programming is done via an Workman Fall Protection Kits include a Workman Harness, a
Ethernet connection. Workman Shock-Absorbing Lanyard, a PointGuard Anchorage
The SWT-1000 Speed Switch/ Transmitter has a single relay setpoint Connector Strap and a Carrying Bag. The Workman Aerial Kits
for over speed protection and provides 4-20mA isolated output. This include a Workman Harness, a Workman Shock-Absorbing
product is configurable via Windows® software. Lanyard and a carrying bag that can be attached to an aerial lift.
The SWTD-1000 Speed Switch/Transmitter has the same function- www.MSAnet.com.
ality as the SWT-1000 and includes an integrated backlit dis-
play. This product is software programmable and utilizes
a 1/8 DIN package for easy installation.
The SW-100 is a DIN rail mountable speed switch that
uses a single setpoint for over/underspeed protection.
The SW-100 is simple to configure – no test equipment
or computer is needed.
Dynalco has a reputation for providing rugged and
dependable products for the oil and gas production, nat-
ural gas pipeline, and processing industry. The SWT
series enhances the current Dynalco line of speed switch-
es and transmitters, allowing a wide range of solutions for
machine monitoring and protection.
For more information visit www.dynalco.com

Oil & Gas Network, December 2009 27


2009
Product in review

ESAB’S Introduces the New


PowerCut 1300 & 1600 Plasma
Cutting Packages
E
SAB Welding & Cutting Products introduces the new PowerCut 1300 & 1600 plasma cut-
ting packages. PowerCut 1300 has a cutting capacity of up to 1-1/4 in. (32 mm) and sev-
ers 1-1/2 in. (38 mm). PowerCut 1600 has a cutting capacity of up to 1-1/2 in. (38 mm) and
severs 1-3/4 in. (44 mm).
Both PowerCut 1300 & 1600 packages come fully assembled and ready-to-cut once input cable
is plugged in and system is hooked up to a compressed air source. Each package includes the 25
ft. (7.6 m) or 50 ft. (15.2 m) PT-38 heavy-duty plasma cutting torch, torch holder and spare parts
kit. Each package can be also be converted for mechanized cutting using the PT-37 mechanized
cutting torch.
Standard features include digital display, automatic switching between gouge, grate, and nor-
mal modes, blowback technology to eliminate high-frequency in-
terference with nearby electronic devices, silicone-sealed
switches for protection against corrosion, automat-
ic fan and much more.
For more information about the
PowerCut 1300 and 1600 visit
www.esab.ca, email CanadaMktg@
esab.com or call 1-877-935-3226.

Moyno® Down-Hole Pumps Feature a Progressing


Cavity Design For Superior Versatility and Cost-
Effectiveness in Heavy Oil Applications

R
&M Energy Systems, part of
the Fluid Management
Group of Robbins & Myers,
Inc., offers Moyno® Down-Hole
Pumps for superior performance
in heavy oil well production.These
pumps feature a progressing cavi-
ty design which results in efficient
and cost-effective performance,
simple maintenance, and long
service life. Numerous models are
available to handle various flow
rates, pumping depths, and well
conditions.
Moyno Down-Hole Pumps re-
quire minimal maintenance be-
cause they have only one moving
part down-hole. In addition, lower
input energy
(403) 264-E-mail: info@rmener-
gy.com

28 Oil & Gas Network, December 2009


Control Microsystems Announces the Volant Products 2008 Inc., continues
SCADAPack 330E and 334E Controllers to gain market presence with the
HydroFORM™ Centralizer
C
ontrol Microsystems, global developer of ad-
vanced SCADA products, has announced the
release of the SCADAPack 330E and 334E, two

V
olant designed an application specific centralizer in 2006,
exciting additions to the SCADAPack family of teleme- which proved very successful for casing window exiting.The
try and control devices. These cost-effective con- multi lateral design centralizer was tested in Houston Texas by
trollers are based on the popular SCADAPack 330/334 both the Oil operator, and the company which manufactures and
hardware platform and address the growing demand supplies the window liner hanger system. Several other centralizer
for secure and authenticated data. styles were also tested, with Volant windowing centralizer being se-
The SCADAPack 330E and 334E provide multi-ven- lected as the best product for the customers application. The cen-
dor interoperability and reliable communications tralizer offers a unique combination of a smooth transition from the
through native DNP3 and IEC 60870-5. Data integri- casing outside diameter to the rib diameter along with the uni-body
ty for billable applications or critical operations is sup- design which provides the required robustness for window exiting.
ported with AGA12 encryption. In the mother bore it reduces drag, and provides positive standoff to
“The popularity of E-Series features has driven the resist helical buckling, while in the horizontal section of the well
growth of the product line”, said Dale Symington, VP bore, it aids in drag reduction for the extended reach wells.
Product Strategy. “DNP3 and IEC 60870-5 allow the Volant Products 2008 Inc. has recently acquired additional con-
slave controller to store a time-stamped event when- tracts involving a number of multi lateral wells, by various operators.
ever data points change and continuous recording
means there are never holes in the data, even when communication links go down.”
The E-Series controllers support a full-featured FAT32 (PC compatible) file system and command
line, which is accessible over FTP, Telnet, DNP3 or local serial port. The command line provides Moyno® Progressing Cavity Pumps Offer
direct access to the file system and configuration commands. An IEC 61131-3 programming envi-
ronment provides support for two logic applications running simultaneously. This allows system
High Performance & Low Maintenance
integrators to introduce password-protected applications that offer value-added functionality in their in Oil and Gas Industry Applications
chosen industry, all while leaving the second application open for the end-user to add custom con-

M
oyno Progressing Cavity Pumps provide the ultimate in versatility as they are
trol if required. capable of handling clean, clear liquids as well as thick, abrasive, and corrosive flu-
ids and slurries, even with viscosities over 1,000,000 cps.The product line includes
models capable of generating flow rates up to 2,500 gpm and pressures to 2,100 psi. Moyno
pumps are well-known for low maintenance and long service life which result in low over-
all total cost of ownership.Their high performance, progressing cavity design results in a gen-
Sleek, compact smartphone tle, low shear discharge, while their pulsation-less flow rate improves metering capabilities.
A variety of proprietary Ultra-Flex® stator elastomers and Ultra-Shield® rotor coatings
combines BlackBerry applications sustains peak pumping efficiencies even in the most corrosive and/or abrasive service
environments.
with Direct Connect Push To Talk

T
ELUS launched the new BlackBerry Curve
8350i smartphone, featuring support for
the popular Direct Connect Push To Talk
service and available only on the TELUS Mike
Network.
The BlackBerry Curve 8350i smartphone is
the ultimate productivity tool for professionals
in the field and on the go who need instant
communication with their teams along with
instant access to their e-mail. The new smart-
phone is packed with functionality, including
built-in Wi-Fi and GPS, and combines
BlackBerry communications and multimedia
capabilities with Mike’s Direct Connect Push
To Talk, all in one.
“The BlackBerry Curve 8350i combines
the convenience of our Mike Direct
Connect Push To Talk technology and the
trusted BlackBerry solution,” said Jim Senko,
vice-president of Mobility Solutions at
TELUS.“It’s a fantastic new addition to our
extensive selection of business-ready
smartphones operating on our Mike or
PCS networks.”
Featuring integrated Global Position-
ing System (GPS), the new BlackBerry
Curve 8350i smartphone from TELUS
supports GPS tracking and dispatch so-
Specialized Hardbanding System
lutions and also has Bluetooth-enabled support for

R
ankin® Automation has developed a specialized hardbanding system for applying tough
accessories such as wireless headsets or hands-free car kits. In addition to being tungsten carbides to a wide variety of drilling equipment subject to downhole abra-
ready for work, the BlackBerry Curve 8350i is ready for play. It includes a robust media player, a sion. Drill collars, stabilizers, flights, tool joints, and scrapers will benefit from ex-
2MP camera with video recording and the capacity to store up to 16GB of music, pictures, video tended operating time thereby improving bottom-line performance. Rankin® Automation
and documents per memory card. And with its built-in Wi-Fi, users have more ways to stay con- offers both field-based and shop-based hardfacing systems that are cost efficient and practi-
nected with the people and information that matter most. cal in design.
www.telus.net

Oil & Gas Network, December 2009 29


2009
Product in review

Alloy Screen Works introduces Retrofits Make Economic Sense -


new premium sand screen In a time when efficiency matters
A
lloy Screen Works, , has introduced a new product

T
he current drilling environment continues to put
to compliment their extensive line of downhole pressure on producers to create production effi-
sand control screens. The ASW/CT Premium Screen ciencies on existing wells and find ways to work with
was developed specifically for thru-tubing completion a shrinking skilled work force. Zedi invites producers to
applications. Innovative new manufacturing technology has revisit the retrofit advantage of putting electronic flow
resulted in a close tolerance (CT) method of construction measurement (EFM) devices on their wells. Zedi’s surveil-
that produces a slim hole screen, which surpasses the spec- lance offerings, Smart-Alek® and Zedi EFM Walk-up™ help
ifications of other thru-tubing screens currently available. producers become more efficient and consequently save
This new ASW/CT design involves the use of diffusion- them time and money.
bonded sintered-laminate woven wire mesh combined with Customers confirm that a key advantage of moving from
a robust outer perforated protective shroud over a perfo- charts to EFM is that an operator’s work week is restruc-
rated base tube. Diffusion-bonded laminate mesh is well tured to support more effective work practices. Well visita-
recognized as a superior downhole sand control media. tion changes from daily to ‘as required’ – freeing up time for
Alloy Screen Works has developed a process to weld the value added activities like preventative maintenance. A
media “flush-on” directly to the inner perforated tube of more efficient work structure ultimately leads to opera-
the screen assembly. This integrated process greatly en- tional cost savings and a higher well to operator ratio.
hances the screen’s strength and reduces the overall OD For new drills or retrofitting, producers may also want
when coupled to the close tolerance outer shroud. These to add an element of control. Zedi Connect™ is the next
two attributes are crucial when considering the downhole generation of Zedi’s optimization solutions combining surveillance and control. It allows users to
restrictions encountered by thru-tubing well screens. remotely control and monitor well site equipment through the web. Built as a unique technology
www.alloyscreenworks.com that’s compatible with industry field devices, it is designed to upgrade optimization applications
remotely eliminating the need for site visits.

30 Oil & Gas Network, December 2009