Oil & Gas Network - December 2009

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Publication Mail Agreement No.: 40039458

December 2009 Volume 10, Number 6

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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

David Coll Seema D Dhawan Joni Evans Elizabeth Hak Joe Perraton

Drilling Benchmarking Study 10 Imperial Oil helps SAIT students soar to success 10 Oil and Gas Industry Survey of Public in “Operational”

Areas Yields Surprising Results 11 Canadian Operating Costs Continue Rise in ‘08; No

Drop in 9 Months ‘09 DESIGN & LAYOUT

millstonecommunications.ca [email protected]

12 Facing financial challenges as gas hits seven year low 14 The ‘Ups & Downs’ of Natural Gas Prices 14 BJ Services Bolsters its Process and Pipeline Services

with New Bases in Canada ADVERTISING SALES

John Robertsen 403.503.0460 [email protected]

15 Nexen logo unveiled on STARS helicopter in recognition

of $500,000 contribution 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 Suite 300, 840 6th Ave SW Calgary AB T2P 3E5 Phone: 403 503 0460

with No Peak Evident 17 Singletouch Labor Monitor report shows real-time

productivity, percentage complete 17 World First Installation of a Fibre Optic Acoustic Sensor

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for Reservoir Monitoring 18 Wireless technologies bring the office into the field 20 Taking charts to the next level 20 Control Microsystems Releases the Accutech TM10

Wireless Turbine Meter Totalizer

OIL & GAS NETWORK MAIL

21 H2S Measurement Applications

2 - 1450 28th Street, N.E. Calgary, AB T2A 7W6

23 Dresser Waukesha Introduces 12-Cylinder High

Performance Engine for Gas Compression Applications 23 High Performance Rod Guides for Tubing Wear

Oil & Gas Network is published six times a year. Reproduction in whole or in part of any material in this publication without the express written permission of the publisher is prohibited. The publisher of Oil & Gas Network is not responsible for errors or emissions printed, and retains the right to edit all copy.

Prevention in Progressing Cavity Downhole Pumping Applications 24 Challenging the shallow gas status quo 25 XACT Downhole Telemetry Inc. Announces Industry

Firsts for Acoustic Telemetry 25 Iridium Provides Data Links for Underwater Monitoring

Systems 26-30 2009 Product in Review

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

Face-to-Face with the Media

Corner

Coll’s

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 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 latest ‘non-event’ enquiry. As I submitted my 26-page draft to the CEO for review, I was feeling 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 dealing 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 . . .

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• 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 overtly 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 answer. 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 company is fair game.

Oil & Gas Network, December 2009 5

2009

A Year in Review

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 pressure 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. 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-permetre-drilled royalty credit to companies on a scale based on their production levels from 2008.

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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.

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

Drilling Expected to Be Flat Through 2010, Says PSAC he 2010 Canadian Drilling Activity Forecast, released in early November 2009 by the Petroleum Services Association of Canada (PSAC), forecasts a total of 8,000 wells drilled (rig released) across Canada for 2010.This is in line with the expected final tally for 2009, also of 8,000 wells drilled. “Drilling activity levels are plateauing as we ride out this recession,” said Roger Soucy, President of PSAC. “Last year at this time, we were expecting to see more than 16,000 wells drilled in 2009. But activity slowed substantially throughout the year as the recession dug in and commodity prices collapsed. We are now at a much lower activity level – a level we think will be sustained in 2010.” On a provincial basis for 2010, PSAC estimates 5,095 wells drilled in Alberta and 630 in British Columbia, representing a decrease of five per cent in Alberta and an increase of seven per cent in BC over expected 2009 drilling levels. Saskatchewan’s drilling rate in 2010 will see a 10 per cent increase to 1,935 wells. Drilling in Manitoba will see a 22 per cent increase to 300 wells. Commodity prices are the biggest influence on oilpatch activity. PSAC is basing its 2010 Forecast on average natural gas prices of CDN$5.00/mcf (AECO) and crude oil prices of US$72.00 barrel (WTI). “We all know that oil and gas activity is predicated on price,” continued Mr. Soucy. “In 2010, oil prices will be adequate to sustain conventional oil activity. As a result, we are forecasting an increase in drilling in oil areas like Saskatchewan and northeast Alberta. Gas pricing, on the other hand, remains relatively 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 downturn,” 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 services sector. Companies have been trying to hold steady, but now we’re going to see some consolidation 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 difficult to meet, because of the retrenchment companies 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 people and innovative technology to take advantage of the upswing.”

Albertans should be concerned about downturn in natural gas industry ndustry expert sees much more than price behind Alberta’s diminishing gas production.Calgary -based oil and gas consulting firm AJM Petroleum Consultants warned that, without some decisive and proactive interventions to encourage natural gas production in Alberta, the potential for negative

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Photo by Chris Beeger

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impact on the province’s economy is very real. AJM’s Vice President of GeoScience Dave Russum, summarizes the overall decline of production across Western Canada and points to specific conditions in Alberta – other than the current decline in the natural gas price – that may be accentuating Alberta’s drop in production. “Reduced production during a time of low gas prices is understandable,” said Mr. Russum.“But there’s been a general downward trend for more than ten years, regardless of price and number of wells drilled. And in each of the last two years,Alberta has been shedding production at an alarming rate of greater than 1bcf/d. Current production is about 3.3 bcf/d, or 20 per cent, below the peak production levels of the late 1990s.” Even if natural gas prices do climb, Mr. Russum said Alberta producers would be hit with higher royalties as determined by changes to Alberta’s Royalty Program. Furthermore, while unconventional gas is showing promise in other jurisdictions, the dispersed nature of Alberta’s unconventional gas deposits and difficulties with extraction make Alberta plays less attractive than those promoted in other parts of the world. “Natural gas has been the strength of the Alberta economy for more than 30 years,” continued Mr. Russum. “In terms of the future, it is a much easier sell than coal or oil sands to an environment-conscious world. We need to re-assess natural gas royalties to reflect the maturity of Alberta’s natural gas industry and the real costs and rewards of doing business here. We need to take the initiative, as neighboring provinces have done, to fund research into new natural gas opportunities. And we need to encourage risk-taking, experimentation and entrepreneurial spirit in the natural gas industry by providing appropriate tax, royalty and other incentives. Without some significant changes, the negative impact will be felt province-wide.”

Oil & Gas Network, December 2009 7

Ziff Energy Publishes 1st SAGD & Delineation Wells Drilling Benchmarking Study iff Energy Group has completed its 1st Steam Assisted Gravity Drainage (SAGD) Drilling Benchmarking Study which provides an independent detailed analysis of the Drilling and Completions costs on SAGD and Delineation Wells for Oil Sands properties in the Western Canadian Sedimentary Basin for the 4+ year period, from late 2004 to Fall 2008. The study assessed 159 SAGD well pairs and 1,833 Delineation wells, with total dollars (as spent) of $1.04 Billion. Clients of the study included 5 International and 2 Canadian operators. This

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analysis is especially important as the Oil Sands today are one of the few positive economic drivers of the Alberta economy. The first part of any SAGD project involves the drilling of many hundreds of Delineation wells, which are relatively shallow vertical wells ranging from 200-600 metres deep – which aid the companies in proving the reserves. Delineation wells are grouped as Cored or Non-Cored. Cored wells involve the drilling and cutting of wellbore cores, usually through the anticipated pay zone, which contributes to a more complete

picture of the geology. The Cored and NonCored wells are both drilled to Total Depth while obtaining Chip samples at 5 meter increments and ultimately obtaining Electric wire well logs. Once a given area has been thoroughly “mapped” for the anticipated pay zone, companies can design the specific pattern 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 produce the oil from bitumen which is too deep to mine. This method is far more environmentally benign than oil sands mining. The approach involves drilling two parallel horizontal wells – one above another with a typical 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 oriented 180° in the opposite direction – to maximize reservoir coverage. The 5 meter separation has been proven to be the optimal gap which allows for maximum reservoir production due to the most effective impact of the injected steam. The study found that although the separation between Injector and Producer wells is planned for 5 m, some wells had as high as 89 metre gaps at some points, reducing production capability from that particular zone. Well quality is a design metric incorporated into the study, and shows that average standard deviations across the horizontal wellbore resulted in the Flatness of the wells to be about 0.3 metres, and the average standard deviation across the wellbore resulted in the Straightness of the wells to be about 0.5 metres, 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, followed by all of the Injectors. Operators drill the Injectors with the assistance of “ranging tools” which aid in exactly tracking the wellbore 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 creating 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 produced 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 natural gas to heat the water to produce one barrel 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. SAGD Projects are attractive to Producers (as compared to Oil Sands mines), as the SAGD process can access deeper formations and can be developed on a smaller scale (and in phases), which sharply reduces the capital at risk, and the engineering and construction risk. Therefore, far smaller pro-

By comparing Unit Drilling Cost (excluding fixed material costs such as casing and cement) vs. Total Depth, as in Figure 3, Operators can clearly see that as depth increases, unit costs generally decrease. In this example, we can see 2 distinct programs, one with considerably higher unit costs, which may be a function of well location (i.e. outside wells tending to cost more than internal wells, due to well profile).

ducers can undertake a SAGD project, and there are many more SAGD projects than mines. SAGD production will overtake mining production by 2030 (Source: Ziff Energy Gas Services Group). This initial study provides valuable insight into both SAGD Producer and Injector well costs and drilling performance, with similar insight for the Delineation Programs (Cored and NonCored wells). In fact, of the $1.04 Billion spent, over half was spent on the Delineation programs – quite substantial! Benchmarking the performance and cost structure of SAGD Drilling allowed study participants to: • directly compare their drilling cost performance to peers • learn technical best-practices to capitalize on prior lessons learned, thereby gaining efficiencies • gain the important component to benchmarking – unbiased cost comparison.

Rig Time and Performance go hand in hand. Figure 4 illustrates that relative to the Average, if you were to target being in the Top Decile (43% less than Average) or the ‘Leader Third’ (36% less than Average), that should amount to substantial costsavings. However, if your wells are in the High Cost Third, they would incur a 37% cost premium! By measuring Drilling and Completions (D&C) costs relative to similar programs (by geographic regions & well design), D&C teams gain factual data that pinpoints high cost areas,

provided practical insight to drive down the costs of future SAGD Drilling programs. By minimizing drilling costs and focusing on performance, profitability rises for SAGD projects. Comparing Unit Drilling Cost to Penetration Rate (ROP) identifies an interesting and unexpected trend. Figure 4 shows that once a certain 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 expect, and wellbore issues could increase. High unit costs identify an opportunity to improve, but the reduction will likely be non-ROP related (i.e. wellbore instability, fishing, losses, etc.). A low ROP virtually guarantees much higher drilling costs, so a threshold minimum ROP rate must be achieved. Paul Ziff, CEO of Ziff Energy, says “It is very important for operators to understand SAGD drilling performance so operators can focus on achieving cost control in their spending.” As this is the first ever comparative SAGD Drilling and Cost Benchmarking Study in the world, the SAGD participants have been keen to discover how efficient their In-Situ programs are and what they can learn from the Ziff Energy Analysis. General feedback has been very positive, and has led to one Executive to declare that the results “were very timely for our future planning and provided great value.” The Study brings together some of the most experienced minds in SAGD and allows other participants to leverage past knowledge and experiences while managing their costs effectively. Strong Canadian technical expertise is provided by the Ziff Energy team. The project is now complete, however companies interested in participating may submit their data and play a key part in further contributing data to this unbiased Benchmarking Study. For more details, call Scott Jones, Canadian E&P Client Representative, at (403) 234-4298 ([email protected]) or Paul Ziff, CEO, at (403) 234-4276 ([email protected]).

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 future spending, and the volatility of world oil prices, combined 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, involving client input and statistical indices, to normalize all costs to 2008 dollars, thereby providing fair cost comparisons to all study clients.

Oil & Gas Network, December 2009 9

Imperial Oil helps SAIT students soar to success AIT Polytechnic has received a corporate jet valued at $8 million from Imperial Oil. The Bombardier Challenger 601-3A was presented to SAIT for use in its School of Transportation’s aircraft maintenance, avionics and structures programs. “This donation will serve to benefit both students and industry,”said Irene Lewis, SAIT’s President and CEO. “With thanks to Imperial Oil, the Bombardier Challenger will enable our students to train on an aircraft with modern avionics and be even better prepared when entering the workforce.” The jet, which is no longer required to meet Imperial's corporate travel needs, has been de-registered and is now ineligible to fly in Canada. It will provide on the ground training for more than 250 students

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annually in SAIT’s Aircraft Maintenance Engineers Technology, Avionics Technology and Aircraft Structures Technician programs. In addition to the aircraft, Imperial also donated associated ground support equipment and spare parts inventory. “We are pleased to provide SAIT students with tools to enhance their learning experience about aviation mechanics, maintenance and instrumentation,” said Bruce March, Imperial's Chairman, President and CEO. “This contribution reflects our commitment to support education in technology, including supporting reliable air service to northern communities across Canada.” To view photos of the Challenger and from today’s news conference, visit our photo library.To learn more about Imperial's citizenship

activities, download the 2008 Corporate Citizenship Report or view the Summary Report. SAIT Polytechnic has maintained close association with business and industry to ensure graduate success since 1916. SAIT offers 67 certificate, diploma, and applied degree programs as well as 30 apprenticeship programs, 300 distance education courses and 1,800 continuing education and customized corporate training courses. SAIT offers training in 15 countries around the world and last year had 79,000 course and program registrations. SAIT is a proud member of Polytechnics Canada.

Oil and Gas Industry Survey of Public in “Operational” Areas Yields Surprising Results 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 service 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 protecting the environment, maintaining the quality of life associated with small communities, and communicating 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 industry better understand areas of concern.“This survey 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 overall 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 environmental issues in the communities we work in and around.” The public survey was the first step on the communication front, enabling PSAC and its industry counterparts to listen to what community members 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 consulted. In addition, PSAC is building a public website, scheduled for release in early 2010. The website Continues >

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10 Oil & Gas Network, December 2009

Canadian Operating Costs Continue Rise in ‘08; No Drop in 9 Months ‘09 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 and 26,800 producing wells, operated by E&P companies and Trusts, which produce 3.3 Bcf/d of gas and 160 MBbl/d of conventional oil. Annual operating costs total $2.3 Billion. The study found that oil & gas field operating costs in Western Canadian Sedimentary Basin continued to rise sharply in 2008. (The wide variance on a BOE basis (about 2:1) reflects the much lower price gas receives compared to the notional 6 Mcf = 1 barrel conversion.) Weighted average unit costs increased 13% to $1.10/McfE for gas fields and by 15% to $13.70/BOE for oil fields. Main drivers of the cost increase were the higher processing fees, maintenance services, and higher energy costs. The ‘big 4’ gas costs are Lease Fuel Used, not costed by most producers (23%); Processing Fees (21%); Surface Repairs Figure 1 & Maintenance (14%); and Purchased Energy (11%). For Oil Fields the ‘big 4’ costs are Surface Repairs & Maintenance (18%), Purchased Energy (16%), Well Servicing (12%), and Contract Services (11%). The detailed makeup of average gas and oil costs in 2008 is shown in Figure 1. In the 1st 9 months of 2009, average operating costs were virtually flat compared to a year ago. However, the range of operating company performance was wide, with 3 companies decreasing costs by over 10% but 7 companies seeing OpEx costs rise by over 10%!

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Production Reliability – New Analysis Ziff Energy’s Operations Performance study now includes oil and gas Production Reliability (‘Uptime’) assessment (i.e. how high actual production is compared to the realistic potential). Ziff Energy developed a unique methodology to evaluate Production Efficiency, Mean Time between Incidents, Mean Time to Recover, and a proprietary Reliability Index. This methodology compares operations for different operators and identifies production improvement opportunities. This year’s study results show production efficiency of assessed oil and gas fields range from a very low 75% to a “best in class” 99%, presenting significant opportunities for volume maximization. Figure 2 identifies Leader performance at 96% Uptime; however, a majority of Canadian oil fields are only achieving 88-93% Uptime, losing many millions in revenues in the current year. Reducing production incidents and downtime not only increases the revenue, but also reduces unit operating cost.

Trends • Continuation of significant overall cost inflation - the main goal of the operations study is to compare fields of similar type. On average, the potential operating cost reduction opportunities are 20% of total adjusted operating costs. • Significant cost improvement opportunities are generally available within the following cost classifications (some of these areas involve contract renegotiations): - Energy, particularly Lease Fuel consumption - Processing Fees - Surface Repairs & Maintenance

- Well Servicing - Labour & Field Supervision

• Some companies are seeing the benefits of cost reductions in 2009; however, an equal number are not!

will answer the most commonly asked questions about oil and gas, and provide an open line of communication 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, disposing of garbage properly, slowing down to reduce dust and noise, driving safely, and scheduling operations to limit extra traffic at peak times. “We expect these industry-wide initiatives to have a positive impact on the communications and quality of life issues identified by survey respondents,” continued 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 environmental initiatives, while we continue to conduct environmental 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 slowdown in exploration, production and capital spending is hitting the energy sector, which benefited from strong earnings from 2005 through mid-2008. The cash generated from those earnings is dwindling and some companies are now running out of available cash. The downturn is also exposing a truth about the Alberta economy that often gets overlooked. Natural gas production represents

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a major component of the province’s economy and yet changes in oil prices dominate headlines. But today, with the price of natural gas dropping to a seven-year low and inventories reaching a record high, the situation has changed, especially for firms more weighted towards gas. “As a result, those junior gas companies are encountering financial challenges in terms of raising additional capital, be it

equity or debt,” says Brooke Valentine, an associate partner at PricewaterhouseCoopers Corporate Finance (PwCCF) Inc. in Calgary.” It’s not just the natural gas firms that are hurting, but the energy services companies are also feeling the effect. “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 become 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 little benefit because they can not borrow more or borrow 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 market, particularly for smaller companies. Public companies 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 leaseback 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 proactive approach with their lender. This includes providing 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 balance 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 expansion is another thing I think they should be pursuing. 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.”

The ‘Ups & Downs’ of Natural Gas Prices Paul Ziff, CEO f all the kings’ men had challenges putting Humpty Dumpty back together after his great fall, I wonder what the 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, ‘disconnected’. Just a few months ago, the ratio of oil value to gas value was 8 to 9, whereas since September the ratio has skyrocketed to 18 to 20 in North America, and in the North Sea too.

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My earlier white paper1 (publicly available on Ziff Energy’s userfriendly website --- www.ziff energy.com) concluded that producers are experiencing massive value destruction for shareholders for each Mcf of gas produced, and that shrinking gas fortunes will continue unless operators take action. In addition to the ideas shared in the white paper of how to off set the value being lost, Ziff Energy provides these suggestions to the variousparticipants in the gas value chain: • Producers should defer annual gas plant maintenance to the Aug 1 to Oct 31 time period; and benefit by getting“spring” gas prices for their gas production, and lose lesswhen gas prices are traditionally lower in the fall (due to filling gas storage). • Producers & Royalty Owners - since gas reserves are fi nite, it is better to leave gas in the ground until prices recover • Industrial Consumers can perform plant maintenance in early Spring, not in the fall. This helpful step reduces the industrials overall gas supply cost as gas supply prices are often higher in the spring and lower in the fall • LDCs may wish to reduce their summer gas storage injectionsin the early spring and inject larger volumes in the fall. Natural gas prices today are turbulent, and ‘business as normal’ has become a hazardous approach. We recommend more active management of risk and portfolio on a value basis.

14 Oil & Gas Network, December 2009

BJ Services Bolsters its Process and Pipeline Services with New Bases in Canada J Services Company announced that it has opened two new operations 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 rooms and offices for approximately 30 staff members. The facility houses management, engineering, sales, accounts, safety and training departments for process and pipeline services in Canada. “This expansion reflects the company’s confidence in—and commitment to—Canada. We look forward to continued growth of our business across the country,” said Gordon Bradbury, BJ Services Company, business unit manager – process and pipeline services for Canada. “This new facility is a key element of BJ’s process and pipeline services’ plans to expand throughout Canada, as well as our aggressive growth strategy in the Americas,” he added. In addition, the company has opened a new facility in Fort McMurray, Alberta. BJ Services will provide a wide range of plant and pipeline precommissioning and maintenance services, including oil flushing, nitrogen services, chemical cleaning and pipeline services. “This base will make it possible for us to better support our many customers in the Fort McMurray area by cutting our response time. In addition, it offers related cost reduction benefits to our clients, and illustrates our continued commitment to the Fort McMurray area,” said Bradbury. “To support the base, we have invested heavily in capital equipment. We look forward to continuing the success that has become synonymous with BJ Services’ process and pipeline services in Canada,” he added.

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Nexen logo unveiled on STARS helicopter in recognition of $500,000 contribution 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 photograph) 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 service areas covering approximately 94 per cent of Alberta’s population. “Nexen is a key supporter and partner of STARS,” said Levson.“Their very significant contribution supports STARS’ life saving work in communities across Alberta.” In 2009, STARS responded to over 100 work sites across Alberta for critically ill or injured patients, and assisted with the coordination of medical response, 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 airborne intensive care to critically ill or injured patients. Patient care and transport, emergency medical communications, 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.

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Moyno® 2000 Model G2 Progressing Cavity oyno, Inc. offers the Moyno® 2000 Model G2 Progressing Cavity Pump. This versatile, high-performance 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.

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Oil Demand from Developed Countries Has Peaked orld oil demand is poised for recovery driven by emerging markets but demand from OECD countries is unlikely return to its 2005 high Oil demand in developed countries—currently 54 percent of all oil demand—likely reached its all-time peak in 2005, according to a new research report by IHS Cambridge Energy Research Associates. While world oil demand is now set to grow as the world economy moves from recession to recovery, the demand lost in 30 developed countries that make up the Organization for Economic Cooperation and Development (OECD) is not likely to ever be regained, the report finds. “The economic downturn has been masking a larger trend in the oil demand of developed countries,” said IHS CERA Chairman and Pulitzer Prize-winning author of The Prize, Daniel Yergin. “The fact is that OECD oil demand has been falling since late 2005, well before the Great Recession began.” The key factor making it unlikely for OECD demand to ever return to its 2005 peak is that petroleum demand in the transportation sector—which accounts for 60 percent of OECD petroleum demand—is likely to flatten out after years of steady growth. Oil demand outside the transportation sector has already been relatively flat since 1980. Now the conjunction of several long-term factors is doing the same to transportation: Demographic and socioeconomic changes – Vehicle ownership rates in developed countries have reached a “saturation” level while aging populations with low to negative population growth suggests a flattening of demand for mobility. The growth of women’s participation in the labor force is also leveling off, meaning the flattening of another source of demand growth. Stronger governmental and consumer push for passenger vehicle fuel economy gains – Energy security concerns and climate change initiatives have led OECD governments to tighten fuel economy standards. The rise in energy prices over the past several years has pushed consumers to value increased efficiency and the auto industry through a major reorientation toward greater efficiency. Greater penetration of alternative fuels and vehicle technologies – Governments across the OECD continue to favor mandates that increase the share of

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alternative fuels in the transportation sector. New technologies such as plug-in hybrid electric vehicles and next-generation biofuels could also have a greater impact in the future. “Petroleum for transportation has been the single driving force behind OECD oil demand for the past two decades,” said Aaron Brady, IHS CERA Director, Global Oil.“After the oil crisis of the early 1980s the nontransportation sector turned to readily available substitutes like coal, gas or nuclear power. Now we are seeing the tempering of the last significant driver of oil demand in developed countries—petroleum for transportation.” Future world oil demand growth will be driven almost exclusively by emerging markets.The latest IHS CERA World Oil Watch expects oil demand to increase from 83.8 mbd in 2009 to 89.1 mbd in 2014. 83 percent (4.4 mbd) will come from non-OECD countries. China alone is expected to account for 1.6 mbd of cumulative growth. Just 900,000 bpd of growth is expected to come from OECD countries, just a fraction of the 3.7 million bpd of demand lost over the course of 2005 to 2009. But the peak of OECD oil demand does not mean that the end of the oil age in these developed economies is imminent, the report finds. The size of the decline in oil demand from the peak year of 2005 to 2030 is expected to be fairly modest, says Brady, assuming that some demand rebounds over the next few years. “The reason for a modest decline is that although the potential for demand growth has diminished so has the potential, at least in the short to medium term, for large-scale substitution away from petroleum,” he said. “Today’s alternative fuels and technologies can only gain market share slowly owing to the slow turnover of the cars, trucks and airplanes that use petroleum. Petroleum will still be the dominant fuel for transportation 25 years from now, although other sources of energy will likely have captured a growing foothold in transportation.” Regardless if the decline is modest, the peak of OECD demand will have major implications, the report finds. Peak demand will dampen the rate of increase in dependency on oil imports. It likewise could also help make economic growth in those countries less susceptible to oil price shocks. Finally, peak OECD demand could counteract the expected rapid demand growth in the developing world.

16 Oil & Gas Network, December 2009

IHS CERA: Oil Supply Set to Grow Through 2030 with No Peak Evident boveground drivers, not the amount of belowground resources will be crucial factor to flow of supply in the coming decades Global oil productive capacity will grow though 2030 with no evidence of a peak of supply before that time, according to a new report by IHS Cambridge Energy Research Associates based on analysis of more than 10,000 projects around the globe. The report, The Future of Global Oil Supply: Understanding the Building Blocks extends IHS CERA’s global oil outlook through 2030 and expects global oil productive capacity to grow to as much as 115 million barrels per day (mbd) through that period from the current level of 92 mbd – a 25 percent increase. Post-2030 supply could struggle to meet demand but this would take the form of a decades-long “undulating plateau” rather than a sharp fall, the report says. “There is more than an adequate inventory of physical resources available to increase supply to meet anticipated levels of demand through 2030,” says Peter Jackson. “It would be easy to interpret the market and oil price trends from 2003 through 2009 in isolation to support the belief that a peak in global supply has passed or is imminent. But this only illustrates that the market continues to act as the 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 production is estimated to be 4.5 percent, the study finds. “Supply evolution through 2030 is not a question of resource availability,” Jackson added.“The crucial issue lies not belowground. It is the aboveground factors that will dictate the ultimate shape of the supply curve.” Key aboveground factors such as global economic growth, the capability of the upstream oil industry, costs, government and policies on access to reserves and taxation, the evolution producof renewable alternative energy sources and the effect tion investof climate change issues on policy concerning the use ment, of fossil fuels will have a major impact on the shape exploration and of supply, the report finds. field upgrades have “A radically different oil markets landscape tended to replace has evolved in the past year,” says Jackson.“A global production of 30 drop in demand caused by the economic billion new barrels (bnb) recession has provided a supply cushion per annum in recent years. that has moved supply concerns to the Despite recessionary pressures backburner for the next few years.” the first three quarters of 2009 While the economic receshave produced discoveries with colsion has also driven a reduclective reserves more than 8bnb. This tion in exploration does not include the revisions and extensions which are so important to reserves growth. Multi-billion barrel discoveries, such as those of the Subsalt Brazil, as well as those in Offshore West Africa and Offshore East Africa, continue to emerge. And new giant discoveries in Iraq also create the potential for that country to double its capacity by 2020, the report finds. The peaking of global oil demand—rather than scale and deliverability of below ground resources—could have a major impact on the flow of supply, the report finds. IHS CERA’s analysis finds that oil demand has already peaked in developed countries. “So much will happen between now and 2030 to affect demand—from changes in the automobile engine and the electric battery to changes in demographics and values,” says Jackson.“Peak demand may ultimately prove to be the main driver of long-term supply.”

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Singletouch Labor Monitor report shows real-time productivity, percentage complete

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ustom report shows actual hours to date by cost code, enabling contractors to create accurate estimates, execute on budget and control costs Singletouch Corporation (www.singletouch.com), a developer and marketer of a real-time data-capture platform for contractors, today announced a new feature called the Labor Monitor tool, reporting functionality that shows productivity and percentage complete by cost code, which enables contractors to estimate jobs more accurately, execute on budget, manage cost overruns and be more accountable to their customers. Electrical, mechanical and other contractors working in environments where they need to capture and report on materials and labor can use Singletouch to instantly send details collected in the field to head office, where that data is seamlessly integrated into backend systems, expediting payroll, accounting and project-reporting processes, and eliminating the paperwork headaches that beleaguer the contractor industry. Once data has been entered, project managers and office administrators can use it for invoicing and reporting, even before the team has returned from the site. Accurate details are entered only once, at the time and point where the transaction occurs, and delivered instantaneously to all stakeholders, eliminating the logjams and errors traditionally associated with the filing of paperwork and subsequent reentering of details to create invoices and reports. A new feature of the platform is the Labor Monitor report, a custom report generated by the Project Control module. By combining budget data, actual data such as time tickets, and the field survey, the Labor Monitor report assists a project manager in managing workforce efficiency and productivity in the field. The field survey, typically conducted either daily or weekly, allows the project manager to capture exactly which items have been installed onsite and, through a simple calculation, determine the percentage complete for that item. Project managers can then course correct if necessary to

increase productivity or stick to estimates. Within the Labor Monitor report, cost codes for the project, each of which will have a materials, services, labor, subsistence and direct job expenses (DJE) budget amount associated with it, are documented and useful statistics determined against each code. These statistics enable the project manager to understand the percentage complete by cost

code, forecast labor hours to complete the cost code, and understand the productivity for each cost code. With accountability becoming a major focus in an industry where tenders used to be decided on price, resumes and safety record alone, customers now expect more visibility into cost overruns and productivity. With the Labor Monitor tool, contractors can provide specific information about issues that may have impacted productivity; in some job environments, weather may play a role, cost of materials may change suddenly, labor rates may change, or there may be other dynamic market factors.This instantaneous reporting functionality is revolutionary for the contracting industry. “I have literally had prospects gasp when they saw the intelligence displayed by the Labor Monitor tool,” said Marty Hilsenteger, Singletouch CEO.“I like to refer to this function as the ‘holy grail’ for contractors because this industry has always sought a user-friendly, real-time reporting tool that enables contractors to create accurate estimates and execute jobs on time and on budget while controlling costs. “Often, customers offer bonuses to companies that can deliver 1.0 productivity, where the job matches the estimate exactly. Until now, it has been very hard to gain real-time visibility into percentage complete on jobs due to the lag between information gathered in the field and when the data is input into back-office systems. With the Labor Monitor report, all the information is available quickly and easily, facilitating decisionmaking for the contractor and providing peace of mind to the customer.” The names of actual companies or products mentioned herein may be the trademarks of their respective owners.

World First Installation of a Fibre Optic Acoustic Sensor for Reservoir Monitoring nternational Leader in fibre optic sensing systems Fotech Solutions has installed the world’s first dedicated downhole distributed acoustic optical fibre system using the company’s new and unique Helios monitoring solution. The Helios distributed acoustic monitoring system was installed in a coal-bed methane well in Scotland for Composite Energy Ltd of Stirling, UK. The easily-installed Helios system can be deployed in a range of applications in the global oil and gas industry including reservoir surveillance, production monitoring, integrity assurance, flowline movement, flow assurance and leak detection. The system was installed in August 2009 and has already provided valuable data including: • Downhole pump condition monitoring, • Location of water level, • Flow profiles across the production intervals, • Vibrations at the wellhead, • Gas flow

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Other potential benefits of the system include: • Monitoring of, and locating sand production • Casing/tubing integrity • Cross flow The system comprises two elements – a simple low cost telecoms grade optical fibre cable; and the Helios interrogator which is the heart of the system. Helios effectively provides acoustic or vibration information along the entire length of the installed optical fibre to provide multiple-event information, event characterisation and highly accurate event location. An acoustic signal is recorded for each metre along the fibre. The system can therefore detect and position an event to an accuracy of one metre and can distinguish separate events more than two metres apart. It also has remote control capability. The fibre can be laid near a pipeline or installed in a borehole. Don Sharples, technical manager, Composite Energy, said: “Initial results from the Fotech fibre are very encouraging.

The Fotech Distri buted Acoustic technology collects data which is not available from other downhole sensors and will give Composite the ability to determine which coals are producing in any given well.” Alan Piesse co founder and Executive Vice President of Fotech Services said: “Our vision for Helios was to provide sound at the speed of light and its successful deployment has really changed the game in the global monitoring sector. “We see a strong future for the system in monitoring gas flow in Coal Bed Methane wells and other applications For the first time flow can be seen and heard entering and moving in the well and quantified in real-time. We hope to continue monitoring Composite Energy’s CBM wells and look forward to a close working relationship with them.” Website www.fotechsolutions.com

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Wireless technologies bring the office into the field By Roland Labuhn, VP, Energy Solutions, TELUS ccording to Industry Canada, more than 230,000 people work in the Canadian energy industry. Almost 70 per cent of these workers spend their days away from the office – in the oil patch, on rigs and on the road. Keeping valued employees safe in these high-risk environments while making sure they can also be productive off-site are critical to business success. Using wireless technologies to bridge the communications gap between head office and workers in the field is one of the most effective ways to achieve both these business goals. In fact, for small businesses in the energy sector, wireless technologies should be considered an essential piece of industry equipment, just like hard hats, tools and other safety equipment. Here are five ways wireless solutions can help small businesses stay competitive by improving productivity and keeping their workers safe.

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rely heavily on voice communication and paper forms which need to be processed manually. These processes can be expensive and can slow productivity. With traditional systems, field workers often need to make multiple trips back to the office to pick up new work orders and schedules and drop off reports. Instead of waiting for forms to be filled out by hand and delivered to the office, wireless work orders provide an alternative that speeds up communication, is cost-effective and reduces the potential for human error. Using wireless work orders, field workers spend less time circling back to the office and more time in the field. As a result, they can complete more tasks in a work day.

Improve cash flow Maintaining a healthy cash flow is always top-of-mind for Canadian small business owners and an investment in wireless technology can provide significant returns by reducing operating costs and optimizing productivity. Using a wireless work order solution ensures small businesses are paid faster upon job completion, instead of having to wait for an invoice to work through traditional processes.

Organize off-site activity In 2009, the Enterprise Council on Small Business (ECSB) found that productivity was a main concern for Canadian small business owners. One of the ways businesses can drive productivity and make the most of an employee’s time is gaining better visibility into field worker activity. For example, fleet tracking solutions allow dispatchers to supervise a driver’s speed, location and time, as well as the position of workers.This helps companies efficiently manage all equipment in the field, as well as dispatch any available workers to other jobs without needing them to check in to the office to get their next assignment. Not only does this enhance productivity, it also helps companies achieve cost savings by reducing delivery time and monitoring vehicle usage and wear.

Do more in less time As the economy recovers and demand ramps back up, many small business owners in the energy sector are still focusing on finding ways to cut costs while keeping up with growing customer demands. As such, many companies have started evaluating their work flow processes and communications. Traditional paper-based work order and invoicing systems

For example, GNR Corbus, a natural resources company with 80 employees, traded in their mobile phones and pagers and replaced them with handsets equipped with PushTo-Talk functionality. GNR Corbus found that switching not only reduced moRoland Labuhn bile phone usage and long-distance charges, but also improved communication between team members. The company’s accounting department estimates they save more than $5,000 each year as a result.

Help keep workers safe

Stay connected – for less Small businesses in the oil and gas industry rely on mobile devices to stay in touch with their crews in the field. Improving the way field workers communicate with each other and head office can help small businesses cut costs. Push-to-Talk networks allow workers to connect with individual team members or an entire crew in seconds with the push of a button. These handsets work like a two-way radio, eliminating the delays and frustration of voice mail and phone tag at a fraction of the cost of traditional mobile devices.

Safety is always a top priority in the workplace, especially in the oil and gas industry. Employees in the field often work alone in remote locations in extreme weather, near hazardous machinery, toxic chemicals and even wildlife, putting them at increased risk of injury. Being able to report hazards quickly is crucial to protecting employees. Alberta’s Work Alone legislation, for example, requires employers to protect their workers by identifying and eliminating safety risks and refining communication among workers to better enable them to report hazards. For small businesses with field workers, increased visibility into field operations is integral. GPS solutions, like remote fleet tracker can help small businesses improve field worker safety 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 business 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 remote fleet tracker system, it features an intrinsically safe ‘no motion’ sensor, which notifies head office staff or an emergency 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 provide a personalized assessment of your business’s wirelesssolutions needs.

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Taking charts to the next level edi Inc. recently announced the integration of Zedi TrueChart™ with Zedi Access™ (formerly 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. The convenience is more than using Zedi Access as one online access point. The automated integration of chart and EFM data sets a new standard in the management of gas field production. Key functionality already enjoyed with EFM products on Zedi Access is now offered with charts.This includes data exports, daily production volumes and the ability to create custom production reports and graphical representations that make comparisons and trending, across an entire field, simple and flexible. In addition to enhanced visibility of production, producers can strengthen their business processes and documentation, a key factor in the ERCB’s upcoming Enhanced Production Audit Program (EPAP). For example, digitized daily production volumes provide straightforward documentation for audit purposes. And the reduction of manual errors with the electronic, seamless integration of chart data to Zedi’s field data capture system, Zedi Vital™, is another proactive measure that reduces the risk of non-compliance. Having critical information from different sources, all accessible in one place, simplifies operations, saves valuable time, eliminates errors and reduces costs. Everybody from the field to head office can make smarter decisions about daily workflow activities or future operational direction. “Zedi strives to deliver an experience that positively addresses our customers’ business needs, regardless of their field device choice,” explains Jeff Jewitt, Zedi’s Surveillance Product Manager and project lead for the integration project. “Providing chart and EFM data in one spot simply gives producers faster, easier access to accurate data and provides new capabilities that helps them better manage their operations and compliance requirements.” Zedi TrueChart is Zedi’s high resolution image analysis software that fully automates the production of daily readings from charts and delivers the most comprehensive coverage of events available at the meter site today. Emerging from the acquisition of OAS Oilfield Accounting Service Ltd. in October 2008, Zedi TrueChart complements the full range of Zedi’s EFM monitoring systems - Smart-Alek®, Zedi EFM Walk-up™, Zedi SCADA™ and Zedi Connect™.

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20 Oil & Gas Network, December 2009

Control Microsystems Releases the Accutech TM10 Wireless Turbine Meter Totalizer ccutech, a division of Control Microsystems, today announced the launch of the TM10 Turbine Meter Totalizer, the latest battery powered wireless instrumentation product that offers precise flow rate and total accumulated flow volume data for standard turbine meters. The TM10 field unit measures the volumetric flow rate of liquids or gases by detecting the frequency of pulses generated with a standard turbine meter and applying a user-configured proportional “K” factor. A 22-point correction curve is used as a final offset or for custom calibration of the turbine meter as required.There are two principal outputs providing flow rate and totalized flow measurement. Easy to use and install, the TM10 features a 1” female NPT connection for quick removal, installation, and replacement of turbine meters that use magnetic sensor pickups at frequency range of 1Hz to 10KHz. “The TM10 is yet another of our innovative battery powered wireless instruments, this one boasting flow rate accuracy to ± 0.01% of reading,” says Steve Goodman, Vice President of Accutech. “Like all our instruments, the value proposition centers on cost of ownership and reliability. These instruments work simply, allowing field operations to deploy monitoring solutions fast while forgoing to prohibitive costs of wire line installation”. All Accutech field units automatically report field data to a centralized base radio over distances of up to 5000ft (1524m). Each unit is self-contained, featuring an integrated 900MHz frequency hopping, spread-spectrum transceiver, antenna, and a long lasting battery for years of maintenance-free operation. The TM10 is rated for industrial use at -40F to 185F (-40C to 85C) and has CSA C/US certification for intrinsically safe installations (Class I, Div 1 and 2, Groups A, B, C, and D).All Accutech field units are protected by an industry-leading 3-year warranty. www.accutechinstruments.com.

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H2S Measurement Applications nvent Engineering Ltd is a manufacturer of analytical measurement equipment focused on the natural gas industry. 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 measurement.

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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 transmission line is essentially mandatory in the natural gas industry. 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 specific 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 absolutely 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 technology is faster and less maintenance. This is outdated information at best, if not creative sales misinformation. Current tape analyzer 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 normally 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 unreliable 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 UV based systems, increased costs, marginal sensitivity, slower response times, background matrix effects, and cross interference from other sulfur compounds contribute to erroneous measurement risk. Another technology is solid state sensors, which is essentially using sensors designed for ambient monitoring where occasional levels of H2S are present in air, for continuous monitoring in natural gas. Envent manufacturers a system utilizing a solid state sensor but we would caution users to only use this when the measurement is not critical, other interfering sulfur compounds are minimal and the background gas composition is static.

Stronger H2S sensing tapes, pioneered by Envent is another improvement for our analyzers which has provided increased reliability in older competitive tape analyzers as well. Like the internal combustion engine, lead acetate is an mature but practical technology, but when combined with precision machined parts, and advanced electronic technology, increased reliability and horse power is the result. Below are typical sales gas analyzers for use in Class 1, Division 1 and Class 2, Division 2 configurations.

Higher Level H2S Measurements There are many applications measuring higher levels from 100 ppm to 1% H2S for pipeline permitting or even higher levels from a few % to 50% H2S for sulfur balance and pipeline blending. Over the last few years, Envent has successfully implemented permeable membrane technology which extends the continuous useful range of 0 to100 ppm to percentage levels. This offers users a low power (12-24 volt at less than 3 watts) and cost effectiveoption for field measurement where power options are limited.The permeable membrane utilizes a dry carrier gas, such as sweet fuel gas or N2 or instrument air to pick up a proportional amount of H2S from the process stream in dilution ratio of 5:1 and up to 5000:1. An explosion proof air pump for dilution gas is also developed when another carrier gas is not available. There it at times, a need to measure high range H2S at where there is no convenient place to vent the sample post dilution. Envent has developed an integral high pressure dilutor which will allow users to measure H2S levels in the process at pressure with no sample venting.This requires a flowing pressure input to correct the analyzer reading.

Combined H2S and CO2 Measurement There are times when users require CO2 as well as H2S in their measurement application. Envent produces a combination H2S and CO analyzer by adding the infrared based M90 CO2 monitor with the H2S sample system or integrating the CO2 sensor into the spare input channel of the H2s analyzer electronics.This is a very cost effective solution for both measurements.

Total Sculpture Measurement Lead acetate tape analyzers are the only practical way to measure total sulfur in process and pipeline gas. The system combines the sample and Hydrogen (H2) in a reaction furnace heated to 1000 deg C or higher . All of the sulfur compounds are converted to H2S and read by the tape. The system provided by Envent will switch between H2S and Total Sulfur based on an user configured time table. The system will also conserve H2 consumption by turning off H2 when measuring H2S only.

Portable and Transportable Systems Envent provides a transportable platform for their Division 2, analyzers for temporary installations as well as a battery powered portable general purpose unit that can provide short term testing and or serve as a field calibration and/or verification unit for other field H2S analyzers. Both units have built in data loggers. H2S in Water and Liquid Hydrocarbons and LPG H2S in hydrocarbon liquids and other liquids can be measured by sparging the liquid with a dry carrier and measuring the H2S in the gas. Envent has provided a number of successful customized sparging systems combined with permeable membranes measuring H2S approximately 1 to 5 ppm by weight. Because of the multiplying effect of liquid to gas volume, the system is quite capable of detecting below 50 ppbw in liquids.

Oil & Gas Network, December 2009 21

Dresser Waukesha Introduces 12-Cylinder High Performance Engine for Gas Compression Applications resser Waukesha, a leading manufacturer of natural gas engines that deliver clean, costeffective power, has introduced the 12-cylinder 12V275GL engine, the latest in Dresser Waukesha’s 275GL™ Series, a new generation of high-performance engines for gas compression applications. The new 12V275GL engine is rated at 3375 bhp at 1000 rpm – eight percent higher than its predecessor, the 12-cylinder ATGL®. With design and engineering updates as well as an enhanced engine control system, the new engine is designed to maximize efficiency and minimize fuel costs while greatly simplifying and improving packaging, operation and service. At the same time, the new 12V275GL engine retains the robust construction and reliable operation for which its predecessor ATGL model is known.

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High Performance Rod Guides for Tubing Wear Prevention in Progressing Cavity Downhole Pumping Applications &M Energy Systems recently launched a new line of rod guides for progressing cavity downhole pumping applications. The New Era ® Pathfinder™ High Performance Rod Guides extend the life of the rods and tubing, reduce pressure drop and premature wear from sand, increase production and reduce costs. The unique spin-thru design of the New Era Pathfinder rod guide allows fluid to easily flow through four distinct channels that are molded directly into the rod guide sleeve. This flow path reduces pressure drop by allowing fluid to flow through the rod guide rather than limiting flow to the space around it. In sandy applications, this active flow path keeps solids from embedding between the rotating sleeve and the stationary guide to reduce premature rod guide wear. New Era Pathfinder rod guides also reduce the torque that is generated by the mechanical and hydraulic friction of conventional rod guides that are fixed to the rotating rod string. Additional features and benefits include: • Spin-thru design consisting of a four-channeled inside sleeve and a separate, three-fin stationary outside sleeve • Fits rod sizes from 5/8” to 1” and tubing sizes from 2-7/8” to 3-1/2” • Handles temperatures to 180°F • Ideal for sandy well conditions • Extra material added to offset channels and R&M Energy’s pro-

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prietary SanGard material increase guide life R&M Energy Systems can recommend the proper rod guide design, material, spacing and auxiliary equipment for both beam and progressing cavity pump applications using its proprietary Rod Guide Advisory Program (RGAP™) software along with its years of well monitoring and performance tracking. Wellbore deviations, dynamometer readings, workover histories, well operating conditions, completion information and production data, are all used to properly select the most effective New Era rod guide design, material and spacing for each well.

“Based on my experience with this engine platform 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 enhancements with the higher power rating and the packagability upgrades, I believe Waukesha has created 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, turbocharger control, speed governing, knock detection, start-stop control, diagnostic tools, fault logging, engine safeties and air/fuel ratio (AFR) control. ESM is factory-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 system with plate-type oil cooler and spin-on disposable lube oil filter elements, and quick disconnects for ignition coils and thermocouples. In addition, improvements to the fuel and exhaust systems of the 12V275GL create a more standardized platform between 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.dresserwaukesha.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 roducing gas in the Western Canadian Sedimentary Basin (WCSB) inevitably means operating a group of shallow gas wells, notorious for very low flow rates and challenging economics for development and long-term production. Typically the wells are group-metered to keep completion and surface facility costs as low as possible. But even in typical situations, creative applications and individuals willing to try new things, can result in more effective production operations and impact to their company’s bottom line. To challenge the norm, Zedi Inc., a production operations company based in Alberta, joined up with a producer1 operating approximately 2,500 shallow gas wells in southeast Alberta. All it took was the determination of a bright, young engineer to prove there was a better way, an enthusiastic team at Zedi, and a fleet of 35 portable Smart-Skids. Together, their vision was to build a fleet of portable, electronic flow measurement (EFM) systems that could be used in a series of mini projects to gather accurate field data, but in such a way that was more cost-effective than using permanent EFM gear on every well. That vision resulted in a project that provided insight to a number of problems, including: 1. How to effectively determine the optimal cleanout frequency for each well 2. How to determine the effectiveness of alternative completion strategies, and 3. What is the production potential from the various optimization techniques that could be applied to wells or a group of wells Evan West, Zedi’s Director of Production Optimization, comments on the project.“Compliance wasn’t the driving force for this producer,” explains West.“They already had a process in place to

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do monthly five-minute flow tests that exceeded the regulatory requirements for individual well flow rate testing.The challenge the producer was having with these wells, even with this frequency, was that they struggled with the timing and length of the flow test to provide sufficient data to impact their completion, optimization and production operation needs.” What is a portable Smart-Skid™ and how was it used in this project? The Zedi Smart-Skid is a portable metering facility that contains a Smart-Alek®, a metering computer that measures and monitors gas flow, and an eTube™ flow measurement device enclosed in a weatherproof shack. The Smart-Alek captures all test data electronically and sends it through a cellular or satellite network to Zedi’s secure web portal, ZediAccess.com.This well information can be viewed instantly, at anytime, using an Internet-enabled computer. Installation and implementation is simple: hook the Smart-Skid up to proving taps, run the required testing for as long as required, communicate the location, and move to the next well. Once testing is done, the data and trends can be viewed and analyzed when it’s convenient. For this project, a Smart-Skid was temporarily installed on a group of wells, and when sufficient data was gathered, the Smart-Skid was moved to a different group of wells. By implementing this process, they were able to find the relationship between the accurate, high resolution 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 managing 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 resolution 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 frequency of cleanout. While some wells showed positive production results from the cleanout, others 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 performance (at the same time of year, with a consistent dewatering procedure, but fractured differently) 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 revisited 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 simulating 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 economical 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 continues, “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 better, 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 [email protected]

24 Oil & Gas Network, December 2009

XACT Downhole Telemetry Inc. Announces Industry Firsts for Acoustic Telemetry ACT Downhole Telemetry Inc. has announced the successful provision of its acoustic telemetr y Measurement While Drilling (“MWD”) service in air drilled horizontal gas wells for Equitable Resources Inc. XACT Downhole Telemetry Inc. The XACT system is automated, solid state, and incorporates a full throughbore design. The tool can easily be operated by rig crews without the need for full-time MWD operators on location. It is capable of transmitting data from downhole to surface at over 20 baud giving it the fastest commercially available wireless update rate in the industry. The system has advantages over mud pulse systems as it does not rely on the presence of non-compressible fluid in the pipe or the use of the mud pumps to generate the signals to the surface. XACT’s acoustic system is indifferent to formation type and can be used within close proximity to active coal mines or other nearby electromagnetic (“EM”) telemetry systems, giving it distinct advantages over conventional EM telemetry systems. In addition, sensor nodes can be installed along the drillstring enabling the use of distributed measurements while drilling and tripping as was demonstrated on the Equitable wells. “We are very pleased to have the support of companies such as EQT who recognize the inherent advantages of our acoustic MWD system for their applications.This has led to the very successful 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 systems and marks significant advancement within the MWD industry.“said James Neff, President and CEO of XACT Downhole Telemetry.

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Iridium Provides Data Links for Underwater Monitoring Systems astwave Communications has received a contract from Chevron Australia Pty Ltd to supply a water quality monitoring system for the Gorgon offshore gas project based on Iridium satellite data links provided by Iridium Communications Inc. 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 turbidity sensors, data loggers, an Iridium short-burst data (SBD) modem and rechargeable battery packs.They are connected to small moored buoys which relay the data packets through the Iridium satellites to an environmental monitoring system onshore. “We designed our underwater monitoring systems to take advantage of Iridium’s global coverage, high network quality and low-latency, two-way SBD links, providing a robust solution capable of working reliably under extreme environmental conditions,” said Nick Daws, Director, Fastwave. Protection of the marine environment is a key priority for the Gorgon project and this will include a program of water quality monitoring using the Fastwave system. The system 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 in the region.The modules are designed to function at depths up to 50 meters with endurance of at least four months between battery recharges. “Iridium’s fast-growing machine-to-machine (M2M) data business is being driven largely by the innovative and creative solutions being developed by our Value-Added Partners such as Fastwave,” said Patrick Shay, vice president of Iridium’s data division. “Iridium offers a unique value proposition for remote M2M asset monitoring and tracking, providing reliable, low-latency data communications anywhere in the world, on land, in the air, on the sea and even under the sea.”

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“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 translate 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 Product in review

Control Microsystems Announces the SCADAWave Ultra KR20 Integrated Data Radio 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 communication into cramped enclosures. The KR20 uses the same advanced radio technology 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 programmable, 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 collision-avoidance and long range capability”. www.controlmicrosystems.com

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R&M Energy Systems’ SENTRY® Closure Features Innovative One-Piece Sea &M Energy Systems offers its latest, most technically advanced solution for pipeline and vessel 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 available in other types of closures. 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 temperature materials (other compounds 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 maintenance 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 injury during pipeline or vessel servicing.

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EliminX(tm) Extreme by Silex ilex has introduced the new EliminX(tm) Extreme - a state-ofthe-art combination silencer / catalytic converter that virtually 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 housing 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.

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26 Oil & Gas Network, December 2009

Flir Announcement

OneWireless oneywell’s updated version of its OneWireless™ industrial wireless network equipment is designed to be compatible with the end-user driven ISA100.11a industrial wireless communication standard. The latest OneWireless release is the process industries’ first mesh network with ISA100-ready hardware. The network can be easily upgraded to the ISA100.11a standard, when it is completed, through an over-the-air software update.

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Manufacturers have been asking for a secure and reliable multi-functional wireless network that can handle the thousands of devices they use within their plants. Until now, the only way to do so was with proprietary systems. The ISA100.11a standard will allow OneWireless users to achieve this vision using a standards-based network. The new version also extends Honeywell’s product line of transmitters with a new XYR™ 6000 Digital Input wireless transmitter. OneWireless supports a broad range of both wired and wireless transmitters, including corrosion, gauge pressure, differential pressure, high-level analog input and temperature transmitters. As a single network supporting both sensors and IEEE 802.11-based applications, OneWireless also supports mobile worker devices, such as Honeywell’s IntelaTrac PKS and Experion Mobile Station, and can improve plant safety by helping customers quickly locate employees. In addition, the latest OneWireless release expands the interface capabilities of the system, supporting the HART protocol. HART is commonly used by asset management applications such as Honeywell’s Field Device Manager. OneWireless system management software makes any XYR 6000 transmitter communicate to existing HART-enabled applications in the same manner as to a wired HART device.This continuous evolution of the OneWireless platform highlights the multi-protocol capabilities of the Honeywell system. For more information about Honeywell’s OneWireless solution, visit http://hpsweb.honeywell.com/Cultures/en-US/ Products/wireless/default.htm.

New SWT series 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 isolated for compatibility with existing systems. The SWT-2000, a 2 Channel Speed Switch/Transmitter, contains two isolated speed switches in one package. The SWT-2000 is able to monitor and protect two separate machines or processes simultaneously, with separate 4-20 mA proportional outputs. It also contains (4) relay setpoints and (2) open collector outputs with a variety of configuration options. Applications would include dual turbocharger protection and redundant protection for critical operations. Programming is done via an Ethernet connection. The SWT-1000 Speed Switch/ Transmitter has a single relay setpoint for over speed protection and provides 4-20mA isolated output. This product is configurable via Windows® software. The SWTD-1000 Speed Switch/Transmitter has the same functionality as the SWT-1000 and includes an integrated backlit display. 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, natural gas pipeline, and processing industry. The SWT series enhances the current Dynalco line of speed switches and transmitters, allowing a wide range of solutions for machine monitoring and protection. For more information visit www.dynalco.com

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LIR Systems Ltd. is pleased to announce the addition of JFC Solutions of Burnaby, BC as manufacturing agents for FLIR infrared cameras and Extech Instruments for Electrical/MRO distribution from Ontario west to British Columbia. FLIR acquired Extech Instruments in 2007.The tremendous momentum of both its’ proprietary test and measurement products and the global-leading infrared systems in distribution has necessitated an expansion of it’s already, extensive customer support offering. JFC Solutions, with over 13 years experience exceeding expectations as a manufacturer’s representative, has been added to support FLIR’s national distribution partners; EECOL Electric, Acklands Grainger (T&M) and Wesco Distribution.

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MSA’s new Workman™ Fall Protection Kits combine safety, quality, economy hese all-in-one kits are designed specifically for the construction industry. The kits come complete with everything workers will need to keep them safe and secure. Workman Fall Protection Kits include a Workman Harness, a Workman Shock-Absorbing Lanyard, a PointGuard Anchorage Connector Strap and a Carrying Bag. The Workman Aerial Kits include a Workman Harness, a Workman Shock-Absorbing Lanyard and a carrying bag that can be attached to an aerial lift. www.MSAnet.com.

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Oil & Gas Network, December 2009 27

2009

Product in review

ESAB’S Introduces the New PowerCut 1300 & 1600 Plasma Cutting Packages SAB Welding & Cutting Products introduces the new PowerCut 1300 & 1600 plasma cutting packages. PowerCut 1300 has a cutting capacity of up to 1-1/4 in. (32 mm) and severs 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 normal modes, blowback technology to eliminate high-frequency interference with nearby electronic devices, silicone-sealed switches for protection against corrosion, automatic 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.

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Moyno® Down-Hole Pumps Feature a Progressing Cavity Design For Superior Versatility and CostEffectiveness in Heavy Oil Applications &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 cavity 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 require minimal maintenance because they have only one moving part down-hole. In addition, lower input energy (403) 264-E-mail: [email protected]

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28 Oil & Gas Network, December 2009

Control Microsystems Announces the SCADAPack 330E and 334E Controllers ontrol Microsystems, global developer of advanced SCADA products, has announced the release of the SCADAPack 330E and 334E, two exciting additions to the SCADAPack family of telemetry and control devices. These cost-effective controllers are based on the popular SCADAPack 330/334 hardware platform and address the growing demand for secure and authenticated data. The SCADAPack 330E and 334E provide multi-vendor interoperability and reliable communications through native DNP3 and IEC 60870-5. Data integrity for billable applications or critical operations is supported with AGA12 encryption. “The popularity of E-Series features has driven the growth of the product line”, said Dale Symington, VP Product Strategy. “DNP3 and IEC 60870-5 allow the slave controller to store a time-stamped event whenever 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 direct access to the file system and configuration commands. An IEC 61131-3 programming environment provides support for two logic applications running simultaneously. This allows system integrators to introduce password-protected applications that offer value-added functionality in their chosen industry, all while leaving the second application open for the end-user to add custom control if required.

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Sleek, compact smartphone combines BlackBerry applications with Direct Connect Push To Talk 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 smartphone 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 Positioning System (GPS), the new BlackBerry Curve 8350i smartphone from TELUS supports GPS tracking and dispatch solutions and also has Bluetooth-enabled support for accessories such as wireless headsets or hands-free car kits. In addition to being ready for work, the BlackBerry Curve 8350i is ready for play. It includes a robust media player, a 2MP camera with video recording and the capacity to store up to 16GB of music, pictures, video and documents per memory card. And with its built-in Wi-Fi, users have more ways to stay connected with the people and information that matter most. www.telus.net

Volant Products 2008 Inc., continues to gain market presence with the HydroFORM™ Centralizer olant designed an application specific centralizer in 2006, which proved very successful for casing window exiting.The multi lateral design centralizer was tested in Houston Texas by both the Oil operator, and the company which manufactures and supplies the window liner hanger system. Several other centralizer styles were also tested, with Volant windowing centralizer being selected as the best product for the customers application. The centralizer offers a unique combination of a smooth transition from the casing outside diameter to the rib diameter along with the uni-body design which provides the required robustness for window exiting. In the mother bore it reduces drag, and provides positive standoff to resist helical buckling, while in the horizontal section of the well bore, it aids in drag reduction for the extended reach wells. Volant Products 2008 Inc. has recently acquired additional contracts involving a number of multi lateral wells, by various operators.

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Moyno® Progressing Cavity Pumps Offer High Performance & Low Maintenance in Oil and Gas Industry Applications oyno Progressing Cavity Pumps provide the ultimate in versatility as they are capable of handling clean, clear liquids as well as thick, abrasive, and corrosive fluids 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 overall total cost of ownership.Their high performance, progressing cavity design results in a gentle, 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 sustains peak pumping efficiencies even in the most corrosive and/or abrasive service environments.

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Specialized Hardbanding System ankin® Automation has developed a specialized hardbanding system for applying tough tungsten carbides to a wide variety of drilling equipment subject to downhole abrasion. Drill collars, stabilizers, flights, tool joints, and scrapers will benefit from extended operating time thereby improving bottom-line performance. Rankin® Automation offers both field-based and shop-based hardfacing systems that are cost efficient and practical in design.

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Oil & Gas Network, December 2009 29

2009

Product in review

Alloy Screen Works introduces new premium sand screen

Retrofits Make Economic Sense In a time when efficiency matters

lloy Screen Works, , has introduced a new product to compliment their extensive line of downhole sand control screens. The ASW/CT Premium Screen was developed specifically for thru-tubing completion applications. Innovative new manufacturing technology has resulted in a close tolerance (CT) method of construction that produces a slim hole screen, which surpasses the specifications of other thru-tubing screens currently available. This new ASW/CT design involves the use of diffusionbonded sintered-laminate woven wire mesh combined with a robust outer perforated protective shroud over a perforated base tube. Diffusion-bonded laminate mesh is well recognized as a superior downhole sand control media. Alloy Screen Works has developed a process to weld the media “flush-on” directly to the inner perforated tube of the screen assembly. This integrated process greatly enhances the screen’s strength and reduces the overall OD when coupled to the close tolerance outer shroud. These two attributes are crucial when considering the downhole restrictions encountered by thru-tubing well screens. www.alloyscreenworks.com

he current drilling environment continues to put pressure on producers to create production efficiencies on existing wells and find ways to work with a shrinking skilled work force. Zedi invites producers to revisit the retrofit advantage of putting electronic flow measurement (EFM) devices on their wells. Zedi’s surveillance offerings, Smart-Alek® and Zedi EFM Walk-up™ help producers become more efficient and consequently save them time and money. Customers confirm that a key advantage of moving from charts to EFM is that an operator’s work week is restructured to support more effective work practices. Well visitation changes from daily to ‘as required’ – freeing up time for value added activities like preventative maintenance. A more efficient work structure ultimately leads to operational cost savings and a higher well to operator ratio. For new drills or retrofitting, producers may also want to add an element of control. Zedi Connect™ is the next generation of Zedi’s optimization solutions combining surveillance and control. It allows users to remotely control and monitor well site equipment through the web. Built as a unique technology that’s compatible with industry field devices, it is designed to upgrade optimization applications remotely eliminating the need for site visits.

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30 Oil & Gas Network, December 2009

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