The mandate of the Canadian Association of Drilling Engineers is to provide high-quality technical meetings and to promote awareness on behalf of the drilling and well servicing industry.
The official publication of the Canadian Association of Drilling Engineers NOVEMBER/DECEMBER • 2012 PLUS Need a Lift? A rundown of heavy oil secondary recovery methods PM#40020055 Green Dream? Carbon capture and storage could curb emissions from heavy oil production Horizontal drilling and thermal production make their way to the home of heavy oil Hot or Cold? Knowing if thermal techniques will be used in a well can help during construction
Transcript
The offi cial publication of the Canadian Association of Drilling Engineers
NOVEMBER/DECEMBER • 2012
PLUSNeed a Lift? A rundown of heavy oil secondary recovery methods
PM#40020055
Green Dream? Carbon capture and storage could curb emissions from heavy oil production
Horizontal drilling and thermal production make their way to the home of heavy oil
Hot or Cold? Knowing if thermal techniques will be used in a well can help during construction
000WCJ-Phoenix-FP.indd 1 8/23/12 8:24:56 AM WCJ_Nov-Dec_12_p32-01.indd 1 10/31/12 4:09:07 PM
The offi cial publication of the Canadian Association of Drilling Engineers
DEPARTMENTS
4 PRESIDENT’S MESSAGE
7 THE DRAWING BOARDPresident’s message, member’s corner, news and notes, technical luncheons
12 MEMBER PROFILE
14 STUDENT PROFILES
28 BY THE NUMBERS
30 DRILLING DEEPERU.S. natural gas could fuel oil sands production
22
FEATURES
16 HEAVY OIL INTEREST HEATS UPLloydminster is at the centre of renewed interest in Western Canada’s heavy oil belt
22 ENHANCING PRODUCTIONCarbon capture projects aim to limit the environmental impact of increased production
24 FROM COLD TO HOTThermal production is just one of the considerations for constructing a heavy oil well
26 HEAVY LIFTINGA little help goes a long way in trying to pump heavy oil from the ground
The mandate of the Canadian Association of Drilling Engineers is to provide high-quality technical meetings and to promote awareness on behalf of the drilling and well servicing industry. With more than 500 members from more than 300 companies, CADE represents a broad spectrum of experience in all areas of operations and technologies. Through CADE, members and the public can learn about the tech-nical challenges and the in-depth experience of our members that continue to drive the industry forward. For drilling and completions specialists, CADE currently offers one of the best networking and knowledge sharing opportunities in the Canadian petroleum industry.
CANADIAN ASSOCIATION OF DRILLING ENGINEERS560, 400 – 5 Avenue SW
Calgary, AB T2P 0L2Phone: 403-532-0220
Fax: 403-263-2722www.cadecanada.com
PRESIDENT: Robert JacksonPAST PRESIDENT: Eric Schmelzl
WELL CONSTRUCTION JOURNAL EDITOR: Christian Gillis
WELL CONSTRUCTION JOURNAL IS PUBLISHED FOR CADE BY VENTURE PUBLISHING INC.
10259 105 StreetEdmonton, AB T5J 1E3Phone: 780-990-0839
Knowledge is Political PowerPeople need to educate themselves and challenge governments to become fi scally responsible
RESIDENTIAL ELECTIONS ARE Alot like the famous line from Forrest Gump,
“life is like a box of chocolates, you never know what you are going to get.”
Each candidate spends many hours in front of television, pandering to the media and glad-hand-ing their way across the country. All of that effort is spent describing their position on the apparent issues of the day, as they pretend to clarify exactly what the public will get if they are elected.
In reality, the real issues surrounding the coun-try are most often not put in front of the public at all, as the “average citizen” is not well versed in global monetary systems and the complexities of international currency, tax and trade, to know what questions are really relevant to the country’s current or future fi scal situation.
The typical citizen relies on the various “checks and balances,” which have been designed to keep government in line, if not honest. The problem is the public has absolutely no recourse should a government fail to deliver on promises made along the campaign trail. When was the last time a government was forced out of offi ce because they were held accountable for fi scal issues? Govern-ments simply borrow more money without any public mandate or input, and announce yet an-other budget defi cit. It washes through the media with little notice and hardly a murmur from the public – the ramifi cations seem too far from day-to-day life to be real, pertinent and important.
Budget defi cits have been the norm for so many governments for so long, that it is assumed that they have little, if any, impact on the average citi-zen. Unless, of course, you are a citizen of Greece, or Spain, or any one of a long list of fi nancially destitute countries who can no longer meet the interest payments on their debts. When the gov-ernment is fi nancially ruined, then the people of the country are in fi nancial ruin along with them. Citizens of those countries cannot opt out of the consequences or vote in a new political leader
who will make the pain go away. They cannot carry on with “life as usual” as the infrastructure and institutions that previously supported their way of life shrink or disappear altogether.
The reality of the situation becomes very clear, very personal, and of overwhelming importance. It brings with it an outcry against all of the politi-cal leaders who drove them into ruin, knowingly mismanaging the fi scal affairs of the country over decades.
The important question to ask is: what lessons can be learned from some of the current political happenings around the globe? I believe there is one clear, pertinent, and important step that ev-ery citizen in every country can take to change the course of our destiny. The general public needs to take responsibility for becoming educated on the topics that really matter. We need to make the effort to learn exactly what the issues really are, the facts that surround those issues and not just accept whatever the media chooses to feed us.
Once armed with knowledge, people need to get active. They need to take action to ensure that fear, misinformation and public ignorance does not allow mismanagement of our fi scal or natu-ral resources to occur. In my opinion, that is the only prescription that may prevent the disease and death of a city, province or nation.
Our industry currently faces the same challeng-es our country does. Moratoriums on hydraulic fracturing, water use, and a myriad of aboriginal, land use and inter-provincial squabbles threaten our future. For those who know the facts sur-rounding those issues, it is time to get actively in-volved to ensure the correct decisions are made.
Speak to your friends, neighbours and family. Join associations, clubs and conferences. Lever-age the internet, and all of the communication and educational opportunities it offers. There is a great deal to do and little time in which to do it. The only thing we cannot do, is nothing at all.
Eric SchmelzlCADE Past President
MESSAGEPast President’s
4 NOVEMBER/DECEMBER 2012 Well Construction Journal
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NOVEMBER/DECEMBER 2012 7 www.cadecanada.com
BOARDThe Drawing
Revisiting LloydminsterELCOME TO THE NOVEMBER/DECEMBER EDITION of Well Construction Journal. This is our last issue for the year and we hope that everyone is enjoying the new format. We are going to be
continuing on with the same format next year.This issue takes a look at the heavy oil fi elds near
Lloydminster. Some of Alberta’s earliest oil discoveries were made in this region, but production from the heavy oil belt proved diffi cult. While Husky Energy remained the dominant producer in the region for many years, more companies are heading to the region to see if thermal pro-duction techniques, such as steam-assisted gravity drainage (SAGD), can turn the old fi elds into new production.
The CADE Technical Luncheons will be running in November and December. They will be held monthly at the Westin in downtown Calgary, so check out our website (www.cadecanada.com) where details of the upcoming luncheons are posted.
We are continuing to look for ideas and presenters for the Technical Luncheon presentations. Please don’t hesitate to contact us if you have any ideas for upcoming topics or issues you’d like to see included at the luncheons or in the magazine. We hope you the membership will par-ticipate and continue to make these events interesting and successful. We are also looking for topics that tie into the
formation we focus on in Well Construction Journal each month. If you have any issues you’d like to see covered, please email me and we will do our best to get the story.
Don’t forget, we would like to publish any of your information and announcements on new products, new technologies and senior personnel changes for publication each month. Please forward any announcements to us, as we would be excited to run them in our new feature section.
The fi rst annual CADE golf tournament was a huge success. There were 108 golfers at Bearspaw Country Club on Oct. 1 for what turned out to be one of the nicest fall golf days in Calgary. Many of the golfers stayed well after the tournament to socialize and get caught up with old friends and colleagues. Watch for announcements this spring, online and in the magazine, for information on next year’s event.
We appreciate your continued support and good luck to all going into the winter drilling season. We look forward to seeing you at the upcoming luncheons.
CADE Executive Team 2012/2013President Robert Jackson 403-615-9504Past President Eric Schmelzl 403-862-0870Secretary Tammy Todd 403 613-8844Treasurer Cecil Conaghan 403-667-9812Membership Chairman John Burnell 403-265-4973Education Chairman Mike Buker 403-930-9015Social Chairman Dan Schlosser 403-531-5284WCJ Editor Christian Gillis 403-265-4973Technical Chairman Jeff Arvidson 403-232-7100IT Chairman Matthew Stuart 403-605-3790Drilling Conf. Liaison Jeff Orita 403-693-7563Executive Member John Pahl 403-292-7966Sponsorship & Marketing Scott Payne 403-400-4032
E X E C U T I V E T E A M
Drilling Conf. Liaison Jeff Orita Drilling Conf. Liaison Jeff Orita Executive Member John Pahl Executive Member John Pahl
WCJ_Nov-Dec_12_p06-11.indd 7 10/31/12 3:22:37 PM
Well Construction Journal8 NOVEMBER/DECEMBER 2012
BOARDThe Drawing
N E W S A N D N O T E S
Deadline for Scholarship Program Approaches
APPLICATIONS ARE CURRENTLY BEING ACCEPTEDfor the Canadian Association of Drilling Engineers (CADE) student bursary program, but the deadline for applications is drawing closer.
CADE’s student bursary program was created to support dependents of the association’s members, or members themselves, who are furthering their education in a fi eld of study related to the petroleum industry.
The bursary is open to students that are residents
or landed immigrants of Canada who are studying in either Canada or abroad. The grading of bursary applications will be based on the following criteria:
1. Enrollment in an engineering program is given highest priority; other programs are given secondary consideration.
2. Financial need.3. Industry experience.4. Overall quality of submission.Applicants must be an active CADE member to
be eligible. For more information on becoming a CADE member or to fi nd an application form for the bursary program, visit the CADE website at www.cadecanada.com. Any questions regarding the information presented here can be directed to Mike Buker at 403-930-9015.
The deadline for applications is December 15, 2012. The selection process will be at the discretion of the CADE Executive Committee and recipients will be notifi ed by March 1, 2013.
Getting the Full Picture DownholeAFTER A SUMMER BREAK, THE CANADIAN Association of Drilling Engineers (CADE) technical luncheons returned in September with a session at the Westin in downtown Calgary on utilizing downhole cameras.
Curtis Jerrom, vice-president of EV Canada Inc., spoke talked about how downhole cameras can be deployed to understand the many challenges that occur in horizontal wellbores.
Jerrom worked as a logging engineer with Halliburton Logging, where a lot of the technology for downhole cameras was introduced. EV Canada was started in 2011 and has advanced the camera technology in an effort to meet the needs of the extreme hot and high pressure environments of today’s horizontally drilled wellbores.
The presentation focused on how cameras can be good “fi shing aids” and mechanical inspection tools on diffi cult wells, so companies can make “cost-optimal go or no-go decisions.” The cameras offer a qualitative analysis of the
wellbore, which combined with fi eld experience, can assist in resolving a wide range of operational problems, Jerrom says.
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NOVEMBER/DECEMBER 2012 9 www.cadecanada.com
Deadline for Scholarship Program Approaches
N E W S A N D N O T E S
Twin Acquisitions Strengthen Company’s Position in LloydminsterTWIN BUTTE ENERGY LTD. MADE A $127 MILLIONoffer to acquire a producer in the Lloydminster area, shortly after closing on an acquisition of another producer in the region.
The Calgary-based intermediate completed its all-share acquisition of Avalon Exploration Ltd. in August and made the offer to purchase Waseca Energy Inc. in September. The two targeted private companies hold heavy oil assets near Lloydminster where Twin Butte operates.
The acquisition of Avalon added 85,000 acres of undeveloped land, which effectively doubled Twin Butte’s net undeveloped land position in
the Lloydminster heavy oil fairway. The Waseca acquisition, meanwhile, increased Twin Butte’s land position further to a total of about 220,000 undeveloped acres. Twin Butte will also receive a seismic data base of 2,500 kilometres of 2D data and 16 square-kilometres of 3D data.
The Waseca transaction also increased Twin Butte’s current production of conventional heavy oil in the region by 3,500 barrels per day to 19,000 barrels of oil equivalent per day. Roughly 89 per cent of Twin Butte’s production from the Lloydminster area is heavy oil and the remaining portion of production is natural gas liquids.
T E C H N I C A L L U N C H E O N S
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November 7December 5The Westin320 4th Avenue SWCalgary 11:30 a.m. Reception 12:00 p.m. Lunch 12:30 p.m. PresentationKeep an eye on www.cadecanada.com for updates on technical luncheon topics and presentations.
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WCJ_Nov-Dec_12_p06-11.indd 9 10/31/12 3:22:57 PM
Well Construction Journal10 NOVEMBER/DECEMBER 2012
BOARDThe Drawing
N E W S A N D N O T E S
A Couple of Big Swings Finish Off the Golf Tournament SeasonTHE FIRST ANNUAL GOLF TOURNAMENT hosted by the Canadian Association of Drilling Engineers (CADE) was pulled together in relatively short time, but went off without a hitch on Oct. 1.
The tournament was held at the Bearspaw Country Club and 108 golfers participated in the event. Proceeds from the CADE Golf Tournament will be used to support the association’s student bursary program.
NETWORKINGThe Student Petroleum Society (SPS) at SAIT Polytechnic organized its second annual SPS Industry Golf Tournament this fall to give students an opportunity to network with industry professionals.
The golf tournament was held on Sept. 17 at Valley Ridge Golf Club. There were about 40 students in the tournament and about the same number of participants from the oil and gas industry. Each foursome consisted of two students and two people working in the industry.
SPS vice-president of external relations Dave Rathgeber says the tournament was a phenomenal success and the student organization is already planning next year’s event.
WHY BECOME A CADE MEMBER?As of 2012, the Canadian Association of Drilling Engineers (CADE) has been active for 38 years. With more than 500 members from more than 300 companies, CADE represents a large spectrum of experience in all areas of operations and technologies.
For drilling and completions specialists, CADE currently offers one of the best networking and knowledge sharing opportunities in the Canadian petroleum industry. The skills and knowledge obtained by your participation in CADE will benefi t you and your employer, with direct application to your professional career.
CADE offers various means for members to connect and share their insights. Monthly technical luncheons are held with topical industry presentations. Other membership benefi ts include our monthly publication Well Construction Journal and
a membership directory, which is the who’s who of the Canadian drilling industry. Our website – www.cadecanada.com – is an excellent focal point for industry events, blogs and other news. We are also active on LinkedIn and Twitter.
WHO CAN BECOME A CADE MEMBER?CADE members can be anyone employed in the drilling and completions industry or with merely an interest in the industry.
Typical members include drilling and completions engineers, geologists, technical personnel, sales personnel and students. Student memberships are avail-able to any post-secondary student inter-ested in learning more about drilling and completions.
Please feel free to share information about CADE with all the people in your organization who are interested in the drilling and completions industry.
CADE MEMBERSHIP RENEWALSCADE’s membership year is from Septem-ber to September. During the summer, CADE members will receive an email and link for the renewal process on our web-site.
Please remember the benefi ts of being a CADE member include APEGA’s professional development hour, staying abreast of technological and industry advances, drilling conferences and a great opportunity to network. Thank you for your support.
CADE MEMBERSHIP CHANGESLog on to www.cadecanada.com to become a member or to update your contact information.
M E M B E R ’ S C O R N E RWELCOME NEW MEMBERS
WHY BECOME A CADE MEMBER?
WHO CAN BECOME A CADE MEMBER?
CADE MEMBERSHIP RENEWALS
CADE MEMBERSHIP CHANGES
WCJ_Nov-Dec_12_p06-11.indd 11 10/31/12 3:23:10 PM
Well Construction Journal12 NOVEMBER/DECEMBER 2012
M
PROFILEMember
The IT FactorMatt Stuart brings a decade of IT experience to the oil and gas industry
ATT STUART WAS THE ODD MAN OUTwhen he helped launch Petrosight Inc. last year. He was the only one of the four founding partners without experience
in the oil and gas industry. Stuart, however, did have a long history in IT and was a quick study in understanding how technology can augment operations in the energy sector.
“The main concern with implementing something new, when you’re doing something as dangerous as drilling a well, is making a mistake,” says the 30-year-old. “Technology should be used as support and to deliver value. It should help companies understand the drill they just did and the drill they want to do. It should help them make the best decisions in order to spend money wisely.”
Petrosight developed a web-based well and rig management system. The program is designed to allow a user to monitor, report and control every
step of the drilling lifecycle, and was released to a handful of clients in September for testing. The cloud-based system can be accessed on any computer or device with internet access and is intended to provide companies with up-to-date software without having to invest in a large IT infrastructure.
“Presently, every option out there is a typical monolithic client server,” Stuart says. “It requires expensive licenses up front, expensive hardware they have to buy, they have to have their own IT people to keep it up to date, and hire consultants when it doesn’t work.”
Stuart started off as an IT consultant 10 years ago when he founded Surge Ingenuities Inc. He became interested in programming video games at a young age, but while working towards a computer science degree at the University of Calgary, Stuart realized he was more interested in solving problems. “That led me to business software, which led me to business consulting,” he says.
Stuart enjoyed the expectations that came with being a consultant. He liked putting his reputation on the line, he enjoyed the pressure of always needing to have the right answer and of always
being one step ahead of a client’s needs.
Stuart also liked the variety. He spent time working as an IT consultant in the advertising industry, the magazine industry and in the fi nance industry. “It
allows me to pull from a variety of experiences, from different markets and pull data from different problems,” he says.The oil and gas industry will provide Stuart with a new set of experiences to pull from and he took over as the IT Chairperson on the Canadian Association of Drilling Engineers (CADE) executive team earlier this year to gain more exposure to the industry. “Working in the oil and gas industry was long overdue,” he says.
000WCJ-Pacesetter-FP.indd 1 10/19/12 11:51:40 AM
“Technology should be used as support and to deliver value. It should help
companies understand the drill they just did and the drill they want to do. It should help them make the best decisions in order
Well Construction Journal14 NOVEMBER/DECEMBER 2012
Carter Dziuba is majoring in chemical engineering at the University of Calgary Schulich School of Engineering. He has completed three years of his undergraduate degree and is cur-rently on a 16-month internship with Laricina Energy Ltd.
The internship is focused on reservoir engineering and project management at a steam-assisted gravity drainage (SAGD) operation. As part of the internship, Dziuba looks at increasing oil recovery from bitumen reservoirs through the use of solvent-assisted SAGD.
Dziuba is also currently serving as the director of external relations for the University of Calgary Petroleum and Energy Society (PES). Prior to this role, he served as the director of membership for PES and helped facilitate the largest membership increase in the history of the organization. The number of PES members increased by 40 per cent during 2011 – 2012. Dziuba believes students should have the opportunity to explore their career interests beyond the classroom. He is committed to helping students gain exposure to the energy industry and exploring the career options available to them.
After obtaining his degree, Dziuba plans to work in the heavy oil industry to gain the experience needed to achieve his professional engineering designation and then pursue further education.
Young TalentHighlighting tomorrow’s best and brightest
StudentPROFILE
Carter DziubaChemical EngineeringUniversity of Calgary
Dion WebsterPetroleum Engineering Technology
SAIT Polytechnic
ion Webster is a second year Petroleum Engineering Tech-nology student at SAIT Polytechnic, but prior to enrolling at the post-secondary school she had the opportunity to job shadow different occupations in the industry. After gaining
an understanding of what the industry had to offer, she decided to follow in her father’s footsteps – who spent more than 25 years work-ing in the oilfi eld – and enroll in an energy-related post-secondary program.
After completing her fi rst year of school, Webster worked for ConocoPhillips Canada as a summer student in production oper-ations. She was involved in a turnaround where she had the chance to inspect a treater, free water knockout and numerous other tanks.
After her fi rst year in school and fi rst summer working in the fi eld, Webster has become very interested in drilling, completions and production operations. When her second year of school is com-plete, Webster will have a better feel of which discipline she wants to specialize in.
D
WCJ_Nov-Dec_12_p14-15.indd 14 10/31/12 3:33:08 PM
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NOVEMBER/DECEMBER 2012 15 www.cadecanada.com
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DESIGNATED HELPThe Association of Professional Engineers and Geoscientists of Alberta (APEGA) has hired a staff member to assist internation-ally-educated graduates become licensed in Alberta.
Colombia-born and educated professional engineer Guillermo Barreiro joined the Calgary-based association in September to serve as the manager of internationally educated graduates integration and liaison.
Barreiro immigrated to Canada from Colombia in 2001. He worked his way through the licensing system and received his professional engineering designation, the same licence held by thousands of professional engineers across Alberta.
“There’s lots of pressure on new Canadians when they come here. I had a lot of adapting to do. Having help from someone who knows the challenges fi rst-hand would have made things easier for me,” said Barreiro in a news release. “I’m looking for-ward to giving back because getting my licence from APEGA allowed me to practice as a professional engineer, contribute to Alberta’s economy and give my family a good life here in our new home.”
With the support of APEGA’s registration department, Bar-reiro will offer one-to-one guidance to foreign-educated gradu-ates on the rules for licensure, and how to put together a clear and effective application. Once they’ve received a decision on an application, Barreiro can help applicants understand the next steps. Barreiro will also reach out to agencies that work with immigrants to clear misunderstandings about the licens-ing process.
APEGA receives about 2,500 applications for licensure from foreign-educated engineers and geoscientists each year. “APE-GA recognizes the public concern that new Canadians are not able to fully use their skills in support of Alberta’s economy. I don’t want to see any properly qualifi ed and capable new Canadian prevented from joining our profession because of cultural differences,” says Leah Lawrence, president of APEGA. “Protecting public safety is still our most important job. In-ternationally-educated graduates still have to meet the same criteria as Canadian-educated applicants. It’s about making the process clearer, not easier or less thorough.”
HELP WANTED: Career Department
GRAVEYARD TOUR: the overnight work shift of a drilling crew that begins at midnight. Drilling operations usually occur around the clock because of the cost to rent a rig. As a result, there are usually two separate crews working twelve-hour tours or three eight-hour tours.
KELLY: a long square or hexagonal steel bar with a hole drilled through the middle for a fl uid path. The kelly is used to trans-mit rotary motion from the rotary table or kelly bushing to the drill string, while allowing the drill string to be lowered or raised during rotation.
SALT PLUG: a temporary plugging agent comprised of graded granules of salt that form a physical or hydraulic barrier. The resulting plug typically provides good mechanical and hydrau-lic strength to enable safe treatment of an adjacent zone. On completion of the treatment, the temporary salt plug is easily removed by circulating a water-base fl uid to dissolve the plug.
DRILLING SLANG
If you want to walk the walk on a drill site, it helps to talk the talk. Here are some unique terms and phrases heard out in the fi eld.
BASKET: a downhole device or tool component designed to catch debris or objects, such as balls, darts or plugs dropped to actuate downhole equipment or tools.
WCJ_Nov-Dec_12_p14-15.indd 15 10/31/12 3:33:14 PM
Well Construction Journal16 NOVEMBER/DECEMBER 2012
REPORTSpecial
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WCJ_Nov-Dec_12_p16-21.indd 16 11/15/12 10:48:19 AM
NOVEMBER/DECEMBER 2012 17 www.cadecanada.com
EST WELLS WERE DRILLED NEAR LLOYDMINSTER early in the 20th century, but it took one farmer and an
accidental well to really kick off the region’s oil industry. Charlie Marren had drilled a well for his livestock, but
his cattle wouldn’t drink from the 160-foot well. In an effort to determine what was wrong with the water, and why his cattle wouldn’t take to it, he sent a sample to the University of Alberta for testing. The answer came back a few days later. Marren’s well contained petroleum distillates — it was close to an oil reserve.
Rather than a drilling bonanza, production in the region took off slowly due to the heavy oil that was pervasive in the area. The Husky Oil Company moved a refi nery to Lloyd-minster from Wyoming in 1946 and the heavy oil industry began to grow.
Recent deployment of innovative techniques, such as steam-assisted gravity drainage (SAGD) wells, and a price of oil that generates economical returns has brought renewed a new wave of producers to the Lloydminster region.
LOCATION: Lloydminster
RESOURCE: heavy oil
ESTIMATED RECOVERABLE RESERVES: 75 billion barrels of oil
RESOURCE BASE: 350 billion barrels of oil
MAJOR PRODUCERS: Husky Energy Inc., Devon
Energy Corp., Canadian Natural Resources Ltd.,
Baytex Energy Corp., Twin Butte Energy Ltd.
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Well Construction Journal18 NOVEMBER/DECEMBER 2012
By Justin Bell
Heavy Oil Interest Heats Up
IRBY HAYES HAS LIVED IN LLOYDMINSTERhis entire life. He started working for his father at the age of 10 and decided at a fair-ly young age that he would stick around.
He had no desire to follow others who grow up in the border town and go to university or move to Edmonton. Hayes wanted to make money and his life has revolved around Lloydminster’s heavy oil fi elds.
Hayes started his own oilfi eld services company Kirby Hayes Inc. when, as he puts it, “I got sick of get-ting laid off.” He has witnessed innovations in the heavy oil industry and has watched the industry blossom in the past few decades.
“I suppose because I lived through that as a service guy I was able to talk to lots of operators,” says Hayes. “It was a very open patch at that time. There was a lot of discussion be-tween service providers. No one was right or wrong. We were trying to understand heavy oil production with sand.”
Recent deployment of innovative techniques, such as steam-assisted gravity drainage (SAGD) wells, and a price of oil that generates good economic re-turns has brought a new wave of producers to the
Lloydminster region. “It’s going to deplete at some point,” Hayes says, “but right now we are doing high volume on wells that were uneconomical at $40 or $50 a barrel.”
Test wells were drilled near Lloydminster early in the 20th century, but it took one farmer and an accidental well to really kick off the region’s oil industry.
Charlie Marren had drilled a well for his livestock, but his cattle wouldn’t drink from the 160-foot well. In an effort to determine what was wrong with the
water, and why his cattle wouldn’t take to it, he sent a sample to the University of Alberta for testing. The answer came back a few days later. Marren’s well
contained petroleum distillates — it was close to an oil reserve.
Rather than a drilling bonanza, production in the region took off slowly due to the heavy oil that was pervasive in the area. Heavy oil is diffi cult to extract and problematic to refi ne. It is more viscous than light oil but not as thick as bitumen. Heavy oil typi-cally has a high specifi c gravity, low hydrogen to car-bon ratios, high carbon residues, and high contents of asphaltenes, heavy metal, sulphur and nitrogen.
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REPORTSpecial
Lloydminster is at the centre of renewed interest in Western Canada’s heavy oil belt
“I think as long as the oil prices continue to climb, we will be okay.”
– Kirby Hayes, owner Kirby Hayes Inc.
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NOVEMBER/DECEMBER 2012 19 www.cadecanada.com
Heavy Oil Interest Heats Up
The Dina Oil Company Ltd. hit a good gas well in 1937. More ro-tary rigs were brought to the region and conventional wells started to increase oil production. The Husky Oil Company moved a re-fi nery from its home state of Wyoming to the Lloydminster re-gion in 1946 as part of the now Calgary-based company’s search for new business opportunities. The refi nery began processing asphalt, as well as bunker fuel for the rail industry. Husky’s refi nery helped in-crease the number of wells producing in the region.
A switch in 1958 by both of Canada’s national rail companies to use steam from diesel engines, rather than bunker fuel, to power their locomotives threatened to put a large dent into Husky’s Lloydminster operations. To offset the loss, the company formed an ambitious, and aptly named, plan — The Lloydminster Project. It was aimed at reducing production costs, while increasing production to 12,000 barrels per day (BPD).
Husky remains one of the biggest players in the Lloydminster region. The company still operates its refi nery, which produces about 29,000 BPD, and added an upgrader in the area in 1992 with the help of gov-ernment funding. According to material provided by the company, Husky produces approximately 100,000 BPD in the Lloydminster area. Only 20 per cent of that is currently produced using thermal technolo-gies. Husky remains one of the largest producers of asphalt in Western Canada. Since 1946, the company has pulled more than 800 million
barrels of oil out of the ground near Lloydminster. There was a slowdown in the region’s oil production during the 1980s.
Operators began deploying new technologies to increase the amount of oil that could be extracted from the ground, sent through pipelines and refi ned to more usable standards. Progressive cavity pumps and foamy oil drive gave producers greater access to the Lloydminster heavy oil at a more economical price.
As the price of the West Texas Intermediate (WTI) benchmark spends more time near $100 per barrel, the economics improve and new com-
panies are drawn to the region. Devon En-ergy Corp. entered the Lloydminster region in 2001 when the company purchased An-derson Exploration for $4.6 billion. Devon has continued to expand its holdings in the
region and currently has 4,101 producing wells on more than 2.7 mil-lion acres of land.
The company has drilled more than 1,800 wells since 2003 and has current production of 39 million barrels of oil equivalent per day. According to Kevin Casper, vice-president of production with Devon, there are also about 1,000 suspended wells in the area. Although, he says, that number is constantly in fl ux and the suspended wells could be reactivated depending on technology advancements or the price of oil.
The majority of Devon’s production near Lloydminster comes from
“We are doing high volume on wells that were uneconomical at $40 or $50 a barrel.”
– Kirby Hayes
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DEVON ENERGY: Currently has 4,101 producing wells on more than 2.7 million acres of land.
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Well Construction Journal20 NOVEMBER/DECEMBER 2012
REPORTSpecial
conventional wells using cold fl ow technology in shallow formations. “Conventional heavy oil, in the Lloydminster/Bonnyville area, has a high sand con-tent,” says Casper. “If you have a mixture of sand, oil and water, it is highly abrasive. It wears out pumps, tubing and other components along the way.”
Devon’s in situ oil sands operations, which produce oil even thicker than Lloydminster’s heavy oil, is pro-duced using SAGD. Thermal operations have been a successful production technique in the oil sands and Devon’s vice-president of thermal operations, Cal Watson says the company expects its Jackfi sh SAGD project to be at 145,000 barrels per day by 2018 and be up to 200,000 barrels per day by 2020.
Thermal operations, such as SAGD, could be the next innovation in the Lloydminster region to give the heavy oil industry another boost. “There are 7 or 8 billion barrels in the Lloydminster area,” Watson says. “That’s a huge resource and we’ve only tapped 6 to 10 per cent of it. We need to fi nd ways to construct facilities on a modular and capital-effi cient basis.”
Watson doesn’t expect the company to see the same concentration in Lloydminster as it does at Jackfi sh
by utilizing steam in older wells. Still, it will mean 7,000 to 10,000 barrels from a well that would nor-mally have been shut down. “In primary cold fl ow oil, you only recover 6 to 10 per cent in place, so over 90 per cent of the oil is there,” he says.
This latest innovation in production from the heavy oil belt isn’t just attracting big players like Husky and Devon. Twin Butte Energy Ltd. recently made two acquisitions in the Lloydminster region to bring its production to about 19,000 BPD.
Palliser Oil and Gas Corp. has also established it-self in the area. The Calgary-based junior has about 95 per cent of its production weighted in Lloyd-minster. “What attracts us to the Lloydminster area is the low recovery factor,” says Allan Carswell, president and chief operating offi cer for Palliser. “Basically, going back into some of these old fi elds and increasing the recovery factor.”
Hayes is enjoying the increased attention Lloydminster is getting from these innovative strategies to produce heavy oil. “I think as long as the oil prices continue to climb, we will be okay,” he says.
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ECONOMICS: Increased returns have brought a new wave of producers to the Lloydminster region.
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Well Construction Journal NOVEMBER/DECEMBER 2012 21
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Well Construction Journal22 NOVEMBER/DECEMBER 2012
The project aims to reduce greenhouse gas emis-sions by capturing carbon dioxide produced from a SAGD facility and store it at a nearby oil produc-tion fi eld.
“By integrating new process equipment with existing infrastructure, the aim of the project is to capture approximately 35 tonnes of CO2 a day from a steam generator, transport it by pipeline to
an existing compression facility and inject it into a partially depleted oil reser-voir,” Husky said in a news release. The advancement of the project is contingent
on securing additional funding participants, as well as fi nal company and regulatory approvals.
CCS DEVELOPMENTAfter mulling it over, Shell Canada Ltd. decided in September to move forward with the fi rst carbon capture and storage (CCS) project for an oil sands operation in Canada.
The Quest CCS project will capture more than one million tonnes per year of CO2 from Shell’s Scotford Upgrader. The carbon dioxide will be trans-ported 80 kilometres from the upgrader through an underground pipeline to a storage site north of the Scotford site. The storage site is a porous rock formation called the Basal Cambrian Sands (BSC), which according to Shell, is located beneath layers of impermeable rock. The CO2 will be injected more than two kilometres underground and will be monitored to ensure the carbon is permanently stored.
The International Energy Agency (IEA) estimated in its 2011 CCS Technology Roadmap that projects in the energy sector will increase CO2 emissions by 130 per cent by 2050 in the absence of new policies or supply constraints as a result of increased fossil fuel usage.
The IEA says that, “CCS is an important part of the lowest cost GHG mitigation portfolio,” and CCS will need to contribute one-fi fth of the necessary emissions reductions in 2050 to achieve stabilisa-tion in the most cost-effective manner. The organi-
By Steve Macleod
S HUSKY ENERGY CONTINUES TO DEVELOP NEWways of extracting heavy oil from its massive land holdings near Lloydminster, the com-pany also hopes to reduce its environmental
footprint. In July, the integrated oil and gas company secured $3 million in funding from Climate Change and Emissions Management Corp. to support a carbon dioxide capture project 35 kilometres east of Lloydminster.
The majority of Husky’s heavy oil assets are located in the relatively shallow oil fi elds in the Lloydminster region. The Calgary-based company holds approximately two million acres straddling the Alberta-Saskatchewan border. Husky produces approximately 100,000 barrels of oil per day. During the past six decades, the company has produced more than 775 million barrels of heavy oil in the Lloydminster area, which is only about seven percent of the oil under its leases in the region.
According to Husky, approximately 80 percent of the company’s heavy oil is currently recovered through cold heavy oil production with sand (CHOPS). This method produces sand from the for-mation along with the oil, increasing productivity by creating a path of least resistance for the oil to fl ow to the wellbore. Husky says the resulting production rates are higher than what would be expected in a conventional reservoir setting and CHOPS has been a foundation for the growth of heavy oil production in the region since the mid-1990s.
The rest of Husky’s heavy oil production is recovered using thermal techniques such as steam-assisted gravity drainage (SAGD). Husky expects the percentage of heavy oil produced from thermal projects to increase substantially in the future. Advances in enhanced oil recovery (EOR) technolo-gies are also expected to further unlock reserves in the region.
The company’s steam project in Lashburn is also the site of one of those EOR advances. Husky says the proposed $10-million Lashburn CO2 Capture Demonstration project, if successful, could result in emission reductions of one megaton by 2021.
A
Enhancing ProductionCarbon capture projects aim to limit the environmental impact of increased production
REPORTTech
Shell Canada Ltd. decided in September to move forward with the fi rst carbon
capture and storage (CCS) project for an oil sands operation in Canada.
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www.cadecanada.com NOVEMBER/DECEMBER 2012 23
zation envisions 100 CCS projects globally by 2020 and more than 3,000 projects in 2050. The cost to meet those targets is estimated at more than US$5 trillion between 2010 and 2050.
Both the Canadian federal and Albertan provin-cial governments have identifi ed CCS as a technol-ogy in their strategies to reduce CO2 emissions. The Alberta government will invest $745 million in Shell’s Quest CCS project from a $2-billion fund to support CCS, while the Government of Canada will invest $120 million through its Clean Energy Fund.
The Quest project will be built on behalf of Shell’s Athabasca Oil Sands project joint venture. Shell is the operator of the project and 60 per cent owner. Chevron Canada Ltd. and Marathon Oil Canada Corp. each have a 20 per cent stake in the project, which includes Quest CCS, two oil sands
mine operations and the Scotford Upgrader.The bitumen produced from the mining
projects – about 255,000 barrels per day from Muskeg River Mine and Jackpine Mine – is sent in a pipeline from north of Fort McMurray to the Scotford Up-grader near Edmonton. From late 2015, Quest will capture and store deep underground more than one million tonnes of CO2 a year resulting from bitu-men processing. Quest will reduce direct emissions from the Scotford Upgrader by up to 35 per cent – the equivalent of taking 175,000 North American cars off the road annually, says Shell.
Construction has begun on Shell’s Quest CCS project. To improve effi ciency, the company says up to 50 per cent of project work will be done offsite at a construction yard. Large pre-assembled modules will then be delivered to the Shell site for installation.
QUEST FOR CARBON: The Quest CCS project will capture more than one million tonnes per year of CO2 from Shell’s Scotford Upgrader.
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24 NOVEMBER/DECEMBER 2012 Well Construction Journal
P
From Cold to HotDesigning and constructing heavy oil wells in the Lloydminster area presents a unique set of challenges
REPORTTech
By Graham Chandler
UMPING HEAVY OIL FROM THE RESERVOIRSnear Lloydminster is like trying to produce “ketchup fi lled with sand,” says Angelo Ledda, Devon Energy Corp.’s senior project
geologist for the area. The unique geology of the heavy oil fi elds
stretching across the Alberta-Saskatchewan border make planning and drilling a well in the region quite different from constructing a well for lighter conventional oil. And shale oil. And oil sands.
“The biggest difference as compared to other conventional reservoirs is [Lloydminster heavy oil is] unconsolidated sand, unlike consolidated rock that you tend to fi nd in other reservoirs,” Ledda says. “So, you handle it differently in how you design your wellbore because at the end of the day, what we are trying to produce is heavy oil combined with uncon-solidated sand. In conven-tional reservoirs the oil is light enough that it fl ows into the wellbore and the sand stays out.”
Devon has more than 4,000 producing wells in the Lloydminster area. Early drilling techniques took their cue from conventional operations and there was a focus on holding the sand back dur-ing production. It was eventually discovered that allowing the sand to fl ow with the oil increased production as wormholes began to grow, which led to the creation of the primary technique used in the region today: cold heavy oil production with sand, or CHOPS.
“We are trying to get the well to produce sand and create a wormhole where the sand starts com-ing in with the oil stuck to it,” Ledda say. “The fi rst clue that you have a good well is you get a bunch of sand coming into the wellbore as well.”
While operators near Lloydminster have fi gured out that sand is helpful in production, optimum
horizontal well lengths for CHOPS are still being determined. “It’s kind of a mixed bag,” says Andrew Tyler, reservoir engineer for Lloydminster with Devon. “Costs will track pretty close to lengths, to the actual target zone. Drilling is quite fast, so to extend the length of your horizontal doesn’t add a lot of cost; it’s just whether or not it’s worth doing from a production standpoint.”
The target zones in the area can also be challeng-ing to hit, adds Ledda, which can be challenging because the different formations in the area have different requirements for optimizing production. “There are a lot of potential targets,” he says. “You’ll be going after say the Sparky [formation], which is one of our main targets, but maybe you will miss it and get the McLaren. Each one has its own unique characteristics.”
One major consider-ation in planning a well is pump placement. The mixture of heavy oil and sand creates a lot of work for downhole pumps and engineers need to fi nd a smooth location to place
the pump to minimize failure. “It’s an important factor for us,” says Tyler. “A couple of things we’re looking for as we drill the horizontals are trying to keep the bit angle as smooth as possible, and landing as close as possible to the reservoir.”
Tyler also says they pick a dogleg severity and try to stay below it. “And ensure that we are build-ing at a reasonable pace,” he says. “We try not to sacrifi ce well shape just to get it drilled faster—for us a smooth hole is an important consideration.”
Greg Belbin with Gyrodata Services Canada, says a gyroscopic continuous system can help identify a smooth section of the wellbore beforehand and eliminate any premature failures. The company’s full directional survey system provides inclination, azimuth, measured depth, horizontal core depths
“The wells that are drilled for CHOPS are done as cheaply as possible and they are certainly not designed for
for every depth reference and dogleg sever-ity. Belbin says the tools that drill the wells generally survey every nine metres – each new stand of pipe.
Hole diameter is another consideration Devon places a lot of emphasis on. “If you look at the vertical and slant well, we want to make sure we are drilling a hole that’s big
enough to accommodate some of the larger pumps as well,” says Tyler. “We found that some smaller diameter wells that have higher water cuts just can’t handle those higher pumps.”
CHOPS may have increased production compared to conventional techniques, but only fi ve to 10 per cent of reserves
are being recovered from reservoirs in the Lloydminster area. Companies are starting to look at thermal recovery techniques, such as steam-assisted gravity drainage (SAGD), to improve recovery rates, but that requires further consideration when constructing the well. “In order for it to become a thermal project it has to meet certain criteria like reservoir thickness,” says Devon’s Ledda. He says it wouldn’t be cost effective to install casings, cement and other requirements for high temperature production at the outset for every well. “Not all of the reservoirs we do for CHOPS fi t the criteria to go to ther-mal,” he adds.
While thermal recovery of a CHOPS-con-structed well is becoming common, most companies in the area are not considering both techniques when building their wells at the outset. “Although it is almost a guar-antee that thermal will come later because the amount of reserves is immense,” says Doug Hollies, vice-president of oil sands en-gineering at Codeco Oilsands Engineering. “Certainly the big prize in the Lloydminster area is unrecovered oil from primary opera-tions—to go back there and get more of that oil by heating it up and having it fl ow more easily into those horizontal wellbores at these lower pressures.”
That’s where a whole new round of drill-ing needs to be planned and executed – re-entering wells. Wellbore integrity, Hollies says, should be a major consideration for companies using heat as a secondary recov-ery technique. “The wells that are drilled for CHOPS are done as cheaply as possible and they are certainly not designed for thermal stimulation,” he says. “Any well that is in the zone to be stimulated thermally that’s going to be a big issue. You can’t heat some-thing up, cement it in place and expect it to survive mechanically.”
As Devon continues to explore new spots in the heavy oil fi elds surrounding Lloyd-minster, the company faces new challenges. “We are focusing on infi ll drilling in estab-lished pools and identifying new spots,” says Tyler. “And dealing with water is becoming more of an issue. We are targeting zones that previously had high water cuts that we can now go back with larger pumps and chase more oil recovery there.”
PROGRESSIVE STAGING: Strap jack pumps at Husky’s Paradise Hills thermal plant.
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26 NOVEMBER/DECEMBER 2012 Well Construction Journal
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Heavy LiftingLloydminster has been a proving ground for artifi cial lift technology
REPORTTech
By Kelley Stark
UMPING HEAVY OIL OUT OF THE GROUND ISnot easy; especially, heavy oil in the Lloyd-minster region. There is a large amount of sand and other debris in the reservoirs along
Alberta’s eastern border, which forces producers to take extra steps in order to get the resource out of the ground.
“If a well was producing at 400 barrels a day and it suddenly stopped, there are still a lot of resources there. Artifi cial lift is an easy way to go in and mechanically assist in getting the fl uids out,” says Nicholas Donohoe, president and CEO of ICI Artifi cial Lift Inc. “That would be your fi rst technique to try.”
Nicholas Donohoe, president and CEO of ICI Artifi cial Lift Inc.
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NOVEMBER/DECEMBER 2012 27 www.cadecanada.com
Using an artifi cial lift to re-energize a well-bore and improve production is a common practice in many different regions, Lloydmin-ster just happens to be where ICI got its start a decade ago. ICI’s fi rst product was designed to pressurize a well and pump heavy oil to the surface using a lower stroke rate than a conventional pump jack. The Edmonton-based company was looking for a way to improve the conventional pump jack system, which resembles a large hammer, and is a common sight across Alberta’s landscape. ICI patented, designed and manufactured its line of hydraulic artifi cial lifts, which resemble a large antenna, and aimed to eliminate many of the mechanical components of a conven-tional system. “[The conventional system] is a very technical product, and the application and system are quite technical,” Donohoe says. “There’s no gear box and all the moving parts are replaced by a hydraulic cylinder, so it becomes a real simple system.”
ICI shipped its fi rst product in 2003, one year after the company launched. At the time, hydraulic pump jacks were relatively new to the market. In those early days, the majority of ICI’s competition came from major players like Weatherford and National Oilwell Varco. As the market has expanded, so has the number of manufacturers of artifi cial lifts and other secondary recovery method equipment.
PUMP JACKSThe most well-known secondary recovery method is probably rod, or beam, pumping. The pump jack – also referred to as a nod-ding donkey, horsehead pump or sucker rod pump – sits above ground, rocking back and forth while plunging a string of sucker rods down into the bottom of the well where the pump plunger sits. Tension and pressure from the surface can cause the sucker rod to fatigue and crack over time. Weatherford In-ternational developed high-strength sucker rods, while companies such as ICI and HRP International developed hydraulic systems to eliminate the downhole tension. ICI’s sys-tem pumps the entire tubing string, which eliminates the need for sucker rods. HRP’s hydraulic system, meanwhile, eliminates rod string compression.
PROGRESSIVE CAVITY PUMPSProgressive cavity pumps (PCP) can be used for many different applications including heavy oil and coalbed methane, as well as horizontal, slant and directional wells. The
system consists of a surface drive, sucker rod, stator, rotor and pump. The rotor turns inside a lined stator that remains station-ary. As the rotor turns, a set of cavities form causing a displacement fl ow to reach above ground. Though this kind of pump has limited lift capabilities, they don’t cost as much as other methods, both as a capital investment and maintenance fees. The PCP systems are also quiet, portable, lightweight and installation is relatively simple.
ELECTRIC SUBMERSIBLE PUMPSAnother method of artifi cial lift is the elec-tric submersible pump (ESP). These pumps are used most often for high volume ap-plications. ESPs run with an electric motor and centrifugal pump unit. General Electric Co. estimates there are more than 130,000 ESPs operating around the world and ac-count for more than 60 per cent of global oil production. GE’s systems are designed to produce up to 50,000 barrels of oil per day. They are designed to withstand high down-hole temperatures associated with thermal projects, can operate at high-temperatures, and average operating depth is 6,000 feet below surface. Most ESPs can be automated and be set to pump continuously or inter-mittently. One of the downsides of ESPs is scale deposits can buildup on the pump downhole.
SUBSURFACE HYDRAULIC PUMPSSubsurface hydraulic pumps use power fl uid (crude oil or water) to lift the oil to the surface. The power fl uid is controlled by valves at a control station and is taken from a storage tank. The fl uid runs through the surface pump and is sent to the wellheads.
The power fl uid is used to run the piston pump, then returns to the surface with the produced oil. The biggest benefi t to using this system is that the pump can be retrieved by reversing fl uid fl ow which eliminates the
need for wireline or workover rigs. It also has a high volume capacity and can service more than one well with just one pump. Disadvantages, however, include a high initial cost and it has the potential to shut down more than one well if there is a problem.
GAS LIFTA gas lift system is different from the other methods; it uses compressed gas to lift the oil to the surface. The gas mixes with the heavy oil making it lighter and causing the oil to fl ow easier. The gas is sent down the casing tubing annulus and enters the well through gas-lift valves forming bubbles and lowering the pressure of the heavy oil. The gas lift system most closely resembles the natural fl ow process and though the system requires a supply of pressurized gas, the gas is typically recycled from the well in the fi rst place. Unfortunately, this system can require vigilant maintenance and can be diffi cult to operate.
UP NEXTTechnically, it can be argued that any method used after a primary method could be an artifi cial lift and it’s possible that waterfl ooding and other enhanced oil recovery (EOR) methods can be alternative methods to artifi cial lift. ICI’s Donohoe agrees that these methods would be a little more limited in scope to the artifi cial lift method but says that he can’t think of any-one who would go from a primary method to an EOR method without fi rst employing an artifi cial lift.
As companies continue to put more research and development efforts behind improving EOR methods, such as chemical fl oods and thermal fl oods, artifi cial lift op-erators continue to develop their products. “There’s always room for improvement,” Donohoe says. “That’s what’ll happen over time in each of the different segments; they’re continuously improving.”
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“If a well was producing at 400 barrels a day and it suddenly stopped, there are still a lot of resources
there. Artifi cial lift is an easy way to go in and mechanically assist in getting the fl uids out.”
– Nicholas Donohoe, president and CEO of ICI Artifi cial Lift Inc.
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Well Construction Journal28 NOVEMBER/DECEMBER 2012
Canadian Rig Counts October 10, 2012
Drilling Down Total Utilization
Alberta 226 381 607 37%
B.C. 28 23 51 55%
Manitoba 13 11 24 54%
New Brunswick 0 1 1 –
Newfoundland 0 1 1 –
Quebec 0 0 0 –
Saskatchewan 72 69 141 51%
Totals 339 486 825 41%Source: Divestco
NUMBERSBy the
Stats at a Glance:
Alberta Rig Counts October 10, 2012
Drilling Down Total Utilization
Northern Alberta 51 83 134 38%
Central Alberta 146 246 392 37%
Southern Alberta 29 49 78 37%
Totals 226 381 607 37%
Source: Divestco
Alberta Land SalesAugust 30, 2012
August 2012 August 2011 YTD 2012 YTD 2011
Oil and Natural Gas
Land Sales $59 million $572 million $799 million $2.7 billion
Price Per Hectare $194.31 $1,278.69 $387.15 $1,020.49
Oil Sands
Land Sales $454,000 $361,000 $8.4 million $49 million
Price Per Hectare $591.48 $201.24 $113.09 $103.92Source: Alberta Department of Energy
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www.cadecanada.com NOVEMBER/DECEMBER 2012 29
Alberta Well LicensesApproval issued by the Alberta Energy Resources Conservation Board
Number of Licences Issued March 2012 April 2012 May 2012 June 2012 July 2012
Development 359 287 593 635 431
Exploration 36 26 27 52 44
Source: Alberta Department of Energy
Alberta Spudded WellsAugust 30, 2012
Number of Wells Spudded
2011 2012
January 1812 1751
February 2001 2013
March 1318 973
April 241 261
May 334 356
June 525 488
July 812 625
August 964 464
Source: Alberta Department of Energy
Alberta Completed WellsAugust 30, 2012
Number of Wells Completed
2011 2012
January 413 381
February 774 718
March 1846 717
April 1003 672
May 958 486
June 433 254
July 245 488
August 728 541
Source: Alberta Department of Energy
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Well Construction Journal30 NOVEMBER/DECEMBER 2012
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Trade BaitA heavy reliance on natural gas for oil sands production could improve Canada’s cross-border trade
HE MAJORITY OF THE 169 BILLION BARRELSof bitumen reserves in Alberta’s oil sands is too deep for mining operations and will need to be produced through wellbore,
which could be good news for Canada-U.S. trade relations.
According to the Canadian Energy Research Institute (CERI), more than the conventional oil and gas industries, the oil sands industry is a large consumer of energy. Currently, most in situ proj-ects generate steam using natural gas-fi red steam generators and natural gas is the single highest operating cost for these in situ thermal projects.
The research organization noted in a report this spring that considering how aggressively shale gas production in the U.S. has come on stream, and the potential for shale production in Canada, meeting the oil sands industry’s future demand for natural gas should not be a concern. “It would be expected that Canada and the U.S. could be engaged in an energy exchange – Canadian oil for
TU.S. natural gas – that further enhances the trade relationship between the two countries,” CERI wrote in the report. “Also, the prospects for tech-nology switching and effi ciency improvements are substantial and will likely put downward pres-sure on the industry’s natural gas requirements.”
The organization also noted in its report that a steam-assisted gravity drainage (SAGD) project averages dry steam-oil ratios which typically range from 2.0-2.5. While a cyclic steam stimulation (CSS) project averages wet steam-oil ratios from between 3.0-3.5. However, the actual natural gas requirements can vary signifi cantly because of the different pressure, steam, and temperature requirements needed in different geological formations.
Regardless, CERI writes, the amount of natural gas required to sustain the oil sands industry is substantial. By 2045, the organization estimates natural gas requirements will increase by two to three times the current levels.
4,000
For drilling and completions specialists, CADE currently offers one of the best networking and knowledge sharing opportunities in the Canadian petroleum industry. As you look to build your business and launch new technologies, new products and services in the drilling industry, a CADE Sponsorship offers you a cost effective way to deliver your message directly to the entire membership of the leading industry association for Well Construction Professionals in Canada.
YOUR SPONSORSHIP INCLUDES:• Ads in Well Construction Journal, full of relevant industry news and
articles, presented in a high quality, well-read magazine• Your logo in the “Thank you to our sponsors” feature on the CADE
website and in every issue of Well Construction Journal• Your logo on the “Thank you to our sponsors” display at every CADE
Technical Luncheon• Authorized use of the CADE logo on your website and in marketing
materials
Connect with Canada’s Drilling IndustryBecome a CADE Sponsor
2012 SPONSORSHIP PACKAGES ARE NOW AVAILABLE
Contact Scott H. Payne at 403-400-4032 or by email [email protected]
Support CADE by sponsoring our technical lunches, our website and the Well Construction Journal.
Thank You to Our SponsorsThe support of CADE sponsors plays an integral part in our association’s success.
For drilling and completions specialists, CADE currently offers one of the best networking and knowledge sharing opportunities in the Canadian petroleum industry. As you look to build your business and launch new technologies, new products and services in the drilling industry, a CADE Sponsorship offers you a cost effective way to deliver your message directly to the entire membership of the leading industry association for Well Construction Professionals in Canada.
YOUR SPONSORSHIP INCLUDES:• Ads in Well Construction Journal, full of relevant industry news and
articles, presented in a high quality, well-read magazine• Your logo in the “Thank you to our sponsors” feature on the CADE
website and in every issue of Well Construction Journal• Your logo on the “Thank you to our sponsors” display at every CADE
Technical Luncheon• Authorized use of the CADE logo on your website and in marketing
materials
Connect with Canada’s Drilling IndustryBecome a CADE Sponsor
2012 SPONSORSHIP PACKAGES ARE NOW AVAILABLE
Contact Scott H. Payne at 403-400-4032 or by email [email protected]
Support CADE by sponsoring our technical lunches, our website and the Well Construction Journal.
Thank You to Our SponsorsThe support of CADE sponsors plays an integral part in our association’s success.
