october 2009 volume 10, number 5

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www.oilgas.netOctober 2009 Volume 10, Number 5

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October 2009 Volume 10, Number 5

Contents

Photos courtesy of Sanjel

Oil & Gas Network, October 2009 3

5 The Mega-Merger Hangover

6 70% of Canadian energy companies expect oil prices to increase over the next year: PwC survey

7 Public Survey Yields Surprising Results

7 Latest Chinese Purchase Big News for Oilsands

8 SAIT welcomes first students to new energy diploma program

9-11 No Surprise – Oil Industry Profits Down from 2008 Record Levels

12 The Canadian Association of Petroleum Producers (CAPP) released its 2009 crude oil production forecastand markets and pipelines outlook

14 IHS CERA: World Oil Demand Set to Resume Growth; Return to Pre-recession Levels by 2012

15 One-time field data capture: now a reality

16 EnCana proceeds with plan to split into two distinct and independent energy companies

Small Business Week 2009;

18 Experts reveal why this recession is a great time to go green

18 Small Business Week

18 Young Entrepreneur Awards

21 Colfax Unveils Alternative Fluid-Handling Strategy for Crude Oil Transport

21 Calgary technology companies ensure lone worker safety from the convenience store to the oil field

21 Nexen helps build the next generation classroom

23 PFM Manufacturing, Inc. Build one of The Most Versatile, Most Extreme, Heavy Duty Remote Access Vehicles for Oil and Gas Exploration

24 The New RTV1100 - Factory Cab Utility Vehicle

25 New Prinoth Go-Tract™ 4500 Carrier

25 The new RTV1140 is the newest released vehicle form Kubota

26 Don’t be too quick to sign those pink slips

26 Oil Rigs Delivered in Record Time

27 Historical drilling records now digitized and online

27 Wood Group Offers High-Pressure, High-Temperature Well Cement Bond Logging Service

28 Laid-off professionals get help transitioning their careers

29 BGAN Demonstration

30 Moyno® Progressing Cavity Pumps Offer Dependable Performance & Low

30 Global Heat Transfer Ltd. announces a breakthrough in lightweight cooling systems


Coll’s Corn

er

Although the Petro-Canada name will live on at its handsomely branded retail outlets,

the company that many loved to hate (at least in its infancy) is gone, absorbed by

Suncor, a company with an even longer history and, as you’d expect, a much better

historical track record. With a market cap hovering around $50 billion, the new Suncor is

about 20% bigger than EnCana, the monster created in 2002 by the so-called “merger of

equals” — AEC and PanCanadian.

But if anyone at Suncor is feeling particularly satisfied about being the undisputed

domestic energy lynchpin, they should be aware that from the EnCana example that their

status as number-one may well be short-lived. And the taste of champagne can leave a wicked

hangover.

The powers that be will pretend everything can be neatly wrapped up in a bow by a cer-

tain date, but the turmoil created within a newly merged enterprise so large and complex is

ongoing. When the dust finally settles, if indeed it does, what you wind up with is very

different from what you thought you were going to have.

How we’d end up in this business? Why did we sell that? Who hired that guy?

Just ask EnCana, which announced in May 2008 that it planned to divide itself into two

separate companies; after postponing the deal a few months later in the wake of the global

credit crunch, it was put back on the table in September 2009.

To think that such a plan would emerge within just a few years would have been pre-

posterous at the time of EnCana’s creation – when it was claimed with a great deal of flag-

waving fanfare that a certain “critical mass” was necessary, if not for survival alone, then to

offer investors improved liquidity, access to capital at lower costs and higher share prices

relative to cash flow.

Suncor is using essentially these same arguments today, ironically to absorb the com-

pany that virtually patented the flag-waving takeover in the early 80s.

But it’s apparent now that “bigger is better” no longer works for EnCana.

And so the question has to be asked: if the same market that was rewarding size above

all else just a few years ago has now discovered that “more value” can be created by split-

ting EnCana along distinct business lines, why is the Suncor-Petro-Canada merger hailed

as such a wonderful thing? Won’t that same fate ultimately befall Suncor once all its post-

merger asset shuffling is finally concluded?

There are differences in the two deals beyond the mere passage of time but, if anything,

the Suncor deal is way more complicated than EnCana’s ever was, given the merging of

downstream as well as upstream assets. It’s easy to foresee Suncor eventually splitting at

least the upstream and downstream and perhaps bringing the weaker, regional Sunoco brand

under the national Petro-Canada name and marketing umbrella.

That leaves a final question that can also be asked of the EnCana split – at inception, would

the production and net asset value of the new entity be that much greater than what could

have been generated had the businesses that went into its creation been left to grow undis-

turbed?

I have a sneaking suspicion the numbers might be closer than one would think. You can

scoff at the notion and toss out a bunch of actual and projected numbers to make your case,

but the reality is that no one will ever truly know. Precious little speculative comparison ever

sees the light of day.

There is also a huge body of data out there that would make anyone question the ulti-

mate value of these large deals, financially, operationally and socially. The latter is often over-

looked, yet many a study cites social/cultural/communication issues as the number-one cause

of failed mergers. It’s one thing to say you’re going to integrate two cultures and quite an-

other to actually achieve the integration. (Suncor has its hands full with Petro-Canada –

they’re very different animals).

In the end I can’t help but wonder if, in reality, the only people who ultimately benefit

from these big deals are those who finance and broker them, those who are in a position to

determine whether they proceed or not and can carefully orchestrate the timing, and the

armies of lawyers, forensic accountants and others who back them up and thereby garner a

hefty commission or dubious promotion for their loyalty to the cause and a few late evenings

on computer.

I’d compare it all to the formation of the so-called rock and roll supergroups of the late

60s and 70s – the hype outweighed the substance and the music itself, after the initial shine

wore off, was flat and unmemorable.

The Mega-Merger HangoverWhen the dust finally settles, if indeed it does, what you wind up with looks verydifferent from what you thought you were going to have

6 Oil & Gas Network, October 2009

While 2008 was a year of two extremes, with oil andgas producers experiencing boom and bust all with-in 12 months and many responding by cutting their

capital spending plans for 2009 anywhere from 25% - 35%, theystill continue to plan for the future according to the CanadianEnergy Survey released today by PricewaterhouseCoopers (PwC).

– 70% of respondents expect prices to increase somewhatover the next year and 11% believe prices will increase sub-stantially. Approximately 16% said crude oil prices will stayabout the same in the year ahead.

– The majority of respondents said oil prices will have toincrease to at least US$70-$80 before they would consider in-creasing conventional drilling programs, although an almostequal number said prices will have to head north of US$80 be-fore spending more on conventional drilling.

– Close to 57% of respondents said the ability to adapt tochange is a critical requirement for their long-term sustain-ability; while 68% of respondents said attracting and retainingtop talent was viewed as critical for their long-term growth.Technological innovation was seen by 40% of respondents ascritical for ensuring sustainable growth.

– Respondents also said they expect to increase their in-vestment into research and development (R&D) over the nexttwo years, with 23% indicating they plan to boost R&D spend-ing in 2011 versus only 4% this year and 22% in 2010.

– 72% of gas producers believe prices should recover with-in the next two years to a level that will lead them to increasetheir drilling programs whereas 28% believed it might takethree years or longer for natural gas prices to recover to levelsthat will result in more wells being spudded.

“The turbulent swing in energy prices from all-time highsin the summer of 2008 to four-year lows in December is a pow-erful reminder that the booms in commodities can quicklyevaporate,” says John Williamson, Partner and Canadian EnergyLeader at PwC. “At the mid-way mark of 2009, while gas pricescontinue to languish, many believe natural gas fundamentalspoint to a recovery in 2010, which will lead to improveddrilling activity levels. Crude oil prices have already rebound-ed from year-end 2008 levels.”

Companies across the oilpatch are adopting a numberof measures to remain profitable, including capital budgetcutbacks, moving operations to other jurisdictions withlower royalties, as well as salary freezes or rollbacks, andlayoffs.

While industry has cut staff, many energy companies pre-fer not to lay off employees because so much time has beenspent training them. In the survey, attracting and retaining toptalent was viewed by 68% of respondents as critical for theirlong-term growth. This driver was seen by respondents as themost critical factor that will influence future growth.

Financing The financial crisis has reduced access to both debt and

equity. As a result, 39% of survey respondents expect to rely oncash flow to support their business over the next year, while26% identified debt and 14% equity as their primary sources offinancing.

Two-thirds of respondents said access to capital and creditis critical to sustain their growth over the long-term. But respondents also feel that debt will likely be the most difficultsource of financing to obtain in the short-term (over the nextthree years), with 63% saying it will be somewhat challengingand 26% believing it will be very challenging. Close to 54% ofrespondents also believe it will be somewhat challenging to se-cure equity financing in the next three years, with 33% sayingit will be very challenging.

Operating Costs Fully 57% of survey respondents said they anticipate their

overall operating costs to decrease over the next year, with de-clining labour and material costs helping the bottom line. Someoil producers now say that labour and material costs have low-ered so much that projects may be economical at lower prices.

In addition, 76% of respondents said their land acquisitioncosts would stay the same or decrease over the coming year.

Crude oil and natural gas prices will have the most significant impact on the energy business in the next three years

Continues on page 11

70% of Canadian energy companies expect oil prices to increase over the next year: PwC survey


Public Survey YieldsSurprising ResultsRob Gray, Manager, Communications & Member Relations

Despite what media and naysayers may have youbelieve, communities where oil and gas activityis most active actually view the petroleum

industry in a surprisingly more favourable light com-pared to the national average. However, community res-idents still point to some key issues where industry canimprove its performance.

Findings of a recent Ipsos-Reid public opinion survey,conducted on behalf of PSAC, suggest that communitieswithin the WCSB where oil and gas activity is takingplace – as in those communities that actually live withindustry activity on a regular, if not daily basis –don’tthink the industry is all that bad. This is in stark com-parison to what industry and the public were led to believe during the royalty review process in 2007/2008,and varies widely from similar surveys that have takena more national perspective.

The survey was undertaken as a strategy for indus-try to listen to the public, hear and understand theirconcerns, and ultimately be able to address those con-cerns, in an effort to protect industry’s social license tooperate.

Against a backdrop of typically negative media cov-erage and seemingly negative public attitudes towardsindustry, the results of the survey were pleasantly sur-prising with 60 per cent of respondents having afavourable opinion of the industry, while another 20 percent of people are indifferent. That means only two in10 people hold a negative view of the industry, which,for any industry, is a pretty good number.

Eight out of 10 respondents gave industry top ratingsfor providing jobs and supporting the local economy.And, nearly three quarters of respondents noted indus-try’s community participation - such as donations, vol-unteering, and sponsorships – as clear positives.Respondents also gave industry relatively positive marksfor treating residents and property with respect.

However, before becoming too self-congratulatory, it is important to note that the survey also highlightedsome very specific areas for improvement. One of theprevailing themes of the survey is that industry is fallingflat when it comes to communication. The benchmarksfor listening and responding to community concerns,and just communicating in general about activity are allbelow where they should be.

The survey shows that 50 per cent of people feel industry needs to do a better job on this front. Almosttwo-thirds of those surveyed are asking for more infor-mation from industry, which according to Ipsos-Reid isa startlingly high number compared to other industries.

Some of the specific concerns noted by residents relate to driving habits, minimizing mess, reducing noise,and protecting public health and safety. The number oneconcern, which is shared by a majority of respondents,relates to protecting the environment.

The detailed findings of the survey provide a lot ofammunition, both in support of industry, but also in sup-port of some improvements that need to be made. It iscritical for issues to address these issues now, in advanceof the next upturn, so that industry can remain in goodpublic favour. This is certainly something that PSAC willcontinue working on, on behalf of Members, and issomething that other industry stakeholders may wantconsider as well.

Since China’s need for energy is growing faster than any othercountry, it may not be too great a surprise that a government-controlled Chinese company has purchased a large stake in

the Alberta oilsands.In August, Athabasca Oil Sands Corp. (AOSC) entered into an

agreement with PetroChina International Investment Co., allowingit to have a 60 per cent working interest in AOSC’s MacKay Riverand Dover oilsands projects for $1.9 billion. The agreement alsoprovides for certain financing arrangements for AOSC.

“This deal shows that the biggest energy company in the worldhas chosen Athabasca as their partner,” said Sveinung Svarte,Athabasca Oil Sands president and chief executive. “They clearlytold us that’s because they like our assets the best and obviously,they (oilsands) are the crude oil story.”

The projects are located in the centre of the Athabasca area innortheastern Alberta and have been assessed by an independentthird party to contain roughly five billion barrels of bitumen. Thedeal basically allows for three billion of those barrels to be sold toPetroChina, said Bill Gallacher, chairman of the Athabasca Oil Sands.

Oilsands projects require a huge investment, and now “we havea fully funded business model to go forward,” he said. "Oilsandsprojects are very capital-intensive long-term investments and dif-ficult to fully finance in the traditional equity market.

“AOSC therefore decided to look for joint venture partners, andthese strategic joint venture arrangements with PetroChina, one ofthe world's largest energy companies, can ensure that the MacKayRiver and Dover projects will be developed in timely manner,which is excellent news for Alberta and the rest of Canada.”

The deal is expected to close Oct. 31, Gallacher announced ina conference call. It is pending government approval, but AOSC executives say they don't foresee any obstacles.

Some of them recently visited several oil facilities in north-eastern China where PetroChina operates a number of heavy oilprojects using sophisticated technologies, including various SAGDprocesses and firefloods.

“I was pleasantly surprised at the operations we’ve seen. It wasvery, very impressive,” Gallacher said.

As joint venture partners, AOSC and PetroChina plan to usecommon in-situ methods to develop the oilsands projects. AOSChas filed regulatory applications for approval of two pilot projectswithin the project areas with the Alberta Energy ResourcesConservation Board.

The Calgary-based company intends to file a regulatory appli-cation for the first 35,000 bbl/d phase of the MacKay River com-mercial project at the end of this year.

The MacKay River project is about 60 kilometres west of FortMacKay, while the Dover project is about 35 kilometres northwestof Fort McMurray.

“We will remain as operators for the time being of the two assets,”Svarte said.

Commercial oil could flow by 2014, with subsequent phasesreaching 150,000 bbl/d of production.

PetroChina is not the only Chinese firm to show interest innorthern Alberta's oil reserves. Sinopec Corp. has a 50 per centstake in the Northern Lights project 100 kilometres northeast ofFort McMurray.

A Scotiabank commodity report says that Chinese oil con-sumption has increased 3.5 per cent this year and in July was at8.1 million barrels per day.

Latest Chinese Purchase Big Newsfor Oilsands


The first students enrolled in SAIT Polytechnic’s new EnergyAsset Management (EAM) program were celebrated at a spe-cial launch event for industry partners and students.

“We are very pleased to welcome the first group of students tothe Energy Asset Management program,” said Mary MacDonald, Deanof SAIT’s MacPhail School of Energy. “Over the past two years wehave worked together with industry to develop a program that will

give students the training required to succeed in this essential field.”The first known program of its kind in North America, EAM was

created in response to the Alberta oil and gas industry’s growingdemand for job-ready employees in the field of energy asset man-agement. The EAM program will focus on the management and ad-ministration of regulatory, financial and contractual compliancepertaining to energy assets.

“The demographics in this industry show there willbe a tremendous shortfall of qualified workers over thenext 10 years,” said Melinda Scherger, Chair of theCentre for Energy Asset Management Studies Board ofDirectors. “Future SAIT graduates of the Energy AssetManagement program will be extremely valuable to theenergy industry.”

Interest in the two-year diploma program was sohigh that SAIT added a second class for the current fallsemester. Sixty-four students are enrolled.

The EAM program was developed in partnershipwith the Centre for Energy Asset Management Studies.Graduates will find career opportunities in areas suchas land contracts, operations accounting and well assetmanagement, and with energy service companies andgovernments.

SAIT welcomes first students to new energy diploma programSAIT Polytechnic’sPresident andCEO, Irene Lewis

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www.oilgas.netAugust 2009 Volume 10, Number 4


Current EnvironmentThe Canadian oil industry has always been a boom or bust

industry, and there is no better illustration than the events ofthe past 12 months. The West Texas Intermediate (WTI) priceof crude has been on a roller coaster that pushed prices aboveUS$145 in July 2008, only to see them collapse to US$35 justsix months later. The catalyst for these sharp movements wasthe global recession that was brought on by the collapse ofthe American housing market and the credit crisis that fol-lowed. The Conference Board projects real GDP in the UnitedStates will contract 2.5 per cent this year. The U.S. economy accounts for a huge share of global consumption, and as theU.S. consumes less, industrial and commercial activities aroundthe world are negatively affected.

Determining the near-term prospects for oil prices remainsdifficult given the conflicting signals in the market. The rapiddecline in global demand that began last winter has only nowstarted to show up in terms of higher inventory levels, puttingdownward pressure on oil prices. On the other hand, OPEChas cut production several times in the past year, resulting inless supply to the market. Geopolitical tensions remain a con-cern—the rebuilding of Iraq has yet to yield much in the wayof increased capacity or production there, and political dissentcontinues to hamper production in Nigeria. The purchase of oilfutures for non-commercial use has begun again, introducing adisconnect between fundamentals and the prevailing price.

After considering these factors, we estimate that the WTIprice of crude will average US$69.88 for the remainder of theyear. A weak production profile will also weigh on the near-termperformance of the industry. Shortages of labour and materialshave delayed completion of several projects. Despite the bil-lions of investment dollars sunk into the industry over the pastdecade, production still declined in 2008 and will advance onlymarginally this year. The conventional industry is being hit par-ticularly hard this year, as drilling activity has declined in recordfashion. But capacity for expansion of non-conventional pro-duction is enormous; and as prices rise over the forecast, theeconomics of these megaprojects will improve, ensuring im-pressive gains over the medium term. Indeed, non-conventionalproduction will be the dominant oil type produced going for-ward, eventually reaching 2.4 mmbd by 2013.

Relative to last year’s record performance, revenuegrowth will suffer in 2009. Even though prices have dou-bled since the start of the year, they remain more than50 per cent below their 2008 record highs. As a result,revenues will grow by just 6.3 per cent. Fortunately,growth in the industry’s costs has also slowed.

Despite this deceleration, costs remain high—a resultof the massive increases seen near the end of 2008. Profitswill suffer as a result, falling 24.5 per cent to $11.6 billion.

Economic growth is predicted to remain weak throughthe end of the year, but stimulus packages around theworld will lead to improved performance starting in 2010.Accordingly, oil prices will resume their long-term upwardtrend, eventually reaching US$103 by 2013. Surging rev-enue growth related to higher prices will result in profitstopping $32 billion by the end of the forecast.

The industry will also be a source of job creation forCanada, adding 17,800 jobs over the forecast.

Macroeconomic DriversIndustrial and consumer demand for oil products

around the globe have fallen considerably as the reces-sion remains firmly entrenched in much of the devel-oped world. This has led to a rapid building of stockpiles,pushing prices to very low levels by recent standards.Global stimulus packages should help to lift economic activity as we move through the second half of 2009,boosting oil demand and prompting prices to resumetheir long-term upward trend. The WTI price is expectedto average $103.38 in 2013.

Supply and DemandSlower economic activity around the world has dras-

tically affected the supply demand balance for oil.

According to the Inter-national Energy Agency (IEA),global demand for crude willtotal 83.3 mmbd this year,down 2.5 mmbd from 2008.(See Chart 1.) Demand hasbeen hardest hit in OECDcountries, where economicgrowth has been hurt themost. (See Chart 2.) These de-veloped countries will seeconsumption fall 2.3 mmbd.On the other hand, non-OECD countries have beenable to sustain consumptionlevels near where they werea year ago, as many develop-ing economies have beenable to sidestep the reces-sion. As such, non-OECD de-mand will contract just200,000 b/d, or about 0.5 percent. Of the major developingregions, only countries in theformer Soviet Union will ac-tually see demand fall, whileChina, the Middle East, andLatin America will all pullthrough with demand un-scathed. The emerging mid-dle class in these countriesensures that energy-hungryluxury goods continue to bein high demand.

The recession will also impact global supply. Low priceshave caused companies to slash investment intentions. Worse,even oil plays that are profitable at current prices are findingit difficult to acquire the necessary financing to move forward.The IEA estimates that $170 billion in global investment hasbeen deferred or cancelled as a result of the recession. Non-OPEC production is therefore projected to fall 100,000 b/d to

50.5 mmbd, leaving 32.8 mmbd for OPEC to supply if balanceis to be achieved in the global market. OPEC produced 33.4mmbd in May, sufficient to keep the market in equilibrium, andthe IEA estimates that OPEC has more than 6 mmbd of sparecapacity should demand accelerate more quickly than currentforecasts. (See Chart 3.)

Oil PriceEven though there appears to be sufficient supply to sat-

isfy the forecast weak demand, the price of oil has risen sig-nificantly. The benchmark price rose 65 per cent betweenFebruary and July to hover around the US$70 level. Clearly adisconnect exists between fundamentals and current price lev-els, and one explanation offered is that a future supply crunchis inevitable as demand will continue its upward trend. We thinkthese concerns are premature. According to BP’s StatisticalReview of World Energy, the global reserves to-production ratiostands at 42 years, which has been relatively constant over thepast several years as energy companies continue to replaceevery barrel of oil produced with oil from new reserves mov-ing into the commercial category. That suggests medium-termsupply will not exert undue upward pressure on prices.

In the summer of 2008, at the height of the oil price spike,Saudi Arabia announced unilateral production increases—firstin May, and then again in June. Markets were unconvinced ofthe Saudis’ ability to get the extra oil onto the market, howev-er, and prices increased following the announcements.

Because of the usual lag time between when oil leaves thewellhead and when it reaches the storage facility, these pro-duction increases did not show up in higher inventories untillate 2008—roughly the same time that global demand col-lapsed. Prices crashed, prompting OPEC into action once again.This time the cartel cut production, hoping to provide a floorfor prices.

However, crumbling demand ensured that it was “too little,too late” to slow the decline that persisted into the first quar-ter of 2009. As a result, global stock levels rose steadily over thefirst half of the year. By April, inventory levels in OECD coun-tries were 208 million barrels higher than 12 months earlier and6 per cent above their five-year average.

While market fundamentals are indeed the main driver

No Surprise – Oil Industry Profits Down from 2008 Record Levels


behind price determination, the recent increase in crude prices isdifficult to explain based on fundamental factors alone, even whileOPEC production remains low by recent standards and gasolinemarkets have tightened. Although supply and demand are the keydrivers, it is foolish in the current market to assume they are theonly drivers. According to the IEA’s June Oil Market Report:

Prospects for equity markets and the global economy, backedup by exchange rate fluctuations, expectations about future oil mar-ket tightness and, by inference, a shift of money into or out of thefutures market can all influence short-term prices.

There is little doubt that the financial markets have played a rolein the recent run-up in prices. Indeed, the shift in NYMEX non-com-mercial positions— from a net short position at the beginning ofMay to a net long position a month later—provides clear evidenceof the financial markets’ role in this most recent increase.1 At least in the near term, oil prices will likely be determined by a mix of

fundamental factors and the whimsof the financial markets.

Still, the recent narrowing ofthe contango (the difference be-tween the spot price and the high-er future price) would suggest thatoil prices are not expected to takeoff in the next 12 months—and ad-equate supply to satisfy weak de-mand should help to keep theappreciation of oil prices slowover the medium term.

As such, the Conference Board estimates that the WTI price ofcrude will average just US$61.74 for 2009 as a whole (thanks to thelow prices at the start of the year), but will increase steadily through-out 2010 to reach US$76.89 by year’s end. (See Chart 4.)

The deferral of billions of investment dollarswill affect Canadian production in the mediumterm, particularly on the conventional side of theindustry, as drilling will drop in record fashion.Low prices, and tight credit markets will ensurethat some non-conventional production is pushedback. Nevertheless, the remaining potential of theoil sands provides security in the long term for theindustry, and will outweigh the expected losses inthe conventional industry. Total crude outputshould reach 3.5 mmbd in 2013. Export capacityis also expected to rise significantly over the fore-cast, allowing Canadian companies to ship incre-mental production to the United States.

Non-Conventional ProductionThe events of the past 12 months have lowered

expectations for future oil production. Lower oilprices are one reason for lower forecasts, but theslowdown in the global economy has also curtailedfuture prospects for oil demand and lowered cur-rent investment intentions. Nevertheless, long-termopportunities remain bright. According to Alberta’sEnergy Resources Conservation Board (ERCB), remaining established reserves of bitumen resourcesstand at 170 billion barrels, with only 6.4 billion bar-rels having already been exploited. Indeed, the areasthat are currently under development alone repre-sent 27 billion barrels. Non-conventional productiondropped in 2008, as the three main mining compa-nies all experienced a variety of technical issues thatrestrained production. Syncrude saw two unplannedturnarounds on coker units lower production by 8per cent; Suncor’s planned maintenance pushed itsproduction 7 per cent lower; and the Albian Sandsproject underwent changes to its tailings plan thatled to unplanned maintenance and lower grade ore,yielding a decrease of 10 per cent.

With these issues resolved, and the fact that min-ing at CNRL’s Horizon project began in September2008, non-conventional production will rebound in2009. Barring any further unplanned maintenance-related delays or stoppages, bitumen and syntheticcrude production will combine to increase 9.2 percent this year. Going forward, the profile for non-conventional oil in Canada remains bright. (SeeChart 5.) The ERCB estimates that as much as 1.6mmbd of additional capacity from bitumen mineswill be brought online sometime in the next decade.However, this future production is rife with un-certainty regarding timing and project scope, andit depends heavily on current economic condi-tions, expectations for oil prices, cost structuresin Western Provinces, construction delays, andthe availability of refining capacity. Consideringthese factors, theConference Boardestimates thatnon-conventionalproduction wil laverage annualgains of 15.6 percent over 2010 to2013, eventuallyreaching 2.4 mmbdby the end of 2013.

Conventional Production: Slowing ProductivityHurts Production As bright as the outlook is for non-conventional production, the outlook is dark for theconventional industry. Conventional crude produc-tion already faced a long and steady decline, due tothe maturation of the Western CanadianSedimentary Basin. Then, as oil prices crashed at thebeginning of the year, drilling came to a virtual halt.According to the Canadian Association of Oilwell


Drilling Contractors, rig utilization rates in WesternCanada stood at just 19 per cent in July, compared with a44 per cent utilization rate a year earlier when oil pricespeaked.

Drilling will not pick up this year. Peak season has already passed, and the prospects for the remainingmonths of the year are bleak. The Petroleum ServicesAssociation of Canada estimates that wells drilled will decline to 9,500 this year—a decrease of nearly 45 percent. This estimate includes natural gas as well as the oilextraction industries, but it highlights the general slow-down in activity in the Western provinces.

Helping to maintain what little activity there is,drillings costs are lower— steel prices have come downsignificantly and the cost of fuel is lower than it was atthis time last year. The Alberta government has also amend-ed its royalty program for the fifth time in two years. Theinitiative extends by one year the measures put in placelast March, with intent to spur conventional activity. Thenew well incentive program offers a maximum five percent royalty rate for the first year of production on newoil (and gas) wells. The program also offers a credit of$200 per metre drilled, applied on a sliding scale basedon 2008 production levels. It is not clear what the net effect of this program will be in the long term, as the con-fusion created by ever-changing royalty levels may detractfrom any short-term benefits generated by the potentialfor increased drilling.

Finally, the averageproductivity of conven-tional oil wells in Canadais falling. (See Chart 6.)Having already exploitedthe best pools, compa-nies now turn to margin-al discoveries. This raisesthe cost per barrel of oilproduced—and evenwith enhanced recoverytechniques, some oil willbe left in the ground because it won’t be profitable to extract. The average productivity of an oil well at the endof 2008 in Western Canada had declined 30 per cent sincethe beginning of the decade. Over that period, produc-tivity declined 34 per cent in Alberta and 14.4 per centin Saskatchewan—the provinces that are home to thebulk of Canada’s oil wells.

Because drilling will fare so poorly this year, conven-tional Western production is predicted to drop 5.4 percent. Going forward, production will continue to declinebut at a slower pace as drilling is expected to reboundsomewhat starting next year in response to higher pricesand lower drilling costs. Production will decline 2.2 percent on average between 2010 and 2013.

Offshore production is also expected to decline overthe medium term. However, a number of potential newprojects and satellites to current fields exist but remain invarious stages of regulatory development. The planned ex-pansion of the Hibernia field faces some regulatory diffi-culty, but is assumed to begin producing in 2012, providinga boost to production at that field if approved. Husky andthe provincial government finally worked out an arrange-ment on North Amethyst (a satellite of White Rose), andfirst oil is projected for late 2009 or early 2010.6 WhiteRose South and West White Rose also have proven depositsbut, given the current environment, are unlikely to comeonline in the medium term. Offshore production will drop15.7 per cent this year and then average declines of 4.3per cent annually until the end of the forecast.

ExportsTrade is a vital part of the oil extraction industry.

Domestic demand in Canada will be particularly weak thisyear and next thanks to a weaker economy (see Chart 7),but demand will pick up near the end of the forecast asdomestic refining capacity increases. Crude oil is feedstockfor refineries, and companies prefer to export refined

petroleum products (ratherthan crude oil) so as to takeadvantage of the higher valueadded. Still, refinery capacityis insufficient, and much ofthe additional supply willflow outside Canada to theUnited States.

Canada is the singlelargest supplier of importedoil to the United States, ac-counting for nearly 20 percent of total imports last yearat approximately 2.4 mmbd, ashare that has been steadilyrising over the past 20 years.(See Chart 8.) Given the U.S.’sdesire to move away fromMiddle Eastern oil, we expectCanadian oil sands to play anincreasingly important roleon the world stage. Virtuallyall of Canada’s oil exportshead to the U.S. via five majorpipelines that provide a totalof about 2.7 mmbd in exportcapacity. With 1.9 mmbd of capacity, the Enbridgepipeline is the world’s largestcrude oil and products pipeline, servicing Eastern Canada andthe U.S. east coast. Canada’s other pipelines all end in theRocky Mountains or the Midwest. Still, Canada will require additional export capacity to accommodate the large increasesin production. To that end, plans call for nine major exportpipelines to begin operating before 2014, with capacity totalling nearly 3 mmbd.

TransCanada’s Keystone pipeline alone will have over 1 mmbd of capacity upon completion of the expansion set for2012 or 2013, with the oil destined for the U.S. Midwest andGulf Coast. So while exports will decline this year (with mostof the drop coming in the first half the year), they will thenexpand steadily—averaging 7.8 annual growth from 2010 tothe end of the medium term—as demand in the U.S. stabilizes.(See Chart 9.)

In the first half of 2009, producers paid the Alberta governmentan average of $137 per hectare for petroleum and natural gasrights versus $307 per hectare in the first six months of last year.

Climate Change Canada’s climate change plan aims to reduce the country's

total greenhouse gas (GHG) emissions by 20% from 2006 levelsby 2020 -- and by 60-70% by 2050. Survey respondents indicat-ed they are taking a number of steps to respond to the issue ofclimate change, and, within the next 12 months, 40% will makestrategic investments to lower GHG emissions, 35% will adoptmore rigorous risk management processes, 34% plan to optimizetheir supply chain management and 32% anticipate deployingnew technologies

“All Canadian oil and gas producers -- from small juniors totrusts to large integrated companies -- are affected by a list ofgrowing concerns related to the economic downturn: volatileand weakened commodity prices, input costs misaligned withcurrent prices, changing royalty situations and the disruption ofcapital markets,” says Stephen Marsters, Editorial Director atJuneWarren-Nickle’s Energy Group. “Respondents to theCanadian Energy Survey provided detail on the state of the in-dustry, their own set of challenges as well as key drivers affect-ing growth and we felt it was important to provide thisforward-looking view of the industry.”

Methodology and Demographics The 2009 Canadian Energy Survey contains results from an

online survey, conducted by PricewaterhouseCoopers andJuneWarren-Nickle’s Energy Group during the 22-day periodfrom May 25 to June 15, 2009, to better understand issues cur-rently impacting the industry. Close to 85% of the 140 respon-dents fill senior roles within the energy sector (49% in aleadership role; 35% in a managerial role), with the balance com-prising employees and consultants.

The majority of respondents work for exploration and pro-duction (E&P) companies that produce a mix of natural gas andcrude oil. Just over 50% of respondents reported their company’sannual revenues at more than $500 million, with about 17% list-ing revenues at $100 million to $500 million per year, and closeto 16% said annual revenues were $10 million to $100 million.About 15% of respondents said revenues were $5 million or lessper year.

Continues from page 6


The Canadian Association of Petroleum Producers (CAPP) released its2009 crude oil production forecast and markets and pipelines outlook

conservative outlook in the Operating & InConstruction Case includes only projectscurrently in operation or under construc-tion. This case represents a minimum growthoutlook. Both cases are presented in thechart below:

Low oil prices, receding short-term demand as a result of the global economicdownturn, and constraints in securing investment capital are some of the factorscontributing to the reduced pace of devel-opment reflected in the Growth Case. In theOperating & In Construction Case, produc-tion is forecast to rise to 3.0 million barrelsper day (b/d) by 2015 and then decline grad-ually through 2025, due to a reduction inconventional production. This reduction ismoderated by increased light crude oil production from the Bakken field inSaskatchewan over the near-term, and theHebron heavy oil project in Atlantic Canada,expected to come on stream by 2017.

For the oil sands component of Canada’soil supply, the share of supply coming fromin situ projects increases slightly over theforecast period and the proportion of totaloil sands that is upgraded remains relativelyunchanged over the forecast period.

“In terms of pipeline capacity to meetmarket expectations, this year’s outlook in-dicates that the significant pipeline devel-opment now underway will amply connectforecasted production to long-term demandin the North American energy market,”Stringham said.A full copy of the 2009 forecast is availableat www.capp.ca.

Earlier this year CAPP conducted a survey of producers to determine planned production of oil through 2025. CAPP usedthis data along with other inputs to prepare its annual forecast,

which this year provides both a Growth Case and an Operating & InConstruction Case.

“CAPP’s Production Forecast indicates that even with delays due tocurrent economic circumstances, oil sands production is expected to

grow, although the pace of development has slowed,” said GregStringham, CAPP’s

Vice-President, Markets and Oil Sands. “Producers expect continueddemand for the security of supply that crude oil from Canada providesto the North American energy market.”

The Growth Case represents expected production and assumesthe current investment climate will improve over time. The more

www.oilgas.net

--------------------------------------------------------------------------------Growth Case 2.7 3.3 4.0 4.2--------------------------------------------------------------------------------Operating & In Construction 2.7 3.0 3.0 2.8--------------------------------------------------------------------------------Canadian Oil Sands Production (million barrels/day)--------------------------------------------------------------------------------Growth Case 1.2 2.2 2.9 3.3--------------------------------------------------------------------------------Operating & In Construction 1.2 1.9 2.0 2.0--------------------------------------------------------------------------------

2008 2015 2020 2025

Total Canadian Crude Oil Production (million barrels/day) - including oil sands

OIL & GAS NETWORKSuite 300, 840 6th Ave SW

Calgary AB T2P 3E5

Phone: 403 503 0460


World oil demand is set togrow next year for the firsttime since 2007 and return

to pre-recession levels by 2012, according to IHS Cambridge EnergyResearch Associates (IHS CERA) in itsquarterly World Oil Watch report. Therebound would mark a turnaroundfrom the largest drop in global oil demand since the oil crisis of theearly 1980s.

IHS CERA expects oil demandgrowth to resume by 900,000 barrelsper day (bd) in 2010 and return to its2007 high of 86.5 million barrels perday (mbd) by 2012—a five year turn-around.

“There are a lot of questions as towhether things will be ‘different thistime’ in terms of the recovery of oildemand,” said IHS CERA chairmanand Pulitzer Prize-winning author ofThe Prize, Daniel Yergin. “While theanswer is that it will be shorter, it isstill going to take a substantialamount of time.”

Oil demand dropped by 2.8 mbdfrom its high point of 86.5 mbd in2007 to 83.8 mbd in 2009. The lasttime that the world experienced sucha severe decline in oil consumptionwas in the early 1980s and it tooknine years for demand to return to the1979 pre-recession high. A five year turnaround—while still a substantial amount of time—wouldbe swift in comparison.

The key differences between the current recovery and that of the 1980s are demand fromemerging markets and fewer options for substituting fuels on a global scale, said IHS CERA glob-al oil managing director, Jim Burkhard.

“In the 1980’s the largest area of the demand decline came from power generation, where

oil was replaced by readilyavailable substitutes like coal,gas or nuclear,” Mr. Burkhardsaid. “Today, global demandgrowth is coming from thetransportation sector in emerg-ing markets where there arefewer large-scale options forswitching fuels.”

Overall, emerging marketswill drive the recovery of oildemand. IHS CERA expects oildemand to increase from 83.8mbd in 2009 to 89.1 mbd in2014. 83 percent (4.4 mbd)will come from non-OECDcountries. China alone is expected to account for 1.6mbd of cumulative growth. Just900,000 bpd of growth is ex-pected to come from OECDcountries.

“This near-stagnation of oil demand growth in the industrial countries of the OECDhighlights several structuralchanges,” Burkhard said.“Decreasing oil intensity associ-ated with economic growth,higher fuel efficiency, the dis-placement of conventional oilwith renewable energy sourcesand a slower pace of growth in

transportation fuel consumption – all these point to a leveling off of demand in the industrial world.”While the trajectory of oil demand seems certain, Burkhard pointed out that, as always,

future events large and small could alter the course of demand.“While our base case suggests that 2012 will be the year that global oil demand recovers to

2007 levels, we continue to research the alternative scenarios that could alter the balance in theoil market,” said Burkhard.

IHS CERA: World Oil Demand Set to Resume Growth; Return to Pre-recession Levels by 2012Signs point to recovery that will be quicker than in the early 1980s due to strength of emerging markets and lack of options to substitute fuels


One-time field data capture: now a realityExploring the benefits of effective data capture for oil andgas companies and the contractors that serve themBy Marty Hilsenteger, Singletouch Corp.

For those working in the field operations of the oil and gas sector, the concept of entering data just once hasbeen a much desired but generally unachievable objective. All too often, capturing the data from the field isa haphazard, disorganized and frequently duplicated process, and many executives and field workers alike

despair at the inefficiencies and inaccuracies that stem from these problems. Traditionally, data has been captured on a clipboard, log book or the inside of a pack of smokes. Sometimes,

information can be recorded and then re-recorded as often as five times before it is finally entered into the correctsystems and properly processed. Administrative staff often have to be specifically hired to direct this flood of datafrom the field, and to re-enter it in the back office. Errors are inevitable as the same information is entered and re-entered, and delays are unavoidable as paper-based records get lost or simply held up on their way between thefield operations and headquarters.

The key factors for any field-based company are to maximize production and minimize downtime. What is required is a way to address those needs through effective data collection, analysis and integration with a compa-ny’s existing analysis tools. And today, thanks to advances in software and mobile computing, there are now optionsfor oil and gas companies that want to improve the accuracy with which they capture data in the field, whether itbe at a gas well, plant, oil battery, pump jack or lease. But how best to roll out such new technologies?

What should come first when building an IT strategy for a field-based organization, the field or the office? Giventhe evidence, for most companies the answer to date has been the office. But why should this be the case? If thework is being conducted predominantly in the field, why is the IT infrastructure supporting that work built fromthe back office out?

Back to front?Consider a typical rollout of a new enterprise software system. Invariably, the IT plan starts with the creation

of a new system in the back office, which is then eventually rolled out to the field. Often, the company’s manage-ment in the field has little or no idea about the existence of the new system until it has already been implement-ed. Perhaps the reason for doing this is that it’s simply easier to train the office staff during implementation, ormaybe companies would rather ignore all the complex processes presented by the field in favour of forcing acceptance of a new way of doing things from the office outwards.

Either way, the result is that these field processes are often left as manual steps to be completed in the sameway they have always been. Field staff end up frustrated because the new system fails to address the administra-tive headaches they deal with on a daily basis. Company executives may be pleased with the final outputs gener-ated from the new system, but they may well not realise that the whole process is far from optimised, and thattheir final data is still the product of a series of time-consuming and error-strewn manual processes.

The field comes firstFor a new IT system to truly succeed, such companies must see that starting in the field, where most of their

significant inefficiencies lie, will result in a far more productive end-point, with both happier field staff and an ITinfrastructure that both supports and drives their business.

At Singletouch, when it comes to technology implementations in the oil and gas sector, we strongly believe inputting the field first.

Singletouch Collector is a paperless data collection software application, designed for oil and gas producers andtheir contractors to track production and maintenance data related to wells, compressors, tanks and other fieldequipment. The software is developed for use on laptops and other intrinsically safe handheld devices.

Singletouch Collector can be deployed on a multitude of devices to speed up field data collection and to feedfield information directly into a company’s core databases. It allows field personnel to easily capture all field pro-duction data from any field location. This data is then transmitted to a web-based viewing platform or to a pro-duction management system, esnuring that time-critical production data is available at all times for office staff.

The product also offers a web-based viewing package for field information allowing trending and analysis ofdata, and allows companies to create a secure login site for viewing data, ensuring that the field and office haveaccess to the same information. Continues on page 17


But effective data capture can do more than help the field operations of oil and gas companies… it can also help improve the way the industry works with its contractors.

Data capture and contractorsFor large oil and gas companies, the cost of using electri-

cal contractors and other skilled trades can add up to billionsof dollars a year, and yet projects often suffer from lack of cen-tralized oversight and control. Project costs easily and fre-quently spiral out of control. Recent drops in commodityprices have been a rude awakening for many industry giants,who have committed billions of dollars to projects that haveinvariably exceeded budgets by huge margins.

In a recessionary economy, contractor companies are aneasy target for cost-cutting. This leaves contractors squeezedto deliver their services more efficiently, and operational effi-ciency has now become a major pain point in the contractservices sector.

Due to the same field data collection challenges faced byoil companies in, it is almost impossible to track the costs andstatus of a given project with any kind of real-time accuracy,or to gain the kind of intelligence needed to inform a proj-ect owner how specific variables are affecting the budget.Most important of all, the whole process takes a significantperiod of time, meaning invoices to customers are delayed,payments delayed while invoice details are contested, andmanagement of cash-flow becomes an increasing challenge.

As these headaches become more pronounced in the in-dustry, new technologies are being developed to help con-tractorsimprove their business efficiency and keep up withthe increasing demands of their customers.

Singletouch has developed a comprehensive data-captureplatform for electrical contractors working in industrial con-

struction that enables real-time input of information

in the field – one time, easily and accurately – thus eliminating the paperwork headaches thathave plagued the industry. Details collected in the field are instantly accessible at head office and seamlessly integratedinto backend systems, expediting payroll, accounting and proj-ect reporting.

Singletouch is a comprehensive solution that easily integrates and shares data with traditional accounting, payrolland other reporting software, in addition to generating itsown customizable reports. Once data have been entered, project managers and office administrators can use the data forinvoicing and reporting, even before the team has returnedfrom the site.

Enter data onceIn an industry where cash flow is critical, and timely and

accurate billing essential, this back-office integration eliminatespaperwork bottlenecks. Accurate details are entered in the sys-tem only once, at the time and point where the transaction occurs, and delivered instantaneously to all stakeholders, elim-inating the logjams and errors traditionally associated with thefiling of paperwork and subsequent re-entering of details tocreate invoices and reports.

At any time, built-in reports provide an up-to-the-second viewof project completion status, with all work and materials accu-rately accounted for, and actual performance against budgetsand schedules easily reported to the customer.

Ultimately, Singletouch has designed a solution for con-tractors that will not only help them to conduct their busi-ness more effectively, but also provides their oil and gascompany customers with unparalleled insight into their busi-ness, with accurate, timely reporting on the budget and status of major projects. If you aren’t getting this kind of information from your contractors, then maybe you need toask them why not.

The Board of Directors of EnCana Corporation has unani-mously approved plans to proceed with a corporate reorganization to split EnCana into two highly focused

energy companies: one a natural gas company – EnCana(GasCo), which has an outstanding portfolio of prolific shaleand other gas resource plays across North America, and the otheran integrated oil company – Cenovus Energy Inc., which has in-dustry-leading enhanced oil production and top-performing refineries, as well as an underlying foundation of reliable oil and gas resource plays. This transaction – expected to closeNovember 30, 2009 – is designed to enhance long-term value for EnCana shareholders by creating two sustainable, independent, publicly traded companies, each with an ability topursue and achieve greater success by employing operationalstrategies best suited to its unique assets and business plans.

EnCana first announced the proposed corporate reorganiza-tion on May 11, 2008 and was advancing plans for the split lastfall when the global debt and equity markets experienced un-precedented turmoil and volatility. Given that uncertainty,EnCana announced on October 15, 2008 a revision to the orig-inal reorganization schedule and delayed seeking shareholderand court approval for the transaction until clear signs of stabilityreturned to the financial markets.

“We believe the conditions are now favourable to proceedwith the split. Equity and debt markets have improved signifi-cantly with debt financing available at reasonable cost. Globaland national economic indicators suggest that the world’seconomies are showing promising signs of recovery. As well, thestrategic rationale for creating two leading energy companiesremains as sound as ever – the conversion of one leading un-conventional resource company into two independent, premiumentities unlocks greater long-term shareholder value from in-

dustry-leading North American energy assets,” saidRandy Eresman, EnCana’s President &

Chief Executive Officer. “While natural gasprices are currently

low, we have re-duced our

near-term

commodityprice risk by hedginga significant portion ofour expected production forthe 2009-2010 gas year. We are aleader in low-cost natural gas pro-duction and our continued pursuit ofthat objective helps us enhance ourcompetitive position during periods of lowcommodity prices. Over the longer term, webelieve the current low natural gas prices arenot sustainable and we expect a

recovery in prices in 2010,” Eresman said.

Strengthened foundation for creating two leadingenergy companies

“In addition, the financial and operational strength ofeach company’s asset base has improved during the past year.Additional drilling in our natural gas shale plays has advancedour understanding of their enormous potential and increasedour confidence in our ability to grow these prolific new nat-ural gas supplies from the Montney, Horn River and Haynesvilleplays. With the start up of two new phases at Foster Creek andcontinued production increases from Christina Lake, gross pro-duction from these enhanced oil recovery projects now exceeds100,000 barrels per day, a significant milestone in the long-term oil growth plan for the assets that will be transferred toCenovus. Construction of our coker and refinery expansion(CORE) project at the Wood River refinery is past the mid-point. It is on time and on budget, and is expected to start up expanded capacity in early 2011. And overall, looking at the financial position of EnCana, our debt at August 31, 2009 wasabout $8.2 billion, down about 19 percent from when we first

announced our plan to split in May 2008,” Eresman said. Well advanced reorganization plans lower transac-tion risks

“Our extensive work in the past year has helped re-duce the risks associated with the transaction. We havereceived tax rulings from the Canadian and U.S. feder-al tax authorities that confirm, subject to the terms ofthe rulings, that the transactions will not be taxablefrom a corporate and shareholder perspective. We havesecured committed financing for Cenovus that will sup-port its independent business plan. We have acquiredand built much of the infrastructure for Cenovus’s in-formation technology systems. The leadership teamshave been identified and employees have been assignedto new or continuing roles in each of the proposedcompanies. Having completed this foundational work,and with the return of financial market stability, we areproceeding with this value-creating transaction in aprompt and prudent manner,” Eresman said.

Continuing tradition of focused execution to deliver enhanced value and capture competitiveopportunities

Since its formation in 2002, EnCana has establisheda strong track record of value creation through the con-tinued pursuit of low-cost natural gas and oil produc-tion, growth in proved reserves and an innovativestrategy of developing unconventional natural gas andoil resources in North America. That success is found-ed in the central belief that companies with a disci-plined focus on establishing leadership in their corebusiness will earn increased value recognition of theirassets, capture competitive opportunities and be bestpositioned to effectively respond to changing markets.With this planned split into two companies, each man-agement team will focus more directly on the criticalsuccess factors in its respective businesses. They willbe better equipped to direct their strategies and op-erations towards building value by tailoring practicesand execution to fit the unique nature of their assets.The two companies will be focused on achieving at-tractive total shareholder returns through a combina-tion of growing production and reserves, achievingstrong refining margins, paying a meaningful dividendand by investing free cash flow in share buy backs.With greater transparency and focus, the investmentcommunity will be able to more easily follow and moreaccurately assess and value these companies.

EnCana shareholders to own one share ineach of the two companies

The proposed transaction would be implemented through a Plan of

Arrangement under the CanadaBusiness Corporations Act and

is subject to shareholder approval, approval of the

Court of Queen’s

Benchof Alberta,receipt of ap-propriate regulatoryapprovals and satisfaction ofother customary closing conditions. Under the pro-posed transaction, EnCana common shareholders willretain their EnCana shares and receive one Cenovuscommon share for each EnCana share held. EnCana in-tends that the initial combined dividends of the twocompanies will be approximately equal to EnCana’scurrent dividend of US$1.60 per share annually. Future

EnCana proceeds with plan to split into twodistinct and independent energy companies



containan estimated

40 billion barrels oforiginal bitumen in place.

We believe these assets areamong the best in the busi-ness. Our teams have more thana decade of innovative technicaland development experience inachieving industry-leading produc-tion and capital efficiencies. They haveset the pace in reducing environmentalimpact and have consistently increased theenergy efficiencies of daily production. We willcontinually look for opportunities to optimize ourportfolio by advancing the development of new oil

Two large energy firms toemerge

Both of these companies will belarge, Calgary-headquartered enterpriseswith strong, visible growth profiles, competitivecost structures and solid financial positions. It is expected that both companies would be among Canada’s 30largest corporations and among the top seven energy companiesin Canada.

“Each company plans to continue the tradition that createdand sustains EnCana’s success, applying the principles of strong

bus iness leader ship that are focused on the object ives of enhancing the value of every share, disciplined capital investment

and leadership in low-cost production. Each will operate in a princi-pled and ethical manner, pursue energy efficiency, strive to be employ-

ers of choice and actively participate in helping to build the communitieswhere they operate. These companies will strive to maintain the same corporate

responsibility principles that EnCana has established and its employees practice,”Eresman said.

dividends will be at the discretion of the respective boards ofdirectors of each company and no dividend policy has yet beenadopted.

Creation of two independent energy companies Upon completion, this transaction would create Cenovus

Energy Inc. – a publicly traded integrated oil company that willbe focused on the development of EnCana’s Canadian enhancedoil assets and United States refinery interests, underpinned bya well-established natural gas and oil production base in Albertaand Saskatchewan with significant capacity to deliver long-termfree cash flow. The Cenovus assets, which encompass EnCana’sIntegrated Oil and Canadian Plains divisions, represent aboutone-third of EnCana’s current production and proved reservesat year-end 2008. EnCana’s other major operating divisions,Canadian Foothills and USA, would form a pure-play natural gasgrowth company, aimed at growing existing high-potential re-source plays in Canada and the U.S. This natural gas companywould retain the name EnCana Corporation and representsabout two-thirds of EnCana’s current production and proved re-serves at year-end 2008.

Cenovus – a premier enhanced oil growth company inte-grated with expanding refinery capacity

“At inception, Cenovus is designed to be North America’spremier enhanced oil company. Our enhanced oil recoveryprojects at Foster Creek and Christina Lake are positioned todeliver, over the next five years, an expected compound annu-al growth rate of 12 to 14 percent. Cenovus’s total oil and nat-ural gas production is expected to be steady as the companygenerates strong free cash flow from its mature gas and oilproperties to fund enhanced oil production growth. Cenovusis also positioned to pursue the benefits of the full value chainintegration of its successful enhanced oil recovery projects inAlberta with two top-performing refineries at Wood River inIllinois and Borger in Texas. Our integrated oil business is intoits third year of our 50-50 joint venture with ConocoPhillips –a successful partnership that strategically and financially linkspremier oil assets with 226,000 net barrels per day of ideally-located refinery assets, creating one of the industry’s lowestcost integrated oil developments,” said Brian Ferguson, EnCana’sChief Financial Officer, and designated President & ChiefExecutive Officer of Cenovus.

“While Cenovus’s medium and long-term growth is expected to be driven by our enhanced oil recovery projectsat Foster Creek and Christina Lake, we will also holdextensive lands covering top-tier oil reservoirslocated in the heart of Alberta’s Athabascaoil region, properties that provideopportunity to grow oil pro-duction for decades ahead.Cenovus’s 1.4 millionacres of existinghigh-qualityleases

recovery technologies and will examine divestitures of maturenatural gas and oil assets,” Ferguson said.

“In addition, our well-established gas and oil resource playsconsisting of enhanced oil recovery projects such as Weyburnin Saskatchewan, Pelican Lake in northern Alberta, plus vastShallow Gas lands in southern Alberta, are capable of deliver-ing strong free cash flow and they have an extensive invento-ry of future well locations capable of delivering predictableand reliable production. These are excellent characteristics forbuilding a financially strong, sustainable, integrated oil compa-ny that builds net asset value per share,” Ferguson said.

In 2009, the Cenovus assets are forecast to produce net oilproduction of more than 110,000 barrels per day and naturalgas production of about 820 million cubic feet per day, for atotal of about 248,000 barrels of oil equivalent per day. The assets contain about 8.1 million net acres of land and, as of theend of 2008, an estimated 1.2 billion barrels of oil equivalentof net proved reserves, which are about 75 percent oil.

EnCana (GasCo) – a pure-play natural gas company grow-ing high-potential North American resource plays

“Our natural gas business is very strong and the propertiesdesignated for EnCana (GasCo) are extremely well positionedto grow at anticipated double-digit rates. We have a diversifiedportfolio of unconventional natural gas assets across NorthAmerica and hold a highly competitive land and resource position in a number of the continent’s most promising shaleand tight gas resource plays, including Haynesville in the U.S.and Horn River and the Montney in Canada. Our natural gas exploration and development teams have been industry lead-ers in applying long-reach horizontal drilling and multi-stagefracing – revolutionary innovations that are the foundation forour continued pursuit of the lowest production costs and max-imized margins. These transformative technologies have unlocked an enormous new inventory of natural gas supply inNorth America – clean burning natural gas that is abundant, affordable and readily available to supply consumers’ growingtransportation and power needs while reducing the continent’senvironmental footprint,” Eresman said.

Strong gas growth potential ahead “Over the next five years we will be targeting a compound

annual production growth rate of about 10 percent. Our prop-erties have a proven track record of strong and sustainablegrowth. From 2006 to 2008, natural gas production from ourCanadian Foothills and USA divisions grew by 12 percent.Despite the more moderate approach we have chosen to takefor this year when gas prices are very low, these assets are capable of deliver ing strong growth for years ahead,” Eresman said.

“EnCana’s (GasCo) portfolio of prolific gas resource playswill include our Coalbed Methane in central and southernAlberta, the Bighorn Deep Basin play in Western Alberta,Cutbank Ridge and Greater Sierra plays in British Columbia,Jonah play in Wyoming, significant Piceance basin plays inColorado, the Barnett shale play in Fort Worth and Deep Bossierplay in East Texas. In addition to these established resourceplays, our teams have recently achieved some promising ex-ploration results in a number of North American shale plays,such as Horn River in British Columbia and Haynesville inLouisiana. These and other emerging plays have the potentialto add significant depth to the company’s strong portfolio ofnatural gas assets,” said Eresman, who will continue as EnCana’s(GasCo) President & Chief Executive Officer.

“With about 16 million net acres, 12.4 trillion cubic feetequivalent of proved gas reserves and 3 billion cubic feet perday (Bcf/d) of natural gas production, EnCana (GasCo) is ex-pected to retain its standing as a leading North American natu-ral gas producer with strong growth potential,” Eresman said.

About half of expected 2010 natural gas production hedgedat more than $6 per thousand cubic feet

EnCana has hedged two-thirds of expected 2009 natural gasproduction, about 2.6 Bcf/d, through October of this year at anaverage NYMEX equivalent price of $9.13 per thousand cubicfeet (Mcf). EnCana has also extended its risk management pro-gram through 2010. As of September 8, 2009, EnCana had established fixed price hedges on about half of expected 2010natural gas production – or about 2 Bcf/d – at an averageNYMEX equivalent price of $6.08 per Mcf for the gas year,which runs from November 1, 2009 to October 31, 2010.EnCana also has 27,000 bbls/d of expected 2010 oil productionhedged at an average fixed price of WTI $76.89 per barrel.EnCana plans to split the 2010 hedges between the two com-panies based on their current proportion of production vol-umes for oil and natural gas. The company’s price hedgingstrategy increases certainty in cash flow to help ensure that

EnCana can meet its capital and dividend requirementswithout substantially adding to debt. EnCana con-

tinually assesses its hedging needs and theopportunities available prior to estab-

lishing its capital program forthe upcoming year.


It’s understandable to think this recession has put adamper on “green” or environmentally friendly busi-ness practices. Going green or staying green may be a

luxury many struggling businesses simply can’t affordthese days.

But while that may have been the case for past down-turns, times have certainly changed. For starters, manygreen initiatives save companies money.

Catherine Swift, president and CEO of the CanadianFederation of Independent Business (CFIB), which repre-sents 105,000 small businesses nationwide, says she’s seenno indication from her members that saving the Earth istaking a back seat to saving the business.

“One reason is that for smaller companies, the recessionhasn’t been as dire as for large firms that are driven by thestock markets. Our members are privately owned compa-nies, and among them, we’re continuing to see a focus onenvironmental practices,” she says.

A 2007 CFIB survey found that energy conservationranked as the second most important environmental issueafter recycling of materials, with 83% of its members hav-ing already implemented energy conservation changes.While about half of respondents said cost savings was a factor in making changes, 81% said they were motivatedby their own personal views. Swift says that trend appearsto be holding.

“These companies are motivated primarily by theowner’s personal views about the importance of protect-ing the environment for future generations. Embracing environmental practices isn’t something you usually haveto convince them to do,” says Swift.

Of course, it’s always nice if a company can help theenvironment and its bottom line at the same time. A quickGoogle search will turn up thousands of web pages onhow companies of all sizes can be both green and prof-itable.

First, there’s the low-hanging fruit, things like printingon both sides of paper, recycling, switching to energy-efficient light bulbs, turning down the thermostat and shutting off idle office equipment. Natural Step Canada(www.naturalstep.org) has a free sustainability toolkit thatcan be downloaded from their website. Another helpfulresource is a book authored by Bob Willard entitled “TheBusiness Case for Sustainability”.

According to Willard, integrating sustainability strate-gies can increase profits up to 38% for large companies and66% for small- or medium-sized companies over a five-yearperiod. A lot of these savings can be achieved by reducingenergy costs.

“If your energy costs are high, you certainly have an incentive to reduce them,” says Michel Bergeron, VicePresident, Corporate Relations at the Business DevelopmentBank of Canada. “But even if they aren’t high, cutting your energy costs can give your company a competitive

advantage by improving efficiencies and your corporateimage with both customers and suppliers.”

Tax credits and incentives for energy efficiency andother green incentives are being pushed from Ottawa allthe way down to local municipalities. Most utilities nowoffer businesses incentives to reduce energy use. HydroQuebec, for example, offers financial assistance for elec-tricity-saving industrial equipment, systems or processes.

Keeping ahead of the law and public opinion Lower operational costs aren’t the only reason to reduce

energy use. All levels of government, including local, are introducing laws and regulations that will require compa-nies to reduce waste and embrace more sustainable busi-ness practices.

For example, once cap and trade rules become morewidespread, Bergeron said companies will need to be care-ful about how much carbon they produce.

“Reducing your energy use – and thus, your carbonfootprint – should be part of any business plan. You canstart with something as simple as reducing your corpo-rate travel by using inexpensive videoconferencing tech-nologies like Skype,” he says. “But the most importantbuilding block should be an energy efficiency audit ofyour workplace. ”

Business owners that act early will find themselves ata competitive advantage when new rules are imple-mented.

“At some point, the consideration of environmental andsocial issues will be mandated, so for business this becomesa central risk factor. It also becomes an opportunity.Companies shouldn’t wait until the economy picks up,”says Melissa Shin, managing editor of Corporate Knights, amagazine focusing on corporate responsibility.

Attracting a green workforceCompanies that don’t embrace environmental prac-

tices could also find themselves as a competitive disad-vantage in attracting young, skilled employees. Today’syoung workers are more environmentally aware than pre-vious generations, and they’re bringing those values intotheir workplaces.

“BDC, for example, is heavily paper-based and this be-comes an irritant for our younger employees who viewpaper as a waste of resources,” says Bergeron. “They’re put-ting pressure on us to move more quickly to change ourways, and we are.

Companies that incorporate environmental responsi-bility into their mandate will also tend to have more loyalemployees who are more willing to make sacrifices, ifneeded, during a recession.

“Embracing environmental and socially sustainablepractices is a great way to retain your staff in an econom-ic downturn,” says Shin.

Experts reveal why this recession is a great time to go green Entrepreneurs and their innovative businesses are key to Canada's

economic growth. By responding to the changing demands of themarketplace and creating jobs, entrepreneurs continue to be a pri-

mary force in driving the national economy.Since its inception in 1979, as a small event in British Columbia, Small

Business Week® has grown substantially in both size and scope. Now anationwide celebration of entrepreneurship, Small Business Week (SBW)continues to pay tribute to the important contribution that small busi-nesses make to the national economy. SBW activities provide establishedand prospective entrepreneurs with training and development oppor-tunities, and create a forum for networking and sharing ideas. Events in-clude conferences, trade fairs, seminars, workshops and businessluncheons. BDC branches, with the assistance of numerous local publicand private sector organizations, play an active role in planning and pub-licizing these events.

SBW theme: Your dream, your business, your passionEntrepreneurs are idea people – filled with ideas, aspirations and

objectives. They see an opportunity at every turn and are continuouslylooking for improvement. An entrepreneur’s life is frenetic, powered bya seemingly unlimited vitality. The entrepreneur’s tenacity is surpassedonly by a strong passion for business.

The theme of Small Business Week 2009, “Your dream, your business,your passion”, reflects the energy and efforts of Canadian entrepreneursof all ages and pays tribute to their important contribution to thestrength of the economy. It will also be the background for all the activities that will take place throughout the Week.

The Young Entrepreneur Awards (YEA) were established by BDC in1988, and are presented each October during Small BusinessWeek®. One winner in each province and territory is selected to

receive the award in recognition of their spirit of innovation and busi-ness acumen. Nominees must be young entrepreneurs between the agesof 19 and 35.

Nominations may be submitted by individuals, associations, organi-zations, and various levels of government. Young entrepreneurs may alsonominate themselves.

All nominees are judged using the same criteria: the company’s suc-cess and growth potential, innovation and community involvement. The panel also considers the company's export performance, the entre-preneur’s age when the business was established, and any special chal-lenges that were overcome.

Winners are selected by a panel of judges comprised of business pro-fessionals, entrepreneurs, members of local Boards of Trade andChambers of Commerce, and BDC employees.

Each year, the awards ceremony is held in a different city. Award recipients are presented with a commemorative trophy, and applaudedby the business community for their hard work and ingenuity. They ben-efit from nationwide media visibility, unparalleled opportunities for net-working with other entrepreneurs, valuable media training and manyskills development opportunities. The 2009 YEA gala will take place inOttawa on October 20.

Small Business Week

Young Entrepreneur Awards

Small Business Week 2009:October 18-24


Calgary technology companiesensure lone worker safety from theconvenience store to the oil field

Rogers Wireless is partnering with local technologycompanies to help employers keep their loneworkers safe and comply with new

provincial legislation mandating that employersmust be in constant contact with employeesworking alone.

“The lone worker legislation may be new, butwe’ve been doing some real pioneering here inCalgary on this topic for some time,” said Steve Roberts,vice-president for Rogers Wireless in Alberta. “We’re proud topartner with innovative companies like Blackline GPS, Premier GPSand NelTrak to create and provide simple wireless technologies thathelp keep people safe, no matter where and when they’re working.”

Until recently, there have been few options available for employers to meetlone worker requirements. While some use costly call centers to check in on workers, othersopt for a low-tech solution like having workers call into the office.

Rogers Wireless has worked with its local partners to improve lone worker safety by pro-ducing well-tested, reliable and portable wireless safety communication products.

For a tiny, fits-on-the-hip option, there’s the Loner by Blackline GPS, a manufacturer of com-munication technology security, tracking and monitoring devices. The size of a mobile phone,the Loner is worn by the lone worker and constantly provides its GPS location. It also includesa panic button for emergencies and motion detector that tracks lack of motion which can in-dicate a worker in distress.

The SafetyBerry is a BlackBerry application by Calgary’s Premier GPS. Available on theBlackBerry Curve and Bold, it offers advanced real-time GPS tracking functions and ways for loneworkers to indicate distress or check in with their employer with the click of a few keys.

For oil and gas workers traveling alone in their vehicles, NelTrak, a Calgary wireless solutionsprovider, offers several options including a GPS unit with built-in panic button that is installedin vehicles, a FOB that workers can carry with them, and a portable unit that can be strappedonto an ATV or sled. Each option can be monitored 24/7 by highly trained oil and gas special-ists in a technical centre—a one-of-its-kind approach in the oilpatch.

“These are all home grown solutions,” said Roberts. “They are great examples of Alberta busi-nesses pioneering in technology to promote worker safety in an easy and affordable way.”

To further ensure lone worker safety, especially in Alberta’s oil and gas industry, RogersWireless announced in June a $42 million expansion of its world-standard GSM wireless voiceand data network. The expansion adds 49 new wireless sites expanding coverage throughoutthe energy heartland.

Colfax Unveils Alternative Fluid-Handling Strategy for CrudeOil TransportSolutions leveraging rotary positive displacementscrew pumps increase efficiency and minimizeemissions

Colfax Corporation aglobal leader in fluid-handling solutions for

critical applications in themost demanding environ-ments, has unveiled a newapproach to handling high-and low-viscosity fluids thatrequire high pressure boostsin the transport of crude oil.The Colfax l ine of rotary positive displacement (PD)screw pumps not only delivers the unsurpassed relia-bility required in crude oiltransport applications but responds to growing Oil & Gasindustry demands for higherenergy efficiency and greaterenvironmental responsibility.

“Rotary pumps have beenthe standard in delivering high-efficiency, low-maintenance solutions for critical fluid handlingin the past,” said John A. Young, president and CEO of Colfax. “But the perception that screwpumps mean higher expense is simply outdated, preventing oil transport companies from takingfull advantage of their significant benefits for energy savings and reduced environmental impactin these applications.

“In fact, rotary PD screw pumps actually offer tremendous cost advantages,” he continued. “A typical Colfax solution on a single 250,000 BPD crude oil pumping station in Western Canada– using three rotary PD screw pumps operating in parallel with one standby pump – delivers a29 percent reduction in combined capital, energy and maintenance costs over a five-year period,when compared to the traditional centrifugal pump solution of two pumps operating in parallelwith one standby pump. That translates into more than $7 million in savings to own and oper-ate a rotary PD screw pump solution over five years, a concept that we call Total Savings ofOwnership at Colfax.”*

“We’ve also taken the lead at Colfax in developing various shaft-sealing solutions, for the industry to address market demand for reduced process fluid emissions,” Young noted. “Like therotary PD screw pump designs themselves, they are efficient and reliable, providing operatorswith the highest level of safety.”

According to Mike Moore, a product specialist in crude oil transport for Colfax Americas –the division responsible for Colfax customers in North and South America – Western Canada rec-ognized early on the advantages of the screw pump’s simple, but robust design. “Oil companieshave used screw pumps to move crude oil to market for the past 30 years; and in Alberta andSaskatchewan, screw pump lines manufactured by Colfax handle 4.8 million barrels of crude oileach day,” he said.

The hydraulic principle behind screw pump operation delivers both high volumetric andhigh overall operating efficiencies, he stated, in addition to offering long mean time between repairs (MTBR) and ease-of-maintenance features for field servicing, which combine to maximizeoperational uptime. Other value-added advantages of these pumps include: Constant flow, evenin the presence of varying system backpressures Non-pulsating flow, without the need for pul-sation dampeners Low noise and vibration levels, minimizing foundation requirements

Keith Schafer, vice president of sales and marketing for Colfax Americas, underscored the com-pany’s commitment to expanding the use of rotary PD screw pump systems throughout the industry. “Colfax’s strong portfolio of screw pump designs from global brands Allweiler, Houttuin,Imo, Tushaco and Warren means that we can provide more product solutions than any other PDpump manufacturer on the globe. But product is just the beginning of our Total Solutions approach. We also bring deep expertise in critical Oil & Gas applications, including crude oil trans-port, and provide ongoing service and support to our customers, from assessing their specificneeds to designing and implementing solutions that meet those needs to providing ongoing mon-itoring and maintenance.

“As true partners, we help our crude oil transport customers – and ideally the Oil & Gas industry at large – balance reliable and efficient performance, fiscal responsibility and environ-mental stewardship with fluid-handling solutions that improve business and grow the bottom line,”Schafer concluded. www.colfaxcorp.com

NAIT is celebrating the official opening of the Nexen Theatre with the announcementof a $1 million donation from Nexen. “Industry partners such as Nexen are critical inproviding our students access to the latest technology,” says Dr. Sam Shaw, NAIT’s

President and CEO. “Nexen has made a significant contribution to build a high-tech distanceeducation facility. Nexen’s leadership as a company is shown in their support for NAIT to havethe technology to train workers anywhere, anytime, to be globally competitive.”

“As a company with operations across Canada and around the world, Nexen knows first-hand the importance of effective communication,” said Marvin Romanow, Nexen President andCEO. “This next generation classroom will

allow students the ability to communicate and learn in a virtual environment. The advancesin technology that this facility offers will greatly enhance student learning and development.”

Some of the features the theatre boosts include a 19 foot by 7.7 foot screen, a 103-inch plas-ma screen, a high definition camera with remote capabilities, Dolby sound and five computerstations connected to the screen which allows for group work.

“The Nexen Theatre is about possibilities,” says Dr. Shaw. “The equipment is the most tech-nologically advanced available for this type of facility, so I am very excited about how it is goingto be used to enhance our students’ learning experience.”

NAIT is one of the preeminent institutes of technology in Canada, providing real-world education in business, advanced technologies and skilled trades to more than 84,000 learnersworldwide. Known for student success,

NAIT also engages with business and industry in applied research and innovation and pro-vides corporate training around the world.

Nexen helps build the nextgeneration classroomNexen Theatre is one of the most technologicallyequipped conference facilities in Canada


As Natural resources are often located in remote swampy areas, accessing these areas byhelicopter can prove be expensive. The Land Tamer has been identified as an economicmeans to keep costs down when servicing remote gas line well heads. The Land Tamer’s®

unique drive system allows the installation of tracks over the tires for year around use in anyterrain type. This is a unique capability and strength of the Land Tamer’s® go-anywhere, any-time, easy mission configurability.

Storied HistoryPFM Manufacturing, which was founded by Patrick F. Miller Sr. in 1998, was successful in

developing, patenting and introducing the new Land Tamer 6x6 ATV to fill a niche in the mar-ketplace for a heavy-duty, low-impact, commercial grade amphibious all-terrain vehicle.

As the company’s commercial market grew for the Land Tamer ATV, it became apparent thata larger Land Tamer ATV was needed. In 2000 the Land Tamer 8x8 model was introduced tofill the need for a heavier hauling amphibious vehicle. In conjunction with introducing the LandTamer 8x8 ATV, commercial customers demanded a diesel model. Consequently, in 2001 PFMintroduced the first diesel engine powered Land Tamer 8x8 ATV.

In 2005 the name “Remote Access Vehicle” (RAV) was chosen to differentiate the LandTamer from other ATVs. Coinciding with the new name reference were new design im-provements and upgrades to the vehicle that made it even more capable and more versatilethan ever before.

“The new 2005 Land Tamer II RAV featured taller, more durable truck or Ag tires, higherground clearance, larger cargo capacities, and a sealed hydraulic gear drive system,” he says.“Other upgrades included a simple to use T-handle or electric joystick control, and a more pow-erful, external mounted water propulsion system.”

PFM Manufacturing, Inc. Build one of The Most Versatile, Most Extreme,Heavy Duty Remote Access Vehicles for Oil and Gas Exploration

Question / Answer Q: How does the Land Tamer’s hydraulic gear drive system work?A: The Land Tamer’s hydraulic gear drive system utilizes the proven benefits of a closed loop

hydraulic drive system that is found in mobile and construction equipment applications, such asskid steer loaders, etc.

Q: What is a closed loop hydraulic drive system?A: Closed loop system means that hydraulic oil flows from a pump to drive a motor and back

to the pump completing the loop. Most closed loop drive systems utilize a variable flow displace-ment pump that flows to the drive motor. Nearly all the hydraulic oil flow from the pump drivesthe hydraulic motor in a closed loop system, but a small percentage of the hydraulic oil redirectedthrough a cooler and back to the tank. The Land Tamer utilizes commercial grade, Made-in-AmericaEaton Hydraulics tandem pumps and motors, in which one pump drives the left motor and theother pump drives the right motor. The left drive motor delivers torque to the left side wheelsand the right motor drives the right wheels. The benefits are proven reliability and availability.

Q: How is the torque delivered from the hydraulic drive motors to the wheels?A: A pair of powerful Eaton 6000 Series hydraulic motors is connected to parallel reduction gear-

boxes that are coupled to a set of right-angle gearboxes at each axle on each side of the vehicle.This parallel gearbox is coupled to a common drive shaft that supplies equal torque to all axles oneach side of the vehicle.

Benefits – this system allows maximum torque to all wheels no matter which tires have themost traction with the ground. Maximum torque from the engine and pumps can be delivered nomatter how many wheels are off the ground as when crossing ditches or large obstacles. Virtuallyno maintenance or adjustments are required either.

Continues on page 24

All Terrain Vehicles


The New RTV1100 - Factory Cab Utility Vehicle

Welcome the industry’s first Factory Cab Utility Vehicle; another innovation fromKubota. The advantage of a one piece tubular design integrates the cab structure withthe chassis for optimal durability and a pressurized cab. The tight seal is ideal for the

RTV1100 comforts like standard air conditioning and heater. The RTV1100 is powered byKubota’s new 25 HP diesel engine and a Variable Hydrostatic Transmission. Other standard fea-tures include a 70 amp alternator, power steer-ing, cloth seats, head rests, rear viewmirror and its radio ready. Look forthe RTV1100 in Kubota Orangeor Realtree® Camouflage thisspring. For more informationplease visit the Kubota boothor www.kubota.ca to locateyour local dealer.


Q: How does the operator drive the Land Tamer?A: All driving functions, forward, reverse, right or left turns, are achieved

with our unique proprietary single T-handle Controller. Pushing the T-han-dle forward moves the vehicle forward. The farther you move the T-handleforward the faster the vehicle goes. To travel in reverse, you pull the T-han-dle back and to turn left or right one simply twists the T-handle right or leftto whatever degree of turn you desire.

This system allows for zero turns in which one set of wheels rotates for-ward at the same time the other set of wheels rotate backward allowingfor 360 degree on the spot turns.

Benefits – the Land Tamer is very simple to drive. One hand is all that isneeded to operate the vehicle and it frees up the other hand for work ap-plications, like holding a weed spraying nozzle, or a fire spray nozzle, etc.

Q: Why is the Land Tamer’s Hydraulic/Gear Drive System better thanany other amphibious vehicles which use drive chains or hydraulic gearmotors on each axle?

A: The main disadvantage of chain drive vehicles is that they requiremuch adjustment and maintenance. They may be okay for a weekend recre-ational vehicle, but they simply do not hold up for the working outdoorsman who needs a seriously reliable vehicle with low maintenance.

The Land Tamer’s proven hydraulic/gear drive system is the only way togo. It is very efficient, easy to drive, built for heavy-duty commercial work, very low mainte-nance and built to last. The Land Tamer is hands down the best in amphibious vehicle designand in a league of its own. But don’t take our word for it, ask our customers!

Q: What are my options for an engine and the advantage of each one?A: You have your choice of the 60- HP Kubota Turbo Diesel, 80-HP Deutz, and 91-HP Zenith

fuel injected Gas/LP engine for our full size models. The RS (reduced size) model comes witha Kohler 40-HP V-twin gas engine standard or optional diesel engine.

In most cases the 60-HP Kubota will provide enough power for most slower moving appli-cations. However, if the primary application is traveling faster or swampy or snow coveredground with tracks installed, then we would recommend the 80-HP Deutz or the 91-HP Zenithengine. These bigger displacement engines will provide the raw power needed to power throughthe toughest conditions.

Q: What is the 3-Point Hitch system and what can I use it for?A: Our optional 3-Point Hitch turns the Land Tamer into a full fledged tractor and adds a

whole new dimension of work applications never available before for an amphibious vehicle.To our knowledge, the Land Tamer is the only amphibious tractor manufactured in the world.

The 3 Point Hitch allows the owner to attach to the front or rear of the Land Tamer anyCategory 1, 3-point hitch farm attachment. These include a snow blade or snow blower for win-ter use, or a rotary mower, post hole auger, lifting device, generator or just about any after-mar-ket farm equipment available by any farm equipment manufacture rated as Category 1. This addsto the Land Tamer’s four-vehicles-in-one-concept – serving as boat, ATV, snowmobile and trac-tor. No other vehicle has this much versatility.www.landtamer.com



The new RTV1140 is the newestreleased vehicle form Kubota

The operator can eas-ily switch from tworows of seating to

one row of seating and ex-pand the cargo box area.This is a requested additionto our line for increasedcargo capabilities andadded worker transport

In 2004 Kubota intro-duced the work utility vehicles to the marketplacewith the RTV900 Series.Renown for the bulletproof diesel engines, in-dustry leading success incompact tractors and ex-cavators, the

RTV900s experiencedimmediate success. Shortlythereafter came the firstfactory pressurized cabwith standard HVAC sys-tem, the RTV1100. Last fallthe family expanded to thepick-up truck friendly RTV500, Kubota’s own gasoline powered small utility vehicle. A compre-hensive family of utility vehicles, but one model was still on the creative engineer’s minds. A machine that could carry more cargo, yet also carry extra passengers without being too big ortoo long. Kubota is now pleased to introduce the all new RTV1140CPX Utility Vehicle.

Stretch your productivity with the new 24.8Hp Kubota RTV1140CPX Four-Seater. If you needmore cargo room slide and lock the back seat to the forward position without tools to achieveindustry leading cargo space. Transporting more passengers is an easy slide and lock process. Ineither position the operator can easily dump the cargo box hydraulically with the lift of a lever.Manoeuvre around your worksite in confidence and ease with the smooth acting, heavy-duty 3Range Variable Hydrostatic Plus transmission and hydrostatic power steering. As always Kubotakeeps safety at the top of the list, with fully Certified Roll Over Protection structure, a standarddesign in all Kubota work utility vehicles.For more information on the RTV1140CPX or any of the Kubota work Utility Vehicles visitwww.kubota.ca or see them in action at your local Kubota dealership.

New Prinoth Go-Tract™4500 Carrier

PRINOTH Ltd. proudly introduces the GO-TRACT™ 4500 fully-tracked equipment carrier that offers a line-leading 46,000-pound payload with maximum mobility and minimum impact.

Designed to carry heavy equipment such as cranes up to 40 toncapacity, man-lift booms, aerial devices, large drill rigs, and otherheavy payloads, the new GO-TRACT 4500 has a ground pressure ofjust 4.4-pounds per square inch at the maximum gross vehicleweight rating (GVWR). The new carrier offers 35-square feet moredeck space than the GO-TRACT 3000 stretch. Yet it will fit on a dou-ble drop deck trailer.

A Caterpillar C9 EPA-Certified Tier 3 engine provides 375 horse-power to propel the GO-TRACT 4500 at ground speeds up to 6miles per hour (10Km/hr). The 120-gallon (US) fuel capacity allowsa full day’s work on a single tank.

An ergonomically engineered cabin includes an easy to read full-color operator information display, micro-controller-assisted steer-ing, and R.O.P.S. certification at maximum GVWR. A back-up camerais optional.

Like all GO-TRACT series vehicles, the new GO-TRACT 4500 isbacked by PRINOTH’s comprehensive post-sale service support featuring 24/7 telephone inquiry assistance and PRINOTH-certifiedtechnicians on-site if required.



Oil Rigs Delivered in Record Time

In a paper delivered at the International Conference onComputer Applications in Shipbuilding (ICCAS) held in Shanghai, Dr.Oskar Lee explains how these shipyards have managed to achievesuch impressive results.

According his analysis, the most successful shipyards link thegeometry and associated material data from 3D models to data-bases such as ERP systems so that information can accurately beshared and utilized by various departments to plan efficient pro-duction. In this manner, critical path issues are identified and re-sources effectively deployed.

His research also indicates that effective change management isimportant due to frequent modifications requested by owners andclassification societies. To accommodate these changes, Dr. Lee

observed that the most successful yards in his study utilize completemodels consisting of geometric and attribute information. Each modelwas not merely a drawing or a series of drawings. Rather, the modelwas contained within a database from which drawings, machine cut-ting code and other information could automatically be derived andshared amongst various departments. This dramatically simplified theability to accurately make changes, thus increasing productivity.

All of the shipyards in Dr. Lee’s study used ShipConstructor soft-ware during the detail design process. Because ShipConstructoruses a data-rich 3D model capable of linking to other databases, theuse of ShipConstructor was a key reason for the shipyards’ pro-ductivity in oil rig fabrication.www.shipconstructor.com

Lamprell LT-116E Jackup Rig

Safefreight Technology, a fleet safety www.safefreight.com/fleet-safety/ and GPS fleet tracking provider, is pleased to an-nounce its strategic partnership with Rogers Communications

to market SmartFleet, Safefreight’s GPS driver safety and fleet man-agement system.

“Safefreight’s technology is unique in Canada and offers ourcustomers the most comprehensive solution on the market to mit-igate driver risk and optimize vehicle performance. We look for-ward to working with the Safefreight team to provide our currentand future customers with these innovative tools to enhance thesafety and management of their f leet operations,” said SteveRoberts, Rogers’ Vice President.

“We are extremely excited to be working with Canada’s premierprovider of wireless products and services,” said Curtis Serna,Safefreight’s Chief Executive Officer. “Rogers’ recent expansion ofnetwork coverage in Alberta in combination with our fleet safetytechnology offers companies in safety focused industries – like theenergy sector - a cost-effective solution to enhance safety in the field.”

SmartFleet is a telematics solution that incorporates a “smart”vehicle mounted device, asset-to-internet capability, wireless com-munications and web-based fleet management software. It helpsfleet managers measure and manage the company’s driving cul-ture. In addition to providing real-time risk alerts, SmartFleet pro-vides a forensic trail and makes it easier for f leet owners tosubstantiate warranty claims and more effectively manage fleetservice plans. ROI on the solution is usually measured in months,depending on the number of devices deployed and the metricsbeing monitored.

SmartFleet empowersfleet managers with action-able data to:· Decrease number of acci-dents by up to 70% · Cut vehicle downtime byup to 50% · Reduce fuel consumptionby up to 35% · Lengthen the lifetime oftires, brakes, clutches andgears· Enhance workforce andequipment productivity · Improve customer servicethrough timely reporting ofasset location · Reduce carbon emissions · Reduce risk of theft and expedite stolen vehicle recovery · Secure cargo assets (monitoring tampering and temperature) · Manage data in the field (including real time data capture)

Safefreight and Rogers are offering incented pricing of devicesand software subscriptions, exclusively through the Rogers saleschannel. Rogers’ customers get a free, one year software sub-scription to Location Based Services. Advanced and Premium soft-ware subscriptions are also available at discounted pricing throughthe Rogers promotion.

Only 13 months after initiating training for new3D CAD/CAM software, Lamprell Energylaunched the LT-116E Jackup Rig. The entire

project was completed in only 18 months.Other shipyards have achieved large gains in

productivity as well. This is noteworthy in the currenteconomic climate with the constant pressure to reduce costs.

Fleet Safety and GPS Tracking Firm Partners with Rogers


Historical drilling records nowdigitized and onlineFor decades, the ERCB has pro-

vided an invaluable service tothe industry by sourcing the

tour sheets of every well drilled inAlberta. These tour sheets tell the entire story of a well, from spud to rigrelease. What bits are used, what mudweights are applied, important notesand comments from the rig manager,etc. all recorded on a daily (sometimeshourly) basis. Thanks to this readilyavailable information, our collectiveknowledge on drilling techniques andstrategies throughout our province isunmatched.

This information is critical to well planning, benchmarking drill performance, and analysison past wells drilled…an imperative practice to any efficient drilling department or servicecompany.

It’s not enough to know your own wells: you need to know what’s going on around you.Tour sheets hold very valuable information, but in a very inaccessible format. It is very time

consuming, depending on photocopies and trips to the ERCB Core Research Center to accessthis data, yet that is the only way that companies can review tour information on-demand. Incooperation with CAODC, companies have built advanced systems to capture this informationin a digitized format…and yet the information is still stored publically in paper/hardcopy format only.

The challenge is now to make it available to those who need it. XI Technologies has responded to demands from the drilling industry for better access to this vital tool for diligentdrilling practices.

XI discovered a clever way to make this data available to the industry…share it. There’s nosecret that operators/service companies have their finger on the pulse of their offsetting com-petitors…there are also no secrets contained in tour information, considering the sheets arepublically available.

Through XI’s TourXchange agreement, operators have mutually agreed that the value of thisinformation (in digital form) is immeasurable in terms of drilling efficiency, cost savings, and over-all drilling performance. Therefore, in order to access digitized tour records of offsetting oper-ators, they have endorsed the philosophy by offering their own digital data into the collectiveTourXchange database. The program is simple – share the digital version of the already-publictour sheets and in turn, they can access the digital tour reports of existing participants.

Acceptance of this program has been quite positive so far, building a database of over 40,000wells worth of digital tour data. As the concept gains further recognition, the TourXchange data-base will eventually contain a major portion of the digital drill records throughout WesternCanada in the next year.

Researching pacesetters, understanding the problems of historical wells that offset your locations, and having a general knowledge of best-drilling-practice is key to prudent drill planning.Data is the key to building these types of analytical tools, and now the industry can finally makeuse of the information that was previously locked away in paper documents.

Wood Group Offers High-Pressure, High- Temperature Well Cement Bond Logging Service

Wood Group Logging Services, part of international energy services company

John Wood Group PLC (“Wood Group”), has introduced a new cement bond

evaluation service designed for deeper wells with wellbore conditions up to

500° F (260° C) and 30,000 psi of hydrostatic borehole pressure.

The service is accomplished in a single well logging run by using a new 360° radial

measurement that identifies potential channelling, void areas around the casing and in-

adequate bonding. The resulting evaluation confirms intervals of good cement bond that

adequately isolate zones, and minimizes nonessential remedial cementing.

“This new cement bond evaluation service is expedient and cost-effective, and builds

upon our reputation for providing outstanding service in hostile downhole conditions”

stated John Paul Jones, president of Wood Group Logging Services. “The service expands

the operating range for cement bond evaluation and will enable our clients to make bet-

ter informed decisions on deep high value wells.”


When geologist Larry Spence was suddenly laid off, it came so suddenly and unexpect-edly his wife thought it was a joke.

“They went and got my things for me out of my office, and ‘allowed' me one phone call,” herecalls, “it just happened to be April 1st.”

Spence was shocked. While his company had been letting people go since January, his cowork-ers were as surprised as he was. He'd been an exploration manager with Talisman Energy for 22years and, just one month before, was given a glowing performance appraisal. There was no advance notice.

Two minutes after being informed he was let go, a representative from Toombs Inc. – a careertransition service – introduced herself to Spence. Almost four months later, Spence is in a very dif-ferent position indeed. On July 27, Spence started his new job, as exploration manager withTransGlobe Energy. He chose the position with TransGlobe over another excellent offer from adifferent company. His compensation package is “equal or better” than his equivalent position atTalisman. As Spence freely admits, however, he got there with significant help.

“We help people (who have just lost their jobs) in a variety of ways,” says Kathleen Wollenberg,vice president and general manager of Toombs.

“For people (like Spence) who haven't had to look for work in years and years, it can be veryscary –looking for work is a process that requires a lot of different skills.”

At the professional career level, simply skimming the classified ads just isn't good enough. It'snot unlike fishing – the big fish aren't caught with luck, but with patience and skill. For many pro-fessionals suddenly thrust back into the marketplace, they need to re-learn even the most basicbut necessary skills – including the seemingly basic skill of resume writing.

“I'd always kept my resume up to date, but again, it had been 22 years since it saw the lightof day,” says Spence. “Things change in 22 years – especially style and format.”

Spence attended a resume workshop, with about 12 other Toombs clients, which included in-struction, time to re-write, and one-on-one counselling and proofing. The result? A much better-looking, and in Spence's case, concise resume.

“It was six or seven pages before, which I had thought was more impressive,” he chuckles. “It'sabout half that now, with nothing missing and much more concise reading.”

Another vital career management skill many professionals lack, says Wollenberg, is just learn-ing who’s really hiring: she estimates “a full 80% of jobs at this level aren’t advertised. Even if theyare, she adds, they're usually still hired through referrals and networking.

“Our program really emphasizes the importance of networking,” says Wollenberg. “So many peo-ple have told me they’d always blown it off, but the light goes on and they say ‘I get it now.’”

“Networking is so important – you need to have a lot of people in your camp” agrees Spence,adding that one of his two offers came via a colleague in a similar position.

Skills aside, Spence says one of the most important things Toombs did for him was also one ofthe simplest: it gave him a place to work.

“I felt lost without an office,” says Spence. He’d had an office downtown for 22 years. He wasused to working in a professional setting, and wasn’t comfortable working from home. To addressthis feeling of disorientation, Toombs gives its clients access to a “bullpen office,” with computersand private booths to make calls.

“Toombs was like a transition home,” Spence laughs. In a buyer’s market for work, mastering as many career management skills as possible is vital.

While Alberta’s unemployment rate is the lowest in the country, it’s still on the rise. In June, itreached the highest percentage since November 1996 – 6.8%, up from 6.6% in May.

Companies forced to let some of their people go can still help them by engaging a career tran-sition service, says Briar McGinnis of Alberta Employment and Immigration. “I think there’s moreoverall sensibility now than before – at lot of companies hire private contractors to assist afterlayoffs,” he says.

The Alberta government also offers career transition services, he adds, up to and including financial assistance.

Laid-off professionals get helptransitioning their careers

Simple, portable, and easy to use are deceivingwords for such complex technology, but this isexactly how Inmarsat’s Broadband Global Area

Network (BGAN) service works. The BGAN systemutilizes three powerful Inmarsat 4 (I-4) satellites toprovide broadband coverage anywhere in theworld. On Thursday, Sept 10, Inmarsat, their distribution partner Stratos Global, and serviceprovider Infosat Communications LP came to-gether in Calgary to demonstrate the technology behind the BGAN terminals and their applicationswithin the oil and gas industry.

After a brief introduction and explanation of sev-eral BGAN features, Guy Mariz of Inmarsat gave thestep-by-step demonstration showing how quicklyand easily a BGAN terminal is set up.

Within five minutes, including a detailed expla-nation of each step, the Explorer 700 terminal wasup and running. The BGAN terminal had located thesatellite, registered the user, and accessed the inter-net, all through Mariz’s laptop. A quick Googlesearch illustrated the connection speed.

The Explorer 700’s standard variable bit rate is492 kbps, but if a guaranteed service rate is need-ed streaming at 384 kbps is possible, explainedMariz.

“Automatic setup is also possible,” Mariz says. TheBGAN terminal uses a single SIM card which is pro-grammable for specific users, streamlining the setupprocess.

“BGAN excels as a mobile device,” he says, “Youonly pay for what you use, per megabyte or perminute.”

BGAN terminals are able to simultaneously uti-lize voice and broadband data transmissions. Marizdemonstrated this by simply plugging in a regulartelephone and placing a call.

“BGAN gives anyone the connectivity they would enjoy in an office anywhere in the world,”he says. “Essentially you can replicate your office.”

The terminal uses Launch pad, a simple interface, and is compatible with all Microsoft prod-ucts, Citrix and many FTP programs. There are several terminal types based around the needsof industry. Many terminals offer Ethernet, Bluetooth and USB connections for a variety of lap-tops. One BGAN terminal has the ability to support 11 simultaneous users.

There are several different access terminals available, each with their own unique features.Each access terminal is designed for portability and will fit easily in a laptop bag or briefcase,making it ideal for use in remote locations, man alone situations, and at the exploration phase.BGAN easily allows workers to remaining in touch, instantly sending photos, reports, and updates back to the office.

Next, BGAN’s video conferencing capabilities were highlighted as he connected with a col-league in Inmarsat’s London, England office.

“We’ve had many requests for video conferencing from our oil and gas clients,” says DaleGamber, Infosat communications vice-president of sales and marketing. The video conferenc-ing capabilities are becoming more commonly used all the time, says Gamber.

“It’s surprising what a powerful tool it is. Companies are able to get their message out toeveryone at the same time,” he says.

Two additional products were demonstrated using the BGAN network, a FrontlineCommunicator by AudiSoft Technologies and AFIANT Satellite Network Video ManagementSystem by Modern Security Solutions LTD.

The Frontline Communicator is a small portable device with a small camera attached to aheadset, for hands-free use, and its own interface. The communicator was designed withtelemedicine or off-site expert advice in mind. Users are able to connect to the BGAN net-work, and communicate through voice and live video, with an expert who may be locatedhalf a world away.

The AFIANT Satellite Network Video Management System is a unique security offeringjointly offered through Stratos Global and Modern Security Solutions LTD. AFIANT providesa cost effective solution for video surveillance and monitoring of remote assets.

By utilizing the BGAN background IP channel, user’s can implement motion triggered record-ing, and view or manage the information from anywhere in the world.

“The balance BGAN strikes between portability and data capacity makes it the prefect solution for our customers,” says Sarah Crew, Infosat’s sales and marketing coordinator. “Theportability and easy use of the terminals are where BGAN really shines.”

Infosat Communications LP is a complete communications solutions provider located inCalgary, Alberta. As one of North America’s leading providers of satellite communications, BGANwas a natural addition to Infosat’s services.

By building upon Inmarsat’s global satellite coverage through the I-4 network, and StratosGlobal position as the only first tier BGAN service providers in Canada, Infosat offers 24/7 cus-tomer support and the right BGAN solution to resolve unique communication challenges inthe industry.


BGAN DemonstrationJoni Evans


Moyno® Progressing Cavity PumpsOffer Dependable Performance & Low Maintenance in Upper- and Lower-Deck FPSO Applications

Moyno® Progressing CavityPumps from Moyno, Inc. providenumerous performance enhanc-

ing benefits in upper- and lower-deckFPSO applications in the oil and gas in-dustry.

Moyno Progressing Cavity Pumps pro-vide the ultimate in positive displacementpump versatility as they are capable ofcost-effectively handling clean and oily liquids as well as corrosive f luids andthick, abrasive slurries and sludges, evenwith viscosities over 1,000,000 cps. Theproduct line includes models capable ofgenerating flow rates up to 2,500 gpmand pressures to 2,100 psi. Moyno pumpsare well-known for low maintenance, dependability and long service life which result in low overalltotal cost of ownership in both top-side and hull-side applications. Their high performance, progressingcavity design results in a gentle, low shear, pulsation-less discharge.

A variety of proprietary Ultra-Flex® stator elastomers and Ultra-Shield® rotor coatings sustains peakpumping efficiencies, minimizes maintenance and extends useful service life even in the most cor-rosive and/or abrasive service environments.

Typical Moyno Progressing Cavity Pump applications include the following:• Desalter• LP and HP Flare• Closed Drain• Sludge Drain

• Oily Bilge Water• Diesel Fuel Generator Feed• Drilling Mud Transfer

Global Heat Transfer Ltd.announces a breakthrough in lightweight cooling systems

The Jumbotron design utilizes GHT’s latest Aluminum Technologyto cut more than 50% of the weight out of previous3000HP designs, 30% out of 2500HP designs and

even cuts 27% out of the 2250HP designs.Combined with our industry partners we are able

to help the industry design some of the first Canadianroad legal 3000HP Frac Pumpers in the market today.

The math was easy. With an average well requiring up to 50,000 HP to

Frac the current fleet of 2250HP pumps requires a mini-mum of 23 units at site. A fleet of 2500HP pumps requires 20units at site. The cost savings of getting to 3000HP boils down to themath. With a 50,000HP well, it only requires 17 units on site vs 20 or 23units previously. That’s an immediate 15% improvement (compared to 20 units) or a 26% improvement when compared to 23 units on site. When the capital cost of the fleet and thelabor to operate the fleet is factored in, it’s adds up as a major cost savings for the industry.

If the math was that easy, why was it never done before? The issue was always the weightof the radiator. To get an extra 500HP cooled you neededlarger radiators than 2500 or 2250HP units. Larger radiatormeant more weight. More weight on the cooling systemadded up with more engine wet and a heavier transmissionmeant the units could not pass legal road bans.

GHT combined with a few select industry partners andreduced weight on our cooling system by 50% in the3000HP application and are able to certify the 3000HPpumps as road legal.

Contact GHT today for more information.

october 2009 volume 10, number 5

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