The official publication of the Canadian Association of Drilling Engineers

NOVEMBER/DECEMBER • 2012
PLUS
Need a Lift? A rundown of heavy
oil secondary recovery methods
PM#40020055
Green Dream? Carbon capture and storage
could curb emissions from heavy oil production
Horizontal drilling and
thermal production make
their way to the home of
heavy oil
Hot or Cold? Knowing if thermal
techniques will be used in a well
can help during construction
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www.cadecanada.com NOVEMBER/DECEMBER 2012 3
The official publication of the Canadian Association of Drilling Engineers
DEPARTMENTS
4 PRESIDENT’S MESSAGE
7
THE DRAWING BOARD
President’s message,
member’s corner, news and
notes, technical luncheons
12 MEMBER PROFILE
14 STUDENT PROFILES
28
BY THE NUMBERS
30 DRILLING DEEPER
U.S. natural gas could fuel
oil sands production
22
FEATURES
16 HEAVY OIL INTEREST HEATS UP
Lloydminster is at the centre
of renewed interest
in Western Canada’s
heavy oil belt
22 ENHANCING PRODUCTION
Carbon capture projects aim
to limit the environmental
impact of increased
production
24 FROM COLD TO HOT
Thermal production is just
one of the considerations for
constructing a heavy oil well
26 HEAVY LIFTING
A little help goes a long way
in trying to pump heavy oil
from the ground
The mandate of the Canadian Association of Drilling Engineers is to
provide high-quality technical meetings and to promote awareness on
behalf of the drilling and well servicing industry. With more than 500
members from more than 300 companies, CADE represents a broad
spectrum of experience in all areas of operations and technologies.
Through CADE, members and the public can learn about the tech-
nical challenges and the in-depth experience of our members that
continue to drive the industry forward. For drilling and completions
specialists, CADE currently offers one of the best networking and
knowledge sharing opportunities in the Canadian petroleum industry.
CANADIAN ASSOCIATION OF DRILLING ENGINEERS
560, 400 – 5 Avenue SW
Calgary, AB T2P 0L2
Phone: 403-532-0220
Fax: 403-263-2722
www.cadecanada.com
PRESIDENT: Robert Jackson
PAST PRESIDENT: Eric Schmelzl
WELL CONSTRUCTION JOURNAL EDITOR: Christian Gillis
WELL CONSTRUCTION JOURNAL IS PUBLISHED FOR CADE
BY VENTURE PUBLISHING INC.
10259 105 Street
Edmonton, AB T5J 1E3
Phone: 780-990-0839
Fax: 780-425-4921
Toll Free: 1-866-227-4276
circulation@venturepublishing.ca
PUBLISHER: Ruth Kelly
ASSOCIATE PUBLISHER: Joyce Byrne
MANAGING EDITOR: Steve Macleod
ART DIRECTOR: Charles Burke
ASSOCIATE ART DIRECTOR: Andrea deBoer
ASSISTANT ART DIRECTOR: Colin Spence
PRODUCTION COORDINATOR: Betty-Lou Smith
PRODUCTION TECHNICIAN: Brent Felzien
CIRCULATION COORDINATOR: Jennifer King
ACCOUNT EXECUTIVE: David Frazier
CONTRIBUTING WRITERS: Justin Bell, Graham Chandler,
Kelley Stark
NOVEMBER/DECEMBER • 2012
24
PRINTED IN CANADA BY ION PRINT SOLUTIONS.
RETURN UNDELIVERABLE MAIL TO 10259 105 ST.
EDMONTON AB, T5J 1E3
CIRCULATION@VENTUREPUBLISHING.CA
PUBLICATION MAIL AGREEMENT #40020055
CONTENTS
©
2012 CADE. NOT TO BE REPRINTED OR
REPRODUCED WITHOUT PERMISSION.
000PSN-CCI-FP.indd 1 4/18/12 9:17:06 AM
16
WCJ_Nov-Dec_12_p02-03.indd 3 11/15/12 10:45:34 AM
Knowledge is
Political Power
People need to educate themselves and challenge governments
to become fiscally responsible
RESIDENTIAL ELECTIONS ARE A
lot like the famous line from Forrest Gump,
“life is like a box of chocolates, you never
know what you are going to get.”
Each candidate spends many hours in front of
television, pandering to the media and glad-hand-
ing their way across the country. All of that effort
is spent describing their position on the apparent
issues of the day, as they pretend to clarify exactly
what the public will get if they are elected.
In reality, the real issues surrounding the coun-
try are most often not put in front of the public
at all, as the “average citizen” is not well versed
in global monetary systems and the complexities
of international currency, tax and trade, to know
what questions are really relevant to the country’s
current or future fiscal situation.
The typical citizen relies on the various “checks
and balances,” which have been designed to keep
government in line, if not honest. The problem
is the public has absolutely no recourse should
a government fail to deliver on promises made
along the campaign trail. When was the last time a
government was forced out of office because they
were held accountable for fiscal issues? Govern-
ments simply borrow more money without any
public mandate or input, and announce yet an-
other budget deficit. It washes through the media
with little notice and hardly a murmur from the
public – the ramifications seem too far from day-
to-day life to be real, pertinent and important.
Budget deficits have been the norm for so many
governments for so long, that it is assumed that
they have little, if any, impact on the average citi-
zen. Unless, of course, you are a citizen of Greece,
or Spain, or any one of a long list of financially
destitute countries who can no longer meet the
interest payments on their debts. When the gov-
ernment is financially ruined, then the people of
the country are in financial ruin along with them.
Citizens of those countries cannot opt out of the
consequences or vote in a new political leader
who will make the pain go away. They cannot
carry on with “life as usual” as the infrastructure
and institutions that previously supported their
way of life shrink or disappear altogether.
The reality of the situation becomes very clear,
very personal, and of overwhelming importance.
It brings with it an outcry against all of the politi-
cal leaders who drove them into ruin, knowingly
mismanaging the fiscal affairs of the country over
decades.
The important question to ask is: what lessons
can be learned from some of the current political
happenings around the globe? I believe there is
one clear, pertinent, and important step that ev-
ery citizen in every country can take to change the
course of our destiny. The general public needs to
take responsibility for becoming educated on the
topics that really matter. We need to make the
effort to learn exactly what the issues really are,
the facts that surround those issues and not just
accept whatever the media chooses to feed us.
Once armed with knowledge, people need to
get active. They need to take action to ensure that
fear, misinformation and public ignorance does
not allow mismanagement of our fiscal or natu-
ral resources to occur. In my opinion, that is the
only prescription that may prevent the disease
and death of a city, province or nation.
Our industry currently faces the same challeng-
es our country does. Moratoriums on hydraulic
fracturing, water use, and a myriad of aboriginal,
land use and inter-provincial squabbles threaten
our future. For those who know the facts sur-
rounding those issues, it is time to get actively in-
volved to ensure the correct decisions are made.
Speak to your friends, neighbours and family.
Join associations, clubs and conferences. Lever-
age the internet, and all of the communication
and educational opportunities it offers. There
is a great deal to do and little time in which to
do it. The only thing we cannot do, is nothing
at all.
Eric Schmelzl
CADE Past President
MESSAGE
Past President’s
4 NOVEMBER/DECEMBER 2012
Well Construction Journal
WCJ_Nov-Dec_12_p04-05.indd 4 11/13/12 12:32:00 PM
www.cadecanada.com NOVEMBER/DECEMBER 2012 5
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Global Steel maintains key relationships with
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One call to Global Steel provides customers with com-
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WCJ_Nov-Dec_12_p06-11.indd 6 10/31/12 3:27:16 PM
NOVEMBER/DECEMBER 2012 7 www.cadecanada.com
BOARD
The Drawing
Revisiting Lloydminster
ELCOME TO THE NOVEMBER/DECEMBER EDITION
of Well Construction Journal. This is our last
issue for the year and we hope that everyone
is enjoying the new format. We are going to be
continuing on with the same format next year.
This issue takes a look at the heavy oil fields near
Lloydminster. Some of Alberta’s earliest oil discoveries
were made in this region, but production from the heavy
oil belt proved difficult. While Husky Energy remained the
dominant producer in the region for many years, more
companies are heading to the region to see if thermal pro-
duction techniques, such as steam-assisted gravity drainage
(SAGD), can turn the old fields into new production.
The CADE Technical Luncheons will be running in
November and December. They will be held monthly at
the Westin in downtown Calgary, so check out our website
(www.cadecanada.com) where details of the upcoming
luncheons are posted.
We are continuing to look for ideas and presenters
for the Technical Luncheon presentations. Please don’t
hesitate to contact us if you have any ideas for upcoming
topics or issues you’d like to see included at the luncheons
or in the magazine. We hope you the membership will par-
ticipate and continue to make these events interesting and
successful. We are also looking for topics that tie into the
formation we focus on in Well Construction Journal each
month. If you have any issues you’d like to see covered,
please email me and we will do our best to get the story.
Don’t forget, we would like to publish any of your
information and announcements on new products, new
technologies and senior personnel changes for publication
each month. Please forward any announcements to us,
as we would be excited to run them in our new feature
section.
The first annual CADE golf tournament was a huge
success. There were 108 golfers at Bearspaw Country Club
on Oct. 1 for what turned out to be one of the nicest fall
golf days in Calgary. Many of the golfers stayed well after
the tournament to socialize and get caught up with old
friends and colleagues. Watch for announcements this
spring, online and in the magazine, for information on
next year’s event.
We appreciate your continued support and good luck to
all going into the winter drilling season. We look forward
to seeing you at the upcoming luncheons.
CHRISTIAN GILLIS, Editor
Well Construction Journal
christiang@hawkeye.ca
403-265-4973
W
E D I T O R ’ S N O T E
CADE Executive
Team 2012/2013
President Robert Jackson 403-615-9504
Past President Eric Schmelzl 403-862-0870
Secretary Tammy Todd 403 613-8844
Treasurer Cecil Conaghan 403-667-9812
Membership Chairman John Burnell 403-265-4973
Education Chairman Mike Buker 403-930-9015
Social Chairman Dan Schlosser 403-531-5284
WCJ Editor Christian Gillis 403-265-4973
Technical Chairman Jeff Arvidson 403-232-7100
IT Chairman Matthew Stuart 403-605-3790
Drilling Conf. Liaison Jeff Orita 403-693-7563
Executive Member John Pahl 403-292-7966
Sponsorship & Marketing Scott Payne 403-400-4032
E X E C U T I V E T E A M
Drilling Conf. Liaison Jeff Orita Drilling Conf. Liaison Jeff Orita
Executive Member John Pahl Executive Member John Pahl
WCJ_Nov-Dec_12_p06-11.indd 7 10/31/12 3:22:37 PM
Well Construction Journal 8 NOVEMBER/DECEMBER 2012
BOARD
The Drawing
N E WS A N D N O T E S
Deadline for Scholarship
Program Approaches
APPLICATIONS ARE CURRENTLY BEING ACCEPTED
for the Canadian Association of Drilling Engineers
(CADE) student bursary program, but the deadline
for applications is drawing closer.
CADE’s student bursary program was created to
support dependents of the association’s members,
or members themselves, who are furthering
their education in a field of study related to the
petroleum industry.
The bursary is open to students that are residents
or landed immigrants of Canada who are studying
in either Canada or abroad. The grading of bursary
applications will be based on the following criteria:
1. Enrollment in an engineering program is given
highest priority; other programs are given
secondary consideration.
2. Financial need.
3. Industry experience.
4. Overall quality of submission.
Applicants must be an active CADE member to
be eligible. For more information on becoming a
CADE member or to find an application form for
the bursary program, visit the CADE website at
www.cadecanada.com. Any questions regarding the
information presented here can be directed to Mike
Buker at 403-930-9015.
The deadline for applications is December 15,
2012. The selection process will be at the discretion
of the CADE Executive Committee and recipients
will be notified by March 1, 2013.
Getting the Full Picture Downhole
AFTER A SUMMER BREAK, THE CANADIAN
Association of Drilling Engineers (CADE)
technical luncheons returned in September with
a session at the Westin in downtown Calgary on
utilizing downhole cameras.
Curtis Jerrom, vice-president of EV Canada Inc.,
spoke talked about how downhole cameras can
be deployed to understand the many challenges
that occur in horizontal wellbores.
Jerrom worked as a logging engineer with
Halliburton Logging, where a lot of the technology
for downhole cameras was introduced. EV Canada
was started in 2011 and has advanced the camera
technology in an effort to meet the needs of the
extreme hot and high pressure environments of
today’s horizontally drilled wellbores.
The presentation focused on how cameras
can be good “fishing aids” and mechanical
inspection tools on difficult wells, so companies
can make “cost-optimal go or no-go decisions.”
The cameras offer a qualitative analysis of the
wellbore, which combined with field experience,
can assist in resolving a wide range of operational
problems, Jerrom says.
WCJ_Nov-Dec_12_p06-11.indd 8 10/31/12 3:22:47 PM
NOVEMBER/DECEMBER 2012 9 www.cadecanada.com
Deadline for Scholarship
Program Approaches
N E WS A N D N O T E S
Twin Acquisitions Strengthen
Company’s Position in Lloydminster
TWIN BUTTE ENERGY LTD. MADE A $127 MILLION
offer to acquire a producer in the Lloydminster
area, shortly after closing on an acquisition of
another producer in the region.
The Calgary-based intermediate completed its
all-share acquisition of Avalon Exploration Ltd.
in August and made the offer to purchase Waseca
Energy Inc. in September. The two targeted private
companies hold heavy oil assets near Lloydminster
where Twin Butte operates.
The acquisition of Avalon added 85,000 acres
of undeveloped land, which effectively doubled
Twin Butte’s net undeveloped land position in
the Lloydminster heavy oil fairway. The Waseca
acquisition, meanwhile, increased Twin Butte’s
land position further to a total of about 220,000
undeveloped acres. Twin Butte will also receive a
seismic data base of 2,500 kilometres of 2D data
and 16 square-kilometres of 3D data.
The Waseca transaction also increased Twin
Butte’s current production of conventional
heavy oil in the region by 3,500 barrels per day to
19,000 barrels of oil equivalent per day. Roughly
89 per cent of Twin Butte’s production from the
Lloydminster area is heavy oil and the remaining
portion of production is natural gas liquids.
T E C H N I C A L L U N C H E O N S
Luncheon Tickets
November 7
December 5
The Westin
320 4th Avenue SW
Calgary
11:30 a.m. Reception
12:00 p.m. Lunch
12:30 p.m. Presentation
Keep an eye on www.cadecanada.com for
updates on technical luncheon topics and
presentations.
Save the Date
MEMBERS: $45 (plus GST)
NON-MEMBERS: $55 (plus GST)
FULL TABLES OF 10: $450 (plus GST)
STUDENT: $15 (plus GST)
WALK-UP: $55 (plus GST)
GST REGISTRATION #R123175036
Visit www.cadecanada.com for all
ticket purchases
WCJ_Nov-Dec_12_p06-11.indd 9 10/31/12 3:22:57 PM
Well Construction Journal 10 NOVEMBER/DECEMBER 2012
BOARD
The Drawing
N E WS A N D N O T E S
A Couple of Big Swings Finish Off
the Golf Tournament Season
THE FIRST ANNUAL GOLF TOURNAMENT hosted by
the Canadian Association of Drilling Engineers
(CADE) was pulled together in relatively short
time, but went off without a hitch on Oct. 1.
The tournament was held at the Bearspaw
Country Club and 108 golfers participated in the
event. Proceeds from the CADE Golf Tournament
will be used to support the association’s student
bursary program.
NETWORKING
The Student Petroleum Society (SPS) at SAIT
Polytechnic organized its second annual SPS
Industry Golf Tournament this fall to give
students an opportunity to network with industry
professionals.
The golf tournament was held on Sept. 17
at Valley Ridge Golf Club. There were about 40
students in the tournament and about the same
number of participants from the oil and gas
industry. Each foursome consisted of two students
and two people working in the industry.
SPS vice-president of external relations Dave
Rathgeber says the tournament was a phenomenal
success and the student organization is already
planning next year’s event.
WCJ_Nov-Dec_12_p06-11.indd 10 10/31/12 3:44:27 PM
NOVEMBER/DECEMBER 2012 11 www.cadecanada.com
WELCOME NEW MEMBERS
PER ANGMAN
MUHAMMAD ASIM
CORY BACHMEIER
DAVID BAILLARGEON
ALLEN BEKOLAY
GREG BELBIN
DONALD BOOKER
CRAIG BOTHWELL
LOUIS BRUNEAU
DAVID CALDWELL
KRISHNENTHU CHAKRA
RAVI CHAUDHARI
MIKE CULLEN
DAVE DIACHOK
JEFF DICKIE
SHAWN DOBLE
BOB DYCK
MICHAEL DYKALSKI
GREG ELLIOT
JIM EVENSON
ED FACEY
JAMES FARQUHARSON
SCOTT FAWCETT
MOHAMMAD FAZAELIZADEH
JANIS GAYLE
PATRICK GERBER
NICK GETZLAF
TERRY HAGEN
HAROLD HANSEL
RICHARD HAWKER
BRIAN HEPBURN
ALEX HLADUN
CLIFFORD HOGSTEAD
CHRIS HOPEWELL
JOHN KEARSEY
AMANDA KETCHUM
TOM LESSING
RUSS LILJA
GORDON LOVE
TIM MACTAVISH
MEHDI MANSOURPOUR
BLAKE MCCLEERY
TRAVIS MCGINNIS
DOUG MCLEAN
ROBERT MCRAE
BOB MONETA
LES MORRIS
EWEN MUNRO
CHRIS MURRAY
BYRON OLSON
AKSHIT PATEL
GLEN PECKHAM
TOD PODWYSOCKI
ZENON PYLYPEC
RYAN QUIGG
DEREK RAE
JONATHAN REIMER
DEAN RUTLEDGE
DAVID SALAMANDICK
BRAD SCHAAL
DANIEL SCHLOSSER
LAURA SCHLOSSER
KEVIN SCHMIGEL
CODY SCHNEIDER
EARL SECORD
GREG SHPYTKOVSKY
SHEENA SMIGELSKI
TERRY SMITH
DARREN SMITH
KEVIN SPARKS
DARRELL STELMACK
ALEXANDER (SANDY) STETSKO
PETER WALLIS
SUSAN WARREN
BRIAN WILSON
MICHAEL WILTON
WHY BECOME A CADE MEMBER?
As of 2012, the Canadian Association of
Drilling Engineers (CADE) has been active
for 38 years. With more than 500 members
from more than 300 companies, CADE
represents a large spectrum of experience in
all areas of operations and technologies.
For drilling and completions specialists,
CADE currently offers one of the best
networking and knowledge sharing
opportunities in the Canadian petroleum
industry. The skills and knowledge obtained
by your participation in CADE will benefit
you and your employer, with direct
application to your professional career.
CADE offers various means for members
to connect and share their insights.
Monthly technical luncheons are held
with topical industry presentations. Other
membership benefits include our monthly
publication Well Construction Journal and
a membership directory, which is the who’s
who of the Canadian drilling industry. Our
website – www.cadecanada.com – is an
excellent focal point for industry events,
blogs and other news. We are also active on
LinkedIn and Twitter.
WHO CAN BECOME A CADE MEMBER?
CADE members can be anyone employed
in the drilling and completions industry
or with merely an interest in the industry.
Typical members include drilling
and completions engineers, geologists,
technical personnel, sales personnel and
students. Student memberships are avail-
able to any post-secondary student inter-
ested in learning more about drilling and
completions.
Please feel free to share information
about CADE with all the people in your
organization who are interested in the
drilling and completions industry.
CADE MEMBERSHIP RENEWALS
CADE’s membership year is from Septem-
ber to September. During the summer,
CADE members will receive an email and
link for the renewal process on our web-
site.
Please remember the benefits of being a
CADE member include APEGA’s professional
development hour, staying abreast of
technological and industry advances,
drilling conferences and a great opportunity
to network. Thank you for your support.
CADE MEMBERSHIP CHANGES
Log on to www.cadecanada.com to become
a member or to update your contact
information.
ME MB E R ’ S C O R N E R
WELCOME NEW MEMBERS
WHY BECOME A CADE MEMBER?
WHO CAN BECOME A CADE MEMBER?
CADE MEMBERSHIP RENEWALS
CADE MEMBERSHIP CHANGES
WCJ_Nov-Dec_12_p06-11.indd 11 10/31/12 3:23:10 PM
Well Construction Journal 12 NOVEMBER/DECEMBER 2012
M
PROFILE
Member
The IT Factor
Matt Stuart brings a decade of IT experience to
the oil and gas industry
ATT STUART WAS THE ODD MAN OUT
when he helped launch Petrosight Inc.
last year. He was the only one of the four
founding partners without experience
in the oil and gas industry. Stuart, however, did
have a long history in IT and was a quick study
in understanding how
technology can augment
operations in the energy
sector.
“The main concern
with implementing
something new, when
you’re doing something
as dangerous as drilling a well, is making a
mistake,” says the 30-year-old. “Technology should
be used as support and to deliver value. It should
help companies understand the drill they just did
and the drill they want to do. It should help them
make the best decisions in order to spend money
wisely.”
Petrosight developed a web-based well and rig
management system. The program is designed to
allow a user to monitor, report and control every
step of the drilling lifecycle, and was released
to a handful of clients in September for testing.
The cloud-based system can be accessed on any
computer or device with internet access and is
intended to provide companies with up-to-date
software without having to invest in a large IT
infrastructure.
“Presently, every option out there is a typical
monolithic client server,” Stuart says. “It requires
expensive licenses up front, expensive hardware
they have to buy, they have to have their own IT
people to keep it up to date, and hire consultants
when it doesn’t work.”
Stuart started off as an IT consultant 10 years
ago when he founded Surge Ingenuities Inc. He
became interested in programming video games
at a young age, but while working towards a
computer science degree at the University of
Calgary, Stuart realized he was more interested
in solving problems. “That led me to business
software, which led me to business consulting,”
he says.
Stuart enjoyed the expectations that came with
being a consultant. He liked putting his reputation
on the line, he enjoyed the pressure of always
needing to have the right answer and of always
being one step ahead of a
client’s needs.
Stuart also liked the
variety. He spent time
working as an IT consultant
in the advertising industry,
the magazine industry and
in the finance industry. “It
allows me to pull from a variety of experiences,
from different markets and pull data from different
problems,” he says.
The oil and gas industry will provide Stuart with
a new set of experiences to pull from and he
took over as the IT Chairperson on the Canadian
Association of Drilling Engineers (CADE) executive
team earlier this year to gain more exposure to the
industry. “Working in the oil and gas industry was
long overdue,” he says.
000WCJ-Pacesetter-FP.indd 1 10/19/12 11:51:40 AM
“Technology should be used as support
and to deliver value. It should help
companies understand the drill they just
did and the drill they want to do. It should
help them make the best decisions in order
to spend money wisely.”
WCJ_Nov-Dec_12_p12-13.indd 12 10/31/12 3:31:01 PM
000WCJ-Pacesetter-FP.indd 1 10/19/12 11:51:40 AM WCJ_Nov-Dec_12_p12-13.indd 13 10/31/12 3:31:02 PM
Well Construction Journal 14 NOVEMBER/DECEMBER 2012
C
arter Dziuba is majoring in chemical engineering at the
University of Calgary Schulich School of Engineering. He has
completed three years of his undergraduate degree and is cur-
rently on a 16-month internship with Laricina Energy Ltd.
The internship is focused on reservoir engineering and project
management at a steam-assisted gravity drainage (SAGD) operation.
As part of the internship, Dziuba looks at increasing oil recovery
from bitumen reservoirs through the use of solvent-assisted SAGD.
Dziuba is also currently serving as the director of external relations
for the University of Calgary Petroleum and Energy Society (PES).
Prior to this role, he served as the director of membership for PES
and helped facilitate the largest membership increase in the history
of the organization. The number of PES members increased by 40 per
cent during 2011 – 2012. Dziuba believes students should have the
opportunity to explore their career interests beyond the classroom.
He is committed to helping students gain exposure to the energy
industry and exploring the career options available to them.
After obtaining his degree, Dziuba plans to work in the heavy oil
industry to gain the experience needed to achieve his professional
engineering designation and then pursue further education.
Young Talent
Highlighting tomorrow’s best and brightest
Student
PROFILE
Carter Dziuba
Chemical Engineering
University of Calgary
Dion Webster
Petroleum Engineering Technology
SAIT Polytechnic
ion Webster is a second year Petroleum Engineering Tech-
nology student at SAIT Polytechnic, but prior to enrolling at
the post-secondary school she had the opportunity to job
shadow different occupations in the industry. After gaining
an understanding of what the industry had to offer, she decided to
follow in her father’s footsteps – who spent more than 25 years work-
ing in the oilfield – and enroll in an energy-related post-secondary
program.
After completing her first year of school, Webster worked
for ConocoPhillips Canada as a summer student in production oper-
ations. She was involved in a turnaround where she had the chance
to inspect a treater, free water knockout and numerous other tanks.
After her first year in school and first summer working in the field,
Webster has become very interested in drilling, completions and
production operations. When her second year of school is com-
plete, Webster will have a better feel of which discipline she wants to
specialize in.
D
WCJ_Nov-Dec_12_p14-15.indd 14 10/31/12 3:33:08 PM
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NOVEMBER/DECEMBER 2012 15 www.cadecanada.com
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DESIGNATED HELP
The Association of Professional Engineers and Geoscientists of
Alberta (APEGA) has hired a staff member to assist internation-
ally-educated graduates become licensed in Alberta.
Colombia-born and educated professional engineer
Guillermo Barreiro joined the Calgary-based association
in September to serve as the manager of internationally
educated graduates integration and liaison.
Barreiro immigrated to Canada from Colombia in 2001. He
worked his way through the licensing system and received his
professional engineering designation, the same licence held by
thousands of professional engineers across Alberta.
“There’s lots of pressure on new Canadians when they come
here. I had a lot of adapting to do. Having help from someone
who knows the challenges first-hand would have made things
easier for me,” said Barreiro in a news release. “I’m looking for-
ward to giving back because getting my licence from APEGA
allowed me to practice as a professional engineer, contribute to
Alberta’s economy and give my family a good life here in our
new home.”
With the support of APEGA’s registration department, Bar-
reiro will offer one-to-one guidance to foreign-educated gradu-
ates on the rules for licensure, and how to put together a clear
and effective application. Once they’ve received a decision on
an application, Barreiro can help applicants understand the
next steps. Barreiro will also reach out to agencies that work
with immigrants to clear misunderstandings about the licens-
ing process.
APEGA receives about 2,500 applications for licensure from
foreign-educated engineers and geoscientists each year. “APE-
GA recognizes the public concern that new Canadians are not
able to fully use their skills in support of Alberta’s economy.
I don’t want to see any properly qualified and capable new
Canadian prevented from joining our profession because of
cultural differences,” says Leah Lawrence, president of APEGA.
“Protecting public safety is still our most important job. In-
ternationally-educated graduates still have to meet the same
criteria as Canadian-educated applicants. It’s about making the
process clearer, not easier or less thorough.”
HELP WANTED: Career Department
GRAVEYARD TOUR: the overnight work shift of a drilling
crew that begins at midnight. Drilling operations usually occur
around the clock because of the cost to rent a rig. As a result,
there are usually two separate crews working twelve-hour tours
or three eight-hour tours.
KELLY: a long square or hexagonal steel bar with a hole drilled
through the middle for a fluid path. The kelly is used to trans-
mit rotary motion from the rotary table or kelly bushing to
the drill string, while allowing the drill string to be lowered or
raised during rotation.
SALT PLUG: a temporary plugging agent comprised of graded
granules of salt that form a physical or hydraulic barrier. The
resulting plug typically provides good mechanical and hydrau-
lic strength to enable safe treatment of an adjacent zone. On
completion of the treatment, the temporary salt plug is easily
removed by circulating a water-base fluid to dissolve the plug.
DRILLING SLANG
If you want to walk the walk on a drill site, it helps to talk
the talk. Here are some unique terms and phrases heard out in
the field.
BASKET: a downhole device or tool component designed to
catch debris or objects, such as balls, darts or plugs dropped to
actuate downhole equipment or tools.
WCJ_Nov-Dec_12_p14-15.indd 15 10/31/12 3:33:14 PM
Well Construction Journal 16 NOVEMBER/DECEMBER 2012
REPORT
Special
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NOVEMBER/DECEMBER 2012 17 www.cadecanada.com
EST WELLS WERE DRILLED NEAR LLOYDMINSTER
early in the 20th century, but it took one farmer and an
accidental well to really kick off the region’s oil industry.
Charlie Marren had drilled a well for his livestock, but
his cattle wouldn’t drink from the 160-foot well. In an effort
to determine what was wrong with the water, and why his
cattle wouldn’t take to it, he sent a sample to the University
of Alberta for testing. The answer came back a few days later.
Marren’s well contained petroleum distillates — it was close
to an oil reserve.
Rather than a drilling bonanza, production in the region
took off slowly due to the heavy oil that was pervasive in the
area. The Husky Oil Company moved a refinery to Lloyd-
minster from Wyoming in 1946 and the heavy oil industry
began to grow.
Recent deployment of innovative techniques, such as
steam-assisted gravity drainage (SAGD) wells, and a price of
oil that generates economical returns has brought renewed a
new wave of producers to the Lloydminster region.
LOCATION: Lloydminster
RESOURCE: heavy oil
ESTIMATED RECOVERABLE RESERVES:
75
billion
barrels of oil
RESOURCE BASE:
350
billion barrels of oil

MAJOR PRODUCERS: Husky Energy Inc., Devon
Energy Corp., Canadian Natural Resources Ltd.,
Baytex Energy Corp., Twin Butte Energy Ltd.
WCJ_Nov-Dec_12_p16-21.indd 17 11/15/12 10:48:37 AM
Well Construction Journal 18 NOVEMBER/DECEMBER 2012
By Justin Bell
Heavy Oil Interest
Heats Up
IRBY HAYES HAS LIVED IN LLOYDMINSTER
his entire life. He started working for his
father at the age of 10 and decided at a fair-
ly young age that he would stick around.
He had no desire to follow others who grow up in
the border town and go to university or move to
Edmonton. Hayes wanted to make money and
his life has revolved around Lloydminster’s heavy
oil fields.
Hayes started his own oilfield services company
Kirby Hayes Inc. when, as he puts it, “I got sick of get-
ting laid off.” He has witnessed
innovations in the heavy oil
industry and has watched the
industry blossom in the past
few decades.
“I suppose because I lived
through that as a service guy I was able to talk to
lots of operators,” says Hayes. “It was a very open
patch at that time. There was a lot of discussion be-
tween service providers. No one was right or wrong.
We were trying to understand heavy oil production
with sand.”
Recent deployment of innovative techniques,
such as steam-assisted gravity drainage (SAGD) wells,
and a price of oil that generates good economic re-
turns has brought a new wave of producers to the
Lloydminster region. “It’s going to deplete at some
point,” Hayes says, “but right now we are doing high
volume on wells that were uneconomical at $40 or
$50 a barrel.”
Test wells were drilled near Lloydminster early
in the 20th century, but it took one farmer and
an accidental well to really kick off the region’s oil
industry.
Charlie Marren had drilled a well for his livestock,
but his cattle wouldn’t drink from the 160-foot well.
In an effort to determine what was wrong with the
water, and why his cattle
wouldn’t take to it, he sent
a sample to the University
of Alberta for testing. The
answer came back a few
days later. Marren’s well
contained petroleum distillates — it was close to an
oil reserve.
Rather than a drilling bonanza, production in the
region took off slowly due to the heavy oil that was
pervasive in the area. Heavy oil is difficult to extract
and problematic to refine. It is more viscous than
light oil but not as thick as bitumen. Heavy oil typi-
cally has a high specific gravity, low hydrogen to car-
bon ratios, high carbon residues, and high contents
of asphaltenes, heavy metal, sulphur and nitrogen.
K
REPORT
Special
Lloydminster is at the centre of renewed interest in Western
Canada’s heavy oil belt
“I think as long as the oil prices
continue to climb, we will be okay.”
– Kirby Hayes, owner
Kirby Hayes Inc.
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NOVEMBER/DECEMBER 2012 19 www.cadecanada.com
Heavy Oil Interest
Heats Up
The Dina Oil Company Ltd. hit a good gas well in 1937. More ro-
tary rigs were brought to the region and conventional wells started
to increase oil production. The Husky Oil Company moved a re-
finery from its home state of Wyoming to the Lloydminster re-
gion in 1946 as part of the now Calgary-based company’s search
for new business opportunities. The refinery began processing asphalt,
as well as bunker fuel for the rail industry. Husky’s refinery helped in-
crease the number of wells producing in the region.
A switch in 1958 by both of Canada’s national rail companies to use
steam from diesel engines, rather than bunker
fuel, to power their locomotives threatened
to put a large dent into Husky’s Lloydminster
operations. To offset the loss, the company
formed an ambitious, and aptly named, plan
— The Lloydminster Project. It was aimed at reducing production costs,
while increasing production to 12,000 barrels per day (BPD).
Husky remains one of the biggest players in the Lloydminster region.
The company still operates its refinery, which produces about 29,000
BPD, and added an upgrader in the area in 1992 with the help of gov-
ernment funding. According to material provided by the company,
Husky produces approximately 100,000 BPD in the Lloydminster area.
Only 20 per cent of that is currently produced using thermal technolo-
gies. Husky remains one of the largest producers of asphalt in Western
Canada. Since 1946, the company has pulled more than 800 million
barrels of oil out of the ground near Lloydminster.
There was a slowdown in the region’s oil production during the 1980s.
Operators began deploying new technologies to increase the amount of
oil that could be extracted from the ground, sent through pipelines and
refined to more usable standards. Progressive cavity pumps and foamy
oil drive gave producers greater access to the Lloydminster heavy oil at
a more economical price.
As the price of the West Texas Intermediate (WTI) benchmark spends
more time near $100 per barrel, the economics improve and new com-
panies are drawn to the region. Devon En-
ergy Corp. entered the Lloydminster region
in 2001 when the company purchased An-
derson Exploration for $4.6 billion. Devon
has continued to expand its holdings in the
region and currently has 4,101 producing wells on more than 2.7 mil-
lion acres of land.
The company has drilled more than 1,800 wells since 2003 and
has current production of 39 million barrels of oil equivalent per day.
According to Kevin Casper, vice-president of production with Devon,
there are also about 1,000 suspended wells in the area. Although,
he says, that number is constantly in flux and the suspended wells
could be reactivated depending on technology advancements or the
price of oil.
The majority of Devon’s production near Lloydminster comes from
“We are doing high volume on wells that
were uneconomical at $40 or $50 a barrel.”
– Kirby Hayes
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DEVON ENERGY: Currently has 4,101 producing
wells on more than 2.7 million acres of land.
WCJ_Nov-Dec_12_p16-21.indd 19 10/31/12 3:35:42 PM
Well Construction Journal 20 NOVEMBER/DECEMBER 2012
REPORT
Special
conventional wells using cold flow technology in
shallow formations. “Conventional heavy oil, in the
Lloydminster/Bonnyville area, has a high sand con-
tent,” says Casper. “If you have a mixture of sand, oil
and water, it is highly abrasive. It wears out pumps,
tubing and other components along the way.”
Devon’s in situ oil sands operations, which produce
oil even thicker than Lloydminster’s heavy oil, is pro-
duced using SAGD. Thermal operations have been a
successful production technique in the oil sands and
Devon’s vice-president of thermal operations, Cal
Watson says the company expects its Jackfish SAGD
project to be at 145,000 barrels per day by 2018 and
be up to 200,000 barrels per day by 2020.
Thermal operations, such as SAGD, could be the
next innovation in the Lloydminster region to give
the heavy oil industry another boost. “There are 7 or
8 billion barrels in the Lloydminster area,” Watson
says. “That’s a huge resource and we’ve only tapped 6
to 10 per cent of it. We need to find ways to construct
facilities on a modular and capital-efficient basis.”
Watson doesn’t expect the company to see the same
concentration in Lloydminster as it does at Jackfish
by utilizing steam in older wells. Still, it will mean
7,000 to 10,000 barrels from a well that would nor-
mally have been shut down. “In primary cold flow
oil, you only recover 6 to 10 per cent in place, so
over 90 per cent of the oil is there,” he says.
This latest innovation in production from the
heavy oil belt isn’t just attracting big players like
Husky and Devon. Twin Butte Energy Ltd. recently
made two acquisitions in the Lloydminster region
to bring its production to about 19,000 BPD.
Palliser Oil and Gas Corp. has also established it-
self in the area. The Calgary-based junior has about
95 per cent of its production weighted in Lloyd-
minster. “What attracts us to the Lloydminster area
is the low recovery factor,” says Allan Carswell,
president and chief operating officer for Palliser.
“Basically, going back into some of these old fields
and increasing the recovery factor.”
Hayes is enjoying the increased attention
Lloydminster is getting from these innovative
strategies to produce heavy oil. “I think as long
as the oil prices continue to climb, we will be
okay,” he says.
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ECONOMICS: Increased returns have brought a
new wave of producers to the Lloydminster region.
WCJ_Nov-Dec_12_p16-21.indd 20 10/31/12 3:35:52 PM
Well Construction Journal NOVEMBER/DECEMBER 2012 21
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Well Construction Journal 22 NOVEMBER/DECEMBER 2012
The project aims to reduce greenhouse gas emis-
sions by capturing carbon dioxide produced from
a SAGD facility and store it at a nearby oil produc-
tion field.
“By integrating new process equipment with
existing infrastructure, the aim of the project is
to capture approximately 35 tonnes of CO2 a day
from a steam generator, transport it by pipeline to
an existing compression
facility and inject it into a
partially depleted oil reser-
voir,” Husky said in a news
release. The advancement
of the project is contingent
on securing additional funding participants, as well
as final company and regulatory approvals.
CCS DEVELOPMENT
After mulling it over, Shell Canada Ltd. decided in
September to move forward with the first carbon
capture and storage (CCS) project for an oil sands
operation in Canada.
The Quest CCS project will capture more than
one million tonnes per year of CO2 from Shell’s
Scotford Upgrader. The carbon dioxide will be trans-
ported 80 kilometres from the upgrader through
an underground pipeline to a storage site north of
the Scotford site. The storage site is a porous rock
formation called the Basal Cambrian Sands (BSC),
which according to Shell, is located beneath layers
of impermeable rock. The CO2 will be injected
more than two kilometres underground and will
be monitored to ensure the carbon is permanently
stored.
The International Energy Agency (IEA) estimated
in its 2011 CCS Technology Roadmap that projects in
the energy sector will increase CO2 emissions by
130 per cent by 2050 in the absence of new policies
or supply constraints as a result of increased fossil
fuel usage.
The IEA says that, “CCS is an important part of
the lowest cost GHG mitigation portfolio,” and CCS
will need to contribute one-fifth of the necessary
emissions reductions in 2050 to achieve stabilisa-
tion in the most cost-effective manner. The organi-
By Steve Macleod
S HUSKY ENERGY CONTINUES TO DEVELOP NEW
ways of extracting heavy oil from its massive
land holdings near Lloydminster, the com-
pany also hopes to reduce its environmental
footprint. In July, the integrated oil and gas company
secured $3 million in funding from Climate Change
and Emissions Management Corp. to support a
carbon dioxide capture project 35 kilometres east of
Lloydminster.
The majority of Husky’s
heavy oil assets are located
in the relatively shallow oil
fields in the Lloydminster
region. The Calgary-based
company holds approximately two million acres
straddling the Alberta-Saskatchewan border. Husky
produces approximately 100,000 barrels of oil per
day. During the past six decades, the company has
produced more than 775 million barrels of heavy oil
in the Lloydminster area, which is only about seven
percent of the oil under its leases in the region.
According to Husky, approximately 80 percent
of the company’s heavy oil is currently recovered
through cold heavy oil production with sand
(CHOPS). This method produces sand from the for-
mation along with the oil, increasing productivity by
creating a path of least resistance for the oil to flow
to the wellbore. Husky says the resulting production
rates are higher than what would be expected in a
conventional reservoir setting and CHOPS has been
a foundation for the growth of heavy oil production
in the region since the mid-1990s.
The rest of Husky’s heavy oil production is
recovered using thermal techniques such as steam-
assisted gravity drainage (SAGD). Husky expects
the percentage of heavy oil produced from thermal
projects to increase substantially in the future.
Advances in enhanced oil recovery (EOR) technolo-
gies are also expected to further unlock reserves in
the region.
The company’s steam project in Lashburn is also
the site of one of those EOR advances. Husky says
the proposed $10-million Lashburn CO2 Capture
Demonstration project, if successful, could result
in emission reductions of one megaton by 2021.
A
Enhancing Production
Carbon capture projects aim to limit the environmental impact of
increased production
REPORT
Tech
Shell Canada Ltd. decided in September
to move forward with the first carbon
capture and storage (CCS) project for an
oil sands operation in Canada.
WCJ_Nov-Dec_12_p22-23.indd 22 10/31/12 3:47:13 PM
www.cadecanada.com NOVEMBER/DECEMBER 2012 23
zation envisions 100 CCS projects globally by 2020
and more than 3,000 projects in 2050. The cost to
meet those targets is estimated at more than US$5
trillion between 2010 and 2050.
Both the Canadian federal and Albertan provin-
cial governments have identified CCS as a technol-
ogy in their strategies to reduce CO2 emissions.
The Alberta government will invest $745 million
in Shell’s Quest CCS project from a $2-billion fund
to support CCS, while the Government of Canada
will invest $120 million through its Clean Energy
Fund.
The Quest project will be built on behalf of
Shell’s Athabasca Oil Sands project joint venture.
Shell is the operator of the project and 60 per cent
owner. Chevron Canada Ltd. and Marathon Oil
Canada Corp. each have a 20 per cent stake in the
project, which includes Quest CCS, two oil sands
mine operations and the Scotford Upgrader.
The bitumen produced from the mining
projects – about 255,000 barrels per day from Muskeg
River Mine and Jackpine Mine – is sent in a pipeline
from north of Fort McMurray to the Scotford Up-
grader near Edmonton. From late 2015, Quest will
capture and store deep underground more than one
million tonnes of CO2 a year resulting from bitu-
men processing. Quest will reduce direct emissions
from the Scotford Upgrader by up to 35 per cent
– the equivalent of taking 175,000 North American
cars off the road annually, says Shell.
Construction has begun on Shell’s Quest CCS
project. To improve efficiency, the company says
up to 50 per cent of project work will be done
offsite at a construction yard. Large pre-assembled
modules will then be delivered to the Shell site for
installation.
QUEST FOR CARBON: The Quest CCS project will capture
more than one million tonnes per year of CO2 from Shell’s
Scotford Upgrader.
WCJ_Nov-Dec_12_p22-23.indd 23 10/31/12 3:47:21 PM
24 NOVEMBER/DECEMBER 2012 Well Construction Journal
P
From Cold to Hot
Designing and constructing heavy oil wells in the
Lloydminster area presents a unique set of challenges
REPORT
Tech
By Graham Chandler
UMPING HEAVY OIL FROM THE RESERVOIRS
near Lloydminster is like trying to produce
“ketchup filled with sand,” says Angelo
Ledda, Devon Energy Corp.’s senior project
geologist for the area.
The unique geology of the heavy oil fields
stretching across the Alberta-Saskatchewan border
make planning and drilling a well in the region
quite different from constructing a well for lighter
conventional oil. And shale oil. And oil sands.
“The biggest difference as compared to other
conventional reservoirs is [Lloydminster heavy
oil is] unconsolidated sand, unlike consolidated
rock that you tend to find in other reservoirs,”
Ledda says. “So, you handle it differently in how
you design your wellbore because at the end of
the day, what we are trying to produce is heavy
oil combined with uncon-
solidated sand. In conven-
tional reservoirs the oil is
light enough that it flows
into the wellbore and the
sand stays out.”
Devon has more than
4,000 producing wells in
the Lloydminster area. Early drilling techniques
took their cue from conventional operations and
there was a focus on holding the sand back dur-
ing production. It was eventually discovered that
allowing the sand to flow with the oil increased
production as wormholes began to grow, which
led to the creation of the primary technique used
in the region today: cold heavy oil production
with sand, or CHOPS.
“We are trying to get the well to produce sand
and create a wormhole where the sand starts com-
ing in with the oil stuck to it,” Ledda say. “The first
clue that you have a good well is you get a bunch
of sand coming into the wellbore as well.”
While operators near Lloydminster have figured
out that sand is helpful in production, optimum
horizontal well lengths for CHOPS are still being
determined. “It’s kind of a mixed bag,” says Andrew
Tyler, reservoir engineer for Lloydminster with
Devon. “Costs will track pretty close to lengths, to
the actual target zone. Drilling is quite fast, so to
extend the length of your horizontal doesn’t add a
lot of cost; it’s just whether or not it’s worth doing
from a production standpoint.”
The target zones in the area can also be challeng-
ing to hit, adds Ledda, which can be challenging
because the different formations in the area have
different requirements for optimizing production.
“There are a lot of potential targets,” he says.
“You’ll be going after say the Sparky [formation],
which is one of our main targets, but maybe you
will miss it and get the McLaren. Each one has its
own unique characteristics.”
One major consider-
ation in planning a well
is pump placement. The
mixture of heavy oil and
sand creates a lot of work
for downhole pumps and
engineers need to find a
smooth location to place
the pump to minimize failure. “It’s an important
factor for us,” says Tyler. “A couple of things we’re
looking for as we drill the horizontals are trying
to keep the bit angle as smooth as possible, and
landing as close as possible to the reservoir.”
Tyler also says they pick a dogleg severity and
try to stay below it. “And ensure that we are build-
ing at a reasonable pace,” he says. “We try not to
sacrifice well shape just to get it drilled faster—for
us a smooth hole is an important consideration.”
Greg Belbin with Gyrodata Services Canada, says
a gyroscopic continuous system can help identify
a smooth section of the wellbore beforehand and
eliminate any premature failures. The company’s
full directional survey system provides inclination,
azimuth, measured depth, horizontal core depths
“The wells that are drilled for CHOPS
are done as cheaply as possible and
they are certainly not designed for
thermal stimulation.”
– Doug Hollies, vice president,
Codeco Oilsands Engineering
WCJ_Nov-Dec_12_p24-25.indd 24 10/31/12 3:48:47 PM
NOVEMBER/DECEMBER 2012 25 www.cadecanada.com
for every depth reference and dogleg sever-
ity. Belbin says the tools that drill the wells
generally survey every nine metres – each
new stand of pipe.
Hole diameter is another consideration
Devon places a lot of emphasis on. “If you
look at the vertical and slant well, we want
to make sure we are drilling a hole that’s big
enough to accommodate some of the larger
pumps as well,” says Tyler. “We found that
some smaller diameter wells that have
higher water cuts just can’t handle those
higher pumps.”
CHOPS may have increased production
compared to conventional techniques,
but only five to 10 per cent of reserves
are being recovered from reservoirs in the
Lloydminster area. Companies are starting
to look at thermal recovery techniques, such
as steam-assisted gravity drainage (SAGD),
to improve recovery rates, but that requires
further consideration when constructing the
well. “In order for it to become a thermal
project it has to meet certain criteria like
reservoir thickness,” says Devon’s Ledda. He
says it wouldn’t be cost effective to install
casings, cement and other requirements for
high temperature production at the outset
for every well. “Not all of the reservoirs we
do for CHOPS fit the criteria to go to ther-
mal,” he adds.
While thermal recovery of a CHOPS-con-
structed well is becoming common, most
companies in the area are not considering
both techniques when building their wells
at the outset. “Although it is almost a guar-
antee that thermal will come later because
the amount of reserves is immense,” says
Doug Hollies, vice-president of oil sands en-
gineering at Codeco Oilsands Engineering.
“Certainly the big prize in the Lloydminster
area is unrecovered oil from primary opera-
tions—to go back there and get more of that
oil by heating it up and having it flow more
easily into those horizontal wellbores at
these lower pressures.”
That’s where a whole new round of drill-
ing needs to be planned and executed – re-
entering wells. Wellbore integrity, Hollies
says, should be a major consideration for
companies using heat as a secondary recov-
ery technique. “The wells that are drilled for
CHOPS are done as cheaply as possible and
they are certainly not designed for thermal
stimulation,” he says. “Any well that is in
the zone to be stimulated thermally that’s
going to be a big issue. You can’t heat some-
thing up, cement it in place and expect it to
survive mechanically.”
As Devon continues to explore new spots
in the heavy oil fields surrounding Lloyd-
minster, the company faces new challenges.
“We are focusing on infill drilling in estab-
lished pools and identifying new spots,” says
Tyler. “And dealing with water is becoming
more of an issue. We are targeting zones that
previously had high water cuts that we can
now go back with larger pumps and chase
more oil recovery there.”
PROGRESSIVE STAGING: Strap jack pumps
at Husky’s Paradise Hills thermal plant.
WCJ_Nov-Dec_12_p24-25.indd 25 10/31/12 3:48:56 PM
26 NOVEMBER/DECEMBER 2012 Well Construction Journal
P
Heavy Lifting
Lloydminster has been a proving ground for artificial lift technology
REPORT
Tech
By Kelley Stark
UMPING HEAVY OIL OUT OF THE GROUND IS
not easy; especially, heavy oil in the Lloyd-
minster region. There is a large amount of
sand and other debris in the reservoirs along
Alberta’s eastern border, which forces producers to
take extra steps in order to get the resource out of
the ground.
“If a well was producing at 400 barrels a day
and it suddenly stopped, there are still a lot of
resources there. Artificial lift is an easy way to go
in and mechanically assist in getting the fluids
out,” says Nicholas Donohoe, president and CEO
of ICI Artificial Lift Inc. “That would be your first
technique to try.”
Nicholas Donohoe, president and
CEO of ICI Artificial Lift Inc.
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Using an artificial lift to re-energize a well-
bore and improve production is a common
practice in many different regions, Lloydmin-
ster just happens to be where ICI got its start
a decade ago. ICI’s first product was designed
to pressurize a well and pump heavy oil
to the surface using a lower stroke rate
than a conventional pump jack. The
Edmonton-based company was looking
for a way to improve the conventional
pump jack system, which resembles
a large hammer, and is a common
sight across Alberta’s landscape. ICI
patented, designed and manufactured its line
of hydraulic artificial lifts, which resemble a
large antenna, and aimed to eliminate many
of the mechanical components of a conven-
tional system. “[The conventional system] is
a very technical product, and the application
and system are quite technical,” Donohoe
says. “There’s no gear box and all the moving
parts are replaced by a hydraulic cylinder, so
it becomes a real simple system.”
ICI shipped its first product in 2003, one
year after the company launched. At the
time, hydraulic pump jacks were relatively
new to the market. In those early days, the
majority of ICI’s competition came from
major players like Weatherford and National
Oilwell Varco. As the market has expanded, so
has the number of manufacturers of artificial
lifts and other secondary recovery method
equipment.
PUMP JACKS
The most well-known secondary recovery
method is probably rod, or beam, pumping.
The pump jack – also referred to as a nod-
ding donkey, horsehead pump or sucker rod
pump – sits above ground, rocking back and
forth while plunging a string of sucker rods
down into the bottom of the well where the
pump plunger sits. Tension and pressure
from the surface can cause the sucker rod to
fatigue and crack over time. Weatherford In-
ternational developed high-strength sucker
rods, while companies such as ICI and HRP
International developed hydraulic systems
to eliminate the downhole tension. ICI’s sys-
tem pumps the entire tubing string, which
eliminates the need for sucker rods. HRP’s
hydraulic system, meanwhile, eliminates rod
string compression.
PROGRESSIVE CAVITY PUMPS
Progressive cavity pumps (PCP) can be used
for many different applications including
heavy oil and coalbed methane, as well as
horizontal, slant and directional wells. The
system consists of a surface drive, sucker
rod, stator, rotor and pump. The rotor turns
inside a lined stator that remains station-
ary. As the rotor turns, a set of cavities form
causing a displacement flow to reach above
ground. Though this kind of pump has
limited lift capabilities, they don’t cost as
much as other methods, both as a capital
investment and maintenance fees. The PCP
systems are also quiet, portable, lightweight
and installation is relatively simple.
ELECTRIC SUBMERSIBLE PUMPS
Another method of artificial lift is the elec-
tric submersible pump (ESP). These pumps
are used most often for high volume ap-
plications. ESPs run with an electric motor
and centrifugal pump unit. General Electric
Co. estimates there are more than 130,000
ESPs operating around the world and ac-
count for more than 60 per cent of global
oil production. GE’s systems are designed to
produce up to 50,000 barrels of oil per day.
They are designed to withstand high down-
hole temperatures associated with thermal
projects, can operate at high-temperatures,
and average operating depth is 6,000 feet
below surface. Most ESPs can be automated
and be set to pump continuously or inter-
mittently. One of the downsides of ESPs is
scale deposits can buildup on the pump
downhole.
SUBSURFACE HYDRAULIC PUMPS
Subsurface hydraulic pumps use power
fluid (crude oil or water) to lift the oil to
the surface. The power fluid is controlled by
valves at a control station and is taken from
a storage tank. The fluid runs through the
surface pump and is sent to the wellheads.
The power fluid is used to run the piston
pump, then returns to the surface with the
produced oil. The biggest benefit to using
this system is that the pump can be retrieved
by reversing fluid flow which eliminates the
need for wireline or workover rigs.
It also has a high volume capacity
and can service more than one well
with just one pump. Disadvantages,
however, include a high initial cost
and it has the potential to shut
down more than one well if there
is a problem.
GAS LIFT
A gas lift system is different from the other
methods; it uses compressed gas to lift the
oil to the surface. The gas mixes with the
heavy oil making it lighter and causing the
oil to flow easier. The gas is sent down the
casing tubing annulus and enters the well
through gas-lift valves forming bubbles and
lowering the pressure of the heavy oil. The
gas lift system most closely resembles the
natural flow process and though the system
requires a supply of pressurized gas, the gas
is typically recycled from the well in the first
place. Unfortunately, this system can require
vigilant maintenance and can be difficult to
operate.
UP NEXT
Technically, it can be argued that any
method used after a primary method
could be an artificial lift and it’s possible
that waterflooding and other enhanced oil
recovery (EOR) methods can be alternative
methods to artificial lift. ICI’s Donohoe
agrees that these methods would be a little
more limited in scope to the artificial lift
method but says that he can’t think of any-
one who would go from a primary method
to an EOR method without first employing
an artificial lift.
As companies continue to put more
research and development efforts behind
improving EOR methods, such as chemical
floods and thermal floods, artificial lift op-
erators continue to develop their products.
“There’s always room for improvement,”
Donohoe says. “That’s what’ll happen over
time in each of the different segments;
they’re continuously improving.”
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“If a well was producing at 400 barrels a day and it
suddenly stopped, there are still a lot of resources
there. Artificial lift is an easy way to go in and
mechanically assist in getting the fluids out.”
– Nicholas Donohoe, president and CEO of
ICI Artificial Lift Inc.
WCJ_Nov-Dec_12_p26-27.indd 27 10/31/12 3:51:20 PM
Well Construction Journal 28 NOVEMBER/DECEMBER 2012
Canadian Rig Counts
October 10, 2012
Drilling Down Total Utilization
Alberta
226 381 607 37%
B.C.
28 23 51 55%
Manitoba
13 11 24 54%
New Brunswick
0 1 1 –
Newfoundland
0 1 1 –
Quebec
0 0 0 –
Saskatchewan
72 69 141 51%
Totals 339 486 825 41%
Source: Divestco
NUMBERS
By the
Stats at
a Glance:
Alberta Rig Counts
October 10, 2012
Drilling Down Total Utilization
Northern Alberta 51 83 134 38%
Central Alberta 146 246 392 37%
Southern Alberta 29 49 78 37%
Totals 226 381 607 37%
Source: Divestco
Alberta Land Sales
August 30, 2012
August 2012 August 2011 YTD 2012 YTD 2011
Oil and Natural Gas
Land Sales $59 million $572 million $799 million $2.7 billion
Price Per Hectare $194.31 $1,278.69 $387.15 $1,020.49
Oil Sands
Land Sales $454,000 $361,000 $8.4 million $49 million
Price Per Hectare $591.48 $201.24 $113.09 $103.92
Source: Alberta Department of Energy
WCJ_Nov-Dec_12_p28-29.indd 28 10/31/12 3:52:33 PM
www.cadecanada.com NOVEMBER/DECEMBER 2012 29
Alberta Well Licenses
Approval issued by the Alberta Energy Resources Conservation Board
Number of Licences Issued March 2012 April 2012 May 2012 June 2012 July 2012
Development 359 287 593 635 431
Exploration 36 26 27 52 44
Source: Alberta Department of Energy
Alberta Spudded Wells
August 30, 2012
Number of Wells Spudded
2011 2012
January 1812 1751
February 2001 2013
March 1318 973
April 241 261
May 334 356
June 525 488
July 812 625
August 964 464
Source: Alberta Department of Energy
Alberta Completed Wells
August 30, 2012
Number of Wells Completed
2011 2012
January 413 381
February 774 718
March 1846 717
April 1003 672
May 958 486
June 433 254
July 245 488
August 728 541
Source: Alberta Department of Energy
WCJ_Nov-Dec_12_p28-29.indd 29 10/31/12 3:52:35 PM
Well Construction Journal 30 NOVEMBER/DECEMBER 2012
DEEPER
Drilling
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Trade Bait
A heavy reliance on natural gas for oil sands production
could improve Canada’s cross-border trade
HE MAJORITY OF THE 169 BILLION BARRELS
of bitumen reserves in Alberta’s oil sands
is too deep for mining operations and will
need to be produced through wellbore,
which could be good news for Canada-U.S. trade
relations.
According to the Canadian Energy Research
Institute (CERI), more than the conventional oil
and gas industries, the oil sands industry is a large
consumer of energy. Currently, most in situ proj-
ects generate steam using natural gas-fired steam
generators and natural gas is the single highest
operating cost for these in situ thermal projects.
The research organization noted in a report this
spring that considering how aggressively shale
gas production in the U.S. has come on stream,
and the potential for shale production in Canada,
meeting the oil sands industry’s future demand
for natural gas should not be a concern. “It would
be expected that Canada and the U.S. could be
engaged in an energy exchange – Canadian oil for
T
U.S. natural gas – that further enhances the trade
relationship between the two countries,” CERI
wrote in the report. “Also, the prospects for tech-
nology switching and efficiency improvements
are substantial and will likely put downward pres-
sure on the industry’s natural gas requirements.”
The organization also noted in its report that
a steam-assisted gravity drainage (SAGD) project
averages dry steam-oil ratios which typically range
from 2.0-2.5. While a cyclic steam stimulation
(CSS) project averages wet steam-oil ratios from
between 3.0-3.5. However, the actual natural gas
requirements can vary significantly because of
the different pressure, steam, and temperature
requirements needed in different geological
formations.
Regardless, CERI writes, the amount of natural
gas required to sustain the oil sands industry is
substantial. By 2045, the organization estimates
natural gas requirements will increase by two to
three times the current levels.



4,000
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Thank You to Our Sponsors
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Platinum Sponsors
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Gold Sponsors
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For drilling and completions specialists, CADE currently offers one of the best networking and knowledge sharing
opportunities in the Canadian petroleum industry. As you look to build your business and launch new technologies,
new products and services in the drilling industry, a CADE Sponsorship offers you a cost effective way to deliver your
message directly to the entire membership of the leading industry association for Well Construction Professionals in
Canada.
YOUR SPONSORSHIP INCLUDES:
• Ads in Well Construction Journal, full of relevant industry news and
articles, presented in a high quality, well-read magazine
• Your logo in the “Thank you to our sponsors” feature on the CADE
website and in every issue of Well Construction Journal
• Your logo on the “Thank you to our sponsors” display at every CADE
Technical Luncheon
• Authorized use of the CADE logo on your website and in marketing
materials
Connect with Canada’s Drilling Industry
Become a CADE Sponsor
2012 SPONSORSHIP PACKAGES ARE NOW AVAILABLE
Contact Scott H. Payne at 403-400-4032 or by email scott@eastsidemedia.ca
www.cadecanada.com
Support CADE by sponsoring our technical lunches, our website and the Well Construction Journal.
Thank You to Our Sponsors
The support of CADE sponsors plays an integral part in our association’s success.
Platinum Sponsors
NCS Energy Services Inc.
Phoenix Technology Services
Schlumberger
PathFinder
M-I Swaco
Smith Bits
Extreme Engineering
Gold Sponsors
Global Steel Ltd.
Halliburton
Pacesetter Directional Drilling Ltd.
Q’Max Solutions Inc.
XI Technologies Inc.
Silver Sponsors
Akita Drilling Ltd.
Baker Hughes Pressure Pumping
Bankers Petroleum Ltd.
Cathedral Energy Services Ltd.
Central Alberta Well Services Corp.
Code-Rite
Hawkeye Engineering
Import Tool Corp. Ltd.
Layfield Group
Lory Oilfield Rentals Inc.
Packers Plus Energy Services Inc.
Spirit West Energy Services Corp.
Tristar Resource Management Ltd.
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