June 2009 Volume 10, Number 3

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June 2009
Publication Mail Agreement No. : 40039458

Volume 10, Number 3

Contents
5 Giving Employees a Voice Coll’s Corner - A Time to Fight Back 12th Annual BC Natural Gas Symposium 7 7 8-9 The 4th Oil Recession 10 Wellons Canada Supplies Gas Fired Heaters for Oil & Gas Projects 10 Next Dimension in Offshore Oil Exploration - Airborne “De-Risking” Surveys 11 Honeywell Joins North America’s Largest System Integrators Organization 11 How Companies Can Optimize Their Access to Capital 12 Energy industry to help fight for the cure during Go-EXPO 14-15 Ziff Energy Launches 1st International FPSO Operations Study to Assist Operators Enhance Operating Efficiency 15 Retrofits Make Economic Sense - In a time when efficiency matters 16 Study Finds 2008 Global Upstream Oil & Gas Transaction Value Fell 32%, with Canadian Total Plunging 68% 16 Alberta’s been here before: Say hello to 1980s deficits 16 Commodity Price Recovery Anticipated into 2010 17 Corporate sustainability reporting remains an issue for Canadian companies: PwC and FEI Canada Study 19 ACTive Matrix Enables Effective Openhole Stimulation in Western Canada 21 Wireless Solutions that Extend your Office into the Field 21 Rogers Expands its Most Reliable Wireless Network in Alberta 22 A new generation of technology providing true global coverage 24 ABB Automation & Power World 2009 breaks attendance records 25 Globalstar Announces Launch of Smartone Satellite-Based Asset Tracking Management Solution 25 Winegard Special Products’ Next Generation 26 Expro to Expand Presence in Alaska with New Permanent Base 26 WellEz launches WellEz On-DemandTM, an integrated support program that enhances the WellEz.NET reporting system 26 Record numbers bid on equipment in unreserved Ritchie Bros. Grande Prairie auction 27 Predator™ Drilling System from Atlas Copco Drilling Solutions 27 “Don’t Buy Gas Detectors” Theme Introduces Gas Detection as a Service 28 Western Canada Natural Gas Production Outlook to 2020 28 Alloy Screen Works introduces new premium sand screen 29 Dresser Waukesha Introduces High-Performance Engines for Gas Compression Market 29 New SWT series 30 Flir Announcement 30 Specialized Hardbanding System

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Oil & Gas Network, June 2009 3

Giving Employees a Voice
PSAC Employee Survey Sheds Light on Industry Issues
Rob Gray, Manager, Communications & Member Relations, PSAC

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here are a lot of things that industry is doing right, and a lot that industry is doing wrong, say the employees of PSAC Member companies, and in both cases employees need a lot more information than they’re getting. That’s the message that came through loud and clear from employees in a PSAC survey conducted of Member company employees. The survey, which incorporated the views of over 1,200 respondents – a respectable representation of the PSAC member company employee base, was conducted as a means to listen to industry’s own workers on their views of the industry and that of their friends, family, and community members in places where they work. The survey provided an opportunity for employees to voice their opinions, share their concerns and provide valuable information on a number of key indicators. The survey was undertaken through PSAC’s Public Perception Program, on the premise that, with 88 per cent of Albertans supporting royalty hikes, it was clear that some of those people had to work in or with the oil and gas industry. The PSAC Board felt it was important to give these workers a voice to better understand their mindset and to show them first hand that industry is listening. “Our workers are both the backbone and the frontline of our industry. They are the ones interacting with the greater community on a daily basis, and they have a tremendous potential to be our first line of defense in protecting industry’s social license to operate,” says Roger Soucy, PSAC President. Overall, it was apparent that workers hold the industry in relatively high regard, but feel that their family, friends, and members of the community do not view industry as favorably. Interestingly, a majority of survey respondents (79 per cent) are concerned about this. Workers cited a lack of awareness and understanding of the industry as one of the root causes behind this issue and called for greater industry outreach and communication to remedy this. When it comes to understanding industry’s economic contribution, employees indicated that both they themselves as well as the general public understand and value the contribution that industry makes in terms of employment, economy, and investment to local communities. It was also noted that industry’s products are also highly valued. At the same time, workers indicated a number of questions that they receive in their daily interactions, which most felt ill-equipped to answer. Such questions included those related to gasoline pricing (keeping in mind that the survey was conducted when gasoline prices were at an all-time high), industry’s environmental impact, royalties, why record profits from the E&P sector don’t appear to trickle down to benefit employees and communities, and what its like to work in the industry. Respondents also indicated that they hear a lot of questions and concerns from local communities regarding anticipated industry activity levels and the related impact to communities. “It is very clear through this survey that, as an industry, we have got to do a better job of getting the right information to our people, so that they are in a better position to communicate effectively about industry and the issues that our stakeholders care about,” says Soucy. In addition to questions they frequently hear, survey respondents also identified a number of issues around which they feel improvement is necessary. Overall, industry came under heavy fire from its workers (60 per cent of them) for not connecting effectively with communities, and for not being responsive to issues of community concern. Interestingly, workers self identified those issues as including the transient nature of industry’s employees who move through communities, industry driving habits, the impact of waste, and a general lack of courtesy when workers are in local communities. The difficult lifestyle created by long shifts and the cyclical nature of work in the industry was also cited as a major concern. Many employees noted the associated risks of divorce, drug use, alcohol, and burn-out, especially in the case of younger workers, as negative aspects of the job. Accordingly, employees actually called for stricter regulatory involvement related to employment and workplace standards, safety, and other key areas impacting industry, including environment and water usage, which were also ranked as a top area of concern. “It was fairly shocking that our own people want to see more regulation of industry, and I would say that this is a fairly clear indicator that we have got to do some work to clean up our own backyard,” Soucy says. Interestingly though, employees ranked their own companies much higher than they did the industry’s performance overall on almost every key indicator in the survey. E&P companies were ranked the lowest, and, in fact, came under heavy fire in a number of key areas – particularly when it comes to the relationship with industry suppliers and contractors, an area it seems, which has deteriorated significantly of late. In its survey, PSAC asked service sector employees if they would be willing to change their habits, such as by closing gates and slowing down to reduce dust, in order to make a positive difference in the communities they work in. Eighty-four per cent of respondents said yes, but with the caveat that they would expect more support from companies in all industry sectors to ensure that their individual actions were supported by a collective effort. “That’s fair enough,” said Roger Soucy, PSAC President.“We can’t ask each employee to go it alone. We need to provide them with information and tools that will help all employees, and the companies they work for, to strengthen our social license to operate.” While the survey certainly has brought to light some key areas which industry must now address, the results were not all negative. Workers gave industry an extremely positive review in a number of areas including protecting public health, keeping workers safe, and investing in communities where it operates.

“Industry is doing a lot of things right. We just never seem to take the opportunity to talk about these positives,” says Soucy. “There are some great examples out there of how industry is working to protect the environment, proactively responding to issues of community concern,

Continued on page 7

Oil & Gas Network, June 2009 5

Coll’s

Corner

A Time to Fight Back
Will emotion and hype continue to win the battle over logic and reason?
or a moment, I am going to forget my badly charred resource portfolio, real estate investments that look all-too real, and those worthless stock options used so ingeniously by HR to convince me to stay put for the past five years. I guess I’ve learned -- like so many others -- that even when times are good, treading water is the same thing as sinking like a stone. It’s the journey, right? Yeah, right. For a moment then, like the impressionable young grunt played by Charlie Sheen in Platoon -who realizes he’s made a terrible mistake trading his middle-class lifestyle for the realities of jungle warfare in 1960s Vietnam -- I am going to attempt to climb from this personal abyss and begin to rebuild. Find some positives in this dark and dirty Recession we are experiencing. This is exactly the same position the Canada’s embattled and embittered oilsands sector finds itself in – never lower, despite some glorious years when it seemed the sky was truly the limit. And just as I’m seeking a way out and back up on a personal level, so too is the industry. For the past couple of years, the hammering in the media against the oilsands “juggernaut” has been relentless – driven by emotional triggers activated so skillfully by increasingly strident and well-funded environmental non-government organizations (ENGOs) whose only aim is to destroy the fossil fuel economy (and thereby the entire world economy). The “Dirty Oil” campaign, you must admit, is brilliant in its simplicity and unfortunately, as any PR agency worth its salt will tell you, it has legs. Is the worst over for the industry that carries North America’s energy future on its back? Will emotion and hype continue to win the battle over logic and reason? When will the industry start fighting back and take meaningful action to reclaim its voice in this high-stakes debate? No one has the answers to these questions right now but be assured the industry has been gearing up through groups the Canadian Association of Petroleum Producers, the Oil Sands Developers Groups and other initiatives that will surely come to light in the near future, to counter the many false claims that continue to make front-page news all around the world and make Canada look like a Draconian industry backwater. You can’t help but feel there are sinister economic forces at work here, but I’ll save the Angels and Demons conspiracy theory column for a future issue. Instead, let’s focus on a theme that’s beginning to crop up and has manifested itself in recent speeches by Alberta Energy Minister Mel Knight, OSDG President Don Thompson, and Syncrude President and CEO Tom Katinas among others.That theme is embodied in the title of Thompson’s speech: Setting the Record Straight and revolves around correcting the myths perpetuated primarily ENGOs about oilsands development. Thompson talked about 10 myths, while Knight has his Six ways to tell you’re not getting the whole oilsands story – for the sake of space, I’ll use the latter which I’ve adapted Coles-notes style:

visit us at GO EXPO

GAS AND OIL EXPOSITION

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Reality: the oilsands lay below an area the size of Florida, but 80% of that development is in-situ or underground as opposed to surface mined. Myth #3: Developers are “destroying the boreal forest.” Reality: the entire mineable area is less than 1% of this forest. Less than 1/16th of that 1% has been disturbed to date. And reclamation is a regulatory requirement. Myth #4: Developers are “depleting fresh water resources to produce oil.” Reality: Up to 90% of water is recycled; saline/nonpotable water is used whenever possible and there are strict limits on fresh water withdrawals. Myth #5: “Development is contaminating rivers and putting people and habitat at risk.” Reality: Testing shows that rivers adjacent to oilsands projects have lower contaminant levels than other rivers in the region with no industrial oilsands activity near them; bitumen is naturally present on the banks and in the Athabasca River. Myth #6: Oilsands activity is three to five times more intensive than conventional oil. Reality: On a “wells to wheels” basis (from extraction to end use), the oil sands are less carbon intensive than Venezuelan crude and comparable to oil shipped from the Middle East and California heavy; Canada accounts for 2% of world’s overall emissions and the oilsands is less than 5% of that (i.e. 1/10th of 1% of world’s emissions). In the days and months ahead, you’re going to be hearing a lot more about these myths but more importantly about these realities. If I were an enterprising reporter (past life), I’d be jumping all over this stuff before my competitors do.

12th Annual BC Natural Gas Symposium
n 2008 B.C. saw record land sales. For the first time ever land sale figures topped Alberta! All of the excitement is around unconventional gas in the Northeast. B.C. has a great environment to incent activity - great geological reserves and a government that wants to encourage business opportunities. Of course, all of this opportunity does come with challenges. Attend The Canadian Institute’s 12th Annual BC Natural Gas Symposium where you can expect to hear some of the province’s most prominent stakeholders and players discuss what is being done to overcome challenges and capitalize on opportunities surrounding BC natural gas plays.

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Conference Title: The Canadian Institute’s 12th Annual BC Natural Gas Symposium Date: Location: June 4 & 5, 2009 The Fairmont Palliser, Calgary

Continued from page 5
inventing new technology which benefits the end-user, and otherwise. We need to start sharing these stories”. With this input from its Member company employees, PSAC is now preparing a number of tactics and tools through its Public Perception Program that will be launched over the next number of months. This will include a new section on the PSAC website with information on the industry and its issues, geared towards communicating with the public. PSAC will also be unveiling an employee engagement toolkit for its Members, in an effort to get the information employees called for in the survey out to workers so that they are better able to be ambassadors for industry in their day-to-day work. “Even in a tight economic market, the PSAC Board and Members recognize the value of this long-term initiative,” summarized Soucy.“We will continue to do whatever we can to help the industry strengthen its public support.”

Myth #1: Calling it the “tar sands” industry. Reality: We’re producing oil, not tar. Myth #2: Oilsands developers are “ripping up an area the size of Florida.” Oil & Gas Network, June 2009 7

The 4th Oil Recession
Looking for Company & Country Leadership
Paul Ziff , CEO
his is our 27th year in consulting, and 4th (or more?) signifi cant recession. One of the characteristics of longevity is experience (which is not necessarily wisdom).With that caution, some of my observations follow. The last decade saw a prolonged oil price uptrend, from the low teens in winter ‘98/99 to all time highs reached in mid-July ’08

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(with a hiccup in winter ‘06/07). In my opinion, this surge originally reflected the fundamental economics of growing demand and more expensive supply, then acquired a ‘political premium’ regarding supply uncertainty, impacted initially by the war in Iraq, which tightened supply, and enhanced the impact of other uncertainties such as unrest in Nigeria, and politics in Venezuela.

Two other factors were at play. At the peak, oil traded at least 15 times each physical barrel, so it is clear that financial markets, including hedge fund and commodity speculators, played a key role in setting prices, including the volatility of technical trading models. For the majority of world producers, a weak US dollar (resulting from the ‘easy money’ policy of the US Federal Reserve Bank) depreciated the value of what they received and fed higher commodity prices in North America. The oil price reached a crescendo when oil reached $145/Bbl in July ’08 --- over 10 times its ’98 low, in just a decade! While this price may not be expensive compared to bottled water, it was far too costly for the world economy to absorb (notwithstanding Alan Greenspan’s comments to the contrary). With the sharp world economic downturn, an oil price free fall ensued, which has brought us far (perhaps halfway) below the break-even point for new reserves virtually anywhere. Oil Prices 1970 - 2009 & the 4 Recessions

During the last decade, the strong demand for oil and gas strained human and physical resources, creating huge cost increases, in sectors as diverse as deep off shore drilling rigs and the Alberta oil sands. Operators’ prime focus was on the incremental barrel, ‘cost be damned’, as pundits from the financial institutions forecast oil at $200/Bbl (in our view, defying gravity). Unfortunately today, high costs for many energy base goods and services are now deeply engrained, and reversing the status quo to achieve reasonable service costs will be difficult and painful. This process has begun; however, has a long way yet to go. Many senior executives have bemoaned the tyranny of Wall Street, with its expectations of unreasonable growth of profits many times the inflation rate, and for its ‘flavor of the month’ lens for evaluating company strategies and performance, vs. a longer term perspective, which reflects the investment realities of the oil business (or most other businesses, for that matter). Short term performance is not a sound basis to grow real businesses. Excessive power is concentrated in the hands of relatively few analysts, many with little real industry experience.The true substance, and leverage, of many of these high flying investment firms and banks has been laid bare --- if these firms are really so smart, why are so many of them in deep trouble, requiring large bailouts in most countries of the developed (and undeveloped) worlds? This is similar to the Enron follies (CEO Jeff Skilling’s disdain for real assets, like oil and gas wells, and pipelines), and the ‘dot.com’ period. The common theme: unreasonable Wall Street expectations drives excessive risk taking by public companies. This performance greed (‘bonfire of the vanities’ lives on) lies behind the fiasco of ‘Asset Backed Paper’, which has ensnared many corporations, pension funds, and individuals. The ‘rating’ of risk by several bond rating agencies (talk about concentration of power!) in a ‘laissez faire’ world of regulation (where was the US 8 Oil & Gas Network, June 2009

Security & Exchange Commission?) enabled the greed, with many parties in the chain receiving huge ‘performance’ fees. According to Charlie Fischer (the long term CEO of Nexen, a successful & technologically adventurous Canadian Independent,) the markets’ dominant focus on short term realizations in the next few quarters puts public companies at a distinct disadvantage because they are driven to meet market expectations rather than taking a longer term view. This leads to a focus on transactions for ‘quick impact’, rather than investment in new exploration or the development of new technology. This is unfortunate for energy supply since most reserve additions today come from projects that need new technologies and have a long cycle time (Deepwater, oil sands, ‘Arctic gas’). When markets want instant gratifi cation, public companies can be punished for investing for the long term. By contrast, national oil companies (NOC’s) can make that bet because they are making investment decisions for the long term. Despite the financial and economic meltdowns, the latter partly due to the whipsaw of credit --- from too free before, to too restrictive now --- energy remains the engine of the economy, and like it or not, hydrocarbons still dominate. This contributes to costly international confl icts, both military and pipeline, which then further distort and contort markets, to the detriment of the economy and real producers and users, particularly underdeveloped countries without energy resources (e.g. Africa). At times like these, OPEC will progressively cut production to approach reduced demand, and in some time, sane prices will be restored to refl ect the fundamentals of oil & gas supply. Part of the economic responsibility lies with private sector producers. At a time when the full cycle cost for North American natural gas costs $7/Mcf (and more for 3rd and 4th tier producers) to replace, does it make sense for shareholders to sell it for $4/Mcf? The 2 ways to mitigate the dissipation of relatively shortlived reserves are either to hedge (still possible for a year out), or shut in production during low price months (providing there are no reservoir or processing technical issues). However, in the past reducing production has been harshly punished by Wall Street gurus. Through our work we are intimately familiar with the high costs of energy in many countries across the world. Producers themselves should be more disciplined regarding the value of their assets. The current low energy prices are no more reasonable nor sustainable than oil selling for $150/Bbl. Many speculative financings in recent years made no sense, except for those pursuing greed --- the promoters, and issuers --- pity the suckers who bought the issues. Nor does it make any sense for banks today to base lending requirements (e.g. cash flow or debt service coverage ratios) on current ultra-low prices, and cut credit lines (fortunately most energy companies have fairly strong balance sheets after so many favorable years). What can companies do during this turmoil? In my opinion, focus on ‘back to basics’. This includes careful review of costs (out of favor in recent years), with a continued focus on maximizing production uptime to increase cash flow. Oil & gas fields are the DNA of any oil and gas company and need to be managed appropriately. In recent years, many companies have bought back their shares, to ‘fi nancially engineer’ higher profits per share.Yet today, energy stock prices are lower by 50% to 75%. Did the ‘buy-back investment’ contribute to the world’s energy supply, or more environmentally benign energy sources? Did it ultimately help shareholders? Would some of these billions have been better invested in developing and enhancing alternative energy supplies, for future sustainability? In new areas, investment reduces long term cost curves. Let’s give credit where it’s due --- some energy producers and service companies have been extremely creative in developing new technologies:

• Deepwater developments across the world • world-wide LNG projects to develop stranded gas, creating a new LNG world ‘pipeline’ that many countries can access • Shale Gas development (principally in North America, so far) • measurement while drilling creates ‘designer’ wells. Gas & Oil Price Margins

Yet many companies have been inefficient (and individuals in their Hummers, and other oversized ineffi cient vehicles). Why did GM destroy all their electric car prototypes? Would it have been in a better position today, vs. Toyota & its Prius? Having been to Brazil and seen their extensive CNG fleet – a decade ago, it was striking to hear an Oklahoma oilman (gasman?) like Aubrey McLendon, CEO of US gas giant Chesapeake, promote Compressed Natural Gas (CNG) vehicles last fall during the US presidential election. Europe (& California) have led the world in concern for the environment --- which many in the oil and gas industry have been slow to embrace. If one subscribes to the view of ‘Peak Oil’ (as espoused by Matt Simmons), then the logical conclusion is to treat oil as a more precious good. Serious adjustments are required in 2009+, however will it be possible to target the rational mean, rather than huge swings? For companies, this requires true leadership by

Management, and support from their Boards, to run their companies on a sound longer term basis, rather than bowing to short sighted and inappropriate financial drivers from the (former) paragons of financial strategy. Several Super-Majors are pursuing a course of stability, vs. knee jerk reaction. Respect for strong technical staff is a must, both as a principle, and due to the aging of the baby boom generation in OECD countries. The ‘hire & fire’ staff cycle creates a very negative profile for the university graduates that the industry needs to attract to replace the ‘baby boomers’. Companies can be responsible and thrive! Countries should recognize that energy is critical for economic well-being, and national stability. China is continuing its purchase of world assets, and related tied relationships. Gazprom is pursuing a similar world campaign. Arguably the worst energy policy has been that of the US – which has had virtually none; gasoline prices that are low relative to most other developed countries have encouraged wasting of scarce resources --- and contributed to the ‘demise of Detroit’. Although apparently inexpensive, the related costs, political, environmental, can be quite high. This policy is changing under the regime of new US President Obama – although some of his changes, fiscal, will not be popular with the American oil industry, clearly there will be some signifi cant changes. In North America, major clean gas resources in the far North (Alaska gas alone equals half of all Canada’s gas production) remain undeveloped – a national tragedy. While both US Presidential candidates supported the Alaska Gas Pipeline, there has been no observable progress. In Alberta, former Premier Peter Lougheed (one of the few outstanding energy statesmen in recent decades in North America) has bemoaned the random development of the oil sands, a major world resource. Prescient as he always is, approaches of the past will not be adequate in the future, both for environmentalists, and for the broad inflationary impacts on the Alberta economy. For energy endowed, high population countries, the rise of left wing populists across South America provides a lesson regarding broader distribution of the benefits of energy riches.

Oil & Gas Network, June 2009 9

Wellons Canada Supplies Gas Fired Heaters for Oil & Gas Projects
ellons Canada, a Surrey, BC based supplier of gas fired and biomass fired thermal energy systems, has recently supplied thermal fluid heating equipment for two oil & gas projects. Wellons is currently working on a crude oil heating system for a major pipeline and merchant tank operator in Alberta. The heart of project scope is two Wellons 40MM BTU/hr gas fired skid assembled glycol heaters. Wellons project scope also includes two glycol- to-crude oil heat exchangers, glycol and crude oil circulating pump skids, and a prefabricated control room module. Wellons Canada also recently supplied a 12MM BTU/hr gas fired thermal oil heater for a new

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gas plant facility in British Columbia. The skid scope included operating and standby pumps, primary loop piping, PLC based HMI control system, motor control center, and gas combustor c/w combustion air fan flame arrestor. This equipment was shop assembled and located in an enclosure on the skid. The enclosure was supplied with flanged pipe connections and electrical interconnection panels for easy site tie-ins.

Next Dimension in Offshore Oil Exploration - Airborne “De-Risking” Surveys

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Field Exploration LLP has announced the completion of their first Offshore Airborne Survey - a powerful new “De-Risking Tool” for the Oil & Gas Exploration Industry. Contracted by a Norwegian JV, the survey in the Nordland area of the Norwegian Sea was used to rapidly assess the potential of multiple blocks for the Norwegian Petroleum Directorate’s 20th Licensing Round. Flying over 100 miles offshore and over water up to 1000 feet deep, Passive Electromagnetic and High Resolution Magnetic data acquisition was completed in less than one week with a specially designed sensor package. eField Aircraft based at Brønnøysund, Norway for the survey. “Conventional methods such as Marine Seismic or CSEM would have taken months and costs would have been prohibitive” says Ed Johnson, president of eField. “Our Offshore Airborne System can cover up to 500 line miles per day at a fraction of the cost of a marine survey.” Johnson further noted that “eField’s platform incorporates multiple sensors including high resolution magnetics and electromagnetics recording data from the air-ocean interface to sub-f loor penetration. Satellite data is then added to provide valuable natural seep mapping.

eField’s EMT System: eField’s new generation of airborne ElectroMagnetotelluric technology leverages advances in airborne geophysics, remote sensing, and forward modeling. The underlying technology of the eField system detects the presence of hydrocarbons by reading natural electric currents known as Telluric currents. Telluric currents are induced by solar energy and lightning that penetrate deep into the earth. eField’s airborne system captures resultant resistivity and polarization changes that occur at the interface of water and dissolved hydrocarbons and in the sea bed. This approach is significantly different than technologies that rely on spectral imaging, gravity, or magnetic measurements. These and other indirect measurement systems, like seismic, require time consuming data gathering and interpretation methodologies that identify anomalies or prospects which may or may not contain oil or gas. Oil and Gas are natural insulators - they have high resistivity compared to water. This differentiation allows eField to model and accurately identify anomalies where hydrocarbons may be present at depths of 20,000 feet or more below the ocean floor and in natural seep columns that percolate to the surface.

10 Oil & Gas Network, June 2009

How Companies Can Optimize Honeywell Joins North America’s Largest System Their Access to Capital Integrators Organization

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oneywell has joined the Control Systems Integrators Association (CSIA) www.controlsys.org/index.htm , North America’s largest organization for independent control systems integrators. CSIA includes more than 300 member companies dedicated to sharing and developing systems integration best practices. In addition to providing a forum for members to discuss common business issues, the group publishes its Best Practices and Benchmarks reference guide and offers its renowned Certified Member program used to help manufacturers identify leading integrators. “Honeywell is a natural fit for CSIA because the company has made integration a cornerstone of its strategy for helping manufacturers of all sizes improve operations,” said Norm O’Leary, executive director of CSIA. “With deep expertise in integration, system design and the unique needs of various industries, we expect that Honeywell will contribute a wealth of knowledge to the group and help strengthen its resulting research.” Honeywell, a past winner of the System Integrator of the Year Award from Control Engineering magazine, has more than 3,000 project engineers and designers who work worldwide through a network of 50 design centers. Honeywell provides a wide range of technology platforms and instrumentation that enable manufacturers to coordinate previously disparate systems. For example, the company’s award-winning process control platform, Experion® Process Knowledge System (PKS) <http://hpsweb.honeywell.com/Cultures/enUS/Products/Systems/ExperionPKS/ExperionPlatformOverview/default.htm> , coordinates critical subsystems dispersed throughout a manufacturing facility to provide greater visibility into plant operations. The latest solution in the Experion product line, Experion LS <http://hpsweb.honeywell.com /Cultures/en-US/Products/Systems/ExperionLS/default.htm> , allows integrators to offer customers the power and reliability of a traditional distributed control system (DCS) in a smaller, flexible package more commonly associated with Programmable Logic Controllers (PLCs). “Organizations such as CSIA are critical for advancing our industry because they build great knowledge bases that shed insight into the new challenges our customers face,” said Harsh Chitale, vice president of strategy and global marketing for Honeywell Process Solutions. “Helping to set high standards for systems integration will help manufacturers meet those challenges in a cost-effective manner, which ultimately means better business results for everyone involved.” www.honeywell.com/ps.

lthough liquidity is constrained in this uncertain market, there are actions that companies can take to strengthen their financial position and optimize their access to capital. The key is understanding what is available and how a smart financing solution can enhance financial ratios, provide surplus cash flow and protect the longevity of a business. Align long-term assets with long-term debt. Many companies currently use their operating line to cover the costs of long-term investment opportunities, such as equipment, because it’s readily available and perhaps a lower-rate alternative. Operating lines are typically secured by short-term assets, which can be extremely volatile in value, such as natural gas reserves, receivables, or inventory. In this economic environment, an operating lender may try to protect his position by reducing lending ratios, increasing rates, charging fees for even small covenant breaches, rolling back lines of credit, or calling the loan on demand. One way around the risk of being subjected to any such actions is to consider long-term financing structures secured by the asset the company is investing in. In doing so, the monthly obligations are much better aligned with the revenue the asset is earning over the duration of the useful life of the asset. In addition, this strengthens the company’s balance sheet with stronger current ratios and frees up short-term capital for short-term needs. A simple mini-restructure like this can make a big difference and will be more attractive to lenders. Monetize your assets. A good buffer of readily available cash can go a long way in today’s uncertain environment. On the one hand, it can help a company ensure steady operations through temporary unexpected downturns. On the other hand, cash can help advance a company’s competitive advantage when opportunities arise. Companies need to look no further for this than their full inventory of equipment - be it gas compression equipment, equipment for heavy transport, loading or digging, as well as manufacturing and many other types of equipment. Existing equipment

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can provide companies access to a reserve of cash to cover everyday expenses or provide them the flexibility to jump on an acquisition when a good deal comes along. A lender with a specialized asset management team, such as GE Capital, can help companies find equity in their existing capital equipment and turn it into cash for their business.The company can require that this cash be available on a standby revolver while ensuring long-term balance sheet treatment. Having cash available during uncertain times can provide assurance that businesses make it through difficult economic times. Don’t stop at rate, invest in a solution. When shopping around for financing, it is important to remember that there is more to it than simply rate. It is critical that companies find a partner who is willing to take the time to understand their unique needs. When it comes to financing, one-size does not fit all. It is important to question “off the shelf” products sold by those who aren’t asking questions about the business’ objectives. A lender who can collaborate with a company to structure a solid financial solution that will not only provide liquidity but also protect the business, is worth a second look. It may be surprising to find out how much the amount of interest paid can pale in comparison to the money a company can make or save with the right financing structure. Companies should challenge their lender to prove it to them. In the quest of strategic partnerships, GE Capital is proactively seeking opportunities, across all industries, to help companies re-structure their balances sheets and improve their cash flow positions through flexible financing solutions. As one of General Electric’s largest growth engines in Canada, GE Capital offers lending products, growth capital, revolving lines of credit, equipment leasing, cash flow programs, asset financing and other financial services. Companies can expect reliable, well-capitalized and competitively priced financing solutions – and the personal attention that they deserve.

June 2009 Volume 10, Number 3

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Oil & Gas Network, June 2009 11

Energy industry to help fight for the cure during Go-EXPO
n North America, one in six men will develop prostate cancer in their lifetime.The good news is that the mortality rate from prostate cancer in North America has been falling in recent years. The bad news is that the fight against prostate cancer is not over yet because an average of about 500 Canadian men will be diagnosed with prostate cancer each week. The oil and gas industry will gather together to help “Knock out Prostate Cancer” during a unique fundraising/networking event that will be hosted by Energy TV during Go-EXPO.This fun-filled evening, known as the Boxer Blues, has been created to increase awareness and raise funds for prostate cancer. “Prostate cancer has become one of the most common cancers that affect our male population today and in a male dominated industry like the petroleum sector, it seemed like a perfect fit to host an event with that focus,” says Shelly Brimble, Boxer Blues project manager.

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Energy TV is proud to announce the keynote speaker for the Boxer Blues will be Canadian petroleum icon W. Brett Wilson, who will share his journey with prostate cancer.Wilson is the co-founder of FirstEnergy Capital Corp. He is also an award winning entrepreneur and philanthropist with accolades including:Top 40 under 40,Top 20 Deal Makers, and Top M&A Specialists. Alberta Venture Magazine selected Wilson as the Business Person of the Year for 2008. Wilson is currently the managing director and president, Prairie Merchant Corporation, a private merchant bank focused on business opportunities. Recently, his entrepreneurial savvy landed him a role as a panelist on CBC’s Dragons' Den. Wilson’s life took a new turn when he was diagnosed with prostate cancer at 43 years old. Since then, he has become one of Canada’s most sought-after public speakers sharing his story about the path to success in business and life – with a focus on his struggle with prostate cancer. During the Boxer Blues, the Prostate Cancer Institute, Calgary will unveil a unique community outreach project that has been in the works for the past three years known as the “Man Van.”This mobile unit can collect blood samples in the community then bring then provide results in less then 30 minutes. Blood samples are one of the most important tools used to diagnose prostate cancer other than the digital rectal exam (DRE). Prostate specific antigen (PSA) are a markers found through blood that uncover hidden cancer. Linda MacNaughton, community relations coordinator, Prostate Cancer Institute, says they are planning to start with four three hour mobile baseline PSA blood testing clinics per month in various locations in and around Calgary. The Prostate Cancer Institute has imported mobile PSA testing units into Canada for use with the Man Van and each unit can provide a result within 30 minutes. This rapid detection is key to survival because like any other cancer, the chances of successful treatment increase with early detection. Many men go undetected because quite often prostate cancer show little symptoms until the disease has progressed.This is why regular PSA testing can reduce prostate cancer death by 20 per cent. According to the largest study ever conducted on prostate cancer screening (European Randomized Study of Screening for Prostate Cancer) the screening is working because 48 men were treated for the presence of prostate cancer out of every 1,408 men tested. Funds to battle prostate cancer will be raised during Boxer Blues through various activities including a boxing zone. Participants can challenge amateur boxers from Calgary-based Impact Boxing Club on Nintendo Wii stations. Louie Raposo, owner/operator, Impact Boxing Club, will bring a championship belt for the best player. Calgary Women in Energy, a networking group in the petroleum industry, have also volunteered to provide staffing support for the event. Silent auction items are also being collected to raise funds and items will be accepted until the day of the event.“We have been touched by so many personal stories from people in the energy industry that have been impacted by this disease and are graciously giving items,” adds Brimble. “One man who recently recovered from prostate cancer is also an artist. He is currently creating a painting just for this event.” Boxer Blues (www.energytv.com) will be hosted on June 10, 2009, within walking distance from Go-EXPO at Hotel Arts. About 450 people from the petroleum sector will help raise funds to battle prostate cancer from 6 p.m. to 10 p.m. All proceeds raised on site will be donated to: Prostaid Calgary (www.prostaid.org), the Prostate Cancer Institute, Calgary (www.prostatecalgar y.com) and the Prostate Cancer Canada (www.prostatecancer.ca). “Everybody knows that this is a hard time for the oil and gas industry, but when the going gets rough, the industry pulls together. We hope to host a fun-filled event while successfully raising funds for a great cause. We challenge Go-EXPO participants to join Energy TV and W. Brett Wilson to hit a TKO against prostate cancer during the Boxer Blues,” adds Brimble.

12 Oil & Gas Network, June 2009

Ziff Energy Launches 1st International FPSO Operations Study to Assist Operators Enhance Operating Efficiency
iff Energy Group (ZEG), a long established and leading upstream energy niche consulting firm, with offices in Houston and Calgary, announces the launch of its 1st International FPSO Operations Efficiency study, evaluating uptime reliability and operating costs for FPSOs in various regions of the world. FPSOs are a principal method for International oil production for areas where no refinery is located nearby (in contrast to Offshore Platforms for Shelfdepth offshore waters around the world, and floating Deepwater Structures which connect to fixed pipelines, such as in the US Gulf of Mexico and Brazil). The world ‘nameplate’ capacity for FPSOs is an impressive 15 million Bbl/d, although the actual throughput is less, with depletion in field production over time. Moored offshore, the FPSO (which stands for ‘Floating, Producing, Storage, Offloading’) gathers offshore oil production, from Platforms or Sub-Sea wells, for fields in either Shelf or Deepwater water depth, and then holds the crude oil for loading onto tankers for delivery to refineries for processing. Some FPSOs are ‘purpose-built’ (esp. in the harsh North Sea environment), while many FPSOs are converted oil tankers. The first FPSO was Shell’s Castellon, dating back to 1977, 3 decades ago. Like other production systems, there is a wide variety of FPSOs --- some of the major variances are capacity (e.g. from as small as 15-40 MBbl/d to as large as 200M+ Bbl/d); vintage (several decades old to new); and complexity of processing (amount of water, degree of liquids stripping, natural gas). As usual, Ziff Energy will be grouping the FPSOs into ‘like Groups’ of comparable assets. Slightly under 200 FPSOs operate worldwide, and are widely dispersed --- the largest centers are Asia (about 50, especially CNOOC - 20, Australia 15, Indonesia, Vietnam), the North Sea (30+), Brazil (40), and West Africa (30, mainly Nigeria & Angola). Among production systems employed internationally, FPSO’s have perhaps the greatest degree of similarity, as they are all marine operations, regardless of which coast they are deployed in. Ziff Energy has assessed FPSO’s operating in a number of countries in Asia and Brazil in the last 2 years. For many years, there have been two types of ownership and operation --- sometimes FPSOs

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are owned by the producer, however often a Contract Operator is responsible (e.g. Bluewater, Modec, SBM). As well, there are 3 main forms of contract (as well as combinations): Owned & Operated: the oil company buys a vessel, and then operates and maintains it (similar to other upstream operations) Wet Lease: a producer pays a vessel operator/owner a fee to provide FPSO services Bareboat Charter: an oil company has a contract operator develop a vessel to their specifications, and pays a lease fee, however the oil company is responsible to operate and maintain the vessel. The purpose of the study is to help Operators, both producers and Contract Operator, enhance efficiency, to help them cope with the impact of the dramatic price decline on cash flow, and counter the effects of rapid production decline, which have a big impact on unit operating costs. Regardless of type of contract, all FPSOs will be comparable on the same basis for Uptime Reliability, and total cost. In the last 15 years, Ziff Energy has delivered a series of 12 multi-client marine operations (7 Deepwater Studies, 5 Shelf Operations), a major multi-client study in Asia Pacific in 2007-8 covering 7 countries (Australia, China, Indonesia, Malaysia,Thailand, and Vietnam); plus custom projects for offshore Brazil (2008), Trinidad & Tobago, and India. This study will focus on Production Uptime Reliability and Operating Efficiency in 2008, with metrics that were first developed as part of Ziff Energy’s 6th Offshore Deepwater study, completed in 2007, and enhanced with input from our Super-Major clients. These new metrics include the value of lost production, the mean time between incidents (MTBI) and the mean time to recover (MTTR). In the Deepwater study, the value of the unplanned deferment far exceeded the total OpEx of the participants! Uptime is a prime driver of upstream ‘value add’. Ziff Energy will identify “best in class” production uptime targets and will help validate the value associated with specific investments in improved reliability. Key members of Ziff’s Offshore team include David Richmond, former Offshore Installation Manager for a Major, with an extensive background knowledge in all aspects of Offshore

The Power Catwalk Specialists
FEATURES AND BENEFITS
Safety – the fully mechanized process keeps personnel clear of hazardous operations using a wireless remote at the rig floor. G Time saving and safe set up / tear down using built-in hydraulics - no need for expensive cranes. G Productivity maximized through repeatable dependable operation. G Open belly design for pad rig operation. G Optimal tubular presentation for safe handling at the rig floor. G Range of rig floor heights from 14’ to 37’ . G Easy transportation using a winch deck truck, no need for cranes. G Proven design and track record, with an unbeatable safety record, incredible uptime, reliability and longevity. G Self contained power pack. G Energy efficient design. G Numerous safety features and failsafe devices G Easy to learn operation. G Low maintenance construction
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14 Oil & Gas Network, June 2009

GoExpo
Operations including FSO and FPSO, from wells to market; and Tom Gray, Ziff Energy’s Offshore Operations specialist, who joined Ziff Energy after a long and impressive career at a Major where he served last as Director, Gulf of Mexico Deepwater Operations. Participants will receive confidential, blinded, asset-level cost comparisons versus comparable assets, as well as detailed cost driver analysis. “Study participants receive a detailed diagnostic report on each asset, compared on a ‘like kind’ basis with peer assets and identifying potential savings in each cost category.” Historically, Ziff Energy’s studies have helped Operators in 20+ countries pinpoint areas to achieve significant savings on operating costs. After the study is completed, Ziff Energy meets with each client regarding areas for future action plans to assist them achieve these efficiency savings, as well as for best practices to gain production. Ziff Energy is a leading benchmarking firm, focused in operating costs and practices for the Gulf of Mexico, and around the world in 2 dozen countries. Our offshore operations database includes 600 Shelf fields worldwide and 50+ Deepwater assets. Last year, Ziff Energy established a Center for Benchmarking Excellence in Calgary, staffed with full-time experienced engineers to ensure the highest quality and efficiency in conducting benchmarking analysis.

Retrofits Make Economic Sense In a time when efficiency matters
he current drilling environment continues to put pressure on producers to create production efficiencies on existing wells and find ways to work with a shrinking skilled work force. Zedi invites producers to revisit the retrofit advantage of putting electronic flow measurement (EFM) devices on their wells. Zedi’s surveillance offerings, Smart-Alek® and Zedi EFM Walk-up™ help producers become more efficient and consequently save them time and money. Customers confirm that a key advantage of moving from charts to EFM is that an operator’s work week is restructured to support more effective work practices. Well visitation changes from daily to ‘as required’ – freeing up time for value added activities like preventative maintenance. A more efficient work structure ultimately leads to operational cost savings and a higher well to operator ratio. For new drills or retrofitting, producers may also want to add an element of control. Zedi Connect™ is the next generation of Zedi’s optimization solutions combining surveillance and control. It allows users to remotely control and monitor well site equipment through the web. Built as a unique technology that’s compatible with industry field devices, it is designed to upgrade optimization applications remotely eliminating the need for site visits. Learn more at Zedi’s GO Expo booth #1113.

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Oil & Gas Network, June 2009 15

Study Finds 2008 Global Upstream Oil & Gas Transaction Value Fell 32%, with Canadian Total Plunging 68%
lobal mergers and acquisitions (M&A) upstream transaction value fell to $104 billion from an annual average of nearly $160 billion in 2005-2007, according to the 2009 Global Upstream M&A Review prepared by IHS Herold Inc., an IHS company (NYSE: IHS), and Harrison Lovegrove & Co., Ltd., a Standard Chartered group company. This review provides a comprehensive analysis of more than 280 significant upstream transactions that were announced in 2008. Canadian M&A upstream transaction value declined to just US$14.5 billion from a record US$45.5 billion in 2007 Canadian asset transaction value in 2008 sank almost 75 percent to a six-year low while corporate deal value declined by two-thirds from the prior year as activity fell off dramatically in the last four months of the year. Fifty-five significant deals (over US$10MM) were announced in the first eight months of 2008, but just ten from September through December. Canadian transactions accounted for less than 15 percent of total worldwide M&A value, the lowest percentage since 2005 and less than half of the record 30 percent in 2007. Royal Dutch Shell’s US$5.8 billion all-cash corporate acquisition of gas-weighted producer Duvernay Oil was one of only two deals over US$1 billion. Corporate deals outnumbered asset transactions for the fourth consecutive year, although the average corporate transaction value, excluding the Shell-Duvernay deal, was less than US$200MM.

Alberta’s been here before: Say hello to 1980s deficits
By Mark Milke
n March 1987, then Alberta treasurer Dick Johnston -- back when finance ministers were called treasurers -- told Albertans they enjoyed the highest percapita program spending in the country. Albertans also enjoyed a $3.3-billion deficit the previous budget year as a result of such spending; Johnston’s response was to tell Albertans to pay up. Thus, Johnston’s remedy to red ink leaned heavily in the direction of increased taxes. In his 1987 budget, he raised corporate taxes by one-third, healthcare premiums by 28 per cent, and fees in nursing homes by 40 per cent. He also raised personal income taxes in the hopes $1 billion could be added on the revenue side. In all, Johnston raised or introduced 23 separate taxes. Balancing the budget with tax increases was impossible. It was an experiment in taxing one’s way out of a budgetary imbalance and guaranteed to fail. While a government might slip in a barely noticeable tax increase without an effect upon incentives, a 23-item tax hike of a billion dollars is akin to smothering an ill patient with chloroform. That reality left the spending side to help balance the books. In 1987, the treasurer did promise some budget cuts; Premier Don Getty and his treasurer had long hinted at and occasionally pruned spending after the collapse of energy prices in 1986. But compared to the tax increases of about 13 per cent above existing revenues, the spending cuts at a predicted four per cent of program spending were underwhelming. The 1987 actions were part of a plan launched the year before to balance the books by 1990. “A deficit of this size cannot be allowed to continue,” said Johnston in his 1987 budget remarks. Except that it did. The province incurred $2.1 billion in red ink in 1990--the planned year for balanced books, followed by deficits of $1.8 billion in 1991, $2.6 billion in 1992, $3.3 billion in 1993, and almost $1.4 billion in 1994. It wasn’t until 1995 that a surplus was produced and only after a deficit binge that left Alberta $22.7 billion in debt. What finally turned the corner was not another 23-point tax hike; it was public clarity, first, followed, second, by a political awakening in the Liberal party and then in the Tories that spending had risen to unsustainable heights and must be brought down. Total program expenses in 1990 amounted to $13.8 billion and continued to climb, hitting a peak of $16.2 billion in 1993; program spending was cut back to $13.5 billion in 1995 and $12.7 billion in 1996. But that never happened under Getty and Johnston, out of the premier’s chair and the finance portfolio respectively in later 1992; they were replaced by Ralph Klein and Jim Dinning. The provincial government was only helped in a small way by revenues, which were at their lowest level in 1990 and at their highest in 1995, the latter due to a significant uptick in resource revenue. But the province couldn’t have relied on that luck to balance the books. In 1996, the province’s own-source revenue, including from resources, again dropped. Without a spending chop, and some restraint in the increases in the following years, deficits would have been as common in the last half of the 1990s as they were in the first half. Fast forward to 2009 and proponents of deficits appear to have dressed up in 1980sstyle fiscal drag and the corresponding justifications. spendBut here’s the reality check for the ing would recent years: Had Alberta kept prohave been gram spending tied to inflation $25.6 billion in and population growth the fiscal year just since 2001, program ended (the end of March). Instead, program expenses (I’m not including capital expenditures) were $11.2 billion higher at $36.8 billion in fiscal 2009. That was 43 per cent higher than can be justified by population growth and inflation. In 1986, at the beginning of the last provincial spiral into deficit financing, Premier Getty said that “The deficit can be handled. We are the strongest province financially. . . . Despite cutbacks we still have the largest per-capita spending on our social services system of any province.” Back then, Getty, as with apologists for red ink now, missed the relevant point he himself introduced: That above-average spending would eventually have to change if the province was to avoid a lengthy string of deficits.

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After considerable consolidation among Royalty Trusts in 2007, activity in the sector was moderate (reflecting weak equity and credit market conditions) ahead of the income trust taxstatus transition in 2011. The only major acquisition involving a trust was the US$1.3 billion stockfor-stock merger between ProEx Energy Ltd. and Progress Energy Trust, with the merged entity converting to a corporate E&P structure. Oil Sands transaction value plunged from US$18 billion in 2007 to US$2 billion in 2008. Three oil sands deals were among the ten largest in Canada, but each was in the modest US$400MMUS$600MM range. NOCs/Sovereign Wealth entities were absent from the Canadian M&A market after an active 2007. Transacted proved (1P) and proved plus probable (2P) reserve volumes declined precipitously to five year lows. Outside of oil sands, gas accounted for the majority of acquired 1P and 2P reserves for the third consecutive year. The Shell/Duvernay transaction considerably lifted total region weighted average implied reserve values from US$21.42/ barrel of oil equivalent (boe) to US$31.81/boe, with corporate pricing at a substantial premium to asset deal pricing. Excluding oil sands, 1P asset deal pricing was 15% higher, fueled by a nearly 60 percent rise in pricing for gas-weighted transactions. Pricing was flat for 2P assets, indicating lower valuations placed on upside potential in a low commodity price environment.

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Decreasing Capital Expenditures has Silver Lining
algary, AB, April 7, 2009 – Recent declines in the capital expenditures required to develop oil and natural gas will help drive commodity market prices up predicts AJM Petroleum Consultants in their current oil and gas price forecast, established effective March 31, 2009. “Some analysts believe world oil production peaked in 2008, but regardless of whether or not you agree, it is generally accepted that the world’s supply of hydrocarbons is declining,” said Ralph Glass, economist and Vice President of Operations at AJM Petroleum Consultants. “The current decrease in investment for oilsands projects and natural gas drilling projects will have the inevitable impact of less production coming on-stream. Less production will lower gas supply levels, and the resulting difference between supply and demand will force prices up.” Reduced drilling over the past two years in Canada’s natural gas sector has caused approximately 1 Bcf/d of production to fall off the market and, with the first quarter of 2009 seeing an even higher drop in rig counts, Mr. Glass anticipates even sharper declines in drilling. While the United States saw a dramatic increase in gas supply levels in the latter part of 2008 due to high levels of drilling in shale gas plays, declines in drilling activity in 2009 will lead to just as dramatic production declines. This drop in supply will ultimately force natural gas prices to rise. AJM’s current price forecast shows crude oil prices in constant dollars based on a WTI forecast of US$55.00/bbl for 2009, rising to US$70.00/bbl in 2010, then reaching US$100.00/bbl by 2016 and holding at this level for the balance of the forecast. The AECO US NYMEX natural gas price in constant dollars is expected to average US$4.50/Mcf in 2009, rising with oil to a long-term price in 2016 of US$9.00/Mcf. The Canadian priced AECO forecast is expected to average Cdn$4.50/Mcf in 2009 rising to Cdn$8.50/Mcf in 2016, corresponding with the expected recovery of the Canadian dollar over the same period. When compared with the forecast prepared by AJM at December 31, 2008, this current forecast features natural gas price predictions that reflect a drop of $1 - $2/Mcf until 2016. Complete forecast tables, commentary and documentation for AJM’s March 31 Price Forecast are available for download on the AJM Petroleum Consultants website at www.ajmpetroleumconsultants.com.

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16 Oil & Gas Network, June 2009

Corporate sustainability reporting remains an issue for Canadian companies: PwC and FEI Canada Study

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n overwhelming majority (90%) of Canadian senior financial executives consider reporting on the environmental and social impacts of their companies to be important. A large proportion of responding companies (72%), according to a new survey from PricewaterhouseCoopers LLP (PwC) and the Canadian Financial Executives Research Foundation (CFERF), the research institute of FEI Canada (FEI Canada), also claimed that their company understood which sustainability issues were most relevant to achieving their business goals. However, when asked if there was an effective strategy for managing these issues, only half of respondents reported that they had one in place. Similarly, almost all (92%) senior finance executives felt that it was important to communicate sustainability performance to senior management and the Board, while at the same time, over half admitted that they did not have an effective system and process in place for periodically measuring sustainability performance. Again, when asked if this same information should be periodically reported to shareholders, employees and external stakeholders, most agreed that this was important. However, over half (55%) admitted that their companies did not have an effective system in place to enable this type of reporting. Indeed, most respondents (78%) believe that the average investor does not have enough information about the sustainability performance of Canadian companies. “Several forces may be working together to explain the disconnect.” says Mike Harris, PwC partner and leader of the firms Sustainable Business Solutions practice in Canada. “First, a general framework does not exist for measuring and reporting, making comparisons between industries a challenge. Second, many companies have not developed robust data collection systems to make the reporting process efficient and reliable.Third, most finance executives continue to only focus on the mandatory financial disclosures and finally, the cost/benefit of optional sustainability reporting does not provide support for the types of systems and process required to effectively implement it. Until sustainability reporting is mandatory, this is likely to remain the norm.” According to the survey, larger companies were more likely to link the application of corporate sustainability practices to business goals. For instance, when asked if management understood which sustainability issues were most relevant to its business goals, 79% of respondents from

enterprises answered affirmative versus 17% of private companies. Companies also felt challenged in compiling data in a costeffective manner that would accommodate a broad spectrum of stakeholders, from employees, shareholders, customers, institutional investors, reporting regulators to environmental activist groups. Furthermore, companies are concerned with the costs associated with sustainability reporting, specifically for small to medium-sized enterprises (SMEs). When it comes to industry sectors, reporting practices vary by the extent to which each are locally and federally regulated and the extent to which they emit pollutants into the environment, such as oil and gas, or hydro-electric power generation. The four largest responding groups in the survey, professional and scientific and technical services, manufacturing, finance and insurance, and mining and oil and gas extraction demonstrate these differences.When asked if their companies had developed an effective strategy for managing sustainability issues relevant to their business goals, over 50% of respondents in the mining and oil and gas sector, as well as the manufacturing sector said that they had, compared with 41% in finance and insurance and 33% in professional services. While many executives in these industries did not necessarily feel that their environmental strategies were fully developed, the vast majority felt that it was important to periodically measure and report on their sustainability performance to the board. This was true for over 90% of all respondents from the professional services, manufacturing and mining and oil and gas sectors. However, only 81% of senior finance executives from financial services felt that they should report on these matters to their board of directors. The survey results clearly indicate that the vast majority of financial executives polled believed that regulatory requirements pertaining to sustainability

disclosure and reporting will increase in the years to come and nearly 75% of the survey respondents (74% of CFOs based on 74 responses) believed that legislation relating to disclosure and reporting of sustainability performance will become more stringent over the next five years. “For many senior financial executives participating in this study, the future development of corporate sustainability reporting in Canada depends on the establishment of a standardized reporting framework developed around industryspecific Key Performance Indicators (KPIs),” says Ramona Dzinkowski, executive director of CFERF. “Ultimately, the CFO has, and will continue to have, a major role to play in driving the corporate sustainability agenda of Canadian corporations.” Survey Methodology The Corporate Sustainability Reporting – Executive Research Report was prepared by the Canadian Financial Executives Research Foundation (CFERF), the research institute of FEI Canada and was sponsored by Pricewaterhouse Coopers (PwC). It comprises the results of a survey conducted of 343 senior financial executives across Canada as well as the insights of individuals who participated in an Executive Research Forum. Just under 50% of the survey respondents represent enterprises with annual revenue of $250 million or less, with the remainder being companies with revenues ranging from $250 to more than $20 billion. For more information, please visit www.pwc.com/ca/sustainability. About PricewaterhouseCoopers LLP PricewaterhouseCoopers www.pwc.com provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 155,000 people in 153 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice. In Canada, PricewaterhouseCoopers LLP www.pwc.comand its related entities have more than 5,200 partners and staff in offices across the country. “PricewaterhouseCoopers” refers to Pricewaterhouse Coopers LLP, an Ontario limited liability partnership, or, as the context requires, the

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companies with revenues between $1 billion to more than $20 billion replied affirmative compared with 69% of companies with revenues of less than $1 billion. Furthermore, when asked if companies comply with external reporting standards such as the Global Reporting Initiative (GRI) and the Greenhouse Gas Protocol (GGP), nearly double (30%) of respondents representing public

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About Financial Executives International Canada (FEI Canada) FEI Canada is the all-industry professional membership association for senior financial executives. With eleven chapters across Canada and more than 2,000 members, FEI Canada provides professional development, thought leadership and advocacy services to its members. The association membership, which consists of Chief Financial Officers, Audit Committee Directors and senior executives in the Finance, Controller, Treasury and Taxation functions, represents a significant number of Canada’s leading and most influential corporations. Further information can be found at www.feicanada.org. Oil & Gas Network, June 2009 17

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ACTive Matrix Enables Effective Openhole Stimulation in Western Canada
Real-time downhole measurements and interpretation increase the stimulation coverage of a multilateral gas well
Challenge
To effectively stimulate a two-branch multilateral openhole completion in a naturally fractured dolomite formation. ACTive live in-well performance ACTive Matrix is part of the ACTive portfolio of CT services that includes ACTive Cleanout, ACTive Perf, ACTive Isolation, ACTive Lift, and ACTive Profiling. These services enable live in-well downhole measurements, interpretation, and performance optimization.

Solution
ACTive Matrix to enable accurate depth placement of the coiled tubing (CT) in each lateral using real-time downhole measurements.

Results
Effective placement of the stimulation and diverting fluid systems and real-time verification of the treatment and lateral entry results. Costly interventions in Western Canada An operator needed to increase productivity of two openhole legs in an existing multilateral gas well in a naturally fractured dolomite formation in Western Canada. The well produced 21% H2S and 5% CO2. Operators in this area face economic challenges in maximizing reservoir contact in these partially depleted carbonate reservoirs. By using a multilateral completion technique, the operators have been able to achieve greater reservoir contact and access isolated reservoir compartments with a minimal increase in well construction cost or complexity. Coiled tubing, which has been used to access and treat the multilaterals, presents two challenges: • ensuring efficient access and treatment of all laterals during intervention • existing downhole tools to operate in a subhydrostatic environment. Accurate depth and placement of downhole tools ACTive Matrix uses downhole measurements and tools and chemical stimulation/diverting fluid systems to meet the challenges. These services enable accurate location and placement of downhole tools in the laterals to control stimulation of the individual legs. CT was run in the hole to obtain downhole measurements, which were used to stimulate the openhole legs. Acid treatments temporarily diverted and treated the sections of the open hole that otherwise would not have been stimulated. Pre- and post-treatment distributed temperature survey (DTS) data were used to optimize acid placement. Accuracy and effectiveness of acid stimulation confirmed Using the more reliable real-time bottomhole pressure measurements rather than surface pressure measurements increased the accuracy and effectiveness of the stimulation treatments. The initial acid treatment was confirmed and injectivity points and other zones to be opened were identified.Thermal analysis results were used to generate a revised pump schedule that provided details of the appropriate diverter and acid stages, which allowed temporary diversion of the initially stimulated zones and better overall treatment of the multilateral leg. A final DTS survey confirmed that the treatment successfully diverted the acid and stimulated all the targeted zones.

Oil & Gas Network, June 2009 19

Communications

Wireless Solutions that Extend your Office into the Field
By Roland Labuhn, VP, Energy Solutions, TELUS

Rogers Expands its Most Reliable Wireless Network in Alberta

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taying connected while on a job site or on the road is an uphill battle for many junior producers and small energy service companies in the oil and gas industry. In fact, more than 70 per cent of workers in the energy sector are mobile, which can cause a huge disconnect and potential declines in productivity when workers are away from the office. Wireless communications tools play a key role in improving communication between the office and mobile workers. By equipping mobile staff with wireless solutions, businesses gain better visibility into their workforce, resulting in increased productivity and improved safety for field workers.

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Boosting Productivity Most junior producers and small service companies have fewer than 100 employees. With such limited resources, these businesses need everyone to be as productive as possible, wherever they are working. TELUS’ Mike network has a number of rugged mobile handsets with features that make it easy for workers to stay connected and get work done faster. Using Mike Direct Connect technology—commonly known as Push To Talk (PTT)—staff can connect with colleagues in less than a second, making it easy for them to have short and efficient conversations. In addition to Mike, TELUS Tracking and Dispatch solutions help small businesses boost their overall productivity and customer service levels. By using TELUS Resource Tracker, dispatch staff can track the real-time location of the nearest mobile worker for a job, provide customers with more precise arrival times, and ensure accurate scheduling. Enhanced Worker Safety Mobile workers in the energy sector are often exposed to

dangerous environments. With Mike PTT, workers can instantly communicate safety concerns with a team member, or the entire crew with a push of a button. Having work-safe equipment is important, and many don’t realize the wireless devices they use to make their job more productive can produce sparks, potentially igniting fuels and causing explosions. Mike is the only Canadian provider of rugged, intrinsically safe Motorola handsets with PTT for workers in the utility, petrochemical and industrial sectors. They are designed to have low electrical and thermal output, which eliminates the risk of producing sparks and, therefore, enhances worker safety. Small producers and operators can also improve worker safety by using TELUS Tracking and Dispatch solutions to gain visibility into the activities and locations of their mobile workers and assets. For example, TELUS Remote Fleet Tracker can improve safety by monitoring driver speeds and protecting loneworkers with a man-down safety service. Moreover,Asset Tracker enables businesses to use real-time tracking to recover stolen vehicles and valuable assets. Select the Right Wireless Solutions By helping staff overcome communication barriers, wireless solutions enable small businesses in the oil and gas industry to enhance the effectiveness of their mobile workforce. Businesses that need help finding the right solutions can take advantage of the TELUS Wireless Solutions Roadmap. This tool helps companies understand how wireless technology can enhance their business, benchmark their wireless investments against their peers, and create a personalized assessment. To access the TELUS Wireless Solutions Roadmap and learn more about TELUS’ solutions for the energy sector, visit telus.com/fieldservices.

ogers Wireless announced the expansion of its world standard GSM wireless voice and data network in Northern Alberta. This $42 million investment provides new and broader service to residents in the region and a range of business solutions to local companies, including those operating within the oil and gas industry. “Wireless customers who work in Northern Alberta, travel across the province, or live in the new coverage areas will find that they are now connected in more places than ever before,” says Steve Roberts, Vice President for Rogers in Alberta.“In addition to expanding Canada’s most reliable wireless network, we have developed wireless applications that help companies increase efficiency. Our solutions, expertise, and equipment are designed to help improve business productivity.” The always growing Rogers network has added 48 new sites with expanded coverage now available in the following areas: • In the Peace River area along Highway 58 which connects Rainbow Lake, Zama, High Level and Fort Vermilion, and south along Highway 35 to Peace River. • New coverage and enhanced services in areas surrounding Fort McMurray and Fort McKay; and along Hwy 881 connecting Lac La Biche, Conklin, and Anzac. • New coverage in Wabasca and Red Earth Creek, and south to Slave Lake and High Prairie. • New coverage in Grande Cache and Northeast to Hwy 43 and Valleyview. • In Southern Alberta, extended coverage is also available along Hwy 11 between Red Deer and Nordegg and along Hwy 61 in Foremost and Manyberries. Northeast of Brooks, service is available in Jenner, Cessford and Sunnynook. Rogers offers the most innovative lineup of smartphones including the BlackBerry Curve 8900, the BlackBerry Pearl Flip, the Apple iPhone 3G, the Nokia E71 and the BlackBerry Bold, enabling users to stay connected to email and access desktop functions while away from the office. For those requiring a device in demanding outdoor work conditions, Rogers offers three exclusive ruggedized handsets: the Motorola Extreme, the ZTE Rock, and the Samsung Rugby. Workers on the move can stay connected with the Rogers Rocket Mobile Hi-Speed Internet Stick.The device allows users to connect their laptop to the internet from anywhere within a Rogers coverage area. For business customers in industries needing integrated f leet management solutions, Rogers exclusively offers NelTrak. This industry-leading system provides GPS-based asset tracking, expense management capabilities, and lone worker solutions. For more information on products, services and network coverage, please visit www.rogers.com.

Oil & Gas Network, June 2009 21

Communications

A new generation of technology providing true global coverage
By Joni Evans
“Anyone beyond the reach of standard terrestrial or mobile networks can take their BGAN terminal out, point it up to the sky, and literally within a minute have broadband connectivity anywhere in the world,” says Simon Curran, Inmarsat’s business development manager. “Users can take comfort that wherever they are, no matter how harsh the conditions are, they are able to get connected.” BGAN is the only mobile satellite service which offers simultaneous voice and broadband data transfers. Guaranteed streaming data at 384kbps plus, video conferencing, email, SMS messaging and analog phone service are just a few examples of the possibilities for utilizing this device, anywhere on the planet. BGAN effectively brings connectivity to people beyond the normal communication networks. “Users have a broadband connection that will follow them anywhere around the world,” says Curran.“Anything they could do at their desks in their offices, they could equally do out of their backpacks in the midst of Siberia.” Within the oil and gas industry the primary use for the BGAN system takes place at exploration phase, says Curran. Yet applications for development, production, supply and transmission phases should not be overlooked. Teams required to work in remote locations, which can be seismically unstable, or politically unstable, have the ability to send data back to the main office in real time. This saves time and money, as teams are able to receive guidance on location, circumventing delays in the flow of information. “Companies can save money on a project by project basis,” says Curran. The portability and simplicity of the BGAN terminal allows for rapid setup and takedown, and enables the coordination of site development. One BGAN terminal has the ability to support 11 simultaneous users. From a project management perspective, remaining in touch, sending photos, reports and updates back to the project offices, particularly if the site is remote, is the key to reducing costs and allowing for safety and risk management. “From a health and safety perspective, this is important,” says Curran.“From a welfare perspective teams are able to maintain communications with their families and maintain their lifestyles.” “Often with any development there is an affect on the local communities,” says Curran. A BGAN terminal with prepaid airtime may New mobile broadband satellite systems, such as BGAN from Stratos, offer help the community connect with the world, often voice and high-speed data connectivity via compact, lightweight terminals. allowing schools to meet educational needs. “This is a way for oil and gas companies to embrace corporate and social responsibility in a way that costs A 1.5 billion dollar investment, the I-4s are fully funded, proare controlled,” says Curran. viding end users with a little bit of reassurance considering the BGAN can also serve as a reliable back-up to any commuworld’s current economical climate. The I-4’s life expectancy nications infrastructure. will reach well into the mid 2020’s. Once a site is developed, a permanent satellite solution such Working with a number of partners and service providers as fixed VSAT, will enable higher data speeds. However, BGAN Inmarsat offers a wide range of voice and high speed data servoperates on the L Band, a frequency which remains stable despite ices anywhere in the world. weather concerns. With the SABRE Ranger, a BGAN terminal, unmanned inteBroadband Global Area Network- True global coverage for gration and remote monitoring are possible utilizing oil and gas Supervisory Control And Data Acquisition (SCADA) applicaUtilizing the I-4 satellites Inmarsat’s Broadband Global Area tions. Remote SMS control allows for activation (or deactivaNetwork service (BGAN) offers the oil and gas industry a unique tion) to perform any SCADA operation. This robust terminal package: instant voice and high-speed broadband data transfers may be left behind at a site for environmental monitoring. from a terminal designed for portability and simplicity. BGAN is available from Inmarsat’s 16 distribution partners The BGAN terminal is small enough to fit in a backpack- and and a network of over 600 service providers around the world. little technical expertise is required for set up.

Addvalue’s new SABRE Ranger BGAN SCADA terminal.

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n land, in the air or at sea, Inmarsat effectively brings communication tools to people working in the most remote or challenging corners of the world. Poised at the tipping point for a new generation of technology, Inmarsat is the world’s leading provider of mobile satellite communications. Primarily a satellite operator, Inmarsat boasts a constellation of 11 satellites positioned roughly 36,000 km from the earth. The cornerstones of the Inmarsat satellite network are three Inmarsat-4 (I-4) satellites. The I-4s are the most advanced and sophisticated satellites providing the world’s only mobile broadband network covering the entire globe. Three satellites are required to span the globe.Two I-4s were launched in 2005, while the third was launched in August, 2008. In February, a slight repositioning of the satellites optimized Inmarsat’s global coverage. The I-4s are geostationary satellites allowing users to lock on to their position indefinitely.

To date, the service has been deployed in over 185 countries. While BGAN offers all of these services on land, Inmarsat also provides FleetBroadband for use at sea. FleetBroadband provides similar levels of connectivity, as a stabilized antenna enables users to track the satellite offshore.

The Stratos Advantage
Recently, Inmarsat acquired its distribution partner Stratos, which resells Inmarsat satellite services worldwide. With corporate offices in Bethesda, MD, U.S. and St. John’s, NL, CAN, Stratos is uniquely positioned to serve the demanding communications requirements of the oil and gas industry. “Together (with Inmarsat) there are a lot of opportunities to offer customers a premium service,” says Hugh Donnan, manager of enterprise vertical markets for Stratos. Stratos provides industry-leading value-added services to optimize communications performance with the Inmarsat-4 satellite network, says Donnan.The Stratos Advantage is a suite of services that help elevate BGAN from Stratos far above baseline offerings. These value-added services, including Stratos Dashboard, provide users with cost control, firewall management, full traffic information, pre-paid facilities, high security options, easy VPN access, messaging services and full IP range. With a global network of 400 channel partners, Stratos provides Inmarsat with insight into customer requirements and markets. This partnership provides a unique platform for oil and gas companies. “We see a lot of operators looking for a backup system, or another satellite network that offers a more global reach,” he says. “The entire land mass of the earth is covered by the I-4 satellites and there is no need for switching to different satellites or satellite networks.” “We see BGAN fitting in as a frontline solution, and definitely a backup at a number of key receiving points for oil and gas companies,” he says. Stratos together with Addvalue Technologies, was responsible for the development of the Addvalue SABRE Ranger BGAN SCADA terminal. In terms of oil and gas exploration, the latest broadband solutions enable senior geologists to remain in the office, saving travel time and costs, while technicians are sent out into the field. “Technicians are able to collect the data and send it straight back to the head office.Then work can begin immediately,” says Donnan. “This allows companies to work smarter.” “It’s a very interesting time in oil and gas, the newer generation of services are collectively regarded as mobile broadband services, all available via the I-4 network,” says Donnan. “Customers are finding more ways of utilizing BGAN to work a little smarter.”

Inmarsat - On the Horizon
There are two new developments in the company’s future. Inmarsat will be the operator of the European Space Agency’s Alphasat initiative. The Alphasat I-XL satellite will use additional spectrum to provide advanced mobile services over Europe, the Middle East and Africa. The second development is a global satellite handheld device, which will be introduced by Inmarsat in 2010. Today, Inmarsat is in a position to offer mobile broadband services on land, at sea and in the air. With numerous distribution and service partners, such as Stratos, Inmarsat is well positioned to offer the oil and gas industry effective mobile broadband network services.

22 Oil & Gas Network, June 2009

Communications

ABB Automation & Power World 2009 breaks attendance records
BB Automation & Power World 2009, held in Orlando, Florida exceeded event attendance expectations and attracted a record number of participants for any ABB event, totaling more than 3,300 attendees.

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ABB also announced the dates and venue for ABB Automation & Power World 2010.The event will be held at the Hilton Americas in Houston, Texas, from May 18-20, 2010. ABB Automation & Power World combined ABB’s two popular North American customer conferences into one single, unique event. The three-day event was a comprehensive users conference and exhibition that showcased ABB’s extensive automation and power offerings and expertise under one roof; it included more than 500 technical workshops and a massive 72,000 square foot exhibit hall. “We are very pleased that so many of our customers were able to join us for this world-class event, which showcased the collective benefits provided by ABB’s power and automation businesses,” said Rick Hepperla, Event Chairman, ABB Inc.“The goal of this conference was provide our customers with the tools and knowledge to help them to be more efficient, productive and profitable in today’s challenging economic environment. Many of them told us they were eager to share and apply this knowledge within their own business to address their immediate and long-term business objectives.”

ABB designed its largest customer event for automation, robotics, industrial power and utility power users in engineering, operations, mill, plant and general management, and executive management in a wide variety of industries. The convergence of key market issues, such as the need to improve energy efficiency in the face of soaring energy costs, and the productivity, reliability and safety gains achieved from process and electrical integration, combined with challenging economic conditions, have exponentially increased interest in both power and automation. ABB’s unique scope of supply and resident expertise addresses the entire spectrum of the energy issues, from generation and distribution to use in production and automation, and provides customers with the competitive edge they need to succeed in today’s economy. ABB (www.abb.com) is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact. The ABB Group of companies operates in around 100 countries and employs over 120,000 people. The company's North American operations, headquartered in Cary, North Carolina, employ about 12,000 people in 20 manufacturing and other major facilities.

24 Oil & Gas Network, June 2009

Globalstar Announces Launch of Smartone SatelliteBased Asset Tracking Management Solution
Leading Simplex data integrator Axonn LLC provides price breakthrough for those customers looking to economically manage the location and status of mobile assets

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lobalstar, Inc. www.globalstar.ca, provider of mobile satellite voice and data services, announced that leading Simplex data integrator Axonn LLC www.axonn.com has launched SMARTONE, the Satellite Managed Asset Ready Tracker. SMARTONE is Axonn’s newest global asset tracking solution that utilizes the highly reliable Globalstar Simplex data network and enables customers to track the location of their mobile assets virtually anywhere. The SMARTONE device transmits real-time GPS location, alarm inputs and engine run-time data over the Globalstar constellation of low earth-orbiting (LEO) satellites. The small size (6.5” x 3.25” x 1”) and design allows it to be easily installed and field managed without the need for harnesses, antennas, or external power. The device is powered by AA size lithium batteries providing up to three years of battery life. Axonn's current asset management products are used on a variety of mobile assets such as cargo containers, trailers and railcars, construction and service vehicles as well as fixed assets like field equipment, generators, pipelines, and propane and fuel storage tanks. “In preparation for the launch of our next-generation of enhanced satellite data services, we are very pleased to announce the addition of the SMARTONE product to the suite of asset tracking solutions that utilize the Globalstar Simplex network,” said Jim Mandala, General Manager, Globalstar Canada.“With the high messaging reliability of our Simplex data performance and the continued expansion of our global Simplex coverage, Globalstar anticipates the introduction of new and innovative Simplex data products and integrated solutions later this year and into 2010, in conjunction with the deployment of our second-generation satellite constellation.” “There was a pent up market demand for a sub $200 satellite asset management device that operates on “off-the-shelf” batteries capable of providing years of service.” said Dave Biggs, CEO of Axonn LLC. Mr. Biggs added, “We’ve met that need with the SMARTONE at a price point that makes it economically feasible for customers to invest in a device to manage their high value assets as well as their previously overlooked lower value assets.” The Globalstar Simplex data offering is a low cost, one-way satellite data service that permits customers to use satellite modems and integrated back office management solutions to track mobile assets, such as vehicles, trailers, cargo containers and maritime vessels, using GPS or other location-based technologies. The Simplex data network also provides a platform for personal tracking and messaging solutions for commercial and recreational customers using products such as the SPOT Satellite GPS Messenger™. Simplex data service can be used for a wide variety of industrial and security applications to monitor and send information from fixed assets, such as environmental measuring instruments, utility meters, or report the state of various mobile sensor devices and their locations.

Winegard Special Products’ Next Generation
Two-Way Systems Strong on Every Front
he Winegard Company’s Special Products Division is answering the need for a robust two-way VSAT satellite communications system designed for the rigorous conditions of the energy and emergency response industries. Winegard’s two-way satellite antennas feature extremely heavy-duty construction and incorporate hydrophobicallysealed motors and the strongest, most rugged actuators in the industry. These features allow for maximum reliability in extreme environments. And now, its new, next-generation WX series of auto-aimers offers more elevation and azimuth resolution for better fine peaking, and incorporates a mounting option for an oversized BUC (block up-converter) to achieve higher data rates when necessary. Winegard two-way VSAT satellite communications systems are available in 0.96 meter, 1.2 meter and 1.8 meter configurations, as well as a 0.84 meter size specially made for smaller vehicle applications. All Winegard two-way systems are auto-deployable and provide phone, fax, internet search, video, SNG (satellite news gathering), and VoIP (Voice over Internet Protocol) capabilities, as well as cell phone backhauls. The antenna subsystem performance can be monitored from remote locations. The systems handle slopes of ?2? Other superior design parameters include exceptional snow load (8" deep at 8lbs/cu.ft.), operational wind load (50+mph), temperature tolerance (-40oF to 122oF), and typical lock times of three to five minutes. Unlike other systems weighed down with a cable harness, the Winegard two-way systems offer single-wire hookup for control of the antenna. “The single-wire coaxial cable hookup is definitely an advantage,” noted Winegard Director of Engineering Jon Manley. “It’s quicker and easier to install. And, since it’s standard material, it’s field-replaceable.” The antenna controller is fully integrated, offers easy to use, single-button operation, and provides excellent user interface with the industry’s only color, interactive touch screen. A built-in DVB receiver and GPS allow the Winegard controller to work on most platforms available in the industry including HughesNet, iDirect, Spacenet, ViaSat, Nera and Comtech. The rack-mountable controller requires no external PC for operation.

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Oil & Gas Network, June 2009 25

Expro to Expand Presence in Alaska with New Permanent Base

WellEz launches WellEz On-DemandTM, an integrated support program that enhances the WellEz.NET reporting system
ellEz Information Management announced today an expanded support program for WellEz.NET, the Software-as-a-Service operations reporting system for the oil & gas industry. Branded as “WellEz On-Demand”, the new help desk is a comprehensive program that integrates multiple support mechanisms for clients using WellEz.NET. WellEz OnDemand provides clients with a combination of support tools, including email reporting of inquiries, remote login by WellEz technicians, on-line chat and phone support. Using the remote login capability, WellEz technicians are able to see the client’s screen and address questions immediately. “WellEz On-Demand has been designed to offer continuous enhancement of the client experience, while identifying additional sources of value available to clients through WellEz services”, says Charles Jeffery, President and CEO. “The WellEz On-Demand program is both immediately responsive and engaging with our

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xpro, a leading international oilfield service company, announced today its plan to open a new permanent facility in Kenai, Alaska. The new location will mark the company’s second Center of Excellence in North America, the first being in Broussard, La. The Kenai location will become a multi-service base for Expro, with the first phase expected to be complete in July 2009. The location will integrate well testing, surface sampling and data acquisition sub departments for testing and commissioning. The estimated completion date for the second phase is late 2009. Once completed, the new facility will integrate all of Expro’s well integrity services and expertise in one location, including its award-winning Cableless Telemetry System for reservoir monitoring (CaTS™), EXCAPE® completion process, downhole video technology, calipers and logging tools, slickline and e-line, providing customers with maximum versatility. The new Expro base will also provide well integrity supervision and maintenance services and training, well-site supervision, and abandonment planning services. “Alaska has been a growing market for Expro for the past five years,” said Brett Lestrange, Sr. Vice President, Expro North America. “Proximity to our clients is of crucial importance, and the decision to establish a permanent Center of Excellence in Kenai demonstrates our commitment to grow the business in Alaska, as well as provide local operators with more options and high-quality services from Expro’s extensive well flow management portfolio. Our expanding presence in Alaska is more evidence of Expro’s commitment to invest in long-term opportunities in North America.” Expro currently has 26 permanent employees in Alaska, and all the personnel are multi-skilled and cross-trained to work with the full portfolio of Expro services.The company plans to recruit additional staff and a permanent base manager upon completion of Phase 2. Expro’s current client roster in Alaska includes Conoco Phillips, Chevron, Anadarko, Marathon, Pioneer and Armstrong, among others.

clients, leveraging the skills of WellEz technicians who are knowledgeable on oil & gas operations. Since using WellEz.NET does not require purchasing and maintaining software, our clients can invest their time in using the information on their field operations from the WellEz.NET reporting system. Being responsive and proactive increases efficiencies for our clients and that is our priority.” Through WellEz On-Demand, WellEz technicians are able to proactively provide support by diagnosing and addressing issues early, before they become critical. The service outreach program is also proving to be an excellent means for clients to better evaluate their field information. WellEz On-Demand is expected to provide clients even greater operational reliability from the use of the WellEz.NET reporting system, while logging and tracking support request. Part of the service outreach elements of WellEz On-Demand, the program also includes monthly reports that itemize inquiries and resolutions.

Record numbers bid on equipment in unreserved Ritchie Bros. Grande Prairie auction
itchie Bros. Auctioneers conducted the auction at its permanent auction site in Grande Prairie on April 15 & 16, 2009, setting new site records for total and online bidder registrations, as well as online sales. One in four people registered to bid in real time over the internet; online bidders purchased almost CA$11 million (US$9 million) of equipment. Among over 2,300 items sold: construction, agricultural and transportation equipment, consumer items and real estate. “A lot of people are selling equipment right now because of the downturn in the local market, making it even more important for them to reach beyond the region for buyers,” said Brian Podruzny, Ritchie Bros. Regional Manager. “A diverse range of quality equipment from reputable consignors and the knowledge that every item would be sold for fair market value on auction day attracted record numbers of bidders to our Grande Prairie auction. Buyers from outside Alberta purchased more than a third of the equipment. It's clear that more people are looking for used rather than new equipment at the moment - and they want to buy it in a fair, transparent environment.” Terry Coray of Crater Enterprises in Grande Cache, Alberta, was one of over 300 consignors in Grande Prairie. He sold millions of dollars of equipment at the unreserved auction as part of a major company realignment. “We were working at a major mining operation and that work

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ended abruptly, leaving us with a large amount of surplus equipment to liquidate,” said Mr. Coray. “We looked at our different options and realized we couldn’t afford to hang on to the equipment and wait for it to sell piecemeal. We decided that selling by auction was our best option, and if you're going to sell by auction, there’s only one company you can rely on: Ritchie Bros. They did a very professional job.We’ve been able to move on and invest in a concrete and gravel operation.” Ritchie Bros. is also pleased to announce that it recently contributed to the development of the new Montrose Cultural Centre in Grande Prairie, which will serve as the new home for the Grande Prairie Public Library and the expanded Prairie Art Gallery.The Company's donation will fund the Children’s Internet Centre in the library. “We believe in giving back where our customers and employees live, work and play,” said Kevin Tink, Ritchie Bros. Senior Vice President. “We are a proud member of the Grande Prairie community and this project was an easy decision for us as this will not only service the Grande Prairie region but also will be a resource for all of the neighboring communities for years to come. We applaud the efforts of the volunteers and all the individuals that have worked so diligently to achieve this reality.This is a great opportunity for us to give back to the communities that have supported Ritchie Bros for many years and we thank you.”

26 Oil & Gas Network, June 2009

Predator™ Drilling System from Atlas Copco Drilling Solutions
Design incorporates mobile rig, substructure, and pipe-handling skate
tlas Copco Drilling Solutions announces the introduction of the Predator Drilling System at the Offshore Technology Conference in Houston,Texas. The Predator Drilling System is a three-component, integrated package consisting of a mobile drilling rig, substructure support system and a pipe handling skate.

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Hydraulic carrier drive The Predator’s single 950 hp (708 kw) engine and hydraulic system power both the carrier and the drill. The engine is capable of producing full torque to the wheels at any speed. The hydraulic carrier features a dynamic braking system, which is both quiet and efficient. It also has the ability to drive in “creep mode,” which provides precise control and vehicle placement in off-road or extreme driving conditions. Mobile drill rig Predator is a mobile, self-contained rig with 200,000 lb (90718 kg) hook load capacity. It incorporates a unique telescopic mast that reduces overall rig-transport length while maintaining the capability to handle Range II and Range III pipe and casing. The Predator pipe handling and breakout system is virtually hands free. Its dual-range hydraulic top drive tips out to handle drill pipe and casing. Predator also uses an iron roughneck and hydraulic slips. The operator can set the top-drive torque limit so that every joint of pipe and casing is made up to specification. Predator is designed to push, pull, rotate and flush tubulars. Predator’s mast and substructure are engineered to API 4-F. The hydraulic cylinder hoisting and pulldown system provides high mechanical and hydraulic efficiency, which may reduce operating cost. The electronic control system is designed to be precise and reliable. Predator’s “on demand” hydraulic system allows the driller to allocate power to various drilling systems as needed. This capability can improve drilling performance and reduce operating cost. The operator’s console and monitor can be placed either on the work floor or in a drill cabin. Predator provides the operator with real-time surface and down-hole information to maximize drilling performance at all times.

Substructure The Predator substructure is an integral part of the drilling system. A self-contained rig support system, it is designed to provide a strong, structural base for the rig.The master bushing, hydraulic slips and iron roughneck are part of the substructure and travel with it. Four hydraulic blocking jacks are provided to make leveling the substructure fast and simple. The large 190 ft2 (17.6 m2) work floor was designed with drill-crew efficiency and safety in mind. Because the substructure is a single load, it can be deployed with less assembly and manual labor, reducing time and cost. Skate The Predator skate is a single skid-mounted load. It is designed to handle Range II (30') or Range III (40') oil field drill pipe as well as Range II or Range III casing up to 24 inches (610 mm) in diameter.The skate has foldout pipe racks on both sides fitted with hydraulic jacks so that pipe will roll onto or off of the pipe racks. The control system for pipe handling can be located on the work floor and/or at ground level. New technology “Predator is an example of the next generation of mobile rigs,” said Ron Buell, manager of business development.“Its new and proven technology reduces time and cost but also enhances safety, reduces manual labor and minimizes environmental impact.” The Predator Drilling System offers contractors a lightweight, mobile package that can be mobilized and rigged up quickly. It targets vertical, directional and horizontal exploration and production wells in the 6,000 - 10,000 ft (1800 – 3000 m) depth range. It is also well suited to drilling and casing surface and intermediate holes for deeper wells.

“Don’t Buy Gas Detectors” Theme Introduces Gas Detection as a Service
ndustrial Scientific has announced the theme “Don’t Buy Gas Detectors” in support of iNet™, a software-based subscription service for gas detector fleets. Industrial Scientific currently supports over 24,500 gas detectors and 3,600 DS2 Docking Stations™ in over 930 iNet customer sites around the world. iNet enables organizations to keep workers safe from gas hazards without actually owning gas detectors. Kevin Miller, Industrial Scientific’s Vice President of Global Sales, Services and Marketing, said that for many people, buying and maintaining gas detectors is like buying and maintaining tires.“No one likes to do it, but everyone has to,” he said.“All tires look simple and similar, yet they are surprisingly complicated. You have to track tire data – air pressure, wear, and rotation schedule.They have to be serviced.This is painful for busy people. And, if you buy the wrong tire or fail to maintain it, accidents may happen. “It’s the same with gas detectors,” he continued. “No one likes to buy and maintain gas detectors, but historically, there were no other safe options. Gas detectors look simple and similar, but selecting the right one and setting it up correctly is often tedious. Like tires, gas detectors also have to be serviced regularly.You have to track lots of data – equipment usage, calibration records, sensor life, and most importantly, alarm events. This is painful for most organizations. And, if you don’t properly manage your gas detectors, your expenses go up and accidents may happen.” iNet offers customers an escape from the original model of buying and maintaining gas detectors. It eliminates the costly, up-front purchase. And it mitigates time-consuming, out-of-control maintenance costs. iNet offers support from the Gas Detection People, Industrial Scientific employees who have dedicated their careers to gas detection. It also gives customers complete visibility into their gas detection program, including the knowledge of potentially deadly alarm events. Finally, customers do not have to buy the gas detectors. They subscribe to iNet. In exchange for a monthly fee, they receive gas detection as a service. iNet is a better way to do gas detection. As customers dock Industrial Scientificowned gas detectors on DS2 Docking Stations, iNet automatically performs record-keeping, bump tests, and calibrations. It e-mails real-time alerts, and when iNet detects a problem, Industrial Scientific rushes a replacement gas detector to the customer. All “Don’t Buy Gas Detectors” and iNet materials are available at www.dontbuygasdetectors.com

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Oil & Gas Network, June 2009 27

Western Canada Natural Gas Production Outlook to 2020
iff Energy Group announces the release of an executive report analyzing the declining natural gas production outlook through 2020 within Western Canada, the second largest natural gas producing region in North America. This topic paper forecasts gas production by gas type (Solution, Existing, New Conventional, Tight Gas, Coalbed Methane, and Shale Gas), and by Ziff Energy’s ten Gas Strategy Areas. For each of the 10 gas strategy regions, the report provides a 10 year outlook of: • expected gas well completions • productivity of new gas wells • gas production decline rates, for both new and existing gas wells • gas production forecast for each strategy. Western Canada is maturing, and high natural gas drilling is not able to maintain current production. Gas production peaked at 17 Bcf/d in 2001 and Ziff Energy believes gas production will decline to under 14 Bcf/d by 2020, consistent with our view of the past several years, even including strong growth of Shale Gas production from the Horn River basin in Northeast British Columbia. The analysis excludes the Mackenzie Delta and Alaska. Ziff Energy’s analysis indicates that by 2020: • half of today’s gas production comes from wells connected in the last 5 years • new gas well completions will likely contribute over 70% of gas production • 2 Bcf/d of new gas is needed each year to replace declines. In 2007 and 2008 Alberta producers reduced gas drilling in response to poor economics. Gas prices have plummeted since summer 2008 and producers have reacted by slashing capital spending. In Alberta, the threatened royalty increases have made the cuts deeper.

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Figure 1 indicates the composition of Western Canada gas production in 2020, by gas type: Solution, Existing, New Conventional, Tight Gas, Coalbed Methane (CBM), and Shale Gas. Figure 1 2020 Western Canada Gas Production

Other recent Ziff Energy reports include:
• Shale Gas Outlook to 2020 • North American Demand Outlook to 2020 • Natural Gas Implications of Greenhouse Gas • Mexico’s Gas Supply / Demand Outlook to 2016 • Global LNG Outlook to 2020 • Natural Gas Opportunities for Ethanol • Gas Price Differentials Forecast to 2017 • North American Gas Storage • Henry Hub Gas Price Outlook to 2017 • North America Gas Supply - The Next Decade • North American Power Generation to 2017 • Canadian Natural Gas Exports to 2020

• 2007 U.S. and Canadian Gas Reserve • Replacement • Pipelines for Growing Oil Sands Production • Northern Gas Moving Forward • North American Pipeline Construction • LNG Terminals – Costs and Timing

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

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28 Oil & Gas Network, June 2009

Dresser Waukesha Introduces High-Performance Engines for Gas Compression Market
New 275GL™ Series Engines Minimize Fuel Cost While Simplifying and Improving Packaging, Operation and Service
resser Waukesha, manufacturer of natural gas engines that deliver clean, cost-effective power, has introduced its 275GL™ Series engines, a new generation of highperformance engines for the gas compression market. The new 275GL Series combines the robust construction and reliable operation of Waukesha’s ATGL® Series with design and engineering updates and an enhanced engine control system. The result is a new, high-performance engine series that enables customers to maximize efficiency and minimize fuel cost while greatly simplifying and improving packaging, operation and service. The 275GL Series has been designed with factory-mounted lube oil and cooling systems, which reduce the time and cost required to design, fabricate, and integrate the 275GL into a compressor package. Other features include an upgraded oil filtration system with plate-type oil cooler and spin-on disposable lube oil filter elements, and quick disconnects for ignition coils and thermocouples. These improvements, along with new design features that are common to both the 12- and 16-cylinder models, streamline and optimize the 275GL Series. Standard on the 275GL Series is an enhanced version of Dresser Waukesha’s easy-to-use control system, the Engine System Manager (ESM®), which has been proven on the company’s VHP® Series and the state-of-the-art APG® (Advanced Power Generation) Series. The ESM is a reliable total engine management system designed to optimize engine performance and maximize

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uptime by integrating spark timing control, turbocharger control, speed governing, knock detection, start-stop control, diagnostic tools, fault logging, engine safeties and air/fuel ratio (AFR) control. The ESM is factory-mounted, calibrated, and tested to minimize on-site set-up requirements and allows users to monitor critical engine functions in order to maximize efficiency and minimize fuel cost. The 16-cylinder (16V275GL) version of the 275GL engine is available now and is rated at 4500 bhp; the 12cylinder (12V275GL) model will be available in the fourth quarter of 2009 and will be rated at 3375 bhp, eight percent higher than the 12-cylinder ATGL model. “The market for higher horsepower engines for gas compression applications is continuing to grow,” said Bill Moore, senior vice president of operations for Enerflex, Dresser Waukesha’s Canadian distributor. Enerflex has worked closely with Waukesha in the development of the 275GL Series. “The 275GL engines are equipped with the latest version of Waukesha’s ESM engine control system, a key feature that will help these engines gain market acceptance,” Moore said. “For engines of this size, it all comes down to having an effective control system to operate with maximum reliability in remote locations while meeting efficiency requirements. With the introduction of the 275GL Series, Waukesha is delivering a product that Enerflex and other customers can successfully adopt in this market.” www.waukeshaengine.dresser.com

New SWT series
ynalco, a Crane Co. company, announces a brand new SWT series of speed switches for the monitoring and protection of rotating and reciprocating machinery.The SWT series of speed switches are DIN rail mountable for easy installation and are fully isolated for compatibility with existing systems. The SWT-2000, a 2 Channel Speed Switch/Transmitter, contains two isolated speed switches in one package. The SWT2000 is able to monitor and protect two separate machines or processes simultaneously, with separate 4-20 mA proportional outputs. It also contains (4) relay setpoints and (2) open collector outputs with a variety of configuration options.Applications would include dual turbocharger protection and redundant protection for critical operations. Programming is done via an Ethernet connection. The SWT-1000 Speed Switch/ Transmitter has a single relay setpoint for over speed protection and provides 4-20mA isolated output. This product is configurable via Windows® software. The SWTD-1000 Speed Switch/Transmitter has the same functionality as the SWT1000 and includes an integrated backlit display. This product is software programmable and utilizes a 1/8 DIN package for easy installation. The SW-100 is a DIN rail mountable speed switch that uses a single setpoint for over/underspeed protection. The SW-100 is simple to configure – no test equipment or computer is needed. Dynalco has a reputation for providing rugged and dependable products for the oil and gas production, natural gas pipeline, and processing industry. The SWT series enhances the current Dynalco line of speed switches and transmitters, allowing a wide range of solutions for machine monitoring and protection. For more information visit www.dynalco.com

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Oil & Gas Network, June 2009 29

Flir Announcement

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

Specialized Hardbanding System

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

directory of advertisers
ABB Inc. www.abb.com/oilandgas ASCOValve Canada www.asco.ca Axia NetMedia Corporation www.axia.com Baker Hughes Canada www.bakerhughes.com Control Microsystems www.controlmicrosystems.com Dmg Worldmedia www.petroleumshow.com Dow Microbial Control www.dow.com/biocides Edmonton Exchanger www.edmontonexchanger.com Fiberspar Linepipe Canada Ltd. www.fiberspar.com Flexpipe Systems www.flexpipesystems.com FLIR Systems Ltd. www.flir.ca Halliburton Energy Services www.halliburton.com Inmarsat www.inmarsat.com/oilgas Langara Fishing Adventures www.langara.com Mattracks www.mattracks.com Molex www.molex.com Naiad Company Ltd www.naiad.ca Net Safety Monitoring Inc. www.net-safety.com North Rig Catwalk Technologies www.northrig.com Petro-Canada Lubricants www.lubricants.petro-canada.ca/mining Prinoth Ltd. www.prinoth-utilityvehicles.com Rogers Wireless www.rogers.com Singletouch Canada Inc www.singletouch.com TELUS Communications Inc. www.telus.com Volant Products www.volantproducts.ca Wainbee www.wainbee.com Wellons Canada www.wellons.ca Wood Group ESP (Canada) Ltd. www.woodgroup.com

30 Oil & Gas Network, June 2009

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