Special Features - Oil and Gas

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ional

Regional

Oil & GasSection

2014Black Gold

in theHeartland

2014 OIL & GAS SECTION OCTOBER 2014

Joel van der VeenExpansion in the Castor area may soon be in the

cards for a Calgary-based energy company. N. Desmond Smith, Pennine Petroleum Corporation’s

chief financial officer, said that the company has a crew on site to determine the viability of a natural gas well located east of Castor.

“We’re on site and we’re doing the work,” he said in an interview on Wednesday, Sept. 24.

It was announced in July that the corporation had signed a joint operating agreement with its partner on the property, and was appointed operator of the project.

On Sept. 15, the corporation announced that it expected to be on site within a week to conduct tests on the well, which was drilled in 1989 and abandoned a decade later as natural gas prices dropped.

Now that prices are stable, Smith said Pennine had made the decision to re-enter the well and, once its productivity has been measured, to connect it to a nearby pipeline.

“This is the beginning of positive asset-building activities of the corporation,” said director John Garden in a press release, “and will kick off the corporation’s move to expand interests in the Castor area.”

Smith confirmed that Pennine is interested in expanding further in the region, but said the ultimate decision would be determined by the success of the testing currently in progress.

“We’re going through the process of determining the integrity of the old well bore,” he said.

Once that’s complete, the company will do further testing to determine the flow rate, and from there it will make the decision whether or not to tie the well into a pipeline and market the gas that is produced.

A public announcement on the company’s decision was expected by Sunday, Sept. 28.

“We’re keeping our fingers and toes crossed,” Smith said, but added he anticipated good news based on “indications from earlier years.”

The well site, referred to as “Castor 2-22” in company documents, is located roughly 500 metres from transportation infrastructure and about one kilometre east of the town site.

Smith said during the interview that, on average, six or seven crew members were on site, including management, subtradesmen operating the drill rig, and ancillary companies responsible for other tasks.

According to the Sept. 15 press release, the well would be re-entered in the Mannville Formation where, following a 90-minute drill stem test over the target zone, maximum natural gas rates of 629,000 cubic feet per day were recorded, with 59 feet of drilling mud recovered.

The company press release describes Pennine as an “emerging oil and gas exploration and development company currently active in Alberta and Saskatchewan.”

Pennine’s strategy, the release continues, is based around growing the company’s cash flow through drilling and well recompletions on the specific land areas in which it operates.

According to Bloomberg Businessweek, the company holds a 50 per cent working interest in the Success area, located near Swift Current, Sask., and a 66.7 per cent working interest in the Chauvin South East Central area, consisting of two wells located southeast of Edmonton.

Castor area is under focus again for natural gas production

METAL BUILDINGS INC.

For further information, check us out on-line www.mmbi.ca. Our website hosts galleries of work we have done, as well as an on-line quote request form available 24/7.

Clay andLorisa Brower

4204 - 46 Avenue4204 - 46 AvenuePhone 403-742-1300Phone 403-742-1300

If you’ve traveled the highways and bi-ways of Alberta, you have likely seen one of our buildings housing the very equipment that keeps our economy cking. Without these buildings, equipment would freeze or overheat, emit noise and toxic odors, and present a hazard to wildlife and people alike.

Local employer METALEX does everything from design to fabricate to erect, or can provideSupply Only services. Our Exper se is in Self Framer, Foam Panel, Interlock and Hybridsystems for Industrial, Oil & Gas, Agricultural, Commercial and Residen al applica ons. METALEX services all Western Canadaand can export products inter-provincially or interna onally.For background, METALEX has been design/building metal buildings for 12 yearsand has tackled quite an array or projects.

Further facts about METALEX:• Design and Fabrica on facility located in Ste ler Alberta’s Oil and Gas Heartland• Service facility in Edmonton• Services virtually all of Alberta, B.C., Saskatchewan and NWT• Sta located in Ste ler, Red Deer, Edmonton and Calgary• Design/ build large and small industrial enclosures• Specializes in modular, mobile equipment sta ons• Municipal, residen al and agricultural structures• Provides engineered commercial buildings• CAN/CSA A660 cer ed (Manufacturer of Steel Structures)• Averages over a thousand buildings per year, of various sizes, loca ons and applica ons• Full capabili es for Self-framer and polyurethane foam panel steel buildings• Insula ng division for structures as well as vessels and piping projects• Respected Safety and QC program• Family owned and operated business founded by Clay and Lisa Brower• Very community orientated

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PAGE 32014 OIL & GAS SECTIONOCTOBER 2014


PH: 403-742-2212 Site # 39127, Range Road 19-3, Stettler, AB

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- Transport CanadaTDG Recerti cation & Repair Facility

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3811 - 46 AvenueStettler, AB

403-742-4747Facility Registration Number: 25-0768

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For more information call

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4810 - 45 Street, Lacombe, AB4701C - 41 Street, Stettler, AB

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Proctor Picker Service Ltd.

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The supply side glut in the oil market combined with the decline in global demand makes it difficult for oil producers to effectively exercise any control over oil prices, according Seth Kleinman, Citi Energy Analyst.

Even in the context of recent serious geopolitical issues that could potentially cause supply disruptions and high oil prices, the world is witnessing a decline in oil prices. Brent has traded since early July within the range of $95 to $110. It is hovering around $98 to $100 a barrel on the London-based ICE Futures Europe exchange.

On the supply side a lot of excess stocks combined with new sources of production such as US shale oil, massive gas substitution are depressing the oil prices. Kleinman said the medium term outlook for oil demand is not encouraging as the emerging market demand growth, particularly from China is on a decline.

The long held belief that emerging markets are perennial sources of oil demand is fast changing partly because of the changes in economic growth dynamics and partly because of massive energy substitution of natural gas — often obtained through the hydraulic fracturing of shale rock for oil, and fuel-efficiency mandates in many key countries.

Oil glut in the market is

beyond Opec’s control

OILFIELD • INDUSTRIAL • SAFETYOILFIELD • INDUSTRIAL • SAFETYLocally owned and operated in both our locations, we strive to not only to supply

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We’re big enough to handle it and small enough to care!

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CORONATION INDUSTRIALSALES & RENTALS

Box 6904706 Victoria Ave.,

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CASALTACASALTAOILFIELDOILFIELDSERVICES LTD.SERVICES LTD.

Box 202, Castor, AB T0C 0X0Box 202, Castor, AB T0C 0X0

403-742-9538403-742-9538

Steven WiartOwner/Operator


600+people

operating hubs

A large seismic database

five

65,000 boe/d

Producing over 6,760operating wells

1.4m acres of undeveloped land1,500+billion

cubic feet equivalent

Proven and probable reserves

OPERATING INFRASTRUCTURE

Centrica Energy

A real sense of communityThank you for letting us be a part of yours

Direct Energy Marketing Limited’s upstream gas business

is now operating under the trade name “Centrica Energy”.

CENTRICA ENERGY CANADA QUICK FACTS

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Tornado Combustion

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A strong and growing design/manufacturing company providing combustion related products including arrestors, fl are stacks, thermal oxidizers and custom designedequipment.

[email protected]

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by innovative minds.

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STETTLER AGENCY

7007A - 50 Ave., Hwy. 12 WestSTETTLER

1-866-742-2647

Cardlock & Convenience Store

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HOURS: Monday to Friday - 6 a.m. - 7 p.m.; Saturday - 8 a.m. - 5 p.m.

Oilfi eld, Agriculture, Consumer, CommercialBulk Fuel Sales & Delivery

Chevron & Shell Lubricants & Propane

On SiteServices

REINBOLDPETROLEUM LTD.

Reinbold Petroleum is pleased to serve you

at our added locations:

Hanna605-1st Ave West

403-854-4370

Delia101 Railway Ave

403-364-3922


K-OSS KLEANINGDrycleaning of: Coveralls, Gloves, Oilfi eld Clothing, etc.

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4707 - 50 Street, Stettler 403-742-0080Regular Pick-up & Drop off routes in your area

The world will need to deal with an excess volume in the supply of refined oil products as new Asian and Middle East refineries increase o i l p r o c e s s i n g , t h e In ternat ional Energy Agency (IEA) said in its latest monthly report.

A c c o r d i n g t o t h e r e p o r t , t h e a g e n c y expec t s 9 .5 mi l l i on barrels per day (bpd) of new crude distillation capacity, representing more than a 10 percent of global demand, to come on stream in 2013-2 0 1 8 , s u b s t a n t i a l l y more than the forecast i n c r e a s e i n c r u d e production capacity and global demand growth.

“ W h i l e E u r o p e ’ s e c o n o m i c w o e s a r e taking a toll on demand, there are mounting signs that China’s oil use, like its economy, may have shifted to a lower gear. Slower growth in demand than in runs could lead to product stock builds,” the IEA said.

T h e a g e n c y s a i d c h a n g e s w o u l d b e already felt from the third quarter of 2013 as global refinery runs

may rise by more than 2 million bpd on the back of increased processing by China, Saudi Arabia and Venezuela.

This spike in crude r u n s w o u l d e x c e e d forecast product demand growth of 1.7 million bpd, the IEA said.

It also added global c r u d e s u p p l y c o u l d struggle to keep up with refining demand because of seasonal maintenance to North Sea production, Sudan’ s s t rugg le to resume production, the annual hurricane season in the U.S. Gulf and risks to Middle Eastern output due to the Syrian civil war.

Shorter-than-expected crude supply and large refining volumes would u n d e r m i n e r e f i n i n g margins.

“While that would n o r m a l l y p r o m p t refiners to drop their t h roughpu t s , marke t par t ic ipants may not be equally receptive to such price signals. New refining capacity would likely be the last to cut back on runs if refining e c o n o m i c s t u r n e d south,” the IEA report said.

More refineries in action

in Asia and Middle East


Tel: 403-742-6116 Cell: 403-742-9704 [email protected]

Darren LaRose

Paul ’s ROAD MAINTENANCE LTD.ROAD MAINTENANCE LTD.

• Oilfi eld & Residential • Road Building, Blading & Snow Removal

• Group Benefi ts • Private Health Service Plans• Health Care Spending Accounts

Our oil and gas industrysupports more than 550,000 jobs across Canada.We want to help ensure that those employees haveadequate health care coverage.

info@gilbertfi nancial.netToll Free 1-888-898-10104937 50 Street Stettler

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Custom fi t your benefi t plan to meet your unique needsas an Oil and Gas Contractor or Service Company.Please call us for more information on our Private HealthService Plans and Unique Packages for Contractorsand Groups of all sizes.

Benefi t From OurExperience

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Recent declines in the oil price in global markets could potentially jeopardize oil production in Alberta’s oil sands.

After U.S. oil tumbled to its lowest prices in nearly two years early this month, a sudden slump in prices this winter would be particularly unwelcome. At around $79 per barrel, the absolute price in Canada is getting nearer the break-even cost for major new developments.

As important to the Canadian industry is world demand. “The recent slowdown in demand growth” according to the IEA “is nothing short of remarkable.”

The EU economy has yet to recover from the slump to bring about an increased demand while in China, demand has been capped by both economic and environmental concerns.

China is reported have reduced both oil and coal imports and increased LNG imports and use of renewable energy. According to Platts Energy Prices, demand for oil in China fell to 9.61 million bpd in July, which is a drop of 2.1 per cent from a year ago and China is now exporting surplus refined product.

With the several hoped for pipeline projects still undecided, any exports of oil from northern Alberta could become even costlier with added transportation expenses as the winter sets in.

Given the increased oil and gas production in the US thanks to the utilization of shale technology, the closest export market for Canadian oil is likely to become much tighter in the weeks and moths ahead.

Canada’s oil sands

production could come

under threat


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PO Box 760Stettler, AB T0C 2L0

P Tarcels

ruckingOilfield Service

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CENTRAL ALBERTA CO-OPMembers earned 5.9% on Petroleumpurchases and 8.5% on Oil & Grease.

Gas BarGas Bar 4821 - 62 St., Stettler 4821 - 62 St., Stettler 403-742-1466403-742-1466

Central Alberta Central Alberta Co-op Ltd.Co-op Ltd.

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Special Features - Oil and Gas

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