International

Mar. 2002 Vol. 223 No. 3  International

Kurt S. Abraham,  Managing/International Editor

Canadian firms ready for bumpy ride. Expectations for this year’s E&P market in Canada were not quite as chilly as the weather, when this editor arrived in Calgary at the end of January. Compared to a cold snap that plunged temperatures to – 25°C ( – 13°F) at night, the outlook for Canadian upstream activity seemed relatively balmy. Let’s just say that most companies are taking an "intelligently cautious" approach (credit for this term goes to a local E&P professional).

Consider the numbers that back up this Calgarian thinking: According to various Canadian associations and publications, between 17,000 and 18,000 wells were drilled in Canada last year. Depending on who counts wells from year to year, this was either a record or near-record performance. For 2002, the forecasts run between 13,600 and 15,015 wells, which would still be Canada’s fourth-best year, ever.

Anadarko retains faith. Now, fast-forward to this editor’s chat in Calgary with Dave Brown, drilling manager at Anadarko Canada. A well-experienced hand, Brown has seen numerous Alberta up – down cycles, both at Berkley Petroleum and now at Anadarko. He’s not intimidated by the temporary downturn. "Oh, sure, we’re going to drill 12% fewer wells than last year," said Mr. Brown. "But when put into context, we’re still going to be one of the most active drillers in Canada."

Brown noted that his firm’s major reductions targeted uneconomic, capital-intensive projects. "I would expect that a lot of companies are pursuing the same strategy. This is perfectly understandable when you factor in the role of natural gas prices and realize that we haven’t had a lot of strong gas demand around here (lately)." Anadarko is exploiting about 20 different properties in Alberta and southwestern Saskatchewan, while a majority of its exploration work is in northeastern British Columbia. "We’ve had some good successes so far this year," enthused Mr. Brown, "and we’re still drilling some tests."

Brown and his drilling staff constantly improve technology practices. "Yeah, we feel strongly that PDC bits and downhole motors give us the biggest bang for the buck, when you consider the formations that we deal with. At the same time, we’re trying to find alternative mud systems that will give us better environmental benefits." He also has pet peeves in the field: "Lost circulation and borehole instability remain our biggest problems and give me my biggest headaches."

There also is the matter of average rig condition. "You know, there’s a lot of old equipment around Western Canada, and there’s a pile of old rigs. I suppose that owes to the fact that we (Alberta operators) use only 50% of our drilling capacity for nine months of the year, and then 90% for three months. So, there’s not a lot of motivation for capital investment by rig owners. Consequently, we will always have a need for new rigs in Canada."

Crown thrives on frac units. In southeastern Calgary, Crown Energy Technologies (previously named Crown Industries) is pursuing its innovations in spite of market fluctuations. One example is a new coil frac unit (see photo).

According to Crown Vice President of Business Development Reid MacDonald, this application of fracturing through coiled tubing conveys a straddle packer assembly to the exact perforated interval to be treated. Treatment is pumped through 27_8-in. tubing, thus entering the designated zone, only. This results in increased production, and job treatment size is less in most cases. Up to 16 perforated intervals can be treated in one run, meaning that a crew no longer has to run mechanical isolation (run bridge plugs), which previously meant 4 to 5 hr between treating zones. Instead, the time required to move between intervals is only 12 to 15 min.

"This saves two to three days on a job," noted MacDonald. "That means you can put a well on production sooner. Also, average job size shrinks about two-thirds. For example, one operator found that its sand requirement dropped to 100,000 lb from 300,000 lb. In Medicine Hat (Alberta), we typically treat 12 intervals, and there has been a very big application in gas wells to date."

Crown’s coil frac unit prototype

Crown has completed three units (including a prototype rolled out last May) for a major service firm, and a fourth unit is being completed for work in Alaska. The prototype is now in Colorado. Other units are in Farmington, New Mexico, and Medicine Hat. "We’re looking at building two more units for another service company. We feel very good about the market during 2002," said MacDonald.

Tesco project gains momentum. Also on the southeast side of Calgary, Tesco Corp. says that it is beginning to see some real results from its experimental casing drilling project. As was explained to this editor last month, Tesco has invested about five years on the technology, including developmental work at company facilities, plus on-site testing at individual wells. "We’ve come pretty far in the last year," amplified Mark Fischer in Tesco’s Houston office. "We have made significant progress to the point that we believe this will be a very beneficial technology for both operators and drilling contractors.

"Not only do we think that casing drilling will save time, you can reduce the problems associated with formation instability, running logs and casing while increasing safety by eliminating the need for conventional tripping of drill pipe." Tesco has drilled 43 wells (300,000 ft) with various casing sizes. Tesco is currently drilling a tenth well for Conoco in Texas.

Updated numbers. Several Canadian operators were late with their survey returns this winter. Thus, we have added their figures to the updated results in the accompanying table.

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