PSAC Petroleum Service News Spring 2015

SPRING 2015

2015 Drilling Activity Forecast Update

When to Permit, When to Prorate

Success at STARS & Spurs 2015

Experts weigh in on the gloomy forecast for low oil prices

PM#40020055

T H E O F F I C I A L V O I C E O F T H E P E T R O L E U M S E R V I C E S A S S O C I AT I O N O F C A N A D A

PSAC_Spring_2015-p01.indd 1 2015-02-19 11:19 AM

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Oil and gas companies face greater challenges today as they focus on maximizing profitability and shareholder value. As a result, they need practical advice and strategies from professionals who understand the issues that they are facing.

Our dedicated BDO Natural Resources team works closely with businesses like yours to provide quality services in audit, business and financial advisory, domestic and international tax, risk management, and business processes.

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WWW.PSAC.CA 3

Features

Departments59

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22

252830

COVE

R

S P R I N G 2 0 1 5

TAKING A BALANCED APPROACH Experts take on the doom and gloom

surrounding low oil prices

PITCHING INThe 21st annual STARS and Spurs Gala

rings in another year of big success

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MESSAGE FROM THE PRESIDENT

IN THE FIELD News, notes and events from the industry

BUSINESS MATTERSShould you consider registering a vehicle

under the International Registration Plan?

2015 DRILLING ACTIVITY FORECAST

PSAC IN ACTION

MEMBER PROFILE

A LOOK AT LEADERSHIPGetting to know PSAC board members

Ian McConnell and Dave McHattie

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WWW.PSAC.CA

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CONTENTS

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9Oil and gas companies face greater challenges today as they focus on maximizing profitability and shareholder value. As a result, they need practical advice and strategies from professionals who understand the issues that they are facing.

Our dedicated BDO Natural Resources team works closely with businesses like yours to provide quality services in audit, business and financial advisory, domestic and international tax, risk management, and business processes.

Assurance | Accounting | Tax | Advisory

www.bdo.ca

Calgary 403 266 5608

Edmonton 780 461 8000

Grande Prairie 780 539 7075

Lethbridge 403 328 5292

Red Deer 403 342 2500

BDO IS PROUD TO SERVE THE BUSINESSES OF ALBERTA

000PSN-BDO-FP.indd 1 2015-01-27 11:44 AM PSAC_Spring_2015-p02-03.indd 3 2015-02-12 1:58 PM

Leaders never rest.

No matter what the hour, or how many hours they have in front of them, leaders stay the course. Through good times and bad, we’ve done just that, custom building solutions to help our clients do what they do best…lead. Because Alberta means the world to us.

atb.com/Leaders

TM Trademarks of Alberta Treasury Branches.

000PSN-ATB-FP.indd 1 2015-01-19 1:45 PMPSAC_Spring_2015-p04-09.indd 4 2015-02-12 11:56 AM

Mark Salkeld, President & CEO

MESSAGE FROM THE PRESIDENT

ELL, HOW TIMES CHANGE! In the blink of an eye

our industry has been hit by spiralling commodity prices and

headlines are screaming of mass layoffs.

We were quite optimistic about the year ahead when we

released our 2015 Canadian Drilling Activity Forecast back in late October amidst

uncertainty that was already starting to brew in response to declining prices. As

of the end of January, we have revised our forecast pricing assumptions and have

adjusted our drilling activity forecast from 10,100 wells (rig releases) to 7,650. See

page 22 for the detailed breakdown of PSAC’s revised forecast.

The year ahead promises to have some challenges as industry continues to

respond to the changing economic landscape we now face. But there is still

optimism to be had. With the strength of our collective membership, PSAC will

continue to forge ahead to make inroads on the issues that matter most. Despite

what may be some turbulent times ahead, the work to champion the interests of our members,

including removing unnecessary obstacles to their future business success, is as important as ever.

We will continue to focus on four key strategic areas: health and safety, knowledge leadership,

human capital and technology, and competitiveness and innovation. When prices rebound,

we want to make sure our efforts help our members to be resilient and drive towards long-term

business success.

Even in these times which we have faced before and survived, our industry remains generous

and committed to supporting safe and vibrant communities. The PSAC-hosted 21st Annual

STARS and Spurs Gala once again showcased that generosity, raising nearly $1.1 million

supporting STARS’ life-saving emergency medical services. Thank you to this year’s guests,

volunteers and donors, whose unparalleled generosity shows that when the going gets tough, well,

the tough keep doing the right thing. See the re-cap of the event on page 24.

While there will be some uncertainty and pain points for our industry as we continue to ride

the waves of pricing, the year ahead will be a time for us to demonstrate our commitment to

innovation, operational excellence and the entrepreneurial spirit that transcends our membership

and industry, putting Canada’s oil patch back in a leading position sooner than later. We have been

through this before and came out better. This time will be no different.

Best Regards,

Mark Salkeld

PSAC President & CEO

WEmbarking on a Challenging Year Ahead

5WWW.PSAC.CA

Leaders never rest.

No matter what the hour, or how many hours they have in front of them, leaders stay the course. Through good times and bad, we’ve done just that, custom building solutions to help our clients do what they do best…lead. Because Alberta means the world to us.

atb.com/Leaders

TM Trademarks of Alberta Treasury Branches.

000PSN-ATB-FP.indd 1 2015-01-19 1:45 PM PSAC_Spring_2015-p04-09.indd 5 2015-02-12 11:56 AM

SPRING 2015 VOL 14 • No.4

PETROLEUM SERVICES ASSOCIATION OF CANADA 1150 800 6TH AVENUE SW

CALGARY, AB T2P 3G3TEL: 403.264.4195FAX: 403.263.7174

EMAIL: [email protected]

PRESIDENT AND CEO: MARK SALKELDVICE PRESIDENT, COMMUNICATIONS: KELLY MORRISON

PETROLEUM SERVICES NEWS IS PUBLISHED FOR PSAC BY

VENTURE PUBLISHING INC. 10259-105 STREET,

EDMONTON, AB T5J 1E3TEL: 780.990.0839FAX: 780.425.4921

TOLL-FREE: [email protected]

PUBLISHER: RUTH KELLYDIRECTOR OF CUSTOM CONTENT: MIFI PURVIS

MANAGING EDITOR: LYNDSIE BOURGONCONTRIBUTING WRITERS: ROBIN BRUNET, ROBBIE JEFFREY,

SÉAMUS SMYTH, RYAN VAN HORNEART DIRECTOR: CHARLES BURKE

ASSOCIATE ART DIRECTOR: ANDREA DEBOERPRODUCTION MANAGER: BETTY FENIAK SMITH

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CONTENTS © 2015 PSAC. NOT TO BE REPRINTED OR REPRODUCED WITHOUT PERMISSION.

The Petroleum Services Association of Canada is the national trade association representing the service, supply and manufacturing sectors within the upstream petroleum industry. PSAC represents a diverse range of nearly 250 member companies, employing close to 75,000 people and contracting almost exclusively to oil and gas exploration and production companies.

6 SPRING 2015 PETROLEUM SERVICES NEWS

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News, events and activities in the industryIN THE FIELD

April 22, 2015

Calgary, Alberta

PSAC is pleased to present the first event in its 2015 Canada’s Energy Blueprint series, featuring Peter

Tertzakian of ARC Financial, who will be presenting a comprehensive outlook on Canada’s oil and

gas industry. Tertzakian will highlight some of the key outcomes to expect three, five and 10 years

from now based on technology development, cost containment and efficiency, social acceptance and

regulatory development.

Find out more at www.psac.ca/event.

PSAC IS NOW ACCEPTING online applications for

its 2015 Education Fund scholarships. The awards include

five $1,000 PSAC Regular Member scholarships and one

PSAC Roger Soucy Legacy Scholarship, funded by KPMG

in the amount of $2,500. The scholarships are open to

PSAC Regular Member employees and their children.

The application deadline is April 24, 2015. To apply, visit

www.psac.ca/education

Canada’s Energy Blueprint, brought to you by ATB Financial LOOKING AT THE FUTURE STATE OF INDUSTRY

PSAC 2015 Scholarship Competition Now Open

COMING EVENTS

PSAC’S DRILLING ACTIVITY FORECAST MID-YEAR UPDATEApril 30, 2015

Westin

Calgary, Alberta

PSAC EDUCATION FUND GOLF CLASSICJuly 16, 2015

Carnmoney Golf Club

DeWinton, Alberta

For more information and to register for an

event, visit www.psac.ca/event

NEW MEMBERS

REGULAR MEMBERSBig Guns Wireline Services

Blue Spark Energy

Expro

Horizon Oilfield Solutions Inc.

ASSOCIATE MEMBERSDivestLINK Advisory Partners LP

ESI International

Finning (Canada)

LeaderSharp Group

PFM Capital Inc.

SunCity Chem & Polymers Canada Inc.

Volvo Trucks Canada

WWW.PSAC.CA 9

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WWW.PSAC.CA 11

HE HEIGHT OF THE MEDIA’S obsession over the drop in

oil prices came on Janu-

ary 13, when news outlets

reported the Conference

Board of Canada’s predic-

tion that the drop will precipitate a recession

in Alberta. Glen Hodgson, the Conference

Board’s chief economist, was widely quoted as

saying that even if oil rebounds to $65 per bar-

rel, investment, profits and consumer spending

will still be down: “It’s going to be very hard

for Alberta to avoid a recession this year,”

he added.

It was just the latest in a daily spectacle of

worried reporters citing $47-per-barrel oil

prices as a potential trigger for everything

“WE WILL SURVIVE AND BOUNCE BACK, AND JUST AS HAS BEEN THE CASE IN PRIOR DOWNTURNS

WE WILL BE LEANER AND STRONGER FOR IT, PLUS WE’LL HAVE FURTHER DEVELOPED TECHNOLOGY

THAT PROVIDES EVEN GREATER PRODUCTION EFFICIENCIES.” – MARK SALKELD

BY ROBIN BRUNET

Experts take on the doom and gloom surrounding low oil prices

Tfrom the collapse of oil sands production to the bottom dropping out

of B.C.’s liquefied natural gas projects.

But the reality and the news are two different things, and Todd

Hirsch, chief economist at Calgary-based ATB Financial, is bewildered

by the panic. “I just heard [Alberta’s] premier calling the price plum-

met the worst downturn in generations,” he says. “That could only be

true if you have the lifespan of a golden retriever. About the only reason

I can come up with for him making such an outrageous statement is

that he’s trying to prepare Albertans for a tough budget.”

Hirsch says that even the experts can’t always be relied on to accu-

rately predict the ebb and flow of prices. “As recently as five years ago,

I inadvertently stuck my foot in my mouth by

declaring that oil couldn’t go below $80 per bar-

rel, and it promptly dropped to $30 – which is

$17 less than it is today. I guess what I’m trying to

say is that oil prices have always been like playing

a game of snakes and ladders. Unexpected dra-

matic drops are, in a way, entirely expected.”

Mark Salkeld, president and CEO of the Petro-

leum Services Association of Canada, goes one

better: “In my time I’ve seen oil plummet to $18

per barrel, and yet we’re all still here,” he says.

Salkeld and his colleagues fully appreciate the challenges facing

them. “There’s a lot of hype and talk going on, and rightly so, and

there’s no denying that the drop will break the backs of some play-

ers, primarily newcomers,” he says. “But a few facts must be kept in

mind. First, I don’t know of any significant producer that doesn’t have

APPROACHTaking a Balanced



a 20-year plan in place, with everything cal-

culated to accommodate a wide range of price

downturn scenarios.”

Salkeld cites Crescent Point Energy Corp. as

a perfect example of how seasoned producers

weather price drops. “That company’s poli-

cy-makers have vowed to keep drilling all the

way down to $20 WTI, plus it’s maintaining

the $2.76 per share dividend this year partly

because it hedged 50 per cent of its production

next year at US$90 per barrel.”

Indeed, companies that hedged production in

2014 are significantly insulated from the price

plummet. Calgary-based Encana Corp. hedged

about 30,400 barrels a day of expected oil pro-

duction between July and December of 2014 at

an average WTI price of US$97.34 per barrel.

Cenovus Energy Inc. added financial hedges

on 14,500 barrels a day of expected 2015 pro-

duction, at an average Brent price of C$113.64.

Other Canadian energy producers benefiting

from hedges include NuVista Energy, Whitecap

Resources Inc. and Bonavista Energy Corp.

Salkeld’s second point is that business

opportunities abound during any downturn.

Case in point: in December 2014, Tundra Oil

& Gas Limited announced the purchase of 550

oil wells in southwestern Manitoba from a sub-

sidiary of EOG Resources Inc. The wells pro-

duce approximately 7,000 barrels of light oil

per day in the Waskada and Pierson areas. Tun-

dra’s total production will now exceed 30,000

barrels of oil daily.

In December 2014, Tundra president

Ken Neufeld told reporters, “Despite the recent

volatility in the world oil markets, we take a

long-term approach to our business and we

believe that the addition of these assets will pro-

vide us not only with additional oil production

in the short term, but with further development

and enhanced recovery opportunities over

the longer term.” Tundra will spend $70

million this year to drill and expand the newly

acquired assets.

Much has been said about OPEC’s manoeu-

vring in response to the overwhelming suc-

cess of hydraulic fracturing in the U.S. “It’s no

secret that OPEC, led by Saudi Arabia, is try-

ing to drive out the high-cost producers,” says

Hirsch. “But I question the long-term sustain-

ability of this strategy. While Saudi Arabia is a

low-cost producer, other OPEC members such as Venezuela are not, and it’s doubtful that ramped

up production will be able to continue indefinitely.”

So, what form would the experts like a price recovery to take? “For the sake of industry overall I

would prefer a gradual increase in prices; otherwise we will lose out on all the benefits associated

with the ratcheting down of costs,” says Hirsch. In its first quarter 2015 Economic Outlook, ATB

has outlined three risk scenarios for global energy prices and their implications for Alberta. In

the first scenario, OPEC

refuses to cut produc-

tion – this would result

in an oil price floor

of US$40 WTI, more

layoffs and provincial

real GDP growth slow-

ing to between 0.5 and

1.5 per cent.

In the second scenario (which ATB believes is most likely), OPEC members are not able

to maintain production levels. This will mean a price rebound of above $60 per barrel start-

ing in the summer. Oil sands production would be cut back, and GDP growth would hover at

two per cent.

In the third (and least likely) scenario, global growth accelerates, OPEC dramatically reduces

production and prices climb to US$70-90 per barrel. This would result in only modest curtail-

ment in the oil sands, and GDP growth would remain above 2.5 per cent.

Although in all three scenarios Alberta experiences the slowest rate of GDP growth since the

2009 recession, the provincial unemployment rate remains at or below the national average, “and

in no scenario does Alberta experience a recession,” says Hirsch.

The ATB Economic Outlook does, however, discuss other concerns about the oil and gas sec-

tor. “Energy transportation and access to markets will remain a key concern for producers in

2015,” it states in its overview. “As of the beginning of the year, there is still no resolution on

any of the major pipeline projects (i.e., Northern Gateway, Keystone XL, Energy East or Trans-

Mountain). There is some optimism that the Republican-controlled Congress in the U.S. will

approve the Keystone XL project, but a presidential veto is still possible, meaning the pipeline

remains uncertain.”

For his part, Salkeld remains bullish about the long-term prospects of Western Canada oil

producers. “We will survive and bounce back, and just as has been the case in prior downturns

we will be leaner and stronger for it, plus we’ll have further developed technology that provides

even greater production efficiencies.”

Hirsch sums up the sentiments of his colleagues when he concludes, “Nobody is denying

the hurt that plummeting oil prices are causing. The only thing I don’t understand is how people

who should know better think this is anything new, or out of the ordinary, or something that

won’t be soon corrected. Anyone with a passing acquaintance of past trends knows that prices

will climb in the spring and summer. Yes, job losses are occurring, but 2015 will essentially be

a rebound year.”

“FOR THE SAKE OF INDUSTRY OVERALL I WOULD PREFER A GRADUAL INCREASE IN PRICES;

OTHERWISE WE WILL LOSE OUT ON ALL THE BENEFITS ASSOCIATED WITH THE RATCHETING

DOWN OF COSTS.” – TODD HIRSCH


WWW.PSAC.CA 13

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Y NOW, THOUSANDS OF oilfield services owners and managers across the WCSB have realized that 2015 is going to be a long and difficult year. As upstream cash flow available to oil company clients for reinvestment declines because of lower commodity prices, capital budgets are being slashed. Customers are also

asking their suppliers to share in the correction by seeking reduced pricing for goods and services. Services companies don’t have much choice in this market.

BY DAVID YAGER, NATIONAL LEADER, OILFIELD SERVICES, MNP

What oilfield services managers should consider in 2015

B

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THE OBJECTIVE IS TO GET THROUGH THE DOWNTURN WITH THE COMPANY

INTACT WHILE PRESERVING THE GREATEST NUMBER OF JOBS.

STRIVE FOR PROFITS, NOT PRACTICE, AND YOU’LL BE AMAZED AT WHAT YOU CAN LIVE WITHOUT WHEN YOU HAVE TO.

We’ve been here before. While oil prices are well below replacement cost

and are ultimately unsustainable, a fundamental change in world oil

markets has taken place. Low-cost producers in the Persian Gulf have

abandoned their traditional role of “swing producers” to support prices.

It’s now up to other producing regions to reduce supply (or increase

demand) to raise prices. This will take time. Meanwhile, doing nothing

and waiting for a recovery simply isn’t an option for the service and supply

sector, which must deal with the market as it exists today. Here are some

ways to help your company manage these tough times and emerge with a

leaner, more efficient organization:

TELL YOUR STAFF WHAT’S GOING ONGetting through this slump will be a team effort, so you’ll need your team

on your side. The job market is shrinking fast, so your staff will be ready

(maybe) for some “tough love.” Don’t be alarmist, but be honest: this is

certainly not the time to ask for a raise. The objective is to get through the

downturn with the company intact while preserving the greatest number

of jobs. Elicit everyone’s help to cut costs wherever possible. Align their

success with the company’s success.

SLASH DISCRETIONARY SPENDINGBe merciless in determining what you can live without. Review all non-

essential expense accounts, unassigned employee use of company vehicles,

travel and club memberships, and determine which capital expenditures

and repairs can be deferred. Close unprofitable locations and dump

marginal service and product lines. Strive for profits, not practice, and

you’ll be amazed at what you can live without when you have to.

COMMUNICATE HONESTLY WITH LENDERSLenders hate surprises. They don’t want your assets or your company; they

want their money back and they’ll work with you if you show them you have

a strategy to survive the downturn, position yourself for the recovery, and

ultimately pay them back. Every oilfield services company with debt is facing

the same challenges, so your lender won’t be surprised if you are delivering bad

news. Be honest and don’t wait too long. If you don’t have a plan, make one fast.

HAVE QUALITY FINANCIAL STATEMENTS AND FORECASTSShould you want or need to refinance or restructure your debt, raise equity,

merge with a competitor or otherwise change your financial structure,

quality and timely financial statements are essential. This includes monthly

P&L reports plus Review Engagement annual statements. Many financial

institutions won’t lend to or invest in companies without comprehensive

and independently prepared annual financials. While forecasting is

difficult in today’s dynamic market, being able to demonstrate you can

model your future revenue and expenses is critical.

RETOOL FOR PRICE CUTSWith oil and gas prices down, clients will be looking for their suppliers

to share the pain by working for less. “No” is the wrong answer; instead

“how” has become the challenge. Oilfield services companies cannot

succeed unless their customers succeed. The primary way E&P companies

compensate for lower commodity prices is by spending less and the oilfield

services must participate. But oil companies know they cannot succeed

by bankrupting their vendors, so as you negotiate, ask if your clients are

making the same cuts they’re asking you to take.


WWW.PSAC.CA 17

RUN CREDIT CHECKSAvailable cash for oil companies will be reduced in three ways: lower

production revenue, reduced credit facilities and much higher costs for

equity. If your clients can’t pay their lenders, they certainly can’t pay you.

When the order comes in, don’t move until you’re sure you’ll be paid.

Doing the work then not collecting will exacerbate an already challenging

financial situation.

STRESS-TEST YOUR STATEMENTS AND BALANCE SHEETWill your company make it through a prolonged downturn? Will you have

the money and flexibility to continue to operate the business in the most

normal fashion possible, ensuring your assets, shareholders’ equity and your

“sweat equity” are preserved so that when the recovery comes (and it will

come) you’ll be able to exploit it and preserve your work and investment?

MNP’s Corporate Recovery group is staffed by financial advisory

specialists who can help managers and owners determine financial

risks, analyze cash flows, optimize cash management and review lender

obligations to minimize the chances of a default and avoid the worst

possible outcomes. This includes reviews of accounts receivables, payables,

inventory and underutilized capital assets with an objective of maximizing

cash flow.

FULL DISCLOSUREIn 2009, the writer was CEO of a medium-sized, TSX-listed services

company. Between 2008 and 2009, revenue slumped from $114 million

to $82 million and EBITDA plunged from $10.4 million in 2008 to $0.8

million in 2009. The company shrank from 900 employees to 625. We

defaulted on our senior debt covenants, but our banker stayed with us.

Every strategy above, except the merger, was employed and we lived to fight

another day. It was sold in 2012 for more than six times what it traded at

during the bottom of the 2009 slump.

CONSIDER PAY CUTS AND JOB SHARINGIn the 2009 slump, many services companies cut wages for managers and

staff. This works in a downturn because all your competitors are in the same

boat and your employees have nowhere to go. Management must lead by

example – if the top dogs make proportionately bigger sacrifices, everyone

will fall into line. Retool your company’s base and bonus compensation to

reward success, not activity. Promise to return everyone to higher income

levels as soon as possible and follow through.

STREAMLINE MANAGEMENTIn good times, organizations often become top heavy. The objective should

be to keep the greatest percentage of your skilled and trained revenue-

generating personnel while examining all levels of non-revenue generating

management to maximize efficiency. The primary criterion for who stays

and who goes should be performance, not seniority.

KNOW YOUR JOB DELIVERY COSTSAs you reduce prices, extracting the maximum possible gross margin from

each transaction becomes essential. It’s important to know and control

direct costs. If your staff is efficient and does every job right the first time,

in some cases you can make the same margin at lower prices. With fuel

prices down and labor under control (see above), pleasant surprises can

emerge from doing less work better.

MERGERS WORKOne proven way to preserve shareholders’ equity is consolidation with

competitors. The objective is to spread management costs across a larger

revenue base. Clients want to do more work with fewer and larger vendors,

so put your ego on the shelf and find a way to preserve your investment,

perhaps by owning less of a larger organization that has a fighting chance

of being positioned to exploit the recovery when it comes.

MANAGEMENT MUST LEAD BY EXAMPLE – IF THE TOP DOGS MAKE PROPORTIONATELY BIGGER SACRIFICES, EVERYONE WILL FALL INTO LINE.

QUALITY AND TIMELY FINANCIAL STATEMENTS

ARE ESSENTIAL.

SPECIAL SPONSORED SUPPLEMENT FROM MNP


Photo courtesy of Beaver Drilling Ltd

Times are tough. And so are you.

Successful oilfield services companies know the importance of adapting quickly to volatile markets. MNP’s Oilfield Services team delivers the financial management and business advisory tools you need to become more cost efficient, effective and competitive. By optimizing business fundamentals, we help your operation become more resilient—and better equipped to overcome the toughest times.

Contact David Yager, MNP’s National Oilfield Services Leader at 403.461.8566 or [email protected]

000PSN-MNP-FP.indd 1 2015-01-27 8:32 AM

I


WWW.PSAC.CA 19

Photo courtesy of Beaver Drilling Ltd

Times are tough. And so are you.

Successful oilfield services companies know the importance of adapting quickly to volatile markets. MNP’s Oilfield Services team delivers the financial management and business advisory tools you need to become more cost efficient, effective and competitive. By optimizing business fundamentals, we help your operation become more resilient—and better equipped to overcome the toughest times.

Contact David Yager, MNP’s National Oilfield Services Leader at 403.461.8566 or [email protected]

000PSN-MNP-FP.indd 1 2015-01-27 8:32 AM

prorated sales tax of $3,294 to B.C. and $2,353 to Saskatchewan.

The company could operate in all three provinces for three years for

roughly what it would cost for one year of trip permits and PST paid

to British Columbia alone.

WHEN TO PERMITWhether to use trip permits or register vehicles under IRP depends on

how many days you plan to operate outside your home province and

whether the company has already paid sales tax on that equipment.

Registering a vehicle under IRP doesn’t represent a cost savings in

every case. But it’s worth calculating the real cost of using single trip

permits.

Sandy Johnson is the founder of North Star Fleet Solutions, a Calgary-

based provider of vehicle tax and licence compliance services. She can be

reached at 1-877-860-8025 or northstarfleet.com.

RECENTLY MET WITH an Alberta company that won

a contract moving equipment from Slave Lake to Prince

Rupert, B.C. They had factored a 30-day trip permit ($312)

and Alberta base plate ($2,400) into their bid, but failed to

account for having to pay roughly $70,000 in B.C. provincial sales

tax on the million-dollar piece of trailing equipment used during the

move.

When your business crosses provincial borders, considerations

like this can cause mass confusion about what is and isn’t taxable.

Unfortunately, confusion isn’t a valid excuse during an audit. Here’s

what you need to know about operating vehicles across the border:

WHAT TO KNOWIf your company is based outside of the province you’re working in.,

there could be a provincial sales tax on vehicles (“goods”) that come

into the province for “temporary use.” This takes into consideration

how many days the vehicle is used in the province over a 12-month

period. In general, a vehicle is exempt from PST if the number of

days is five or less.

For instance, in British Columbia under the temporary use

formula, you pay seven per cent PST on the depreciated value of

the vehicle in instalments over a three-year period. In this case, the

company owed roughly $23,000 PST in 2014, 2015 and 2016.

The fleet manager didn’t know about the PST issue until an

accountant at the company’s head office asked why they had

recovered $312 from the customer for the trip permit but not any of

the $23,000 in PST.

But here’s the kicker: the customer had called about doing more

jobs in B.C. and also Saskatchewan, which has a five per cent PST on

any commercial equipment, vehicle or tools used in the province for

one or more days in any 12-month period.

Now what?

A DECISION TO MAKEInstead of paying for single trip permits and PST, the company could

license vehicles under the International Registration Plan. With IRP,

you pay licensing fees and prorated sales tax to your base jurisdiction

at the time of registration. The jurisdiction will calculate and

forward the proper amounts to other IRP jurisdictions according to

the proportion of distance you travel there.

Licensing a million-dollar rig that spends 80 per cent of its time

in Alberta and the other 20 per cent divided between B.C. and

Saskatchewan would cost a total of $2,396 per year under IRP. It

would be exempt from PST and instead the owner would pay a

When to Permit, When to ProrateSHOULD YOU CONSIDER REGISTERING A VEHICLE UNDER THE INTERNATIONAL REGISTRATION PLAN?

BY SANDY JOHNSON

BUSINESS MATTERS

I

“LICENSING A MILLION-DOLLAR RIG THAT SPENDS 80 PER CENT OF ITS TIME IN ALBERTA

AND THE OTHER 20 PER CENT DIVIDED BETWEEN B.C. AND SASKATCHEWAN WOULD COST A TOTAL

OF $2,396 PER YEAR UNDER IRP.”

PH

OTO

CO

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TES

Y B

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O D

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Emergency Response Assistance CanadaAssistance d’Intervention d’Ugence du Canada

Suite #1100, 744 – 4th Ave S.W. Calgary, Alberta T2P 3T4Telephone: (587) 349-5880 Fax: (403) 543-6099 Website: www.erac.org

Emergency Response Assistance Canada (ERAC) formerly LPG Emergency Response Corp. (LPGERC) began operating in 1997

with a mission to provide 24/7/365 emergency pre-paredness and response services to shippers and car-riers of LPG gas covered under the TDG Emergency Response Assistance Plan (ERAP) Act and Regula-tions. ERAC provides the ERAP development and a national preparedness and response capability to more than 300 organizations across Canada. When activated, our Response Teams (RTs), Remedial Measure Advisors (RMAs) and Flammable Liquids Technical Specialists (FLTSs) will report to Incident Command, who is often the local Fire Department Chief or designate. Operating under Incident Com-mand System, the ERAC Response Team reports to Operations as a strike team.

ERAC has developed preparedness and response plans that cover the entire country in support of oil and gas producers, carriers and first responders. ERAC ensures well-trained and qualified people, quality equipment, knowledgeable advice and time-ly assistance to allow responders to deal effectively with LPG incidents by road, rail and stationary tanks greater than 450 L. LPG Products included are:Propane (UN1978)Butane (UN1011)Propylene (UN1077)Butylene (UN1012)Isobutene (UN1969)Isobutylene (UN1055)LPG (1075)

Recently, after the tragic events of Lac-Mégantic, Quebec where a train carrying crude oil derailed and exploded killing 47 people, Transport Canada issued a Protective Direction 33 which requires shippers to have an ERAP for the following: Flammable Liquids, N.O.S. (UN1993)Alcohols, N.O.S. (UN1987)Gasoline (UN1203)Hydrocarbons, Liquid, N.O.S. (UN3295)Ethanol (UN1170)Petroleum Distillates, N.O.S. (UN1268)Fuel, Aviation, Turbine Engine (UN1863)Diesel Fuel (UN1202)Petroleum Crude Oil (UN1267)Ethanol and Gasoline Mixture (UN3475

ERAC, with support from the Canadian Propane Association, Canadian Association of Petroleum Producers and the Rail Association of Canada, creat-ed a new ERAC Flammable Liquids (FL) Division to support the requirements of Protective Direction 33.

One significant difference, in the new Protective Direction 33 ERAP requirement for the Flammable Liquids, is Transport Canada requires all ERAP hold-ers to provide firefighting technical advice and fire-fighting foam and equipment to the first responders on scene as needed. ERAC is committed to provid-ing this support on behalf of our Plan Participants (those we serve as shippers and carriers of danger-ous goods). ERAC has developed detailed activa-tion and response plans which identifies significant foam and equipment caches strategically located coast to coast. In addition, we have recruited Flam-mable Liquids Technical Advisors (FLTAs) available 24/7 to provide firefighting advice by phone and Flammable Liquids Technical Specialists (FLTSs) to provide firefighting advice at the scene alongside the rail technical specialists identified in our Plans.

ERAC operates across Canada with 10 LPG Response Teams, 34 LPG RMAs, 4 Home Base Coordinators (HBCs), 11 FL Response Teams, 14 FLTSs, 6 FLTAs and 1 Emergency Call Centre operated under a divi-sion of STARS.

ERAC takes great pride in providing the training and assessment of all of our responders and being Canada’s only national emergency preparedness and response organization with a Transport Canada approved ERAP. Our priority is to ensure we have competently trained individuals ready and able to support flammable gas and liquids incidents to ensure public and first responder safety.

ERAC response personnel are extensively trained in the handling, storage and/or transportation of LPG and Flammable Liquids products and containers. ERAC provides Plan Participants with responders trained using National Fire Protection Association standards as guidelines. Once a year, Regional Train-ing and Assessment is held in each region across Can-ada for the RMAs, Response Team Leaders (RTLs), Alternate Team Leaders (ATLs), FLTSs, FLTAs and the Response Team Members to test their skills and update them on any new developments. Once every two years, a National Training session is held for all the RMAs, HBCs, FLTSs, FLTAs, RTLs and ATLs across Canada to share their experiences, learn new skills and refresh their knowledge. In addition to the above training, all FLTAs and FLTSs will receive Fire Specialists training for crude and flammable liquids.

More information on ERAC and our services is available at www.erac.org.

000PSN-ERAC-DPS.indd All Pages 2015-02-02 9:23 AMPSAC_Spring_2015-p18-21.indd 20 2015-02-12 11:48 AM

Emergency Response Assistance CanadaAssistance d’Intervention d’Ugence du Canada

Suite #1100, 744 – 4th Ave S.W. Calgary, Alberta T2P 3T4Telephone: (587) 349-5880 Fax: (403) 543-6099 Website: www.erac.org

Emergency Response Assistance Canada (ERAC) formerly LPG Emergency Response Corp. (LPGERC) began operating in 1997

with a mission to provide 24/7/365 emergency pre-paredness and response services to shippers and car-riers of LPG gas covered under the TDG Emergency Response Assistance Plan (ERAP) Act and Regula-tions. ERAC provides the ERAP development and a national preparedness and response capability to more than 300 organizations across Canada. When activated, our Response Teams (RTs), Remedial Measure Advisors (RMAs) and Flammable Liquids Technical Specialists (FLTSs) will report to Incident Command, who is often the local Fire Department Chief or designate. Operating under Incident Com-mand System, the ERAC Response Team reports to Operations as a strike team.

ERAC has developed preparedness and response plans that cover the entire country in support of oil and gas producers, carriers and first responders. ERAC ensures well-trained and qualified people, quality equipment, knowledgeable advice and time-ly assistance to allow responders to deal effectively with LPG incidents by road, rail and stationary tanks greater than 450 L. LPG Products included are:Propane (UN1978)Butane (UN1011)Propylene (UN1077)Butylene (UN1012)Isobutene (UN1969)Isobutylene (UN1055)LPG (1075)

Recently, after the tragic events of Lac-Mégantic, Quebec where a train carrying crude oil derailed and exploded killing 47 people, Transport Canada issued a Protective Direction 33 which requires shippers to have an ERAP for the following: Flammable Liquids, N.O.S. (UN1993)Alcohols, N.O.S. (UN1987)Gasoline (UN1203)Hydrocarbons, Liquid, N.O.S. (UN3295)Ethanol (UN1170)Petroleum Distillates, N.O.S. (UN1268)Fuel, Aviation, Turbine Engine (UN1863)Diesel Fuel (UN1202)Petroleum Crude Oil (UN1267)Ethanol and Gasoline Mixture (UN3475

ERAC, with support from the Canadian Propane Association, Canadian Association of Petroleum Producers and the Rail Association of Canada, creat-ed a new ERAC Flammable Liquids (FL) Division to support the requirements of Protective Direction 33.

One significant difference, in the new Protective Direction 33 ERAP requirement for the Flammable Liquids, is Transport Canada requires all ERAP hold-ers to provide firefighting technical advice and fire-fighting foam and equipment to the first responders on scene as needed. ERAC is committed to provid-ing this support on behalf of our Plan Participants (those we serve as shippers and carriers of danger-ous goods). ERAC has developed detailed activa-tion and response plans which identifies significant foam and equipment caches strategically located coast to coast. In addition, we have recruited Flam-mable Liquids Technical Advisors (FLTAs) available 24/7 to provide firefighting advice by phone and Flammable Liquids Technical Specialists (FLTSs) to provide firefighting advice at the scene alongside the rail technical specialists identified in our Plans.

ERAC operates across Canada with 10 LPG Response Teams, 34 LPG RMAs, 4 Home Base Coordinators (HBCs), 11 FL Response Teams, 14 FLTSs, 6 FLTAs and 1 Emergency Call Centre operated under a divi-sion of STARS.

ERAC takes great pride in providing the training and assessment of all of our responders and being Canada’s only national emergency preparedness and response organization with a Transport Canada approved ERAP. Our priority is to ensure we have competently trained individuals ready and able to support flammable gas and liquids incidents to ensure public and first responder safety.

ERAC response personnel are extensively trained in the handling, storage and/or transportation of LPG and Flammable Liquids products and containers. ERAC provides Plan Participants with responders trained using National Fire Protection Association standards as guidelines. Once a year, Regional Train-ing and Assessment is held in each region across Can-ada for the RMAs, Response Team Leaders (RTLs), Alternate Team Leaders (ATLs), FLTSs, FLTAs and the Response Team Members to test their skills and update them on any new developments. Once every two years, a National Training session is held for all the RMAs, HBCs, FLTSs, FLTAs, RTLs and ATLs across Canada to share their experiences, learn new skills and refresh their knowledge. In addition to the above training, all FLTAs and FLTSs will receive Fire Specialists training for crude and flammable liquids.

More information on ERAC and our services is available at www.erac.org.

ADVERTORIAL

000PSN-ERAC-DPS.indd All Pages 2015-02-12 1:54 PMPSAC_Spring_2015-p18-21.indd 21 2015-02-12 1:56 PM


DRILLING ACTIVITY FORECAST UPDATE

Drilling Forecast RevisedPSAC’S 2015 DRILLING FORECAST DECLINES 24 PER CENT AMID SLUMPING OIL PRICES

N ITS FIRST UPDATE to the 2015 Canadian Drilling

Activity Forecast, the Petroleum Services Association of Canada

(PSAC) has revised its forecasted number of wells drilled (rig

releases) across Canada for 2015 to 7,650 wells. This is a decrease

of 2,450 wells from PSAC’s original 2015 drilling forecast released in late

October 2014, representing a 24 per cent decline.

PSAC is basing its updated 2015 forecast on average natural gas prices

of C$2.50 /mcf (AECO), crude oil prices of US$57bbl (WTI) and the

Canada-U.S. exchange rate averaging $0.84.

“The rapid decline of oil prices over recent weeks is taking hold,” says

Mark Salkeld, president and CEO of PSAC. “There is enormous pressure

on services companies to cut costs even in the face of slim margins.

They are responding and some difficult times may lie ahead in the

immediate term, but companies are focusing on what can be done now

to keep key personnel, enhance efficiencies and optimize operations.”

On a provincial basis for 2015, PSAC now estimates 4,187 wells to

be drilled in Alberta, down from 5,740 wells in the original forecast.

Approximately 25 per cent fewer wells are also expected to be drilled in

British Columbia, with PSAC’s revised forecast now at 415 wells for the

province, down from 555 in the original forecast. The revised forecast

I for Saskatchewan now sits at 2,679 wells, compared to 3,365 wells in the

original forecast, and Manitoba is forecasted to see 364 wells, or a decline

of 66, in well count for 2015.

“The impacts of the current downturn have sent ripple effects

throughout Canada. This is not just affecting our industry negatively,”

continues Salkeld. “We have been through this before and will get

through it, but how long the pricing environment persists is a real

unknown. Although people may appreciate the dollars they save at the

pump, the negative impact to investment portfolios, other industries and

government coffers is serious.”

The Petroleum Services Association of Canada is the national trade

association representing the service, supply and manufacturing sectors

within the upstream petroleum industry. PSAC represents a diverse

range of nearly 230 member companies, employing approximately

70,000 people and contracting almost exclusively to oil and gas

exploration and production companies. The Canadian Drilling Activity

Forecast can be used with the PSAC Well Cost Study to effectively

determine potential drilling and completion market sizes, as well as

pricing and activity direction. For more information, contact PSAC at

[email protected] or 403-264-4195.

BRITISH COLUMBIA: 415

ALBERTA: 4,187

SASKATCHEWAN: 2,679

MANITOBA: 364

TOTAL IN CANADA: 7,650

2015 CANADIAN DRILLING ACTIVITY FORECAST(NUMBER OF WELLS)

Note: Total includes activity in Northern and Eastern Canada.

Get the business intelligence you need tohelp you plan through the downturn and beyond.

Join the Petroleum Services Association of Canada as we present its 2015 Mid-Year Drilling Activity Forecast on April 30, 2015 to get important business intelligence to help fuel your ongoing planning to deal with the current downturn.

Can’t Join Us?You can get forecast numbers and other key information on top operators, meterage, and well type breakdown in regionsacross Canada in PSAC’s Canadian Drilling Activity Forecast publication.

When used in conjunction with the PSAC Well Cost Study, the Canadian Drilling Activity Forecast can be used to determine potential market sizes for drilling and completion products and services, as well as pricing and activity direction.

Leading Energy Services,Supply, Manufacturingand Innovation

PRICES WILLREBOUND,

Subscribe to both and save $200! New subscribers save an additional 10%!

WILL YOU?2015 Mid-Year

Drilling Activity ForecastThursday, April 30, 2015

11:30 am – 2:00 pmWestin, Calgary

Register today at www.psac.ca.

000PSN-PSAC-FP.indd 1 2015-02-11 3:31 PMPSAC_Spring_2015-p22-23.indd 22 2015-02-12 1:59 PM

WWW.PSAC.CA 23

PSAC’S 2015 DRILLING FORECAST DECLINES 24 PER CENT AMID SLUMPING OIL PRICES

Get the business intelligence you need tohelp you plan through the downturn and beyond.

Join the Petroleum Services Association of Canada as we present its 2015 Mid-Year Drilling Activity Forecast on April 30, 2015 to get important business intelligence to help fuel your ongoing planning to deal with the current downturn.

Can’t Join Us?You can get forecast numbers and other key information on top operators, meterage, and well type breakdown in regionsacross Canada in PSAC’s Canadian Drilling Activity Forecast publication.

When used in conjunction with the PSAC Well Cost Study, the Canadian Drilling Activity Forecast can be used to determine potential market sizes for drilling and completion products and services, as well as pricing and activity direction.

Leading Energy Services,Supply, Manufacturingand Innovation

PRICES WILLREBOUND,

Subscribe to both and save $200! New subscribers save an additional 10%!

WILL YOU?2015 Mid-Year

Drilling Activity ForecastThursday, April 30, 2015

11:30 am – 2:00 pmWestin, Calgary

Register today at www.psac.ca.

000PSN-PSAC-FP.indd 1 2015-02-11 3:31 PMPSAC_Spring_2015-p22-23.indd 23 2015-02-12 11:47 AM



WWW.PSAC.CA 25

PSAC IN ACTIONTHE PETROLEUM SERVICES ASSOCIATION OF CANADA (PSAC) CONTINUES TO KEEP THE SERVICE, SUPPLY AND MANUFACTURING SECTORS FRONT AND CENTRE THROUGH ADVOCACY AND OUTREACH.

• PSAC met with Alberta’s new Jobs, Skills, Training & Labour

Minister Ric McIver to introduce him to PSAC’s membership

and PSAC’s various labour initiatives underway. Also attending

by conference call were the minister’s chief of staff and assistant

deputy minister (workforce strategies division).

• While in Ottawa, PSAC met with Eric Johnson, director of

Alberta-Federal Relations for the Government of Alberta, to

introduce PSAC’s membership and key facts, issues and initiatives.

Premier Prentice has announced that, notwithstanding changes to

key positions for that office, Eric Johnson will remain in Ottawa.

• PSAC participated in an employer forum hosted by the Canada

Employment Insurance Commission, which included presentations

and discussions with deputy ministers and senior government staff

from Employment & Social Development (ESD) Canada as well as

a roundtable discussion with ESD Minister Jason Kenney. PSAC

also participated in a roundtable event hosted by Citizenship and

Immigration Canada Minister Chris Alexander on the new Express

Entry program due to launch on January 1, 2015.

INTERNATIONAL BUSINESS AND TRADE• PSAC had the opportunity to sit down with senior policy

personnel from the Department of Foreign Affairs and Trade

Development to introduce PSAC’s membership and to discuss

technology, exports and corporate social responsibility initiatives,

all of which have an impact on Canada’s image abroad.

In February, PSAC delivered presentations to the following:

• The University of Calgary School of Public Policy, on hydraulic

fracturing

• The Association of Financial Professionals – Calgary chapter on

PSAC’s 2015 revised Canadian Drilling Activity Forecast, and

• The Energy Council of Canada on workforce and labour issues

CONGRATULATIONS TO PSAC MEMBERS• Calfrac Well Services’ Ed Oke was honoured as Senior Human

Resources Executive of the Year in Alberta Oil’s C-Suite Energy

LABOUR AND WORKFORCE MANAGEMENT

PSAC PRESENTS

Executive Awards. ComplyWorks Ltd. and McCoy Global

were both recognized in Alberta Venture’s Fast Growth 50

rankings, and ENTREC Corporation and STEP Energy

Services ranked first and second place respectively on the list.

Congrats to all!

PSAC IN THE MEDIA• PSAC was recently quoted or featured by several media outlets,

including the Calgary Herald, CTV News Calgary, Daily Oil

Bulletin, Edmonton Journal, and National Post.

PROPOSED CHANGES TO THE ALBERTA OCCUPATIONAL HEALTH & SAFETY (OH&S) CODE• PSAC participated in a joint project with the other upstream

petroleum industry trade associations to propose changes

to Part 37 – Oil and Gas Operations – of the Alberta OH&S

Code. The project was undertaken in response to the Alberta

government’s scheduled review of parts of the OH&S Code.

• The associations are also working on a proposal to harmonize

OH&S legislation governing oil and gas operations in the four

western provinces. This proposal is being advanced through the

process set up by the premiers of Alberta, British Columbia and

Saskatchewan under the New West Partnership.

RIG MOVING AND HEAVY HAUL IN SASKATCHEWAN• PSAC arranged a meeting in Regina between member

companies and representatives from the Saskatchewan Ministry

of Transportation to discuss concerns raised by members

related to the permitting process for the movement of rigs and

heavy equipment in Saskatchewan.

HEALTH AND SAFETY



Pitching In

A STARS helicopter

More than 1,000 people attended the 21st Annual STARS and Spurs Gala presented by PSAC

Canadian country music artist Corb Lund entertains the crowd

ESPITE A TROUBLING ECONOMIC FORECAST amid falling oil prices, Canada’s energy sector showed its support for STARS on January 24, by helping to raise more than $1 million.

The long-running STARS and Spurs Gala, an

annual fundraiser in Calgary presented by the Petroleum Services Asso-

ciation of Canada (PSAC), has raised more than $11 million over the past

21 years. Mark Salkeld, president and CEO of PSAC, says he is proud of

the industry’s support for the one-of-a-kind event, and credits all sectors

in oil and gas for working together to help ensure STARS is available to be

there for critically ill and injured patients.

“This year’s event was another huge success,” says Salkeld. “Our event

helps ensure that STARS’ emergency medical response services stay in the

air. Our partnership with STARS has endured two decades, and it’s no

wonder with the continued generosity and support of PSAC members and

the industry as a whole.”

The continued backing of individuals, corporations and the ener-

gy industry left STARS president and CEO, Andrea Robertson feeling

overwhelmed. “We are humbled by the support we received from PSAC

and those who participated in the gala this year,” says Robertson.

“Twenty-one years and more than $11 million raised has led to thousands

of lives saved. This partnership reflects the commitment our community

has to helping others.”

D

The 21st-annual STARS and Spurs Gala rings in another year of big success


WWW.PSAC.CA 27

Partners in Compliance

Excellenceon our roadways

Partners In ComplianceMember organizations exceed

benchmarks developed by industry leaders, Alberta Transportation and Enforcement. PIC members have transformed their safety programs into safety cultures.

To learn more about what membership might mean for you please call

1·877·448·7456 (Northen Alberta)1·800·267·1003 (Southern Alberta)

www.partnersincompliance.com

2015 01 12 psac ad.indd 1 1/12/2015 2:21:18 PM

THANK YOU TO THE SPONSORS OF THE 2015 STARS AND SPURS GALA,

PRESENTED BY PSAC:DIAMOND SADDLE:Clean HarborsHalliburtonRuby ReinsCanyon Technical ServicesBlack Diamond Group

EMERALD LARIAT:DiCorpWilliams Joseph

SILVER SPUR:JuneWarren-Nickle’s Energy GroupCargillWells Fargo

Savanna Energy ServiceNewalta CorporationMNPBaker HughesGrant Production Testing Services Ltd.Crescent Point EnergyWestern Energy Services Corp.Strad energy Services

BRONZE BUCKLE:CIOCTenarisSchlumbergerWillow Park Wines & SpiritsStyle Craft Printing

PSAC presents STARS with a cheque for close to $1.1 million. From left to right: Andrea Robertson, STARS President and CEO; Mark Salkeld, PSAC President and CEO; Wally Dumont, PSAC and Gala Committee Chair

Premier Jim Prentice and his wife Karen were among the special

guests in the audience, as was MLA Rick Fraser. In a speech, Prentice

acknowledged the downturn in the economy, noting that Albertans are

“tough” and will weather the storm.

The event, held at the BMO Centre at Stampede Park in Calgary, was

attended by nearly 1,200 guests, who enjoyed dancing to music by local

country singer Corb Lund and participated in an entertaining live auc-

tion, led by auctioneer Bill Brown and his team from Elevate Auctions.

The live auction was an incredible success and a highlight of the evening,

raising $657,000 through 16 different items. The live auction packages ranged

from a Primetime Emmy award experience to drilling services valued at

$100,000. One energy company generously spent $268,000 on three different

industry packages. Meanwhile, there were 194 items in the silent auction that

raised nearly $100,000. The silent auction saw spirited bidding too, with the

top prize – a Paul McCartney-autographed guitar – selling for $4,600.

In addition to representatives from the energy sector, the event was

attended by a number of STARS’ volunteers and Very Important Patients

(VIPs). One of those VIPs, Larry Stevens, was injured in November 2011,

when he fell into an auger while working on a farm near Stettler in cen-

tral Alberta. He was joined on stage by STARS’ flight paramedic Ron

Pasieka and flight nurse Pat Jeffery – the air medical crew on Stevens’

mission. The trio painted a vivid picture of Stevens’ ordeal and rescue,

which ended with him losing his leg due to the extent of the damage.

Despite his loss, Stevens said he is grateful every day.

“Before all of this happened, STARS was just a few helicopters that flew

around,” Stevens told the audience. “I will admit, I never really donated at all,

but I am living proof that it really can happen to someone you know. I do-

nate now more than ever and I am there to help out STARS any chance I get.”

Next year’s gala, the 22nd-annual, will be held on January 23, 2016.

“OUR PARTNERSHIP WITH STARS HAS ENDURED TWO DECADES, AND IT’S NO WONDER WITH THE

CONTINUED GENEROSITY AND SUPPORT OF PSAC MEMBERS AND THE INDUSTRY AS A WHOLE.”

– MARK SALKELD



OR TWO DECADES, Debbie Elliot worked for a major

oil company, managing its

cathodic protection operations

and supervising field surveys for engineering co-

op students every summer. After the company

left Canada, she started Elliot & Associates Con-

sulting, which was incorporated in 2004. Today,

the company’s logo is the Elliot clan badge, and

Elliot runs the company along with her niece,

April. It’s a small operation, but the compa-

ny thrives on close-knit relationships with its

clients. Elliot says she “can’t imagine ever being

big enough that someone else is answering my

phone,” and she stands behind a decade-long

commitment to safety and enduring partner-

ships with her clients.

Cathodic protection, as Elliot succinctly de-

scribes it, is the science of protecting steel using a

sacrificial metal. It can happen through galvanic

corruption, where a less noble metal will corrode

when it’s attached to a more noble metal, or with

an impressed current system, using a DC cur-

rent. Cathodic protection fell under the purview

of electricians until February 2013, when it be-

came a designated occupation under regulations

drafted by industry associations and Alberta’s

Apprenticeship and Industry Training Board.

Now, the industry requires some extra training

of its practitioners, including a week-long train-

ing course at Enform. But that’s nothing new for

A Family Affair

F

Elliot & Associates, where safety is the bedrock of the company.

With its office in Lethbridge and operations predominantly around the

Fox Creek and Red Deer area, Elliot & Associates distinguishes itself by

making safety paramount. “We’re a lot more adamant about safety than

some people with skilled experience are used to. We have quite a high work

standard,” Elliot says. “I wouldn’t be able to handle someone being seri-

ously hurt doing the work we do because our standards are rigid enough

where that really shouldn’t happen.” Elliot & Associates sends its employ-

ees to a driver training evaluation, and Elliot personally spends a few days

with them in the field to establish a strong, trustworthy relationship.

And while the company has grown to include large international

clients, it stays true to its roots. “Our very first client had three fields and

a total of seven wells and seven pipelines,” Elliot says. “That was his entire

operation, and we still do his work. He was our very first field survey. Our

relationship with our clients is very personal – if they have a cathodic pro-

tection problem, they can call the office and know who they’re talking to.”

Elliot says that even if she had her way, the company would never be

bigger than eight to 10 people, and she sings the praises of April, whom she

says her clients can call upon at any time and her response will be instant.

“I really like to work that way, and I like to work with other companies that

also work that way,” she says. Ultimately, the most rewarding part of the

job for Elliot is knowing that her company effectively balances rigorous

safety standards and close relationships with its clients. If you don’t believe

it, you can call them – Elliot will answer.

ELLIOT & ASSOCIATES CONSULTING COMBINES LOFTY SAFETY STANDARDS WITH CLOSE CLIENT RELATIONSHIPS

BY ROBBIE JEFFREY

MEMBER PROFILE

“OUR RELATIONSHIP WITH OUR CLIENTS IS VERY PERSONAL – IF THEY HAVE A CATHODIC PROTECTION PROBLEM, THEY CAN CALL THE

OFFICE AND KNOW WHO THEY’RE TALKING TO.” – DEBBIE ELLIOT


WWW.PSAC.CA 29

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Maintaining in a downturn market means knowing how to leverage your options—pursuing acquisitions or divestitures, corporate carve outs, accessing and structuring debt or equity capital, as well as preserving cash flow.

KPMG’s Corporate Finance advisory team has robust experience to provide strategic advice to help meet your business objectives.

For more information on how KPMG can assist you, please contact:

Rhys RenoufManaging DirectorKPMG Corporate [email protected]

Othello TuasonVice PresidentKPMG Corporate [email protected]

kpmg.ca/energyservices

© 2015 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 8316

SUCCEEDING in turbulent times

000PSN-KPMG-FP.indd 1 2015-02-06 10:33 AM

IF YOU COULD HAVE ANY OTHER JOB OR OCCUPATION, WHAT WOULD YOU BE?IM: Airline pilot.

DM: University professor.

WHAT IS YOUR FAVOURITE BOOK OF ALL TIME?IM: Because We Are Canadians: A Battlefield Memoir by Sergeant

Charles Kipp.

DM: Good to Great by Jim Collins.

WHAT ABOUT MOVIE?IM: Butch Cassidy and the Sundance Kid.

DM: Tin Men or Ferris Bueller’s Day Off.

IF YOU COULD INVITE THREE PEOPLE (DEAD OR ALIVE) TO DINNER, WHO WOULD THEY BE AND WHAT WOULD YOU SERVE?IM: Winston Churchill and my two grandfathers. I’d feed them my

signature meal (below).

DM: Wayne Gretzky, Mahatma Gandhi and Warren Buffett. The meal

would be unimportant.

WHAT DO YOU THINK IS THE BIGGEST CHALLENGE FACING CANADA’S ENERGY INDUSTRY AT THIS TIME?IM: Low oil and gas prices, quickly followed by public perception.

DM: To provide Canadians with the economic literacy required to

understand the opportunity of energy development for our nation’s

economy. If they don’t understand the value of developing the oil and

gas sector, I fear Canada will never again see private businesses invest

in the infrastructure projects required to get our energy to market.

WHAT WOULD YOU SAY IS YOUR BIGGEST ACCOMPLISHMENT TO DATE?IM: In my personal life, my three sons, all taller than me, though that

last bit isn’t saying much. In business, I took a f ledgling, struggling

company and, along with my team, made it the “best in class” in its

niche industry.

DM: Achieving a career that brings challenges every day.

WHAT MOTTO OR PHRASE DO YOU LIVE BY?IM: Treat people the same way that you would want to be treated.

DM: What is the right thing to do?

IF YOU COULD TRAVEL ANYWHERE IN THE WORLD, WHERE WOULD YOU GO?IM: The Cook Islands and New Zealand with my golf clubs, a hat and

some sunscreen.

DM: The guesthouse in Hawaii from Magnum, P.I.

IN 10 WORDS OR LESS, WHAT WOULD YOU SAY ABOUT HOW 2015 IS GOING TO TURN OUT?IM: Please God, give us one more chance at this oil patch.

DM: An opportunity to build a strategic platform for the future.

IF YOU COULD CHANGE ONE THING ABOUT YOURSELF, WHAT WOULD IT BE?IM: Height-to-weight ratio.

DM: I would like to be more outgoing.

WHAT IS YOUR MOST TREASURED POSSESSION?IM: Ryan, Michael and Matthew, who call me Dad.

DM: My Wayne Gretzky rookie card.

WHO ARE YOUR HEROES IN REAL LIFE?IM: My parents (who grew up during the Great Depression and started

a family after WW2 with nothing) and my wife Laurel.

DM: My family.

WHAT FOOD DO YOU CRAVE? BETTER YET, WHAT IS YOUR SIGNATURE MEAL?IM: Are jelly beans a food group? I crave veal cutlets, and my

signature meal is fried chicken, creamed corn, salad with

poppy seed dressing and a cold Canadian 67 beer delivered in

a Saskatchewan Roughrider frosted glass, followed by

another beer.

DM: I crave penne arrabiata, but I no longer have any time to cook

for myself.

IAN MCCONNELLVice-President,

Corporate

Core Laboratories Canada Ltd.

DAVE MCHATTIEVice-President,

Institutional Relations, Canada

Tenaris Global Services Inc.

PETROLEUM SERVICES NEWS TALKS WITH PSAC’S BOARD OF DIRECTORS AND TAKES A PERSONAL LOOK AT LEADERS IN THE SERVICES SECTOR. THIS ISSUE WE MEET:

IAN MCCONNELL DAVE MCHATTIE

A LOOK AT LEADERSHIP


Maintaining in a downturn market means knowing how to leverage your options—pursuing acquisitions or divestitures, corporate carve outs, accessing and structuring debt or equity capital, as well as preserving cash flow.

KPMG’s Corporate Finance advisory team has robust experience to provide strategic advice to help meet your business objectives.

For more information on how KPMG can assist you, please contact:

Rhys RenoufManaging DirectorKPMG Corporate [email protected]

Othello TuasonVice PresidentKPMG Corporate [email protected]

kpmg.ca/energyservices

© 2015 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 8316

SUCCEEDING in turbulent times

000PSN-KPMG-FP.indd 1 2015-02-06 10:33 AMPSAC_Spring_2015-p30-32.indd 31 2015-02-12 11:59 AM

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Documents

PSAC Petroleum Service News Spring 2015