Four technological breakthroughs in energy services
From radio frequencies to software updates – meet four companies finding cheaper and better ways to get oil out of the ground
by Robbie Jeffrey
Energy companies face two monumental challenges during periods of low oil prices such as the one we’re in now. Their bottom line is linked to the number of new wells that producers are drilling, so when that number drops as precipitously as it has, there are dire consequences. And ticket pricing – the charge-out fee at the end of the day – has similarly nosedived. Yet the low oil prices also mean producers are looking more than ever for ways to cut operational costs. And that puts some energy services companies in a privileged position. Alberta Venture looks at four such companies bent on cost containment.
What’s the Frequency, Suncor?
There are few home runs when it comes to cost-containment technologies – most breakthroughs come with compromises. Yet Suncor, in partnership with Devon Energy and Nexen, is in the second phase of testing a technology that could cut down on operational costs and mitigate the impact on the environment. Instead of using steam to heat bitumen in the well reservoir as drillers would do in a typical steam-assisted gravity drainage (SAGD) operation, Suncor is using a radio frequency method of crude extraction. In place of what would normally be the top well in a SAGD operation is a broadcast antenna that beams radio waves into the reservoir and heats up the water, as a microwave would do. Then, using a light hydrocarbon solution, the operator extracts the bitumen.
Harris Corporation, an American defense contractor and communications company, has had a patent on the technology since 2008, but came to Suncor and its partners in 2011 with the promise of fixing problems with SAGD. They did a trial run at Suncor’s Dover site to prove the technology was viable, and are now at the pilot stage. One of the aims of the pilot project is to determine how it reduces the cost-per-barrel for producers, but Mark Bohm, manager of in-situ strategic technology development, says it’s already showing tremendous promise. With radio frequency extraction, “it should be less capital-intensive to develop a resource, and ultimately, your supply costs should be lower,” he says. The technology will use 75 per cent less energy than SAGD, and there’s no need for water handling, treatment, sourcing or disposal. “It gives [producers] that extra margin to move forward confidently on developing new resources in this low-cost environment.”
When your first client is Chevron Canada, you have a head start on your competition, but you also have to live up to high expectations. The founders of Aclaro Softworks, a software development company for the oil and gas sector, all have extensive experience in the industry, and they’ve leveraged that to great effect. With their flagship product, petroLook, Aclaro specializes in data management and analysis, and 15 years later, Chevron Canada is still with them. “Companies are more interested now than when times were good,” says Christoph Faig, founder and CEO of the Calgary-based company. “When oil’s over $100, they’re doing every project they can think of. Right now, they’re all capital-constrained and need to make sure they’re spending their money wisely.”
Faig has worked in data management for a number of different energy companies, and after founding Aclaro in 2000, Chevron asked him for a customized method of data collection. Back then, Faig’s clients manually entered data into spreadsheets and needed help with accuracy and retrieval. Today, petroLook is a bit more complex. One of the newer additions to petroLook is portfolio optimization, which uses advanced algorithms to let companies look at tradeoffs in areas such as production targets and operational costs. If there are opportunities for wells to drill or properties to buy, you can input any combination of them to find the maximum production for every dollar. It also offers look-back analysis to see how the company’s capital has performed on previous investments. “Sometimes people really like certain plays or properties and they ignore what’s going on,” Faig says. “This gives you a more objective view of your asset portfolio.”
Growing with the Flow
Jeff Saponja, a University of Calgary engineering grad, has been in oil and gas since 1990. He worked for Husky and Shell, among others, before becoming one of the co-founders of TriAxon Oil Corporation, a pioneer in artificial lift technology for horizontal wells. TriAxon formed a spinoff company for this technology, called Production Plus Energy Services. And it’s Production Plus that’s seizing the spotlight for its cost-saving technology.
Saponja says that after working in horizontal wells with artificial lift systems (which were, at the time, mostly designed for vertical wells) he learned quickly that they had a high rate of failure. His company started experimenting. “We wanted reliable maximization of the differential,” he says, but “if we wanted reliability, we’d have to sacrifice production. We weren’t happy with that. We wanted better.”
Thus, the Horizontal Enhanced Artificial Lift system, or HEAL, was born. Its aim is to smooth out flows coming from the horizontal well – 20 to 40 per cent of costs in a well are related to messy flows, Saponja says. HEAL does this by regulating flow, reducing fluid density, resolving gas interference and addressing solids problems. Since the first installation 18 months ago, Production Plus has installed 60 HEAL units, and as a producer-operator (through TriAxon) had the advantage of testing on its own wells. “We were able to develop that technology to the point of being a commercial product,” says Saponja. “We could take it to the client and say, ‘It’s proven to work.’ ”
The Church of Efficiency
In July, Calgary-based Cathedral Energy Services announced enhancements to its proprietary drilling-measurement technology called Fusion. This might hold all the excitement of a software update for your iPhone if it didn’t save producers so much money.
For one, Cathedral made advancements to its electromagnetic technology, which is how it transmits information from the bottom-hole assembly at the bottom of the well to the surface. The advanced signal-producing capability transmits through formations that were once impossible to penetrate, and once the signal gets to the surface, Cathedral’s technology can decode that signal and separate the noise, which allows drillers to drill deeper, farther away from the rig. The technology allows drillers to maintain their rate of penetration without failures, which can slow down operating time. “It’s all about reducing the time to drill, and the way we do that is through better equipment and reducing failures,” says Cathedral’s chief financial officer, Michael Hill.
Hill says his company’s value proposition is that it can take days off the time it takes to drill a well. “With any technology company, if you’ve got a difference you can bring to the market, a competitive advantage, that’s quite exciting – not only are you helping your customers but you’re growing your company at the same time.”