Kim Lindsay looks up at the gleaming steel of Precision Drilling Corp.’s PD-T Rig 560, dusted in snow and towering above the North Dakota prairie, and smiles.
“This is hot off the press – been out a month,” said Mr. Lindsay, a U.S. manager with the company. The yellow paint on the rig’s Caterpillar engines is unsullied. The technology is state of the art, with a driller operating a joystick in front of rows of flat-panel monitors that look like something out of NASA mission control. Built in Canada, the rig was trucked across the border to drill for oil.
By March, Precision intends to have 33 of these rigs running – their drill bits aimed at a lucrative payload nearly three kilometres beneath the earth. It is the Middle Bakken formation, known to most as simply the Bakken, a reservoir jammed with so much oil that companies have flocked from all over the world to profit from it.
That includes a growing cadre of Canadian companies that are using the Bakken – and a series of oil and gas plays like it in Arkansas, Pennsylvania, Ohio and beyond – as a springboard to expand their presence beyond Canada. And while they’re brought here by the scent of opportunity, they’re also cashing in on the serendipity of proximity: Williston lies just 1,000 kilometres from Calgary, and an easy day’s drive from Edmonton for the flow of men and machinery that have been dispatched here.
That’s not the only perk – there’s also winter experience, an important distinction compared to U.S. service companies that tend to be based in more southerly latitudes.
Take Precision, for example. The Bakken has become “one of our biggest focuses,” chief executive officer Kevin Neveu said. “For us as a Canadian company, understanding the cold weather and the relative remoteness of the drilling there, we have a huge advantage compared to the local southern-based contractors.”
That’s not to say there aren’t downsides to operating in the Bakken. Foreigners aren’t always welcome in the United States, and at least one worker spoke about drivers flipping him the bird after seeing his British Columbia plates. Bringing Canadian labour to the U.S. is also difficult and hiring local workers is tough in North Dakota, where the work force is already dramatically overstretched. That’s kept away companies like Trican Well Service Ltd.
“Not saying we won’t ever be there, but we’ve kind of stayed out because the labour market has been so tight,” CEO Dale Dusterhoft said.
But the enormous spending on the Bakken, which is attracting drilling worth billions a year, is a major draw. Part of the allure is the expectation that money will be flowing into – and out of – the Bakken for a long time. People in North Dakota talk about an oil play that could last a generation, or longer. That’s especially attractive for a company like CCS Corp., a privately-held Calgary business that does a variety of oil patch environmental services, including cleaning up the fluids used in drilling.
Part of the company’s work requires a long time horizon – like building facilities that take two or three years to permit. The sense that the Bakken won’t vanish overnight has convinced CCS to apply on a series of new facilities, including injection wells to dispose of saltwater waste, plants to treat oil field waste and landfills to sequester it. For CCS, the Bakken forms the cornerstone of significant strategy south of the border.
Roughly three-quarters of CCS’s work in the U.S. today is in the Bakken, which is in turn about 10 per cent of its overall business.
