SEPTEMBER 2012 $5.00

• EXPLORATION • DRILLING • COMPLETION • PRODUCTION •

A Northern StarPublication

Zone Seeker & Zone Striker From Resource Well Completion Technologies

STEP Energy Services Steps Up Coiled Tubing Expertise

Pay Considerations

20 The Roughneck • September 2012

STEPEnergy Services

COVER STORY

21The Roughneck • September 2012

StepsUp

Coiled Tubing

Expertise

Energy Services

22 The Roughneck • September 2012

T here’s more to STEP Energy Services than providing specialized coiled

tubing units and associated pumping and support equipment.

There’s more to STEP Energy Services than delivering the expertise – the people, the equipment and the knowledge – required to improve operational efficiencies and pro-ductivity in extended reach wellbore designs.

And there’s more to STEP Energy Services than a commitment to the execution of safe projects, its dedication to its team of field professionals and providing oil and gas pro-ducers an exceptional client experience.

Ultimately, what STEP stands for is:

S – Safety (safety is no accident);T – Trust (trust is built with character

and competence);E – Execute (goal, plan, execute,

learn, repeat);P – Possibilities (engaged employees

discovering possibilities).

“We believe that the integration of these core values into the company’s corporate culture, growth strategies and client-focused service will differentiate STEP in the marketplace,” says President Bailey Epp, a professional engineer with two decades of oilfield experience.

Founded in Calgary just a year and a half ago, STEP has a field service centre in Blackfalds (near Red Deer) and already employs more than 110 people. It has two next-generation masted coiled tubing units and support equipment at work for Shell Canada and Penn West Exploration, with plans to add four more units this year and six in 2013. Eight fluid pumping units and five nitrogen units are also at work for clients

across B.C., Alberta and Saskatchewan, which represents approximately half of the company’s planned pumping services fleet.

Coiled tubing is effective in well comple-tions and well intervention projects; however, most coiled tubing units are not designed to safely and effectively service today’s deep, horizontal wellbore market.

That’s where STEP steps in.STEP’s units are designed for 50.8 mm

to 73.0 mm (2-inch to 2-7/8-inch) OD tubing with lengths that service the extended reach challenges of today’s technically advanced horizontal wellbore. The mast units are designed to service wellbores greater than 4,000 metres and can extend to more than 6,000 metres with advanced engineered coil string designs.

“Industry response has been extremely positive. We’ve had requests from several large E&P companies to secure our mast units with long-term contracts,” says STEP Chief Operating Officer Steve Glanville, an engineering technologist with more than 20 years in the Canadian oilpatch.

“This response validates our business plan to build a different type of coiled tubing com-pany that is focused on servicing technically advanced wells while providing an excep-tional client experience.”

Bailey Epp and Steve Glanville, who worked together for five years in coiled tubing operations at Sanjel Corporation, and CEO Regan Davis, former head of Flexpipe Systems Inc., founded STEP Energy Services.

Capital investment partner, ARC Financial Corporation also believed that the long-reach horizontal market was under-serviced.

“The right elements converged at the right time, and having a capital partner like ARC Financial was key to taking advantage of the

COVER STORY

23The Roughneck • September 2012

opportunity we see as huge potential in the coiled tubing and pumping services sector,” says Glanville.

To that end, STEP has assembled the management team of coiled tubing experts and industry leading professionals.

In addition to Regan Davis, Bailey Epp and Steve Glanville, other key STEP execu-tives include:

Robert W. Sprinkhuysen, VP Finance and Chief Financial Officer;Aly Bandali, Director of Human Resources;

Todd Stauffer, Sales Manager;Chris Kirby, HSE Manager;Rory Thompson, Operations Manager;Dale Constantine, Maintenance Manager; andLem Edillon, Engineering Team Lead.

Safety & ServiceSTEP’s people strategy is grounded in what the company calls an “exceptional employee

There's more to STEP Energy Services than providing specialized coiled tubing units and associated pumping and support equipment.

24 The Roughneck • September 2012

experience,” and building a STEP family around that philosophy.

The HSE program at STEP Energy Ser-vices is a fundamental part of the com-pany’s operations. “On every project the primary goal of STEP’s field professionals, operations experts and management team is to successfully deliver results without compromising the safety of all workers, inflicting damage to equipment, or bringing harm to the public or the environment,” says Epp.

“External third-party audits and internal assessments are conducted to ensure that regulations and legislated standards are

met. These audits also serve to continuously improve STEP’s safety programs.”

STEP’s HSE policies comply with the Certificate of Recognition program, ISNet-world and other legislated requirements in Western Canada.

Exceptional Coiled TubingAll of STEP Energy’s coiled tubing, fluid pumping and nitrogen equipment is made in Canada. As a technically focused, indepen-dent company, the goal is best-in-class coiled tubing operations.

The company’s next-generation coiled tubing units are manned by a team of profes-

STEP's executive team: Steve Glanville, COO ; Regan Davis, CEO; and Bailey Epp, President.

COVER STORY

25The Roughneck • September 2012

sional CT personnel. The units are ideal for these applications:

√ Wellbore cleanout of frac-turing or produced sand, scale and wax;

√ Overbalanced/underbal-anced milling and scraper treatments;

√ Placement and retrieval of production plugs, packers and retainers;

√ Logging, perforating and deployment of specialized completion tools; and

√ Stimulation techniques, including matrix acidizing and fracturing.

The company’s CT units have injector specifications to meet the demands of 24-hour continuous opera-tions. And by utilizing mast technology, an additional crane unit is eliminated thereby improving rig-up times, injector stability, and most impor-tantly, worker safety. The location of the unit’s controls also allows for safer operation and better visibility.

“A complete suite of coiled tubing services greatly improves logistics, reduces costs and delivers exceptional customer experiences,” says Glanville. “And by utilizing a mast unit design, which combines the capabilities of up to six units into four, the overall lease footprint is reduced.”

Also of note, real-time data monitoring allows clients the ability to monitor multiple

projects from a single location so timely, informed decisions can be made. With the most up-to-date technology, clients can watch everything on their iPads.

Other coiled tubing features and specifica-tions include:

• 57,800 daN (130,000 lbs) lifting; 26,700 daN (60,000 lbs) snubbing injector;

• Real-time CT force and fatigue monitoring;• Class 3 well control equipment

(high pressure);• Standard tandem stuffing box;

26 The Roughneck • September 2012

• Remote injector-mounted camera monitoring system;

• 17-m (55.8-ft) mast height (to ground level);• Quick change cartridge work reel;• Anti 2-block (crown saver);• Auto-levelling trailer; and• Reel capacity of greater than 6,000 m, 60.3

mm OD coiled tubing; greater than 4,000 m, 73.0 mm OD coiled tubing.

"We are running the largest reel capacity," Glanville says. "And we can handle the larger pipe sizes."

Pumping & Nitrogen UnitsSTEP Energy’s fluid pumping units – all fit-for-purpose – are fully integrated, with redundant twin quintaplex pumping units.

“Engine size and pump performance have been selected to support larger OD coiled tubing operations or standalone pump-down treatments with 24-hour, continuous opera-tions,” says Epp.

“The single trailer-mounted units provide improved flow rates and annular flow velocities. In addition, the units feature an in-line, heated, chemical additive system,

And there's more to STEP Energy Services than a commitment to the execution of safe projects, its dedication to its team of field professionals and providing oil and gas producers an exceptional client experience.

COVER STORY

27The Roughneck • September 2012

which improves the efficiency, accuracy and safety of milling and cleanout applications.”

Other specifications of interest: each engine is rated to 800 horsepower; the oper-ating pressure is rated to 99 MPa (14,300 psi); and the mixing tanks are 2 x 1.6 cubic metres.

The company’s nitrogen pumping units support coiled tubing operations by assisting in underbalanced milling or cleanout operations and coiled tubing purging. The company’s nitrogen units are capable of supplying up to 85 scm/min with up to 7,500 scm storage tank capac-ity, providing solutions for a wide range of applications.

“The integration of a nitrogen fleet into our coiled tubing services minimizes logistical concerns and increases job efficiencies so we can address individual needs of our customers and enhance the quality of our service,” Epp says.

Other features include flameless heat recovery, 600 horsepower and 69.4 MPa (10,000 psi) operating pressure.

“The fluid pumping operations have opened doors to other opportunities to showcase our exceptional level of client service,” he says.

STEP FamilyExpansion and recruiting efforts for STEP Energy Services have been primarily through word of mouth. “It’s the culture we have cre-ated – a pride of being part of an exceptional company,” says Steve Glanville.

STEP’s number-one priority is excep-tional client service, but the leadership

team understands that a customer focused company begins with its own people. STEP, which has built an employee oriented culture where everyone is encouraged to develop their skills and talents, wants employees to embrace new challenges and to think outside of the traditional bounds of oil and gas service.

This culture provides an inspiring work environment that rewards performance and encourages proactive, self-moti-vated individuals to achieve individual and team success.

That sentiment is echoed by Christine Wilson, who recently became STEP’s Marketing & Communications Manager but who has been involved with the company early on, specifically with the develop-ment of the STEP brand identity and online presence (www.stepenergyservices.com).

“This company and its culture are truly unique,” she says.

In a year’s time there will be between 250 and 300 members of the STEP family. As Bailey Epp says: “This company is all about its people.”

Update: STEP recently acquired Kamber Nitrogen Services of Fort St. John, B.C. The purchase of Kamber is aligned with STEP’s vision of combining technically advanced, purpose-built coiled tubing units, associ-ated pumping and support equipment with the industry’s most experienced opera-tions professionals.