“There is a future in this business...”

Doug, let’s begin by asking you about your educational background and your employment experience.

My educational background – I graduated from the University of Alberta in Honors Geophysics in 1975. I originally started in Honors Physics. I wanted to be an astrophysicist and study stellar interiors and astronomy, but I switched between years 2 and 3 in the 4-year program so that I could go into Honors Geophysics to basically feed myself. I didn’t see much of a way of making any money going into astrophysics so I switched to geophysics when I found out that oil companies were hiring people at that time. I had just started to date my wife and wished to find employment so that’s how I got into this business.

In 1975 after graduation I went to work as an interpreter with John Card at Sun Oil in the Mackenzie Delta— Beaufort Sea group. I was with Sun Oil, which became Suncor while I was there, for 6 years, with the first 3 years from 1975-78 working in the Delta and offshore Labrador. At the same time I did my M.Sc. as a part-time graduate student at the University of Calgary and since I was dealing with permafrost at this time in the Mackenzie Delta, that’s what my thesis topic was concentrated on, so that I could try to figure out how thick the permafrost was to help the drillers and also to do the static corrections for any structural interpretation at that time.

So, I received my M.Sc. in June 1978 while working full time in that year as well, and after spending a year undergoing training in seismic data processing in Richardson (Dallas), Texas . Those were the days when we had the full training: acquisition , processing, and interpretation.

In 1978 the Western Canadian Basin was heating up. I requested a transfer at that time to Western Canada to where the action was. I wanted to drill wells, and so I was moved into North East B.C. and Northern Alberta at that time and spent 3 years working as an interpreter in those areas – Peace River Arch, Granite Wash, Slave Point Plays, and Sturgeon Lake D3 reef-type plays and others through that area.

In 1981 Ocelot Industries, through their Chief Geophysicist, Perry Kotkas, offered me a job. This was after the National Energy Program in 1980, so it was pretty slow for American based companies at that time and Perry made me an offer I couldn’t refuse, so I went to work for him at Ocelot. I began working again in North East B.C. and Northern Alberta, but also parts of off- shore West Africa and parts of the onshore United States as Ocelot branched out, again, interpreting data from those areas. Never did get to West Africa but that’s the way it goes.

In 1983 Ocelot was slowing down considerably. They had put themselves into financial difficulty with cost overruns in construction of a methanol plant in Kitimat, BC. Anadarko Petroleum of Canada approached me and offered me a position as Division Geophysicist, which I accepted, and then worked there for almost ten years. I worked all over Alberta, from Slave Point Plays in the Hamburg Area, Glauconitic channel and Taber sand plays in Southern Alberta, and Nisku plays in Central Alberta. In 1993, Anadarko decided to move the exploration function to Houston and offered me a position down there. I didn’t see any redeeming value to moving my family to Houston so I said “no”, and took a package and moved to Canadian Hunter to work for Frank van Humbeck as an interpreter in Central and Southern Alberta.

Unfortunately, gas prices plummeted in early 1995, and like many others at Hunter, I was laid off in mid-February (the St.Valentine’s day massacre). However, I went right to work as a consultant in March 1995 with Inverness Petroleum working as an interpreter in SW Saskatchewan. Rigel Oil & Gas purchased Inverness in December 1995 and I then moved to Rigel as an interpreter in this area and SE Saskatchewan. Lastly, Talisman acquired Rigel in September 1999 and I moved over to TLM as a senior geophysicist working in Saskatchewan and South Central Alberta. In 2003, I assumed my present position as a Team Leader, Chauvin and Saskatchewan, currently supervising a team of 16 geologists, geophysicists, and technologists.

So you have been through various mergers, takeovers and lay-offs as you mentioned and over the last 30+ years in the industry; what changes have you witnessed during this period in terms of job prospects, or work environment or other aspects that you would like to share with us?

There have been quite a few, Satinder. Obviously in the last 30 years the biggest changes have been in digital technology, work stations, 3D acquisition and processing. I started in this business with pencil crayons and posting everything by hand on a map with a ruler and T- square, working on drafting tables, and processing data with decks of cards, and manual key punches. Horizontal drilling has been the other big innovation that has really changed the development and exploitation of reserves in this basin in the last 20 years of my career.

In the work environment – one thing I really find positive and I think is fantastic, is that we now have a lot of female professionals which we didn’t have back in the early 70s. Half of my current staff consists of women and I think that’s a very positive change in the work environment and bodes well for the industry’s future.

The other thing that I have noticed on the personnel side is the rise and rule of the engineer. In the 70s and 80s a lot of oil and gas companies were run by geologists, geophysicists, or landmen, but now senior management in many petroleum corporations, including my employer, are engineers. They have a different mind-set than many explorationists, i.e., they are more risk adverse, bottom-line oriented, and want more immediate results. I’m not suggesting that this is a good thing or a bad thing; I’ve raised two engineers and I know that they approach things differently than explorationists.

And lastly, we are slaves to the capital markets. Everything has to be done quarterly now. When I first got into this business we didn’t have that pressure to produce on a quarterly basis, to constantly find good things to say every three months, the continual budgeting and re- forecasting that we have to do 5-6 times a year; I believe there was much more long term thinking back then. It’s quite a different change from the work environment 30 years ago.

That’s not a very positive move?

No. I don’t think it is a very positive move. Currently many of us have to prepare a three to five year plan. But the difficulty with that is you don’t know how to forecast commodity prices, you don’t know how to forecast operating costs, and we are continually changing the plan. So I think what we need to do is start looking at a lot of these things longer term, not just every 3 months.

You are right and I agree with you. What care e r accomplishments are you most proud of?

Oh, well, I guess a couple of discoveries that I have made.

Let’s hear about them.

You bet. The best one that I have ever drilled (and this was drilled in 2004 with Talisman) was the Ferrier Banff C Pool in 9-3-42-10 W5M. We farmed in on a small company in town and drilled a 3D seismic amplitude anomaly in the middle Banff; the well found the dolomitized grainstone porous reservoir as progged. This well originally came on in April 2005 at close to 18 mmcf/d and ~ 1,000 bbls /d of condensate. Estimated OGIP was 23 bcf. I also drilled discoveries in Southern Alberta in the Glauconitic channels at Retlaw, Jumpbush, and Majorville, and in the Taber sand just north and west of the Town of Taber at 10-1-10-17 W4 in 1990. This well came on at over 400 bopd. These are the career accomplishments that I am most proud of from a technical standpoint.

Let’s also hear about your most challenging project.

The most challenging project –

Is it possible that these may not be so challenging?

No, those are – that’s what you are paid to do. You are paid to do that. The challenging project has been to supervise a group of 10 geologists, geophysicists and technicians and technologists.

I started doing that back in 2003 with the objective of melding and leading a team of individuals with diverse backgrounds, experience levels and expectations to accomplish the goals that we were given by management: to drill wells, find hydrocarbons and meet all of the financial and reservoir criteria that we were given. So keeping that team intact and working with the various members that range in age from their early 20s to early 50s with different ethnic, academic, religious, and professional backgrounds has been great, and very challenging on a daily basis and, fortunately, it’s still ongoing.

Could you tell us something about your memorable moments in your professional life and also a success story if the two are different?

Again, the memorable moments in my professional life have always been related to the discovery: the technical work and working with people. I am a people person. I enjoy being promoted or put into a position where I can work with young people and I have done that at Talisman. I also did that at Rigel and have always enjoyed being a technical and advisory mentor.

Success story? – When I assumed control of my current team in early 2005, they were in a state of disarray for a number of reasons. Melding them into a functional team that now drills between 35 and 50 wells a year and spends up to 40 million dollars a year in exploration and development activity (with our engineers) is something that I really look back on with pride.

Doug, what are your personal and professional goals that you may be wanting to work towards?

Personally I am just enjoying doing what I am doing with Talisman, Satinder, and I really enjoy working with geologists, geophysicists, engineers and meeting our goals. I am not planning on retiring any time soon; I am only 53. I would like to work at least another 10 years and contribute to my employer’s success as well as my profession’s success. Professionally, as a team lead, the next rung up the ladder for me in Talisman would be an Exploration Manager and I am working towards that right now within that organization.

I noticed you mentioned, that you mostly focused as an interpreter in areas of Alberta and Saskatchewan. Of course you also mentioned the exposure you got at Ocelot’s International work and other places, but mostly you focused on Alberta and Saskatchewan in the WCSB. I was going to ask you is there any particular reason you have not touched the Foothills or complicated areas in the Mackenzie Delta for example?

The Foothills – no. All of the organizations that I have worked for in my career have never really been Foothills players. They have always been after the smaller structures or stratigraphic plays in nature. If you look at my career at Suncor, Ocelot, Anadarko, Hunter, Inverness and Rigel, I had minimal exposure to the Foothills plays except on a show-and-tell basis when required. There was a conscious effort made by my employers at most times to have me work the stratigraphic plays utilizing my expertise in those types of plays. Now, I am fortunate to work at Talisman where I think that Talisman has some of the best Foothills interpreters in the business in Calgary (if not the world); what they do with that data and how they interpret it is just fascinating.

As to the Mackenzie Delta, I did work that area, and it involved interpreting deltaic depositional environments with growth faults, shale diapers, bright spots, flat spots, etc. The reason that I requested moving out of the Delta in 78 and back into Western Canada was because I find that working the Frontiers is a lot like combat. It’s very short periods of frantic activity in the midst of long periods of boredom because you only have 2 months of the year to work. Everything has to be done in 2 or 3 months and then you sit there for 9 months re- processing, thinking, that kind of thing. I am not that type of person; I like to drill wells. Drilling wells is the best way to prove that you are doing your job. In addition, the Berger Report came out in 1977 and said that nothing will happen in the Delta until the land claim issue with the natives is settled. Nothing has changed in the Delta in 30 years!

Doug are you a firm believer in new technology? Over the years what new technology ideas have you assimilated in your interpretation which were a little ahead of the others at the time and as a result of that you have achieved success and why would you believe so?

Good question. I am a firm believer in new technology , not only for the work that I have done in the past. I still do a little bit of interpretation in Central Alberta for my geologists or overlook and supervise the work that my team is doing. The new technology that I have used and assimilated in a lot of interpretation for clastic channels or fluvial estuarine environments in the past has been complex trace analysis such as instantaneous amplitude, frequency, and phase. I found that when that kind of approach is done really well, it pays off in spades. The other thing that I really utilized was inversion, just the general inversion, not the AVO type or the old seislog type. I am a firm believer in utilizing any new acquisition technology to increase resolution, get as much frequency content in that data as possible utilizing whatever source, recording instruments, whatever, to get the best data possible. It all starts in the field. As you know, Satinder, the interpreter can only do as good a job as the people in the field and in the processing center do for him. I don’t think the people in the field or the folks in the processing centers get as many accolades as they should in terms of the work that they do for the interpreter. The outcome – again, all of the good discoveries I have made have been the result of applying that kind of approach or good 3D acquisition, processing, and interpretation.

And why do I believe so? Because it improves the bottom line. Fewer dry holes for myself and for my staff. I always encourage them to utilize whatever technology is available to help them interpret the data more effectively.

We see that for 3D volumes most interpreters like to go ahead with inline and crossline type of interpretation and then they’ll start preparing structure maps. 3D data should be interpreted as 3D volumes and should make use of 3D visualization. That has not caught up and I was going to ask you your take on this, why is it that we have not been able to bring in these type of techniques in the interpretation?

Good point Satinder. Much of it depends on the age and experience of the interpreter. Many interpreters feel that doing a lot of this stuff isn’t going to necessarily assist them in the interpretation they need to do for the selection of the drilling location within a period of time they are allowed to work the data. Many companies have rigs booked and you only have a certain element of time to interpret that data, get that location tied down, get the well licensed, get all of the surface lined up, and sometimes that can take anywhere from 40 – 60 days or more depending on the area. So I think what’s happened is that the interpreter doesn’t have the time to do a lot of these extra things in order to ensure that the rig has got enough locations ahead of it. You have to have all this stuff lined up and you’d love to spend more time in doing some analyses but in many companies now you just don’t have that option. So I believe that is the number one reason more additional work hasn’t been done by the geophysicists other than the section based interpretation.

The next question is about the big visionariums that some of the big oil companies have and I was going to ask you first, does Talisman also have one?

Yes, we have two.

Okay, and how do you use them, do you think they are really helping in the interpretation or are they just an aid to present your work to management?

Actually, more the latter than the former especially when you want to recommend a drilling program or something where you’ve got engineers or geologists involved as part of the management or approval team. Rather than laying out a section based interpretation on the table it is great to put it up on the wall, or on a screen, and then the interpreter can display whatever he or she wants out of that volume. It really makes it easier for the engineering and geological people to appreciate where that location is. They say that a picture is worth a thousand words so in that respect they have been great.

So the trajectory of the wells...

The trajectory of the wells can be pin-pointed and then we can just display time slices, structure maps, isochrones, amplitude maps, any of the attributes we need to discuss. So we have two, which is great.

So you have taken care of the next question I was going to ask you. Do you use seismic attributes –

Absolutely and I encourage the two geophysicists that I have and I will have a third one in August as a new grad. Yes, we use all of the spectral decompositions, textures, curvature attributes, whatever assists in the interpretation as long as it’s ground proved by the well control and we have done some good drilling on some of these in my areas.

My next question is about WCSB. We know, and everybody knows it is maturing. So do you think there is enough potential here in Alberta to let us remain employed.

I believe so. When I first got into this business in 1975, they had written the Western Canadian Sedimentary Basin off. Bottom line. And that was thirty two years ago and that’s why I ended up working in the Mackenzie Delta and the Beaufort Sea because Sun Oil at that time felt what remained in the WCSB was too small, not economic and now look at what’s happened. I think with good geology, good economics, and good application of geophysical technology there is enough potential here in Alberta to let us remain employed; that is why we are hiring young people to continue that process.

Could you comment on the future of the Canadian Oil Industry as a whole?

That is an interesting one too. Having been through lay-offs and mergers, that is going to continue. The merger activity with the Trusts (now having to convert to oil and gas companies in 4 years because of Government regulations), the size of the remaining targets, the rush to always fulfill that quarterly mandate means that that activity will continue. The future of the Canadian oil industry: obviously there is a big thrust in the Oil Sands – the application of 2D/3D seismic for SAGD projects and other heavy oil projects means that the industry will survive.

On the conventional side, Foothills will do fine; Talisman is a leading company in that respect. For more of the conventional plays that are left in Western Canada or elsewhere, the smaller company approach rather than the larger one due to the smaller target size, the development drilling requirement, and exploitation activity will become the norm. But this is where the technology becomes important to minimize the risk in doing these things.

Doug, you are a member of CSEG, SEG, CSPG and APEGGA. How do you think becoming members of these professional societies helps the geoscientists?

Good question. I have been a member of all of them (but the CSPG) since I started in 1975. Oliver Kuhn touched upon this during his address to the Junior Geophysicists Forum in May before the Convention. He said that networking with these societies, CSEG, the CSPG, APEGGA always helps to allow you to look at how other geoscientists work in the industry, assess other corporate cultures, other companies, other ways of approaching the same problems and also allowing you – should something happen with your current employer – to have a network that you can fall back on to see what other opportunities there may be available to you. It also is important to network with your geologists, as many of them move on to become exploration managers that need to hire geophysicists in the future. There are very few exploration managers/VPs that are geophysicists by profession. I have been fortunate in my career to have worked with or for (and still do) some great geologists who have guided me along the way.

So the value of these professional societies is to allow you to network with your counterparts in the geosciences throughout your career.

You are also active in the CSEG’s JGF, that is the Junior Geophysicist Forum. How do you think the CSEG can get more youngsters into our industry?

The CSEG is helping through the JGF which is part of the Outreach Committee that Perry Kotkas and other former Presidents of the CSEG are involved in. The Outreach Committee also reaches out to High School Students by showing them what a seismic crew does, what a processing crew outfit can do, and they reach out to a non-University audience. With the JGF we try to get the University Students and the new Graduates to let the youngsters know there is a future in this industry.

They hear a lot of negative things about our industry – oh, it is a sunset industry because of Kyoto, etc. My own sons were taught that. That’s why they didn’t go into Petroleum Engineering. They wanted to go into something that they felt had a future. And I said “guys, I heard this 30 years ago and I am still here”. What we try to do at the JGF is to show the youngsters that – hey, a lot of us have been in this industry for so many years, we are doing well, we really enjoy it, it’s a great industry to work in from a people standpoint, and you can make a lot of friends and enjoy yourself while you are working and have fun. And that is why we started the JGF so that we could introduce the youngsters to the chief geophysicists and the senior geophysicists in the city to say – no, this lady or gentleman has been doing this for 30 something years and he or she is still in it and they don’t want to leave, and that is great.

Doug, what are your other interests apart from the science that you practice for a living?

Oh, I enjoy golfing, cycling, gardening, reading. I am a great fan of military history in the late 19th Century and the early 20th Century and I enjoy doing a lot of family type activities. For years I was a soccer coach, a T-Ball coach, football parent. As my sons were growing up I was involved in all aspects of their sporting activities and now that they are adults and have their own lives I can do some of the things that I want to do, which I have just described.

What would be your message for young entrants into our Industry?

I would tell the new entrants, and at Talisman we hire a great deal of them in the summer – 20-30 summer students and new graduates every year – is that there is a future in this business, and yes, I know we have environmental problems, we have emissions to deal with, we have a lot of people that would like to see our activity curtailed for what-ever reason but we still need good, bright young people to come into this industry and work with the technology that we have to make it more environmentally friendly, efficient and profitable for the shareholders and the stakeholders in the areas that we work, not only in Canada but world-wide. So there is a future and please join us.

Doug, in all these questions that I have asked, was there anything that you expected me to ask and I forgot about it, overlooked it or –

No, I thought this was great. As I said to you in my email, this is great insight into my career just by looking at my abbreviated CV because we really haven’t formally met before and that’s unfortunate because I really think that you and I will be good friends from here-on-in.

Yes, why not.

You bet.

Well thank you very much for coming here and for giving us this opportunity of sitting down and asking you your views on these different topics.

Thank you Satinder, it has been an honor and pleasure to be here and I look forward to working with you again in the future.