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Teine Energy may be headquartered in Calgary, but its focus and future are firmly planted next door in Saskatchewan.
“We’ve been in Saskatchewan since 2006, which was not too long after we founded the company,” says Jason Denney, Teine Energy’s Chief Executive Officer and President.
Like Saskatchewan itself, the privately held company punches above its weight. Most of the company’s employees are based in west-central Saskatchewan where Teine is the largest producer in the Viking light oil play near Kindersley.
It has been a profitable venture for the mid-sized producer.
“It’s world-class economics that drive our interest,” Denney says, referring to the Viking light oil play, which makes up most of Teine’s producing assets.
“It competes with the top plays within North America from a returns perspective, even within this tough environment for oil.”
Energy is a strong suit in Saskatchewan, Canada’s second-largest oil-producing province with roughly 13 per cent of the country’s output.
Besides the Viking play, the province has light and medium oil assets in the southeast part of the province — known as the Bakken play — and in the Shaunavon play in the southwest.
While there’s plenty of petroleum-based promise in the ground, the province’s business and regulatory environment has drawn investor approval.
“When you’re trying to decide where to invest your money, you’re seeking a place where you can generate the best risk-adjusted returns for your dollar,” says Denney, who originally hails from the border town of Lloydminster.
“Fair royalty schemes, a less expensive operating environment and the stable government policy in Saskatchewan really help reduce the risk of investment.”
Government policy has, in large part, made the province an attractive place to do business during the ongoing downturn in oil prices. Stability is crucial, especially with respect to royalties. Denney says the province’s tax credits for drilling horizontal wells and advanced oil recovery are especially important for companies such as Teine.
“There are horizontal well incentives that create a win-win for the province and producers. The royalty incentive boosts returns for producers driving increasing capital spending and employment throughout the province, which is especially important during this low commodity price environment.”
For example, the Petroleum Technology Research Centre has led multi-million-dollar research initiatives such as JIVE (Joint Implementation of Vapour Extraction), which is aimed at improving heavy oil recovery in shallower, more viscous oilsand deposits. The technology could be beneficial not just in Alberta and Saskatchewan, but around the world.
“You’re very much incentivized for using new technology in the sector in Saskatchewan,” Denney says, adding that Teine receives credits for its enhanced oil recovery projects. The credits allow the company to use innovative techniques that boost production and profits.
Another benefit of operating in the province, he says, is a straightforward working relationship with the provincial government that involves less red tape.
“There’s more direct conversation with a person on the other side of the telephone versus a long, drawn-out paper/electronic filing process.”
All this upside has prompted Teine to invest more than $2 billion in Saskatchewan over the past decade. In that time its production has grown to over 31,000 barrels of oil equivalent per day. And with billions of barrels in reserves discovered so far, Teine sees a long run of Saskatchewan-based profitability in the years ahead.
But capitalizing on natural resources also requires capable human resources, and Teine has found that in spades in Saskatchewan.
“That’s one of the strengths of this province,” Denney says. “The people are really hard working, innovative, and resilient.”
In fact, many of their local operators are landowners and farmers who are no strangers to using their ingenuity to get the most out of the soil.
“We’re very fortunate to have access to their local knowledge base, their experience in oil and gas production, and the link to the community,” Denney says. “Having a strong local connection is very important for us.”
This story was created by Content Works, Postmedia’s commercial content division, on behalf of the Government of Saskatchewan.