Repairs on rig almost complete but oil producers wonder what took so long

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Officials at Petrolia Discovery say in two months the problems, which have plagued the historic Fitzgerald Rig, should be

fixed.

But some local oil producers are questioning why it has taken so long and why other oil wells on the site have been idle.

Discovery general manager Donna McIlmoyle and Foundation Board President Wendy Bratanek recently sat down with The Independent, concerned with the perception the historic oil site was “dilapidated.”

A report from town staff in December announced the town hoped to work with Discovery to improve the financial situation. At the time Mayor John McCharles said “It’s had its trials and tribulations, maybe through no fault of its own, but its been on a downward slide for a number of years… unless someone catches it, it is going to slip away.”

In 2012, there was nearly a $40,000 deficit as the foundation dealt with major damage caused by Super Storm Sandy. The Fitzgerald Rig – the powerhouse for the attractions oil production – was out of commission for at least three months and then ran sporadically.

It cost $75,000 to repair and in 2012 alone that lead to a decrease of $10,000 in oil revenue.

In the past month, The Independent has talked to four local oil producers who have expressed concerns about the lack of oil production – the revenue necessary to maintain and run the site.

Each, interviewed separately, said during 2013 the site produced as little as 25 barrels of oil a month. All said the site, with 20 wells pumping, should produce at least 250 barrels a month, generating at today’s prices about $250,000 a year, enough to run Discovery.

“They always say they have no money (but) with the price of oil there is no reason not to have it running,” says one industry insider who asked not to be named. He says if the rig was fixed earlier with some capital outlay “it would take a bit of time, but they would get it back.”

“That place could easily pay for itself,” says another.“It’s just frustrating.”

“No real reason for it, its just poor management,” added another.

Petrolia Discovery’s auditors from Hume, Mayor and McDonough also expressed concern about the financial viability of the site without full oil production in the Dec. 2012 Financial Statements. “A number of unfavourable conditions and events have left some doubt as to the assumption (of Discovery being able to continue operation as a going concern),” the auditors wrote. “The foundation has incurred significant operating losses in the last four fiscal years and its working capital is deficient …in addition The Petrolia Discovery has experienced vandalism to its wells directly resulting ina loss of oil production and therefore revenue.”

While neither McIlmoyle nor Bratanek could say how much oil was generated at the property in 2013, they flatly denied only one well was running. They did not say how many wells were running saying operation has been sporadic because of repairs to the historic rig and the weather.

On Monday, when the pair talked with The Independent, nine rigs were in operation. McIlmoyle says repairing the Fitzgerald Rig has been the priority and it has been a difficult fix. “We have a couple of people now working with me on the rig and we’ve fixed many, many things,” says McIlmoyle.

She expects those repairs to be complete in the next two months.

That, she says, will free up time and money to have someone taking care of the oil production. Currently McIlmoyle and the volunteers are fixing any jerker lines damaged by the weather or vandalism.

The pair admit it has been a struggle over the last few years at Discovery. “Since the oil spill, we never have fully recovered, but we’re going to make it,” says Bratanek.

Seventy volunteers put their heart and soul into the place, she says, getting up in the middle of the night when there are power outages to restart the wells, shovelling snow off jerker lines as well as doing all the other jobs to keep Discovery open.

They’re offended by the idea, she says, that people think the place is falling apart. Bratanek says there is work to be done and the community can help. “Donations, financial donations,” says Bratanek.

McIlmoyle agrees saying rising insurance costs – this year at $13,000 – make the financial squeeze worse.

Bratanek says more volunteers are needed suggesting service clubs could adopt the upkeep of

the historic buildings on site.

But oilmen and people familiar with Discovery say the site needs help of people from industry, too.

Over a decade ago, several local producers sat on a technical committee and helped maintain the property but they stepped away from the management of the field after a disagreement.

Petrolia resident and former manager of Discovery, Betty Popelier, says that knowledge is missing. “You still have to have a technical person there every day… You have to have people that are involved in the oil industry and who know how it operates – its very crucial,” she says adding those industry workers could have been a great help fixing the Fitzgerald Rig.

“The electric wells are important for revenue, but you have to preserve why you’re there… There will be no more Discovery when that Fitzgerald Rig goes down,” says Popelier. “That’s what Discovery is about …that is the history.”

McIlmoyle and Bratanek say that is exactly what Discovery’s board has been trying to do. And they welcome any help, including that of the town. “We went to the town last year – finances have always been an issue especially regarding insurance,” says Bratanek.

“We asked for help but their budget was set so we moved to the county and the budget there was set.”

The board, Bratanek says, is willing to take suggestions from the town. “If it is going to benefit all of us, tell us what you want.”

They add once the repairs to the rig are complete in a couple of months, the money may be available to hire that field worker to help repair the rest of the wells.

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