The splash oil's making in Manitoba
It’s no bonanza like Alberta’s but it’s pumping millions into this prairie province. To see the change, come to Virden, in the heart of it all, but don’t say “boom” . . . it’s a bad word there Oil pumps rise everywhere in Virden. Even the cautious town folk admit they may even be there to stay for a while.
For a hundred and ninety miles west of Winnipeg, old Manitoba lulls you with fragrant hay fields, drowsy villages and picture-book farms. Then, suddenly, the harsh petroleum odor of new Manitoba cuts the air. The skyline is laced with steel oil derricks.♦ Fields arc speckled with aluminum storage tanks and redgreen or blue-gold oil-well pumps, tip-tilting lazily like oversize seesaws.
At Virden, a shady town in the middle of it all, long stacks of oil-well pipe and casing crouch by the railway tracks. Husky men in high-laced boots and oil-stained jeans crowd the restaurants. Even the once dusty streets—those that aren’t freshly paved—arc slicked down with crude oil scraped from the bottom of local storage tanks.
Virden is probably the only town in Canada where drive-in theatregoers can watch either a movie or the pumping oil well just right of the screen. Virden's living club is perhaps the only one in Canada that augments its income by “Hying” a pipeline. Every week its aircraft cruise over the local Trans-Prairie gathering system, checking for leaks. Virden has a Derrick restaurant, Derrick movie house and a miniature derrick bearing the town's name in neon at the outskirts. Obviously. Virden is Manitoba’s oil capital.
But it’s the soberest little oil capital in Canada. Manitoba’s five-year-old oil industry has produced twelve oil fields, six hundred and ten wells and more than nine million barrels of crude. This is, of course, a small effort by western oilprovince standards. While Manitoba produced approximately four million barrels last year Saskatchewan produced eleven million and Alberta produced one hundred and thirteen million. And, although Manitoba is only now hitting its stride, it is on the fringe of western Canada’s known oil basin and can't expect to equal the oil potential of cither of its sister provinces.
Nevertheless oil is pouring millions of dollars into Manitoba and especially into Virden. Ninety-seven percent of the production is within a twenty-mile radius of the town. Tweny-two companies work in the area. Fifty-four drilling, trucking, pipeline or other oil-affiliated firms operate out of Virden.
But for four years after the first strike cautious Virden refused to celebrate. Even now many Virdenites are sure the oil business won’t last.
Virden is not only surrounded by oil—it lives on an oil field. Within the 640-acre townsite are sixteen producing wells, one for every forty acres. Day and night the pumps nod inside heavy wire cages in back lanes, vacant lots and along streets. 'There's one on the fair grounds, another by the hospital and a third beside Sixth Avenue, a short block from two hotels.
There is also a well, No. 6-22. in downtown Victoria Park, squeezed between the tennis court and the bowling green. No. 6-22 has so far produced about thirty thousand dollars worth of crude from its surrounding forty acres. Various Virden citizens—including some bowlers and tennis players—have an interest in approximately half that acreage. Consequently, the well's creak has never put anyone off his game.
And although petroleum smells like rotten eggs in some parts, it smells like money to Virden. When all sixteen wells begin paying royalties. private individuals in Virden may collect around sixty thousand dollars a year, depending on production. The town itself will receive about twenty-six thousand dollars a year.
But Virden is long-faced, because expenses have gone up too. For instance, four years ago the town managed on a seventy-five-thousanddollar budget. This year it needed two hundred thousand dollars. Hence no one indulges in champagne parties or foreign sport cars or oilmen's traditional cowboy clothes. Once a man w'as seen around town wearing a Stetson and high-heeled boots but it turned out he was from Oklahoma. Virden astonishes veteran oilmen like Ernest T. Latham, general superintendent of Calgary-based Amurex oil company. Latham, who's heen in the oil business thirty-one years, supervised the drilling of fourteen Virden wells last year.
"Compared wfith Alberta this isn't a boom at all,” he says. “Some oil towns let things get out of hand—teen-agers hanging around the streets at night, that sort of thing. But this is the best little oil towm I've seen.”
Oil has revolutionized Virden's trade. Five years ago as a farmers' centre (population 1.746) it had two industries (a creamery and a flour mill), a dreary array of mouse-colored brick buildings and even a few quaint fieldstone buildings bequeathed by some forgotten Scottish mason.
Today Virden has 3,422 people, two hundred and thirty-eight new ranch-style homes and thirty-one sleek new business buildings. Business has gone up as much as six hundred percent. It’s Manitoba’s most exciting boom. But Virden can't get excited.
Ever since the town was founded in 1882 Virden’s Scottish and English people have taken themselves seriously.
“'They're not exactly stuffy but they’re sure conservative,” says one oilman.
But there’s a deeper reason for Virden's strange composure. An oil boom isn't the carefree experience that most non-oil towns think. It creates enormous problems of planning and servicing. Some communities turn into rowdy shack towns during a boom. Virden didn’t, and therein lies its story.
Before oil, Virden was a gentle, cultured community of farmers’ fairs, teas and lawn bowling, music and drama. In the Thirties there were Gilbert and Sullivan operettas in the Auditorium Theatre. The theatre, now a movie house, still has its stage and dressing rooms and every year Virden produces one of the best music and arts festivals in Manitoba.
continued on page 64
The splash oil’s making in Virden continued from page 19
At first they laughed
at oil; now Virden people are cashing in, though few get wealthy
Nobody was much interested when, in the late Forties, geophysical crews prowled the rural roads, tamping dynamite into the earth and setting off small explosions. The resultant sound waves, traveling through “geophones,” similar to microphones, passed through sensitive instruments which drew graph pictures of the underground strata—and told a story of oil.
"Mut we were more concerned when the oil men began marrying some of our best girls.” says Mrs. Anne Anderson, Virden correspondent for three Manitoba daily papers.
When the California Standard company—which now holds fifty percent of the producing wells in Manitobabrought in its first producer in January 1951, Virden’s weekly, the Empire-Advance, ran a banner headline. But in the next issue editor Rundle McLachlan cautioned ”... We talk a lot, maybe dream a bit but we do not go wildly off the deep end. When we are sure there is something to celebrate we’ll celebrate. Not before.”
For farmers there was something to celebrate. They owned more oil rights than farmers in any other province. Until 1890 homesteaders obtaining western land from the federal government also got the mineral rights. By that time much of Manitoba was settled. Then the government withheld mineral rights in all land deals, later transferring the rights to provincial governments.
Most of Saskatchewan and Alberfci was settled after 1890. Consequently the Saskatchewan government holds approximately sixty percent of provincial mineral rights and Alberta’s government holds some eighty-three percent. But in Manitoba about seventy-eight percent of the oil rights are “freehold”— held by private individuals or companies. Oil companies shoulder all risk and expense and pay the land holder a twelveand-a-half-percent royalty on gross revenue.
During the exploration period some Manitoba farmers didn't realize the value of their oil rights and sold the rights to speculators for as little as eighty dollars per hundred and sixty acres. Wiser men, like Charles Cruickshank. waited. Cruickshank. a Scot, rented a half section fourteen miles southwest of Virden in 1911. Over the next forty years he acquired five children, fourteen grandchildren. a total of six hundred and forty acres, but never had a decent holiday.
“In the Depression I’d have walked off this place without so much as goodby if I’d had another place to go,” Cruickshank says.
Then in 1952 oil wells began popping up on his land. He had mineral rights to twelve. For a while he made four thousand dollars a month in royalties although taxes took about half of it. Slackening production has now cut his oil income by about one half.
He turned his farm over to a son and made two flying trips to Scotland—one of them followed by a bus tour of France, Italy and Switzerland—and a bus tour of the southern U. S., followed by a plane trip to Hawaii.
Cruickshank’s farm and others blossomed into the Daly field which now has two hundred producing wells. Manitoba oil is a light crude, suitable for refining into gasoline. It lies at only two thousand to twenty-five hundred feet, as compared with five or ten thousand feet in Alberta. Consequently Manitoba drilling costs average about forty thousand dollars a well compared with at least seventy thousand, and often much more, in Alberta.
By sheer luck, the Daly field lies beside the Edmonton-Sarnia Interprovincial pipeline. It's a simple matter to truck or pipe Manitoba crude to the Interprovincial pumping station, fifteen miles southwest of Virden.
Drilling for oil on u hunch
These economic advantages brought most major companies and many small ones into Virden. The town was baffled by their haste.
"You mean you work all night.'”’ cried a shocked lumber-yard operator, when asked for an overnight delivery of oilwell cement.
Otherwise, Virden was unimpressed. Everyone thought the Daly was an isolated field. Experts said the area immediately around Virden was dry.
"We’re not counting our chickens yet,” said Mayor D. .1. Reid, a methodical insurance man, of Scottish descent.
But brothers George and Hart Mclvor, also Virden natives and of Scottish descent, came home that summer. They were in the Alberta oil business and had Alberta’s venturesome spirit. Hart completed a drilling contract around Virden and, on a hunch, drilled on his grandfather’s farm, Roselea.
Had he drilled on his first choice of sites—which later proved worthless— there might be no Virden boom today. But there was a wheat crop on the site and it seemed a shame to flatten the grain so Mclvor drilled in a pasture, and brought in a free-flowing well half a mile from Virden.
Crowds hurried to the scene. The well blew a second time, splashing them with crude. Nobody complained, least of all the Mclvors who have three producing wells on the farm now.
The Mclvor strike started a drilling stampede. Virden took on new companies. Land along the Trans-Canada highway at the north edge of town went from thirty to five hundred dollars an acre. Probably the luckiest landowner was Herbert Grose, who bought six hundred and forty acres north of town in 1919. Grose now has fifteen producing wells and has sold parcels of land to several firms. He’s retired in Virden and his son, Gordon, farms the remaining land. According to production statistics, the wells this year were paying the family about $3,500 a month.
Not all farmers are as lucky. DeputyMayor .1. C. Cory insists, with a Virdenite’s penchant for playing down the boom, “You can count the really wealthy ones on your fingers.”
But a glance at Department of Mines and Resources statistics shows that at least thirty Virden district farmers have an interest in two or more wells. They probably receive from sixty to two thousand dollars a month in royalties.
Until late 1953 there was no sign that Virden people would profit directly from oil. Then council called for bids to drill wells within the town. In May 1954 Virden accepted a bid from Ponder Oils, a Calgary-based company which has since sold its assets to Amurex.
Instead of the usual twelve-and-a-halfpercent royalty Ponder promised Virden royalty holders fifty percent of the net proceeds—a less common but not unique deal. It meant Virdenites had to wait until drilling costs were paid before royalty cheques came in but on good wells they could make more money in the long run. If a well produces fifty thousand barrels in its lifetime, royalty holders will share perhaps thirty thousand dollars under the Ponder deal, as compared with roughly fifteen thousand under a twelve-and-a-half-perccnt payment. The CPR, CNR, town, provincial government and seven hundred and sixtythree individuals share mineral rights in Virden’s six hundred and forty acres.
Mrs. Lena Hauk, an elderly widow with twenty acres of rights among four subdivisions, today receives about two hundred and eighty dollars a month in royalties. But most get only a trifle. For instance, a resident with mineral rights to the standard 50-by-1 17-foot lot —about one seventh of an acre—has only a one-three-hundredth interest in a well on a forty-acre subdivision. If the well averages fifteen hundred barrels a month, his annual royalty from Amurex is about sixty dollars.
Before drilling. Ponder had to complete a ticklish legal formality: all royalty holders had to agree to accept the sixteen forty-acre subdivisions as drilling units and to pool their interests accordingly, even though it meant that one householder might receive scraps of royalties from two or more wells. Ponder’s representatives trudged from door to door. A few people were reluctant to sign, usually for no good reason. For instance, a royalty holder who lives in Utah balked because he didn’t want Virden “smelled up with oil.”
By Dec. 4. 1954, the bulk of the legal work was done. Ponder sank a drill in Mike Ka I inski's pasture on the east side of town. Crews gathered. Plump Mrs. Kalinski carried lunch to the drillers. Kalinski, a railway section worker, was mildly excited but he and his wife attended church as usual the next morning and their son, Norman, calmly studied for his Grade 12 Christmas exams.
When the well Mowed, Dec. 29. young Kalinski’s school pals nicknamed him “Gusher” and at home Mike predicted, “Couple years we retire.” He owned three acres of mineral rights, leased at twelve and a half percent to BritishAmerican. But this means he has only a twelve-and-a-half-percent interest in three fortieths of the well’s production which, this year, is averaging nineteen hundred barrels a month. Recently Mrs. Kalinski said glumly, “Some months we get forty dollars, sometimes less. Everybody think we rich but Mike still work on the section, dollar-twenty an hour!”
The well didn’t make Kalinski rich but it made him famous for a while because, with it, Virden finally deemed it safe to celebrate. On Jan. 13—four years from the first strike—Premier Douglas Campbell, the Kalinskis, cabinet ministers, oilmen and townsmen joined for ceremonies and speeches over the well.
Six days later a second well came in. Others followed at twoto three-week intervals. And Virden was calm again. Until all sixteen wells were in, the townsfolk decided, they’d string along with the Empire-Advance, which applauded the oil strikes but warned, “. . . It is wise not to count our chickens ...”
Furthermore, Ponder so carefully avoided noise and nuisance that most householders scarcely noticed the drilling. The crews used small rigs and muffled their diesel motors. They left no waste behind.
"My heart sank when I first saw this pretty little town,” oilman Latham says. “I thought, ‘How in hell is a man going to drill without messing it up?’ But we found a way.”
Ponder trucked out all mud and sludge, instead of burning or ditching it off near the well as is the practice in rural areas. Sometimes it was necessary to drill at an angle to put well heads where they’d be the least bother. Although the well bottom had to fall in the centre target area in each fortyacre tract it wasn’t always possible to put the well head at dead centre.
The well head in Virden fair ground, for example, has its bottom across the street directly under the CPR tracks. Another, on the west edge of town near Gopher Creek, has its bottom under the creek. No. 6-22 in Victoria Park is pumping oil from under the Canadian Legion Hall, two blocks away.
An expert driller from Edmonton was hired for each of these "directional” jobs. He deflected the drill-bit with a wedge, increased the curve by skilfully applying pressure, and arched the steel drill stem toward the target.
As each well came in Ponder encircled the pipe with cement to a depth of four hundred and fifty feet; thus a leak won’t contaminate Virden’s drinking water. The company caged each well to keep children out. Each well pump shuts ofï automatically under abnormal pressure, so a clogged line won’t cause an explosion and perhaps a fire. Since Manitoba crude has a high salt-water content. Ponder pumps the water underground after it is separated from the oil.
These safety precautions and the conduct of Ponder’s crews left Virden with new respect for oilmen. Earlier in the boom there'd been a few disturbing incidents. Once an oilman in festive mood and heavy boots ran a town block along the roofs of parked cars, a caper that distressed his company, the car owners and police.
But during Ponder’s eleven-month assignment there were no hilarious street scenes. Latham urged the men to change their shirts and wash their faces before going downtown after a shift. I he “roughnecks” conducted themselves like gentlemen.
Senior oilmen of all companies were winning Virden’s admiration, too. Ben Bovvering, a Ponder foreman, coached a boys’ hockey team. Ralph Atkinson, originally a BA engineer, now partner in a two-man petroleum consultants’ firm, was elected to town council. Dick Knapp-Fisher, superintendent of TransPrairie pipelines, became president of the Anglican church choir.
California Standard gave money for Virden’s new fire trucks. Ponder offers an annual onc-hundred-dollar scholarship for the Grade 12 student with highest standing. The ninety members of the Virden Oil Wives club have raised thirteen hundred dollars from bake sales. bazaars, tag days and a fashion show, for Virden public library, hospital. Red Cross. Scouts, Guides, swimming pool and playground funds.
But although everyone liked the oilmen and their wells Virden was far from jubilant. House building couldn't keep up with the population. Rentals went from as little as thirty dollars a month to as high as a hundred and twenty. At one time two hundred families lived in trailers in backyards, vacant lots and the park. The town had no waterworks or sewage and sanitation was a serious problem. So. in 1953. Virden laid a S360.()()() water and sewer system and ceremoniously burned an old-fashioned privy in a downtown street.
Still, the crowded trailers were a fire hazard. (Theoretically so are the oil wells but there hasn't been a town oil fire.) So early this year Virden replaced ils antiquated fire trucks with two tenthousand-dollar pumpers which carry foam equipment for oil fires, as well as standard water gear.
Streets surfaced with oil
Next—what to do about trailer dwellers who used town facilities but paid no taxes? Obviously Virden couldn't ban its oil population. Finally the Manitoba legislature ruled that towns could license trailers. A hundred trailerites now pay Virden a five-dollar monthly fee.
In pre-boom days Virden had parking problems only on Saturday night. With the boom parking space was at a premium every day. The narrow streets were choked with cars and dust. So, while the RCMP increased its local force from four to six and cracked down on speeders, Virden adopted a one-way street, lowered the speed limit from thirty to twenty miles an hour, routed heavy trucks around town, laid forty thousand dollars' worth of pavement and oiled the remaining gravel streets. Now the only complaints are from mothers who say their kids track crude oil into the kitchen.
Meanwhile the Manitoba Power Commission spent a half million dollars extending services to the oil fields, where four hundred and eighty-four pumps operate electrically. Manitoba Government Telephones installed six hundred and twelve new town phones and fourteen “mobile” radio-telephones in automobiles. Oilmen in Virden fields often pick up the receiver on their dashboard and phone Calgary or Edmonton. Since 1951 the Virden office's long-distance revenue has increased from eighteen thousand dollars a year to a hundred and thirty thousand.
Finally even downtown Virden discarded its caution and some of its archaic brick fronts. In May 1955 newcomer Manson Martin bought a ramshackle restaurant and turned it into a glass-brick and green-tile drugstore with straw-mat window shades. A few' weeks later Higginbotham’s pharmacy across the street, vintage 1883. appeared in glass, aluminum, blue tile and straw-mat window shades. A dozen other shops donned new fronts. Manager Duncan Elliott of the old Alexandra hotel fitted some rooms with wall-to-wall carpet, matched bedroom suites and private baths —rare luxury for a prairie-town hotel.
The school problem caused Virdcn’s mos' serious rift. In 1952 the town had thirteen teachers and three hundred and ninety-two students. Now' it has twentysix teachers and seven hundred and fifty students. Classes have overflowed into basements and auditoriums. The only suitable new school site was a five-acre chunk of the fair grounds, overlapping the racetrack where for decades the Virden Agricultural Society has held a June meet.
The town asked for the land. The society balked. The town expropriated it. The society claimed fifty-eight thousand dollars damages and was awarded fifteen hundred dollars in court. This summer as a ten-room school rose on the fair grounds, town and society had smoothed over most of their differences with plans to enlarge the fair grounds and form an agricultural-recreational centre for everyone.
And Virden was fresh out of problems, but just as sober as ever. Drilling activity was moving east toward Brandon, on speculation, and west to Fstcvan, Sask., the prairies’ newest oil hot spot. Virden’s super-cautious citizens were saying, “When drilling stops and the wells peter out this’ll be a one-horse town again. Wait and see. Don’t count your chickens ... !”
But the odds are against a Virden slump. For one thing, new wells are still coming in. In June councilman-oilman Ralph Atkinson and his partner, geologist Steve Hegion, drilled on what experts said was dry land. They brought in a well worth at least eighty barrels a day.
Furthermore, millions of barrels of crude lie untouched in Virden wells, as in many other prairie wells. An impermcable rock structure in the oil zone, combined with low gas pressure, permits recovery of only about thirty percent of Virden area oil. Companies are experimenting with “secondary recovery” techniques which, if successful, will force more oil from dead wells and add years of life to the industry.
Finally, Virden is becoming headquarters for such flourishing small firms as Henuset Brothers Pipelines. Three years ago Henry Henuset, a one-time farmer who learned welding in a wartime Vancouver shipyard, bought a fifty-dollar panel truck and. with his younger brother Arthur, began laying pipeline around Virden. Today they own .nearly half a million dollars’ worth of equipment, including twenty-seven trucks ond eleven Caterpillar tractors. From Virden they employ sixty men across the prairie provinces.
“We're just working for fun now,” says thirty-five-year-old Henry. “We don’t need any more money.”
Such businesses and such confidence give Virden a more permanent future than its one-time role of mere oil-producing town. Recently Mayor Reid admitted, albeit cautiously, “We now recognize that the oil business will be .with us for a long time.”
These are strange rash words for Virden. Any year now the place may start acting like a boom town, it