C A NA DIA N A S S OC IAT ION OF OILWE L L DR IL L ING C ONT R A C TOR S - C A ODC

The unified voice of the Canadian drilling and service rig industry

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► Who is CAODC? ► Our Environment ► Our Equipment ► Our People ► Our Challenges

OUT L INE

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► CAODC's Mission • CAODC is the unified voice of the Canadian drilling and service rig industry.

This industry association promotes safer and more efficient operations through advocacy, communications and needed products and services.

► CAODC's Vision • To be a leading advocate for the Canadian petroleum industry, promoting

the value of a strong drilling and service rig sector.

► CAODC's Guiding Principles • CAODC is committed to:

o Promoting a culture of safety excellence in the industry. o Acting in the best interests of its member companies, their employees and the

industry as a whole. o Continuing a strong tradition of leadership and cooperation.

A B OUT C A ODC

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► CAODC represents 100% of the land-based drilling contractors in Canada: 39 companies, 816 rigs

► CAODC represents 99% of the service rig contractors in Canada: 72 companies, 1131rigs

► Focused, homogeneous membership group

ME MB E R S HIP

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► Drilling and service rig contractors are hired by producer or operating companies

► We provide equipment and people to a project – under contract

► Some of the most technologically advanced equipment in the world with the highest inspection standards

► Our people are in demand around the world due to the excellent training standards

E NV IR ONME NT

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► Steady global commodity prices ► Consistent royalty rates ► Intelligent regulatory processes

► Cyclical and seasonal sector

► Biggest threats:

• Lack of skilled manpower • Anything that threatens the stability of the three items

above

E NV IR ONME NT (C ONT ’D)

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2012 C A ODC DR IL L ING F OR E C A S T

2012 Total Number of Wells (Western Canada): 11,834

QUARTER ACTIVE RIGS FLEET UTILIZATION OPERATING DAYS

2012 – 1st *** 540 798 68% 48,109

2012 – 2nd 161 805 20% 14,344

2012 – 3rd 433 817 53% 38,576

2012 – 4th 456 829 55% 40,625

Average 2012 398 812 49% 141,654

WTI: $90.00/bbl (USD) AECO: $3.00/Mcf (CDN) 12.0 days/well

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WE L L C OMP L E T IONS A ND AV E R A G E R IG C OUNT IN WE S T E R N C A NA DA

Year Average Active Rig Count

Fleet Utilization Annual Completions

2012 398 812 49% 11,834

2011 417 795 53% 16,071

2010 326 797 41% 13,566

2009 219 855 26% 8,278 2008 351 877 40% 16,844

2007 335 880 38% 19,144

2006 502 801 63% 22,127

2005 502 736 68% 21,925

2004 439 701 63% 21,593

2003 418 672 62% 19,851

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OUR E QUIP ME NT

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OUR E QUIP ME NT

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OUR E QUIP ME NT

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OUR E QUIP ME NT

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DR IL L ING OR S E R V IC E ?

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S E R V IC E R IG

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DR IL L ING R IG

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► CAODC Service Rig Executive works very closely with Alberta Transportation (as well as counterparts from other provinces)

► CAODC – Alberta Transportation Memorandum of Agreement (MOA)

► Federal Hours of Service legislation ► Transportation of Dangerous Goods (TDG)

T R A NS P OR TAT ION IS S UE S

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OUR P E OP L E

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► 1 working rig: • = direct employment for 16 people (rig workers) • = direct employment for 75 people (the rest of the

services required to drill a well) • = indirect employment for 125 people (surrounding

community, services, etc) ► Q1 2012

• = 540 rigs x 16 = 8640 employed

T HE NUMB E R S

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L E A S E HA ND

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F L OOR HA NDS (R OUG HNE C K S )

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MOTOR HA ND (R IG T E C H 1)

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V IE W F R OM T HE MONK E Y B OA R D

• Two “green” floorhands working with a more experienced floorhand, or motorhand.

• This would be similar to the derrickhand’s view each day.

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DE R R IC K HA ND (R IG T E C H 2)

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DR IL L E R (R IG T E C H 3/J OUR NE Y MA N)

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DR IL L E R (R IG T E C H 3/J OUR NE Y MA N)

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DR IL L E R (R IG T E C H 3/J OUR NE Y MA N)

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► Current generation of workers: • Aging workforce and turnover • Growing upstream operations • Competition inside and outside the sector:

o To recruit the best employees

o To retain/protect our best employees

P E OP L E C HA L L E NG E S

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► New generation of workers • Message from industry:

oGreat long-term career opportunity

oCompetitive compensation

o Excellent training (both OTJ and technical schools)

P E OP L E C HA L L E NG E S

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► Government perspective: • Occupational Health and Safety (OHS) • Workers’ Compensation Board (WCB)

P E OP L E C HA L L E NG E S

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► Drilling members have worked through CAODC to put in place some of the highest training standards in the world.

► Alberta is the only jurisdiction in the world to recognize the unique skill set of rig workers

► Rig Technician – mandatory trade in Alberta, voluntary in BC & SK; Red Seal program

T R A INING INF R A S T R UC T UR E - DR IL L ING

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► Service rig members utilize industry competency training programs through Enform.

► Program is supervised by individual companies ► Administrative structure is similar to the Rig

Technician trade – subject matter experts recommend and approve changes to the content

T R A INING INF R A S T R UC T UR E - S E R V IC E

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► Our members are in the business of Equipment and People

► Our vitality depends on the health of our customers

► Enjoy strong and open working relationships with our government partners

C ONC L US ION

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C ANA DIAN AS S OC IAT ION OF OILWE L L DR IL L ING

C ONT R AC TOR S 800, 540 – 5th Avenue S W, C algary, Alberta T 2P 0M2

E -mail: info@ c aodc .ca C all: (403) 264-4311 F ax: (403) 263-3796

www.caodc.ca www.R igTech.ca www.S erviceR igDrive.ca