Elmer Sperry (1860-1930), one of America’s greatest inventors, and Joseph Newton Pew, Jr. (1886-1963), a member of the Sun Oil Company’s founding family: these two people played pivotal roles in the origins of our company. It was hit or miss in the early days of oil well drilling. It was often quite evident that the borehole ended up being drilled off its planned course. So, beginning in the 1870s, many attempts were made to devise an instrument that could measure borehole inclination. But these attempts proved unreliable.

Until the late 1920s, the most frequent method used was the acid bottle test, a method still used occasionally today in the mining industry. A glass bottle filled with hydrofluoric acid was lowered to the bottom of the borehole, where the acid etched a line on the bottle wall. After recovering the bottle, the acid was poured out and the amount of hole inclination was measured from the line on the bottle wall. This method was expensive, inconvenient and dangerous. The bottle would sometimes explode, causing serious burns on those who handled it.

In 1928, Alexander Anderson published the results of surveying the average drift of a large number of existing boreholes. He used an inclinometer consisting of a camera recording the position of a pendulum as it was lowered into a borehole. He discovered that the average deviation of holes from vertical was quite large, often making a difference of several hundred feet between expected and actual bottomhole position.

His study presented sound evidence and well-supported conclusions, but as yet no consistently accurate method existed to help ensure that boreholes were drilled correctly. The study’s findings only confirmed what Sun Oil executive Joseph Newton Pew had surmised. In 1925, Pew had written to Elmer Sperry, head of Sperry Gyroscope Company, suggesting they get together on developing an instrument capable of reliably measuring both inclination and direction at multiple locations within the borehole. Based on their experience and foresight, Sperry and Pew sensed an opportunity and pursued the idea.

Pew formed a team of Sun Oil engineers to tackle the problem. Under his direction, the team designed the tool. Because the instrument required a special gyroscope, Pew continued dealing directly with Elmer Sperry and with Sperry’s son, Elmer Sperry, Jr., for the manufacture of the special gyro units. The elder Sperry agreed to have his company specially design and build 16 gyro units in return for a 50 percent share in the fledgling company. Thus, the SURWEL™ service, our first gyroscopic surveying service unit and a mainstay of the company until the late 1940s, was born.

One of Sperry-Sun’s founders, the American inventor/entrepreneur Elmer Sperry, is shown with his son Edward Sperry, left; M.L. Patterson, search-light engineer; and another son, Elmer Sperry, Jr., extreme right.

HISTORYSPERRY DRILLING

A mere 20 days before the infamous Stock Market Crash of 1929, Sperry-Sun Well Surveying Company was granted its charter. Then on January 1, 1930, when people were really beginning to feel the effects of the Great Depression, Sperry-Sun officially opened its doors for business.

We expanded to provide singleshots and multishots, sidewall coring devices, and deflection tools and methods for orienting them during the 1940s. In the 1950s, we grew from surveying oil and gas wells into surveying services for the potash mining industry, and this became a mainstay of our business for many years. During the 1960s and 1970s, in addition to providing surveying services to the oil, gas, and mining industries, we also provided high-accuracy instruments and round-the-clock availability of our employees, all of which earned us contracts with the U.S. Atomic Energy Commission at their Nevada test site.

During the 1980s, we continued to grow and expand with the oil and gas industry. This included expansion into directional drilling, horizontal drilling, and MWD (measurement while drilling). In each of these areas, we developed innovative technologies that maintained our reputation as an innovator in the industry. We also expanded our operations into key strategic locations throughout the world to service our customers and expand our markets. It was during this period of growth and change that we introduced our LWD (logging-while-drilling) service, which was revolutionary to the industry. We were able to provide measurement to the industry that had previously not been available while drilling.

During the 1990s, Sperry Drilling services developed new drilling technologies and techniques to accomplish such advanced drilling applications as horizontal, multilateral, underbalanced, short-radius, and extended-reach drilling.

Today, we continue the work our founders originated: developing innovative tools that incorporate sophisticated downhole sensing devices and state-of-the-art data acquisition and analysis that help oil and gas companies reach their targets faster, more accurately and more cost-effectively.

Sperry Drilling remains a leader in groundbreaking technologies, such as MWD/LWD, multilateral drilling, and real-time applications. From modeling to measuring to optimizing every job, Sperry’s drilling optimization and reservoir evaluation solutions result in optimized drilling performance, precise wellbore placement and accurate formation evaluation.

For more than 75 years, Sperry Drilling has been delivering high-quality drilling and geological services critical to safe and efficient drilling operations. Throughout the years, we’ve sustained our strong culture and commitment to operational excellence and the highest standards of HSE. We’ve built and acquired new technology, weathered the ups and downs of the industry and adapted to evolving market needs. We provide our customers with integrated service packages on the cutting edge of planning, executing and analyzing drilling projects. Our global operation includes more than 6,700 people on its staff and over 60 offices in 45 countries.

We’re looking forward to tackling the challenges of the upcoming years and to continuing to provide reliable products and services to our customers.

Sperry Drilling History

2

1929 SURWEL™ gyroscopic borehole surveying device (introduced by Elmer Sperry)

1939 Mud logging unit service

1959 Steam still (allowed improved mud gas chromatography)

1969 ADT service® computerized mud logging unit

1983 RLLSM LWD service

1984 Real Time – 1st real time remote data monitoring

1986 Neutron porosity LWD tool

1987 Formation density LWD tool

1988 Electronic solid state magnetic multishot survey tool

1991 Pore pressure and fracture gradient technique (based on fundamental rock mechanical principles)

1992 Multi-antenna EWR® (electromagnetic wave resistivity) LWD tool

1992 3-3/8” directional gamma ray MWD tool

1993 LTBS™ lateral tie-back multilateral system

1994 4-3/4” multi-antenna EWR® LWD tool

1994 RMLS™ retrievable multilateral system (now known as LatchRite® system)

1996 SOLAR 175® hot-hole MWD tool

1996 PWD (pressure-while-drilling) service

1998 Digital AcoustiCaliper™ LWD tool

1999 BAT™ (bi-modal acoustic) sonic tool (measures “slow”shear)

2000 RESolution 3D™ system (links real-time drilling and petrophysical data to the earth model)

2001 ITBS™ isolated tie-back multilateral system (now known as the FlexRite® system)

2001 MRIL-WD™ (magnetic resonance imaging logging-while-drilling) tool

2003 GeoTap® pad-type formation pressure tester

2004 SperryConnect® well intersection service

2007 SOLAR™ Geo-Pilot 9600 & 7600 series rotary steerable systems (1st hi-temp RST)

2008 FlexRite® LLWD lateral liner washdown multilateral system

2008 Max3Di™ drilling optimization software (1st real-time motor simulation)

2009 FlexRite® LA lateral access high-pressure multilateral system

2009 Geosteering for the Digital Asset™ service

2009 GeoTap® IDS sensor (fluid sampling and identification on LWD)

Industry Firsts

Sperry Drilling History

3

2001 Hart’s MEA – MRIL-WD™ Sensor

2003 Hart’s MEA – GeoTap® Formation Tester

2004 OTC Spotlight on Technology – GeoTap® Formation Tester

2005 World Oil Awards – Best Data Visualization Solution Award - StrataSteer® 3D Service

2006 OTC Spotlight on Technology – Slimhole reservoir drilling and evaluation system (4 3/4” GeoTap + 5200 Geo-Pilot®)

2007 Norway Petroleum Directorate’s (NPD’s) 2006 Improved Oil Recovery Award – FlexRite® and ReFlexRite® multilateral systems

2007 Harts’ MEA – ReFlexRite® multilateral system

2007 Offshore Energy Achievement Award (OEAA) in Well Construction – ReFlexRite® multilateral system

2008 Hart’s MEA – InSite ADR™ sensor

2008 World Oil Awards – Best Data Application/Visualization Award - GeoSignal™ measurement service (provided by InSite ADR™ sensor)

Awards

Sales of Halliburton products and services will be in accord solely with the terms and conditions contained

in the contract between Halliburton and the customer that is applicable to the sale.

7/09

© 2009 Halliburton. All Rights Reserved.

Sperry Drilling History

www.halliburton.com