2014 PESA Spring Newsletter

PESAnews February – April 2014 Annual Meeting 2014 Volume 68, Number 1 The Road to North American Energy Independence www.pesa.org The 2014 PESA Annual Mark Papa, Annual Meeting The panel on Thursday Meeting brought a host Keynote Speaker, EOG (pictured below) moderated by Upcoming Events of excellent speakers. The Resources Paul Coppinger addressed meeting began Thursday with onshore topics. Rick Emerging Leaders Executive keynote speaker Mark Papa unfounded. International Muncrief of Continental Address Series of EOG Resources addressing shale oil is unlikely to affect Resources said the SCOOP July 24, 2014 the meeting’s theme “The global supply within the next (South Central Oklahoma Oil TopGolf Road to North American five to ten years. Province) is a new, high-impact Houston, Texas Energy Independence.” He resource play with world-class said that U.S. oil growth will Domestic oil activity levels resource shale. There is up to Emerging Leaders Oil 101 slow and North America are likely to remain high as 400’ of oil-rich shale, more September 22 – 23, 2014 will likely not become fully E&P’s pedal faster and faster than the Cana Field. The Westin Memorial City oil independent by 2020. to show production growth. play is an excellent siliceous Houston, Texas Wall Street has overstated Domestic post completion and highly fractured reservoir expectations of Permian oil oil opportunities will be very validated by 300 industry 2015 PESA Annual Meeting growth. Still, Mr. Papa said large (pumping, chemicals, SCOOP wells. Continental is April 22 – 25, 2015 the shale revolution is the best compression, etc.). Domestic the dominant leaseholder with overall U.S. economic news in gas activity will likely accelerate roughly 400,000 net acres.The Ritz-Carlton Lodge at Reynolds ±50 years. around 2018+. Plantation Continental is again focused To p q u a l i t y s h a l e p l a y s on tripling production and Greensboro, Georgia (Marcellus, Eagle Ford, proved reserves over the next Bakken) will get dramatically five years – a repeat of their Find all of our upcoming events better with additional time and first five-year plan. Given the at www.pesa.org. technology. Marginal shale company’s larger size today, plays will remain marginal, it’s ambitious, but Muncrief In This Issue i.e. technology will provide believes it is completely doable only slight improvement. The because of the premier assetsPESA Perspective.................Page 2 North American gas market on which it is based.Chairman’s Letter...........Page 2 & 3 will improve, but not untilAnnual Meeting..........Pages 1& 3-5 ≈ 2018+. Concerns about James Wicklund of CreditWashington Fly-In.............Pages 6-7 domestic light crude oil supply Suisse spoke to the industry’sExecutive Committee............Page 8 and demand fundamentals are changing outlook.HR.....................................Page 9 overstated and perhaps totallySupply Chain.....................Page 10 —Annual Meeting continued on page 4.Explorers Golf Tournament..Page 11HSE..................................Page 11Oil 101............................Page 121 PESA News

PESA Perspective Chairman’s LetterI Have Really Enjoyed This At our recent annual meeting in PESA Chairman Tucson, I was elected to serve as Paul CoppingerRecently at the 2014 PESA Annual Meeting, I PESA’s Chairman for the upcominghad a great opportunity to look back over the term. I would like to express my truly bright, dedicated and, in some34+ years I have been at PESA. I cannot express gratitude to our immediate past cases, underprivileged students.the affection I have for the organization and its chairman, Charles E. Jones, for This joint program with our partnersmembers. his leadership and hard work this at IPAA was awarded the Houston past year representing the PESA ISD Community Partner of the YearThere are a number of programs that have meant member companies that form the at the high school level. In Forta great deal to me. From the beginning, PESA’s backbone of the oil and gas service, Worth, it was one of two finalists inEnergy Educators Committee has been a part of manufacturing and supply sector. the Fort Worth Gold Seal awardsthe IPAA Petroleum Academies program. In fact, ceremony. I plan to continue thewhen it came time for IPAA to add new academies, Two years ago, Chris Cragg, expansion of this very rewardingexpand and take on a partner, PESA and its Charlie and I agreed on a three program.members were the logical choice. And from there year plan to focus the messageyour dedication to the program has grown through of the organization around Jobs, The Emerging Leaders Committeeexternships, scholarships, teacher stipends, field Stability and Technology. These continues to develop our membertrips, teacher awards and mentoring. I am so three words manifest themselves in companies’ best and brightestgrateful to have been a part of this effort. our association and are the guiding young professionals by hosting such principles for our priorities for the signature events as our Oil 101I have also taken a great deal of pride in our upcoming year. training classes and the ExecutiveForeign Service Officer Training. We have worked Address Series.in conjunction with the U.S. Departments of State, Number one is supportingEnergy and Commerce to produce a training the development of our future Our Jobs for Veterans initiative hasprogram for our Foreign Service Officers posted in workforce. Our member companies a mutually beneficial partnershipembassies around the world and other government will need tens of thousands of with the USO aimed at veteranrepresentatives located in Washington, D.C. This young, talented associates to hiring, retention best practices andclass is a part of the curriculum for the Foreign support the continued growth of identification of resource gaps.Service Institute and has grown in effectiveness the oil and gas industry. PESA will PESA and the USO teamed up inover the past 20+ years. Waiting lists to enroll be active with initiatives supporting March to host the first ever USOhave grown rather than diminished as a testament several levels of our potential talent Hire Heroes Houston Forum.to the program’s usefulness. pools starting with high school and college students, veterans andOur Emerging Leaders program and the emerging leaders already in ourWashington, D.C. Fly-Ins have enjoyed a good industry.measure of success in recent years, and I hope forthe expansion of these activities. Our Energy Educators program sponsors five IPAA-PESA PetroleumEverything that happens at PESA is due to the Academies in Houston and Fortinvolvement of our Executive Committee, Board Worth and has helped more thanof Directors and member companies. The time 1,000 students in the past sevenyou have given, the effort you have put into our years. Our member companiesprograms and your unwavering support are the host approximately 70 students aselements that have made the difference. externs each summer and last year we doubled our scholarships withinI am retiring from PESA this summer, and I am this program. These academieshappy to be able to express to you how grateful I are doing great things for someam for the opportunities you have given me andfor the difference you have made in my life. Chairman’s Letter Continued on Page 3.Sherry Stephens BlanksPESA President PESA News is published by: PESA Chairman PESA President Petroleum Equipment Paul Coppinger, Weir Oil & Gas Sherry Stephens Blanks Suppliers Association PESA Vice Chairman PESA Vice President 1240 Blalock Rd., Suite 110 Gary Halverson, Cameron Michael Perini Houston, Texas 77055 Phone: 713-932-0168 PESA 1st Vice President PESA Director of Communications Fax: 713-932-0497 © 2014, PESA Johan Pfeiffer, FMC Technologies, Inc. Molly Smart2 PESA News

Chairman’s LetterThis is an outstanding way to not only fill much needed gaps in of the petroleum industry.our workforce, but also help a group of people that have given In return, PESA memberso much to our country. companies gain valuable, educated contacts in theThrough Energy Educators, Emerging Leaders and Jobs for FSO community. To date, theVeterans, PESA will help create the next generation of talented program has trained moreenergy professionals. than 500 officers who operate in more than 90 countriesOur industry’s new profile has both positive and sometimes around the world.negative effects, which brings me to my second priority;government awareness and education. I was recently told in An area that we continuallyWashington by Representative Steve Pearce of New Mexico, hear about in Washington isa former fishing tool company owner in Hobbs, “you can no the power of the voices oflonger be in business without being in politics.” our associates at the grass roots level. I am committed to making it easier for our memberPESA has done an outstanding job improving our profile in companies to educate and leverage those voices on issues thatWashington and promoting a positive image for our members affect our industry and ultimately their jobs. We are currentlyand our industry. We just completed our 4th successful Washington evaluating methods that would allow PESA member companiesFly-In that puts member company executives in front of our to insure their associates have a voice. As I reflect on the strengthlawmakers or their top aides. We will continue this initiative and of our membership I believe we can do more as an associationeach year improve the effectiveness and broaden our audience to educate and influence our lawmakers.beyond our allies to offices that may have a different point ofview. Without the support of Bob Moran and his team from Please read on in the following pages to learn the opinions ofHalliburton in Washington, this initiative would not be possible. our panel of speakers at the Annual Meeting, as well as what our member company executives learned in Washington. I lookAfter 20 years, we are still training Foreign Service Officers who forward to serving as PESA’s Chairman for the coming year andserve in embassies around the world and in energy agencies hope to see you at our upcoming events.in Washington, D.C. Member companies donate their time,personnel, and facilities to give FSOs a hands-on overview2014 Annual Meeting Paul Coppinger Weir Oil & Gas PESA ChairmanHonoring our Petroleum Academy GraduatesAbove: Cody Davis speaks to the Friday morning at the Annual Meeting, PESA was honored to hear from CodyPESA Annual Meeting attendees. Davis. Mr. Davis is a student at the University of Texas and a recent graduate of the Southwest High School Petroleum Academy. He shared his experience in theRight: Galen Cobb presents Davis academy and his hopes for the future.with a college scholarship. Mr. Davis shared a story about his younger brother, who wasn’t on the right track. Mr. Davis’ work in the Petroleum Academy inspired his younger brother to work harder and do better in school. Mr. Davis shared this with PESA to show the impact the academies are having beyond the students in the program. PESA was honored to give Mr. Davis a scholarship to UT, and we look forward to hearing how he does in the future. 3 PESA News

2014 Annual MeetingContinued from Page 1Wicklund said Credit Suisse believes that market and/or consumable products. with great challenges. “World-Class”major oil companies are shifting spending Petroleum Basin with 77 billion barrels offrom offshore deepwater to onshore Longer term, however, many of the oil equivalent (BBOE) discovered and lessunconventionals as they accelerate oil service business segments are than 45 BBOE produced. Challenges ofspending on higher return, faster payback too fragmented and at some point a deepwater development include expensiveprojects. Wicklund says that big fields are reconsolidation wave will unfold. drilling ($1MM/day) and complex wells,getting even bigger with wells per section deepest developments in the world andup 220 percent, the costs per well are up John Hollowell of Shell presented complex reservoirs with variable recoveryless than five percent and the resource Pursuing Deepwater Growth in the factors.potential is up 256 percent. Americas. Hollowell believes that the challenge of maintaining the base may Fact: What is “normal today” wasJohn Daniel of Simmons & Company well exceed the challenges in the next “impossible 10 years ago”International shared perspectives on the frontier. Maintaining the base challengesU.S. land market and considerations for include asset integrity, well reservoir Belief: What is “impossible today” will becapital equipment providers. He said and facility management, waterflood “normal 10 years from now”recent industry trends have E&P capital performance, and intervention andspending off to a healthy start. abandonment capability. Vision and commitment to develop technology now are essential to achieveThey are optimistic that 2014 will be a The focus areas for success in developing success in the future.recovery year for the oil service industry. the next frontier are high-pressure, high- temperature (HPHT) challenges, system Susan Farrell of IHS outlined theRising activity and the eventual return of complexity, seismic imaging, and low offshore outlook and challenges. Shepricing will lead to margin recovery. energy and low mobility reservoirs. said that the U.S. unconventional supply success story is well known, with U.S.In the near term, however, he believes that He concluded his presentation by saying crude oil production increasing bycost pressures will precede the pricing that all of this can’t be done in a vacuum. ~45% over 2011 to end 2013. Therecovery. It requires all of us to work together to surge of light crude in the U.S. from shale be able to change in this regulatory production is expected to continue andAs activity rises and as Wall Street focuses environment. PESA member companies is changing U.S. and global oil markets.on growth, management confidence will have played a major role to the E&P’s U.S. light imports are nearly backed out.rise and that will lead to higher capital success-to-date in deepwater through Louisiana Light Sweet (LLS) is trading at aspending on the part of oil service your technology and innovation. discount to Brent. Globally, Non-OPECcompanies. oil supply is growing faster than global oil Steve Thurston of Chevron North demand. But, 3 million barrels per day ofMoreover, the increased wear-and-tear America E&P Company gave an update oil offline is counter-balancing the surgewill require companies to reinvest more on deepwater Gulf of Mexico and in U.S. supply into the global market.heavily in the asset base. deploying new technologies. Majors need portfolio diversification and deepwater remains an important part ofThese two points should lead to improving Thurston said that the Gulf of Mexico growth strategy.results for the capital equipment industry Deepwater presents a great opportunityand those businesses that focus on after-4 PESA News

2014 Annual MeetingSee the entire photo gallery at www.pesa.orgWednesday Welcome Reception Spouses’ BrunchGolf Tournament Tennis TournamentThursday Dinner at the Coyote Corral Thursday Dinner at the Coyote CorralFriday’s Entertainment, Ryan Hamilton Years of Service Recognition of Sherry Stephens 5 PESA News

Washington, D.C. Fly-InRepresenting more than 500,000 jobs Senator Steve Pearce (R-NM) urged industry.in more than 80 countries, 22 PESA PESA Member Companies to get involvedmember company executives and PESA in their local communities. “Imagine what our nation would lookstaff took the message of jobs, technology like today in the counter case -- if theand stability to Washington, D.C. during Alby Modiano, President of the U.S. Oil new technologies of oil and gas, andthe Association’s fifth Fly-In. and Gas Association. “We are very proud the tens of thousands of small and mid- in this industry to be the vanguard of the sized businesses had not deployed thatMarch 9-11, 2014, PESA members new American renaissance. It’s very rare technology to release the hydrocarbonmet with more than 30 members of for our industry to capture the spotlight riches locked up (in) America’s vastCongress and/or their staffers, along in a positive way, and we have a unique shale fields. The numbers make it clearwith seven industry groups, Washington- opportunity to change people’s opinions.” that but for the hydrocarbon shalebased customer representatives, and revolution, America may have slippedAdministration representatives. Maryam Brown, Senior Energy Policy into Depression.” Advisor to Speaker of the House JohnU.S. Representatives, Senators, Boehner (R-OH) said that Mark P. Mills - Mark P. Mills, Senior Fellow, ManhattanCongressional Staffers, and trade of the Manhattan Institute for Policy Institute for Policy Research, before theassociations all shared a singular Research testified before U.S. House of Committee on Energy & Commercemessage: the most important action one Representatives that the U.S. would be Energy & Power Subcommittee, U.S.can take in the political process is to take in a depression if it wasn’t for the energy House of Representativesyour story to Washington, D.C. “Right now even though gas prices areMonday morning, Ali Zaidi, Deputy not where they have been historically, theyDirector for Energy Policy at the White are higher than they have been relatively,”House, spoke with the group over said Ms. Brown. “We have to consider thebreakfast. Zaidi said, “The reality is we balance of policy and politics, and wherehave a three main branch, two party those two intersect.”government, and there’s a lot of pushand pull there.” When asked by a PESA “ Yo u m u s t b e i n v o l v e d i n l o c a lmember about what the White House’s communities,” said Senator Steve Pearcemessage is, Zaidi said that throughout all (R-NM). “The President’s State of theof the political uncertainty, there are three Union message should send chill bumpsconstant goals: economic security for the up and down your spine because themiddle class and for everyone, energy President said that he’s not going tosecurity, and the need to tackle climate wait on Congress. If we don’t do whatchange. He suggested that whenever we he says, he’s simply going to do it withcan find a way to win on all three, we Executive Order. And it’s the nature ofshould start there. the Executive Orders you have to look at. He’s bypassing the Constitution,“We are always judged by the least laws, every restraint that our foundingcapable producer that’s out there,” said fathers put in place to check the hands of Fly-In Continued on Page 76 PESA News

Members Tell the PESA Story of Jobs, Technology, and Stabilitypowerful government. And he’s moving people we spoke to and their deeper International. “The message is about thewith disregard through it. As he moves understanding of the energy industry. jobs and the positive impacts they makewith disregard, the concept of liberty is After seeing the effects of the attack on on the lives of people. We at Oil Statesat stake. It’s a time when you cannot be the coal industry, Robert “Bob” Ryan need to work on getting local peopleon the sidelines on these bigger issues. I of Stallion Oilfield Holdings, stressed involved. Every time we come here toknow you would rather go and do your the importance of the industry working Washington, they tell us we need to go tobusiness.” He spoke about how hard together. He said that it’s clear that all our local office – that’s where we reallyit is to get anything accomplished in fossil fuels are under scrutiny. Mr. Ryan hear the message. Politics are local andWashington, which makes our industry’s said, “The biggest political risk isn’t in we need to tell that to our employees.getting involved at a local level imperative. Nigeria, it is here (the U.S.).” There’s no better business than ours – we need to communicate that in an effectivePESA Chairman Charles E. Jones said that “The message evolves, but it never really manner. The issues will change, but wehe was impressed by the knowledge of the changes,” said Chris Cragg of Oil States can make a difference.”Senator Jim Inhofe (R-OK) spoke with PESA members at a Rebecca Rosen of Devon and Jim Ford of ConocoPhillips spoke withreception held at the U.S. Capitol Building. Fly-In attendees about the customer’s perspective on Washington. 7 PESA News

2014-2015 Executive CommitteePESA officers for the 2014-2015 term were elected at the 2014 Johan Pfeiffer is Vice Presidentannual meeting: Paul Coppinger (Weir Oil & Gas), Chairman; of  Surface Technologies for FMCGary Halverson (Cameron), Vice Chairman; Johan Pfeiffer Technologies, Inc. Prior to assuming(FMC Technologies, Inc.), First Vice President; and Dave Warren this role in January of 2012, Mr.(Energy Alloys), Treasurer. Pfeiffer was Vice President of Global Surface Wellhead since June 2010.Paul Coppinger is the President Before his role as Vice President,of the Pressure Pumping business Mr. Pfeiffer was General Managerwithin the Oil & Gas Division of the for Subsea activities in Europe,Weir Group PLC. He joined Weir in Africa, and the Common Wealth2011 as President of SPM. Today of Independent States (CIS), asWeir Pressure Pumping is a global well as Managing Director of FMCleader in the design, manufacture Kongsberg Subsea AS since 2007.and servicing of frac and cementpumps as well as the related flow Mr. Pfeiffer also draws upon leadership expertise gained fromcontrol products. global management positions held with the company including General Manager for FMC Technologies Surface business inPrior to joining Weir in 2011, Mr. the Americas, Director of Subsea Customer Support based inCoppinger was the President of the Bergen, Norway, and General Manager Surface Latin AmericaEnergy Group for ten years at Circor based in Caracas, Venezuela. He joined the company in 1993International, Inc., a diversified manufacturer of valves and as a Business Analyst in Philadelphia.related products in the Energy and Aerospace industries. Mr. Pfeiffer is a graduate of the Swiss Institute of TechnologyHe started his career in 1984 with Baker Hughes and spent where he received a degree in Material Sciences. In 1993,ten years in increasingly responsible positions in down hole he earned a Master’s Degree in International Studies from thecompletion equipment service, sales, marketing and engineering University of Pennsylvania’s Lauder Institute and an MBA fromin Midland, Houston, Tulsa, Jakarta and finally as Asia Pacific the University of Pennsylvania’s Wharton School.Region Manager in Singapore. He was Vice President & GeneralManager of Highland Artificial Lift Systems, a division of Energy Dave Warren co-founded EnergyVentures Inc. from 1994 to 1996 before returning to Baker Alloys in 1995 and has been itsHughes as Vice President Sales & Marketing for EIMCO Process President and CEO since inception,Equipment. and is today its largest shareholder.Gary Halverson was named Energy Alloys is a global supplyPresident, Drilling & Production chain solution provider to oil andSystems, in October 2013. In gas manufacturers and serviceOctober 2012, he was named companies worldwide. Under Mr.Sr. Vice President of Cameron Warren’s leadership, the companyInternational. Most recently he held has remained entrepreneurial andthe position of President of Surface customer-focused, while expandingSystems since October 2005. value-added services and product lines to become the industry’sMr. Halverson joined Cameron leading provider of creative supply chain solutions to customersin 1978 and has held numerous in the major oilfield manufacturing centers around the world.management positions throughout his 36 year career in the U.S.and overseas. He served as Director of Sales and Marketing for Before joining Energy Alloys, Mr. Warren gained extensiveAsia Pacific Middle East based in Singapore, General Manager experience in field operations, oilfield tool manufacturing,of Latin America, Vice President and General Manager for the technical sales and product development, and businessWestern Hemisphere based in Houston. development at companies such as NL Atlas Bradford, Wilson Industries and Pipeco Services and has more than 35 years ofMr. Halverson is a graduate of Odessa College. He serves expertise in the oilfield industry.on the board of the general committee of special programs(GCSP), American Petroleum Institute (API), a board member of Mr. Warren holds a finance degree from Louisiana StateMedical Bridges, and is a U.S. delegate to the World Petroleum University and attended the University of Houston MBA program.Congress (WPC).Additional members of the Executive Committee are Charles E. Jones, Immediate Past Chairman; Christopher Cragg (OilStates International), Past Chairman; Robert Workman (DistributionNOW), Explorers of Houston Chairman; Charles Currie(Schlumberger), Membership Chairman; Galen Cobb (Halliburton), Emerging Leaders Liaison; Pat Bond (LTR), Energy EducatorsChairman; Burk Ellison (DistributionNOW), Gulf Coast District – TX Chairman; Douglas A. Polk (Vallourec USA Corporation),Gulf Coast District – LA Chairman; and Saeid Rahimian (Gardner Denver, Inc.), Mid-Continent District Chairman.8 PESA News

HR Committee Hosts Seminar andRoundtable Discussions Brandon Martin, Director of Security, Western Hemisphere for BP (pictured at left), was the keynote speaker for the HR Seminar “Understanding Cultural Diversity: Doing Business in the Middle East” held April 14, 2014, in Houston. Prior to relocating back to Houston, Brandon was responsible for Regional Security for the Middle East for BP, based in Dubai. Before joining BP, Brandon worked for the United States Government as an FBI Agent. Mr. Martin discussed aspects and impacts of cultural diversity in the Middle East, including: • Understanding the Arab culture • Understanding cultures from other workers residing in the region • Understanding security risks and implications – A Lesson in Iraq • What a Cultural Sensitivity Training program should include • Conducting business in the Middle East Roundtable Discussions The PESA HR Committee started a new bi-monthly roundtable series. Participants discuss HR trends, challenges and solutions with peers in the industry. February 26 the roundtable discussion centered on military recruiting, recruiting challenges in Houston and how to attract candidates. April 16 the roundtable discussion topics were: best practices in recruiting and retention, attracting talent from other industries, diversity recruiting, military recruiting, and retention strategies in Houston and other tight labor markets. 9 PESA News

Supply ChainThe 2014 Supply Chain Seminar, “Supply and profitability. for 2014 and beyond. Although thereChain Opportunities and Challenges in 5. Use metrics to drive supply chain will be a slowdown in North America, thethe Oil & Gas Market” was held February industry is still full steam ahead elsewhere.27, 2014, at the Westin Memorial City performance: use metrics to measure There will be particularly strong growthHotel in Houston, Texas. Gary Kilponen, the health of each core supply chain for offshore spending, while onshoreVice President - Global Supply Chain, process and identify problem areas. spending growth will be slow due toValves & Measurement, Cameron, and North America. Mr. Vaucher said thatSupply Chain Committee Chairman Mike Bahorich, Apache Corporation signs point to slower activity growth alsohosted the meeting. Through the variety Mike Bahorich, Executive Vice President outside North America going forwards.of speakers, the committee hoped to and Chief Technology Officer, Apache Capacity is to remain tight in segmentsgarner supply chain thought leadership, Corporation, presented an industry view requiring high levels of engineeringget market input and hear customers’ of supply chain management practices. expertise and experience. The length ofperspectives. We greatly appreciate the Mr. Bahorich said that the importance of training required is leading to challengeshard work of the committee members for the supply chain can be divided into three in increasing effective capacity. Finally, asputting together this event. major areas of focus: Unconventionals, contractor capacity tightens, costs rise, Deepwater, and Mega Projects. Each and oil prices trend lower, further projects Joseph Roussel, PwC, Strategy and comes with their own supply chain are expected to be pushed back. The Operations Practice challenges. market balance will start improving in 2-3 In unconventionals the challenges are years in current tight segments.Joseph Roussel, Partner, PwC, Strategy the cost (resource plays have economicand Operations Practice, presented the risk not geologic risk), ensuring source Stacy Palmatary, Occidental Oil & Gasfive core disciplines of strategic supply of supply, supporting aggressive drilling Corporationchain management. Mr. Roussel said programs, and a “factory” approachthat strategic supply chain management to development. Deepwater challenges Stacy Palmatary, Senior Vice Presidentis a different mindset and having a focus are leadtimes, technical complexity, of Supply Chain, Occidental Oil & Gason making change happen can enable logistical challenges, and costly delays. Corporation, shared opportunities withinsuperior performance and industry “Mega Projects” challenges are leverage, the oilfield through the lens of supplyleadership. planning and scheduling, expediting, and chain management. Oxy’s capabilities costly delays. today have made them a worldwideThe five core disciplines are: leader in applying enhanced oil recovery1. View your supply chain as a strategic David Vaucher, IHS techniques, such as CO2 flooding. But according to Mr. Palmatary, Oxy’s cycle asset: design the supply chain around David Vaucher, Director, Upstream time on data capture at the wellhead a defined basis of competition to Operating Costs Forum, IHS – Cambridge is slow, cumbersome, & paper based. enable the overall business strategy. Energy Research Associates shared Therefore, the company’s next step will2. Develop an end-to-end process upstream spending and activity trends be to digitize the field ticket, which will architecture: develop integrated include an electronic pricebook, invoice supply chain processes and systems and field ticket. The benefits will include that interface efficiently with the rest streamlined supplier ability to invoice/field of the enterprise. ticket “Supplier Charges” against Oracle3. D e s i g n y o u r o r g a n i z a t i o n f o r based price book, increased visibility of performance: develop and maintain “Supplier Charges” against contracts and organizational structure and skills to invoice status, and much faster approval define and manage the supply chain and payment for vendors. of the future.4. Build the right collaborative model: understand core competencies and choose partners to maximize focus10 PESA News

Explorers Golf Tournament After days of ice and unusual winter weather, the sun shined for PESA’s Explorers of Houston Annual Golf Tournament, held March 6, 2014, at the Golf Club of Houston. The event was chaired and organized by Committee Chairman Robert Workman (DistributionNOW). Thanks to our generous sponsors: World Oil, Schlumberger, GE Oil & Gas, DistributionNOW, Energy Alloys, and Oil States International. Proceeds from the tournament support our Explorers Award Program and PESA’s annual contributions to the Offshore Energy Center in Galveston, the NEED (National Energy Education Development) program and the IPAA-PESA Petroleum Academies. Closest to the Pin #7 Ricardo Fernandez (National Oilwell Varco) Closest to the Pin on Second Shot #18 David Cunningham (Tudor, Pickering, Holt & Co.) Longest Drive #13 David McClure (Alta Mesa) Straightest Drive David Cunningham (Tudor, Pickering, Holt & Co.)Tournament Winners (119) Second Place (123*) Third Place (123*)Carroll Hall (Gardner Denver) Jared Maerz (Patterson Tubular Services) Bill Dodd (Halliburton)Mike Thomas (H&P Drilling) Joe Edwards (White Deer Energy) Stuart Barrowman (BHP Billiton)Brandon Janda (Gardner Denver) Jason Glende (Norris Production Eddie Doré (Nexen) Solutions) Bill Henn (Halliburton)Chris Melber (Nabors Completion andProduction Services) Brandon Turner (Baker Hughes)HSE Update*Second and third place teams determined by scorecard playoffAn update from Health, Safety & Environment Committee protection of the human and natural environments. In order toChairman A. J. Leuterman, Director - Occupational Health & accomplish this task the agency sought a better understandingEnvironment, M-I SWACO of the types and quantities of chemicals used offshore, most especially in deeper waters.Earlier this spring PESA agreed to support the OOC EnvironmentalSubcommittee’s efforts to review the OCS Study – MMS 2001- Their successor agency – Bureau of Ocean Energy Management011. The original document, done under the auspices of the (BOEM) – is presently seeking updated information on theU.S. Minerals Management Service (MMS), consisted of an chemicals now utilized offshore, on a volunteer basis frominventory of “up to then used” chemicals commonly found in industry members/groups, in an effort to satisfy their Nationalongoing oil and gas E&P activities in the GOM. MMS was Environmental Policy Act (NEPA) obligations. Operators, servicemandated to manage the development of GOM oil and companies and trade associations are joining in to providenatural gas resources while also ensuring safe operations and pertinent data. PESA is one of those contributing to this effort. 11 PESA News

U.S. Oil and Gas Field PESA News First Class Equipment Exports Petroleum Equipment Suppliers Association US Postage Paid 1240 Blalock Road, Suite 110Top 15 Destinations for Q1 2014 Houston, TX 77055 Houston, TX (in U.S. $1,000) Permit No. 04805 Jan. Feb. Mar.China 29,003 29,210 100,197Saudi Arabia 24,936 25,153 58,325Mexico 48,028 44,972 56,622Russia 14,751 20,773 45,480Colombia 6,717 11,648 39,762Singapore 47,359 31,755 35,884Spain 106 1,382 27,583Brazil 22,699 24,703 27,183Korea 32,862 28,182 27,181Nigeria 7,809 12,713 24,719UAE 29,990 16,236 23,318UK 13,890 13,622 16,095Canada 14,964 12,797 15,365Angola 18,247 28,932 15,159Venezuela 15,697 21,642 13,130Subtotal : 327,060 323,718 526,002All Other: 228,733 186,973 228,220Total 555,793 510,691 754,222Sources: U.S. Department of Commerce &the U.S. International Trade CommissionOil 101The PESA Emerging Leaders Committee Energy Markets: Marshall Adkins, Director Oil Toolsheld the highly acclaimed Oil 101 of Energy Research, Raymond James &program March 13 – 14, 2014, in Houston. Associates, Inc. Subsea Drilling and Production: Charlie Weakly, Field Development, FMCOil 101 gave an overview of the Geology and Seismic: James Geary, Technologies, Inc.exploration, drilling and production Senior Exploration Geologist, Cobaltphases of oil and natural gas wells as International Energy, Inc. Refining: Chris Doss, P.E., Processwell as presentations on related subjects Engineer, Downstream, Wood Groupincluding economics and refining. Want Rig Systems and Drilling the Well: Karl Mustangto know what 4-D seismic is? When and Appleton, Business and Technologyhow to stimulate a declining well? What Director, National Oilwell Varco Oil and Gas Drilling: From Planning toit takes to drill underneath 15,000 feet of Productionwater? It was all covered in Oil 101, with: Completions and Flow Equipment: Mark Teel, Engineering Director, NExT— We were honored to have an excellentHistory of the Industry: Steve Jacobs, Network of Excellence in Training keynote speaker Carlos Aguilera, ViceSenior Vice President - Oil & Gas, Sinclair President Business Development, ChevronGroup Well Intervention and Well End-of-Life: Africa and Latin America. Wes Heiskell, President & CEO, VikingMarshall Adkins of Raymond James Wes Heiskell of Viking Oil Tools James Geary of Cobalt International Energy12 PESA News