November 2013
In This Issue
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Q3 Update • SWS Rig 124 • What’s Happening? • The Last Page
Q3 2013
Q3 2013 Summary
Q3 2013 saw increases in EBITDAS of $2.2 million compared with Q3 2012. This increase is largely attributed to improved utilization and activity in Australia and an uptick in Canadian drilling utilization. Australia’s operating margins totaled $5.4 million for the quarter on a steadily expanding market. Canadian operating margins did not see much movement relative to Q3 2012. Increases in Canadian drilling activity were met with decreases in pricing, while lower well servicing activity was tempered by an improved fixed cost structure and increased revenue and operating margins from oilfield rentals. In the US, Savanna generated $15.4 million in operating margins on $44.9 million of revenue in the quarter, up slightly from Q3 2012.
Revenue
Q3 2013 $170.6 million Q3 2012 $158.7 million
Operating Margin
Q3 2013 $50.6 million Q3 2012 $47.6 million
Net Earnings
Q3 2013 $7.3 million
Q3 2012 $8.0 million
7%
“Our results from Australia really set us
6%
American market, we were able to buck
8%
apart from our direct competitors in Q3. While most of them saw year-over-year
decreases in EBITDAS in a tough North that trend and our Australian operations played a big part in that.”
- Rick Torriero, Corporate Director, Accounting & Finance
For more detailed Q3 2013 information, please log on to www.savannaenergy.com and click the Invest tab.
2014 Strategic Focus & Capital Program
Savanna’s strategic focus for 2014 is centered on 3 key areas: expanding our footprint in Australia, entering the triple drilling rig market in North America, and improving the utilization of our North American service rig fleet. Our capital commitments match this focus with approximately half of the $145.6 million initial capital budget for 2014 directed to these areas. Expanding our footprint in Australia = complete construction of 5 new workover rigs for Australia Entering the triple drilling rig market in North America = initiate construction of 2 triple drilling rigs Improving the utilization of our North American service rig fleet = transfer 6 service rigs from Canada to North Dakota The other half of our approved capital budget will be directed toward maintaining and upgrading our current equipment fleets and constructing new field locations, the largest of which is the new drilling and well servicing facility in Leduc, Alberta. For the full press release related to Savanna’s 2014 strategic focus and capital program, please log on to www.savannaenergy.com and click the Invest tab.
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Rig-n-Dig • November 2013
800, 311 6th Avenue SW Calgary, Alberta T2P 3H2 Phone: 403 503 9990 Fax: 403 267 6749 info@savannaenergy.com Savanna Energy Services Corp. is listed on the Toronto Stock Exchange (TSX:SVY) For current stock information, visit tsx.com or savannaenergy.com
Rig-n-Dig November 2013
Rig-n-Dig is published by Savanna Energy Services Corp. as an information vehicle for our employees and for our community. Suggestions and contributions are welcome and encouraged. Editor/Publisher/Managing Editor: John Bayko 403 781 9999 jbayko@savannaenergy.com
In This Issue Q3 Summary Canadian RRSP SWS Deploys T-Sill Holiday Well Being What’s Happening? Australia The Last Page
page page page page page page page
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Canadian RRSP
Your Savanna Retirement Savings Plan Keep your retirement savings on track by reviewing the following reminders:
The RRSP deadline is March 1, 2014.
Contribute to your group Registered Retirement Savings Plan (RRSP) through Sun Life Financial before March 1, 2014 and take advantage of tax saving opportunities for the 2013 tax year. Still under Canada Revenues Agency (CRA) limit for RRSP contributions * Make a lump-sum contribution before March 2014 (lump sum contributions will not be matched) Eligible for an increase in the Company Matching percentage(s)? Contact Sun Life to increase your contributions to attract the maximum company matching amount * You can find your RRSP contribution limit on the Notice of Assessment you received from the CRA
Sun Life Financial tax receipts – when to expect them Contributions made between:
When you can expect your tax receipt
In what tax year you can use the tax receipt
January 1, 2013 – March 1, 2013
March 2013
2012 or 2013
March 2, 2013 – December 31, 2013
Early January 2014
2013
January 1, 2014 – March 1, 2013
March 2014
2013 or 2014
RRSP help – online, anytime you want it! Sign in to mysunlife. ca/savanna to: print a duplicate copy of your Sun Life Financial RRSP tax receipt, at no charge explore tools to help you manage your RRSP Review your investments to ensure you’re on track to meet your retirement goals. Start by reviewing your tolerance for risk by completing the Asset allocation tool. Under the Resource Centre drop-down menu, select my “money tools”. Select “Continue” to begin. Learn about your funds by accessing in-depth, objective information on all of your investments through Morningstar®,a leading provider of investment news and analysis. Under the “Accounts” drop-down menu, select “Investment Performance”, then select the Morningstar® link and select each fund.
So many reasons to top up your RRSP... • You benefit from tax savings. Your RRSP contributions are deducted from your taxable income for the year so that you benefit from a reduction in your income tax – just for contributing to your own savings. • Your money builds quickly. You've heard it before but it’s worth repeating: the more money you invest in tax-sheltered savings, the more time you give it to grow and the better off you'll be. • It’s just so easy. To make a contribution, call 1-866-733-8612 any business day from 6 a.m. to 6 p.m. MT, or sign in to Sun Life Financial’s Plan Member Services website, mysunlife.ca/savanna.
Not enrolled in the RRSP? Take advantage of this benefit and enroll today. Do not lose out on company match. You can enroll online at mysunlife.ca/savanna or complete an enrolment form to begin your payroll deductions
Rig-n-Dig • savannaenergy.com
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Savanna Well Servicing deploys T-Sill Matting System
Leadership through people, innovation and technology. SWS Rig 124 has deployed a T-Sill system that walks the talk when it comes to Savanna’s Vision. The crew of Savanna Well Servicing Rig 124 has made the most of a new T-Sill matting system to meet the needs of an important customer. On their critical sour abandonment program in Balzac, Savanna’s customer Nexen felt any freestanding service rigs should employ external guy lines to the four corners of the lease to add stability to the rig due to severe crosswinds common to the area. This, however, requires additional time and effort, as four 25,000lb steel blocks must be spotted at each of the corners for anchors. While the extra time and effort is undoubtedly worth it from an HSE perspective, Savanna’s vision involves leadership through people, innovation, and technology, and as such, a better solution for the customer was sought. Enter the T-Sill matting system. The T-Sill is designed to improve structural response and side and rear overturning stability on freestanding service rigs, eliminating the need to use outriggers. It increases the rig’s hookload, provides a cost savings to customers by reducing set-up times, and makes the rig safer to operate. SWS R-124 is the first rig to deploy the system, and by all accounts it has been successful. “It’s pretty straightforward and easy to work with,” says Rig Manager Brent Osmond. The system is transported via truck with the rest of the rig’s equipment, and according to Osmond
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Rig-n-Dig • November 2013
Above: The T-Sill matting system is set in place with a picker and adds stability and additional hookload to R-124. Below R: The T-Sill system requires less room on location and is working very well for abandonment applications thus far.
takes about a half hour longer than a normal set up of a freestanding rig. This is less time than it takes to set up anchors and wire, and also creates a smaller footprint. “It takes up a lot less space on location,” Osmond notes, “and so far it’s working very well for abandonments, which is what we are doing.” Whether or not the T-Sill system would be beneficial in other applications is yet to be determined, but for now Osmond is happy with the results. Area Manager Brad Hartstok is also quite happy. Not only does the T-Sill system seem to be a success, but Hartstok considers the crew of R-124 Nexen’s flag ship rig in Alberta. “Most of the crew (8 individuals) have been together for over a year and a half, and keep a steady rotation,” he explains. “The rig does not shut down. It works 340 days per year and its safety record is impeccable.”
Above: The crew of SWS R-124. L to R: John Baker, Derrick Brawn, Brent Osmond, Mike Metzger, Ian Norris, Josh Mahan. Missing: our 2 swing crew members Rick St. Pierre and Nhan Ngo.
Benefits
Holiday Safety and Well Being It can be easy to get swept up in the busy holiday season, celebrating, being of good cheer and blowing caution to the wind in many areas of their life. For some, the Christmas season may be their favorite time of year. But let us not forget that for others, Christmas can be a very demanding, anxious, depressing and challenging time. December is often a very busy month, as people are caught up with scheduling engagements and celebrations, shopping etc. in addition to their normal work pressures, and deadlines. Financially, there can sometimes be unrealistic expectations surrounding the season, as there are extra expenses in buying gifts, baking, decorating, putting on festive meals, and traveling. While many enjoy the holiday season with family and friends, some folks are alone, and their isolation may
“Amidst the hustle and bustle, please slow down, be mindful of others, be kind and patient to one another, and lookout for your fellow man.” be amplified by all the festivities surrounding them. As such, this time of year may cause anxiety and depression because it may be a reminder of loss, loneliness, or loved ones who may be far away. Additionally, just because it is Christmas doesn’t mean life’s daily problems can suddenly be put on hold. During
this time, people with health issues, marital or family issues, or drug or alcohol issues, must still cope and may have difficulty finding the energy or inspiration for holiday cheer. If you find yourself struggling please do not hesitate to reach out for support. EAP “Homewood Human Solutions” is available to you 24/7 at 1-800-663-1142. Someone is waiting to support you in your time of need. If you are in crisis tell the intake operator you are in crisis & they will connect you immediately with someone who can help give you the support you require. Also, here are some general tips for enjoying the season in a healthy and happy way: • While on the roadways and in parking lots use extra caution. SLOW DOWN and DOUBLE CHECK your movement. Accommodate your speed to the road conditions, use your signal lights appropriately, Double check before making lane changes, stay off your mobile devices at all times while driving. Please DO NOT DRIVE under the influence of drugs or alcohol. • Slips and falls on ice can potentially cause debilitating injuries, so mind your steps. • If drinking, drink responsibly so everyone can enjoy the season. • Get sufficient sleep. • Don’t neglect good nutrition. Mix in some healthy fuel for the body with all your holiday treats! Finally, amidst the hustle and bustle, please slow down, be mindful of others, be kind and patient to one another, and lookout for your fellow man. Have a wonderful Holiday Season!!
Contact our Benefits Administrators Group Benefits — Drilling & RRSP Adiel Rautenbach at 403-267-6779 or arautenbach@savannaenergy.com Group Benefits — Well Servicing, D&D Rentals, Corporate and Rotators Application for Short Term Disability, Long Term Disability or Life Claim Sylvia Sargeant at 403-214-5950 or ssargeant@savannaenergy.com
fit e n e B a’s ent S n n a v a S epartm D Rig-n-Dig • savannaenergy.com
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What’s Happening? BABIES!!!!
Congratulations Krystal and Scott
Saige Quigley: Lucky 13!
Priyanka and Luke Quigley (Luke is a motorhand on SD 406 in Australia, welcomed baby Saige on November 13, 2013 in the 13th hour. Saige is being held by her proud sister Sahara.
Scott Schaffer (SD Rig 449 in Australia) and his wife Krystal had their first baby, son Archer.
Beautiful Autumn Weather
Santa Hits Nisku Early
It Really Was Thiiiiiiiiis Big!
Savanna Australia’s Jason Shepherdson (Rig 449) landed his huge fish while on leave. What kind of fish is it Jason, and where did you catch it? Let us know at communications@ savannaenergy.com and we’ll post an update next month!
We’re not sure what he was doing, but Santa stopped by Savanna Drilling’s Nisku office in November. From L to R: Tracy Hug, Kris Kringle, Leona Andres, Chelsea-Lee Kane, Miranda Murphy.
Mates4Mates Savanna donated $500 to the Mates4Mates charity Kayak expedition from Sydney to Brisbane. Mates4Mates is a not-for-profit, apolitical and nonreligious charitable entity that provides holistic welfare and rehabilitation treatment programs that give direct support to physically and/or psychologically wounded, injured or ill current and ex-serving Australian Defence Force (ADF) members and their families. Mates4Mates works collaboratively with the ADF, other existing public and charitable programs, as well as support people or professionals involved in the rehabilitation of the wounded, injured or ill. Front L: Craig Turnbull, Savanna HSE Advisor
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Rig-n-Dig • November 2013
What’s Happening? Savanna Milestones!! This section has been pretty, pretty, pretty, pretty popular over the last few months. Congrats and thanks to all of November’s milestone recipients!! 5 Year Rings! Carrie Chan (Calgary, October)
Receives her ring from Anita Collett
Ubaldo Gamez (Texas)
Rig Manager on SD 413, receives his ring from Carl Wade
Halyna Pimukhova (Calgary)
Receives her ring from Adriana Clavijo
Clinton Nanemahoo (Nisku)
Brian Gould (Louisiana)
receives his ring from Bill Lawless
Rig Manager on SD 650 receives his ring from Cordell Phillips
Nikki Allan (Calgary)
Receives her ring from Adriana Clavijo
William Cook (Nisku)
Driller on SD 621 receives his ring from Bill Lawless
Dan McCrea (Nisku)
SD 405 receives his ring from Keith Wachter
Rig-n-Dig • savannaenergy.com
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What’s Happening? Derek’s Italian Adventure! L to R: Rome at St. Peter’s Basilica; Venice; Rome at the Colosseum; Rome at a Lazio match; back at the Basilica.
Derek the Derrick accompanied Savanna Calgary’s Doug Fields on a tour of Italy’s magnificent architecture in November!
Friends in High Places
Beautiful Sky
Jeff McKinnon of Savanna Drilling Rig 638E sent us this image of his rig under a vivid purple sky near Rocky Mountain House, AB.
Savanna Drilling Rig 634 is seen from a rare vantage near Hinton, AB thanks to Rig Manager Sheridan Ryan.
SWS 64
Summer Storm in Brisbane
Thanks to Savanna Brisbane’s Claudia de Beer for these striking images of a summer storm rolling in.
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Rig-n-Dig • November 2013
A cloudy sunset and brilliant lightening strike were among the November highlights for Savanna Well Servicing 64 in Australia. Never a dull moment when you work outside!!
Australia
Charity Collection for an Australian Bush Christmas The 2013 Christmas Charity Collection was officially launched by Savanna Energy Services Australia on Wednesday 20th November. The campaign aims to raise funds and collect practical gifts as donations for rural families in need. Most of the recipients have lived in the rural regions where we carry out our day to day field operations. There has been substantial acceleration in the oil and gas sector which is strengthening Australia’s economic growth and we, at Savanna, are lucky enough to be riding this wave. However, a percentage of the rural and regional population who have lived and worked in western Queensland for generations are not so fortunate; you could say they are drowning, not waving.
“
Operations Manager Don Goldade believes this is a charity worth giving to and supports the Savanna initiative that encourages fortunate people in our business to give to those less fortunate in our region.
”
Bush communities have been negatively impacted by a series of natural disasters including floods and drought. In addition to these challenges, the resources boom has increased expenditure for rural families including rising costs for fuel, accommodation, grocery items and the increased competition for essential services including health, police, emergency services and child care. With one third of the state’s rural communities now living in drought declared areas, our country cousins could use a helping hand this Christmas.
By Cadence Page
The nominated charity organisation Ozcare is an offshoot of the St Vincent de Paul Society and delivers the Bush Connection Program from the Toowoomba branch. Bush Connections aims to support rural families with financial and social issues through the use of preventative, educative and early intervention family-building strategies. Each Christmas the program conducts a charity drive to create food and essential-item hampers and collect food and fuel vouchers to send to the rural and remote families in need. Operations Manager Don Goldade believes this is a charity worth giving to and supports the Savanna initiative that encourages fortunate people in our business to give to those less fortunate in our region. Logistics Manager Thomas Ingledew offered to transport goods from Toowoomba to the Surat basin, some 4 hours away, to assist with the delivery of goods to regional communities. Pam from Bush Connections was extremely excited that Savanna Australia chose this program as our charity for 2013. Pam was thrilled with the offer to transport the hampers because it is often costly to freight goods and in the past they’ve had to rely on the good will of local trucking companies. Great idea, Thomas! Please join us in donating to this worthy program. Suggested items include fuel or food vouchers (Woolworths/Caltex or Coles/Shell), non-perishable food, household electrical items, sheets, towels, saucepans. Contact a 2013 Christmas Charity Collection Coordinator to register your donation, as follows: Kellie Lehmann (Operations) Trevor Tann or Jennie Lowe (Logistics/Transport) Tarnz Comer or Cass Alcock (Warehousing/ Purchasing) All other staff – Emma Krumins (Reception) or Cadence Page (HR) I hope we can bring some light into the lives of our rural families through the Bush Connections program. Cadence Page (HR Assistant temp)
Rig-n-Dig • savannaenergy.com
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Australia
Savanna Trucking Australia The Path for Others to Follow Savanna Trucking Australia team have been hard at work and on the 18th and 19th November we undertook the ALC – Australian Logistics Council, NLSA – National Logistics Safety Code Audit, The Code of Practice audit was developed specifically for the Oil and Gas Industry for Origin, Santos, QGC and Arrow Energy setting out all participants responsibilities when they control the movement of equipment and freight in the supply chain. The purpose is to reduce the risks and improve compliance with OH&S and other safety regulations. Savanna’s major client, Origin APLNG requires Savanna to undertake this Audit as part of Origin’s CSG Logistics Safety Code. There were 10 key elements in the Audit that spanned over two days. Elements included Legal, OH&S Compliance, Advanced Fatigue Management (AFM), Mass and Maintenance Management, Communication, Equipment, IVMS IAP, Operational Infrastructure, Equipment and Driver Health.
Savanna Trucking audit result was 100% Compliant. Thomas Ingledew, General Manager – Logistics said, “ This is a spectacular result from Savanna Trucking and this audit being our second annual audit by the NLSA, Savanna have demonstrated that it is not only achievable but sustainable “showing the path for others to follow.” We have received congratulations from numerous industry participants highlighting the tremendous result. Origin Auditors having extended their congratulations to Savanna Trucking by stating, “I just want to congratulate you and your team on an excellent result. This is one of the best results we have seen in CSG context. It is always nice to know where you fit in a benchmark situation. From my observations of hundreds of audits your team is leading the way. Well done.” Colin Karlson, Chain of Compliance, NLSC Auditor.
S
NOW HIRING DRILLERS Savanna is hiring Drillers on our workover rigs in Australia Perks include: • 28 on / 28 off • Equal time pay • Year round work
To apply, email Isaac Beadle: ibeadle@savannaenergy.com
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Rig-n-Dig • November 2013
The Last Page
RIG TRIVIA WHAT WAS THE DEEPEST HOLE EVER DRILLED? According to Popular Science, in 2012 Japanese researchers drilled a hole from aboard the science vessel Chikyu. The crew of Chikyu drilled to a depth of 7,740 m or 25,400 ft below sea level. According to Wikipedia, the Kola Superdeep Borehole was the deepest borehole in the world for two decades. The Kola project began in the former USSR in 1970. In 1989, the project’s deepest hole was recorded at 12,262 meters or 40,502 ft. In May of 2008, a new deep hole record was set by Transocean for Maersk Oil in the Al Shaheen oil field in Qatar. It was drilled to 12,289 m or 40,318 ft.
The Kola Superdeep Borehole. Source: http://www.universetoday.com/81980/ deepest-hole-in-the-world
Sudoku
However, in terms of depth below the surface, the Kola Superdeep Borehole still retains the world record as of November 2013. Sources: Popular Science; Wikipedia
Bad Joke I was at the gym the other day, trying to get some flab in shape. A beautiful young woman came in. I asked my trainer what machine I could use to impress her.
Solution next month
He said, “The ATM.” Rig-n-Dig • savannaenergy.com
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Not everyone DIES in workplace incidents.
Last year over 38,000 Albertans had their lives changed forever. For the time it takes, put on the proper safety gear. DON’T LOSE IT AT WORK. Make smart, safe choices. Learn how you can make a difference. Visit www.worksafely.org or call the Workplace Health and Safety Call Centre (toll-free) at 1-866-415-8690.