Rig-n-Dig February 2011
S
In This Issue Interview with Eric Thompson D & D Profile Spring Break Up Options What’s Happening?
Message from Management
President’s Message With Savanna celebrating its 10 year anniversary, President and CEO Ken Mullen, discusses Savanna’s past, present and future initiatives and how we have grown in the global energy services sector.
Savanna is celebrating our tenth year as and customers in Australia, with the an organization in 2011. The 2010 year goal of becoming the leading service represented a transition into the next provider in our operating area. decade for the Company and an excellent We are also generating successful opportunity to clarify our vision and expansion closer to home. Working with values strategy as we head into the future. an existing customer in Pennsylvania, Savanna has always treasured our we cooperatively designed and initiated status as an innovator in our sector, but construction of a state-of-the-art mobile the fundamental market shifts that idled 4,000 meter (15,000 foot) AC drilling rig. much of our hybrid drilling fleet over That rig will reset expectations regarding the last few years not only challenged the balance between deep drilling capacity our ability to generate acceptable returns and mobility in a very challenging drilling from almost one-half of our drilling rig area. The rig provides a springboard for fleet, but also raised questions about similar designs for introduction into our ability to reload and recover—both other areas of North America as well. operationally and economically. We In the past year we have re-ignited our found the answer to this challenge innovative capacity and have begun to through reference to Savanna’s vision, stake a claim in the international market. It “Defining leadership in global energy is certainly early, but the progress has been services through people, innovation and excellent and the efforts will continue. technology—the path for others to follow”. In respect of domestic North American That vision underpins the tactical operations, we have enhanced our strategy for Savanna as we revitalize our presence in existing bases in Texas, hybrid drilling Pennsylvania, North fleet, and serves Dakota, Alberta and In the past year we notice as well of Saskatchewan. We have re-ignited our Savanna’s designs have relocated our on becoming a fleets and focus to innovative capacity global force in areas of sustainable and have begun to energy services. oil activity and And the numbers substantial natural stake a claim in the show it. Revenue gas potential. We international market. from outside have continued Canada reached to enhance the its highest percentage of total revenues balance of activity and revenue, between in 2010 at 30 per cent. While the 2010 Canada and the United States. The contributor was primarily the United prior label of Savanna as a Canadian, States, heading into 2011 the contribution shallow gas-focused operator simply from outside North America, specifically does not apply. Almost 30 per cent of Australia, will also become meaningful. our go-forward revenue will come from In late 2010 we delivered the most services other than drilling, and over technically advanced, efficient workover 75 per cent of our drilling revenue will and hybrid drilling rigs currently derive from our state-of-the-art deep operating in Australia. We built, and drilling fleet. This is a tremendous shift continue to reinforce, very strong accomplished in a very short time frame. relations with our new key employees Overall, industry activity in drilling
“
“
2
www.savannaenergy.com
February 2011
Ken Mullen, President and CEO of Savanna Energy Services Corp.
and oilfield services was moderately higher in 2010 versus 2009, and activity levels accelerated in the back half of the year. For Savanna, the activity increase exceeded that of the overall market for four key reasons: 1. Specific repositioning of field bases, rigs and equipment to higher activity areas; 2. Disproportionate overall recovery in activity levels in geographic regions in which Savanna’s services are concentrated; 3. Upgrade of conventional workover and conventional double drilling fleet to enhance the fleet’s capacity and breadth of application; and 4. Initiation of hybrid drilling rig retrofit and repositioning. The first two of these thrusts required establishing positions in new markets. Getting the best personnel and equipment in place obviously takes time, but we are now beginning to reap the rewards of these efforts as the upfront costs of these moves are behind us and are being met with higher activity levels and efficiencies in current operations. The upgrades to our conventional drilling and workover fleet include the expansion of their depth capacity on recertification, as well as the addition of more top drives to Savanna’s already industry leading percentage >>
Message from Management of top driven rigs. Savanna’s deep double drilling fleet and workover fleet continue to exceed average industry utilization rates as a result, and pricing is moving higher in reflection of higher activity and the quality of our services offered. After several quarters of planning, design and construction, the physical revitalization of our hybrid drilling fleet also reached the operational stage in late 2010. We delivered our first hybrid rig outside North America under our five year take-or-pay contract in Australia, and we commissioned our first TDS3000TM automated range III drilling rig as well. The challenge of addressing our 25 to 30 hybrid domestic drilling rig overcapacity remains, but through these two thrusts The upgrades to our alone, that excess conventional drilling capacity will be eliminated by the and workover fleet end of 2012. By the include the expansion end of 2011 alone, at least twelve of of their depth capacity the retrofits and on recertification relocations will have been completed. This is equivalent to the addition of an equal number of new rigs, as the retrofitted rigs operate at effectively full capacity, versus less than 20 per cent previously. The final mix between international placement and TDS-3000TM retrofit is certainly fluid and flexible, and is dependent on market demand in the many
“
“
1800, 311 6th Avenue SW Calgary, Alberta T2P 3H2 Phone: 403 503 9990 Fax: 403 267 6749 info@savannaenergy.com
international areas Savanna is investigating for application. The commitment to completing the retrofit process is underway and we are extremely confident of its success and timing. Savanna’s financial performance and share performance has lagged the market for over two years, and the recovery from the shock to our business due to the vicious decline in the market for hybrid drilling did put us on our heels—an unfamiliar territory to say the least. Addressing that challenge has placed stress not only on the hybrid division, but on our conventional drilling, well servicing, and rental businesses as well, as they were unable to access the capital they desired to accretively grow their own operations. I am proud of how all of our operations managers handled these challenges, and in their unbreakable confidence in their own businesses. Financial metrics from every corner of our organization continue to improve, and everyone at Savanna remains very focused on developing the people, processes and products that will generate sustainable profitable growth for the organization into the future. We have a strong tactical plan, and are executing on that plan. The results to date are as we anticipated, and the opportunities that will surface once the retrofit process is complete are manifold. In that journey, we will continue to demonstrate the core values that have brought Savanna to this point; integrity, demonstrating the courage to do the right thing; relationships, building collaborative partnerships with all stakeholders; excellence, setting the industry standard, and; sustainability, balancing short and long term success. We are extremely appreciative of the patience and faith that our people, customers and shareholders have demonstrated in Savanna, and are excited about our expectations of repaying that trust through tangible improved results. Respectfully submitted,
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 February 2011
Rig-n-Dig is published by Savanna Energy Services Corp.
Ken Mullen President and Chief Executive Officer Calgary, Alberta
as an information vehicle for our employees and for our community. Suggestions and contributions are welcome and encouraged. Editor/Publisher: Janine Tannahill 403 267 6739 jtannahill@savannaenergy.com Managing Editor: John Bayko 403 781 9999 jbayko@savannaenergy.com
In This Issue
Message from Mgt. Employee Profile Spring Break-up Options What’s Happening? Canadian Benefits IT Profile D & D Profile Last Page
page 2 page 4 page 5 page 6 page 8 page 9 page 10 page 11
Rig-n-Dig
February 2011
3
Employee Profile
A Top Down Safety Approach Savanna’s newly appointed Global HSE Director, Eric Thompson, takes a personal approach to safety. After spending many years in the field and seeing how individuals and families are affected by workplace accidents, he is committed to improving safety at Savanna. Savanna’s newly appointed Global HSE Director, Eric Thompson, takes a personal approach to safety. After spending many years in the field and seeing how individuals and families are affected by workplace accidents, he is committed to improving safety at Savanna. In February, Thompson was promoted to the position of Global HSE Director for Savanna Energy Services Corp. In his words, Thompson is responsible for “assisting” employees of Savanna in making informed safety decisions when at work. Thompson began working for Savanna in October 2010 and brings to the company 23 years experience in oil and gas—working in a variety of positions from floorhand to Human Resources. As Global HSE Director, Thompson’s responsibility really is global—covering all Savanna employees in North America and Australia. Being hands on and personal in his approach to management, Thompson definitely has his work cut out for him.
“Some people see senior management as organising everyone, but it’s more of a two-way street” states Thompson. “To be effective you have to visit and converse with people”— Thompson, who has just spent four days in the US visiting rig crews and is now getting ready to leave for Australia— is standing by his methodology. Thompson is a glass half full kind of guy. He sees many opportunities within Savanna for improving not just safety practices, but also our safety culture and communication. A safe working culture is a productive working culture and positive communication carried out with respect and care is the first step. “[We need to] create an atmosphere of increased communication, an atmosphere of care and an atmosphere of cooperation” explains Thompson. Each of these relate to Savanna’s recently implemented values of integrity, relationships, excellence and sustainability. When it comes to improving safety,
Eric Thompson, Global HSE Director for Savanna Energy Services Corp.
Thompson sees it as a collaborative effort between HSE, management and operations. “Improving safety will be a top down approach” says Thompson. “Our challenge is not the operation part of it—it’s the succeeding in the operational side in a safe manner. We need to take ownership and
10 Quick Questions with Eric Where did you grow up?
Three Rivers, Quebec
Favourite annual holiday?
Family Day (any holiday home with my family is the best holiday) Football or hockey?
Hockey What do you like to do in your spare time?
Go on canoeing trips (rivers and lakes)
4
www.savannaenergy.com
Last place you visited on holiday?
Kitimat, British Columbia
What is your signature dish?
Anything with seafood (Eric worked as a cook in high school) Favourite movie?
“A Wonderful Life” and “Fried Green Tomatoes”
What sort of vehicle do you drive?
There’s only one type of vehicle: a Dodge truck!
February 2011
Most embarrassing moment?
I was about to do one of my first presentations and I was a little nervous and went to the bathroom to splash cold water on my face. Once presenting, I realised I had splashed water down the front of my pants in a rather inconvenient place
Cat or dog?
Neither
>>
Employee Profile encourage safer work practices”. A couple of safety programs will be implemented in order to improve safety at Savanna. Behaviour Based Safety (BBS) is a job observation/intervention program that reinforces action correction. Thompson states that 96 per cent of workplace injuries are caused through personal choice. People can be trained to identify hazards, but they then have to make the choice to intervene and correct the hazard. BBS teaches people to listen to their voice of reason and make a safe choice. Another program for implementation will be Competency by Position, whereby Job Hazard Assessments are broken down by position, task and steps. Comprehensive individual evaluations will be done
to assess the competency of people in certain positions and then training will be completed based on the evaluations. Thompson’s whole approach to safety is a personal one. Not only has he been thrown 20 feet across a rig floor and lost consciousness, but he has also witnessed many terrible workplace accidents and a fatality. He has seen firsthand how accidents affect employees and families. He has a personal mission to ensure that everyone is safe when they come to work, but it is a mission that relies on many variables. Not only is it understanding each individual’s abilities and then aligning these with the goals of the company, but it is also adjusting to the cyclical nature of the oil and gas industry
with the challenges it represents and not making this an excuse for the choices we make leading into an unsafe act. Thompson has always had a strong interest in safety. His career in oil and gas may have had a shaky start whereby he lived on site in his vehicle for the first little while. But after receiving his first pay cheque he was committed and his interest in safety grew. Today, his enthusiasm has not waned and each day he is at work he knows he is one day closer to obtaining his goal: no one getting hurt. “It is very satisfying to know you had an impact on a person and changed their life” says Thompson. “I firmly believe that in the future we will be able to operate without hurting anybody”.
Spring Break Up Options
Options During Spring Break Up Spring Break Up may just be around the corner, but it doesn’t mean you have to forgo your pay cheque. The following information offers some suggestions to keep you busy, earn some money or improve your current level of training. For the people working on the rigs, Spring Break Up is the time where many rural roads are closed to heavy vehicles. As the weather begins to warm, access roads and sites become soft and in some cases, impassable. During this annual downtime, rigs stop working due to the limited ability to move between locations. Occasionally some rigs may need some refurbishment or a recertification. For some rig workers, Spring Break Up is a well earned break while others like to keep working. If you fall into the later category, then here are some options to keep the money rolling in. Training Training is your best option during Spring Break Up. Not only are you paid for your training time, but it also improves your on-thejob skills and knowledge. If you are interested in completing some training courses during Spring Break Up then please talk to your Rig Manager. Alternatively: Drilling crews can contact Shelley Axelson in Blackfalds (403 885 2858) regarding training and the apprenticeship program. Well Servicing crews can contact Jessica Brown in Nisku (780 955 7027) regarding the Service Rig Competency Program.
Rig Refurbishment or Recertification Work There is usually work to be done on refurbishing or recertifying some rigs; however, the number of people required to do this work is limited and most work is done at the yards in Nisku. If you are interested in working on a rig or helping out around the yards, then please talk to your rig Manager or Crew Coordinator. A list will be made of the people interested in working and when a position is available, you will be contacted. If you are keen to work during Spring Break Up, then please contact your Rig Manager or Crew Coordinator to discuss your options. Savanna encourages and supports further training and work during Spring Break Up. As we strive for excellence in safety, technical expertise and the quality of our people, we hope you will consider the benefits of pursuing training during the Break.
Rig-n-Dig
February 2011
5
What’s Happening?
What’s Happening? Safety Standown Pics
Left: Rig 414 working for Conoco Phillips near Fort McMurray. Rig 414 Crew with Gene Carriere and Conoco Phillips staff
Below: Rig 617 also received visitors as part of Safety Standown—only a visitor left with less than he arrived with. Savanna CEO, Ken Mullen, was asked by one of the Rig Hands for a new pair of coveralls. Mullen asked what size. Turns out Mullen and the Rig Hand wore the same size coveralls, so Mullen gave him his. The Rig Hand heading back to work with his new coveralls.
L-R: Ken Mullen, Geoff Tywoniuk, Dwayne LaMontagne and Gerald Gould (Rig Manager)
Caught!
On January 29-30, Terry Kuntz from D&D in Redcliff participated in a fishing derby at Rattle Snake Lake. Kuntz won biggest fish for his 81 centimetre, 9.5 pound Pike. His prize was $2500.00 which he shared with his fishing buddies. Not a bad couple of day’s fishing!
6
www.savannaenergy.com
February 2011
What’s Happening? Room for two…
It was one big jacket Anne Jendruck from the Purchasing Department at Savanna Drilling in Nisku just couldn’t quite fill. Anne tried on a size 6XL jacket and found there was plenty of room for two…or maybe even three or four!
Five Year Ring
Congratulations to Jay Hill on receiving his five year ring. Jay is a Rig Manager on Rig 438 and is also now managing Rig 419—the TDS-3000TM.
Pimp my Shack
The floor of his Shack was a little water damaged, so Rig Manager Ernie Langridge decided to do some home repairs. Using some laminate, Ernie took to the floor and pimped out his shack. Judging by the photos, Ernie has some hidden talents. The Rig itself was located in West Virginia.
Rig-n-Dig
February 2011
7
IT Profile
From the BS Team, with Love THE SITUATION Spira locks your account just as you’re submitting a tour sheet. You call the help desk and talk to Frank over speaker phone like you’re ordering a tall double-double. For most people, this is the full extent of their interaction with the IT group. Something blows up, you call, and the team at the help desk saves the day (again). This is a reactive approach, and while it will always have its place in our business, we would like to do better; but we need your help. Don’t get me wrong, Frank’s a great guy; but if you know his favorite color, what high school he went to, and generally spend more time talking to him than your spouse and kids, then we need to do a better job. That’s where the Business Systems Team comes in. WHAT WE DO The Business Systems Team (that’s right, the BS Team) is made up of Business Analysts (BA’s) specializing in their respective fields: HSE, Operations, Finance, HR, Maintenance, etc... Our role at Savanna is to translate your business needs into technical solutions that you can work with. Essentially, you tell us what you need (or want), and we find a solution. Think of our team as a service provider for Savanna. You are our customer, and we want to provide you with a quality product or service that fits your needs and adds value to the organization. We exist for you; no matter what area of the company you belong to. With Savanna quickly becoming a leader in the industry and expanding into new markets and making new acquisitions, we have a challenge in bringing all the systems, processes, and people together to meet the
by Dana Bruns
issues, find the perfect solution, implement it flawlessly, and support it in a way that allows our users to eventually take it all away from us. Like my personal goals involving private islands, Ferraris, and space travel, there’s a long way to go. And while I can get closer to my personal/financial goals by doing things like quoting my boss’s boss in print, my IT goals require a lot more effort. They also require you. We rely on you to tell us how we can make your life easier so you can drill holes, record safety information, submit bids, create PO’s, pay bills, and at the end get as much value out of our 78 million shares as possible.
goal of a unified company. At the same time, we have to support existing systems and processes that allow you to do your job; whether that job is to pay invoices or to change the motor on the mud pump. We are responsible for gathering requirements, finding solutions, implementation, user manuals, training and support. WHO WE ARE Rob Normandeau-Business Systems Manager Clay Fraser-Finance Dawn Tran-Operations (Spira) Kevin Geddert-Human Resources Dana Bruns-Equipment and Maintenance Currently Hiring-Payroll, HSE, Operations WHY WE EXIST I’m going to risk the accusations of “Suck up”, or probably worse (like getting a wedgie), and I’m going to quote my boss’s boss: “My goal is to work myself out of a job, by creating a legacy that has a positive impact on Savanna’s Business, and is scalable and sustainable.” –Steve Ross, CIO What this means is that if we’ve done our job properly, we shouldn’t have a job anymore; the systems will work perfectly, the software will never fail, and it will be able to expand with the business, without any intervention. In short, there should be nothing left for us to do except jump into the next challenge and opportunity at Savanna to provide a positive impact—or happily apply for pogey. Of course, to get to this point we need to understand every aspect of the business, every process, identify all the
The BS Team: L-R Kevin Geddert, Dawn Tran, Clay Fraser, Rob Normandeau and Dana Bruns.
GOING FORWARD From new international bids, to 80 per cent rig utilization, the sales team at Savanna is keeping everyone fantastically busy this year. And with all the new business comes new opportunity for us to grow collaboratively. Our team is growing and changing just as the business is. In the coming months, we will be calling and visiting and asking questions—because the better we know you and your teams, the better we can create systems and processes that apply to this unique company and a changing industry. We hope to be more involved with the business so that the business is more involved and invested in the end result; because there’s no point creating something no one wants to use. IN THE MEAN TIME Tell us your story. Call us to complain. E-mail us your thoughts or insights. Tell us your favorite color and what high school you went to. We want to know and Frank needs a break. We promise to put our pocket protectors away and not talk about binary code, if you promise not to laugh when we don’t know what “dope, soap, and rope” means. One thing I’ve learned during my short time at Savanna is our value of relationships. That’s why I’ve chosen to work here and that’s why I love it. It’s like a family—a family that doesn’t scare your girlfriend away or argue at a funeral about who’s going to pay for parking. We want to be more involved with this family and support its needs. From all of us in Business Systems, thanks for paying the bills, and thanks for teaching us new words from the field.
Rig-n-Dig
February 2011
9
D & D Profile
The Faces of D & D D & D Oilfield Rentals is owned by Savanna Energy Services and offer high quality oilfield rentals, customized service and over 150 years combined experience. D & D Oilfield Rentals stand by its personal approach to service and to quality oilfield rental equipment. You would be hard pressed to find another oilfield rental company offering the standard of equipment, maintenance and service provided by D & D. Located in Redcliff, Lloydminster, Swift Current and Weyburn, D & D is proudly affiliated with Savanna Energy Services Corp., making them your number one oilfield rental partner. Over the coming months, the Rign-Dig will introduce the people of D & D. This month introduces D & D Sales Representative, Greg Fehr, who has been with the company since August of 2010. Prior to working with D & D, Fehr worked for wholesale drilling fluid companies in sales and purchasing—making him no stranger to the oilfield business. Working from Savanna’s Head Office in Calgary, Fehr’s role with D & D includes maintaining and building new rental clientele. Fehr comments on a shift in clientele, whereby more consulting or engineering firms are acting on behalf of the drilling company. But in being true to their personal approach to service, D & D will consult with anyone looking for oilfield rentals. When asked what sets D & D apart from the competition, Fehr says it is the ability to be your “one stop shop”.
Anything and everything you could ever need is available from D & D and if they don’t have it, they will do what they can to get it for you. Fehr states that D & D is always open to ideas and customer suggestions for equipment and will also customize any rental package. And with D & D having its own hauling equipment, rentals and transportation costs are all on the one bill. D & D pride themselves on their friendly, knowledgeable and experienced staff. With four office locations in central and southern Alberta and Saskatchewan, D & D employ 40 people and have more than 150 years combined experience in oilfield rentals. D & D’s equipment is also of a high standard and very well maintained, believing in preventative maintenance and not renting any equipment below par. Everything is serviced, repaired and cleaned before being sent back to the field in top condition. D & D also have on call personnel for the rare instance where something does breakdown. So, if you are looking for a brand new self-contained trailer (with air conditioning!), pre-mix tanks, generators, combination shale and flock tanks, or anything else, give one of D & D’s four locations a call or e-mail them at info@ ddoil.net!
Looking for all the comforts of home while working in the field? D & D’s brand new, self contained trailers have all the mod-cons you could ever need.
10
www.savannaenergy.com
February 2011
Greg Fehr, D & D Sales Representative
CONTACT: Calgary, AB - 1.403.267.6737 Medicine Hat, AB - 1.877.548.2700 Lloydminster, AB - 1.888.875.5171 Weyburn, SK - 1.306.577.3324 Swift Current, SK - 1.306.750.1675 info@ddoil.net www.ddoil.net
Last Page From the crew of Service Rig 22...
IN MEMORY OF JOSH CROOKS
Rig-n-Dig
February 2011
11