October 10, 2012 • Volume 02, No. 12 OilfieldServices Serving the marketplace with news, analysis and business opportunities

Transocean grows backlog ~43% led by $7.6 billion Shell order Seadrill orders 7th UDW Just weeks after announcing a billion-dollar exit from the standard jackup space, drillship for $600 million Transocean showed the industry why with $7.6 billion order from Shell for four Saying current strong demand will result newbuild UDW drillships under 10-year contracts. DSME will build the vessels at in limited rig availability in 2014, Seadrill its Okpo, South Korea yard beginning in 4Q13, with the first delivered mid-2015 and ordered a newbuild UDW drillship from additional deliveries occurring in six-month increments. Transocean said it expects to Samsung for construction invest $3 billion toward construction. at its South Korea yard in a Shell EVP Peter Sharpe DSME will field 4 newbuild UDWs, $600 million deal. Payments are weighted said the company was adding to 2 currently being built. toward the tail of the construction period, collaborating with Transocean in rig with delivery expected in 4Q14. The design and described the rigs as state-of-the-art, with the highest operational, safety deal includes a fixed price option for a and environmental standards. They will feature dual-activity drilling, industry leading housing capacity, two 15,000 psi BOPs to reduce non-productive time, capacity for 7th newbuild UDW is slated for 2014, when Seadrill projects tight market. a 20,000 psi BOP and Tier III international emission compliant diesel engines, with drilling capacity of up to 40,000 feet in up to 12,000 feet of water. Continues On Pg 8 second drillship for 1Q15 delivery, which Sticky water issues remain major cost, drawing investment Seadrill expects to exercise. It is currently discussing upgrades for the option unit. Speakers at the recent World Shale Oil & Gas summit in Houston praised significant Seadrill chairman John Fredriksen said improvements in drilling which have reduced overall well drilling time from weeks to dayrates and contract durations are hitting days, in turn pressing well costs lower. Unfortunately, as overall drilling efficiency new highs, while yard costs are currently very has improved, water usage issues (i.e., the millions of gallons of water attractive due to overcapacity. Fredriksen said required to frac each well and Meeting both technical & economic this environment supported the aggressive the problem with produced and flowback needs would be ‘holy grail’–SWN. organic growth for the company, with the water) has become even more demanding. strategy outshining M&A and asset proposals Longer laterals, more frac stages per well, larger volumes of water consumed per stage which have also been considered as a means and produced water in some shale zones have exacerbated the problem further. to create value. Continues On Pg 16 Southwestern CEO Steven Mueller cited the example that ~25% of costs for a $6.0 million well in the Marcellus is consumed in water transport. And the situation Featured Deals could become more strained. As noted by the Houston Chronicle, Schlumberger’s VP of marketing and technology for well production services Salvador Ayala predicted one TUSCALOOSA OVERRIDE PKG million unconventional wells will be drilled by 2035. Continues On Pg 6 ~143,000+ Acres; ~8,400 Royalty Acres LOUISIANA & MISSISSIPPI CGGVeritas buying Fugro’s Geoscience division for $1.5 billion Tuscaloosa Marine Shale--Austin Chalk RR CGGVeritas announced it would acquire Dutch engineering company Fugro’s Area Under Rapid Development Most Leases 3 Year Primary; 2 OTE Geoscience division‒excluding its existing multi-client seismic library and ocean ~1.0% ORRI Under Most Of Position bottom nodes business‒for $1.5 billion in cash. The deal will transform CGG into a Offset Encana, Goodrich, Devon & EOG fully integrated geoscience company, giving it a leadership position in the fast-growing --Midstates & Anadarko integrated geology, geophysics and reservoir characterization segment. ~60,000 Acres Leased to Encana Fugro’s Robertson brand services provide data analysis, wellsite services, High Resistivity Area of TMS Trend RR 8712 training, geology/geophysics service, reservoir engineering and related services. Reservoir characterization brands include Fugro’s multi-client library & ocean ECTOR CO., TX NONOP SALE Jason, Powerlog and E-Plus. 21-Active Wells. 8-Drilling. 6-Completions. nodes business are worth ~$550 million. The deal also strengthens CGG’s SPRABERRY TREND AREA fleet and data acquisition capabilities, adding seven seagoing vessels and four harsh CORE SPRABERRY DEVELOPMENT PP Upside Potential: 31 Permits. 3-AFEs environment-capable, 12+ streamer, 3D seismic vessels featuring Sercel products. Interest Under 5 Contiguous Sections Fugro has made advances in gravity and EM data services and enhancement, and is a Wells Being Drilled On 20 Acre Spacing leading airborne data acquisition provider with a fleet of 45 specialized aircraft. It also ~1.5% NonOperated WI; ~1.125% NRI offers De Regt marine cables with seismic exploration applications and has 13 seismic Gross Prod: 1.3 MBO & 2.1 MMCFD Net Production: ~17 BOED SPRABERRY data processing centers. Net Cash Flow: ~$36,000/Month CGG and Fugro also created a joint venture, Seabed JV, in which CGG owns PP 2124DV 40% and Fugro will have 60%. CGG will contribute shallow Continues On Pg 10 All Standard Disclaimers & Seller Rights Apply. OilfieldServices 2 October 10, 2012 Oil & gas counts both bearish, starts & permits at 2012 lows Oilfield Service Briefs The “oil-toppy/gas-bottomy” trends appear to have both become more concrete in • Drilling fluid and steel pipe recent weeks, both being reinforced by Baker Hughes October 5 data showing a 12- distributor and manufacturer Bri-Chem rig drop in the oil count and a two-rig increase in the gas count, with the overall count added a drilling fluid product and dropping by 11 to 1,837. Over the past month, the oil and gas counts have stimulation additive storage area for both increased two of the past four weeks and declined two of the four. distribution in Farmington, New Mexico. Overall monthly trend has both been to the downside, with oil down less than a percent With the site, Bri-Chem is targeting and the gas count down over 3 percent. activity in the Mancos Shale in the San This is the first time we’ve cracked the Oil count listing, down only 2% from Juan basin. The site is in the yard of August peak. 1,300s in oil since June. Bri-Chem’s unidentified transportation The Mississippian and Granite Wash plays saw the biggest gains over the past month, partner, which will also handle delivery. both rising four rigs. The Williston and Eagle Ford also saw 3-rig gains, while the Utica The site, the company’s 11th in the US, is lost three (down 12% vs. the month-ago). part of Bri-Chem’s “aggressive” US drilling September well starts came in at the second-lowest levels of 2012 according to fluid market expansion plant. • Bristow Group CEO Bill Chiles RigData, at 3,047 (a 12% sequential decline). Major decliners were Texas (falling recently told the Houston Business 105 to 1,380) and California (down 98 to a 2012 record low 195). States seeing 2012 Journal the oilfield helicopter service lows were Colorado, Pennsylvania, New Mexico, Utah and Louisiana. Only North market is very robust and dynamic with Dakota rose with another 2012 record North Dakota was the only state with huge growth potential. But competition increases in well starts and permits. high, climbing three to 236. is stiff, said Chiles. “Everybody can Outlook also turned bearish longer- buy a helicopter … We have term, with September permits at a 2012 low, down 19% vs. August at 4,698. Texas to differentiate on the safety saw an overall 2012 low with a 23% sequential decrease to 1,521. Other large decliners and service.” Chiles said the were Kansas, North Louisiana, Colorado and Wyoming, and most other states also company is also considering greater declined. However, Pennsylvania came in strong rising 47 to 216, and North Dakota, expansion into search and rescue, and is North Louisiana and California saw modest increases. currently bidding on a major UK contract in that segment. North American Rotary Rig Count As Of October 5 Source: Baker Hughes • Edison Chouest Offshore will build eight DP-2, ABS, Jones Act-classed, Week Current Ago Month Ago Year Ago ~5,100 deadweight-ton platform Location 10/5/12 9/28/12 9/7/12 10/7/11 % Chg. YOY supply vessels (PSVs) at its shipyards on spec, addressing a prior announced United States 1837 1,848 1,864 2,012 -8% aggressive newbuild campaign Canada 372 359 345 522 -31% and working to replace Jones US Breakout Information Act tonnage deployed to the Oil 1398 1,410 1,409 1,070 32% GOM two years ago, imminently scheduled for return. The PSVs will be Gas 437 435 452 935 -53% built at four shipyards: North American Miscellaneous 2 3 3 7 -57% Shipbuilding (Larose, LA), La Ship Major Field Variances (Houma, LA), Gulf Ship (Gulfport, MS) and Barnett 40 40 41 66 -39% Tampa Ship (Tampa, FL). Deliveries are slated within the next two years. D-J (Niobrara) 43 43 41 43 0% • Turbomachinery manufacturer Eagle Ford 231 233 234 222 5% Elliott Group and controls producer Fayetteville 14 14 14 34 -59% Tri-Sen Systems entered an alliance Granite Wash 70 75 74 92 -18% to standardize controls for Elliott’s turbomachinery, compressors and steam Haynesville 37 36 38 128 -72% turbines for new projects, retrofits and Marcellus 90 87 90 136 -36% aftermarket applications. Under terms, Mississippian 85 87 84 44 98% Tri-Sen becomes Elliott’s sole provider of Permian 500 505 501 465 9% controls, expanding its market presence and providing offerings including a Utica 25 22 22 14 57% programmable control system with Williston 202 205 205 200 3% diagnostic capabilities, a built-in human Woodford 46 46 47 87 -47% machine interface, and real time and historical trending. Find more on the oilfield sector at To learn more about PLS, call 713-650-1212 Volume 02, No. 12 3ServiceSector Oilfield Service Briefs Oilfield Service News • GreenHunter Energy commenced Tudor issues slew of North American service downgrades operations at its new ~3,000 bpd Tudor, Pickering, Holt & Co. relied on concerns regarding September pricing salt water disposal (SWD) facility in erosion, depressed activity through the end of the year, overcapacity and downward Ritchie Co., WV, serving Appalachian Q3 guidance announcements to conclude North America is likely to be a tricky market Basin drillers and targeting disposal through the short- in the Geneseo formation. The facility Tudor said industry sentiment took a and medium-term. features storage tanks, a contained downturn in September. Tudor said North America was “for offloading platform with six unloading the patient.” Price and utilization erosion has impacted services from pressure pumping trailer bays, a pump house and a redundant high-speed pump system. to land drilling, and Tudor said “E&P apathy” should erode margins further through GreenHunter is nearing its YE 2012 SWD year’s end. There is hope from some quarters that spending will return in January. capacity target of 12,500 bpd, said COO The I-bank believes these trends could dampen Canada’s seasonal Q4 bounce, as well. Jonathan Hoopes. Hoopes noted strong Even if activity increases under a natural gas price rally, US capex (a key driver demand in the region and likely future for service companies) is ~80% oil-focused, so overall impacts may be minimal. And acquisitions. GreenHunter also bought at these levels, Tudor believes a 10+% demand increase is needed to move the needle. eight salt water transport trucks. For pressure pumpers, it appears lower material costs are being competed away. • Parker Drilling will deliver the Well servicing appears to be holding steady, but all companies covered by Tudor in this segment also have fluid handling exposure first of two custom drilling rigs to BP Recovering gas price may not help for onshore Alaska work in Q4. The rigs which has been pressured. sector; US capex ~80% oil-focused. have cold-weather features including Because of these drivers, Tudor complete enclosure to protect workers downgraded Basic Energy, Baker Hughes, Precision Drilling, Patterson- and a walking system. With construction UTI and Superior Energy from Buy to Accumulate. It also downgraded Core and engineering problems and rig-up Laboratories to Sell. TPH kept Halliburton, Helmerich & issues, the delivery comes years Some providers stood out under these Payne and C&J at Buy. late and millions over budget trying conditions and maintained their at ~$200 million apiece. Parker Buy ratings as a result. Tudor said Helmerich & Payne’s land drilling utilization has has also stacked seven of its rigs in remained relatively steady while others have declined 15-20% since mid-April. C&J Kazakhstan due to a soft market, with Energy Services appears to be avoiding the worst of the pressure pumping market hopes to sell or move them. Two rigs dynamics with its small size and nimbleness. And Halliburton is comparatively well- remain under contract in the region. positioned among big players with differentiated customers, significant 24/7 work, • Saipem’s newbuild semisub established infrastructure and logistics and a balanced earnings stream. Scarabeo 8 began listing during drilling of the Salina well in the Barents Sea for Eni. Conditions were stabilized, but Eni Bridges does lion’s share of buying at huge auction is investigating, as is Norway’s safety Odessa’s Bridges Equipment dominated the bidding in what was one of the largest regulator. The regulator previously found oil and gas equipment auctions ever, according to the Houston Chronicle. The two-day listing problems on the rig, which was auction served as a chance for wildcatters and equipment refurbishers, in some cases, just cleared for drilling this summer. The to pay less than the value of the raw steel used in making the resold drilling equipment. rig is operating under a five-year, $840 Despite the fall off in demand for the equipment since cheap natural gas prices Auctioned rigs go for one-sixth of million contract with Eni. original price. • Step Energy acquired private began cutting into activity, Bridges spent British Columbia-based coiled tubing and millions of dollars for used equipment which it plans to rebuild and resell. Rigs that nitrogen pumping company Kamber sold for more than $3 million years ago were in some instances auctioned off Nitrogen Services for an undisclosed for less than $500,000. sum. Kamber’s primary assets are two The equipment being auctioned was originally owned and well- deep capacity conventional coiled tubing maintained by Houston-based Grey Wolf Drilling. Grey Wolf was bought by leading units, two twin-fluid pump units and five land driller Precision Drilling in 2008 who put the rigs up for auction. nitrogen pump units. One attractive feature for the used • TMK IPSCO recently hosted a grand Older rigs still remain top of the line equipment is that while majors are looking in many countries. opening of its new Houston R&D center. to upgrade, the older rigs remain as top of The company is also moving its corporate the line in many countries with the quality and power of the equipment making it headquarters from Illinois to Houston. valuable. After making purchases, buyers are still looking at the cost of shipping the TMK said it would ultimately have over rigs–generally ~$250,000. 500 employees in the Houston area. Kruse Energy & Equipment hosted the auction with 74 drilling rigs up for bid and about 600 people attending. Krause did not say how much money the auction generated. For general inquiries, e-mail [email protected] Access PLS’ archive for previous oilfield services news OilfieldServices 4 October 10, 2012 Oilfield Service News Gas-powered rigs cut fuel Rowan orders 4th drillship as dayrates rise costs over 70% Rowan Companies announced it exercised an option to build a fourth UDW The compelling economics of gas- drillship through Hyundai Heavy Industries for delivery in March 2015. At $620 powered drilling rigs were showcased million, Rowan said the price tag is 6% higher than prior orders but in line with at the recent High current market rates. Like its Horsepower Summit New rig will be 6% more expensive previous UDW orders, the rig in Houston. Ensign Energy Services’ than previous orders due to higher costs. will be a GustoMSC P10,000 engineering manager Brian Murphy said model, 12,000 feet of water capable but equipped initially with a 10,000-ft riser Gas-powered rigs cut fuel costs by and featuring a second BOP. Costs for an additional 2,000 feet of riser, the extra $1.25 million/year. BOP, training and ramp-up are expected to be ~$75 million, so all-in costs will be ~$695 million. The deal with Hyundai also contains an option for a fifth drillship, that at current prices standard diesel exercisable in Q4, for 3Q15 delivery. rigs consume $4,653 of fuel per day. Rowan will pay ~$75 million for extra According to Murphy, by utilizing on-site riser, BOP & other features. President and CEO Matt Ralls cited the company’s recent three-year win captured and processed gas to fuel natural with Repsol for its first drillship, the Rowan Renaissance (slated for late 2013 gas powered models, operators could delivery), as evidence of continuing demand and expansion of the UDW market. pay only $1,322 per day for fuel (a 72% The company’s latest fleet status report shows negotiations under the Renaissance difference), seeing $1.25 million a year LOI have taken a turn in Rowan’s favor, as well. As reported previously by PLS, per rig in fuel savings. Ensign currently the Renaissance was originally expected operates 15 gas-powered drilling rigs. Renaissance negotiations see West to earn in the mid-$620,000’s/day Powering pressure pumping and Africa dayrates at ~$655,000 in 2016. during its first year in West Africa, then other frac equipment was another potentially moving to the US Gulf in the mid-$610,000’s. Most recent negotiations highlighted opportunity. Encana’s David show the first year rate dropping slightly to the high-$610,000’s. However, second Hill said the industry year projections for US Gulf work remained flat in the mid-$610,000’s. Should consumes 1.2 billion the Renaissance stay in the Gulf a third year, its rate will increase to the mid- gallons of diesel per year on pressure $620,000’s. More importantly, projections now contemplate a significant rate pumping alone. And Encana engineer Pat increase should the drillship remain off West Africa, rising to the mid-$640,000’s Osachuk said the company’s bi-fuel frac in year two and mid-$650,000’s in year three. pumps, using both diesel and natural gas, Oilfield gas conversion larger than Drillship Dayrates Moving Higher with Strong Demand ferries, trucking & trains combined. are cutting diesel use by as much as 55%, DayrateFixtures* Rowan with no performance losses. Renaissance for 10,000’+ Drillships Contract EQT’s David Ross said that between drilling and fracking, the oilfield 700000 presented a larger opportunity than 600000 other applications such as ferries, long- haul trucks and locomotives combined. 500000 Baker Hughes engineer Pierce Dehring 400000 puts combined industry use of diesel for drilling and fracking at over 2.8 billion 300000 gallons/year (presumably 1.6+ billion 200000 gallons for drilling alone, after dropping out Encana’s frac projection). 100000 Overall, Caterpillar predicts a 0 general shift in large engines toward gas, because they burn the most fuel. The company’s director of gas engine strategy Joel Feucht said the company is going 1 Year or Less >1 and <3 Years 3 Years or More “all in on gas,” telling attendees “if you’re * based on ‘new mutual’ contracts waiting for someone to decide, let me just tell you that we decided. The product’s Source: Rowan September 2012 Presentation via PLS docFinder www.plsx.com/finder going to come.” Find more on the oilfield sector at To learn more about PLS, call 713-650-1212 Volume 02, No. 12 5 ServiceSector Oilfield Service News Basic reports stable demand but growing competition Nabors rig count declining Basic Energy Services’ chief Ken Huseman said demand for its services in versus national average August was stable, but increased competition was pressuring revenues and wages. The company remains committed to retaining market position, which monthly data reflects. Recent RigData records showed Huseman noted that despite an August improvement in crude prices, robust activity Nabors with 179 working rigs, down levels seen earlier in 2012 have not resumed. Combined with lackadaisical gas prices, from a Q2 average 218. The company’s Basic is predicting gradual reduction in count peaked in March and has Basic sees activity and pricing activity and pricing into next year. dropped ~20% since then vs. a dipping gradually through year’s end. For August, Basic reported 3,543 5% decline in the overall US service rig hours per working day, up slightly from July’s 3,518 rig hours/day. land rigs. Tudor, Pickering, Holt & Co. Utilization also rose 100 basis points to 75%. YOY, rig hours/day were up 3.4%, due believes this is a function of term contract largely to a greater number of rigs worked during the period. Fluid service trucks rose declines, noting Nabors Q3 term contract by six vs. July to 933, while truck hours per working day dropped marginally to 8,339. count is 31% below its Q1 average, as well Drilling rig utilization rose from 89% to 91% sequentially. Operating count down 20% vs. March peak; national count down 5%. Workovers: count flat YOY narrowing 3rd straight month as customer specific issues. Customers Cameron International August data showed a ten-rig sequential drop in the decreasing business with Nabors, active US workover rig count. YOY, the count is up 10, but that lead has declined every include Shell, BHP Billiton, Murphy month since May when the count was up 6.0% YOY. Primary decliners were the Texas and Occidental, not all of which have Gulf , Eastern US and West Coast, with modest drops in two other regions. Declines were mitigated by a four-rig, 3% made overall cuts. The last time the US was lower on a On the upside, over 90 of Nabors rigs sequential ArkLaTex increase YOY basis was March 2010. are pad drilling capable‒ahead of peers‒ and more modest Mid-Con and which is becoming more important in hot Rockies upticks. Meanwhile, Canada bounced back from one-month multi- plays like the Bakken and Eagle Ford. year lows, spiking to 679, but is still down 7% YOY. In pressure pumping, Tudor sees a Year-over-year, the Texas Gulf is up 21%, although this trend has been narrowing mixed bag. Nabors has improved costs significantly. West Texas is up 12%, but has also been narrowing slightly, in recent and logistics controls, maintaining months. Other than marginal YOY gains in the West Coast/Alaska and Rockies, all attractive profits on term contracts. But other regions are down. Most declines are modest, except for the Mid-Con with a 33% spot dynamics cannot be overlooked, (117-rig) YOY decline, holding steady the past few months. Capacity-wise, ArkLaTex and Nabors will begin to roll off tightened by 500 basis points into the mid-60’s and the Mid-Con tightened slightly, but contracts beginning in April 2013. most other regions were down. Tudor predicts EBIT margin contraction from 12% to ~8%. North American Workover Rig Status by Region Source: Cameron The company’s other, smaller August-12 July-12 12 months ago segments appear to have stable to Active % Change encouraging outlook, but contribute Active % of Active % Active ~1/3 of profits. Area Rigs total Active rigs utilization YOY Texas Gulf Coast 222 70% 228 184 67% 21% Arklatex 138 64% 134 146 62% -5% Eastern U.S.A. 90 63% 94 97 71% -7% South Louisiana 28 37% 31 30 45% -7% Mid-Continent 239 55% 237 356 65% -33% West Texas / Permian 714 72% 715 636 68% 12% Clients can access an archive of news Rocky 348 70% 346 337 73% 3% and reports, plus the PLS multiple listing Mountain database at any time. West Coast / Alaska 351 72% 355 334 67% 5% Subscribe today for research, insight U.S. Total 2130 68% 2140 2120 67% 0% and transaction opportunities. Canada Total 679 76% 636 734 78% -7% To subscribe today, call U.S. & Canada Total 2809 69% 2793 2854 70% -2%

For general inquiries, e-mail [email protected] Access PLS’ archive for previous oilfield services news OilfieldServices 6 October 10, 2012 Oilfield Service News Service Contract Briefs Water issues draw investment Continued From Pg 1 • Emerson engineering group won Under current water consumption rates, scarcity could become a problem. a $21 million contract from BP to supply In fact, recent weather trends are already creating scarcity concerns. This past July control and safety equipment for its Quad 204 FPSO vessel. The new vessel was the hottest on record in US history, and the Department of Agriculture has declared will replace the Schiehallion many federal drought disaster areas. In Kansas, for example, the water table FPSO at the Schiehallion and was down an average 61 centimeters YOY. The state voided all permits Loyal fields ~108 miles from the to pump surface water issued since 1984 and operators scrambled to lock up supply. Shetland Islands. The FPSO can handle Many bought land to build holding ponds or contracted with private land owners. 130,000 bopd and ~77.7 MMcfd And obtaining access to water has been only part of the battle. With occasional summer of gas. Emerson’s proprietary temperatures of over 110°F, black polyethylene holding tank liners reportedly reflected digital plant architecture and heat and accelerated evaporation, sometimes to the tune of 1,000 bpd or more of water. predictive maintenance software is Select Energy Services has noted included in the deal. Drought conditions can exacerbate rising demand for third party water- water concerns for all constituents. • NEOS GeoSolutions received sourcing services in both Kansas and commitment from a global independent Oklahoma, with customers ranging from wildcatters to integrated super-majors. Select E&P company for its first-ever Middle handles all relevant permitting in addition to sourcing. East project — a multi-measurement, Fortunately in Kansas, the average frac job uses only ~65,000 bbl of water, subsurface imaging study over 2,700 according to the state Department of Agriculture. With a projected ~200 frac jobs this sq mi of Jordan — eight months after year in Kansas, usage equates roughly to 0.05% of the Kansas' annual water opening an Abu Dhabi usage – not exactly crisis levels. branch. In the project’s But BHP Billiton’s Michael Yeager said concerns go beyond cost alone, first phase, NEOS will noting environmental and landowner incentives to improve current processes, as well. work with existing geophysical data, Other execs echoed these comments, with the takeaway that cutting costs through providing its client with understanding either reduction in water use or increased recycling would save substantial capex and of basin-scale geologic features, such as amounted to a significant opportunity. target sediment packages’ depth and Schlumberger’s channel fracturing areal extent, folds, faults and intrusives’ As for techniques that replace water with cuts water use 50% or more. propane, CO2 or nitrogen, Southwestern's structural impacts and the sediment Mueller said costs were high and the methods created less than ideal fractures. He column’s thickness. went so far as to say an ideal solution that would meet both economic and technical • Noble Corporation announced requirements would be a “holy grail” for the industry. its jackup Lloyd Noble took a two-year contract with Perenco off Cameroon/ Send me an angel (investor)— Congo to begin at $131,000/ The industry itself is working hard to improve conditions. BHP’s Yeager said the day and eventually industry is focused on water issues daily and is confident the situation will improve. transition to $121,000/day. Additionally, Schlumberger’s Ayala provided evidence, with the company’s its Gus Andros jackup won a deal with “channel fracturing” technique cutting water use by over half, as Maersk running from late October well as cutting proppant and other raw material usage. But Ayala noted most companies to mid-September 2013 off the UAE have yet to adopt the process. at $125,000 day. Tudor, Pickering, Holt & Co.’s Bobby Tudor pointed out however, “When the • TDW Offshore Services secured a industry faces a big problem, typically there is a profit opportunity for somebody three-year, extended frame agreement somewhere.” Tudor went on to describe a recent “flood of capital” to address the issue. with Statoil to provide pipeline Tudor itself is part of that flood. Its PE armTPH Partners II LP just announced an pressure isolation services and undisclosed investment in Midland-based water solutions provider Big Horn Energy equipment for Statoil’s North Services. Big Horn provides water transfer and other oilfield water solutions in the Sea installations. Terms include two, two-year options. Per the agreement, Permian. A Big Horn VP told the Houston Business Journal that TPH’s investment Tidewater will continue servicing 8- to would let the company nearly double its current 50-member team, help it expand 48-inch pipes using SmartPlug, a remote- Permian operations and move into other shale plays. If comments from the industry operated pipeline pressure are any indication, we will likely see more of these types of investments, and soon. isolation tool. Tidewater has performed over thirty pipeline Increase deal flow & business opportunities. isolations for Statoil over the past decade, supporting Norway’s submarine Subscribe to PLS! For available options, e-mail gas network and its gas transport system to Europe. Find more on the oilfield sector at To learn more about PLS, call 713-650-1212 Volume 02, No. 12 7 ServiceSector Service Contracts Oilfield Service News Noble signs $639 million GE wins record subsea system contract with Petrobras deal for Mediterranean rig GE Oil & Gas won a $1.1 billion subsea wellhead system contract with Petrobras Atwood Oceanics announced a Noble covering 380 systems, the largest subsea wellhead system contract in history. The Energy subsidiary booked its first newbuild company’s size appears to have influenced the win, and GE Oil & Gas’ Latin America drillship, the Advantage, for a three-year division president and CEO Joao Geraldo Ferreira said the company has been investing global program commencing in the Eastern toward preparation for market growth and contracts of this size for the past Mediterranean at $584,000/day. The win is few years. Ferreira said the division wants to grow alongside Brazil. material for Atwood, adding $639 million Installation tools will also be provided under the deal which will in new backlog to a previous $2.2 billion, incorporate over 75% local based. Equipment will be provided by GE’s Jandira, Sao for a 28% increase to ~$2.9 billion. Paulo plant. Latin America subsea systems president Fernando Martins said the facility The ship is under construction has been crucial in the company’s efforts GE has installed ~1,200 wellhead to “prioritize” Brazil-based production. by DSME and due for delivery systems; 180 off Brazil; current deal for 380. September 2013. The companies also have some history, with GE taking a then-record (in terms of number of wellheads) $250 million Atwood's newbuild drillship, subsea deal with Petrobras in 2009. Advantage, wins three-year contract. The oil and gas sector also won a compressor train supply deal with Petronas for its The deal appears to have ramped floating LNG facility in progress off Sarawak, Malaysia. It will supply four gas turbine Atwood’s ambitions, with the company generators, two gas turbine-driven compressors and two electricity-driven centrifugal exercising an option with DSME for compressors. Terms were not disclosed. The deal “takes advantage” of a 2009 global a third UDW at a cost of $635 million frame agreement between the companies. Delivery is expected by August 2013. for 1Q15 delivery. The vessel, the Meanwhile, GE’s power and water GE will use over 75% local content. Atwood Admiral, will be identical division reported $1.2 billion in contracts to the Advantage and the previously with power producers in the US, Japan and Saudi Arabia for 19 new heavy-duty gas ordered Achiever, featuring two seven- turbines. GE said the technology is more fuel efficient and allows for faster ramping ram BOPs, three 100-ton knuckle boom up and down. US purchasers include Xcel Energy and Hess. Japan’s Chubu is cranes, a 165-ton “tree-running” knuckle buying six turbines, while the Saudi Electric is buying eight. The turbines will boom crane, DP-3 dynamic positioning, be manufactured in Greenville, South GE also won $1.2 billion in gas Carolina with deliveries from 2013-2016. accommodations for ~200, water depth turbine orders. operability of 12,000 feet and total Power & Water also won a water drilling capacity to 40,000 feet. treatment deal with Athabasca Oil to design and provide an integrated evaporator system for its 12,000 bopd Hangingstone oil sand operations in Alberta. GE will ‘Dayrate suggests Israel could be provide two evaporator units with 3Q13 delivery and operations slated for 2014. game-changing.’—Oppenheimer The system will recycle 97% of produced water into boiler feedwater to support Atwood noted it has increased the the SAGD process. accordion under its senior credit facility by $200 million to $550 million, and plans to GE Subsea Market Projections fully fund construction with a combination of the facility, ready cash and cash flow. The company also obtained another option for a fourth UDW with DSME at similar pricing and 4Q15 delivery. It must be exercised, if at all, by June 2013. Atwood said it has not yet decided whether it will do so. Advertise withPLS Deliver your message with advanced media solutions from PLS. To advertise today, call Source: GE September 27 Presentation via PLS docFinder www.plsx.com/finder

For general inquiries, e-mail [email protected] Access PLS’ archive for previous oilfield services news OilfieldServices 8 October 10, 2012 Service Contracts Bechtel wins power plant, Transocean grows backlog ~43% Continued From Pg 1 refinery deals In broad terms, dayrates break down to ~$520,000/day, so given recent trends it Bechtel recently won a power appears Shell is getting a volume pricing break. plant EPC contract and a refinery Transocean also provided details regarding its previously announced senior note coking complex process design deal. issuances to fund construction of its newbuilds. Transocean is offering $1.5 billion In partnership with Siemens, Bechtel in senior notes via public offering, will provide a 758 MW natural gas New US Gulf UDW awards nearing powered, combined-cycle plant for half yielding 3.8% and due 2022, the $600,000/day for Transocean. other half yielding 2.5% and due 2017. Panda Sherman Power in Sherman, Barclays, Citigroup, JP Morgan, Wells Fargo, Merrill Lynch and DNB Markets Texas. Bechtel will perform EPC, while are underwriting. Siemens will provide the power island Backlog grew an additional $1.7 billion under Transocean’s most recent package including gas and steam turbines fleet status report, ~$1.0 billion of which stemmed from UDW deals. The and waste heat recovery boilers. biggest take was a three-year, $652 million contract with an undisclosed customer Plant is second 758 MW gas for newbuild UDW drillship Deepwater Invictus, beginning 2Q14. Invictus will earn combined-cycle order for Panda. $595,000/day in the US Gulf. Another large ($348 million) contract was a 20-month extension for UDW hi-spec floater GSF Development Driller I with BHP Billiton, Bechtel said Panda Sherman will be also in the Gulf. At $580,000/day, BHP gave Transocean an 11% premium over the one of the most efficient gas-fueled power rig’s previous rate. plants in America, providing power to In midwater, floater GSF Rig 135 won a two-year, $266 million deal with Total ~750,000 homes. The facility is expected offshore Congo at $365,000/day (a 7% increase over prior rate). And the Transocean to create 700-800 jobs, with construction Prospect took a $146 million, four-well deal with ConocoPhillips in the UK North Sea, beginning immediately and operations with contract average rates of $390,000/ slated for 2014. 1 Bond issuances should cover /2 of day, ~55% above the rig’s prior contract Meanwhile, Bechtel Hydrocarbon construction capex for new drillships. rate of $252,000. Technology Solutions won a process A small portion of new backlog ($99 million) stems from and licensing contract with Pemex for a two-year contract extension for standard jackup GSF Parameswara with Total off its planned $10 billion Tula refinery in Indonesia at $136,000/day, which will presumably fall out of Transocean’s log when it Hidalgo, Mexico. Bechtel will design six completes divestment of its standard jackup fleet toShelf Drilling. drums and three heaters for the facility’s Using Transocean’s most recently announced backlog of $22.9 billion on July 18, delayed coking unit (DCU) complex, adding the Shell order plus a combined $2.3 billion in additional new backlog over the which will feature Bechtel’s proprietary past two months and dropping out any backlog depletion, new deals appear to have process for upgrading heavy oil to light grown backlog 43% to $32.8 billion. hydrocarbons. Bechtel VP Scott Johnson Transocean also sold deepwater floater Jim Cunningham and drillship Discoverer said the unit would be one of the largest 534 for undisclosed sums to undisclosed buyers. The rigs were previously stacked and DCUs on earth, featuring two trains and held for sale. capacity of 166,000 bopd. Terms were Injunction would have forced not disclosed for either deal. Brazil injunction overturned— Transocean to cease all work in Brazil. Down in Brazil, Transocean dodged www.plsx.com a major setback as the country’s second highest court overturned an injunction against the company, which ordered it to cease its Brazilian operations within one month. The judge was persuaded by Brazilian petroleum regulator ANP’s argument that execution of the injunction would have cost Petrobras over $3.8 billion in royalties over the next two years due to necessary ceasing of Transocean’s current operations on behalf of the national oil major. The floater market is particularly tight, at 97% global utilization. Transocean has 10 rigs under contract in Brazil of which eight are booked with Petrobras, so finding replacements Transocean GO in a reasonable time frame would have been next to impossible. PLS provides clients with research, Transocean is also rumored to be an early frontrunner for a tender by insight and transaction opportunities... Husky Energy for a harsh-environment semisub to operate in the Canadian Atlantic under a five-year deal, according to Upstream. Husky is reportedly seeking a rig under 24 | 7 | 365 ten years of age or a newbuild for the project, and the award could come as early as this Source information at www.plsx.com month. Noble and Ocean Rig are also reportedly bidders. Or call 713-650-1212.

Find more on the oilfield sector at To learn more about PLS, call 713-650-1212 Volume 02, No. 12 9ServiceSector Service Contracts Oil States wins Kearl oil sands accommodation extension Tyco Flow Control takes Shell Oil States International announced Imperial Oil awarded its Canadian global frame agreement accommodations subsidiary PTI Group a 2.5-year extension of an accommodation Tyco International’s Flow Control contract keyed to expansion of the company’s Kearl oil sands development. PTI’s subsidiary has been awarded a five-year, Wapasu Creek Lodge and Henday Lodge will be used under the extension. The extension term begins in April and runs to 2015. pressure relief valve and after-market service Kearl accounts for ~40% of 2013 global frame agreement projected oil sands room count.—TPH Oil States work at Kearl will now go with Shell. The deal covers beyond the expansion phase, as well, with the company’s Crosby and Anderson PTI winning a ten-year deal to support future operations personnel. That contract will Greenwood direct acting and pilot-operated incorporate part of the Wapasu Creek Lodge to accommodate Imperial’s permanent staff, beginning with 675 rooms and expanding over the duration of the contract which Tyco Flow raising $900MM for Pentair runs through August 2022. Prices were not disclosed for either deal. note redemption & parent payback. Oil States president and CEO Cindy Taylor called taking the 2.5-year construction valve lines, line block relief valves and extension one of the company’s top priorities. Taylor also said long-term contracts, support services. Tyco Flow Control will such as the ten-year deal, allow the company to provide better service. service Shell through its 300+ locations Tudor, Pickering, Holt & Co. called the construction extension “a big deal,” saying that globally. This is Tyco’s second framework although the win was expected, Oil States’ Kearl work accounts for ~40% of Tudor’s projected agreement of 2012, and the company won a oil sands room count for the company. The longer term deal was also received positively. similar frame agreement with Shell covering Offshore activity rises slightly led by Gulf of Mexico butterfly valves last year. Active offshore rigs increased globally by three the past month, hitting 563 Tyco Flow‒which is in the midst of according to Rigzone. Regional gainers were led by the US Gulf, which added two a $4.9 billion spinoff and merger with actives, and the Persian Gulf, North Sea and Mexico which each added an active. Pentair‒is also raising $900 million in Southeast Asia and West Africa lost a rig each. YOY, Brazil has seen the biggest senior notes to support a $500 million percentage gains at 20%. The US Gulf is up 19%, while Southeast Asia and the Persian note redemption by Pentair and deal- Gulf are both up over 10%. related reimbursements to parent Tyco. Global utilization is flat sequentially, Gulf of Mexico now at 75% utilization with 64 rigs running. tightening only 30 basis points to 81.3%. For Sale Brazil remains very tight at 92.3%, but is looser than last month. The US Gulf saw the

biggest tightening as no new rigs entered the region despite activations, pushing utilization up 240 bps to 75.3%. Southeast Asia also tightened 140 bps, the North Sea and Persian Gulf were essentially flat despite increased activity; and West Africa loosened 170 bps. Call PLS Now at 713-650-1212 Offshore Rig Utilization As Of 10/05/12 Source: Rigzone Current 1 Month Ago 1 Year Ago Avail Act Util Avail Act Util Avail Act Util Region Rigs Rigs % Rigs Rigs % Rigs Rigs % COLORADO PACKAGE FOR SALE W. Africa 60 51 85.0% 60 52 86.7% 61 49 80.3% ~31 PDP Wells; ~140 PUDS Far East 27 18 66.7% 27 18 66.7% 27 20 74.1% DENVER JULESBERG BASIN Weld Co. - Niobrara Fairway S. Asia 33 30 90.9% 33 30 90.9% 33 30 90.9% Niobrara, Codell, DJ Sands SE Asia 97 77 79.4% 100 78 78.0% 98 69 70.4% Vertical & Directional Wells Australia 12 11 91.7% 12 11 91.7% 10 8 80.0% Area Ripe For Horizontal Development 100% Operated WI; 80% NRI North Sea 86 77 89.5% 85 76 89.4% 80 73 91.3% Net Production ~450 BOED Medit. 22 17 77.3% 23 19 82.6% 23 19 82.6% Producing from Niobrara, DJ & Codell Persian Gulf 101 79 78.2% 100 78 78.0% 94 71 75.5% D&C Costs: $575,0000 PV10 PDP:$28MM. Total Proved $96MM Red Sea 9 7 77.8% 9 7 77.8% 10 9 90.0% PP 8868DV Mexico 40 31 77.5% 40 30 75.0% 35 30 85.7% U.S. GoM 85 64 75.3% 85 62 72.9% 76 54 71.1% For more details on this package, please e-mail Brian Green at Brazil 78 72 92.3% 77 72 93.5% 75 60 80.0% [email protected] Venezuela 10 8 80.0% 10 7 70.0% 10 9 90.0% This package’s virtual data room can be Other S. 11 7 63.6% 11 8 72.7% 9 6 66.7% access for additional info at www.plsx.com Am. & Carib.

For general inquiries, e-mail [email protected] Access PLS’ archive for previous oilfield services news OilfieldServices 10 October 10, 2012 Service A&D Service A&D Briefs CGGVeritas buying Fugro’s Geoscience division Continued From Pg 1 • HII Technologies has acquired water, ocean bottom cable and permanent reservoir monitoring services, while frac water handling company AES for Fugro will contribute its ocean bottom node business and $290 million. First year an undisclosed sum. AES specializes in JV revenues are expected to be ~$516 million. mobile, high volume piping solutions. AES’ primary customers have operations Other deals include a CGG sales arrangement to market Fugro’s multi-client library in Texas and Oklahoma. HII projects and a global technical and 2,500 Fugro employees will join CGG; significant organic growth, with commercial mutual preferred 230 CGG employees will join Seabed JV. expectations that AES will generate supplier arrangement. $4.0 million in revenue over the next 12 CGG CEO Jean-Georges Malcor said the deal “perfectly fits our strategy” and that months. AES president Brent Mulliniks the Seabed JV would create a market leader in a “very promising and dynamic market said recent improvements in horizontal segment.” He also noted the market for high-end vessel use is undergoing recovery and drilling will require significantly CGG said it would benefit from the fleet additions via acquisition as opposed to newbuilds. larger amounts of water and related Other benefits for CGG include a “major step forward” in field development and reservoir equipment, and with HII’s assistance the capabilities, greater exposure to the less cyclical and capital intensive geosciences company plans to expand its offering to consulting space, and benefits from scale and increased fleet productivity. include flowback water recycling. Meanwhile, Fugro noted the deal would allow it to leave “the capital intensive and • Pentair completed its previously volatile” seismic space. Fugro chairman announced merger with Tyco’s Flow Debt-to-equity is expected to shift Arnold Steenbakker said a review of the Control business, creating Pentair from 55% to 49% by year’s end. company’s options and No. 4 market Ltd. The enterprise is a global leader position led it to conclude it would not be able to achieve the degree of market in water and fluid solutions, valves, leadership it has in other sectors. controls, equipment protection and Fugro’s divestment generated $1.0 billion in revenues and $161 million EBITDAs heat management. Pentair chief Randall in 2011, which would have accounted for 25% of combined pro forma revenue Hogan said the new company’s scale and 16% of EBITDAs. 1H12 data shows a shift to 23% of pro forma revenue, but would allow it to better capitalize on 20% of EBITDAs. growth opportunities. CGG plans to finance the buy with 1/3 equity and 2/3 debt and Seabed proceeds. • Secunda Canada sold a 6,600 The Fugro assets are expected to be accretive for CGG from 2013 and cash flow. hp PSV, the Acadian Sea, to Fletcher Closure is expected before year-end 2012. Credit Suisse and BofA Merrill Shipping for an undisclosed price. The Lynch advised CGG. vessel is on term contract with Apache in the North Sea to year-end 2012, and Apache has a one-year extension Fugro Geoscience Q3 and Q4 Backlog at end of Q2 (in €MM) option. The Acadian Sea, which finished 2012 2011 2010 2009 2008 a seven-day drydocking including engine Geotechnical overhaul and repainting, has been renamed the FS Taurus. The sale increases Onshore Geotechnical 179 155 151 130 133 Fletcher’s PSV fleet size to three vessels. • Step Energy acquired private British Offshore Geotechnical 154 168 154 102 110 Columbia-based CT and nitrogen pumping Subtotal Geotechnical 333 323 305 232 243 company Kamber Nitrogen Services for an undisclosed sum. Kamber’s primary Survey assets are two deep capacity conventional Offshore Survey 318 261 264 246 248 CT units, two twin-fluid Subsea Service 245 192 139 130 129 pump units, five nitrogen Geospatial Services 50 49 65 57 49 pump units and related Subtotal Survey 613 502 468 433 426 support equipment. Step CEO Regan Geoscience Davis called Kamber an early entrant with Seismic Services 258 179 183 195 214 a highly-regarded northeast BC business. Geophysical & Step, also private, focuses on specialized CT Geological Services 85 80 82 71 86 units, pumping and support equipment for Subtotal Geoscience 343 259 265 266 300 deep horizontal activity in Western Canada. Total 1,289 1,084 1,038 931 969 www.plsx.com Applicable $US Rate EUR 0.80 EUR 0.69 EUR 0.81 EUR 0.71 EUR 0.63 Source: Fugro 1H12 report Step Energy

Find more on the oilfield sector at To learn more about PLS, call 713-650-1212 Volume 02, No. 12 11 ServiceSector Service A&D Lufkin takeover talks resume on multi-year valuation low Wood Group makes Bakken With share prices nearing one-year lows in August, buzz has returned concerning push with $135 million buy Lufkin Industries as a takeover target. After trouble meeting estimates and lower In a move increasing its Bakken guidance, Lufkin hit a 10.8x TTM EBITDA multiple, the company’s lowest valuation exposure, UK-based Wood Group is since December 2009 according to Bloomberg. acquiring Mitchell’s Oil Field Services The company is a leader in the attractive and growing artificial lift segment, poised to move higher on oil-shale for an initial payment Lufkin's 10.8x TTM EBITDA is lowest tailwinds. Because of significantly faster of $135 million plus since December 2009. earn-out possibilities decline rates for shale oil wells compared to through 2015 worth as much as $47.5 conventional, opportunities for artificial lift should develop all the more quickly. Lufkin’s million. The buy will also complement specialization in pumpjacks makes it a “very, very attractive” target, according to Global Wood’s operations and EPC division Hunter’s Brian Uhlmer, who believes that market is poised to expand dramatically. Lufkin already saw record oilfield orders in 1Q12 and again in Q2. Some analysts are Additional earn-out payments could calling for profits to double next year vs. 2011 levels, with revenues growing over 50%. add up to $47.5 million to the deal. Lufkin is also expanding overseas and will bring a Romanian factory online in Wood Group PSN’s operations and Q4. The company booked over $75 million in orders from Argentina in a recent quarter, and non-US sales were 37% of maintenance, construction supervision EBITDA is 14% above industry average and survey offerings in the region. total 2011 sales. for companies over $1.0B market cap. Montana-based Mitchell’s provides Global Hunter suggests the company maintenance, installation and fab in might merit a $75/share valuation in a takeover bid, a ~40% premium to recent share prices. the Bakken region, and is the leading Citigroup and Gabelli & Co. have suggested Big 4 players Schlumberger, Halliburton Williston provider of roustabout, crane, and Baker Hughes as prospective buyers. Citigroup’s Robin Shoemaker told Bloomberg trucking and related services. that big players have been seeking to expand their artificial lift exposure and, with a Mitchell’s also offers general market cap under $2.0 billion, Lufkin falls well within their acquisition ranges. services covering production facilities, Gabelli’s Andrea Sharkey, who puts a $65-70/share target on Lufkin, said gas compression, tank batteries and Halliburton “makes the most sense,” since it does not currently offer artificial gathering lines, and offers pumping lift pumps. SunTrust’s Neal Dingmann said Lufkin’s international exposure could draw and pipe construction, consulting a bid from Aker Solutions. Eric Mintz, a fund manager with Lufkin’s largest shareholder and equipment leasing. It is owned Eagle Asset Management, told Bloomberg “There is no shortage of suitors.” by PE firm Stone Arch Capital and Lufkin has not commented on the rumors. JP Morgan recently initiated coverage management. Pro forma, Wood will at Neutral, saying Lufkin is in a strong market, but pricing upside is limited and JPM have nine Bakken locations with ~650 is concerned execution risk may continue. personnel. Wood said Mitchell’s would be immediately accretive to earnings. Lufkin History Of Revenue And Margin Growth Mitchell’s 2011 pre-tax profits were $13 million and annualized adjusted pro Outstanding Financial Performance forma EBITA was $19 million. Closure Long History of Revenue and Margin Growth is expected in Q4. The move follows Wood’s purchase Revenue ($ millions) Gross Margin (%) $1,500 40% of Duval Lease Service in the Eagle

Ford. Wood made another recent move $1,250

30%

Mitchell’s Oil Field Services has 8 $1,000 locations in Montana and N. Dakota.

$750 20% in Texas, securing a $24 million, fast- track EPC deal with Petra Nova for a $500 75 MW gas turbine peaking facility 10% outside Houston. Aside from a GE $250 gas turbine, all remaining equipment $0 0% will be furnished by Wood. It will 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E(1) also inspect and maintain the turbine. Revenue Gross Margin Work has commenced for summer 1) Lufkin Industries press release issued 7/30/2012. 2013 completion. Source: Lufkin Industries October 2 Presentation via PLS docFinder www.plsx.com/finder© 2012 Lufkin Industries, Inc.

For general inquiries, e-mail [email protected] Access PLS’ archive for previous oilfield services news OilfieldServices 12 October 10, 2012 Service A&D Oilfield waste treater R360 Sidewinder taking Union Drilling private in $243 million deal picked for ~$1.3 billion cash Privately-held Sidewinder Drilling is acquiring Union Drilling for $242 million Solid waste services player Waste in cash and assumed debt. Sidewinder is making the move to increase its overall scale Connections is acquiring R360 of operations and customer base and broaden exposure to North American shale E&P. Environmental Solutions for ~$1.3 Union’s Christopher Strong said the deal would help it continue to revitalize its fleet billion cash. Houston- and otherwise reinvest in the company. based R360 provides non- Union’s 53 rigs will mean a significant hazardous oilfield waste Union specializes in horizontal upsizing for Sidewinder. drilling and owns 53 onshore drilling rigs, treatment, recovery and disposal services with two more under construction. It has operations in West Virginia, Pennsylvania, in several plays including the Permian, Ohio, Arkansas, Kansas, Oklahoma, New Mexico and Texas. The company says it Bakken and Eagle Ford. Services focuses on plays with high growth potential, adequate takeaway capacity and low provided include landfill-waste disposal F&D costs to maximize utilization and ROC. (largely oil and water-based mud and Sidewinder is also an unconventional US driller, specializing in rigs that feature cuttings); land treatment processes faster rig-up/rig-down time and modern, efficient equipment. Buyer Waste Connections said E&P At $6.50/share, the $139 million offer from Sidewinder subsidiary Fastball waste handling market is booming. Acquisition came at just a 6.0% premium to the prior day’s closing price. However, Union shares have been on the upswing and the offer represents a 27% premium to including bioremediation; washouts for 30-day average price and a 40% premium to the 60-day average. Union also reported hauling trucks, tanks and containers; oil $104 million in long-term debt as of Q2. reclamation from crude and saltwater 1/3 of Union’s rigs are in the Marcellus, storage tanks; cutting and waste another third are in the Permian. In a way the buy is a continuation of private equity’s move into the sector, as transportation; and closed loop equipment Sidewinder is a portfolio company of PE firm Avista Capital Partners, with over and waste collection. It has 26 facilities $4.0 billion AUM. in six states, and is actively permitting Sidewinder is funding the deal with debt. Over 2/3 of Union shares must be several new sites to expand operations. tendered for closure, which is expected in Q4. Shareholders owning over half of Waste Connections chairman and outstanding shares have voiced support. RBC Capital advised Union Drilling on the CEO Ronald Mittelstaedt said the deal deal; Avista advised Sidewinder. was a natural extension of company's current E&P disposal work. And unlike Honeywell grows gas processing with $500+ million buy its municipal solid waste business, In a move intended to expand the company’s gas processing capabilities, which has been negatively impacted Honeywell’s UOP subsidiary is paying $525 million for a 70% stake in Thomas by the economy, E&P waste is seeing Russell Co., a privately held provider of technology and equipment used in gas “impressive organic growth.” R360 processing and treating. chief Troy Thacker called the deal a Thomas Russell specializes in the design, engineering, “terrific opportunity.” fabrication and start-up of skid-mounted modular packaged plant systems for the recovery Municipal solid waste has been hurt and upgrading of NGLs. It offers cryogenic by the economic downturn. Honeywell paying $525 million for liquids recovery plants with capacities 70% of Thomas Russell Company. ranging from 40-200 MMcfd, as well as R360 has annualized revenues of standard amine gas treating systems. Custom plants include gas liquid recovery units, ~$300 million. Mittelstaedt predicts natural gas conditioning and NGL upgrading (including fractionation) systems. Thomas R360 will add over 400 basis points to Russell operates out of a 30,000 sq ft fabrication facility at the Tulsa Port of Catoosa. consolidated EBITDA margins and should UOP’s gas processing and hydrogen business has supplied technology to more than be accretive to free cash flow margins, as 3,600 gas processing units worldwide, well. Closure is expected in Q4. Also partnering with Petronas to Waste Connections serves over two including FPSOs. improve offshore LNG processing. The deal allows Honeywell to buy million residential, commercial and the rest of the Tulsa-based company at a price tied to operating income performance. industrial customers in 30 states, and Closure is expected by year's end, and the deal is expected to be accretive to earnings provides intermodal cargo and solid in 2013. Thomas Russell anticipates 2012 sales of ~$425 million. waste services in the Pacific Northwest. Honeywell also announced a collaboration between UOP and Petronas on offshore

LNG gas processing technology. The focus will be on advanced CO2 absorption $4.0B in assets sold since 1988. to improve reliability of pre-liquefaction contaminant removal, as well as reducing Hire PLS to execute your next negotiated sale, 713-650-1212 weight and footprint of that equipment onboard. The companies will also design and build a land-based demonstration pilot. Find more on the oilfield sector at To learn more about PLS, call 713-650-1212 Volume 02, No. 12 13 ServiceSector Service A&D Technology KKR takes majority stake in Schlumberger pursuing ‘massive prize’ of subsea optimization Acteon Group Schlumberger recently told attendees of a Barclays energy conference it is UK-based offshore services company pursuing the “massive prize” of optimization of subsea production. Schlumberger Acteon Group announced PE juggernaut projects over 200 new deepwater subsea fields will come online over the next four KKR has acquired a majority stake in years, with over 11,000 subsea wells in operation globally by 2020. the company from First Reserve for an CEO Paal Kibsgaard noted current technology limits are undisclosed sum. capping recovery rates below half their Schlumberger predicts over 11,000 potential, with wax, scale, insufficient Smaller Houston- operational subsea wells by 2020. based PE firm White Deer Energy also gas- and water-handling and insufficient took a minority position in conjunction pressure support all contributing factors. The company said bringing production with KKR’s buy. Management is in line with onshore through proper design and optimization of the entire subsea retaining a significant share of equity, production system, to include subsea processing, could grow global oil reserves 10%. and will continue to run the company. Schlumberger expects to offer such a system within the next two years. The companies said the investment Tudor, Pickering, Holt & Co. wondered why Schlumberger would focus so much would support Acteon’s ambitions and of a presentation on a market that accounts for such a small part of its revenue mix, its goal of defining this relatively new noting some suggest the company may have M&A intentions. Ultimately, it concluded market segment. Schlumberger was sincerely highlighting an opportunity and seeking to be active in recovery improvements. Current subsea exposure includes Framo pumps, ESPs and Acteon generates substantial software modeling flow analysis. revenues from deepwater work. Also in the offshore vein, Schlumberger’s M-I Swaco subsidiary is opening a Acteon provides mooring, supply base including 12 drilling fluid and production chemical tanks to support With proper subsea optimization, foundations, risers, conductors, flowlines global oil reserves could grow 10%. and marine electronics products and Barents Sea activity. services, as well as engineering and Meanwhile, Schlumberger is upping the ante on its China efforts, signing a $12 project management. The company million integrated project management JV with Anton Oilfield Services targeting onshore has 17 subsidiary companies including projects. Schlumberger will have a 60% stake. Barclays believes the next round of shale InterMoor, Menck GmbH and Team gas tenders in China will bring a larger number of E&Ps into play in the region, increasing demand for IPM services. The JV is Energy Resources. The company has Schlumberger ups China efforts with facilities in eight countries, including the $12 billion JV. leaving the door open for service partners, US and Brazil. as well, saying integration requires pooling KKR’s Dominic Murphy and premium services and cooperating with other service providers. The company also bought Josselin de Roquemaurel called Acteon 20% of Anton in July for ~$80 million to increase its access to China unconventionals. a “growth investment.” Exiting owner Additionally, the company opened the Schlumberger China Petroleum Institute in Beijing, First Reserve managing directors Will to facilitate best-in-class petrotechnical services and joint R&D initiatives in the region. Honeybourne and Jeff Quake said Acteon had completed eight acquisitions, Deepwater Capex Expected To Double By 2015 quadrupled operating profits and Deepwater Capexby Component significantly grown its geographic footprint since 2006 when First Reserve made its initial investment. Reuters sources said the deal valued Acteon in the $1.30-1.45 billion range. First Reserve’s 52% stake cost £70 (or $113 million at current exchange rates). Closure is expected by year-end 2012. JP Morgan and Simmons & Co. jointly advised First Reserve and Acteon. HSBC advised KKR.

Get Metrics. Note: “SURF” defined as Subsea umbilicals, risers, and flowlines. Source: Douglas Westwood, Wall Street Research; Hornbeck Offshore Presentation via Learn how at www.plsx.com/ma PLS docFinder www.plsx.com/finder Source: Douglas Westwood, Wall Street Research. Note: “SURF” de ned as Subsea umbilicals, risers, and owlines. For general inquiries, e-mail [email protected] OilfieldServices 14 October 10, 2012 Earnings & Capex Earnings & Capex Key expects lower Q3 on fewer US drilling & completions • Core Laboratories said Q3 results Key Energy Services guided down for Q3, projecting 4-5% lower sequential would likely fall below Q2 guidance, revenues and operating margins 250-350 basis points lower than in Q2. Key chief which was based on a flat North Dick Alario said the downward guidance was due to reductions in US drilling and American rig count and international improvements. US rig count declines completion market activity. impact Core’s production enhancement Tudor, Pickering, Holt & Co. said the bad news was expected, but segment, and while it has the magnitude was “surprising.” Previous indications were for 4.0% revenue growth, reduced costs in response, Q3 while expected operating margins of 14% will now likely fall in the 8-9% range. revenues are now expected to While the company’s US workover Revenues down to 4-5%, operating be ~$100 million, still up sequentially rig services and international businesses margins down 250-350 bps. but not at previously expected levels. are expected to contribute in line with last Q3 revenues are now expected to be quarter, fluids management, coiled tubing and Key’s Edge business (which offers frac $240-245 million (down from $250-260 stack spreads, well testing/hydraulic choke and reverse unit services) are all experiencing million), with EPS of $1.09-1.13 (down falling utilization and pricing pressure in core markets. from $1.17-1.25). Q4 results are expected Overall, Key expected flat activity in its core oil markets in 2H12, but Alario noted to be comparable to Q3. rig counts in these markets are down 8.0% with indications that demand may drop • Dresser-Rand is on track to further, beyond typical Q4 seasonality. generate annual record bookings in both Key also announced final sale of its Argentina operations and projected a$45 its new unit and aftermarket divisions, million charge against discontinued operations this quarter. according to Tudor, Pickering, Holt & Co.'s projections. International Tudor said Dresser Aker adds over $500 million in backlog is taking share in aftermarket, while Aker Solutions announced nearly a half-dozen recent contracts, led by a five-year low gas and high oil prices are acting deal to act as management contractor for Shell’s offshore construction and maintenance as tailwinds for new orders in terms of services off Brunei, with an estimated deal value of $400 million. Initially managing FPSOs, LNG and petrochemicals. all work, a priority will be to gradually transfer responsibility to local businesses. Aker maintenance head Tore Sjursen called the deal important for the company’s Southeast Asia efforts, as well as its maintenance business, which has traditionally focused on the North Sea. The deal includes a two-year option. Work begins immediately with the first offshore campaign Local operator training will be a focus slated for 2013. Get Metrics. of the $400 million Brunei deal. Back home, Aker won two deals with Gain clarity and perspective with Statoil, including a four-year frame contract to provide wireline tractor services on the PLS Global M&A Database. the NCS. Running to 2017, the deal includes two, two-year overall extension options The database helps value assets & and an option to provide services from mobile drilling and light well intervention units. Aker believes the well intervention deal will generate over $17 million per identify transaction opportunities. year in revenues. Wireline tractors push equipment for Request a trial! 713-650-1212 Statoil is also buying a subsea miles at lower cost vs. heavier equipment. package consisting of three trees, tubing hangers and tool box from Aker for use at its Troll field for ~$44 million. Aker will also expand North Sea operations with a new engineering office at Stockton-on-Tees in Northeast England, with plans to create up to 100 new jobs. The company is making the move due to growth and significant talent in the region. In the US Gulf, Aker won an undisclosed price deal to supply two production control umbilicals and three umbilical termination assemblies with Murphy for its operations in the Dalmatian field. The main umbilical will be a 21-mile tie-back between the host facility and the Canyon Block 4 well. The second will run five miles, connecting two blocks at depths of ~6,000 feet. Work will be performed from Mobile, Alabama and Houston, with installation slated for 4Q13. Finally, Aker won an undisclosed-price, jack-up drilling equipment package with Shanghai Zhenhua Heavy Industries for a Chinese newbuild. The rig is a 2000E www.plsx.com/ma design. Delivery is next year.

Find more on the oilfield sector at To learn more about PLS, call 713-650-1212 Volume 02, No. 12 15 ServiceSector Technology Briefs International • Abtech Holdings won the World Technip takes $275 million Ichthys contract & other wins Shale Oil & Gas Summit award for best Technip announced several recent contract wins, most prominently a $275 million technology innovator of the year for offshore commissioning contract with Inpex for the Ichthys LNG facility off Australia. its oil-absorbing and –trapping Smart Work will include preparation and execution via Technip’s Perth operating center to Sponge. The sponge has applications begin immediately and completed in ~4Q16. not only for spill cleanups, but also Another win for the company with a Japanese player is a price- can absorb oil from flowback and undisclosed conceptual study of the Layang development off Sarawak with JX Nippon produced water at 300 gallons/minute. Abtech estimates the global market Oil & Energy. Development options for the field include a FPSO plus wellhead for frac and drilling water clean-up at platform and a new process platform to be bridge-linked to the Helang processing $1.2 billion/year. The company is now platform. FEED and design study tenders This is Technip’s 3rd Ichthys LNG win. working on generators that can burn are expected as soon as YE12. engorged chunks of Smart Sponge in the In the North Sea, Technip won a oilfield as fuel. contract with Statoil to fab, install and tie-in flowlines for the Gullfaks South field. • AGR has entered a multi-phase Offshore operations will be carried out by Technip vessels including its Apache II deal with Statoil to develop managed pipelay vessel and a recently chartered newbuild construction vessel. Price was pressure drilling technologies for floating undisclosed. Offshore construction will begin in 1H14, with execution by the rigs. The first phase, worth ~$5.1 million, company’s Oslo and Orkanger, Norway locations. will focus on AGR’s burgeoning EC-Drill Downstream, the EPC firm won FEED contracts valued at a combined ~$64 million dual gradient drilling technology, which covering two refinery modernizations in Kazakhstan. The customers are Pavlodar allows drilling close to fracture pressure Oil Chemistry Refinery, for which Technip will perform an upgrade of the Pavlodar and was recently used to drill wells for refinery in 2013, and Petrokazakhstan Oil Product, for which it will revamp the Repsol and Petronas. The deal will also Shymkent refinery with FEED documents slated for 2013 completion. Production AGR subsidiary Ocean Riser Systems’ capacity and conversion rates are to be increased at both facilities. Technip’s Rome low riser return system. The companies 2 operating center will execute. hope to increase cost savings (some The downstream wins cover /3 of Although it took no contracts in total Kazakh refining capacity. project MPD could shave 25% from Brazil this month, Technip is working subsea drilling time) and production. to improve odds of future wins with news its Genesis Oil and Gas Consultants • Chesapeake has begun testing subsidiary will acquire Rio-based pipeline and structural engineering group Suporte completely environmentally benign Consultoria e Projetos Ltda for an undisclosed sum. Technip believes the deal will frac fluids, according to environmental improve immediate access to the market and strengthen customer relationships, while and regulatory affairs manager Jody also adding to its global subsea team. Jones. The company is testing several “recipes” in various unidentified shale plays. Jones said testing Saipem takes $950 million in offshore deals is difficult because drilling Saipem announced a total ~$950 million in offshore Angola, Kazakh and North costs run from $4-6 million Sea contracts. The company won an EPCI contract with CABGOC for its Congo River and untested frac solutions could Crossing pipeline project offshore Angola and the DRC. Work will cover 68 miles waste that money. worth of three 20-in. and 22-in. diameter subsea pipelines, subsea spools, trenching and crossing works installed at depths of • GE Energy Management’s Saipem’s jack-up construction deal will power conversion business, in be the first jack-up built in Kazakhstan. up to 384 feet. Marine operations will conjunction with the Arab Academy be performed by pipelay vessel Castoro of Science, Technology & Marine 7 from 4Q12-1Q13. Saipem also won a URF and gas export pipe EPCI contract in Transport (AASTMT), opened a dynamic Angola covering 62 miles of pipe and related subsea equipment, to be installed at positioning vessel-control simulator in depths of 230 feet. The client is unidentified. Alexandria, Egypt to address regional Saipem also won two T&I deals with unidentified clients in the UK North Sea for training. GE will operate the simulator deployment of the Sapiem 7000 and the Castoro Sei pipelay vessel. Work will occur for five years. The simulator is the between 2Q14 and 3Q15. centerpiece of AASTMT’s first fully Finally, Saipem counted a previously announced $242 million Kazakh jack-up accredited DP training school, to serve fabrication, outfitting and commissioning contract under its near billion dollars in wins. Egyptian nationals and others on the The rig is being built for Teniz Burgylau for work in the Caspian through Saipem’s African continent. It is also part of GE’s jointly controlled venture Ersai Caspian Contractor with Keppel Kazakhstan. The “localization strategy” to partner with rig will be a Keppel Fels B Class, capable of drilling wells to 20,000 feet in up to 260 government and industry in locations feet of water. Final work will occur at the Ersai Kuryk yard for 1Q15 delivery. where the company operates. For listing inquiries, e-mail [email protected] Access PLS’ for featured deals for sale OilfieldServices 16 October 10, 2012 International International Briefs Seadrill orders 7th UDW drillship Continued From Pg 1 • China Oilfield Service Ltd. Beyond the near term, Fredriksen sees deepwater transforming from exploration (COSL) has plans to add as many as fifty to development, which will bring about a “significant” increase in drilling needs to new, unspecified vessels to support connect previous exploration successes. the company’s offshore oil projects, The current order bears identical characteristics to the six drillships already on just as China’s first deepwater drilling order through Samsung. Seadrill expects the unit to operate in the US Gulf, Brazil rig operations begin near South and the coasts of Africa. Seadrill now has seven drillships, two harsh environment China Sea islands. semisubs, five tender rigs and five jackups • CNPC’s first in-house built drilling Seadrill has 9 UDW/HE units coming under construction. Of the rig was put into service in the Panjin Port, online 2013-2015 plus 3 options. Liaoning Province, China. The rig, the company’s nine deepwater CP-300, is a jack-up designed or HE units coming online from 2013-2015, two are contracted under long-term deals and built by CNPC Bohai and the company is in “specific” discussions for long-term work for a majority of the Equipment Manufacturing. It rest. Seadrill is funding construction through its recent $1.0 billion bond offering. is operable to water depths of 300 feet, It has confidence regarding funding its overall newbuild program, with additional can drill to 30,000 feet, and can drill 30 recent support through a “well oversubscribed” bank financing package and progress wells once in place. on export financing. The board believes growth can be supported without raising • Cosco won an accommodation equity and will lead to increased dividends. and support semisub construction ‘Inorganic’ growth opportunities— contract with new Lauritzen Offshore/ Perhaps blurring the line regarding the company’s comments on equity, Seadrill’s HitecVision JV Axis Offshore. The Seadrill Partners LLC filed to raise $225 million in the IPO of its services MLP. vessel will accommodate 500, Partners will initially own and operate features DP3 positioning and is Seadrill semisubs West Capricorn and designed for North Sea activity. Built on spec, the vessel is scheduled UDW Newbuild Economics West Aquarius, drillship West Capella for 1Q15 delivery and the deal includes and tender rig West Vencedor. Also, options for an additional two units. Price CEO Alf Thorkildsen told Reuters the High was not disclosed. dayrates company plans to list three-fourths owned • Hanwei Energy Services won North Atlantic. ~$3.6 million in combined orders to And perhaps somewhat blurring Low capital supply glass-reinforced epoxy pipes and cost Seadrill’s position regarding M&A, fittings to three international oil and Upstream suggests the company could try gas field operators, all new customers. to acquire Brazil-focused Sevan Drilling, Deliveries will be made within fiscal YE in which it holds a 28.52% stake. March 31, 2013 to Middle Asia, Middle Sevan’s comparatively low share price is East and subcontinent markets. preventing the contractor from exercising • InterMoor won a five-year, Seadrill working towards $225 undisclosed-price frame agreement million IPO of Seadrill Partners LLC. with ExxonMobil for equipment and engineering services offshore Norway. High dayrates options for fifth and sixth cylindrical The contract—which includes an option drilling units. for three one-year extensions—covers The company also announced inspection and logistics work on the Low capital Thorkildsen would no longer serve as North Sea Jotun and Balder fields and cost CEO and would be replaced by John other mooring-related engineering work. Fredriksen, the current CEO of Seadrill • Iranian Offshore Engineering investment Archer Ltd. & Construction Company (IOEC) The move comes as part of a broader won a $135 million contract from effort by the company to reduce the size Iranian national Arvandan Oil & Gas of management and shift it from Norway Production for the early production Low newbuild prices combined and closer to its operating regions. A new stage of the Arvand oilfield shared with high day rates creates unique management office may be established, with Iraq. The oilfield sits in Khuzestan opportunities for investments province, Iran, and has been estimated to with London, Dubai, Singapore and hold 0.5-1.0 billion bbl of oil in reserves, Source: Seadrill September 12 Presentation Houston under consideration. via PLS docFinder www.plsx.com/finder ~150 million bbl recoverable.

Find more on the oilfield sector at To learn more about PLS, call 713-650-1212 Volume 02, No. 12 17 ServiceSector International Briefs International • Offshore vessel-owner Jasa Merin Pemex announced over $1 billion fleet upgrade plan is buying two modern anchor-handling Pemex announced plans to spend over $1 billion over the next three years to tug supply vessels from Muhibbah for upgrade more than 130 vessels from its fleet, with officials calling it the company’s ~$80 million. The 120-tonne bollard- biggest overhaul in decades. pull, DP2 AHTS vessels were built in CEO Juan Jose Suarez said 81 of the company’s refining vessels would 2011. Jasa has already put down a ~$16 million deposit with delivery expected be upgraded, as would 51 E&P vessels. Two petrochemical vessels are also before year’s end. under consideration. • Leighton Holdings subsidiary Improvements will probably stem from a mix of ship leases and newbuildings Thiess won a $140.4 million contract through Mexican and international contractors, depending on costs and what with pipeline specialist Saipem to is being offered. build a tunnel for the Santos-operated Meanwhile, Mexican contractors such as Grupo R are positioning themselves to Gladstone LNG project in Queensland. benefit from projections of as many as 15 additional jackups and multiple drillships. Work involves building and laying a 11.1- Upstream reports the company is taking quotes for 1-2 400’ jackups and two deepwater ft diameter, 2.6-mile long tunnel under drillships. It is reportedly vying against Grupo Mexico for deepwater charters an area of water known as “the narrows” from Pemex. A new unidentified Mexican company is also reportedly considering — without dredging or trenching - to commissioning CIMC Raffles for a Super M2 jackup, although talks are believed to connect the mainland near Gladstone to have stalled. Pemex is also tendering for two non-Mexico sourced jackups. the GLNG LNG plant on Curtis Island. Upstream notes financing is a problem for local players, and third-party and yard • Maersk Drilling increased its West financing is expected to continue in the near term, stymieing newbuild efforts. Africa activities with a two-year, $100 Mexico funds ~1/3 of federal budget revenues through oil, but production dropped million contract for the jack-up Maersk nearly 25% from 2004-2009 due to depletion and lack of exploration investments. Endurer with Sinopec-owned operator Addax Petroleum. Work begins in late ASCO ramps Canada presence with three acquisitions October, off Cameroon. UK’s ASCO Group acquired Alberta-based oilfield services companies EJR • Maracc has accepted delivery of Trucking, Manatokan Oilfield Logistics and Docktor Oilfield Transport, doubling the company’s first rig, the newbuild its Canada operations. The company did not disclose how much it paid for the three semisub Island Innovator, from Cosco. businesses, but ASCO said all existing The rig will execute a two-year, 12-rig ASCO moves to expand on oil & gas staff will remain in place. drilling program for Lundin Petroleum services market in Canada. on the NCS beginning 2Q13, but will be In EJR and Docktor, ASCO takes over operated by Odfjell Drilling. It is slated two oilfield logistics operations, specializing in drilling logistics and infield services. for arrival in Norway in January. Both companies will be integrated into ASCO’s Canadian onshore oilfield services • Petrofac won a $200 million lump- subsidiary MOKO. Manatokan is a specialist in oilfield waste management and will sum EPC contract with Kuwait Oil Co. maintain its separate brand identity. for a new power distribution network in “Our primary focus will always remain the oil and gas services market, but we North Kuwait. Work will include three want to reach new clients as well as provide more services to our current clients, new substations and ~560 miles particularly services which fit and complement our current portfolio,” said ASCO of buried cable connecting them COO Derek Smith. to the distribution network. The acquisitions double the number of ASCO’s Canadian employees to 260, Facilities will support onshore the company said. oil field development in the region. Completion is expected in 2 years. Ocean Rig books semisub Eirik Raude offshore Ireland • Greece awarded a contract of Ocean Rig UDW announced a LOI with an unidentified oil major for a one-well, undisclosed value to Petroleum ~$112 million contract for its semisub Eirik Raude offshore Ireland. Work is scheduled Geo-Services to conduct offshore to begin in 1Q13;with projected duration is up to six months. Assuming the contract seismic tests in a maritime zone up to runs to term and including mobilization and demobilization, the dayrate 250 miles wide in the Ionian Sea and comes to ~$614,000. The rig was slated to work off Equatorial Guinea into offshore Crete. Q3 for Ophir, generating $49 million in backlog, after which it will undergo • Samsung Heavy Industries a 10-year special survey in the Canary Islands, then move to West Africa in Q4 for took an LOI on a $230 million contract another $75 million in backlog with African Petroleum until its Ireland charter begins. with Statoil to build a new permanent Meanwhile, Ocean Rig completed an $800 million private debt offering to fully floating storage unit for use in the repay its $487.5 million credit facility balance and finance rigs. The offering was Heidrun field in Norway. The deal upsized from an initially announced $750 million and consisted of 6.5% senior secured includes options for an additional two notes sold at 99.469% of par and due 2017. units for other fields. For general inquiries, e-mail [email protected] Access PLS’ archive for previous oilfield services news OilfieldServices 18 October 10, 2012 Who's Hot/Who's Not International Briefs Analysts' view on select stocks • Nigerian offshore drilling leader Key: Ticker/Current Price/52-Week Low/52-Week High/Market Cap Seawolf Oil Services won a $140 million, two-year contract for its Oritsetimeyin Upgrades: jackup with Exxon. This equates to • Atwood Oceanics (ATW/$45.74/$34.93/$49.75/$2.99B) from Neutral to Buy a rough dayrate of $191,780. Work is by Guggenheim. slated to begin in 3Q13. • FMC Technologies (FTI/$43.91/$36.89/$55.19/$10.47B) from Neutral to Buy • Sirius Well Manufacturing Services by Guggenheim. won a $135 million rig construction contract New Coverage: linked to the Shell/Petrochina Arrow LNG • Basic Energy Services (BAS/$11.16/$8.52/$23.41/$454.54M) at Hold project in Australia. The company will by Wunderlich. provide four remote controlled CBM drilling • C&J Energy Services (CJES/$18.98/$15.61/$23.32/$1B) at Outperform rigs and related technology. by William Blair. • Sinopec is establishing an • Cameron International (CAM/$55.16/$38.38/$60/$13.58B) at Buy by Lazard. offshore engineering group to lead • CARBO Ceramics (CRR/$63.15/$61.34/$162.36/$1.46B) at Market Perform by EPCI efforts and consolidate its offshore William Blair. businesses, including Shanghai • Core Labs NV (CLB/$102.39/$93.30/$143.21/$4.84B) at Outperform by William Blair. Offshore Petroleum Bureau, • Dawson Geophysical Co. (DWSN/$24.50/$20.20/$40.76/$192.23M) at Sinopec Shengli Oilfield and Outperform by Barrington Research. Sinopec New Star Petroleum. • Dawson Geophysical (DWSN/$24.50/$20.20/$40.76/$192.23M) at Buy SOPB owns and operates two seismic by Wunderlich. vessels (with a third newbuild slated • FMC Technologies (FTI/$43.91/$36.89/$55.19/$10.47B) at Outperform by for 2013), two jackups, some offshore William Blair. service vessels and an offshore logistics • FMC Technologies (FTI/$43.91/$36.89/$55.19/$10.47B) at Buy by Lazard. and supply base. • Key Energy Services (KEG/$6.81/$6.52/$18.18/$1.03B) at Hold by Wunderlich. • SmitLamnalco won a one-year • National Oilwell Varco (NOV/$80.42/$59.07/$89.95/$34.29B) at Outperform by contract with Petrofac supporting William Blair. single point mooring operations at the • Oil States International (OIS/$76.13/$55.65/$87.65/$4.17B) at Outperform by Iraq crude export expansion project. William Blair. SmitLamnalco said the deal covered • Pacific Drilling S.A. (PACD/$9.82/$7.69/$11.47/$2.13B) at Buy by Dahlman Rose. maritime support, operations and • Patterson-UTI Energy (PTEN/$15.88/$12.81/$23.90/$2.39B) at Buy maintenance for four SPM systems ~12 by Wunderlich. miles off Iraq’s Al Fao peninsula. If two • Schlumberger Ltd. (SLB/$71.61/$59.12/$80.78/$95.03B) at Market Perform by one-year options are exercised, total deal William Blair. value could be as high as $200 million. • TETRA Technologies (TTI/$5.96/$5.93/$10.66/$465.09M) at Buy by Wunderlich. • Spectrum began its 2D multiclient • Tyco International Ltd. (TYC/$28.17/$27.82/$58.12/$12.95B) at Overweight campaign for an additional ~3,728 miles by Barclays. over the Foz do Amazonas Basin. The Phase • U.S. Silica Holdings (SLCA/$13.51/$9.02/$22.14/$714.96M) at Market Perform 2 survey will be completed by year’s end. by William Blair. • UMW Oil and Gas decided not to exercise its purchase option on one of four Standard Drilling newbuild jack- Philadelphia Stock Exchange’s Oil Service Sector Index vs. S&P 500 ups being built at Keppel Fels yard in Singapore. The Malaysian company 6% secured the option for the B337 rig during a deal in which it bought another standard 4% newbuild contract for ~$213 million. S&P 500 2%

0% Company. One Source. Oil Service Index -2% Stop. -4% PLS provides clients information they need to manage their portfolios. Learn Sep 17 Sep 24 Oct 1 Oct 8 more at Source: Yahoo! Finance, Past One Month

Find more listings at No commission! List today, call 713-650-1212 Volume 02, No. 12 19 ServiceSector People Briefs Who's Hot/Who's Not • CARBO Ceramics has appointed Downgrades: Don P. Conkle as vice-president, • Atwood Oceanics Inc. (ATW/$45.74/$34.93/$49.75/$2.99B) from Buy to marketing and sales. Accumulate by Global Hunter Securities. • Cdn Oilfield Technologies • Baker Hughes Inc. (BHI/$44.05/$37.08/$61.90/$19.36B) from Buy to Accumulate & Solutions Corp. has changed its by Tudor Pickering. name to Canadian Oilfield Solutions • Basic Energy Services Inc. (BAS/$11.16/$8.52/$23.41/$454.54M) from Buy to Corp. and appointed Ken Berg to its Accumulate by Tudor Pickering. board of directors. • CARBO Ceramics Inc. (CRR/$63.15/$61.34/$162.36/$1.46B) from Buy to Hold • Cordy Oilfield Services Inc. by Oppenheimer. announced the departure of CFO • Core Labs NV (CLB/$102.39/$93.30/$143.21/$4.84B) from Accumulate to Sell by Matthew Braaten, C.A. David J. Boomer, Tudor Pickering. C.A. has been appointed to replace him. • Dril-Quip Inc. (DRQ/$69.82/$55.75/$77.12/$2.82B) from Accumulate to Neutral • Flotek Industries announced by Global Hunter Securities. the departure of executive vice- • IHS Inc. (IHS/$92.32/$75.42/$118.93/$6.09B) from Outperform to Neutral by president Jesse Neyman. Robert W. Baird. • FMC Technologies has appointed • Lufkin Industries (LUFK/$52.24/$45.11/$85.68/$1.76B) from Buy to Accumulate Richard Clark as treasurer. by Global Hunter Securities. • Halliburton has promoted Jeff • Nabors Industries (NBR/$14.04/$12.40/$22.73/$4.08B) from Accumulate to Miller from SVP of global business Neutral by Global Hunter Securities. development to EVP and COO. David • Patterson-UTI Energy (PTEN/$15.88/$12.81/$23.90/$2.39B) from Buy to Topping has been appointed as vice- Accumulate by Tudor Pickering. president, wireline and perforating. • Precision Drilling (PDS/$7.81/$5.82/$12.93/$2.16B) from Buy to Accumulate by • Knight Oil Tools has promoted Tudor Pickering. Barret Lemaire from network manager to • Superior Energy Services (SPN/$19.69/$17.54/$31.88/$3.09B) from Buy to director, information technology. Accumulate by Tudor Pickering. • LiqTech International announced • Tyco International (TYC/$28.17/$27.82/$58.12/$12.95B) from Overweight to the departure of Michael Sonneland from Equal Weight by Barclays. its board of directors. • Union Drilling (UDRL/$6.49/$3.39/$8.42/$138.87M) from Outperform to Market • Quantum Energy Partners Perform by BMO Capital Markets. has appointed Eric C. Nielsen as managing director. Key: Ticker/Current Price/52-Week Low/52-Week High/Market Cap • ROMAR International Ltd. Source: Yahoo! Finance has appointed Malcolm Mackenzie as general manager. • Rowan Companies PLC US Oilfield Services Stock Movers -Last 30 Days Source: Capital IQ has appointed J. Kevin Bartol as $/Share $/Share % executive vice-president, finance and Company Ticker 9/09/12 10/09/12 Change corporate development. Union Drilling UDRL $4.66 $6.49 39% • Schlumberger Business Consulting has appointed Chris Peeters Hercules Offshore HERO $4.49 $5.12 14% as director, Utilities. He has also been Ensco ESV $49.30 $55.31 12% appointed as director, Europe, Middle 5 Top East and Africa. Philip Askew, Claudio Vantage Drilling VTG $1.65 $1.83 11% Castanheira, Vivek Chidambaram, Nuri TGC Industries Inc. TGE $6.62 $7.16 8% Demirdoven, Stefano Ferri and Carlo Procaccini have been appointed as Cal Dive International DVR $1.68 $1.30 -23% vice-presidents. • Transocean Ltd. has Core Laboratories CLB $124.09 $102.34 -18% appointed Ihab Toma as Key Energy Services KEG $8.50 $7.07 -17% executive vice-president. John Stobart has been appointed as executive vice- Bottom 5 Hornbeck Offshore Services HOS $39.88 $35.18 -12% president and COO. CARBO Ceramics CRR $70.19 $63.10 -10% • Xtreme Drilling and Coil Services announced the departure of Kyle Swingle Note: Data includes public, international companies operating in the oil & gas space, limited from its board of directors. to companies >$1000 MM market cap & >$1.00/share.

For general inquiries, e-mail [email protected] Access PLS’ archive for previous oilfield services news OilfieldServices 20 October 10, 2012

ARK-LA-TEX PERMIAN ROCKIES TRUCKING COMPANY FOR SALE PERMIAN BASIN DRILLING COMPANY MULTISTATE ROCKIES NONOP SWD ASSETS FOR SALE 4-Drilling Rigs; 9-Trucks; ~60 Employees 238-Active Wells. ~12,220-Net Acres. EAST TEXAS SOUTHERN MIDLAND BASIN FOCUS NORTH DAKOTA & MONTANA SHELBY & SAN AUGUSTINE Cos SV SOLID GROWTH HISTORY SV BAKKEN / THREE FORKS PLAY PP HAYNESVILLE SHALE PRODUCTION Deep Customer Relationships >170-Active Rigs in the Area 50-Trucks & 1-SWD Well. FOR Highly Active Area Incl Resource Plays Operators Rapidly Developing Acreage SELLER HAS ASKING PRICE SALE SOLID REVENUE STREAM Avg 4.1% NonOperated WI; 3.3% NRI ~885 CONTACT AGENT FOR MORE INFO ONGOING OPERATION. GOOD PROFITS Est October 2012 Net Prod: ~885 BOED BOED SV 4781SWD High Utilization Rate & Activity Level. Operators Include: Continental, EOG, Assets Include: DRILLING Hess, Marathon, Statoil, Slawson & Oasis. GULF COAST --Drilling Rigs & Trucks COMPANY OFFERS DUE BY MID-NOVEMBER 2012 --Office; Facilities & Service Yards PP 1974 TUSCALOOSA CO., AL PROPERTY --Solid & New Duplex/Triplex Pumps 500-Wells (CBM). ~43,000-Net Acres. --Good Equipment. EQUIPMENT BLACK WARRIOR BASIN Recent Rig Appraisals & Valuations ROBINSON’S BEND FIELD PP SV 8960RIGS DRILLING RIG FOR SALE 100% OPERATED WI; 75% NRI Ready For Immediate Delivery. Daily Production: 16,000 MCFD PERMIAN BASIN PROPERTIES 2,000 HP AC. 20,000 FT. CAPACITY. Average Cash Flow: $1,000,000/Month 16,000 14-Active. 19,172-Gross Acres. American Block DKS-2600 AC E Total Proved Reserves: 280.4 BCF MCFD UPTON COUNTY, TEXAS Drawworks, MaxRig IRI20 Remote Total Proved Rsrvs (PV8): $85,600,000 WOLFBERRY TREND PP Op Iron Roughneck, Fully Outfitted DRILLING AGENT IS ASSEMBLING PACKAGE DATA ATTRACTIVE HORIZONTAL WOLFCAMP Avid Controls AC Joystick Drillers RIG PP 8999L High-BTU Devonian Development Cabin & VFD House, & 500 Ton NOV Upside Potential Clearfork/Spraberry TDS11 Top Drive. TRUCKING SERVICE COMPANY SALE 3-D Seismic Available Over Entire Acreage Brand New. Build Out Completed 2011. Hazard & NonHazardous Waste Disposal 100% OPERATED WI; 75-79% NRI Ready To Go To Work. TEXAS & LOUISIANA SERVICES Net Production: 500 BOED 500 SELLER HAS ASKING PRICE Eagle Ford, Tuscaloosa & Haynesville SV Forecast Net Peak Prod: >13.4 MBOED BOED E 1691RIG STRONG FINANCIAL PERFORMANCE Net Operating Income: $600,000/Month 2012 EBITDA $6.9MM on $28.3MM Revenue Total Net Rsrvs: 67 MMBOE (84% Liquids) 100% INTEREST IN COMPANY SALE Net PDP Reserves: 2.1 MMBOE About PLS HIGH UTILIZATION RATES COMPANY Total Reserves PV10: $593,000,000 DIVERSE FLEET OF WASTE HAULING SALE OFFERS DUE BY NOVEMBER 1, 2012 Texas & Louisiana Equipment Include: PP 1975DV The PLS OilfieldService report covers the -- Tractor Trucks; Dump Trucks, Vaccum oil & gas service sector with news and Additional Trucks & Trailers Available MULTISTATE analysis on drilling, completions, operations Strong Customer Base and technology. Solid Expansion Opportunities TEXAS & LOUISIANA PROPERTIES In addition to the news, OilfieldServices list CONTACT AGENT FOR UPDATE 3-Fields. 46-Active. 19,380-Net Acres. companies, technologies, rigs, equipment SV 1321 EAGLE FORD & E TX CRETACEOUS and deals for sale, coded alpha-numerically. CLAY & HARDIN (TEXAS) PP Clients interested in any listing details can OILFIELD EQUIPMENT COMPANY GRAND LAKE (LOUISIANA) contact PLS with provided listing code(s). With Lease Crews For Sale Y-4 Horizontal Drilling. CO2 Flood Potential. To obtain additional PLS product details, GULF COAST / SOUTH TEXAS ~100-Development Locations. Victoria - Eagle Ford Production Area CO OPERATED WI FOR SALE 180 drill www.plsx.com/publications. Net Production: 180 BOED Started In 60’s. Owner Retiring. BOED PLS Inc. Net Cash Flow: $140,000/Mn Good Customer Base. One Riverway, Ste 2200 Net Proved Reserves: 10.7 MMBOE Refurbished All Surface Production EQUIPMENT Houston, Texas 77056 Equipment And Wellheads. COMPANY Net Prov Rsrvs (PV10): $157,000,000 OPERATIONS NEGOTIABLE (LA)Net PDNP Rsrvs (PV10): $4,100,000 713-650-1212 (Main) CONTACT SELLER FOR DETAILS Proven Conventional Development. 713-658-1922 (Facsimile) CO 9345PP AGENT WANTS OFFERS NOV 6, 2012 PP 2309DV To obtain additional listing info, contact us at 713-650-1212 or [email protected] SOUTH TEXAS LEASEHOLD with the listing code. Only clients are able to 94,247-Net Mineral Acres. (Contiguous) receive additional information. To become a GONZALEZ & FAYETTE CO. L No Commission client call 713-650-1212. EAGLE FORD SHALE EAGLE Leases Will Deliver 75% NRI. FORD Get Listed! © Copyright 2012 by PLS, Inc. Offset Well IP: >2,600 BOPD List with PLS today! It works! For Any means of unauthorized reproduction is 3-YEAR LEASE TERM more information on listing, e-mail CALL PLS FOR MORE INFO prohibited by federal law and imposes fines L 8006DV up to $100,000 for violations.

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