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Connection

VOLUME 2

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Cactus’ new Rig 156 joins the action in the Permian Basin

SUMMER 2012

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Letter a letter from the President

Dear employees History is inextricably linked with perspective: it depends on how far back you look and from what vantage point. There is ancient history and modern history. And there is what you are doing for this company — making history. We recently had one of those days that is worthy of special note, a truly historic moment here at Cactus Drilling. In true Cactus form, we turned it into a celebration. On April 3 we had an open house and invited people to tour our new headquarters in Oklahoma City. This facility was designed to accommodate our growth into the future. It is not only modern, more spacious and vastly superior to our old, outdated workplace, but it is symbolic of the vitality of our company. Our open house had a dual purpose. As proud as we are of our new home office, we were every bit as excited to invite Cactus employees, customers, colleagues from throughout our industry and the general public to also tour our newest rig, the AC Rocket Rig 156 — the finest and most advanced rig you will find in the field today. It

was most gratifying to see it come together through the efforts of our skilled, dedicated crews in the expansive new James A. Willis Fabrication and Maintenance Facility behind the headquarters building. We have had rig shows before, but that day was indeed significant. It said a lot about where this Company is going. We have a lot of momentum. We didn’t get to this point by accident; we got here by design. Take a look at Cactus over the years and you will see a legacy of commitment, some strategic risk, vision, the confidence and courage to pull the trigger when the deck was not stacked in our favor — ­ all qualities and characteristics embodied by Jim Willis, whose strong hand helped guide the early path that led to where we are. I hope you will read the story on Page 8 about our history and Jim’s essential role, and see the story about the open house and rig show on Page 10. I hope you will see the future as I do — full of promise. And I hope you will continue to do your job with professionalism, to work every day on the things we will look back on tomorrow with pride.

Sincerely,

Ron Tyson Ron Tyson President Cactus Drilling Company, LLC


Safety

Good catch stops unsafe act

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uring a recent rig move, the rig-moving company was attempting to pick up the blowout preventer (BOP) and the BOP cradle to move the equipment in preparation for transport. Company personnel connected their lifting chains/ slings to the lifting eyes on the annular. The lifting eyes on the annular are used only if lifting just the annular. The lifting eyes are not rated sufficiently to withstand the weight of the whole BOP stack, therefore creating a very serious and unsafe act. Jordan McWatters, who has worked with Cactus since August 2011 and is a floorhand for Rig 102, was on location at the time of the rig move. He spotted the moving company lifting the BOP and cradle by the lifting eyes on the annular. Jordan knew this was not the correct way to make the lift and had the courage to point out the unsafe act to his driller. The job was stopped immediately and the rig moving company was instructed about the proper attachment points for load to be lifted. A hazard observation card/stop card was then filled out addressing the unsafe act and was sent to the Oklahoma City office to be shared with all rig personnel and yard staff. Jordan McWatters is 23 years old. He is from Houston, Texas, and enjoys hunting, fishing, barbecuing, tinkering with old cars, and spending time with family and friends. Cactus Drilling fully supports Stop Work Authority (SWA) and encourages everyone to exercise the right and responsibility to stop the job if there is an unsafe act, or if anyone questions or has uncertainty about a particular task. The SWA is a vital tool in our efforts to achieve greatness, and it is also essential to providing a hazard-free workplace. No job is ever so important that we cannot take the time to do the job safely. Thank you Jordan for your good catch and for your dedication to provide a safe place to work. Justin Lawson Field HSE Manager Cactus Drilling Company L.L.C.

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For information on the safety topic, contact Justin at JustinL@kfoc.net or (405) 795-4588.

Jordan McWatters, congratulations on your safety observation on Rig 102. SUMMER SAFETY TIP

Heat Stress On days where the temperature exceeds 90 degrees, this policy is to be followed by all employees working on a Cactus rig or yard n Before the work shift begins, each employee will drink at least 8 ounces of water. Gatorade and/or Squincher may be consumed in addition to the water. n Every 30 minutes a minimum of 4 ounces of water will be consumed by every employee. n A 15-minute break is to be taken every hour. This break should be taken where cooler air and shade is available (inside safety trailer, cooling trailer, toolpusher’s house, etc.) n No energy drinks are allowed on location during work hours.

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Drilling in the Permian Basin is

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EST TEXAS and NEW MEXICO are renowned for their wide open

spaces. What that means is that there is plenty of room for a boom. That is exactly what is going on in the Permian Basin. Business has been booming for drillers and the forecast is for a continued good business climate. Cactus is taking advantage of the opportunity. Rig 143, pictured at the right, is one of the 16 Cactus rigs finding steady work with even more work laying out as far as the eye can see.

Cactus’ Rocket Rigs are keying the company’s success in the Permian Basin. One example is Rig 153 near Pecos, Texas. Rig Manager Royle “Wingnut” Barham said the technology on the rig gives it a tremendous advantage. “It’s a good rig. It’s a step up from the older style rig,” he said. “It has a lot more advanced technology, that’s for sure. We can walk the rig and drill multiple wells. “The way Cactus does things is smart: they build most of their rigs about the same,” he said. “That makes it good for the employees. They can go from this rig to that and know how it operates. It also helps with rig safety.

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They’re big on safety. They want us to be efficient and productive, but they don’t push us to be in such a hurry that it causes safety problems.” Rig 153 works for Devon Energy. There is about two and a half years remaining on the contract, but the work in the Permian Basin should continue well beyond. “There are more rigs on the way,” Barham said. “That tells us what’s going on with this oilfield. From what I gather, it’s going to be that way for a while. It’s a good outlook on a roughneck’s future, that’s for sure.” Barham noted how far the company has come from its origins to now, being a significant player in one of the


WIDE OPEN hottest regions in the country. Barham said he helped Cactus bring out Rig 102, when the company had about 40 employees working on rigs back then. “We’ve come a long way. I’m glad to be a part of helping them grow.” Driller Henry Campos lives in Cheyenne, Oklahoma, but has made the long drive to Rig 153, recently working near Pecos, Texas, for his hitches since the rig came out of the yard back in November. The long drive is worth it to get this experience working on this rig in this region. Previously, Campos had worked on Rig 106 in the Texas panhandle region outside Wheeler. But he was willing to transfer to this land of expansive horizons to expand his horizons. Continued on next page

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Rig 116 crew.

Rig 143 crew.

As nightfall descends on the Permian Basin, the crew of Rig 153 chalks up another productive day.

“It’s a long drive to get down here. But I wanted to work in this field and on all types of rigs,” he said. “When I go to pushing, I’ll have experience on all types of rigs.” Rig 143 is an example of a Cactus rig that demonstrates its versatility. Until earlier this year, 143 was working in the gas-rich Haynesville Shale Play in Louisiana; now it’s working for Comstock Oil & Gas in the oil-rich Permian Basin. “This rig is ideal for what we’re drilling. It drills easy and moves quickly,” said Rig Manager Lyle Ganey. “It’s busy. I think they plan to drill some horizontals. There is plenty of work,” he said. “Just about the only

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problem is this rare lizard. (That is the sand dune lizard which, if added to the endangered species list because of habitat loss, could affect where drilling in the Permian is allowed.) That’s about the only thing that can slow it down. I expect things to keep hopping for a good five to 10 years.” Rig 116 crew member Mark Starr said the hard work is worth it because of how Cactus treats its employees. “Our pushers are good, very knowledgeable. And the company is good to us,” said Starr, who has been with Rig 116 for almost seven years. “They make you feel appreciated. It’s the little things, like a cookout twice a hitch. That goes a long way. The company I was with


A HERO IN THE FIELD New AC Rocket Rig 156 gets busy in the Permian.

No matter how busy work becomes, safety and employee well-being are Priority No. 1. So it was when Cactus floor hand John Westbrook had a serious allergic reaction to medication during a shift on Rig 156 in the Permian Basin. Rig Manager Jeff Montgomery would not settle for minimal treatment. As John’s condition deteriorated, Montgomery’s insistence on taking extreme measures probably saved his life. We wanted to share Westbrook’s heart-felt letter of appreciation, and also take this opportunity to extend our admiration and appreciation. Thank you, Jeff, a true Cactus hero.

Cactus Drilling LLC 8300 SW 15th Oklahoma City, Oklah om

a 73137

Dear Mr. Tyson, My name is John We stbrook; I am a floor hand on Rig 156. I wo like to draw your atten uld tion to the actions of Jeff Montgomery, Toolpusher. During morning tour 5/14/12, I began to ha ve an acute allergic reaction. I was sent fro m the floor by Kirk Re ese, Callon Drilling Supervisor, at approxim ately 0300, and Jeff be gan medical response protocol. Jeff ’s wife had a similar ev ent. When he heard that I was on the same blood pressure medic ine that had caused her problem, he was transformed into my guardian angel. We followed the nurse’s advice to administer antihistamine, but tha didn’t satisfy Jeff. He t monitored me closely and was in constant contact with the nurse . He knew that my co ndition was worsenin and insisted that we g leave for Midland Me mo rial Hospital. By the time we got to Midla nd, I was beginning to have trouble breathi If Jeff had not taken ng. the actions that he did , when he did, I would not have survived.

before was so big they didn’t know you were there. Cactus appreciates you.” Fellow 116 crew member Stephen Blackwelder is now enjoying another of the benefits of working in the Permian Basin for Cactus. The region is so busy there are opportunities to move and have new experiences. Blackwelder, who had been with 116 for almost three years, has moved to Cactus’ new AC Rocket Rig 158. “It’s going to be awesome,” he said in advance of the move. “That’s the future.” The future is not just the amazing technology on Rig 158, it is much more work for Cactus in the Permian Basin.

Thank you; thank Ca ctus policy; and God bless Jeff Montgomery My wife and three da . ughters know that Jeff saved me. He’ll tell you he was “just doin’ my job,” but Jeff has a genuine commitmen to his men and their t safety. He turns sloga ns and catch phrases into reality. Cactus is lucky to have him, an d his actions should recognized. be

Sincerely,

John Westbrook Cc: Rodney Hale, Supe rintendent Kathy Willingham, VP HR & HSE Pete Martin, VP Marke ting Josh Simons, VP Opera tions Justin Lawson, Field Safety Manager

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Personnel Spotlight

Drilling hotspot Permian Basin is where you’ll find Rodney Hale

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odney Hale has been a fixture at Cactus, since the get-go as he phrases it. So it should come as no surprise that you can find one of the charter members of the Cactus family at the center of one of its most active and important drilling regions — the Permian Basin. As drilling superintendent, Hale oversees the operations of eight very busy rigs in West Texas and New Mexico. That includes the newest entry in the field, Rig 156, the state-of-the-art AC Rocket Rig completed just a couple months ago at the new Oklahoma City fabrication yard and now working about 50 miles south of Midland for Callon Petroleum.

Rodney Hale with Cactus’ new AC Rocket Rig 156 before it left the yard for West Texas.

“It’s a busy area,” Hale said. “Gosh, it’s unreal how busy it is. You can’t go anywhere without seeing rigs.” Hale had been superintendent for a set of rigs in Oklahoma. Now he is spending the lion’s share of his time in the Permian Basin. “We have a plan for how to operate there,” he said. “You have to be ready to adapt to new circumstances. You have to be able to improvise.”

Hale’s oilfield experience has officially covered opposite extremes. Early in his career, he worked offshore for Loffland Bros., (“That was not for me. I’m a land-lover,” he said.) And now he has reached the dusty, parched expanses of the Permian Basin.

It also helps to have great crews. “How do we keep them running? We have the right people,” Hale said. “I brag to Ron (Tyson) and Kathy (Willingham) and Josh (Simons) that I’ve got the best pushers in the fleet. “We recruit them (rig managers) and treat them the way you would want to be treated. And we allow them to do their job.” In fact, Cactus has been able to attract quality crews, most from Oklahoma, to man the rigs out west in twoweek shifts. “They are good, dedicated employees,” Hale said.

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No matter the location, Hale said he is grateful to work for Cactus. “It’s the best job I’ve ever had,” he said, including his two-decade stint with Helmerich & Payne (H&P). “It feels great to have been with Cactus from the ground up. You see it grow and feel like you have a sense of ownership in it. “Ron (Tyson) gave me opportunities I’d never have had at H&P. We’ve got three of the best bosses you could ever work for. And they have assembled the best group of men and women you could ask for. They work great together.”


Cactus: A History

FIRM FOUNDATION Cactus flourishes because of a history of sound business

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ODAY, CACTUS DRILLING LLC is a solid, vibrant, mature company. There is no wonder, really, how the company emerged as the largest privately held land driller in the U.S. — it grew because of the sound business practices of its origins. For those origins, you have to look back to two times and one man. The genesis of Cactus Drilling dates back to the 1980s. It operated for several years before its assets were sold in 2002. By the next year the current incarnation of the company surfaced. And Jim Willis, a fixture with Kaiser-Francis Oil Company, was at the center of both iterations of Cactus Drilling. “He is really the father of this company,” Cactus President Ron Tyson said. Willis, who retired last year, was a visionary businessman, Tyson added. He could envision the potential for this young company, even as he sold the first incarnation. That was a good business move. But Willis would not sign a non-compete clause and retained the company name. “We started up again almost immediately,” said Tyson, who Willis hired in January 2000. Tyson later helped Willis grow the reprised version of Cactus. “We started with zero employees on Day 1; today we have more than 1,400 employees and 56 rigs.” The Willis-Tyson team found quick success by buying stacked rigs and rig parts, refurbishing them and getting them out in the field. “We would spend hours driving across the countryside looking at equipment and building rigs in our mind’s eye. Then the rigs would make it on paper. Next thing you know, we’re building them,” Tyson said. “It didn’t take us long to make decisions. That was very valuable.”

and running. With each rig, the Cactus employee base grew by 22 people, the number of people it takes to run a rig in the field. Rig 136 took Cactus to a different level. It was the company’s first new-build rig. The Cactus Rocket Rig was born and the company sprang to the forefront of domestic land drilling, not as one of the industry giants but as one of the best and most respected players. “It has been fast. It’s been fun too,” Tyson said. “Jim loved this company, still does. His commitment to build the new headquarters building said he was taking the long view, that we are in this for the long haul. “We are continuing to grow,” Tyson added. “We’re growing at our pace, though. We aren’t going to push growth for the sake of growth and get overextended. We pay attention to the market. We grow as the market tells us it will take these rigs. Right now, that’s about one rig a quarter.” At Cactus, the future looks solid because the past grew out of solid principles and practices. Willis set the company’s path on sound footing ­— sustainable growth based on realistic market prospects, not flashy and dramatic short-term growth attained by overreaching. Jim Willis put his heart into Cactus Drilling and left an indelible mark on the company. The bronze statue he presented, which is at the headquarters entrance symbolizes his commitment.

The first 34 rigs — numbers 101 through 135 — were refurbished. (There was no Rig 113 out of deference to the notion of the unlucky 13.) And Cactus was off

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Open House / Rig Show

GOOD SHOW

Great employees, great product essential to event success

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he one day of rain that first week of April had to come on Tuesday, the day of the Cactus Open House and Rig Show. Organizers had planned for higher attendance than the previous rig show. As they planned the event, having enough food for 400 seemed ample. The inclement weather, however, raised concerns that attendance may not meet expectations. But the people kept coming. Then the food started to run out. In what can only be called an unexpectedly huge success, about 600 people braved rainy weather to tour the new corporate headquarters, see the spacious new yard and fabrication facility and get a firsthand look at the muchanticipated Cactus R-156 AC Rocket Rig.

Cooper Ross / Insight Visual Media Productions

Cactus employees, family members, customers, industry colleagues, competitors and vendors swarmed the facilities. Many of them ignored the mud and rain in order to climb all over the rig, step across the rig floor, get a peek at the stateof-the-art driller’s cabin and maybe even sit in the chair. “We are definitely generating operator interest with this event,” said Cactus Vice President of Operations Josh Simons. “Our guests had an opportunity to tour the rig, see our operation firsthand and get a feel for how we conduct our daily business.” The results could hardly have been better. “We received very good feedback on the facility and the rig itself. Everyone was very complimentary,” Simons said. Rig 156 was the star of the show. (See Page 11 for more on the new rig.) But the facilities were of interest to others, like Brian Stringer of Comstock Resources. “They’re taking the next rig,” Simons explained. “Brian and I toured the rig together. He was very impressed and excited to begin the process on Rig 158.” In fact, Stringer related in an e-mail that he “told everyone who would listen how good a company Cactus is. Comstock is certainly sold on it.” It’s no wonder people praise Cactus; consider the product. “These rigs are equipped with the most advanced land drilling system on the planet,” Simons said. “It is a significant

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The high-tech driller’s chair (top) was a major draw. So was the food and conversation (bottom). capital investment that demonstrates our commitment to be a tier-one driller and the contractor of choice. “This event required a lot of planning and improvisation. Everyone was involved at some level,” he said. “The yard guys did a terrific job of organizing the yard and shop. The rig-up team ensured the rig was show-ready. Our office staff members were courteous hosts and did a great job showing people around the facility.” Organizers also praised the improvisational skills and hard work of Kelly Shuck and Cindy Quiles. When strong winds from the incoming weather collapsed a tent where festivities had been planned, they supervised the hurried preparation of space in the fabrication building to accommodate lunch for hundreds of people. “With the weather, I expected about half of the 300 we had in attendance at our last rig show. Instead we had double,” Simons said. “It was great to see how much pride our employees take in their work. They care about Cactus, and when we open the doors, they want to show everyone just how great of an organization we all have the pleasure of working for.”


Cactus Rig 156 HOISTING & ROTATING Drawworks - NOV DSGD-375 (1500 hp) Rotary Table - Rig Components RC-275 (27-1/2”) Traveling Block - Veristic VT400-652 Top Drive - Varco TDS-11SA (500 ton / 800 hp) Pipe Handling - Varco ST-80 Iron Roughneck / NOV Pipecat MAST & SUBSTRUCTURE Mast Design - Veristic Rocket Rig-AC Height - 144’ Capacity - 800k SHL (12 lines) Sub Design - Veristic Rocket Rig-AC Floor Height - 23’ Clear Height - 20’ Capacity - 800k Casing / 600k Setback TRANSPORT Estimated Loads - 45 (less tubulars) DRILLING CONTROL SYSTEM Driller’s Cabin - NOV climate-controlled and pressurized cabin with integrated electronic controls and instrumentation Drilling System - NOV Amphion control system w/ ergonomic driller’s workstation POWER PACKAGE Engines - (3) Caterpillar 3512C (1476 hp) Generators - (3) Kato 6P6-3150 (1204 kW / 1720 kVA / 0.7 pf) VFD System - NOV Drill Force w/ (3) generator bays, (5) inverter bays, and (10) sections Allen-Bradley MCC BOP EQUIPMENT Annular - T-3 Energy 13-5/8” 5M 7022 Single Ram - T-3 Energy 13-5/8” 10M 6012 Double Ram - T-3 Energy 13-5/8” 10M 6012 Accumulator - T-3 Energy 7-station / 220 gallon Choke Manifold - T-3 Energy 4-1/16” 10M Separator - Ledet 4’OD x 20’L MUD SYSTEM Mud Pumps - (2) Hong Hua HHF-1600 (1600 hp / 5000 psi) STORAGE CAPACITIES Drilling Water - 1,000 bbl Diesel - 21,000 gallons TUBULARS Drill Pipe - 5” 19.50# G-105 5” 19.50# S-135 5” HWDP Drill Collars - As needed for normal drilling operations

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Cactus Connection Vol. 2  

Cactus Connection 2nd Quarter 2012

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