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In This Issue: Q1 Results One Savanna Award Recipients What’s Happening? Savanna’s Training Centre

Photo taken by Aaron Olsen, Rig 427


Message f rom Management

The Importance of Being Safe This month’s message from management is written by Savanna’s President and CEO, Ken Mullen. The importance of safe working practices cannot be emphasized enough and we all must be dedicated to ensuring everyone returns home safely to their families and loved ones every day. procedures we perform in our jobs. We 22. This is the age of someone just getting must be constantly vigilant and focused started with life; someone considering on “what could go wrong”. We must not their future; someone who might be shy away from stopping our teammates thinking about marriage, starting a family, from doing something unsafe, and we must or maybe looking around for someone to always be engaged enough to point out do that with. It is NOT when your family better equipment and process designs with and friends should be grieving over your the confidence that we will be listened to. death. Savanna is committed to the safety Savanna is a culture built on engaging of our employees and over the years has our people and supporting them to make had few serious incidents. Unfortunately, our business better. That engagement even one serious injury, or loss of life, is values the safety of our people above all devastating to family, friends, co-workers else. I know desire exists in all our people. and everyone touched by these incidents. As a management team we are fully Zachary “Ty” Stewart was a committed to supporting every possible Derrickhand working on Rig 648. He was approach to improving the safety culture well-liked and well-regarded by his tightin this Company. knit crew. He was Push us, test us, only 22 when he fell We must not shy demand the to his death on the away from stopping our and support required to rig the evening of make us safer every May 10, 2012. With teammates from doing day. We welcome a young adult child something unsafe it. We want it. of my own, I almost Ours is an industry where risks to cannot bear to imagine the grief that Ty employee safety are very real and too many Stewart’s co-workers, friends and family young lives are lost every year. We all can are feeling. honor the memory of Ty and others like The specifics of the incident are being him by sustaining our culture of awareness investigated thoroughly, and in time and dedication to safety to help ensure we hope to understand how and why it everyone in our organization goes home happened. The end result however, is safe every day. This is one area where we that a young man was taken away in an must continue the pursuit of perfection instant from his parents, his family, and every day and in every aspect of our jobs. his friends. For us, his co-workers, it is a painful reminder that the greatest value at Savanna has always been integrity, which includes as an essential element, the safety of our people. Our ability to care for each other overrides everything else we do. We must always be thinking about safety as well as communicating and understanding the risks associated with the tasks and

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Ken Mullen, President and CEO of Savanna Energy Services Corp.

800, 311 6th Avenue SW Calgary, Alberta T2P 3H2 Phone: 403 503 9990 Fax: 403 267 6749 info@savannaenergy.com Savanna Energy Services Corp. is listed on the Toronto Stock Exchange (TSX:SVY) For current stock information, visit tsx.com or savannaenergy.com

Rig-n-Dig May 2012

Rig-n-Dig is published by Savanna Energy Services Corp. as an information vehicle for our employees and for our community. Suggestions and contributions are welcome and encouraged. Editor/Publisher: Janine Tannahill 403 267 6739 jtannahill@savannaenergy.com Managing Editor: John Bayko 403 781 9999 jbayko@savannaenergy.com

In This Issue Message from Mgt. Q1 Results One Savanna Award What’s Happening? Savanna’s Training Centre Savanna Info Last Page

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Q1 2 012 Resul ts

Another Strong Quarter for Savanna The release of Savanna Energy Services Corp.’s Q1 results on May 10 caused quite a stir with the highest EBITDAS in Savanna’s ten year history and increases in margins across all divisions and locations.

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Savanna Energy Services Corp.’s first quarter results were released on May 10 with very positive and encouraging Comparison of Results results. In fact, results for Q1 were record breaking, with an increase in pricing, operating days and hours, operating Q1 2011 margins and EBITDAS. Most results were up from the results reported in Q2 2011 Q1 2011, with some being the highest ever for Savanna, like EBITDAS. EBITDAS is defined as ‘earnings before finance expenses, income taxes, depreciation, amortisation and sharebased compensation’ and excludes any other expenses. It is commonly used to analyse and compare the profitability of companies and industries as the effects of financing and accounting decisions are eliminated. Savanna’s EBITDAS for Q1 2012 was recorded as $72.4 million— the highest in the company’s ten year history! It represented an increase of $31.7 million or 78 percent from Q1 2011. In general, increases were seen across Drilling Drilling Servicing Servicing Overall Overall Net EBITDAS all divisions within Savanna. Savanna Revenue Operating Revenue Operating Revenue Operating Earnings Drilling saw an eight percent increase in Margin (Canada) Margin Margin (Canada) the number of operating days as well as a whopping 74 percent increase in operating margins and a $36.2 million increase in Q1 2011. An increase in activity and rig revenue as compared to Q1 2011. A similar considerable flexibility for the remainder fleet in the US saw margins almost double trend was also noted in Savanna’s USA of 2012. The second key highlight for Savanna’s well drilling division, was the approval of monthly dividend servicing division in with operating payments to shareholders. The first of Savanna’s EBITDAS for Q1 the US. Australian margins more these payments will be paid on June 15. 2012 was recorded as $72.4 operations were than doubling In the future, Savanna will continue also strong this from Q1 2011. upgrading its rigs and plans to convert million—the highest in the quarter with Savanna five more rigs to the highly sought after company’s ten year history! considerable Well Servicing’s TDS-3000™ platform. The CT-1500 improvement over the negative Canadian fleet also experienced platform is remaining strong in the margins experienced in Q1 2011. exceptional increases in operating coring market and Savanna’s long range One of two key highlights during Q1 margins and hours—a tremendous result rigs presented an 81 percent utilisation was the renewal of Savanna’s revolving considering approximately 10 percent rate in Canada during Q1 2012. A fourth credit facility from $135 million to of Canada’s well servicing fleet was not hybrid rig arrived in Australia during $200 million with a term extension of deployed due to personnel shortages. Q1 and has commenced work. All in one year. The increase in the amount Overall, operating margins increased by all, operations are looking positive in $6.3 million or 55 percent, operating hours available under the revolving credit facility all divisions and sectors of Savanna. together with Savanna’s current financial increased by 47 percent, and revenue position provides the company with increased by 58 percent as compared to

savannaenergy.com

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One Savanna Awa rd

One Savanna Award Recipients March saw the selection of Savanna’s inaugural “One Savanna Award” recipients. With a large number of Savanna employees nominated for the award, picking the winners was a difficult choice. All nominees exemplified Savanna’s Vision and Values and are to be congratulated on their commitment to Savanna and their peers. We congratulate both the nominees and the award recipients.

Derrick Williams, Shop Hand, Savanna USA Jim Bakanec, Training and Development Manager,Savanna Australia Saba Asgedom, AP Clerk, Savanna Energy Services Corp. Jim Wilton-Clark, Director of Technical Services, Savanna Energy Services Corp. Allen Krahn, Engineering Manager, Savanna Energy Services Corp. Rob Normandeau, Manager, Business Systems, Savanna Energy Services Corp. Travis Reid, Derrickhand/Driller Savanna Drilling Canada Frank Glasgo, Welding Supervisor, Savanna Drilling Canada Craig Oldford, Floorhand, Savanna Drilling Canada Anne Jendruck, Purchaser, Savanna Drilling Canada Sheridan Ryan, Rig Manager, Savanna Drilling Canada Tracy Hug, Crew Coordinator, Savanna Drilling Canada Sandon Deerig, Derrickhand, Savanna Drilling Canada Shawn Rebman, Rig Manager, Savanna Drilling Canada

“One Savanna Award” Recipients Ricky Rosa, Field Superintendent, Savanna USA Steve Gray, HSE Manager, Savanna Australia David Parsynchuk, Derrickhand, Savanna Drilling Canada Lorne Stang, Field Supervisor, Savanna Well Servicing George Shields, Crew Coordination Supervisor, Savanna Energy Services Corp.

Lorne Stang Lorne is a Field Superintendent for Savanna Well Servicing. He has a positive attitude and always goes above and beyond for the people he works with. He can be relied upon to help whenever someone needs it. His positive attitude makes him an excellent teacher in the field and he is especially great at helping to integrate new employees to the Savanna team. Lorne is a great person to talk to and truly represents what Savanna stands for. Lorne Stang Lorne began his career with well servicing in December 1999, but has worked in the industry for well over 30 years. He says after that amount of time there is not much that happens in the industry that surprises him. Lorne has been a Field Superintendent with Savanna for three years. Congratulations Lorne for being a fantastic mentor and receiving the One Savanna Award.

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SAVANNA

“One Savanna Award” Nominees

Ricky Rosa One of Ricky’s customs is to make sure he meets every new employee hired to work on Savanna’s rigs—even if they are not working on one of his rigs. As a Field Superintendent for Savanna USA, Ricky is always there to help the rig personnel when needed. Ricky makes every attempt to take care of a situation and has an incredible gift when it comes to working with people. He treats everyone equally and with respect and in return, the rig personnel respect Ricky and value his opinion and insight as a Field Superintendent. Ricky truly embodies Savanna’s Vision and Values. Ricky has been in the industry for 17 years and began working for Savanna in August of 2010. He says the best part about working for Savanna is the people. Thanks Ricky for the job you do for Savanna and the assistance you provide to your crews. Congratulations on receiving the inaugural One Savanna Award.


One Savanna Awa rds David Parasynchuk In the oilpatch for over 30 years, David is an inspiration, mentor and friend to his current crew. During his years, he has trained and advised many hands, but is always keen to learn more himself. Currently, David is the Derrickhand for Rig 653 and his crew describes him as a very hard worker, always keen to lend a hand, and a very patient and helpful teacher (not to mention good looking!). David enjoys what he does and it is evident in his work ethic and attitude. He is committed to Savanna and works hard to help those he works with. Thanks for being such a great mentor and teacher David and we congratulate you on receiving one of the first One Savanna Awards.

Dave Hoogendorn (left) presenting Dave Parsynchuk with his award George Shields George began his career with Savanna not too long ago as an employee from Silverstar Well Servicing. During the year, George has had to adapt to working for a larger company and has set an outstanding example for others also making those adaptions. As Crew Coordination Supervisor for Savanna Well Servicing, George is committed to excellence, the community and continuous improvement initiatives such as implementing the One Savanna Award and the Christmas Toy Drive conducted by the South Edmonton Office. George has worked in the industry for 22 years, beginning his career with Grizzly Well Servicing. He enjoys the openness at Savanna and the willingness to listen to ideas and the care shown to employees. Savanna’s family atmosphere is very important to George and he truly believes Savanna wants to make a difference in both the oil and gas industry and the community. Congratulations George on your achievement.

George Shields Stephen Gray Stephen is Savanna’s HSE Manager in Australia and has shown exceptional initiative in the development of the One Savanna Award and many other employee improvement ideas. Over the past 18 months, many situations have challenged Australian Operations, but all have been met with team work, determination and resourcefulness. Stephen says it was during one such challenge that he saw Savanna pull together as a company and work through it. Stephen enjoys working for a values-based company and has seen first-hand how Savanna’s Vision and Values can be used to work through hard times. He says that from these Values, it is easy to see why Savanna is considered by many as the benchmark for performance and safety in Australia and across the industry. Congratulations Stephen as a recipient of the One Savanna Award and thank you for the commitment you have to Savanna and Savanna’s Australian operations.

Stephen Gray

Nominations for the next “One Savanna Award” close June 15! savannaenergy.com

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What ’s Happening?

What’s Happening? Hockey for a Cause Savanna’s best athletes from Head Office tied on their running shoes and traded computer keyboards for hockey sticks in support of the annual Cassie Campbell Street Hockey Festival. Held 04 May, the event raises money for Ronald McDonald House Southern Alberta. 73 teams from companies such as EnCana, Pengrowth, Penn West and WestJet participated in the event, raising over $45,000 for the charity. This year’s participants included: Back L-R: Russ Talbot, Terry Khu, Dave Lamoureux, John Cooper, Aaron Mills and Rob Normandeau Front L-R: Kara Sewell, Naomi Wiens, Anna Guo, Richard Beaulieu, Erin Martin, Emily Clegg and Kelsey Pew, Lying: Trevor Vance

Catering Savanna Style Who would have thought Savanna would add ‘mobile BBQ’ to their list of inventory?! Well, they have! In fact, two brand new mobile BBQs rolled off the assembly line during May; bound for Savanna Well Servicing in Brooks and Grande Prairie. Neil Draper, Field Account Representative for Savanna Well Servicing, debuted one of the BBQs at the Brooks shop, but hasn’t yet had the right weather to set off into the field. The plan is to take the BBQs out to the rigs and cook lunch for Savanna clients, crews and other field personnel on site. They will also be used for Savanna and community functions. If you have a function in mind or would like a visit from the Savanna BBQs, please contact Neil Draper (Brooks) or Terry Robak (Grande Prairie).

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What ’s Happening?

SWS Rigs of the Month – Safety Excellence Award Congratulations to Carlyle’s Well Servicing ‘Rig of the Month’ for February and March: Rig 115 and Rig 116. The rigs were awarded the Safety Excellence Award based on their compliance to safety rules, incident frequency, and ambition and motivation, and were chosen by their Area Manager, Billy Wilson, Field Superintendent, Mark Scott, and HSE Superintendent, Lianne Kenler. Congratulations guys!

Rig 115: L-R; Marcus Penny, Geoff Dolan, Ryan Demeria (Rig Manager), Layton Raes and Kevin Okafer

Rig 116: L-R; Evan Lapierre, Kris Harry, Jon Martin (Rig Manager), Steven Holstein. Missing from photo is Adam Sarsfield

Congratulations!

Supporting our Community

Congratulations to Corey Feuser, Rig Manager for Rig 49, and his wife, Seuser, on the birth of their daughter. Little Addisyn was born March 02. She is their second daughter.

Momentum is a not-for-profit organization with the vision that every person in Calgary can have a sustainable livelihood and contribute to their community. With the aim of reducing poverty, Momentum focuses on holistically developing a person’s five most important asset areas. These areas include personal assets, physical assets, social assets, human assets and financial assets. As part of Savanna’s own Vision and Values and the support given to assist the communities in which we operate, Savanna recently presented Momentum with a donation as part of a three year commitment to the organization. Presenting the cheque was Rachel Moore, Vice President of HR.

Photo Contest

The Rig-n-Dig’s annual Photo Contest is now on! Topic: The Weather Send entries to: savannaphotocontest@gmail.com Competition closes: September 30, 2012 For more information, please see the Rig-n-Dig on Savnet or Facebook.

Rachel Moore (second from left) with Momentum board members and staff

savannaenergy.com

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What ’s Happening?

Recruiting Time! Savanna’s recruiters have been hard at work attending a variety of career fairs around Alberta. Here are some photos from their adventures!

L-R:Gurdeep Dhillon, Christina Andruchow and Brittany Burton

Jamie Ogilvie (left) and Anna Guo (right)

Rig Manager Conferences 2012 This year’s Rig Manager Conference was a huge success! Held April 23-25 and April 30-May 02 at the Sheraton Hotel in Red Deer, approximately 170 Rig Managers attended the event. With a variety of information sessions covering topics from HSE to Benefits, as well as external vendors, the three days were capped off with a Trade Show, dinner and ‘Fun Money’ casino.

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Training the Rig Crews of Tomorrow

Savanna’s Vision and Values are the driving force and inspiration behind the establishment of Savanna’s Training Centre in Lacombe, Alberta. A combined initiative between Operations and the Lacombe office, the Training Centre was developed to not only provide positional technical training to field personnel in a safe and monitored environment, but also to reward and encourage reliable, enthusiastic and hardworking employees interested in moving through the ranks. The training at Lacombe focuses on position specific tasks and skills, as well as the skills necessary to build strong working relationships and the importance of integrity, excellence and sustainability: Savanna’s Values. Talk regarding the creation of Savanna specific training first surfaced in 2010 by a group of eight Savanna Well Servicing employees. Led by Dave Berrecloth, Savanna Well Servicing Operations Manager North, the talk surrounded the changing expectations of potential and current employees and their need for career-based occupations in the field. Berrecloth says the idea was to show individuals that a career in the field does exist and Savanna is more than happy to invest in the training required to help build this career. Together with Peter McNamara, Team Lead Technical Training, a training course was created and focused on safety and assisting field employees with career development and advancement. The first course taught by McNamara was held on December 13, 2010 and was for well servicing Derrickhands. Since December 2010, the Training Centre and the courses offered have grown in leaps and bounds. Today, the centre offers a variety of courses on both the drilling and well servicing side as well as Savanna’s Aboriginal Training program. To accommodate the increase in courses and training participants, a new building was added to the Lacombe office and two training wells were drilled. Both drilling and well servicing rigs are also in the yard to accommodate the practical, hands-on training offered in the courses. McNamara says they have Rig 309 in the yard for drilling

Savanna’s Training Cent re

Savanna’s Training Centre in Lacombe, Alberta, is leading the way when it comes to efficient and effective in-house field position training. Operational since December 2010, the centre was the brain child of Operations and Savanna Well Servicing.

experience; however, he jokes that the well servicing rigs he has keep getting taken from the yard for work in the field. In addition to the changes made at the Lacombe location, McNamara says vendor field trips and third party contractors have also been introduced to the courses to provide training on specific rig parts. At the moment, the well servicing courses available are for the position of Derrickhand, Driller and Greenhand, with the hope that Floorhand will be available by the end of the year. The drilling courses available include Greenhand and Motorhand. Participants for the courses are referred by either their Rig Manager or Field Supervisor as the premise of the courses is to encourage and support enthusiastic employees who are ready to take the next step in their career. The courses are position specific and run through the skills and responsibility associated with that position. To be continued next month... The Training Centre is looking for a full-time Technical Trainer. If you are interested in the position, please contact Peter McNamara at 403 786 2499.

savannaenergy.com

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Savanna In fo

Photo Contest Time! Savanna’s annual Photo Contest is back for another year! This year’s theme is The Weather. Entries can be print or digital images. Digital images must be submitted at the highest resolution possible to savannaphotocontest@gmail.com. Prizes are up for grabs for first, second and third place, with the best from each month’s entries printed in the Rig-n-Dig. Entries will be judged based on composition and relation to the theme. The competition begins now and closes September 30!

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Last Page

Tyler Diamond 1989-2012

We lost one of our own‌ Tyler Diamond, at the age of 22, died 04 May, 2012, as a result of injuries sustained in a motor vehicle accident that occurred while on days off. He was born 23 November, 1989, on the east coast of Canada. His family moved to Alberta and called Spruce Grove their home. Tyler, his older brother Gerald and his father, all shared the same passion of working on the rigs and providing for their families. He grew up in a loving family and surrounded himself with good friends. Tyler leaves behind his beautiful daughter Kallie, mother and father Virginia and Clarence, brother

and sister-in-law Gerald and Allison Gould, his nephews Mathew and Nicholas as well as many cherished family members and friends. Tyler worked as a Derrickhand on Rig 617 under his brother Gerald, who was the Rig Manager. He will be greatly missed here at Savanna Drilling. - Ewa Joniec, Crew Coordinator SD and Tracy Hug, Crew Coordinator SD We need to all remember being safe at home is just as important as being safe at work. savannaenergy.com

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SPINA BIFIDA AND HYDROCEPHALUS ASSOCIATION OF NORTHERN ALBERTA

Did you know ... June is Spina Bifida & Hydrocephalus Awareness Month!

Spina Bifida is the number one birth defect causing permanent disability in Canada. Hydrocephalus often occurs along with spina bifida and is an accumulation of fluid in the brain. Common effects of spina bifida and hydrocephalus include: mobility impairment, bowel and bladder complications, learning disability, headaches, fine motor skill challenges, latex allergy and permanent damage to the spine and spinal cord.

Our Vision: People affected by spina bifida and hydrocephalus are engaged, informed and empowered through a vibrant network facilitated by our leading and innovative organization.

There are many ways to support us in our vision: 5th Annual Hope Classic Wheel/Walk/Run! August 11th, 2012 5k wheel/walk or 8k run • Prizes! • BBQ • Entertainment Family friendly and fun!

5th Annual Keegan Benner Charity Golf Tournament For Spina Bifida & Hydrocephalus

September 29th, 2012 • Silent Auction • Golfing • Banquet • Prizes

The beautiful daisy symbolizes the challenges of spina bifida and hydrocephalus. It’s heart represents the brain; it’s petals represent the many lesions caused by spina bifida & hydrocephalus; it’s irregular leaf and stem represent the spinal cord and backbone of a person born with spina bifida. Most importantly, it’s unique beauty reflects the beauty of people with spina bifida and hydrocephalus who, in spite of their challenges, live happy and productive lives.

SBHANA wishes to thank Savanna Energy Services Corp. for the opportunity to share our vision in this newsletter! To learn more about spina bifida and hydrocephalus and to support the SBHANA, please visit our website:

www.sbhana.org

Rig-n-Dig May 2012  

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