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Rig-n-Dig April 2011

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In This Issue

Interview with George Chow Rig 636 Profile D & D Profile What’s Happening?


Message from Management

Message from Management Savanna President and CEO Ken Mullen recaps the events of the Rig Manager meetings held during April. Spring Break Up is officially upon us but unlike the past few years, this spring our activity is up quite a bit in drilling, well servicing and rentals. With several rigs still running we are ramping up for a very busy summer season and look forward to keeping crews active well into the fall. The high price of commodities, with the notable exception of natural gas, seem to be continuing, and with oil trading over $100 the appetite for drilling is certainly there. I’m not actually sure how we could handle the demand increase that higher natural gas directed drilling would bring. Operationally, we are also currently in the process of re-certification and refurbishment for some of our equipment and our cap-ex program is well under way as we look to improve our existing fleet, and add additional equipmeny. Work is taking place company wide. Additionally, Savanna has just agreed to acquire Performance Services, and in doing so will increase the size of our Well Servicing fleet to 84 units, 5th largest in Canada. Performance’s fleet are deployed in areas in which Savanna is also deployed, so the transition of operations will be relatively seamless, increasing Savanna’s presence in Alberta, BC, and Saskatchewan. On another note, thanks to all Rig Managers and Drillers who attended the spring meetings this year held in Nisku and Red Deer. Although they got off to a rather dry start (thanks to the water main break in Nisku), for the most part they were very well received. The three day event was held twice to accommodate Rig Managers from both drilling and well servicing, and bringing everyone together was an idea we intend to carry forward for next year and into the foreseeable future. The meetings themselves were a combination of corporate and field presentations and some of the topics addressed were employee retention, drug and alcohol testing, operations, and safety. D&D Oilfield Rentals also presented, and outlined the different things they bring to Savanna’s compliment of services. Thanks to all who took the initiative to raise questions or suggestions during the meeting, as well to comment on the sheets provided. The information and suggestions collected will be addressed by the responsible people within Savanna, and comments relating to the manager meetings themselves will be put to use in planning next year’s meetings. Your input is crucial in making these gatherings more worthwhile and next year we hope to improve both delivery and content across the board. As we enjoy the spring snowfalls for which Western Canada is so famous, or if you are just anticipating the heat in our United Sates and Australia operations, we want to thank all of you for helping Savanna take advantage of a global resurgence in our business prospects. Congratulations on a very active start to 2011.

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www.savannaenergy.com

April 2011

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

1800, 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 April 2011

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. Interview with George Chow Rig 636 Profile What’s Happening? Canadian Benefits Scholarship Program D & D Profile Last Page

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Employee Profile

Chatting with Chow So how many people does it take to start an oilfield services company? Well, only five if you have George Chow on your team! Savanna’s Executive VP, Corporate, discusses the early days of Savanna and who he’s picked for the Stanley Cup Playoffs. In 2001, a small energy services company was created. Formed by four friends and co-workers, this company was incorporated as Savanna Energy Services Corp. One of the four founders of this little venture was George Chow, Savanna’s current Executive Vice President Corporate. His partners in crime were current CEO Ken Mullen, VP Finance Darcy Draudson, former Chief Operating Officer Chris Oddy and former Savanna Chairperson Tom Wood. Together, Mr. Chow and the rest laid the groundwork for what is now one of the largest energy services companies in Canada. Like all the founders of Savanna, George Chow’s education and background is varied to say the least. Born in Hong Kong, Chow and his family moved to Edmonton in 1971, where he attended the University of Alberta and obtained a Mechanical Engineering degree. Upon graduation, NOVA Corporation of Alberta (now part of TransCanada Pipelines), a natural gas transmission company, was the next stop. Still keen for an education however, Chow returned to the University of Alberta and completed a law degree. Upon graduation from the U of A in 1988, he moved to Calgary to practice oil and gas and securities law. Then, in 1994, Chow jumped into the oilfield services industry to run a start-up/production testing company called Entest, which later became part of Plains Energy. It was at Plains where Mr. Chow also worked with Darcy Draudson, Ken Mullen. and Chris Oddy. After going public in 1996 and growing the business from five to over 65 production testing units, Chow relinquished his operational duties with Plains in 1998 to take on an executive role with the company. In 2000, Plains was taken over by Precision Drilling in a hostile transaction and the four men, still interested in energy services, decided to

wait out their mandatory non-compliance clause before starting their own business— Savanna Energy Services Corp. Long time acquaintances, the four founders of Savanna came together in what could be described as a happy coincidence. Mullen and Chow actually began their legal careers together at the same law firm and when the latter was practicing law, Darcy Draudson was a client of his. Mr. Chow also worked with Draudson and Chris Oddy prior to working at Plains Energy. All very complicated and intertwined, but the moral of the story is they all ended up establishing the Savanna we know today. Today, Chow’s role at Savanna entails overseeing various functions including Savanna’s legal issues and external lawyers; mergers and acquisition activities on the execution side; Information Technology; and the newly formed Technical Services Group, just to name a few. When asked how his role has changed since Savanna’s early years, Chow notes: “I don’t think it has changed. [It’s] just grown and changed with the company.” His title and main responsibilities have remained the same since 2001. Chow describes the initial years of Savanna as a “little bit of a challenge”. “[We were] very busy getting infrastructure together for an office; busy hiring people that we needed in operations; busy building equipment and busy raising money.” Basically the company began with nothing. The first office location was in Energy Plaza, Calgary—Savanna’s current location—and the first field office was opened in Brooks, Alberta (initially part of Great Plains Well Servicing infrastructure). The team then went about hiring people to get the company going. Some of the first few hired included Gene Carriere, VP and GM of Savanna Drilling Hybrid, Don Goldade, current Manager

George Chow, Executive VP, Corporate, of Savanna Energy Services Corp.

of Field Operations in Australia, Lori Connell, Corporate Secretary and Flora Santos, Corporate Payroll Supervisor, who all had worked for Plains Energy. Chow notes that the biggest change he sees in Savanna is its size. “[Savanna] has certainly grown a lot quicker than I had anticipated or expected when we first started with a few of us back in 2001” he reflects. “I never thought we would be this size this quick,” and he credits Savanna’s rapid growth to the staff and the merger with Lakota. “Equipment’s equipment, so as we’ve seen this last winter, there’s a lot of idle equipment sitting against the fence that we aren’t able to operate because we don’t have the people. And you’ve gotta have the right people.” With Savanna’s rapid growth and many mergers has come an amalgamation of different corporate cultures. Chow identifies that until very recently, Savanna didn’t really have its own unified culture—just a lot of smaller sub-cultures. “We grew the company as separate operating divisions and each operating division had its own way of doing business,” states Chow. With each merger came a new culture and a new way of conducting business. The implementation of Savanna’s Vision and Values is the next step in the company’s growth—the unification of the businesses and people who have helped establish the Company over the last decade. And this next decade is going to be just as big as the first. Growth is an important factor for Savanna; however, as put by Chow, “we won’t grow for the sake of growing.” For many employees of Savanna, the family-like atmosphere

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Employee Profile is what they enjoy most. The small company mentality and culture is important for employee retention and Chow acknowledges this is by design. “We will certainly make every effort to maintain that,” says Chow, “however, we also have to understand that Savanna being the size it is and especially when we are doing business internationally, we need to adopt processes, procedures, checks and balances, new ways of doing things that are more suitable for an organisation this size and not necessarily suitable for a small business. But we certainly hope not to lose the family-type feeling.” Another part of Savanna’s future will be innovation. For a while, Savanna was a clear leader in innovation—one of the first to utilise and commercialise PLC service rigs and the first to commercialise drilling with coil tubing and hybrid drilling rigs in Canada—and the time has now come for Savanna to step back

into the position innovator in accordance with its vision. Chow believes Savanna will continue to lead the way as it has in the past and he sees the company broadening its bases of operations beyond Canada, the US and Australia. 2011 is definitely shaping up to be a big year and when asked how he would like to see Savanna’s 10th birthday celebrated, Chow replies: “I think it’s a shared celebration for the whole company. My preference is that we do it the way most people want to celebrate, ‘cause it’s not just my celebration, it’s everybody’s.” However, there is one thing Chow would like to see celebrated and that is the successes of not just the people who started the company, but also the successes of everyone who has helped to create the Savanna we have today. Besides working for Savanna, Chow also has quite the passion for (ice) hockey and golf. Growing up in Edmonton, he

is obviously an Edmonton Oilers fan, but don’t hold that against him. When asked to comment on their performance this year, Chow simply states “It’s a rebuilding year. I think they’re on the right track.” And his picks for the Stanley Cup final? “Crosby will come back and lead Pittsburgh to the cup finals” says Chow. “And from the West it will be the San Jose Sharks.” Lining one of Chow’s office walls is a collection of golf balls from courses he has played at outside Calgary or the odd special course he wouldn’t mind playing. Chow has done a great deal of golfing in the US and Canada and spends a lot of time golfing in Vernon, BC during the summer. One of his favourite courses outside Canada is Cabos del Sol in Cabos san Lucas, Mexico, which sits along the ocean. Another one of Chow’s favourites close to home is Stewart Creek near Canmore.

10 Quick Questions with George How many brothers or sisters do you have?

What is your full name?

We’ll stick with just George What is your favourite food?

Sushi

One younger sister living in Vancouver

Is there anything you are afraid of?

Where is your dream vacation spot?

Animals with big teeth

Maui, Hawaii What was the last book you read?

“Barbarians at the Gate” What has been your worst job?

Nursing aide in the geriatric ward at Oliver. I worked there during University – it was really good money! 4

www.savannaenergy.com

April 2011

Beer or wine?

Neither

Are you a ‘dinner and a movie’ type of guy or more a ‘stay home and watch a DVD’?

Stay home and watch a DVD Do you have a unique or special talent?

I’m good at fixing things with duct tape!


Rig Profile

Crew of Rig 636 Rig 636 is located just north of Edmonton near Redwater, Alberta. The crew has been drilling for Baytex Energy Ltd.

Tony Brown aka Downtown Derrickhand What do you like to do in your spare time? Spend time with my son. What sort of vehicle do you drive? Dodge Ram 1500 What did you do before working for Savanna? Worked for Trinidad Describe the perfect date: Long walk on the beach What would you do if you found $100 at an ATM? Keep it and buy some KFC

Red Sherwood aka Redrum Floorhand 2 What do you like to do in your spare time? Play the field What sort of vehicle do you drive? Jeep Liberty What did you do before working for Savanna? Roofing Describe the perfect date: Limo, techno beats and a 3:1 girl to guy ratio What would you do if you found $100 at an ATM? Buy Tony some KFC

Daniel Kelly aka Itchy, Motorhand What do you like to do in your spare time? Scratch records What sort of vehicle do you drive? Lifted Jeep TJ What did you do before working for Savanna? Insulator Describe the perfect date: A quiet evening with a case of guinness and a bbq steak What would you do if you found $100 at an ATM? Buy Tony some KFC Dale Bijou, Rig Manager What do you like to do in your spare time? Spend it in the mountains What sort of vehicle do you drive? Recreational vehicle is a 2009 Nissan GT-R What did you do before working for Savanna? Directional driller Describe the perfect date: A night at the top of Kicking Horse mountain at $1500 per night, a private chef, a spectacular view and free lift tickets What would you do if you found $100 at an ATM? Invest in the lottery

Dean Gerber aka Mr Mental Driller What do you like to do in your spare time? Spend time with family What sort of vehicle do you drive? F-350 Harley truck What did you do before working for Savanna? Drilled in the Arctic Describe the perfect date: Anything with my wife What would you do if you found $100 at an ATM? Buy Tony some KFC

Adam O’keef aka Downey Floorhand 1 What do you like to do in your spare time? Travel the world What sort of vehicle do you drive? My mum drives me What did you do before working for Savanna? A bartender Describe the perfect date: When my date pays for everything What would you do if you found $100 at an ATM? Buy Tony some KFC

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What’s Happening?

What’s Happening?

Goose or Maverick?

If Mark Donnelly, Transport Superintendent in Toowoomba, ever found himself without a job, he could always go back to flying F/A-18 Hornets for the Australian Airforce. Or maybe pick up a job with a local fashion magazine photoshopping photos? Nice work Mark!

Savanna Photo Contest

Yes, Savanna is once again holding a photography contest! Even if you don’t know one end of a camera from the other, we would love you to send in any shots you have that show movement, action or motion. The competition is open to all employees of Savanna around the world and entries can be sent to savannaphotocontest@gmail. com (please make sure files are at least 2Mb in size). Prizes are up for grabs! See the ‘Last Page’ for more details. So far we have had one entry submitted by Mary Haberlack from D & D in Redcliff. She has sent in a short clip of her four month old grandson, Chase. Click on the image below to play!

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April 2011


What’s Happening? Rig Manager Meetings

Savanna Well Servicing award for 12 months incident free operations. L-R: Dave Berrecloth, Devin MacDonald, Rob Barrie, Curtis Krushelinski, Rob Berg, Wade Anderson, Adam Young, Trent Hagel & Brad Kingston.

Savanna Well Servicing CAODC Award for 200 incident free operation. L-R: Ben Mejeski, Ed Smith, Dan Keohan, Dave Berrecloth, Terry Harmes, Kurt Smylie, Ryan LaBorde, Rob Omoth, Rob Barrie, Devin MacDonald, Jason Mohr, Trent Hagel, Adam Young, Brad Kingston, Lyal Stuut, Phil Bates, Scott Stevenson, Dan St.Thomas, Steven Haithwaithe, Eugene Barry, Brad Smith, Kevin Harms, Rob Berg, Ehren Geotz, Murray Draper, Kirk Harper & Dennis Noer.

Ken Mullen addressing the crowd during week two,

Joe Gibeau giving the camera a great smile!

Erwin Wildeman trying out a pair of ‘beer goggles’ from ECS Safety.

CAODC Awards (week 2). L-R: Dave Berrecloth, Dave Busenius, Steve Segers, Jason Dargatz, Dave Dempsy, Mike Devins, Conor Smith, Barry Lepard, Brent Abram, John MacNeill, Brad Kingston, Ryan Yakubchak, Matt Billard, Bruce Busenius, James Montgomery, Stephen Ford, Eric Beaudry & Jim Timmins.

Savanna Well Servicing Awards (week 2). L-R: Dave Berrecloth, Dave Judge, Ryan Yakubchak, James Montgomery, Eric Beaudry, John MacNiell & Brad Kingston.

All Rig Manager Meetings photos courtesy of Kristi Osmond

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Canadian Benefits at a Glance

Benefit Conversion When employee Group Plan Benefit Coverage with Great West Life is terminated, an option to convert your Group Plan to Individual Coverage is available.

Health and Dental Care Coverage Conversion Manulife offer four “FollowMe� health and dental conversion plans with various levels of coverage. If you apply to Manulife within 60 days of your Great West Life Group Plan termination, your acceptance is guaranteed without the need of medical questionnaires and examinations. Basic and Optional Life Insurance Great West Life will convert Basic Group Plan Life Insurance and Optional Life Insurance coverage without medical examinations and questionnaires if you apply for conversion within 31 days of your Group Plan termination. The amount converted must be at least equal to the minimum amount for which Great West Life will issue an individual policy for the plan of insurance chosen. The most any one person can convert is $200,000.

There are no conversion options available for Basic and Optional Accidental Death & Dismemberment (AD&D) and Optional Critical Illness Insurance. If you know what Benefit Coverage you will need, it can be beneficial to look at all the options and compare what different companies have to offer.

Policy

Conversion Period

Medical Exam

Company Name

Phone Number

Website

Health Care & Dental Coverage

Within 60 days of Group Benefit Plan termination

No

Manulife

1-877-268-3763 (1-877-COVER-ME)

www.coverme.com

Basic & Optional Life Insurance

Within 31 days of Group Benefit Plan termination

No

Great West Life

780-917-7800

www.greatwestlife.com

Possible

Marathon Benefit Corp. 403-238-7343

Basic & Optional No conversion AD&D & Critical options Illness Insurance All Insurance Options

Advice on best option for individual needs

www.marathonbenefits.com

For any questions or to request a Group Life Conversion Privilege Notification form, please contact your Benefit Administrator: Corporate: Flora Santos, 403.267.6772, fsantos@savannaenergy.com Savanna Well Servicing and D & D Rentals: Sylvia Sargeant, 403.214.5950, ssargeant@savannaenergy.com Savanna Drilling: Adiel Rautenbach, 403.267.6779, awrautenbach@savannaenergy.com

t fi e n e B n a i The Caneapdartment D

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Scholarship Program

Savanna Scholarship Program

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School is IN!! Savanna values Stainability and as such, is committed to driving short and long term successes and developing and empowering people. Savanna’s Scholarship Program is a means to assist Savanna employees in the education of their children in an age where the costs of doing so are often challenging. Therefore, all children of Savanna employees who are entering their first year of post-secondary training at a college, university, or technical/trade school are eligible to apply for one of four annual awards of $3000. For eligibility requirements and applications, please consult the Scholarship Policy located on Savnet’s “People” page or contact vzunti@savannaenergy.com.

Overview of Requirements • Open to all students under the age of 20 entering a college, university or technical college/trade school • Eligible students must have a minimum academic requirement of 60 per cent in their grade 12 coursework • Scholarship applications will be assessed based on the student’s academic standing and involvement in extracurricular and community activities

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D&D Profile

D & D’s Wayne Poole This month the Rig-n-Dig is profiling D & D Oilfield Rentals Operations Manager Wayne Poole. Wayne Poole is the Operations Manager for D & D Oilfield Rentals in Lloydminster (or Lloyd as it is also known), Alberta. Now the provincial classification of Alberta is very important for D & D’s location as Lloydminster sits on the border between Alberta and Saskatchewan, Canada. D & D is located on the Alberta side of town. Poole has worked for D & D since October 2004 and has been in the oilfield business for eight years. Prior to working for D & D, Poole managed a fabrication and machine shop in Medicine Hat. As Operations Manager at D & D, Poole is responsible for the day to day operations of the office and talking with oil company representatives about their rental equipment needs. D & D’s Lloyd location has been in operation for about 11 years and employs 10 to 12 people. Like all D & D Rental locations, Lloyd prides themselves on providing service “that is second to none” and that meets the needs of each customer. Poole says “we do our best to supply equipment needs to our clients, even if it is an item we do not carry in our inventory”. D & D will go the extra mile to ensure their clients are happy and have the equipment they need. Working with clients and meeting their unique needs is what Poole enjoys most about his position. Every day brings new challenges for him. “What I like about my job is … the satisfaction of dealing with and supplying the answers to certain problems,” states Poole. “[It] also allows me to talk with a wide variety of people.” So if you are looking for a certain piece of equipment or are wondering how you can make a process more efficient, then Poole is your man. Outside of work, Poole is an active volunteer for the Lloydminster Lacrosse Association. The Association is for kids aged between five and 16. Involved for some time, Poole began coaching last year

and took the local team, the Brutes, all the way to Provincials where they won bronze. Poole says, “[I] really enjoyed the time and success the team had and the smiles that were on the kids’ faces.” He says he enjoys seeing kids having fun and being interested in organised sports, rather than spending time on the couch or the streets. Poole spends any spare time with his kids, Caileigh who is 14, Rob who is 12 and Brennen who is 21 and also works for D & D. He’s also an active outdoorsman and when the time permits, he likes to head out hunting and fishing. So as Operations Manager, where would Poole like to see D & D Oilfield Rentals go in the future? “It would be nice to see us expand in a couple more regions,” replies Poole. His motivation for this is again so D & D can better serve their clients not only in the areas where they operate now, but also in the Western and Northern parts of Canada

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www.savannaenergy.com

Wayne Poole, Operations Manager for D & D Oilfield Rentals, Lloydminster

CONTACT: Calgary, AB - 1.403.267.6737 Medicine Hat, AB - 1.877.548.2700 Lloydminster, AB - 1.888.875.5171 Weyburn, SK - 1.306.577.3324 Swift Current, SK - 1.306.750.1675 info@ddoil.net www.ddoil.net


Last Page

The Last Page Photo Contest Time! Savanna’s annual Photo Contest is back for another year! The theme this time around is Action & Motion.

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!

Easter Egg Hunt The Easter Bunny found himself (or herself) having a little bit of a wild Easter this year and misplaced some of his Easter Eggs. He still hasn’t recovered them all as there are a few lurking amongst the pages of this month’s Rig-n-Dig . How many eggs can you find? Here’s one to get you started. PS: The answer is at the bottom of the page!

Front Cover Image

A special thanks to Rob Berg for sending in his photo of Adam Ross. If you’re wondering how Rob achieved his shot, then you look no further. The method used for the cover image is known as High Dynamic Range (HDR) photography. Basically HDR photography tries to represent all the tonal ranges and values seen by the human eye. As sophisticated as some film and digital cameras are, they cannot exactly replicate what the human eye sees—there is always some sort of compromise. In order to create a HDR image, photo editing software like Photoshop is required. For more information on HDR photography and techniques, please visit http://www. digitalcameratracker.com/how-to-create-high-definition-range-hdr-photos/. There are 34 eggs

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The Salvation Army is an international Christian organization that began its work in Canada in 1882 and has grown to become the largest non-governmental direct provider of social services in the country. The Salvation Army gives hope and support to vulnerable people today and everyday in 400 communities across Canada and more than 120 countries around the world. The Salvation Army offers practical assistance for children and families often tending to the basic necessities of life, providing shelter for homeless people and rehabilitation for people who have lost control of their lives to an addiction. When you give to The Salvation Army, you are investing in the future of marginalized and overlooked people in your community. During the month of May, The Salvation Army will be focusing on their latest campaign, the Dignity Project. The project is designed to inspire, educate and inform the public about the challenges facing society’s most vulnerable people. A recent report released finds that many Canadians continue to believe persistent myths about poverty and the poor. While the research reveals that Canadians consider poverty to be the third most pressing issue facing the country today, numerous misconceptions about the poor still endure. Some key findings include:      

Nearly 50% of Canadians feel that a family of four could get by on $10,000 - $30,000 per year or less. Nearly half of all Canadians feel that if poor people really want to work, they can always find a job . Nearly 40% believe people who live in poverty in Canada “still have it pretty good.” 41% believe that the poor would “take advantage” of any assistance given and “do nothing” with support provided. About a quarter of Canadians believe that people are poor because they are lazy and have lower moral values than average. 96% of Canadians believe that everyone deserves a sense of dignity, but only 65% believe that being poor can rob you of dignity.

Through online events, on-the-street outreach, traditional advertising, social networking and other events through out the month of May, The Salvation Army will engage Canadians about the reality of poverty in the 21st century. “Our hope is that by educating the public through the Dignity Project, we can debunk some of these myths and help put dignity within reach for every Canadian” Commission William Francis, leader of The Salvation Army in Canada and Bermuda.

For more information about the Dignity Project, go to www.salvationarmy.ca/dignity

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