Petroleum Equipment Suppliers Association 2010 Annual Report

The Business Resource for Petroleum Equipment Suppliers Since 1933

Contents
2 5 6 8 10 12 14 16 18 26 27 28 30 32 38 Chairmans Letter Presidents Letter Annual Meeting W ashington Fly-In Energy Educators Emerging Leaders FSO - Foreign Service Officer Training CID - Credit Interchange Division Year In Review Executive Committee Committee Chairmen Financials Board of Directors Member Companies Past Chairmen

Chairmans Letter

ith everything it does, the PESA Executive Committee has one premise membership value. Despite the highs and lows of the marketparticularly the lowsPESAs leadership strive to build upon the value of membership. Our goal is to build upon each past years success, making a PESA membership more meaningful and of practical business use. In every measurable sense, PESA had a fantastic fiscal year 2010-2011. We continued with our tradition of recruiting the best speakers in oil and gas to address our members. They included Jim Hackett from Anadarko, Mark Papa from EOG Resources, Randy Limbacher from Rosetta Resources, Mark Ellis from LINN Energy, Steve Thurston of Chevron, and many more. PESA has continued its drive to educate future generations about the industry. In fact, this is another area in which we increase our efforts each year. Schlumbergers Pat Bond and the Energy Educators Committee have greatly expanded our education efforts by creating four new programs. Among these was a half-day Oil 101 class for 200 IPAA Petroleum Academy students that discussed the basics of drilling. Several PESA members hosted high-GPA student externs from the Milby Petroleum Academy. Upon completion of the program, PESA hosted a gala night for the students and their families which featured presentations by Houston Mayor Annise Parker and HISD Superintendent Terry Grier. The committee also focused on higher education. The Rice University Energy Club held a discussion on oil and gas production. Commenting on the events success, Bond said, Ive never received so many calls and emails as a result of a single eventthe students were excited to have us. The committee also started a long-term relationship with the University of Texas at Austin McCombs School of Business, which was kicked off by a discussion group on campus. If ever there were a time to become involved in government and energy policy, its now. Numerous issues are currently under discussion that could significantly impact the service and supply sector. Its time to make our voice heard. The PESA Executive Committee revived the Washington Fly-In for late February. Led by Halliburtons Bob Moran and Galen Cobb, this event presents a rare opportunity to meet and educate policymakers in Washington. Members will have face-to-face meetings with several Congressmen, Senators, Senior Congressional Staff as well as members of the U.S. Chamber of Commerce and other influential decision makers. Bill Coates Schlumberger PESA Chairman

Presidents Letter e have come a long way in the past 78 years. Looking back at our history is an excellent gauge of what has been accomplished by our PESA member companies and the Association. Our members have developed the industry expertise that is a benchmark worldwide. Their technological advancements have kept pace with those that have allowed man to move from the earth to the moon and back again. Wells are drilled thousands of feet below the surface of the ocean and special techniques are used to pinpoint well placement. Recent developments have allowed the industry to tap resources that have long been unrecoverable. The industry does this every day in difficult and harsh locations to provide the energy required worldwide. PESA has had the opportunity to benefit from this expertise. At its inception, PESA was specifically formed to be a link between the U.S. government and the oilfield service, supply and equipment companies which provided the necessary infrastructure needed to keep the US energy industry operating. We have moved from that point in history to multiple activities that illustrate the vision and dedication of our volunteer leaders. We are pleased to present our 2010 annual report which summarizes the highlights of our association year from involving our members in mentoring and educating area students to providing energy education to government and industry groups. Any success we have experienced is due to our member company participation and their willingness to share their expertise with us and others. We are grateful for the opportunity to work with our members on a day-to-day basis throughout the year. Sherry Stephens PESA President

Annual Meeting

ncertainty had been the order of the day for nearly two years. PESA member companies were looking for solid ground in 2010, deciding whether the recoveries that had been made were sustainable and if that might correlate to increased E&P activity. That prolonged uncertaintyand how to manage a business through itwas the theme for the 2010 Annual Meeting. Economist and founder of 21st Century Forecasting, Don Reynolds, kicked off the meeting, suggesting that both the stock and energy markets were set for growth. I think were beginning to emerge from another round of a lateral-moving economy. In the near term, Im a raging bull and have invested everything. The Dow Jones will get back to 12,000 and back off a little before elections. My view on energy is simplistic. We use 25 barrels per person, India uses 2, and China uses 0.8 barrels. As their demand goes up, so do prices. So for the long term, Im all in. A three-person panel discussed domestic land exploration and production from the independent producers point of view. Richard Stoneburner, President and COO of Petrohawk Energy, says that when working in shale gas, one needs to be clever, bold, aggressive, and have a lot of capital. But, the plays can be prolific and, If you do your homework and find the right position, its hard to pay too much for acreage in the large shale gas plays. Lee Boothby, President and CEO of Newfield Exploration, says that unconventional resources are a great gift to the world. Natural gas is the real bridge fuel. We need to get out there and educate in personnot in 15-second soundbytesand while were at it, ensure that young people understand there are great careers in energy. And Steven Mueller, President and CEO of Southwestern Energy, says that his company is looking for a repeat of the success they found in the Fayetteville. They believe theyve found it in New Brunswick, Canadas Horton Group, a 200 to 600 foot-thick sandstone and shale reservoir with oil potential. The second day of the Annual Meeting featured another three person panel that discussed international oil and gas from the Supermajors perspective. Peter Coleman, Vice President, Americas for ExxonMobil Production Company, says that North America is becoming more and more attractive. The company will spend about $125 billion in capital investments over the next five years, about 22 percent in Canada and 15 percent in the U.S. Victor Obadiah, President and CEO of Total E&P New Ventures, says that North America also is attractive for Total, but the company prefers joint ventures. Among their recent investments is a $2.25 billion stake in Chesapeake Energy, which equates to a 25 percent stake. And Marshall Adkins, Managing Director, Oilfield Services, Raymond James & Associates, says that oil is poised for a strong and long-term recovery, while gas will hover at around $5. Prices will move higher based on deteriorating non-OPEC supply and falling excess OPEC capacity. The market must eventually ration available oil by price, and that will begin within 2 to 3 years. Nearly 200 members and spouses attended the meeting, which includ ed a presentation on body language by Jan Hargrave and entertainment by comedian Henry Cho.

Washington Fly-In

ESAs founding directive was to establish and maintain a working relationship with the federal government. This year, the Association returned to its roots. Sixteen executives flew into Washington, D.C. to meet and educate policymakers and make the service and supply sectors voice heard. PESA members met face-to-face with many lawmakers including Sen. David Vitter (LA), Rep. Doc Hastings (WA), Rep. Steve Scalise (LA), Rep. Tom Reed (NY), and Rep. Kevin Brady (TX) in addition to a host of Congressional staffers and industry leaders. Overall, members found a receptive ear for service and supply companies in each visit, as well as coming away with an education in the workings of Washington, D.C. The Fly-In has influenced me tremendously, says Josh Lowrey (Sunbelt Steel). I have always enjoyed politics and business, but was a little naive on the politics of business. I have made contact with a few of my Pennsylvania, Wisconsin, Oklahoma, Arkansas, Louisiana, Illinois and Ohio colleagues who I anticipate will join PESA and use the associations influence for the greater good. PESA Government Affairs Chairman Bob Moran says, These meetings helped highlight some of the good things we can accomplish as PESA members when we work together. There were many good ideas raised about special projects and town hall activities that PESA may want to pursue. I look forward to examining these ideas and putting some into practice. Much of the discussions focused on three areas: the permit logjam and its implications in the Gulf; potential fracturing legislation; and a means of PESA becoming more involved in policy matters. Though his state is engulfed in a natural gas fracturing moratorium, Rep. Tom Reed (NY) says that Joe Public and many lawmakers are behind the industry. I think we have a receptive crowd in New York. We need to be firmly committed to a policy bringing domestic energy supplies onto the table. We have a lot of work to do, but were standing with you on the energy issue I look at the Marcellus shale as a great opportunity for my district. Sen. David Vitter (LA) says that he is focused like a laser beam on trying to break through this permit logjam in the Gulf. We had some good news (that one permit was issued Feb. 28) and thats progress. The real question is how much will it accelerate. Ill keep pushing in every way I know how. More than ever before, we need to produce as much energy at home as we can, yet were doing the opposite.

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Energy Educators

ince its inception last year, PESAs newest committee is charging ahead. Energy Educators, backed by an annual budget from the Executive Committee, hosted four large education events in addition to their Teacher of the Year Award and work with local schools. This summer was a preview of the oil industry in 2015 for 51 students and eight companies. For three weeks, students from Milby High Schools Academy for Petroleum Exploration and Production Technology worked as externs with industry companies, often attending executive meetings, testing equipment, and getting a sense of how the industry operates. To qualify for participation in the externship program, students had to maintain a grade point average of at least 3.0. Its given kids a vision of the future and its the type of partnership that any organization ought to be very pleased withI know we are here at HISD, says HISD Superintendent of Schools Terry Grier. Its critical to ensure that our students are college or career ready. What this program does is opens windows to the future and exposes kids to jobs and careers that frankly theyve never thought of. Upon completion of the program, Energy Educators hosted an awards gala for the students and their families at Bradys Landing in south Houston. The galas featured speakers included PESA Past Chairman Galen Cobb (Halliburton), Houston Mayor Annise Parker, and Terry Grier. Each student received a certificate of completion and a $1,000 scholarship from the companies where they worked. The companies that hosted externs this year are El Paso Corporation, FMC Technologies, Inc., Halliburton, Marathon Oil, National Oilwell Varco, Schlumberger, Shell Oil, and Smith International. The committee also hosted events at the university level. At Rice University, Energy Educators Committee Chairman Pat Bond (Schlumberger) and Collin Gerry (Raymond James & Associates) gave an overview of drilling and the industry as well as the current market outlook. Bond stressed that the upcoming manpower shortage equates to excellent careers for driven graduates. The event hosted about 60 students from the universitys Energy Club. At the University of Texas at Austin McCombs School of Business, Bond again delivered a mini Oil 101 and career lecture. Twenty-five members of the schools Finance Club attended. Finally, the committee gave the second annual award for teachers in the IPAA energy academies. The awarddubbed the PESA Teacher of the Year Awardis given to an energy academy teacher who exemplifies excellence in the classroom. The award carries a $10,000 stipend, distributed to the teacher and his or her school. Bond presented the award to Kimberly Myers of Westside High School at the IPAA annual meeting.

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Emerging Leaders

ow in its fourth year, the Emerging Leaders Committee is still growing. This year, the group attracted more than 700 members at four events. The committee began the year with its fifth Executive Address Series featuring Robert Workman, Group President, Distribution Services for National Oilwell Varco. He spoke about what it takes to be successful, to lead people, and produce results in the oil and gas business. I come to work with one purpose every dayto make my team successful. Thats it. At the end of the day, leaders are there for everyone else, says Workman. You become a leader by consistently producing extraordinary resultsleading is producing results through others. If youre leading and have made your team successful, youre successful and your career path will be unlimited. Next, the Emerging Leaders held its fifth class of the highly popular Oil 101. The course features experts from member and industry companies outlaying the drilling process from geology to end-of-life reservoir issues. Speakers included: James Geary, Geologist, Hess Corporation Brian Hadley, Downstream Project Engineer, Mustang Engineering Steve Jacobs, Principal-Market Intelligence, Decision Strategies, Inc. Tom Kellock, Head of Consulting, Houston, ODS-Petrodata Jamie Patrick-Maxwell, Field Development Manager, FMC Technologies, Inc. Eduardo Proano, Advisor, Service Manager - Production, Schlumberger David Reid, Global Accounts Vice President, National Oilwell Varco Mark Teel, Client Relations & Technical Communications Manager, Schlumberger Bob Tippee, Editor, Oil & Gas Journal

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At the groups third event for the year, the committee hosted Tony BridwellArea Vice President & Executive Facilitator, Partners in Leadershipwho presented The Oz Principle Accountability Training, which is based on the best-selling book of the same name. The training emphasizes communication and personal investment, culminating in four best practicesSee It, Own It, Solve It, and Do It. The event was held in the Toyota Center, and following the training, members enjoyed a Houston Rockets game. Finally, a second Oil 101 class completed the year. Speakers for the event included: James Geary, Geologist, Hess Corporation Brian Hadley, Downstream Project Engineer, Mustang Engineering Wes Heiskell, Vice President for Global Business Management Fishing Tools, Schlumberger Steve Jacobs, Principal-Market Intelligence, Decision Strategies, Inc. David Reid, Global Accounts Vice President, National Oilwell Varco Jamie Patrick-Maxwell, Field Development Manager, FMC Technologies, Inc. Mark Teel, Client Relations & Technical Communications Manager, Schlumberger

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Foreign Service Officer Training

ESA has remained the training highlight of the year for Foreign Service Officers since 1992. Member companies donate their time, personnel, and facilities to give FSOs a hands-on overview of the petroleum industry from production to supply. In return, PESA member companies gain valuable, educated contacts in the FSO communityto date, the program has trained more than 425 officers, who now operate in more than 40 countries around the world. The eighteenth FSO class of 25 graduates hailed from the U.S. Departments of State, Energy, and Commerce. Their current assignments range from Accra, Oslo, Baghdad, Lagos, Mumbai and more. Highlights of this years FSO training included a classroom session with Steve Jacobs (Decision Strategies, Inc.), Marshall Adkins (Raymond James & Associates), and Tom Standley (FMC Technologies, Inc); tour of a drilling rig at Schlumberger; university sessions at Rice University and the University of Houston; an explanation of the latest high-tech downhole sensors at Weatherford; a tour of Oceaneerings new high-performance cable facility; a visit to FMC Technologies production floor; plus a tour of Halliburtons Security drill bit facility. Each year, PESA hosts a reception and dinner allowing members to meet the new class of Foreign Service Officers well over 120 members attended this year. The dinners keynote speaker was Dan Pickering, Co-President and Head of Research for Tudor, Pickering, Holt & Co., LLC. He discussed eight major issues facing the oil and gas industry now and in the near future including shale gas, the Gulf oil spill, and Wall Street. Trading is very simple right nowits tightly correlated with economic sentiment, so if the stock market is up, oil also is up, says Pickering. Were not peak oil people, but we think that while oil supply can grow, demand can grow faster, and that means price has to back out demand. Price will be bullish. Also affecting the price long-term is the Gulf oil spill. Prior to the spill, the area had 33 rigs running. While he says the cut in production doesnt matter in a macro sense right now, it will. We think oil will be $90 long term for three main reasons, he says. It isnt easy to produce physically and politically, were pushing out additional supply a little bit with the oil spill, and demand is growing faster than supply. We think $90 is where demand starts to throttle back.

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Credit Interchange Division

epresenting 49 member companies and divisions, the Credit Interchange Division is a unique PESA benefit. Its a vital, everyday business service for subscribers which allows its members to access current confidential ledger experience, which helps to determine customer credit worthiness. This year, CID received 39,000 requests for payment experience on more than 10,000 reports, representing over 44,000 ledger entries. The group added five new members this year: Pathfinder, Thomas Oil Tools, Hamilton Group, Integrated Production Services, and Precision Drilling Company, LP. The service also sponsored a three-day annual meeting held this year at the Omni Bayfront Tower in Corpus Christi. The meeting featured three speakersRichard Grant, a consulting psychologist from the McCombs School of Business at the University of Texas at Austin; Bill Coates, PESA Chairman and Vice President, Sales & Marketing, Schlumberger; and Phil Snow, a partner at Snow, Fogel, Spence LLP. Coates says that North America was the story for 2010, and likely will be for the first half of 2011 as well. The industry saw a dramatic rebound in the U.S. onshore, while internationally business was sluggish as all catalysts for growth were trumped by geopolitical issues. The future of industry growth will be in liquid hydrocarbons and condensates, such as the Eagle Ford play. While there will be a lot of effort to keep classic oil production at current levels, 70 percent of supply growth by 2020 is not going to come from classic oil. Snow says that credit managers need to regain the past power position in bankruptcies. He cited a litany of trends working against oilfield service and supply companies such as spending without getting results, a lack of courtroom attendance, and ceding control of the bankruptcy process to lawyers and accountants. As a remedy, he suggested getting all title information despite the cost, finding law and accounting firms who work on an incentivized basis, and credit managers thinking creatively to offer solutions in bankruptcies. You are well positioned to recover the type of rights that were uniformly asserted in the past, but you have to go about it with a different attitude, he says. In bankruptcy, there are winners and losers, and youve lost sight of that to appease parties along the way. Go out to win. Finally, Grant delivered a discussion on personality preference, saying that learning ones type is key to team building and understanding others. Using the Myers-Briggs Test, members focused on the personality preference and learned about their opposites. He added that preferences are simply thatpreferences, not edicts. If a person scores strongly as an extrovert, it doesnt mean that a person has no empathy for an introvert. It means that they have a preference for communicating and centering themselves in an extroverted manner. If you and your opposite are both on a team and pulling together, youre unbeatable, he says. But if types arent pulling together, theyll be adversaries, especially on time and money.

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The Year in Review

Gulf Coast-Texas District Meeting

ts safe to say that Randy Limbacher likes his companys chances in the Eagle Ford. Hes bet the company on it. Limbacher, President and CEO, Rosetta Resources, Inc., took over the company a little more than three years ago. He inherited a conventional gas company with presence in the Gulf of Mexico, Sacramento Basin, and the Rockies. Other than the logo, that company is gone. Today, the company focuses on unconventional plays, nearly exclusively in the Eagle Ford. Rosetta has a market cap of $2.5 billion, produces 50.2 Bcf over 763 wells with proved reserves of 479 Bcf. The company holds about 415,000 acres, but focuses nearly all of its $360 million spending on the Eagle Ford. The reason, says Limbacher, is that the play is a gamechanger for small companies like Rosetta. Inventory wise in 2007, we had about 100 Bcf in reserves, which was only two years of production, he says. Today in the Eagle Ford alone we have about 2 Tcf of identified drillbit projects.

In 2010, the Eagle Ford generated close to $2.9 billion in revenue, supported approximately 12,600 full-time jobs, and provided nearly $47.6 million in local government revenue. Over the next ten years more than 5,000 new wells are expected to be drilled, generating more than $21.5 billion in total annual economic output, supporting roughly 68,000 full-time jobs in the area. Its a world class reservoir. Whats amazing is that regulators look at our industry and say the oil companies are just fineI dont mind that, but were talking about nearly 70,000 jobs in just one play and the impact on the community is outstanding. In Rosettas Gates Ranch area, the company has 240 wells slated for drilling. To finish those wells, we have to spend another $2.5 billion, and our market cap is only $2.4 billion right now, so there are some challenges to financing, he says. If everything turns out to be good and we develop everything, we would need to spend $5 to $6 billion. These are good problems to have. Finally, he added that among the major needs in the play are huge capital investments, more rigs and stimulation equipment, better water recycling technology, and health and safety vigilance. Ive worked at three companies with significant presence in South Texas, and my experience on the safety side is very good compared to other areas, he says. Last year, we tripled our contractor man hours and our recordable incident rate went down from 2 to 1.25. Thats a trend we need to figure how to prolong.

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Supply Chain Seminar

he 2010 Supply Chain Seminar featured three speakers: EOG Resources Chairman and CEO Mark Papa; Raymond James & Associates analyst Collin Gerry; and EnerVest, Ltd. Executive Vice President and COO Mark Houser. Papa says that the oil and gas industrys successes are not insular achievementstheyre a success story for the nation. Key advances, particularly horizontal drilling, saved $50 billion in energy costs due to lower natural gas prices as well as providing 1 million barrels of additional domestic oil, sixth largest oil field in the history of the U.S. These plays are which reduces the importation of foreign oil by $29 billion and game changers. creates thousands of jobs. Gerry says he expects 2011 to be a bull market for oil and a In one state alone, the industry has raised production from bear market for gas. 100,000 barrels to 500,000 in a relatively short time, says Papa. The effect so far is that North Dakota is a bigger oil In the near term, oil markets will go up or down on anything producing state than Louisiana. happening around the worldwe call it headline risk, says Gerry. In the long term, demand looks solid and supply The Bakken, of course, is not the only oily shale play. looks constrained, while the exact opposite is true for gas. We believe that in our 500,000 acres in the Eagle Ford, we have over 900 million barrels oil equivalent after royalty since most companies report before royalty, thats over a 1 billion barrel oil discovery, he says. Nobody has found 1 billion barrels in the U.S. in 40 years excluding Prudhoe Bay. We believe that the Eagle Ford will turn out to be the Houser describes his companys operating philosophy as a used car buyerthey buy large numbers of operating wells in mature fields, remediate as necessary, and resume operations. He says that some excellent used cars are coming up in the shales. The company spent $1 billion in 2010 to acquire a stronghold in the Barnett. Simple economics swayed Houser and his team to stray into shale. Production in the Barnett has increased from 243 to 383 Mmcf between 2008 to 2011, while expenses have gone down from $1.99 to $1.62 per Mmcf. These wells provide strong cash flow with 97 million Mcf per day with 400 wells, he says. All of the plots are held by production and our lease operating expenses are about $226 million, half of which is people and the other half is services.

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Membership Meeting
dramatic shift in natural gas supply has finally given the U.S. energy options, says Jim Hackett, Chairman and CEO for Anadarko Petroleum Corporation and Chairman of the American Natural Gas Alliance. I believe that natural gas is the right answer for our country. Its abundant, its domestic, and its affordable, he says. The amount of gas that we have in place in the U.S. is stunning and the abundance issue has become important. Its allowed the mainstream of our industry to speak with conviction to policy makers and industrial users and say, We have the gas. Its abundant and its affordable with known technology. He says that the industry needs to speak with one voice in the interest of expanding natural gas markets. The reason why renewables fail is that theyre neither

scalable or affordable. Natural gas has both going for it. Independent studies show that with the shale resource and technology that we have now, we can fulfill a growing market over the next seven years at $5 to $8 per dekatherm, which equates to $30 to $48 per barrel oil equivalent. We can produce a lot of natural gas and serve new markets at an affordable price. Another great story for the industry is that natural gas makes a real impact on the economy and jobs. We added 400,000 jobs to the U.S. economy between 2004 to 2008. We create 2.8 million total jobs and contribute $385 billion to the economy and thats just the natural gas part. Were seeing that many politicians who thought they were coal state politicians are discovering that theyre natural gas politicians. He says that transportation is much less of an immediate issue for natural gas demand, but its at the heart of psychology for America. I believe with all my heart that we should be driving natural gas heavy duty fleet vehicles. Every fleet with centralized fueling in our country should be on natural gas. The best place to begin conversion is fleet vehicles, he says. If you look at heavy duty vehicles, they average 25,254 miles driven per year with a fuel economy of 6.2 miles per gallon and consume 4,075 gallons of fuel. Consider that at the high side of where natural gas might trade in the next 7 years$48 oil equivalentis less than $2.50 a gallon. Were pretty sure that diesel will be over $4 in the near future so theres a lot of savings with that kind of fuel intensity.

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Explorers Award
einvention can be a slow and tedious undertaking. For most companies, charting a new overall strategy and instituting change takes years, if not a decade. But not at EOG Resources. Since Chairman and CEO Mark Papa took the helm ten years ago, the company has been successfully reinvented twice. EOG has shifted from a conventional natural gas, to an unconventional shale gas leader, to a first-mover in unconventional oil. Mark and his team have been able to not only reinvent the company twice in the past decade, but consistently make it more successful, productive, efficient, and technologically driven, says Charlie Jones (Forum Energy Technologies), Chairman of the PESA Explorers of Houston Committee. E&P company that has demonstrated excellence in technological innovation and leadership in the industry. Jones says that last year EOG was the epitome of agility, inventiveness, and industry leadership. The company holds a position of over 500,000 acres in the North Dakota Bakken, and oil production in the region exceeded pipeline capacity. They designed and opened a rail transportation system to transfer 60,000 gross barrels from a crude oil loading facility in Stanley, North Dakota to an unloading facility in Stroud, Oklahoma and then a 17-mile pipeline running from that point to a terminal in Cushing, Oklahoma. Thats getting the job done. Papa was on hand to accept the award for EOG, along with Senior Vice Presidents Loren Leiker and Gary Thomas, as well as Purchasing Director Doug Runkel. It would be easy to say that EOG was a first-mover and we thought through all this and came up with these eureka moments, says Papa. But the reality is that without the advances in the service industry, EOG would have never gotten there and neither would the rest of the industry. It wasnt EOG that invented that stuff. We just took what you built and adapted it.

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Together with Robert Workman (National Oilwell Varco) and Galen Cobb (Halliburton), Jones selected EOG for PESAs 2010 Explorers Award. The award is given annually to the

Legal Seminar

ESAs 2010 Legal Seminar featured five speakers: Pablo Ferrante, a partner with Mayer Brown LLP; Brad Eastman, Associate General Counsel, Cameron; Jeffrey Carr, Senior Vice President, General Counsel, and Secretary, FMC Technologies, Inc.; William Jacobson, Vice President, Co-General Counsel, and Chief Compliance Officer, Weatherford International, Ltd.; and David Beck, Co-Founder, Beck Redden & Secrest LLP. Boland says that the much anticipated mergers of the past several years never really panned out. Instead, mergers in the service and supply sector have been relatively few. He says the drivers for the mergers that occurredand likely will occur in the futureall have common themes. Customers want more single source responsibilitythey want, for example, the entire completion operation under one company, he says. A huge part of the Schlumberger / Smith deal was getting Smith Bits. Schlumberger wants to be able to offer the entire bottom hole assembly.

As Boland worked on the three largest recent mergers in the service and supply sector, he discussed the lessons learned from each. Schlumberger / SmithThe merger had 20 potential product or service overlaps, some of which were significant. The initial view from the analyst report was that it looked a lot like Halliburton and Dresser when they combined. We assumed that there would need to be a divestiture due to shared products in the LWD / MWD space, but we received clearance in the same week from the U.S. and European Commission. The deal went through because we could show that Smith was not particularly strong offshore in LWD / MWD. They were strong in onshore gas fields, but the concern was offshore. Baker Hughes / BJ ServicesThe merger had only 15 overlaps, but many were significant. In the first three months, most of them were resolved, but one remained in sand control because we couldnt find a fifth competitor. We had data that the two were not direct competitors and rarely if ever competed head to head in sand control. But the companies pursued a divestiture to close as quickly as possible, likely because Baker had negotiated a good deal in buying BJ at a 17 percent stock premium. Cameron / NATCOEarly on, it looked to the DOJ that the companies had product overlap in more areas than it didntits all separation equipment. We urged the DOJ to look at the demand side and spent months educating the DOJ, saying that no, that equipment doesnt do the same thing as that. We got them down to a single piece of equipment, a refinery de-salter. Instead of divesting, the company sold an intellectual property license to an aftermarket company. It took six months, but we closed on time.

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Manufacturers Committee Meeting

he 2010 Manufacturers Committee Meeting featured a three-speaker panel that focused on exploring the latest processes, thinking, and techniques employed by successful businesses. Chris Reinsvold, CEO of Decision Strategies, Inc., discussed risk management in oil and gas companies. He suggested a quantitative model in analyzing risk including five steps: identify the customers objective; identify and quantify the uncertainties that may affect the customers objective; identify the decisions that may affect the customers objective; build an influence diagram that describes how the uncertainties and decisions affect the objective; and model results and perform sensitivity analysis.

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Michael Grojean, Professor in the Practice of Management at Rice University, discussed effective leadership in crises. He focused on a metaphor of

effective leadership based on Norman Macleans Young Men and Fire. The book describes a systemic failure among several layers of leaders that culminated in the deaths of 13 smokejumpers in the Mann Gulch fire of 1949. Finally, Steve Palagyi, Director and Partner at PRTM Management Consultants, discussed building effective customer-focused cultures. He stressed the importance of co-creation, or working directly with suppliers for optimal manufacturing. The process is based on the premise of all stakeholders sharing experiences and building platforms for ongoing engagement, dialogue, and interaction.

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Explorers Golf Tournament

eather was once more on PESAs side, yielding yet another picture perfect day on Redstone Golf Clubs links. More than just a great day of golf, the Explorers of Houston Golf Tournament is a chief contributor for much of PESAs community involvement. Proceeds from the Technologies, and sponsored by Gulf Publishings World event support the Explorers of Houston Award, the Oil, Schlumberger, GE Oil & Gas, Oil States International, Offshore Energy Center, the National Energy Education Development Program, and IPAAs Petroleum Academies. and Energy Alloys. Each player received a gift card for an on-site Nike pro shop. For the twelfth annual tournament, thirty-three teams hit the links at Redstones tournament course. The event was The tournament champions were Jerry Lastovica (Flexitallic), Brian Vincent (Lake Charles Rubber), Keith Miller chaired and organized by Committee Chairman Charlie (Flexitallic), and Craig Trosclair (Lake Charles Rubber). Jones, President and CEO of Forum Energy

Executive Committee Bill Coates Chairman Schlumberger John T. Gremp Vice Chairman FMC Technologies, Inc. Chris Cragg First Vice President Oil States International, Inc. Robert Workman Immediate Past Chairman National Oilwell Varco Galen Cobb Past Chairman Halliburton James B. Renfroe, Jr. Treasurer Wood Group Well Support Paul Butero Secretary Baker Hughes, Inc. Joseph C. Winkler Gulf Coast District ChairmanTexas Complete Production Services, Inc. Charles Currie Membership Chairman Schlumberger Charlie Jones Explorers of Houston Chairman Forum Energy Technologies Robert L. Potter Emerging Leaders Liaison FMC Technologies, Inc.

Gary Halverson Pat Bond Gulf Coast District ChairmanLouisiana Energy Educators Chairman Cameron Schlumberger Paul Coppinger Mid-Continent District Chairman Circor Energy Products, Inc.

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Committee Chairmen Corporate Counsel Advisory Brad Eastman Cameron Credit Interchange Division Ross Guthrie Key Energy Services, Inc. E-Business Charles Currie Schlumberger Emerging Leaders Edward Hemphill GE Drilling Systems Energy Educators Pat Bond Schlumberger Executive Bill Coates Schlumberger Explorers of Houston Charlie Jones Forum Energy Technologies Finance James B. Renfroe, Jr. Wood Group Well Support Government Relations Bob Moran Halliburton Health, Safety & Environment A. J. Leuterman M-I SWACO Human Resources Susan Webb FMC Technologies, Inc. Lien Law Jere Crean Schlumberger Manufacturers Robert E. Bob Funk Harbison-Fischer, Inc. Membership Charles Currie Schlumberger Quality Gary Devlin Drilling & Production Systems Cameron Service Jeremy Thigpen Downhole Tools & Pumping Solutions National Oilwell Varco Supply Burk L. Ellison Distribution Services National Oilwell Varco

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Financials

or many in the oil and gas business, 2010 was the year of mixed blessings. Onshore drilling thrived, while offshore work ground to a standstill. Domestic activity was positive on the whole, while many international markets struggled with economic recovery. PESA, on the other hand, had another very good year in terms of membership and event participation. Leading the charge was Charles Currie (Schlumberger) and the Membership Committee, which yielded 29 new member companies to PESA, near an all-time high. Member dues, however, were down $17,854 for the year, totaling $808,863. These are the aftereffects of the 2008 recession as well as some highprofile mergers in the sector.

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More than 2,200 members registered for the associations seventeen public events. The largest draws this year were the Mid-Continent District Meeting, the Gulf Coast-Texas District Meeting, the Membership Meeting, and two Oil 101 courses. Meeting revenue and expenses both increased for the year by 13 percent and 11 percent respectively. Revenue increased to $549,022 from $484,913, and expenses increased to $323,462 from $292,340. The Credit Interchange Division added five member companies for 2010 while usage fees remained the same. In short, PESA is maintaining a strong member and revenue base as it provides an excellent value for member companies. Another indication of the associations strength is reflected in the financial results. Operating revenues and expenses were relatively flat for the yearboth increased by less than 5 percentwhile unrestricted net assets increased more than 12 percent. The increase in liabilities for the year is due to deferred 2011 membership dues and fees which were paid in 2010. PESA also realized a 22 percent increase in cash and investment values due an increase in deferred income and realized and unrealized gains on the investment portfolio. PESA is an association that has been supporting the industry for 77 years, changing with its membership and constantly striving to add value for its members. From a financial standpoint, PESA is poised to be a force for the industry for decades to come. The reason for that success is, of course, our member participation. Thank you all for your ongoing support, and I look forward to seeing you at future PESA events. James B. Renfroe, Jr. Wood Group Well Support PESA Treasurer

Financial Overview

2010
Operating Revenue Investment Activity Total Expenses Net Income Assets Liabilities Unrestricted Net Assets Cash and Investments Employees Member Companies $1,945,045 $210,606 $2,155,651 $1,815,721 $339,930 $3,815,153 $698,998 $3,116,155 $3,672,423 6 184

2009
$1,876,654 $376,268 $2,252,922 $1,772,544 $480,378 $3,097,773 $321,548 $2,776,225 $2,995,386 6 179

2008
$1,843,071 ($377,885) $1, 465,186 $1,781,313 ($316,127) $2,634,988 $339,141 $2,295,847 $2,483,560 6 171
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Board of Directors

At-Large
Robert R. Workman Group President Distribution Services National Oilwell Varco David H. Barr The Woodlands, Texas Galen Cobb Vice President - Industry Relations Halliburton Jack B. Moore President & Chief Executive Officer Cameron Robert L. Potter Executive Vice President FMC Technologies, Inc. Craig Ketchum McJunkin Red Man Corporation

Max L. Lukens Houston, Texas Russell E. Ginn Non Executive Chairman Sunbelt Steel Joseph H. Netherland The Woodlands, Texas Jack Murphy Dallas, Texas Gilbert H. Tausch Sugar Land, Texas James D. Woods Chairman Emeritus Baker Hughes Incorporated Robert H. Smith Dallas, Texas William E. Bradford Dallas, Texas Philip Burguieres Vice Chairman Houston Texans Thomas H. Cruikshank Dallas, Texas J. W. Neely San Juan Capistrano, California W. C. Walker Houston, Texas J. E. Chenault Houston, Texas

Gulf Coast
Scott Bender President Wood Group Pressure Control Pat Bond Vice President - Business Development, Drilling Tools & Remedial Schlumberger Paul Butero President - US Land Region Baker Hughes Incorporated John Carne Executive Vice President, President Drilling & Production Systems Drilling Systems Cameron Bill Coates Vice President - Sales & Marketing Schlumberger T. Jay Collins President & Chief Executive Officer Oceaneering International, Inc. Christopher E. Cragg Senior Vice President - Operations Oil States International, Inc. Mark E. Crews Vice President & General Manager Oilfield Division Lufkin Industries, Inc. Charles S. Currie Vice President - Marketing & Sales Systems Schlumberger

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George I. Boyadjieff Villa Park, California Sheldon R. Erikson Chairman of the Board Cameron Loren K. Carroll Smith International, Inc. Rhys J. Best Chairman of the Board & Chief Executive Officer Seren Management LLC Peter D. Kinnear Chairman of the Board FMC Technologies, Inc. Zeke Zeringue Waggaman, Louisiana Doug Rock Houston, Texas James L. Bryan Houston, Texas

George A. Helland, P.E. Senior Associate Cambridge Energy Research Associates Chad C. DeatonBoard, Chairman of the President & CEO J. C. Bergin Baker Hughes Incorporated Houston, Texas Stephen M. Dillard J. P. Harbin Vice President & GM - Oil & Gas Dallas, Texas Business Unit AmerCable Incorporated E. H. Clark, Jr. San Clemente, California Scott DuBois President & Chief Operating Officer Premier Pipe

Bryan Dudman President Smith Drilling & Evaluation Smith International, Inc.

T. Duane Morgan President Engineered Products Group Gardner Denver, Inc.

Joseph C. Winkler Chairman & Chief Executive Officer Complete Production Services, Inc. Jim Wright Senior Vice President, President - Valves & Measurement Valves & Measurement Cameron

Daniel Newman Brad Eastman Associate General Counsel - Operations President Norris Production Solutions Cameron Jorge Goudet President Auge Industrial Fasteners John T. Gremp President & Chief Executive Officer FMC Technologies, Inc. Gary Halverson President Surface Systems Cameron Pat Herbert Group Chief Executive Officer JDR Cable Systems Will Honeybourne Managing Director First Reserve Corporation Charles E. Jones President Drilling & Subsea Forum Energy Technologies John Kennedy President & Chief Executive Officer Wilson A Schlumberger Company Michael Kowalski President & Chief Executive Officer Sunbelt Steel Texas Christine McGee Director - Marketing Services & Public Relations Weatherford International Ltd. Neil J. Mendes Senior Vice President Sales & Marketing Greene, Tweed & Co. M. A. (Pete) Miller, Jr. President, Chairman & CEO National Oilwell Varco Douglas A. Polk Vice President - Industry Affairs Vallourec & Mannesmann USA Corporation Dennis Proctor Chief Executive Officer Hunting PLC Saeid Rahimian Group President Robbins & Myers, Inc. - Fluid Management Group Michael Read President & Chief Executive Officer Teledyne Oil & Gas James B. Renfroe, Jr. Chief Executive Officer & Group Director Wood Group Well Support J. Wayne Richards President & Chief Executive Officer Global Oilfield Services Bruce Ross Managing Partner Dorado Energy Partners Frank Smith Vice President - Production Equipment Valerus Mike Stansberry President & Chief Executive Officer Global Energy Services, Inc. Gary W. Stratulate Chief Executive Officer Axon Energy Products Dave Warren President & Chief Executive Officer Energy Alloys Jerry Winchester President & Chief Executive Officer Boots & Coots A Halliburton Service

Mid-Continent
Bradford S. Baker Chief Executive Officer Chickasaw Distributors, Inc. Paul M. Coppinger Group President Circor Energy Products, Inc. Robert E. "Bob" Funk Senior Vice President & Managing Director Harbison-Fischer, Inc. Norris Production Solutions Bob Greenwood General Manager Bestolife Corporation Barry L. Pennypacker President & Chief Executive Officer Gardner Denver, Inc. Jack Rogers President Ferguson-Beauregard Norris Production Solutions C. Richard Sivalls President Sivalls, Inc. Bob Weber Area Sales Team Leader National Oilwell Varco

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PESA Member Companies A&B Valve and Piping Systems, LLC Kevin Bernard Chief Executive Officer Houston, Texas AmerCable Incorporated Stephen M. Dillard Vice President & GM - Oil & Gas Business Unit Houston, Texas AmerCable Incorporated - Oil & Gas Division Stephen M. Dillard Vice President & GM - Oil & Gas Business Unit Houston, Texas Aries Freight Systems L.P. Jeff L. McIntyre President & Chief Executive Officer Houston, Texas Auge Industrial Fasteners Jorge Goudet President Houston, Texas Baker Hughes Pressure Pumping Lindsay Link President Pressure Pumping Technology Houston, Texas Basic Energy Services Mike Dye Director of Financial Services Midland, Texas Bestolife Corporation Bob Greenwood General Manager Dallas, Texas Beta International Inc. Bryan Leavitt Chief Executive Officer Houston, Texas Boyden Global Executive Search James N.J. (Jim) Hertlein Managing Director Houston, Texas C&C Industries, Inc. JoElla Bott Vice President - Sales & Marketing Houston, Texas Force Energy Products C&C Industries, Inc. Jerry Brown General Manager Houston, Texas Cameron Jack B. Moore President & Chief Executive Officer Houston, Texas Cameron John Carne Executive Vice President & Chief Operating Officer Houston, Texas Cameron Jim Wright President - Valves & Measurement Valves & Measurement Houston, Texas Cameron Joe Mongrain President - Process & Compression Systems Process & Compression Systems Houston, Texas Cameron Owen Serjeant President - Subsea Systems Subsea Systems Houston, Texas Cameron Gary Halverson President - Surface Systems Surface Systems Houston, Texas Cameron Glen Chiasson President - Drilling Systems Drilling Systems Houston, Texas Capgemini Randall A. Cozzens Vice President Irving, Texas Carlson Capital LLC James K. Wicklund Principal Dallas, Texas Casedhole Solutions, Inc. Don Gawick President & Chief Executive Officer Houston, Texas Caterpillar Inc. Wayne T. Zemke Market Intelligence Manager - Marine and Petroleum Power Division Peoria, Illinois Caterpillar Global Petroleum Wayne T. Zemke Market Intelligence Manager - Marine and Petroleum Power Division Houston, Texas Chickasaw Distributors, Inc. Bradford S. Baker Chief Executive Officer Houston, Texas Circor Energy Products, Inc. Paul M. Coppinger Group President Oklahoma City, Oklahoma Cochrane Technologies, Inc. Douglas A. Cochrane, Jr. President & Chief Executive Officer Lafayette, Louisiana

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Austin White Lime Company Oscar Robinson General Partner Austin, Texas Axon Energy Products Colleen Henneke President Houston, Texas Aztec Tubular Products Rip Martin General Manager Crowley, Texas Baker Hughes Incorporated Paul Butero President - US Land Region Houston, Texas Baker Hughes Completions and Production Neil Harrop President Houston, Texas Baker Hughes Drilling and Evaluation Scott Schmidt President Houston, Texas

Complete Production Services, Inc. Joseph C. Winkler Chairman & Chief Executive Officer Houston, Texas Integrated Production Services, Inc. Complete Production Services, Inc. John Graham Vice President Controller IPS US & Mexico Houston, Texas Consolidated Pressure Control, LLLP Otto Windholz, Jr. President & Chief Operating Officer Houston, Texas Control Risks Eddie Everett Senior Vice President - Global Services Houston, Texas Decision Strategies Chris Reinsvold Chief Executive Officer Houston, Texas Decision Strategies Steve Jacobs Principal, Market Intelligence Group Houston, Texas Deutsche Bank Sten Gustafson Managing Director Houston, Texas Dorado Oil Services, LLC David Douglas President Houston, Texas Dupr Energy Services LLC Cornelius Dupr Chairman of the Board Houston, Texas Endeavor Management Michael T. Shook Managing Director - Oil and Gas Houston, Texas Energy Alloys Dave Warren President & Chief Executive Officer Houston, Texas

Enventure GT Nyla Shepherd Accountant Houston, Texas FMC Technologies, Inc. Peter D. Kinnear Chairman of the Board Houston, Texas FMC Technologies, Inc. John T. Gremp President & Chief Executive Officer Houston, Texas FMC Technologies, Inc. Robert L. Potter Executive Vice President Houston, Texas First Reserve Corporation Will Honeybourne Managing Director Houston, Texas Flexitallic Group, Inc. Jerry L. Lastovica President & Chief Executive Officer Kingwood, Texas Forged Products, Inc. Kevin Crowley President & Chief Executive Officer Houston, Texas Forum Energy Technologies C. Christopher Gaut Chief Executive Officer Houston, Texas Forum Energy Technologies Drilling & Subsea Charles E. Jones President Houston, Texas Forum Energy Technologies Production & Infrastructure Wendell Brooks President Houston, Texas Forum Energy Technologies Production & Infrastructure Valve Solutions Steve Twellman President Stafford, Texas

Forum Energy Technologies Valve Solutions - PBV USA Maury Mills Vice President - Sales & International Sales Stafford, Texas GE Oil & Gas - Drilling & Production J. Wayne Wallace Vice President - North America Houston, Texas GE Oil & Gas - Drilling Platform Chuck Chauviere Drilling Platform Leader Houston, Texas Gardner Denver, Inc. Barry L. Pennypacker President & Chief Executive Officer Quincy, Illinois Gardner Denver, Inc. T. Duane Morgan President Engineered Products Group Houston, Texas Global Energy Services, Inc. Mike Stansberry President and Chief Executive Officer Houston, Texas Global Oilfield Services J. Wayne Richards President & Chief Executive Officer Sugar Land, Texas Global Tubing, LLC C. Robert Bunch Chairman of the Board & CEO Dayton, Texas Greenes Energy Group, LLC Robert P. Vilyus Chief Executive Officer Houston, Texas Devin International, Inc. Greenes Energy Group, LLC Robert P. Vilyus Chief Executive Officer Houston, Texas Greene, Tweed & Co. Neil J. Mendes Senior Vice President - Sales & Marketing Houston, Texas

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Gulf Publishing Company John Royall President & Chief Executive Officer Houston, Texas World Oil Gulf Publishing Company Ron Higgins Publisher Houston, Texas GulfStar Group Alan J. Blackburn Managing Director Houston, Texas Halliburton David J. Lesar Chairman of the Board, President & CEO Houston, Texas Hamilton Acquisitions, Inc. Bruce Billeaud Controller Lafayette, Louisiana

Hunting PLC Dennis Proctor Chief Executive Officer The Woodlands, Texas Hunting Energy Services Hunting PLC Dennis Proctor Chief Executive Officer The Woodlands, Texas National Coupling (Hunting Subsea) Hunting PLC Gary G. Weathers President & Chief Executive Officer Stafford, Texas JDR Cable Systems Pat Herbert Group Chief Executive Officer Houston, Texas JW Williams Steven Russom President Waller, Texas John Crane Production Solutions Jackie L. Thomas Vice President - Global Sales Sugar Land, Texas Kem-Tron Technologies, Inc. Michael Rai Anderson, PE President Stafford, Texas Key Energy Services, Inc. Dick Alario Chairman of the Board, President & CEO Houston, Texas Lone Star Fasteners, LP Stephen Cabral Vice President - Sales & Marketing Spring, Texas Lone Star Sealing Technologies Lone Star Fasteners, LP Richard Cowen Department Manager Spring, Texas Lufkin Industries, Inc. John F. (Jay) Glick President & Chief Executive Officer Lufkin, Texas

Lufkin Industries, Inc. Mark E. Crews Vice President & General Manager Oilfield Division Lufkin, Texas Mam USA, LLC Jason Moore President Houston, Texas Forgiatura Mam Andrea Mam President & CEO Cividate Camuno - BS, Italy mcaConnect David Huether Vice President - Energy Solutions Humble, Texas Minco Inc. J.B. Cheatham Production/Sales Manager Conroe, Texas Morgan Keegan & Company, Inc. Michael Chevalier-White Managing Director Houston, Texas Nabors Well Services Co. Robby Nelson Director - Business Development & Marketing Houston, Texas Nabors Drilling USA, LP Lauri McDonald Director of Credit - Houston Houston, Texas Ryan Energy Technologies USA, Inc. Louis Baddock Accounting Manager Houston, Texas Superior Well Services, Inc. George McNinch US Credit Manager Indiana, Pennsylvania National Oilwell Varco M. A. (Pete) Miller, Jr. President, Chairman & CEO Houston, Texas

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Atlantis E&P Services, Inc. Hamilton Acquisitions, Inc. Bruce Billeaud Controller Lafayette, Louisiana Hamilton Engineering, Inc. Hamilton Acquisitions, Inc. Bruce Billeaud Controller Lafayette, Louisiana Petroleum Engineers, Inc. Hamilton Acquisitions, Inc. Bruce Billeaud Controller Lafayette, Louisiana Hart Energy Publishing Richard A. Eichler President & Chief Executive Officer Houston, Texas Holland 1916 Jim Stradinger Executive Vice President - Sales & Marketing, Partner North Kansas City, Missouri Houston Plating & Coatings, LLC William H. Howard, Jr. Chairman of the Board & CEO South Houston, Texas

National Oilwell Varco Robert R. Workman Group President Distribution Services Houston, Texas National Oilwell Varco Jeremy Thigpen Group President Downhole Tools & Pumping Solutions Houston, Texas National Oilwell Varco Joe McAnally President - Coiled Tubing & Wireline Group Hydra Rig Fort Worth, Texas National Oilwell Varco David Daniel President Quality Tubing Houston, Texas National Oilwell Varco Haynes Smith Group President Services Houston, Texas Nedschroef Corporation Jack Kulasa President Spring, Texas Newpark Resources, Inc. William D. Moss Vice President - Strategy & Development The Woodlands, Texas Newpark Drilling Fluids, LLC Joe Gocke Vice President - Finance & Planning Houston, Texas Newpark Environmental Services, LLC Jeff Juergens President Lafayette, Louisiana Newpark Mats & Integrated Services, LLC Jeff Juergens President Lafayette, Louisiana

Norris Production Solutions Daniel Newman President The Woodlands, Texas C-Tech Norris Production Solutions Mark Widney President & Managing Director Edmonton, Alberta, Canada Ferguson-Beauregard Norris Production Solutions Jack Rogers President Tyler, Texas Harbison-Fischer, Inc. Norris Production Solutions Robert E. Bob Funk Sr. Vice President and Managing Director Crowley, Texas Norris/AOT Norris Production Solutions Daryl Harrington President & Managing Director Tulsa, Oklahoma

Sooner Pipe, LLC Oil States International, Inc. John Shoaff President Houston, Texas Omni Pipe Solutions Gary B. Wade, Sr. President & Chief Executive Officer Houston, Texas Oracle Matt Pitner Area Vice President - Energy Houston, Texas PRTM Management Consultants Marc Waco Director Addison, Texas PPHB Raymond L. Brown, Jr. Partner Houston, Texas PennWell / Oil & Gas Journal Roy L. Markum Vice President - Custom Publishing Houston, Texas

Norriseal Norris Production Solutions Pioneer Drilling Company Jack Lee Sr. Vice President and Managing Director Stacy Locke President & Chief Executive Officer Houston, Texas San Antonio, Texas OFS Portal LLC Pioneer Production Services, Inc. William (Bill) Le Sage Joe Eustace Chief Executive Officer President Houston, Texas San Antonio, Texas Oceaneering International, Inc. Pipeco Services T. Jay Collins David Schott President & Chief Executive Officer President Houston, Texas Houston, Texas Oil States International, Inc. Plains Marketing, L.P. - Trucking Christopher E. Cragg Division Senior Vice President - Operations Mike McBride Houston, Texas Financial Services Director Houston, Texas Oil States Industries, Inc. Oil States International, Inc. Precision Drilling Company L.P. Charles Moses Gene Stahl President President Arlington, Texas Houston, Texas

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Premier Pipe Scott DuBois President & Chief Operating Officer Houston, Texas RBC Capital Markets Shauvik Kundagrami Co-Head of U.S. Energy Investment Banking Houston, Texas RPC, Inc. Allyson Lyons Credit Manager Houma, Louisiana Cudd Pressure Services RPC, Inc. Clint Walker Executive Vice President Atlanta, Georgia

Schlumberger Bill Coates Vice President - Sales & Marketing Paris, France GeoServices A Schlumberger Company Steve Kaufmann President Roissy, France M-I SWACO A Schlumberger Company Steve Orr President Houston, Texas

Shores-Sentry LLC Mark Burris President Wichita, Kansas Simmons & Company International Matt G. Pilon Managing Director - Corporate Finance Houston, Texas Sivalls, Inc. C. Richard Sivalls President Odessa, Texas Spencer Stuart Brad Farnsworth Partner Houston, Texas

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Smith Bits A Schlumberger Company Guy Arrington President, Bits & Advanced Technologies Stallion Oilfield Services Ltd. Craig M. Johnson Houston, Texas Chief Executive Officer & President Patterson Services, Inc. Houston, Texas Smith Services RPC, Inc. A Schlumberger Company Jim Daniel Saltys Disposal Wells Bryan Dudman Vice President & General Manager President, Drilling Tools and Remedial Stallion Oilfield Services Ltd. Houston, Texas Craig M. Johnson Houston, Texas Chief Executive Officer & President RYCO Energy Solutions, Inc. Houston, Texas WesternGeco Wolfgang H. Thoene Carl Trowell President Stallion Offshore Quarters President Houston, Texas Stallion Oilfield Services Ltd. Gatwick, United Kingdom Craig M. Johnson Raymond James & Associates, Inc. Chief Executive Officer & President Wilson Scott McNeill Houston, Texas Managing Director Investment Banking A Schlumberger Company John Kennedy Dallas, Texas Stallion Oilfield Construction President Stallion Oilfield Services Ltd. Houston, Texas Robbins & Myers, Inc. - Fluid Craig M. Johnson Management Group Scientific Drilling International, Inc. Chief Executive Officer & President Saeid Rahimian Houston, Texas Gene Durocher Group President President & Chief Operating Officer Willis, Texas Stallion Production Services Houston, Texas Stallion Oilfield Services Ltd. R&M Energy Systems Craig M. Johnson Scientific Drilling Controls A Robbins & Myers Company Chief Executive Officer & President George Moir Saeid Rahimian Houston, Texas Vice President Group President Dyce, Aberdeen, Scotland Willis, Texas Stallion Rockies Ltd. Stallion Oilfield Services Ltd. Scientific Drilling International, T-3 Energy Services, Inc. Craig M. Johnson Inc.- Canada A Robbins & Myers Company Chief Executive Officer & President Jeffry Wilson Saeid Rahimian Houston, Texas General Manager Group President Calgary, Canada Willis, Texas Stallion Solids Control Stallion Oilfield Services Ltd. Select Energy Services, LLC SCF Partners Craig M. Johnson Debbie Burgess Andrew L. Waite Chief Executive Officer & President MSA/Insurance Administrator Managing Director Houston, Texas Gainesville, Texas Houston, Texas

Sumitomo Corporation of America Takashi Naniwa Product Manager Houston, Texas Sunbelt Steel Texas Michael Kowalski President & Chief Executive Officer Houston, Texas TETRA Technologies, Inc. Geoffrey M. Hertel President & Chief Executive Officer The Woodlands, Texas TIW Corporation Steve Pearce President Houston, Texas Teledyne Oil & Gas Michael Read President & Chief Executive Officer Daytona Beach, Florida Tenaris Jon Barton Director - Technical Sales, USA Houston, Texas Texas Steel Conversion, Inc. Brian M. Binau President Houston, Texas Tidewater Inc. Dean E. Taylor Chairman of the Board, President & CEO New Orleans, Louisiana U. S. Steel Tubular Products George H. Thompson Vice President - Commercial Pittsburgh, Pennsylvania U. S. Steel Canada Tubular Products - Calgary George H. Thompson Vice President - Commercial Pittsburgh, Pennsylvania

U. S. Steel Tubular Products Houston George H. Thompson Vice President - Commercial Pittsburgh, Pennsylvania UBS Investment Bank Leeds Eustis Vice President - Investments / Advisory & Brokerage Services Houston, Texas Utex Industries, Inc. Stacey Buckingham Administrative Assistant Houston, Texas Valerus Frank Smith Vice President - Production Equipment Houston, Texas Vallourec & Mannesmann USA Corporation Douglas A. Polk Vice President - Industry Affairs Houston, Texas V&M Star Vallourec & Mannesmann USA Corporation Ronny Clark Sr. Vice President - Sales Houston, Texas V&M Tube Alloy Vallourec & Mannesmann USA Corporation Grady Harrison President Houston, Texas VAM Drilling Vallourec & Mannesmann USA Corporation Kevin Parks Vice President Sales - Americas Houston, Texas

VAM USA Vallourec & Mannesmann USA Corporation Ron Curtice Vice President - Sales Houston, Texas Vortex Ventures, Inc. Dalton Thomas President & Chief Executive Officer Houston, Texas Weatherford International Ltd. Bernard J. Duroc-Danner Chairman of the Board, President & CEO Houston, Texas Weir SPM Gavin Nicol President Fort Worth, Texas Wells Fargo Energy Group Bret C. West Executive Vice President Houston, Texas Wheatland Tube Co. - Energy Products Group Geoffrey ODonnell National Sales Director Houston, Texas Wood Group Pressure Control Scott Bender President Houston, Texas Wood Group ESP, Inc. Brian Sevin Vice President - North American Operations Houston, Texas Wood Group Logging Services, Inc. John Paul Jones President Houston, Texas

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Past PESA Chairmen 1933-1934 W. L. Childs Reed Roller Bit Company 1934-1935 J. A. Crawford Republic Supply Co. of California 1935-1936 J. A. Geismar National Supply Company 1936-1937 W. J. Morris Continental Supply Company 1937-1938 John M. Crawford Parkersburg Rig & Reel Company 1938-1939 J. L. Shakely Jones & Laughlin Supply Company 1939-1940 E. S. Dulin Byron Jackson Company 1950-1951 Ted Sutter Baker Oil Tools, Inc. 1951-1952 F. M. Mayer Continental Supply Company 1952-1953 Mason B. Jones S. M. Jones Company 1953-1954 D. D. Bovaird Bovaird Supply Company 1954-1955 Rodney Durkee Lane-Wells 1955-1956 M. E. Montrose Hughes Tool Company 1956-1957 Rainey Elliott Jones & Laughlin Supply Company 1957-1958 Grover Kilgore Halliburton Company 1958-1959 W. J. Powell Continental Emsco Company 1959-1960 W. O. Wilson Wilson Supply Company 1960-1961 E. A. Johnson Schlumberger Well Services 1965-1966 M. F. Hazel Oilwell Division, US Steel Corporation 1966-1967 A. C. Polk Dowell Division, Dow Chemical Co. 1967-1968 W. J. Bovaird Bovaird Supply Company 1968-1969 P. L. Myers Hughes Tool Company 1969-1970 John B. Meritt Byron Jackson Pump Division 1970-1971 R. C. Rieder Continental Emsco Company 1971-1972 B. R. McNulty Dia-Log Company 1972-1973 R. E. Etnyre Machinery & Equipment Division - Armco 1973-1974 E. H. Clark, Jr. Baker Oil Tools, Inc. 1974-1975 J. P. Harbin Halliburton Company 1975-1976 J. C. Bergin Republic Supply Company 1976-1977 George A. Helland, Jr. Weatherford International, Inc. 1977-1978 E. J. Hagstette Camco, Inc. 1978-1979 J. E. Chenault Oilwell Division - US Steel Corporation 1979-1980 James R. Lesch Hughes Tool Company

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1940-1941 E. W. Gildart Norvell Wilder Supply Company 1941-1942 Earl W. Miller American Iron & Machine Works 1942-1943 F. F. Murray Oilwell Division - US Steel Corporation 1943-1945 Fred J. Sprang Sprang & Company

1961-1962 1945-1947 W. H. Larkin Hugh Glen Emsco Derrick & Equipment Company Larkin Packer Company 1947-1948 Ardon B. Judd Republic Supply Company 1948-1949 A. W. McKinney National Supply Company 1949-1950 Guy A. Thompson Bethlehem Supply Division 1962-1963 W. J. McWilliams Republic Supply Company 1963-1964 H. H. Peters Technical Oil Tool Company 1964-1965 A. W. Rose Byron Jackson Pump Division

1980-1981 Ralph W. Noble Milchem, Inc. 1981-1982 W.C. Walker Mid-Continent Supply Company 1982-1983 J. W. Neely Smith International, Inc. 1983-1984 Lee A. Drake Continental Emsco Company 1984-1985 T. H. Cruikshank Halliburton Company 1985-1986 E. C. Broun, Jr. Baker Hughes Incorporated 1986-1987 Philip Burguieres Cameron Iron Works, Inc. 1987-1988 W. E. Bradford Dresser-Rand Company 1988-1989 Robert H. Smith National-Oilwell 1989-1990 James D. Woods Baker Hughes Incorporated 1990-1991 Gary D. Nicholson LTV Energy Products Company

1991-1992 Gilbert H. Tausch Camco International, Inc. 1992-1993 Dale P. Jones Halliburton Company 1993-1994 Jack Murphy Dresser Industries, Inc. 1994-1995 Joseph H. Netherland FMC Corporation 1995-1996 Russell E. Ginn The Flexitallic Group, Inc. 1996-1997 Max L. Lukens Baker Hughes Incorporated 1997-1998 James L. Bryan Dresser Industries, Inc. 1998-1999 Doug Rock Smith International 1999-2000 Zeke Zeringue Input/Output, Inc. 1999-2000 Peter D. Kinnear FMC Technologies, Inc. 2000-2001 Rhys J. Best Lone Star Technologies, Inc.

2001-2002 Loren K. Carroll M-I L.L.C. 2002-2003 Sheldon R. Erikson Cameron 2003-2004 George I. Boyadjieff Varco International, Inc. 2004-2005 L. Craig Ketchum Red Man Pipe & Supply Company 2005-2006 Robert L. Potter FMC Technologies, Inc. 2006-2007 Jack B. Moore Cameron 2007-2008 Galen Cobb Halliburton 2008-2009 David Barr Baker Hughes Incorporated 2009-2010 Robert Workman National Oilwell Varco

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Anti-Trust Statement The objectives and activities of the Association shall at all times comply with the applicable laws of the United States of America, its states and local jurisdictions. This compliance shall include strict adherence to the requirements of all antitrust laws including the Sherman Act, the Clayton Act, and the Federal Trade Commission Act as currently enacted. All members and their representatives are responsible for adhering to these requirements and avoiding even the appearance of impropriety in the way their activities are conducted. In order to effectuate the foregoing policy, PESA established guidelines for the conduct of its members during conferences, meetings, and conventions which shall be strictly adhered to by each member and their representatives. If questions arise as to whether a proposed course of conduct complies with the law and this policy, guidance shall be sought from the Chairman, President, or Corporate Counsel Committee of PESA. Approved by the PESA Board of Directors April 22, 1988