Rig-n-Dig December 2011

Rig-n-DigDecember 2011 S

In ThIs IssueCanadian Drilling Integration

Fresh Starts

What’s Happening?

Cover image taken by Ehren Getz, Rig Manager

www.savannaenergy.com 2 December 2011

Message from Management

800, 311 6th Avenue SWCalgary, Alberta T2P 3H2Phone: 403 503 9990Fax: 403 267 [email protected]

Savanna Energy Services Corp. is listedon the Toronto Stock Exchange (TSX:SVY)For current stock information,visit tsx.com or savannaenergy.com

Rig-n-DigDecember 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 [email protected] Editor: John Bayko 403 781 9999

[email protected]

In This IssueMessage from Mgt. page 2Fresh Starts page 3Canadian Drilling Integration Update page 5What’s Happening? page 6Canadian Benefits page 8Bruce’s Blog page 9HSE Calendar Entry page 10Last Page page 11

The Year that was 2011

As 2012 approaches, we can look back on Savanna’s 10th year of operations as significant for several reasons.

January 2011 began with two service rigs underwater in Australia, the Vision and Values being rolled out, and the introduction of Savanna’s new logo in conjunction with our 10th year in business.

February saw the TDS-3000™ drilling rig begin to get excellent reviews in the Cardium and Viking regions as our customers were beginning to see the great results our crews and our new rig type were providing.

As we rolled into March, Savanna’s US drilling and well servicing operations were extremely busy with no slow-down in sight. According to VP of US Operations, Steve Van Howe, “the demand for our high quality equipment and experienced personnel has enabled [Savanna] to establish longer term contracts” down south.

In April, we held the first integrated Rig Managers meetings in both Nisku and then, due to a water main break, Red Deer. This was a great opportunity for Rig Managers from across divisions to mix and mingle and discuss the company and ideas to make us better. Although some of the content was in need of adjustment, the general consensus was that the format was a winner and we will continue with the combined meetings in 2012.

May brought two huge acquisitions on the well servicing side, with Savanna welcoming Performance Well Servicing and Silverstar Well Servicing to the family. Many exceptional people and a total of 33 new service rigs combined to make Savanna Well Servicing into one of the largest providers of rigs in Canada.

The spring and summer of 2011 were among the busiest for Savanna in years and our utilization rates and revenues for

the period were the Company’s best since 2006. The Recruiting team worked hard to keep rigs crewed, and the sales teams kept those crews busy, making what has been traditionally a slow few months into profitable ones.

September and October saw the integration of Savanna’s Canadian Drilling divisions as well as the 10 year gala held at the Stampede grounds in Calgary. The party was viewed as a success by those in attendance, and word spread quickly throughout the industry that Savanna knows how to put on an event (thanks Jessica McLeod!!). As for the integration, things have been progressing nicely and once completed we will begin to see the efficiencies bring on better results for all involved.

2011 also saw the departure of some long-time Savanna employees and the closing of our Blackfalds drilling office, which for a long time was a central part of our drilling operations. Change is inevitable in an organization and industry such as ours and all the changes we have made have been done so with one thing in mind: making a better Savanna. We’d like to thank all those who have come and gone, and welcome those who have just arrived as we move into our second decade of operations. We anticipate many more years of success as our company grows and changes and we look forward to what the future brings!

Rachel Moore, VP Human Resources

Rachel Moore, Vice President of Human Resources, takes a look back over Savanna’s

achievements for 2011. From floods to new family members and memorable

celebrations, our 10th year of operations is definitely one to remember!

www.savannaenergy.com

mailto:[email protected]

tsx.com

savannaenergy.com



3 December 2011 Rig-n-Dig

Fresh Starts

Fresh Start is a new safety initiative from Savanna Drilling. Aimed at creating safety ownership and crew engagement, the program began in January 2011 with the 400 Series Hybrid drilling rigs. Since then, almost 40 Fresh Starts incorporating over 600 Savanna field employees have been conducted. The merit of these meetings has already been noticed as recorded incidents have decreased drastically.

The Fresh Start meetings have been conducted on a rig-by-rig basis and have involved Aaron Mills, Director Operations Canadian Drilling; Eric Thompson, Global HSE Director; Ken Bell, Operations Manager; all Field Superintendents; all HSE Superintendents and the rig crews. Each rig has three crews of five or six members. For many rig crews, the Fresh Start meeting has been the first time both crews have met each other. The day long program covers everything from introductions to Behaviour Based Safety (BBS) and is aimed at discussing the roles and responsibilities of all employees—from the Operations Manager to the Leasehand.

In general, the day begins with introductions and everyone saying a little bit about themselves, their values, family

life, hobbies and thoughts on safety. The informal introductions break the ice and allow everyone to become acquainted. After that, Savanna’s Vision and Values are discussed along with Savanna’s expectations and the crew’s expectations of Savanna. Once all of this is presented, it is usually clear that everyone’s personal values align closely to Savanna’s.

During the morning, the Rig Manager and Drillers talk to the crew members about their work and safety expectations on the rig. They cover everything from communication, to safe work permits and operational practices. It is important for all members to be engaged and participate in order to create ownership of safe work practices. The number one message delivered is that everyone should work safely and never take chances, shortcuts, rush through a task or guess at what it is they are meant to do—safety is not just part of the job, it is the job. Employees can, and must, refuse to do unsafe work—including work they do not understand. Many new rig workers, or ‘greenhands’, are not trained or confident enough to speak up about unsafe work practices or tasks they do not fully understand; therefore, it

is extremely important to make sure new employees not only feel welcome, but also safe. An aim of the Fresh Start meetings is to ensure everyone is on the same page with safety practices and expectations.

Presentations by the HSE department on BBS are held in the afternoon. All crew members participate in learning and developing their skills at observing people working safely or unsafely. How to intervene and correct unsafe work behaviour or how to congratulate a crew member for working safely are also addressed. Congratulating someone for safe working practices is just as important as intervening in an unsafe work situation. Rig crews are also encouraged to discuss their ‘Perfect Rig’—that is describe their ideal working model and values. This again encourages ownership and enables everyone to contribute to their own set of rig values and goals.

The Fresh Start meetings have proven to be a valuable way to introduce crew members to each other, introduce supervisors and management to the crews, and also build a framework for safe work practices on the rig. Already there has been a significant drop in recorded incidents. In 2010 Savanna Drilling recorded 180 incidents in total, which include anything from equipment damage to lost work time due to accidents. This year, Savanna Drilling has only recorded 100 incidents—with an increase of 1,500 operating hours! With 96 per cent of all of incidents caused by unsafe acts, refocusing the approach to working practices and thinking about a task before doing it, greatly reduces the number of recorded incidents and assists us in reaching the ultimate goal of zero recorded incidents.

A Fresh Approach

Since January 2011, Savanna Drilling has implemented a new approach to safety. Known as ‘Fresh Start’,

this initiative is not only decreasing the number of recorded incidents but is also providing a unique

opportunity for rig crews to get together.

by Aaron Mills


Drilling Integration

Canadian Drilling Integration UpdateIn late October of this year, an announcement was made regarding the integration of Savanna’s two

Canadian drilling divisions: hybrid and conventional. To keep everyone in the loop, a memo was sent

out in late December highlighting the progress to date. In case you missed the memo, the Rig-n-Dig has

republished it to bring you up to speed with the integration process.

Key information regarding the integration process includes:

Integration of the hybrid and conventional drilling rigs will make Savanna Drilling 70 rigs strong with over 1000 employees!

A cross functional team has been put together to develop a standard invoice and processing system for Savanna Drilling in Canada. The team hopes to develop one customer database and have a standard invoice for Canadian clients by the third quarter of 2012.

Sales and marketing on the drilling side have already integrated completely. Currently the drilling sales personnel maintain customer relations and sell for all Canadian drilling rig platforms and use one base contract for all customers.

A field staff integration plan is being led by Cindy Korpesho which will address the following:

•Planning an employee education process to ensure staff has a thorough understanding of our drilling business as we merge into one division•Integrating recruiting and crew placement procedures•With the assistance of David Yates’ team, training key employees and positioning them for advancement•Reviewing the feasibility of a retention program•Re-aligning the crew coordinating processes to include all rigs

Job losses are not anticipated and any equipment relocations will be considered far in advance of any actual movement.

Aaron Mills and Dave Hoogendorn are leading the review of the new organizational structure. They are taking a slow and careful approach to ensure minimum disturbance to operations. For Rig Managers and Field Superintendents, it is business as usual.

A team of 16 individuals from various departments has been established to determine goals and develop an integration process. The following goals have been set and are to be achieved by the end of January 2012:

•Determine organization structure•Clarify leadership roles and goals for operation and support services•Have one strategic plan including one marketing plan for Canadian drilling•Identify operational process improvements

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Drilling Integration

Frequently Asked Questions:

Q: What is the combined organization called?A: Savanna Canadian Drilling. A new web page listing all rigs is under construction. We are looking at how we best categorize, communicate and market the rigs. Although not final, we are leaning towards identifying the rigs by depth and coil type. We expect a decision by the end of January, 2012.

Q: Will there be job losses as a result of the integration?A: No. We will work to identify efficiency gains primarily through better processes (doing things once, correctly) that free up time and save money. Essentially, we are in the process of successfully positioning ourselves for further growth.

Q: How long will it take to fully integrate the rigs and get our Field Superintendents comfortably managing all rig types?A: We will take a gradual and purposeful approach. We will test a few combinations in 2012, measure how that goes and re-configure as needed. This will help us determine how rigs will be distributed.

Q: How will we train Field Superintendents on the different rig types?A: We see this as important for the company and for the Field Superintendents to broaden their expertise and scope of experience. In addition, there are two Field Superintendents who have experience managing all of the rig types Savanna offers in Canada. Our approach is to methodically integrate each rig, not rush through the process so we can ensure, as best as we can, that Field Superintendents are comfortable with their current fleet of rigs before adding more. We will also ensure our field bases have a full complement of support staff for all equipment types.

Q: Will anyone have to learn new systems?A: Yes. The integration process is a change. Accordingly, our approach is to adopt the best practices of both groups and improve them (including looking at external methods) as we implement. We will be migrating to common processes and systems in order to achieve one aligned team and gain efficiencies. One example is the “one invoice” process. All employees involved in managing or working in new systems will be introduced to these changes and trained on the new systems.

Q: Will there be a change in pay as a result of the integration?A: No.

Savanna employees have embraced the integration and are working together to make everything happen. Our values of Integrity, Respect, Excellence and Sustainability are guiding us through the decision making processes and as a result, we are achieving considerable success!

Just to provide further information on the Canadian Drilling integration, a list of Frequently Asked Questions has been written. Of course, if you have any additional questions on the integration, you can direct them to John Bayko.


What’s Happening?

What’s happening?Congratulations!Congratulations to Adam Armstrong, Draftsperson from Engineering in Nisku, and Monika Pawlowska on the birth of their little boy, Luke. Luke was born December 5 and weighed 7 pounds, 10 ounces.

Congratulations also go to Patricia Cooper, Tax Technician, for winning Savanna’s second Give and You Shall Receive All-Star Trip Giveaway and Extravaganza Contest. Patricia volunteered her time with Canadian Blood Services and has won a $2000 travel voucher. We congratulate Pat and thank her for volunteering her time within the community.

As that wraps up the 10 year anniversary Charity Contest, we would like to thank everyone who participated and have spent their time volunteering within their local community. Savanna aims to be a positive contributor in the communities in which we operate and we thank all our employees for volunteering their time.

Two Peas in a PodAnother couple of Savanna Well Servicing rigs were out working side-by-side. Rigs 4 and 18 have been working for Paramount Resources. The photos were sent in by Rig Manager, Ehren Getz.


What’s Happening?

Rig 644These photos were sent in by Chris Leblanc, US Marketing Manager, who received the photos from Sergio Abauat, Drilling Superintendent for Oxy Permian in West Texas—a client of Savanna’s. On a recent visit to Rig 644, Sergio was accompanied by his wife, Natalia Laverde, who took the photos.

A Star is BornA Savanna Drilling rig was featured in the November issue of Oilweek magazine. The photo, taken by Jamie Angus, a geologist with Reservoir Dogs Geological, was chosen as the winner of Oilweek’s annual photo contest. The rig was working for Crescent Point Energy near Dollard, Saskatchewan.

Bringing Safety Home Calendar Contest WinnersWe are proud to announce the winners of the first annual Bringing Safety Home Art Contest. A large number of entries were received and a big thank you goes to all who participated. After much deliberation, the executive committee selected the category winners, who will each receive a $200 gift certificate of their choice. Their work will be featured in the Bringing Safety Home Calendar which will be sent to every Savanna employee in the New Year.

The winners are:AdultMeagan GreenerAmy Martin Vlad Bilkun

Age 13-17Ashika ThakerAngela TonesGino Naranjo

Age 7-12Kiya JohnSharaya HillTaylor Ohs

Age 3-6Joey JohnSara KupczykAnna Kupczyk.

Honourable MentionJenny Lin(See the feature article on Jenny’s entry on page 10!)

Left to right: Terold Wilkinson, Matthew Ortiz and Kelley McClelland from Savanna, and Clarence Smith from OXY DSM


Canadian Benefits at a Glance

Tax-Free Savings AccountsEveryone has something they wish to save for. Whether it’s retirement, a new car or a

well deserved holiday, a Tax-Free Savings Account can help you reach these goals a

little bit quicker.

What is a TFSAA Tax-Free Savings Account (TFSA) is a flexible, registered general-purpose savings account that allows Canadians to earn tax-free investment income to assist with lifetime savings needs. You must be a Canadian resident, 18 years of age or older with a valid Social Insurance Number (SIN) top open a TFSA.

The TFSA complements existing registered savings plans like the Registered Retirement Savings Plans (RRSP) and the Registered Education Savings Plans (RESP). Generally, investment options for a TFSA are the same as those permitted for a registered retirement savings plan (RRSP): cash, mutual funds, bonds, securities listed on a designated stock exchange, and certain shares of small business corporations.

Up to $5,000 annually can be contributed to a TFSA. Contributions up to this amount are tax-free; any contributions over this amount will be taxed. Investment income earned in a TFSA is also tax-free.

TFSA Contribution RoomContribution to a TFSA is based on ‘TFSA contribution room’, which can change from year-to-year depending on your personal contributions and withdrawals.TFSA contribution room is made up of:

• Your annual TFSA dollar limit ($5,000 per year)

• Any unused TFSA contribution room from the previous year; and

• Any withdrawals made from the TFSA in the previous year, excluding qualifying transfers or specific distributions.

NOTE: You cannot contribute more than your TFSA contribution room in a given year otherwise you will be taxed at a monthly rate of 1% on the highest excess TFSA amount for each month.

An Example of TFSA Contribution RoomIn March 2009, Jack contributed $5,000 to his TFSA. He did not make any other contributions and he did not withdraw any funds in 2009. His unused TFSA contribution room at the end of 2009 was zero.Jack’s TFSA contribution room at the beginning of 2010 was $5,000 (his 2010 TFSA contribution limit).On June 15, 2010, Jack made a contribution of $500. On October 26, 2010, he withdrew $4,000.His unused TFSA contribution room at the end of 2010 was $4,500 ($5,000 - $500).Jack makes the following calculation to determine his TFSA contribution room at the beginning of 2011:

2010 2011

TFSA Contribution Room at the beginning of 2010 $5,000

Minus: Contributions made in 2010 - $500

Unused TFSA Contribution Room at the end of 2010 $4,500


Plus: Unused TFSA Contribution Room at the end of 2010 +$4,500

Plus: Total withdrawal made in 2010 +$4,000


How to open a TFSA1. Contact your financial institution or

insurance company (issuer).2. Provide the issuer with your valid SIN

and date of birth so that the issuer can register your qualifying arrangement as a TFSA. (If your TFSA is not registered, any income that is earned will have to be reported on your income tax return.)

For more information on the TFSA account go to:http://www.tfsa.gc.ca/index.htmlFor personal assistance regarding TFSA information call:1-800-959-8281For personal and general tax information use the automated service:1-800-267-6999

Information for this article was collected from the Canada Revenue Agency website (www.cra.gc.ca) and the Government of Canada TFSA website (www.tfsa.gc.ca).

http://www.tfsa.gc.ca/index.html

www.cra.gc.ca

www.tfsa.gc.ca


Bruce’s Blog

What Have I got Myself into…Again?

December 2011

by Bruce Nash

Bruce Nash, Sales and Marketing Manager for Savanna Well Servicing,

is at it again! He is participating in the BC Bike Race once more and

will be writing a blog on his experiences.

Well here’s the dope! Oh yeah I forgot—can’t use dope in a cycling story. Let’s start over…

I am outta shape! I stepped on the scale the other day and just about fell off due to a heart attack! What the heck happened? Was it the December line up of Christmas parties? Was it the recent minor surgery I had that put about a five week dampener on my training? How about the lower back or the right knee which both seem to be in constant pain? Not sure, but I have been trying to get my butt down to the new fitness facility at Savanna’s head office. My fellow gym rat David Yates, Manager Organisational Effectiveness, and I have been getting our money’s worth first thing in the morning—no question.

I find Fall is always a tough time to keep my fitness level on track. Cycling season comes to a close with the focus being on playing the last game of golf or starting to think about ski season. However, with the New Year right around the corner it is time to start thinking about getting back on track. I must have been feeling particular good one day at the end of November because for some silly reason I signed up for the B.C. Bike Race again, which starts in June 2012. Not sure what I was thinking, but here are the race stats: seven days of mountain bike racing over 300 kilometres, five hours a day and 25,000 feet of climbing—with some of the best single track mountain biking in the world!

Many of you followed my cycling blog two years ago when I competed in this race for the first time. Boy was I nervous going into that one and I admit to not knowing what I was getting myself into. As preparation, I rode most days during the winter of 2010—many of which were -15˚C or colder. Although my commute is only about 9 kilometres each way, imagine waking up at 5:30am, looking outside

and checking the temperature only to see it snowed five centimeters overnight and it is all blowing across the road…ugh! The prospect of getting on the bike during those days was not something I looked forward to; however, I knew it was something I had to do in order to compete in the race. I didn’t have a coach, only a rough plan of what I thought I needed to do before the start of the race. From memory, I think I rode about 2000 kilometres in the first five months of 2010. Lots of cold days, some days were spent racing, and then of course when spring and the warmer weather came around I was able to get more time in on the bike outside. My goal was to get comfortable riding for about four to five hours at a time.

Of course, race time came quicker than I wanted it to and all I could think about was wishing I could have ridden more. Well, seven days later, exhausted and beat; I finished the race and couldn’t have been more satisfied. Typically you see huge benefits two weeks after a race like that—and that certainly was the case with me! It is just simply addictive. Finishing was always my goal, but this year with the help of a coach and a longer training period, I hope to not only finish but improve my overall placing in my age group.

This year my plan has changed slightly. I have a cycling coach who is working on a program of “periodisation” and I have some pretty specific fitness goals that we feel will help with my overall performance. Periodisation is based on a gradual climbing of intensity over a three week period with one week of easy recovery. The goal is to train your body to high levels and then give it some time to adapt to the hard effort. I was so focused on putting in the long distances for 2010 that I neglected the high intensity work that helps build speed. I am hoping this time with the proper plan in place I

can not only complete the base miles, but build some speed as well, which will improve my times over each stage.

On a personal note, this year I will be riding with three close friends who are doing the race for the first time. Boy, do they have no idea what they are getting into! I am looking forward to a little friendly rivalry with my pals and this has given me added incentive to train harder. Additionally, I will have the support of my wife and two boys along with my parents. We have decided to rent a small motorhome to travel along the route—providing a nice change from the cold showers and crowded bathrooms. Waking up with some guy from the UK snoring beside me in a tent is not something I want to experience again!

I look forward to providing a regular update on my training over the next five months. No doubt the race will be here before I know it and I will be heard saying: “what did I get myself into…again?

Cheers,Bruce

Bruce Nash in action during the BC Bike Race


HSE Calendar Entry

Honourable MentionThe judges of the HSE Bringing Safety Home Calendar Contest were so impressed by the entry from

13 year old Jenny Lin that a special feature in this month’s Rig-n-Dig was requested. Below is Jenny’s

drawing, completed in pencil crayon and oil pastels, along with an explanation of her drawing. Jenny’s

mum, Sandy Wu, is an A/P Clerk for Savanna. Great work Jenny!

What Safety Means to Meby Jenny Lin

To me safety means support, care, cooperation, security, shelter, protection from harm and guarded. In the picture I drew, I tried to portray these phrases.

The extreme wraths of fire (pencil crayon) represent the hazardous danger that surrounds us every day (even without us knowing). The strokes are different from left to right in the fire because there are different kinds of danger (from mental damage to physical damage).

The blackness in the background (oil pastel) supports the angry furies of the

fire—darkness is sinister and evil which compliments the danger. There are hands rising out of the fire protecting the Earth.

The different hands (pencil crayon) are different races and cultures. If we all work together and help each other out to prevent harm, the world would be out of danger. If we all care for each other, love each other, cooperate, and support each others’ needs, the world will be secured, guarded, protected and SAFE.

The Earth has a yellow working helmet on top of it (pencil crayon). It represents

protection, insurance, shield, and security from danger. It also represents the workers at Savanna; supporting Savanna with hard work, offering protection like a helmet protecting a head.

The Earth (pencil crayon) indicates North America, where Savanna’s companies are located (along with Australia). The savanna sign is in the middle representing the company. Savanna is kind of like the Earth—everyone works very hard together to cradle it from harm.

That is what SAFETY means to me!


Last Page

Christmas Puzzle

Christmas Jokes

Christmas PuzzlerChristmas Puzzler

Kim

R W C S S A U N S O Y E C L C S M I N YJ E V O E N O D U S O R A N G E L V E SC A N D L E S N I T O O R C L L G N E GM N C C L C R A E N C D M T H C M L S AS L E I G H S L L E B R E V L I S S A PL C F N R N T R N M T G A C H C E E R TG N I N E S O A C A G E T C E I T E L ON E R A I I C G E N P N E A K M S O R RR M E M N Y K N O R T H P O L E B S G LG P P O D H I G O O W J O L N R R E H EE M L N E O N D C B O C S T A R P S R IN H A L E L G A E Y B A O O E Y G S K VD C C H R I S T M A S I R L E M T C S IL N E L U D I N S W O T R V D N R O J RE I S G D A D A O W O M H A E Y A E C SL E R E O Y C S C W O N O G N C C S A OE E Y L L O H O N D A K S E I R R E B TA M T L P A R W S M L O V E H L R L O YE S O O H S A C H Y S E W E O E T E Y MO J S C E I A I S L E E R A G L N L T S

ANGEL BERRIES BOW

CANDLE CANDY CANE CHIMNEY

CHRISTMAS CINNAMON COAL

COLD COOKIES DECEMBER

EGGNOG ELVES EVE

FIRE PLACE GARLAND HOLIDAY

HOLLY ICICLES JOLLY

JOY LIGHTS MERRY

MISTLETOE NOEL NORTH POLE

NUTCRACKER ORNAMENTS PRESENT

REINDEER RIBBON RUDOLPH

SANTA SCROOGE SILVERBELLS

SLEIGH SNOW SNOWMAN

STAR STOCKINGS TINSEL

TREE WRAP WREATH

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