Rig-n-Dig May 2011

Rig-n-DigMay 2011 S

In ThIs IssueInterview with Myles Blackwater

Q1 Report

Desk Yoga

What’s Happening?

www.savannaenergy.com 2 May 2011

Message from Management

1800, 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-DigMay 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 [email protected]

In This IssueMessage from Mgt. page 2Q1 Report page 3Employee Profile page 4What’s Happening? page 6Canadian Benefits page 8Desk Yoga page 9D & D Profile page 10Last Page page 11

Message from Management

As May comes to a close, Savanna is in the final stages of adding an additional 33 rigs to our well servicing fleet, bringing our total workover count to 101.

Savanna Well Servicing has worked hard at identifying potential acquisitions that fit within our Vision and Values and we are convinced that both Performance and Silverstar will solidify our position as #1 in the industry.

These are exciting times for us as the acquisition of both Performance Well Servicing and Silverstar Well Servicing adds a wide variety of equipment and personnel to our team—people much like ourselves who are dedicated and loyal and bring years of experience in our industry. As we work through the integration process and bring our new family members on board, please join us in welcoming all Performance and Silverstar staff to Savanna! We are very pleased to be meeting many new faces and forming many new friendships.

With the acquisition of Performance, we have added 16 workover units and with Silverstar an additional 17. The equipment ranges from single rigs to double rigs and both fleets have been and will continue to be active in all the areas Savanna currently operates including Saskatchewan, British Columbia and of course Alberta.

We are very fortunate to be adding the skills and talent from two very well run companies to our existing group and we look forward to learning from each other and combining the best from each of these areas to continue to shape Savanna Well Servicing.

In the upcoming weeks and months, many of you will be meeting our new members and we ask you to take the time to make them feel welcome and to share with them our Vision and Values and what makes Savanna a great company to work for. Equally important, we would like to encourage you to ask them questions and find out what made their companies great places to work. No doubt there will be differences in the way we have done common tasks so let’s be patient with one another and take time to learn about different ways we can improve as a cohesive unit.

Ultimately, Savanna’s continued growth is a great opportunity for all our staff and we are extremely pleased to be moving forward according to our Vision and creating “The path for others to follow.”

Bruce Nash, Sales & Marketing Manager for Savanna Well Servicing

It is exciting times for Savanna as the final phases are completed

in the acquisition of Performance Well Servicing and Silverstar Well

Servicing. Bruce Nash discusses these acquisitions and the impact on

Savanna’s Well Servicing fleet.

3 May 2011 Rig-n-Dig

Quarterly Report

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Month End

Comparison of Quarterly Results

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First Quarter ReportSome of us may have complained about or quickly grew tired of the long, cold winter experienced in Savanna’s northern most operating areas, but from a business perspective, the extended winter was a positive for Savanna. The longer winter allowed for a longer operational period, which in turn created an increase in utilization rates not seen by Savanna for several years. Increased operational days, hours and rates were up for the first quarter of 2011 as compared to Q1 of 2010.

As has been the trend, activity in the oil and gas industry in North America is continually improving which also contributes to the increase in Savanna’s Q1 results. “Both the CAODC and the Petroleum Services Association of Canada (PSAC) anticipate stronger drilling activity in Canada in 2011 compared to 2010.”1 Both Savanna’s drilling and well servicing divisions experienced an increase in operating and days and hours with the hybrid drilling division and the well servicing division experiencing its highest utilization quarter since Q1 of 2008.

In addition to the operational increases, Q1 was the first full operational quarter for Savanna’s first two TDS-3000™ rigs. The performance of these rigs during the quarter confirmed their position as a highly competitive and sustainable platform. An additional six TDS-3000™ will be completed during 2011.

Quarter one of 2011 also saw the re-commencement of operations in Australia for one of the flood damaged service rigs. Repairs to the second rig are continuing and it is expected to be operational by June. Operating margins in Australia have been negative during the quarter; however, margins should increase during Q2 with positive cash flow expected in Q3 of 2011.

Another significant activity occurring during Q1 was the signing of an agreement to acquire the outstanding shares of Performance Well Services Ltd., a well servicing company operating out of Calgary, Alberta. Currently operating 16 service rigs throughout Western Canada, Performance’s fleet is relatively new (all but three rigs have been built since 2006) and

will be a good fit with Savanna’s current well servicing rigs. It is anticipated that the new rigs and employees from Performance will be introduced to Savanna before the end of Q2 2011.

Overall, Savanna continues to improve in all operational areas on a comparative quarterly basis. Quarterly results are affected by weather—especially in Canada where the bulk of Savanna’s operations occur. Due to this circumstance, Savanna considers it important to continue its global expansion to lesson the relative impact of Canada’s operational seasonality.

For the remainder of 2011, Savanna’s key initiatives will be to continue the retrofit of hybrid rigs to the new TDS-3000™ rigs as well as expand operations in Australia. Other international areas for Savanna’s hybrid rigs have been deemed attractive with the newly formed technical services group also working towards improving the utilization of hybrid rigs domestically.

Savanna also hopes to expand its Australian fleet by a minimum of four drilling rigs and three service rigs. It is expected that all rigs currently in Australia will be operating within the next few months with a third service rig and two drilling rigs ready for operation by late Q3 or early Q4.

Savanna’s deeper conventional fleet will continue to be a core growth driver during 2011. With the construction of two high specification conventional rigs under way, Savanna is committed to increasing the number of drilling rigs capable of drilling to depths greater than 3,000 meters.

Other key initiatives will include execution of a strategy to grow Savanna’s rental division both domestically and internationally; improve staff development, training and safety execution; and maximize operational efficiencies.

1. Savanna Press Release, May 17 2011


Employee Profile

One of Savanna’s core values is Relationships. In order to pursue our vision, we endeavour to build collaborative partnerships and relationships both as a company and as individuals. By creating supportive and enduring relationships within the areas we operate, communities can benefit from the successes of Savanna.

One of Savanna’s most enduring personal and business relationships has been with local Aboriginal communities. For Savanna, these relationships extend to genuine partnerships built on trust and commitment that benefit the Aboriginal Community, Savanna and our oil and gas producing customers. Working with these communities is beneficial to all parties; however, it also provides Savanna with access to a large and capable labour force. As part of Savanna’s commitment to our Aboriginal partnerships, we offer an extensive and valuable training program focused on developing the skills of all potential employees.

Established in 2004 and is still going strong today, the training program is an intensive two week course aimed at providing successful graduates with the skills necessary to work on a drilling rig. Over the years, Savanna has had many successful graduates, both male and female. One such graduate is Myles Blackwater, who successfully completed Savanna’s inaugural training program in 2005 and is today, still working for Savanna.

Blackwater is a member of the Blood Tribe and lives near Fort MacLeod, Alberta. Initially working in seismic, Blackwater signed up for Savanna’s training program after Savanna visited his reserve. Looking to leave the seismic industry and find better paying work, Blackwater feels he has gained all that and more since joining Savanna: “It has given me a sense of pride; it’s taken me places I never thought I’d be—got me where I am today. Savanna gave me this opportunity and I ran with it.”

Blackwater completed the training program with 14 other participants from various First Nation communities. He sees the program as a great opportunity—“there [aren’t many] companies out there offering training and saying they’re going to provide you with the tickets and the training to get you out there [in the field] and working” says Blackwater, “Savanna is really one of a kind.”

As much as Savanna provides hands on and classroom training for participants, Blackwater feels the best training comes out in the field. “You’ve gotta get out there and actually learn how it is,” he explains. “Going on this little [training] rig is not going to show you how it is out there—you have to want to be out there.”

Blackwater still remembers his first day of field work. He was assigned to Savanna Rig 619 under the supervision of Rig Manager Chris Murfit. Excited for what lay ahead, Blackwater got straight to work cleaning shacks. He knew initiative and hard

work would get him far in the industry. “You just got to get to work,” Blackwater says matter-of-factly. “First thing you do is pick up the scrub brush and get to work. You don’t want to have them [Rig Manager] tell you to do something all the time. You just take initiative and get in there.” And Blackwater’s initiative and drive has paid off as he has worked his way up from scrubbing shacks to Derrickhand.

Blackwater takes care to point out that it really is up to an individual to take initiative and work hard in order to succeed. He humbly states that if he can do it, anyone can, and he has told friends and relatives on the Reserve about Savanna’s program. Blackwater has been a great mentor to fellow workers and his local community. He has encouraged people to take part in Savanna’s training program, but he says “everyone’s their own person. You can only tell them so much.” He also says that he would like to assist with the training program, if time permits, to improve and encourage further participation from members of Savanna’s First Nation partners.

In December 2011, Blackwater will receive his five year service ring from Savanna. Reflecting over the last five years, Blackwater can’t believe how fast it has gone by. For him, the highs include

Working to Greater HeightsSavanna’s Aboriginal Training Program offers training and employment opportunities to

members of Savanna’s partnering Aboriginal communities. An integral part of building

community relationships, the program opens doors for graduates, such Derrick Hand

Myles Blackwater.

Myles Blackwater, Aboriginal Training Program graduate 2005

>>


Employee Profile

Give and You Shall ReceiveAll-Star Trip Giveaway andExtravaganza!!

Savanna Energy Services Corp.S

travelling and moving up the ranks. He has worked in central Alberta, west Texas and Saskatchewan. When asked if he had done much site seeing in Saskatchewan, Blackwater jokes, “Not too much—they put you up on the monkey board and you pretty much see all of Saskatchewan.” Blackwater says he hasn’t experienced any real lows and when talking about the inevitable downtimes, realistically states, “things just happen—there’s nothing you can do about it,” which again shows

A reminder that Savanna’s Charity Contest, with the prize of a vacation gift certificate, is well underway. To enter, volunteer a minimum eight hours with your favourite charitable organization or not-for-profit society and then fill out the form—simple! The contest is open to all employees.

One entry is from Deanne Mosset—here in action with the 1st Sylvan Lake Scouting Section celebrating their annual Lord Baden Powell potluck dinner. The potluck is held to celebrate the founder of Scouts’ birthday and to bring youth and parents together for an evening of visiting, awards and fun.

Deanne has been involved with the Scouts for over six years as a Cub, Scout Leader and Group Commissioner. She became involved when her son joined and says “the Scouting organization follows suit with my values and beliefs in my personal life and teaches life skills that all youth should learn.” Deanne volunteers about two hours a week plus monthly group meetings and camp meetings.

For more information about the contest, please see Savnet or contact the Rig-n-Dig.

Blackwater’s practical and positive attitude. He feels fortunate to have worked with so many great people.

In January of this year, another Blackwater joined the Savanna Team. Cousin Jason has graduated from Savanna’s training program and Myles says he would like to see more people from the Blood Reserve working on the rigs.

When he’s not working, Blackwater likes to go home and spend time with his girlfriend and family in Fort MacLeod.

His big passion is horses and rodeo and he credits both for helping him personally and with his career; “rodeo [has] given me structure; [it] helps me be aggressive when I need to be. Horses have also taught me responsibility and caring for others.”

Congratulations Myles on achieving your five year ring with Savanna! We look forward to celebrating your 10 year milestone!

Deanne in action—bottom right picture, third from left


What’s Happening?

Left to right: Diana Tucker, Shelly Munroe & Kim taylor

What’s Happening?Baby Boom!We haven’t had too many babies until now. Since the last issue of the Rig-n-Dig, there have been three Savanna babies!

Congratulations to Mike and Mimi Burns on the arrival of little Samantha Kay Burns (right) born two weeks early on May 24 at 11:59am and weighing six pounds, two ounces. Mike is an Account Representative for Savanna Drilling.

Congratulations to Jaime DaCosta on the birth of Mackenna Lynn DaCosta (right). Mackenna was born April 23 and weighed eight pounds, three ounces and surprised mum by having red hair. Jaime works as a Corporate Accountant.

Congratulations to Cally Alexander and Jason Earl on the birth of Aiden Everett (below). Aiden was born April 20 and weighed seven pounds, eight ounces. Both Cally and Jason work for Savanna in Leduc—Jason as an Operations Engineer and Cally as a Draftsperson.

Recruitment ActionMembers of the recruiting team in the US recently attended the Oil & Gas Career Fair Expo on May 3 in Weston, West Virginia. Over 500 job seekers and 15 energy companies attended the event. Pictured here is Savanna’s booth with Diana Tucker from Woodlands, Texas; Shelly Munroe from Weatherford, Texas and Kim Taylor from Waynesburg, Pennsylvania. The event was attended to recruit candidates for existing openings and for rig work in the Marcellus Shale area.

Bringing Sexy BackWorking the Savanna coveralls, the girls from the Savanna Drilling office in Blackfalds got to work during their recent fire extinguisher training on May 17.

Left to right: Tracey Ahtila, Rani Larios, Rona Goldade, Shelley Axelson and Brittney Russell.

Photo courtesy of Diana Tucker

Photo courtesy of Rani Larios


What’s Happening?

Wheel Polishing Brigade Jumping for joy to be polishing wheels!

Shawn Droeske from Canada showing Aussie Kent Mayed how to stab pipe

Five Year RingCongratulations to Shawn Hale on receiving his Five Year Ring! Shawn (right) is a Derrick Hand on Rig 630 and is being presented with his ring by Ken Isaac.

Creepy CrawliesWanting to learn about drilling and service rigs, a curious King Brown snake found its way into the training room at the Toowoomba office. A snake not to be sneezed at, the King Brown is a very poisonous snake and can grow to nine feet or three metres in length. Also visiting one of the rigs was a spider.

Sprucing up Rig 64Before moving out Rig 64, the wheels had to be polished to shiny perfection. A wheel polishing brigade, complete with supervisors, was put to work. Even David McKim, Field Supervisor, got in on the action!

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Photos courtesy of David McKim

Photo courtesy of Ken Isaac


Desk Yoga

Yoga at Your Desk

Hold off on that Red Bull, put down that Starbucks coffee and don’t even think about

putting your head down on your desk! Hit that 1pm wall? How about giving yoga a try?!

by Stacey Tetz Kramps, Human Resources Assistant

Now before you sigh and begin to calculate how much time and money you don’t have to find a yoga studio close to the office, how about trying yoga at your desk? Just 15 minutes and a glass of water can reinvigorate your body and mind, enabling you to make it through those last couple of hours at the office.

Yoga and stretching both help to enhance your circulation by increasing the amount of oxygen reaching your muscles and brain. When you sit at your desk all day, moving very little, resulting muscle tension and decreased circulation can mimic fatigue as toxins such as lactic acid build in your major muscle groups. Decreasing tension in your muscles realigns the oxygen pathways and has been shown to be as effective as a cup of coffee. In addition, yoga can help reduce your stress levels. Shutting

the door, relaxing your mind and body, and stealing a complete 15 minutes from the day for yourself can do wonders for body and mind as you focus on the stretch, your breathing, and most importantly, yourself.

Here are some simple stretches to help you feel more awake, less stressed and more focused. You can do these at your desk and in your work clothes. Remember to drink plenty of water, especially after you finish stretching, to help flush any toxins the stretches may release. In addition, though these stretches are for people of most physical capabilities including beginners, it is important to talk to your doctor before you try these out, if you have any concerns. And if you are wearing high heels, you should take them off before starting.

Arm Stretch 1Bring your arms behind your back, clasping your hands, or hold a tie, sweater, or scarf between your hands. Lift your arms as high as you can. Lift your sternum. Hold for 30 to 45 seconds, relax for a moment and then repeat.

Arm Stretch 2Interlock your fingers and extend your arms outward, straight in front of your shoulders. Your palms should be facing outward. Slowly raise your hands overhead, stretching all the way from the waist. Work on straightening your elbows. Hold for 30 to 45 seconds, relax and then repeat.

Cat-Cow StretchPut both feet flat on the floor. Place your hands on your knees. As you inhale, arch your back and look up toward the ceiling. As you exhale, round your spine and let your head drop forward. Repeat for 3-5 breaths.

Neck RollsClose your eyes. Let your chin drop down to your chest. Begin to circle your neck slowly, taking the right ear to the right shoulder, the head back, and then the left ear to the left shoulder. Try to keep your shoulders relaxed and not hurry through areas of tightness. Complete 3-5 rolls and then change directions for another 3-5 rolls.

More stretches next issue!


D & D Profile

Fishing with DarrenIf you like to fish or want to know the ins and outs of competition

fishing, then Darren Zeller is your man. When he’s not busy working

at D & D Oilfield Rentals, he’s out on his boat fishing for walleye.

As we continue profiling the Operations Managers of D & D Oilfield Rentals, we come to Darren Zeller, Operations Manager for D & D’s office in Redcliff, Alberta. Zeller has been working for D & D since January of 2001. As Operations Manager, Zeller is responsible for the day-to-day operations of the Redcliff office. This entails obtaining, assembling and monitoring customer orders; keeping track of equipment inventory and certification; assisting the invoicing department; handling customer inquiries as they arise, and of course, looking after D & D personnel working in the shop and in the field. Zeller also assists the D & D offices in Swift Current and Weyburn, Saskatchewan, on an as needed basis.

The D & D Oilfield Rentals location in Redcliff employs 22 people both for the office and the field. In the last year or so, Zeller says rig mats have been among their best rental items.

Prior to working for D & D, Zeller worked on drilling rigs. He first began on the rigs in 1985, working his way through the positions of Roughneck, Motors and Derrickhand, until 2001 when he joined D & D. During downtime on

the rigs, Zeller also worked at a foundry and a heating and cooling shop. Zeller enjoys his position with D & D and says there is always something to do. “It is always changing—everyday you can learn something new” states Zeller.

In his spare time, Zeller enjoys fishing and competing in fishing tournaments. He first began competing in tournaments in 1995 and averages between six to nine tournaments a year. The biggest tournament Zeller enters is the Vanity Cup—an international walleye tournament held in Nipawin, Saskatchewan. The two day tournament is one of North America’s richest, with first place offering $50,000 in cash. A total of 160 boats are entered in the competition. Zeller says “the best I have finished at the Vanity Cup is 14th, but I have won two tournaments in the Southern Alberta Walleye Trail and have won mixed team of the year six times fishing with my wife in the Saskatchewan Walleye Trail.” The biggest walleye Zeller has caught to date was 13.85 pounds at the Vanity Cup.

Darren Zeller, Operations Manager for D & D Oilfield Rentals, Redcliff

What is a walleye?The walleye is a freshwater fish native to Canada and the Northern United States. It is a close relative to the European pikeperch. Walleyes grow to about 31 inches (80 cm) in length and weigh up to 20 pounds (9 kg). The largest walleye recorded was 42 inches (107 cm) in length and weighed 25 pounds (11.3 kg).

Walleyes are known for their good eyesight in dark and choppy conditions. They tend to feed more at dawn or dusk or in rough water, which both make for good walleye fishing conditions. Walleye is a tasty, edible fish and it is also the state fish of Minnesota and South Dakota.Source: http://en.wikipedia.org/wiki/Walleye

CONTACT:

Calgary, AB - 1.403.267.6737

Medicine Hat, AB - 1.877.548.2700

Lloydminster, AB - 1.888.875.5171

Weyburn, SK - 1.306.577.3324

Swift Current, SK - 1.306.750.1675

[email protected]

www.ddoil.net


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A special thank you...We would like to thank the SAVANNA

family for their support and their donation to the STOLLERY CHILDREN’S HOSPITAL

in memory of our daughter Jazzmin.Dean, Billie & Damin Malowany

Documents

Rig-n-Dig May 2011