WINTER2013/14No185

Hunting Reviewthe external house magazine of Hunting PLC 5 Hanover Square London W1S 1HQ, UKdavid.hunting@hunting.plc.uk Edited by Georgia Langdon and Nick Johnstone, CMS Strategic georgia.langdon@cmsstrategic.com Designed by Anthony B Ainley MCSD tony@tonyainley.com Produced and printed by Duffield Printers Ltd martyn@duffieldprinters.co.uk

IN ISSUE 185 WINTER 2013/2014

4 Turn onthe tapsA return to drilling activity in the ultra-deep waters of the Gulf of Mexico has led to a dramatic construction programme for new and existing facilities in Texas and Louisiana

9 Perfect perforationA brand new perforating gun manufacturing line in Wuxi, China underpins Hunting Titan’s regional production ambitions in Asia

6 Singapore schoolingA regional training centre is now supporting Hunting’s growing presence in the Asia-Pacific region, providing a centre of excellence for employee development

14 IndonesianimprintA recently established distribution centre in Jakarta is proving well-placed to respond effectively to immediate customer needs in South East Asia

12 Dream machinesNew railway developments in London evoke the steam era which saw the emergence of the UK’s first rail transport systems

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Cover:Early morning mist rolls off the Grand Canal as dancers exercise in Taihu Square, Wuxi

Background:Javanese sunrise

Talking point As we reflect on the year’s closing and the prospects ahead, we can note the expansion of our activities around the world to better serve our customers with a broader range of our products. We can also review our commendable efforts to push into new geographies for both manufacturing expediency and distribution efficiencies. None of this can be achieved without the commitment of our workforce, some who we welcome for the first time as we expand and grow into these new areas. Others we applaud for their loyalty and steadfast service through many years. People have been the heart of our company since its founding in 1874 and, as we enter our 140th anniversary year, we are reminded that the core values which we have held close over the intervening years, are the same that safeguard us now. I wish all of our staff, families and different communities in which we operate, a happy and peaceful festive season and a shared energy for the endeavours required of us in the New Year.

Chief Executive Officer

18 XLerate

Following the acquisition of the assets of XL Perforating Partnership, Hunting Energy Services’ completion equipment and distribution network has been extended in Canada

20 Knowledge for successHunting’s multi-faceted approach to skills and knowledge acquisition is being developed into a strategic programme to support employees and attract new staff

22 Lean too

Incremental change and continuous process improvement are the basic foundation blocks on which the company’s Lean Manufacturing drive continues

24 News from our community

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Recent months have seen a renewed upturn in operating activity with the Gulf of Mexico (GoM) offshore rig count rising

and holding steady around the 60 mark, while new permits are being issued to a swathe of the super majors. With strict new safety measures now widely implemented to protect workers and the environment alike, Gulf activity is rising exponentially.

A sea changeIt had been thought that the introduction of stringent regulations and associated high costs might see substantially fewer companies returning to the US Gulf but this has not been borne out in practice. While operators are now required to submit very specific strategies for their offshore ventures, to manage and mitigate the risks of failure with enhanced safety regimes, this has evidently not put them off. Indeed, there is once again intense competition for a presence in this prolific region, considered one of the most technically challenging hydrocarbon basins in the world. Virtually all the big name International Oil Companies have been joined by a group of National Oil Companies eager to garner expertise at the leading edge of new offshore, deep-water technology. This is in part due to many of these same nations aggressively sourcing investment for their own ultra-deep prospects and need to gain the experience to take an active development role. This has been boosted by the passing of the Mexican government’s Energy Reform Bill which ends the 75 year monopoly of state owned

Turn on the tapsThe resurgence of drilling, appraisal and completion

activity in the Gulf of Mexico has led to a

commensurate investment in new capacity

Pemex and allows direct foreign investment. The GoM has a comparative advantage however, in having a relatively stable regulatory regime and established fiscal framework. New records are being announced on a regular basis with wells typically being drilled through salt and rock to the Lower Tertiary level with target reservoir depth over 26,000ft and surface operations in over 12,000ft of water. The reward however is a pay zone which can extend to a depth of 1,000ft with good flow and reservoir characteristics.

The lure is the Gulf ’s so called ‘elephant fields’ - oil fields which can produce for 25 years or more - with a potential to recover 48bn barrels of oil equivalent. While very expensive to put into production, with typical costs per well around $112m, the economics are still hugely attractive compared to the lower cost of a land based well. Land based wells are estimated closer to the $8m mark however initial production flow can peak after a matter of months and reduce to a trickle in a few short years. This is because of the difficult, tight geology. Onshore shale development of both oil and gas reserves has been hugely beneficial to US security of supply, with imports now equalling domestic supply and consequential reduction in energy costs to industry.

The renewal of activity in the GoM will be pivotal to the US economy and its realignment in geopolitical orientation.

Rising tide Anticipating this uptick in demand, Hunting has recently expanded its manufacturing facility,

Tallahassee

Mobile

New OrleansHouston

Houma

CorpusChristi

Coatzacoalcos

Miami

Havana

Cancun

UNITED STATES

MEXICOBELIZE

HONDURAS

CUBA

Breaking ground at Houma 311

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Turn on the taps

nicknamed ‘311’ after the highway on which it is located, close to a junction on I-90 for Houma on the Louisiana coast. Situated on the marshy edge of a former cotton plantation, the 57 acre site was stabilised and hard surfaced for industrial use with the main ‘phase one’ manufacturing and deep-water storage facility operational in 2012. This ‘Supercenter’ was devised to bring together Hunting’s various Houma operations onto one site and has recently been joined by Hunting Titan and the Well Intervention business together with Thru-tubing. The second phase of the building plan has now commenced and will see further consolidation of manufacturing for the three key well trading platforms. Plans are also underway for the establishment of a common support team, including QA, sales and financial functions, in a new administration building. This is designed

to provide a strong foundation for Hunting to continue to deliver quality products, with enhanced customer service, logistical support and significant cost efficiencies.

Synergies are being sought to introduce simplification to the manufacturing processes and inventory control which have a positive impact on productivity. Lean principles streamline the flow of materials through the new plant and machine cells are optimised for efficiency to further increase the savings.

By extending the Houma Supercenter, Hunting is able to maximise its investment at 311, while eliminating the constraints of the previous Woodlawn and Capital Boulevard facilities and taking manufacturing capacity to over 200,000sq ft. In addition, phase two is building an extension of 10,800sq ft on the existing deep-water storage building. This significant

development will allow the company to service 90ft assemblies in a controlled environment. The geographic positioning of 311 has significant advantages for business continuity over the previous locations - it is situated further away from the notorious hurricane flood zone, reducing considerably the chance of any disruption.

Baytown beckonsIn September 2013 Hunting purchased a 40 acre plot of land within the AmeriPort Industrial Complex in Baytown, just to the east of Houston, Texas. The purpose is to build a state of the art facility for full length OCTG tubular threading, to support the company’s growing regional activity. Final configuration is still being decided but it will include some consolidation of existing facilities. It will also gain from the experience of other in-house projects elsewhere in the world such as manufacturing and pipe management in Aberdeen.

Developing a brand new facility such as AmeriPort allows Hunting to establish its Lean, modular, automated and highly efficient procedures from the outset, starting with the design of the plant and equipment. The flexible layout offers room for growth as new threading lines are brought into production, meaning that existing operations will not be disrupted by additional construction. In addition, a state of the art test facility will be commissioned to speed up the development of new thread technology by keeping this process in-house, with due regard to quality, intellectual property and innovation.

Latest pushConstruction at 311 for phase two has commenced, with completion expected in late 2014 and while ground has been broken at AmeriPort, construction is scheduled to take a little longer to complete. Both facilities will enhance Hunting’s footprint in the major offshore points for accessing the Gulf of Mexico’s resurgent opportunities.

Purchased land in Baytown earmarked for development

Stabilising further hard standing

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Singaporeschooling

Hunting’s growing presence in Asia Pacific is now supported by a pioneering regional training academy

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Reflecting Hunting’s phenomenal growth in Asia Pacific, a new regional headquarters and centre of excellence has been

established in Singapore. This includes a Hunting Training Academy (HTA) dedicated to customer interaction and training to impart a common skills-base, promote technical standards and establish the levels of quality assurance expected of Hunting people and the brand.

Open to learning A prelude to the integrated facilities planned for Hunting businesses in Singapore, the HTA was officially opened in October 2013 by Jim Johnson, Chief Operating Officer of Hunting Energy Services (HES). The event was attended by guests from the Singapore Manufacturing Federation, Valin Hengyang, Singapore, and colleagues from Hunting offices nearby.

Following an address from Daniel Tan, Managing Director for HES Asia Pacific, the guests at HTA’s official opening were given a guided tour of the facilities and introduced to the HTA and regional office teams.

After a brief tour of the academy and offices, Jim and Daniel signed the commemorative plaque to officially declare the HTA ‘open’. The event ended with a certificate presentation ceremony to recognise graduates of selected technical skills training and Certified Programme Trainer (CPT) training courses.

Global gatewayLocated in the manufacturing heart of Singapore, the HTA is also home to the regional office for Quality & HSE, Technical Support, Gauge and Calibration, Engineering & Business Process Improvements and ERP/IT Support. Together, the HTA and the regional office promote excellence in their personnel and operations support, placing great emphasis on innovative ideas and initiatives to support continuing growth in Asia Pacific.

Combined with the commercial office at the International Business Park and the expanding

manufacturing facility at Benoi Road, the company has an unrivaled gateway to the region’s emerging markets.

The Academy comprises IT enabled training rooms and a multi-media resource centre, which offers an enhanced learning experience using various educational platforms such as instructional classes, lectures and seminars, e-learning courses, video conferencing and web-based training.

The equipment available includes dedicated CNC machines, buck-on machines, band saw and other related tools, providing practical ‘hands on’ training to support the research, testing and development work of its stakeholders.

The journey to successThe HTA Committee, which developed the whole training package from concept to practise, was established in November 2012 to develop a suite of foundation level and technical skills components. The first training package (specialist module ‘Inspection &

Gauging’) under the auspices of the HTA was delivered later that month at PT Hunting Energy Asia (Batam) manufacturing plant by Andrew Yeo, Advisor for Curriculum Development and HTA trainers Rajoo and Oo Yong Tze.

To supplement the team of curriculum developers and trainers at the HTA and regional office, site-based Certified Programme Trainers began training in January 2013. ‘Training the trainers’ is conducted using experienced site specific personnel who are familiar with the local issues, culture and language, ensuring that the most effective outcome is achieved.

The common (Foundation) and specialist (Technical Skills) modules were developed over five intense months by a dedicated team of engineers from the regional office. The full suit of 12 modules were launched in May 2013.

By August, the HTA had embarked on its second ‘Curriculum Development’ phase to include more training modules in Engineering, Quality, HSE and Perforation.

On-site training in Batam

Instructional Training at the Hunting Training Academy

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Inaugural training programmeThe newly opened academy welcomed its first batch of nine engineers from Singapore, Wuxi and Batam in October 2013. Having successfully completed the initial phase of the Engineering Development Programme (EDP), towards the end of the year the attendees returned to undergo technical skills training as part of a five phase development programme for OCTG engineers.

The EDP is one of the structured training programmes that have been devised to meet the particular needs for the growing Hunting workforce in Asia Pacific. Following in the pipeline are the Technical Skills Programme (TSP), Quality Specialist Programme (QSP) and HSE Programmes to supplement the Core Foundation and Specialist Training modules developed thus far.

While the continual development of these training modules will remain a key focus, HTA will look into the development of additional programmes in leadership development, employee empowerment and service excellence.

Instructional Training(Classroom)

Practical Training(Hands-on)

On-the-Job Training(Application)

Assessment & Certification(Qualification)

Structured methodologyThe HTA adopts a systematic and structured approach to meet the needs of its technical workforce which include:

• Instructional (classroom) training: the provision of a sound theoretical grounding in given areas of technical expertise.

• Practical (hands-on) training: an experiential session with guidance from the trainer.

• On-the-job (OJT) training: coaching guidance with observation and assessment, where applicable.Employees who successfully complete a module/track and the applicable OJT programme will be issued a certificate of achievement from the Academy. They may be qualified in multiple specialist modules provided they meet the requisite standards and are tasked to perform the applicable assignments.

Achieving excellenceHunting’s HTA represents the company’s continued commitment to training and supporting a world-class workforce. Demonstrating how the company’s longevity and success is founded in its people, the academy provides a platform for our employees to develop and grow their careers.

Ultimately, the HTA certification is our pledge to the pursuit of the highest possible standard for reliable products and services through people excellence.

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A brand new perforating line is now up and running at the Wuxi facility in China, promoting the export of Hunting Titan’s

technology for manufacturing perforating guns destined for the domestic Chinese shale gas market and the wider Asia Pacific region. This new manufacturing hub expands Hunting’s perforating footprint beyond its original US roots, using Hunting Energy Services’ global infrastructure to roll out a similar presence in Canada and Mexico, with further opportunities also being explored.

The new Wuxi set up is housed alongside the well-established coupling manufacturing cells, adjacent to the threading operation that handles OCTG and casing from 2 3/8 to 20 inches. These lines are now well bedded down and ship premium, high chrome and carbon tubular products to worldwide markets on a daily basis.

The accelerated perforating project forms part of a twin venture by Hunting Titan to grow its presence in Asia Pacific; its counterpart being the establishment of a Jakarta Regional

Perfect perforation

The company’s Wuxi facility in China hosts Hunting Titan’s perforating gun production ambitions in Asia

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Project Leader Li Jinxin with the Quartet from Wuxi Pioneer Core Team

Breakfast on the go in downtown Wuxi

1010

Distribution Center. When fully operational, Wuxi’s perforating line will have the capacity to manufacture some 2,500 guns per week.

The decision to invest further in the Wuxi New District is a logical one as the city continues to expand the infrastructure required to develop its niche technology manufacturing sector. With seven million people, proximity to quality suppliers and logistical export routes, this Yangtze River Delta location continues to be very attractive.

Building the core teamThe active partnership between the new product introduction team from Hunting Energy in Asia Pacific and the expert team from Hunting Titan in the US, began in July 2012 with a preliminary project training session in Pampa, Texas. This enabled Project Leader Li Jinxin to work on the project details in close consultation with the implementation team.

As the project team worked through the details for the capital expenditure and execution plans, the recruitment and selection of the core team for the perforation line was well under way. The team was required to work to an exacting timetable, and they also attended Manufacturing and QA training in Texas in December 2012. In parallel, project teams from Asia Pacific and the US continued to collaborate on the delivery of accessory parts and specialised machinery for making well-completion equipment.

Led by Project Leader Li Jinxin, the pioneering Wuxi core team comprising Yu Qiang (QA Engineer), Liu Bo (Process Engineer), Guo Jinxia (Production Supervisor & Machinist), and Zhang Fangfa (Machinist) embarked on the production process training,

working closely with the Pampa team under the direction of Floyd Koch to jointly develop a structured document handling system for work instructions that was both intuitive and robust.

Hunting’s Titan internationalisation Delivery of the requisite specialist equipment, including the laser cutting and scalloping machinery, took place in early 2013. Duly set up and commissioned, the company was ready to take the next step in establishing its first completion equipment manufacturing line in Asia Pacific. This achievement was subsequently realised when the Wuxi team successfully made and assembled their maiden perforating gun.

The Wuxi core team was further strengthened by Mike Liu who joined as the local Manufacturing Manager for the perforating line in February 2013. In preparation for the third phase of the project, Mike led the team on a complete Lean Manufacturing review. The Kaizen philosophy of continuous improvement identified a number of areas and processes which could be prioritised for enhancement. Many of these recommendations were implemented immediately, in preparation for the arrival of an expert team from Texas which would conduct further on-site training for the perforating line.

The third phase of the project was rolled out over the following months with training undertaken by Marvin Carlton (GM for Quality), Bruce Gillis (Special Project Manager), Steve Carpenter (Production Supervisor) and Johnny Ferguson (Senior Laser Specialist). Under their guidance, the Wuxi Pioneer team was successfully qualified to manufacture perforating guns - a major step in Hunting

Titan’s internationalisation programme.

Continuous improvementOver several weeks at the Wuxi plant, both project teams had the opportunity to interact and embark on joint Lean events for the production line and pull together to work through the various improvement initiatives. Particular emphasis was placed on ensuring the efficiency of the manufacturing processes and the training programme before they were incorporated into the Hunting Training Academy’s programme in Singapore. This allows for the structured offsite training of recruits and expansion of their skill set for further growth.

The company continues to invest in its employees to ensure a proficient, flexible approach to managing different processes and machine cells. It has also forged close long term links with the Wuxi Professional College which is expected to develop further. Current staffing is 20 and there are plans to rapidly build this number as demand increases.

Up and runningIn September 2013, the Wuxi perforation line completed its first order of 165 perforating guns for the Regional Distribution Center in Jakarta, signalling the successful introduction of Hunting’s perforation manufacturing in Asia.

The close partnership of Hunting Titan with Hunting Energy Services Asia Pacific, so clearly demonstrated by the development of the first perforation line in Wuxi, will go from strength to strength as Hunting’s presence intensifies across the Asia Pacific region.

The perforating gun development team from Wuxi and Pampa

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Excitement there beyond compare, The train had come at last.

And as a boy I’d jump for joy As it went puffing past.

With widened eyes we’d watch the skies Filled with smoke and steam.

Of things we did when we were kids, This would be the cream.

The penultimate two stanzas of George Savige’s poem entitled ‘Steam Trains’ provide an insight into the quasi-mythical

romanticism that is interwoven into the age of steam. Elegantly ugly and incredibly powerful, steam trains have captured the imagination of technologists, engineers, schoolboys and romanticists since George Stephenson introduced the first public steam locomotive for the Stockton and Darlington railway company in 1825. Whether it was Stephenson’s Rocket, the Flying Scotsman or the Mallard - steam trains epitomised British innovation, progress and technological brilliance throughout the 19th and 20th centuries.

In London, steam trains initially provided the answer to a practical problem common to many of today’s commuters - congestion. Passenger traffic on the Thames increased rapidly following the introduction of steam boats in 1815. Services to London came up the river from towns lining the Thames estuary enabling 15,000 people to travel to work via boat by the early 1850s - twice the number that took the train.

In an effort to alleviate the congestion - and deaths which resulted from the glut of river accidents, an extensive investment programme dedicated to London’s rail infrastructure generated a boom in rail travel. The result was that by the mid 1850s, 27,000 people were commuting into London by train every day through the main termini, which now serve 860,000 commuters daily. (These termini were soon connected by an underground or ‘Tube’ network that now handles a billion annual passenger movements).

However, the most renowned steam engines built in Britain operated the high speed intercity routes connecting the capital with the main provincial cities. The No. 4472 ‘Flying Scotsman’

and the No. 4468 ‘Mallard’ are considered by many to be the apogee of steam engineering, both were retired in 1963. The former was built in 1923 and set two world records for steam traction; becoming the first steam locomotive to be officially judged to have reached 100mph and the only steam locomotive to have run for 422 miles non-stop. The latter, built in 1938, remains historically significant for holding the world speed record for a steam locomotive. To achieve this accolade the designer, Sir Nigel Gresley, employed innovative high-tech engineering practices such as wind-tunnels to produce a unique, aerodynamic design.

Both trains embodied the technological prowess and romantic notions of travel which have fuelled Britain’s affinity with rail travel ever since. Historically this national sentiment has been expressed through the celebration of travel posters that portray images of rustic charm, effortless comfort, potential adventure and mechanical beauty.

Even today, the UK’s love affair with the train persists. For example the Crossrail project, which from 2018 will open a new underground rail link connecting East and West London, is seen as a kernel for growth. When Crossrail arrives, passenger numbers through Bond Street station alone, with main entrance directly fronting Hunting PLC’s new corporate office in Hanover Square, are anticipated to grow to over 220,000, daily.

It has also reaffirmed Britain’s engineering

London’s new transport project ‘Crossrail’ is the latest chapter in Britain’s locomotion love story, spanning three centuries of technological innovation and industrial heritage

Dream machinesprowess - the development is the largest infrastructure project in Europe - providing a legacy of which pioneers such as Stephenson and Gresley would be justly proud.

The Mallard was the apogee of twentieth century engineering prowess

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ALL ILLUSTRATIONS REPRODUCED BY PERMISSION OF

THE NATIONAL RAILWAY MUSEUM / SCIENCE & SOCIETY PICTURE LIBRARY

Incarnations of the ‘Flying Scotsman’

Civil engineering feats matched locomotive advances

An exhilarating concoction of power, speed and romance were entwined with steam travel

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Spread across 17,000 islands with a population of 350 million, Indonesia is considered to be the world’s fourth

most populous country. The nation’s capital city, Jakarta, is also the largest - home to an estimated 20 million people on the most densely populated island in the archipelago, Java. Jakarta was the effective capital of the Dutch East Indies, known then as Batavia, and following independence in 1945 the city has continued to be an important trading port. Today it remains the country’s economic, political and cultural powerhouse.

Old and sticky The country has been producing oil since the 1880s and current estimates indicate 25,000 active wells, of which 15,000 are typically mature - producing oil from shallow deposits. Many of these are pumping only modest quantities of heavy crude oil now (which can only be extracted using heat) from fields primarily located in the more intensely explored

Hunting’s newly established Distribution Center in Jakarta is well equipped to respond to immediate well completion needs

western region. The newer prospects are to be found in much deeper wells in the relatively undeveloped eastern sector with considerable proven natural gas reserves. These development wells tend to be deep offshore and so bring a need for more sophisticated equipment.

Indonesia has gone from producing over one million barrels per day of crude oil to 400,000 per day. With a growing population this means the country has gone from being an erstwhile OPEC member, exporting oil by definition, to no longer having the ability to fulfill domestic demand. However, the country is still one of the largest exporters of Liquefied Natural Gas (LNG), mainly to Asian markets.

Asia specific Hunting Energy Services first dipped its toe into this market in the mid 1980s, establishing a niche operation in Singapore. This early endeavor has now grown to a set of representative offices around the region,

Jakarta

JAVA

Jakarta Distribution Center being stocked

Student street studio 14

Left to right: Heru Tjoe, Charlie Baker, Tom Jamail, Adrianus Nurman and Eva Kurniawati

Jakarta Distribution Center being stocked

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Main entrance to Cilandak complex

Inventory racked and ready to roll

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with major manufacturing plants in China, Indonesia and Singapore. In response to the rising demand for a wider range of increasingly sophisticated products, Hunting has broadened its business model and developed a dedicated regional distribution network to service client requirements with locally held stock of completion tools. This follows the successful North American Hunting Titan model of having distribution points close to the field operator to fulfill their ‘Just In Time’ needs.

Stepping stones Hunting Titan has moved swiftly since acquisition of the perforating business in 2011 to leverage off Hunting’s international footprint. Indonesia was identified as the suitable first step in the region for a devolved distributor, so warehousing has now been leased, products stocked and first sales have been made. The Distribution Center is located on Jakarta’s Cilandak Commercial Estate, an energy industry cluster that is home to the biggest oil and gas service companies in Indonesia, including: Halliburton, Schlumberger and Baker Hughes. The business park has full security, while the support of a generator provides back up for when Jakarta’s power supply fails following the region’s regular and violent thunder storms.

The Hunting Distribution Center comprises

two warehouses side by side, with the possibility that additional space could be allocated to establish a service and repair capability. This would boost the local input, an important consideration in itself, and close the long and tenuously expensive overseas loop. A laboratory for clean room assembly is also being set up. The explosive charges for the perforating guns are stored in a secure facility in Batam.

The centre is currently stocked with US manufactured inventory, consisting of a range of perforating tools, accessories and other small, easily handled parts including those from Hunting Specialty. Once confirmation has been given to qualify Hunting products manufactured in Wuxi, a complementary stock of Asian produced tools will begin to serve this market for the first time. The integrity of the business model is already reflected in the sales and the first Purchase Order was received in June 2013. Completion tools have now sold throughout the region including to Australia and New Zealand.

People powered The current workforce which has already been trained in the proprietary business process software by Charlie Baker, includes Adrianus Nurman, Heru Tjoe and Eva Kurniawati. The expansion of the company’s footprint in this region is overseen by the ever engaging Tom

Jamail, who has lived and worked in Indonesia for 28 years, the last 11 with Hunting, working with Soelasno Lasmono on SealLock and OCTG. This comparatively new venture into completion equipment is a return to Tom’s roots - he started out his career with a major US service company in the perforating, logging and wireline sector.

Office address Across the outer ring road from the Distribution Center new offices are currently being fitted out in the Alamanda Tower, also in the bustling Cilandak Business District, about 5km south of central Jakarta and the city’s heavily congested financial district. This will provide a permanent presence for Hunting, coordinating the company’s widespread regional activities from drilling tools, OCTG, completion equipment and well intervention. The office, when fully staffed, is designed to house up to 24 employees and will also act as a local training and administration hub.

Tools on test with a customer in Balikpapan

Jakarta’s heavily congested financial district

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The recent acquisition of XL Perforating Partnership assets extends Hunting’s completion equipment and distribution network in Canada

Integration of XL, Hunting Titan and Hunting Energy manufacturing cells

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Since the acquisition of the Titan Group in 2011, Hunting has steadily built its reputation as a leading provider of

perforating guns and hardware for completing oil and gas wells. This position has recently been reinforced in Canada with the purchase of Calgary-based assets of XL Perforating Partnership (XLPP) in August 2013.

The acquisition readily fits into the company plan to increase its global footprint by adding regional manufacturing capability and the expansion of its field distribution network. This has been echoed in Asia Pacific as well as Europe. XLPP adds immediate manufacturing capacity to Hunting Energy in North America with a skilled workforce already well versed in the perforating business.

Established presenceSince its establishment in 1984, XL Perforating Partnership has grown to become a well known and respected supplier of perforating products to the oil and gas industry throughout its distribution network in Western Canada including: Grande Prairie, Whitecourt, Lloydminster, Bonnyville, Red Deer, Brooks, Medicine Hat, Nisku and of course Calgary. The company services wireline operators through these field centres and carries stock of complete perforating gun systems and associated equipment, including shaped charges, detonating products, carrier systems, tubing and casing cutters, TCP and surface hardware.

Designed to initiate the flow of oil and gas, the perforating guns are programmed to fire explosive charges through the wellbore’s steel casing and into the production geology at predetermined points to allow fracking and production flow back. The company has worked alongside Titan for many of those years.

Additionally XLPP also supplies and distributes electronic, mechanical hardware and logging tools to monitor and evaluate down-hole activity. The company’s range of services extends to maintenance and repair as well as operator training.

A slick operation

In order to retain the experience, skills and expertise of XLPP’s personnel following the acquisition, the manufacturing team was moved across Calgary to Hunting Energy’s comparatively modern and better configured ‘Skyline’ facility - one of Hunting’s two existing manufacturing units in Canada. The second of these is the Drilling Tools unit based at Nisku, just south of Edmonton.

The responsibility of overseeing Hunting Titan’s new Canadian sales and distribution business falls to Regional Manager, Don Mack and is coordinated by Rick Bradley, President of Hunting Titan in the US. Perforating gun and completion equipment manufacturing is now the responsibility of the Hunting Energy Canada facility at Skyline Way. Tony Neeves, Production Integration, is the man directly overseeing the running of the perforating gun manufacturing cell and Elmer Campbell is the Managing Director.

Great attention has historically been given by XLPP management to maintaining its Quality Assurance (QA), a factor that has been central to its success and one that fits

well into the Hunting ethos. Internal audits are also conducted at regular intervals to track continuous improvement programmes in the key areas of; safety, health and the environment, customer focus, training and presentation.

Growing together The Skyline facility, which Hunting first moved to in the summer of 2003 is well located on the main arterial route running north from the city of Calgary, close to the international airport. The company welcomes the expanded team which allows for further cross training and better career development. It also takes advantage of an excellent manufacturing space, well suited to Canada’s harsh environment. It offers more room to store the large new intake of inventory and the location is ideal for feeding the field distribution points. These in turn will be advantageous to Hunting Energy’s existing lines with ‘pull through’ opportunities for products that benefit from field stockists. This is yet another step on the way to Hunting’s global strategy and integrates on many levels with those ambitions.

Left to right:Don Mack of Hunting Titan, Lee Brown and Tony Neeves of Hunting Energy Services

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Knowledge for success

By 2021 an estimated one million jobs of

retired US machinists, assemblers and

inspectors will be left vacant due to a growing

gap in manufacturing knowledge and skills

Understand Goals and Expectations

Identify Training Champions & Programme Administration

Build Training Programme

Metrics and Reporting

Establish a Communication Plan

HR Leaders annual Americas event in Houston

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ised across all divisions to ensure that every new Hunting employee experiences the same welcome and resources made available, regardless of the location, thereby enforcing the ‘One Hunting’ ethos. ‘First Impressions’, Hunting’s new onboarding programme, will include HR, Payroll, Benefits, Quality and general compliance processes which all new employees are required to complete in the early days of their employment.

ToolingU SMEToolingU SME is the industry leader in manufacturing technology. More than 50% of Fortune 500 manufacturing companies are ToolingU SME customers, as are over 500 community colleges, high schools and middle schools. The firm has more than 400 online classes in various departments - including abrasives, metal cutting, welding, and many others - enabling students to learn at their own pace. ToolingU SME’s online content is robust and in line with key industry standards such as NIMS, SME, MSSC and AWS. They provide third party accreditation in areas such as Lean Certification (Bronze, Silver and Gold), Certified Manufacturing Technologist and Certified Manufacturing Engineer.

Having the ability to offer standardised qualifications across all company divisions will help ensure uniformity of high quality standards in addition to offering employees opportunities for advancement in their careers.

HR leaders anniversary eventDuring the inaugural anniversary of the annual HR Leader event, North American based HR Leaders, headed by Hillary La Manna and their respective Training Coordinators, met in Houston for the launch of Hunting University.

The meeting was opened by Jim Johnson, Chief Operating Officer Hunting Energy Services, who set the scene with a welcome address and programme endorsement.

Representatives from ToolingU SME were also in attendance, ready to introduce the online system at both the administrator and student levels. They also taught the class about building core competencies. In addition, a video production company was present to record two live sessions; ‘Administrator User Training’ and ‘Student Center Training’, which are now available on the company intranet.

Guest speaker, Tony Rosato, Hunting Dearborn’s Training and Development Manager, hosted sessions to share best practices for organising employees into groups and assigning curriculum. Denise Tuma, newly appointed Regional Training Coordinator, introduced the Training Handbook as well as describing her role in the divisional rollout. Metrics tools for measuring and monitoring success have also been introduced so that each division is aware of the criteria that will be used to measure their performance. The aim is to have every employee in the region enrolled by the end of 2014.

Training significanceUnderstanding the significance of the personal circumstances and career concerns of employees, the HR Leaders, in conjunction with their Training Coordinators, are professionally responsible for their respective division’s training initiatives. With the full backing of Dennis Proctor, Hunting’s Chief Executive, the company can ensure a continued investment in the future of its employees. As he incisively concludes:‘...employee learning and development is a key differentiator between success and failure’.

n order to address the challenges posed by the predicted future skills gap in North America, Hunting has seized the opportunity

to introduce a new solution. In recognising the need to ensure manufacturing knowledge continues to develop into the next generation, the company has introduced a strategic approach to training.

Regional Training CenterHunting has made a significant financial investment to support this training initiative and is in the process of finishing the building of the first Regional Training Center ‘RTC’, in Houston, Texas. It is located inside the US Manufacturing division’s Sam Houston facility, with a capacity for 60 students. The Houston RTC will be the host location where classroom training is undertaken for large groups of students - both new and existing. Machinery has also been purchased for ‘hands-on’ training and the demonstration element of parts manufacture.

E- learningIn September 2013 Hunting signed an agreement with ToolingU SME to partner for the online segment of the learning system. Core competency requirements and training plans for production based employees will be introduced from the outset; while training plans for non-production based employees will be created subsequently. Through the establishment of ongoing rigorous training programmes for existing staff and new recruits, and creating proper internship opportunities for prospective employees, the company intends to strengthen its current position in the marketplace and into the future.

In addition, processes such as the company’s ‘onboarding’ programme, are being standard-

I

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The Lean Manufacturing philosophy has become a common theme for all Hunting’s facilities, so it is not surprising that when

the new perforating gun systems were mooted for manufacture in Wuxi, the tenets would be applied from the start.

Under starter’s ordersFrom machinery set up to staff training, Lean techniques have been employed to organise the completion equipment cell in the most suitable way. Having only recently reached full manufacturing status, the Lean implementation at Wuxi is well underway. Under the careful supervision of Manufacturing Manager, Mike Liu, who is Six Sigma trained and industry experienced, the team has been coached in how to approach each aspect of the business process in a new way. Many incremental changes have already been introduced and visual control of every process documented. Value stream mapping has also been used to analyse the existing manufacturing layout and suggest simplifications to reduce waste. The introduction of multi-skills training means that by July 2013, 70% of staff were proficient in all ten major manufacturing processes, and champions were named in each. The introduction has proved to be a popular move, one which in turn has eased the need for other interventions.

Kaizen kingsThe elimination of waste is not only limited to physical processes but also extends into every aspect of the business, including the identification of wasted talent. The people, who have much to contribute to Lean, are very often those most familiar and closest to their respective tasks. The creativity they can bring to continuous improvement is therefore a resource to be highly valued. Small changes on a regular basis can lead to significant savings but sometimes it is necessary to take a step back for a fresh look. Kaizen events are also used to take time out from the regular daily tasks and discuss suggested creative

Leantoo

The Chinese perforating line starts as it means to go on

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improvements to operations.

Kaizen projected A series of high level brainstorming sessions at the initial Kaizen project meeting identified 49 specific areas for potential Lean treatment. These were then subjected to a ‘what if ’ scenario setting and eventually written up on a wall chart to explore, prioritise and hone their scope.

Once whittled down to a handful of projects, it was decided that attention would first concentrate on finding a way to improve the interior washing of perforating gun carriers. The original method had seen a rising number of HSE issues which, it was agreed, could be solved by the introduction of a sealed chamber washing machine. Noise, dust and waste products are now all contained in an operator friendly environment.

The second project concerns automatic data collection for QA which originally relied on manually read data from a calliper which was

then recorded in hard copy. Real time data acquisition is now destined to be uploaded

direct from the callipers into a Windows based monitoring programme. Task time

is reduced and potential for human error removed.

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Appointments and PromotionsHunting PLC is pleased to announce the following

Our HuntingCommunity

Hunting PLCSue Harrison has taken on the role of UK Taxation Accountant as a permanent position following 16 months supporting the company in the preparation of UK corporation tax returns. During this period, Sue has provided a significant contribution to tax compliance processes.

Hunting Energy Services AmericasFrank Jarveaux has been promoted to Senior Downhole Tool Advisor, following 30 years of work with the company. Frank was previously Operations Manager at Hunting’s 311 manufacturing facility in Houma.James Steib has been promoted to Operations Manager at the company’s 311 manufacturing facility in Houma. In the 23 years that James has been with Hunting he has taken on a number of manufacturing roles, most recently as Production Manager.Joining Hunting Speciality Supply, Stacy Plata has assumed the role of Accounting Manager and will lead the accounting team at the company’s Cypress location in Texas. Stacy brings nine years of experience in this role and has received a Bachelor of Business Administration with a focus on Accounting from Texas A&M University.James Gibbons has joined the Manufacturing Commercial Sales staff, taking on responsibility for Commercial Sales Well Intervention with a focus on Pressure Control Equipment. James brings over 10 years of experience

in wireline and surface pressure equipment.With a focus on wireline, slickline and coiled tubing sales, Tim Riggs has assumed the role of Commercial Sales Well Intervention. Tim has over 20 years of drilling and production expertise in management and corporate sales.Assuming the position of Controller, Brian Wigington, CPA, has joined Hunting Energy Services, Drilling Tools. This is a new role which has arisen following the rapid growth of the division. Brian brings 19 years of experience as a senior financial reporting and management accountant, including 10 years as a Controller at a number of oil and gas companies. Brian is a Chartered Global Management Accountant (CGMA) and holds a BBA in Accounting from Franklin University.Adrian Swails has been appointed Operations Manager for Hunting Energy Services’ Electronics division. Since joining the company in 2007 Adrian has held numerous positions within the division and will use this knowledge and experience to lead manufacturing operations and continue the drive on improving processes, productivity, quality, delivery and efficiency.

Middle East and AfricaSean O’Shea has been promoted to Managing Director, Middle East/North Africa. Sean will assume the duties of David Deans, who is retiring, having joined Hunting on the acquisition of Welltonic in 2009. The company extends its thanks to David for his dedication

and leadership, successfully growing Hunting’s presence in the Middle East.Sean has worked for Hunting over the past 16 years, holding numerous positions across Europe and Asia and most recently in Dubai.Jay Leighton has assumed the role of Business Development Manager, overseeing the company’s growing activity in Africa. A retired Major from the United States Air Force Reserves, Jay brings 32 years of experience in the oil and gas industry, working for major oil service companies in locations such as South America, North and South Africa, Russia and the Middle East. Jay will be based in Cape Town, South Africa.

EuropeJonathan Brown has joined the company as Group Engineering Manager, responsible for the overall management of EMEA engineering, specifically the Well Intervention product lines. Bringing over 20 years of engineering experience, Jonathan’s expertise includes directing technology programmes and technical solutions from concept commercialisation, strategic business planning, product development and field operations. Following more than 5 years with the company, Miroslac ‘Mira’ Richter has been promoted to Engineering Manager for HESWI Engineering Department. Mira first joined Hunting as a Design Engineer and then Senior Design Engineer, before becoming Lead Engineer for PCE in January 2012.Kevin Angus has assumed the role

of Regional Sales and Service Manager for Hunting Energy Services Subsea Technology. With more than 20 years of drilling and production experience, Kevin has worked in the UK, Norway and North Sea markets. Most recently Kevin held the position of Product Line Manager for a major subsea service company.

Asia PacificDr He Shen has been appointed as Metallurgist and Strategic Sourcing Manager at Hunting Asia Pacific. Having received his doctorate in Materials Science and Engineering from Bejing’s University of Science and Technology, Dr Shen conducted research at the University of Leuven in Belgium before joining a leading steel mill, Shanghai in 2006 and then an international manufacturer in China. In his new role Dr Shen will be based in Shanghai and is responsible for the overall sourcing programme and the development of a strategic supply chain. Dr Shen will also oversee the team of Supplier Quality Engineers for mill quality management.Veersamy Renggaiyah has been appointed Director of Supply Chain and Operations Support covering the company’s Asia Pacific region. He has a Master’s degree in Technology Management (Industrial Engineering) from the University of Technology in Malaysia and held previous positions in the oil and gas sector. Veera joins us with a wealth of Lean Manufacturing and supply chain experience; he will be based in regional headquarters in Singapore.

South African expansionIn December 2013, the company purchased a 10 acre plot of land on the Brackenfield Industrial Park in Cape Town, South Africa. The new facility has been designed to respond to the growing requirements of Hunting customers in East and West Africa and is in a prime location for local shale gas interests. The plant will also have the capacity to repair and service tools, as well as being a distribution point for completion equipment.

Hunting’s Cape Town office on the V&A Waterfront acts as a sales, management and administration base to work with current and potential customers to assess market needs and the appropriate technological response. The team has also managed the land purchase and will oversee all aspects of construction, layout and machine configuration for the new facility. Products will be drawn from the broad Hunting spectrum: drilling tools for sale or rental, perforating products, pressure control equipment, slickline/wireline, as well as thru-tubing tools. The yard and workshop will be designed to handle full length casing, OCTG products and associated accessories.

Plans for the Brackenfield site have been submitted and permits granted to build the facility which is expected to be completed and commissioned later this year. Ancillary offices could eventually replace the down-town sales office. The intention is that this will provide a regional hub for further localised representation and a distribution network in other sub Saharan countries.

Safety milestoneMarking a safety milestone, Managing Director of Hunting Energy Pte Asia, Daniel Tan, joined employees from the Batam Plant last summer to mark the fact that there had been zero recorded accidents onsite for the past year. Daniel was accompanied by Operations Director, Peh Her Yam who emphasised the importance of sustaining a safety culture in the workplace. As well as the actions of employees, the integration of a new management team quickly helped bolster the HSE framework. Risk assessment and management is a key pillar to this approach and one which is continually reinforced through training and education.

The ‘duty to report’ is enshrined in this framework, emphasising the importance of recording not just the event of an accident, but any close calls that require remedial action.

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Gary Brook, Sales Manager for Hunting’s Pipe Group in Houston (pictured right), has been elected for a two year term as President of Oilfield Helping Hands (OHH). Gary has served on the OHH board for the last 7 years. The charity was formed 10 years ago to assist people in the energy industry facing personal and financial challenges through no fault of their own. OHH began as a clay shooting tournament by a group of oilfield friends wanting to help a former colleague’s family, who had been devastated by his untimely death. The success gave the same group the urge to carry on for the continued benefit of other oilfield families in critical need of financial assistance. It is about raising money, having fun and keeping costs down. The organisation was nominated as Hunting’s designated charity in 2010 and 2011.

Patriot PawsEach year, Hunting PLC supports a single deserving charity through a donation made on behalf of the Hunting Art Prize. The gift includes a direct donation as well as a contribution from Hunting that matches the dollars generated from finalists who sell their art at the annual Hunting Art Prize gala.

In keeping with tradition, the company has selected Patriot PAWS Service Dogs as its 2014 charity. The non-profit organisation is dedicated to inspiring and restoring the physical and emotional independence of disabled veterans and others with mobile disabilities by providing service dogs at no cost.

It operates through an ongoing partnership with the Texas Department of Criminal Justice programme designed to help inmates learn a career trade while giving back to the community. Through the innovative prison programme, qualified dogs are taught to perform basic services.

Depending on the needs of each owner, service dogs then complete customised training, where they learn to perform a variety of functions, from pulling wheelchairs and opening and closing doors to picking up and retrieving items and supporting patients with post-traumatic stress disorder.

Patriot PAWS will be presented with its donation at a separate event following the 2014 Hunting Art Prize gala. Since 2006, when the competition moved to Houston after a quarter-century in the United Kingdom, Hunting has contributed more than $700,000 to deserving causes.

For more information about Patriot PAWS, visit http://patriotpaws.org

Local Social ResponsibilityThe annual Corporate Social Responsibility initiative, organised by employees at PT Hunting Asia office, is designed to serve as a reminder to help those that are less fortunate in the local community. Both financial and practical help was given to the Panti Asuhan Restu Illahi Muhammadiyah orphanage. In addition, other donations included food, clothes, milk, school uniforms, stationary sets and sugar.

Jeans for GenesIn September, a substantial part of the office at Hunting PLC dispensed with the usual London suits and ties and donned denim in aid of charity. Funds were raised for Jeans for Genes, a national UK organisation that provides care and support for children and families who are affected by genetic disorders. They aim to raise awareness and promote understanding of genetics and what it means to be affected by a genetic disorder.

London moveOn 16 December Hunting PLC moved out of Cockspur Street to new offices in London’s West End. Switchboard telephone numbers and fax numbers remain the same. The new address is:Hunting PLC5 Hanover SquareLondon W1S 1HQ

Hard facesHunting Energy has recently filed for a new blade protection product for downhole tools. The invention of HEMS Technical Manager, Doug Stuart, the product protects the blades on tools including Hunting’s rental stabilisers, from excessive wear of drilling through rock. The equipment also offers excellent protection to tools on long term rental, maintaining the gauge size of the blade longer than any similar products on the market. Known as Hunting Hardfacing 001 (HHF001), it has been tested through volcanic formations in Kenya and will next be used by customers in the North Sea.

Charity works

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Our HuntingCommunity

Singapore upgradeFollowing the move of the regional Asia Pacific offices to the International Business Park and centre of excellence and Hunting Academy, the opportunity has been taken to refurbish the Benoi Road manufacturing facility. This has resulted in a much better layout addressing HSE concerns and Lean Manufacturing orientation.

Elementary employee protection

As a result of widespread wildfires across the Riau Province of Indonesia in June last year, Singapore was exposed to a heavy haze of smoke. Precautionary steps were immediately put into practise to protect employees against haze-related health risks and protective masks were made compulsory for those undertaking outdoor work. A change in wind direction cleared the sky after two weeks and there were no health related incidents reported.

Temperatures in Wuxi reached new heights last summer, with heat recorded on the shop floor rising to 40 degrees in August. To beat the heat, Hunting’s Wuxi facility put a series of measures in place to cool down outside work areas, while office based employees helped to distribute rehydration drinks to their colleagues outdoors. As temperatures soared, the office organised a trip to Chang Zhou Water Park for workers and their families.

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Leading debateA two day forum held in Singapore last summer provided an ideal opportunity for leadership, management and manufacturing representatives from across Hunting Asia Pacific, to meet new team members and learn the latest about the company’s vision for future development in the region. With the Hunting ethos ‘total customer satisfaction’ at the forefront of debate, the meeting highlighted the importance of harnessing synergies and working together to achieve the level of excellence for which Hunting is renowned.

Team effort is key to a content and productive workforce, a point which was emphasised when the participants were split into three groups to prepare an evening meal for all. After two intense hours in the kitchen everyone sat down to eat in the knowledge that it had all been made possible not by just a recipe but by working together. A memorable adventure, the exercise illustrates the company’s belief that business cannot rely on strategy alone, but on teams working together.

Haiyan reliefIn November 2013, Super Typhoon Haiyan cut a devastating path across the central Philippines, taking thousands of lives and leaving millions homeless. With over 10,000 casualties recorded and many more still unaccounted for, Typhoon Haiyan is thought to be the most powerful tropical cyclone to ever make landfall.

During this time of great need, the international community has taken immediate action, providing relief and aid to the victims, while opening channels for corporations and others to contribute to the humanitarian efforts.

Among the huge wave of global support for those displaced by the crisis, Hunting’s Singapore office, several of whom have families affected by the disaster, mounted a campaign of internal fundraising. Supporting these endeavours, the company pledged to match the amount raised by employees and by the end of the month a cheque for SGD 7,500 ($6,000) was presented to Singapore’s Red Cross Society. This donation has been vital in providing; food, shelter, household items, first aid and health services, water, hygiene and sanitation, psychological support and helping to reunite families.

Training awardsAt the official opening of the Hunting Training Academy in October 2013, Jim Johnson, Group Chief Operating Officer, presented a number of employees with certificates to mark recent achievements. These included: Nofrianton and Khairul Anwar for Inspection and Gauging and Ding En Lai and Zhen Lian for CNC Machining.

In addition, three newly qualified Certified Programme Trainers were welcomed to the company’s expert team of curriculum developers and training staff. From Hunting Energy Services Pte and Hunting Energy Services International Pte, Team Leader for Quality, Ahron C Beltran and Kwek Wee Liang, Manager of Quality & HSE, are both now certified to deliver foundational modules of Quality Management System and Introduction to API 5CT. Gursharen Singh, WASH Officer/Fire and Safety Manager is qualified to deliver the foundational safety training module.

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Hunting PLC (UK)5 Hanover SquareLondon W1S 1HQ, UKTel +44 (0) 20 7321 0123www.huntingplc.com

Hunting PLC (USA)24 Waterway Avenue, Suite 700, The Woodlands Houston, Texas 77380, USATel +1 713 595 2950

Hunting Energy (North America)2 Northpoint Drive, Suite 400, Houston Texas 77060-3236, USATel +1 281 442 7382

Hunting Energy (Europe)Badentoy Avenue, Badentoy Park, Portlethen Aberdeen AB12 4YB, UKTel +44 (0) 1224 787000

Hunting Energy (Middle East)Building B23, Oilfield Supply Center Jebal Ali Freezone, Dubai, UAETel +971 4 887 6850

Hunting Energy (Asia Pacific)2 International Business Park#04 - 13/14, The Strategy Tower 1Singapore 609930Tel +65 693 31777

Gibson ShipbrokersPO Box 278, 16 Ely Place London EC1P 1HP, UKTel +44 (0) 20 7667 1000