NATIONAL OVERVIEW

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NATIONAL OVERVIEW

• Presented by
• Joseph Leimkuhler
• National President - AADE

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Thank You
2009 AADE National Technical Conference Nicole
Baird Chair - Shell Houston Mike Guarisco
Lisa Grant Shell New Orleans Paul Vining MI
Drilling Fluids Benny Manuel Knight Oil Tools
Lafayette Chapter Hoss Smith Knight Oil Tools
Dallas Chapter David De Lao Chesapeake,
Keynotes Plenary Exhibitors Baker/Hughes,
Downhole Devices, NOV-Reed Hycalog, CORT,
Schlumberger, Fann, Wild Well Control, WearSox,
DrilQuip, Vibration Technologies, Knighthawk
Engineering, Grace Inst Co, MD-Totco LSU,
Navigate Energy Services, Vortex Ventures,
NewPark Drlg Fluids, MI-Proceedings Volunteers
Session Moderators
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AADE Background

• We are a non-profit (IRS 501-6C), volunteer
  organization founded in New Orleans in 1978.  We
  are over 30 years old!
• Formation of the AADE was based on the fact that
  no existing drilling industry organization was
  consistently providing technical exchange
  specifically for Drilling Engineers.

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AADE Mission-Vision-Values
Mission To provide the forum for the
dissemination of practical drilling technology to
those employed in the
drilling industry.
or interested
VisionTo be a leading forum for the
dissemination and interchange of drilling
practices and technology.
ValuesTo promote professionalism and respect
within the drilling industry, the community, and
the environment in which it co-exists.
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Are we meeting our Mission?
We are meeting the mission of providing a forum
for the dissemination of drilling technology to
those employed in the industry.
We are also fulfilling our mission of
dissemination of drilling technology to those
interested in the industry
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AADE Membership Breakdown
Over 75 of our membership is in Texas /Gulf
Coast
Texas 62,
15 Student Membership
Louisiana 16
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AADE Current Status

• Technical Forums and National Conferences are
  meeting the needs of our members and mission.
• This is the 1st AADE National Conference held
  outside of Houston.
• Support of Education is increasing interest in
  Drilling related careers
• 250,000 in AADE Scholarships in 2008
• 380,000 in University Education Support in
  2008
• AADE Funded Well Control Training, 150 to date.
• Knowledge Box Associated Programs for Primary
  Secondary Education.
• Not too bad for a Volunteer Organization!

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AADE Critical Analysis - SWOT

• AADE STRENGTHS
• Chapter meetings and technical conferences,
  are meeting the overall mission of the AADE,
  facilitating the exchange of practical drilling
  technology and practices to those employed or
  interested in the drilling industry
• We have dedicated officers at both the
  National and local level who are focused on
  advancing the aims of the organization.
• Our organization has strong support from the
  Oil and Gas Service companies.
• We have a strong nucleus of experienced
  members across all aspects of the Drilling
  industry.
• We have a well established network of Chapters
  and an expanding Student Section program.

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AADE Critical Analysis - SWOT

• AADE WEAKNESSES
• We are a volunteer organization with no paid
  professional staff,
• High Low Industry Activity results in
  challenges for officers and members to find time
  to devote to AADE activities and planning.
• Under the current National Leadership our
  vision/goals, at times, exceeds or capacity to
  execute and deliver.
• Our balance between Operator and Service
  company members is too heavy on the service
  company membership relative to operator staff
  participation.
• Our vision to be/remain a leading forum for
  the dissemination and interchange of drilling
  practices and technology is compromised to due
  the relative inactivity of Operator staff.
• Our active membership is dominated by staff
  with 15 years of experience.
• Organizational impact and activity
  (Scholarships, Knowledge Box, Student Section
  Support) is not well publicized beyond AADE.

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AADE Critical Analysis - SWOT

• OPPORTUNITIES
• Greater service/utility to our members find
  our unique niche and exploit our strengths. IMHO
  we should focus on the operational execution of
  the drilling process both from an HSE as well as
  efficiency standpoint.
• Publicize our events and activities better.
• Increase Upward Feedback from membership to
  Chapter and Local Leadership
• Enhance the website job postings? HSE
  information exchange? Information request
  message boards?
• Increased media presence by AADE
  officers/members advocate on behalf of our
  industry. Sponsor/prepare drilling industry
  responses to FAQ to project portray our
  organization and industry in a truthful positive
  light.

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AADE Critical Analysis - SWOT

• THREATS
• Current Organizational demographics (Chapter
  level) could limit the long term growth of AADE
  we are not doing enough to enroll, mentor or
  attract the new wave of young drilling staff.
• Public perception of Drilling activity, (the
  HSE record, impact on the environment, and impact
  to the economy) is distorted and not based on
  actual performance, real data, or positive
  personal experiences.

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AADE What do we need to grow?

• Find Our Niche

JML Opinion We are not a competitor to SPE
nor IADC.

• There is a gap between SPE IADC Operational
  Efficiency Excellence

When All three communities work effectively
together on a project.magic happens!
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AADE What do we need to grow?

• Find Our Niche

JML Opinion We are not a competitor to SPE
nor IADC.

• There is a gap between SPE IADC Operational
  Efficiency Excellence

• If AADE fills that gap will Operator
  Participation Increase? Yes
• People take action based on what they see as
  possible..

• We need a stable business climateto continue as
  a volunteer organization.
• Unprecedented Oil Price Increases Unsustainable
  Growth
• Unprecedented Oil Price Collapse A return to
  layoffs Boom Bust?
• Are we there?

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Are we in another Boom/Bust Cycle?

• We need a stable business climateto continue as
  a volunteer organization.
• Unprecedented Oil Price Increases Unsustainable
  Growth
• Unprecedented Oil Price Collapse A return to
  layoffs Boom Bust?
• Are we there?

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Are we in another Boom/Bust Cycle?

• We need a stable business climateto continue as
  a volunteer organization.
• Unprecedented Oil Price Increases Unsustainable
  Growth
• Unprecedented Oil Price Collapse A return to
  layoffs Boom Bust?
• Are we there?

NO, once world economic activity resumes sanity
returns 70/Bbl
2007 to 2009 Speculation Oil
2000 to 2007 No Easy Oil

• Increasing Demand from Developing Countries
• OPEC Conventional Oil can not meet Demand

• Investment Firms Speculation Drives Price
• 60-70 of Oil Futures Contracts held by
  Speculators
• Oil Gas Commodity Market Grows 13 to 300 Bln.
• 27 bbls traded for each bbl delivered
• Who were the major players in oil/energy futures
  contracts..Enron, Lehman Bros, AIG, Morgan
  Stanley.
• Commodities bubble bursts with market collapse

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Look into the Future Meeting the energy
challenge, Shells 3 Hard Truths
150 x 67 ?
Ans 100
HARD TRUTH 1 This will lead to a growth in
energy consumption of up to 50
Conventional Oil Gas Reservoirs Declines _at_ 7
p.a.
HARD TRUTH 2 Easy oil (traditional
development) will not meet the demand future
resources will be difficult to find and extract
HARD TRUTH 3 CO2 emissions are rising even
faster than demand for energy
Bottom Line Oil Gas Development will grow not
decline in the next 40 yrs
Technology Innovation Unconventional
resources Alternative energy CO2 management
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AADE What do we need to grow?

• Find Our Niche JML Opinion We are not a
  competitor to SPE nor IADC.

• There is a gap between SPE IADC Operational
  Efficiency Excellence
• If AADE fills that gap will Operator
  Participation Increase? Yes
• People take action based on what they see as
  possible..

• We need a stable business climateto continue as
  a volunteer organization.
• Unprecedented Oil Price Increases Unsustainable
  Growth
• Unprecedented Oil Price Collapse A return to
  layoffs Boom Bust?
• Are we there? NO This is not an oil bust but
  a financial/speculation bust.
• Oil is likely to return to 60-70 /bbl with
  decreased supply (OPEC) and any sign of economic
  growth.
• Even with unprecedented growth in renewable
  energy and conservation conventional oil and gas
  demand will stay at current levels or even
  increase.

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AADE What do we need to grow?

• Find Our Niche JML Opinion We are not a
  competitor to SPE nor IADC.

• There is a gap between SPE IADC Operational
  Efficiency Excellence
• If AADE fills that gap will Operator
  Participation Increase? Yes
• People take action based on what they see as
  possible..

• We need a stable business climateto continue as
  a volunteer organization.
• When the industry is stressed by excessive
  expansion or contraction it is difficult for
  Volunteer organizations to operate.

• We need to focus our limited resources.time
  on the next generation of Drilling technical
  professionals.
• Student Sections vs other education
  initiativescan we continue to do both
• Decided on a chapter basis
• JML Opinion Focus more on student sections,
  less on Knowledge Box other education
  initiatives.

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Whats the Future of AADE?

• Continue to meet the needs of our members via
• Chapter and National Technical meetings
  Conferences.
• Industry Networking/Social events
• Support of Student AADE Sections
• Continue to provide the forum for the
  dissemination of practical drilling
  technology.. operational excellence.
• Promote the development of oil gas in the
  community via education programs/initiatives
  student section support.
• Dispel the common myths about our industry.
• Grow the business by highlighting long term
  career opportunities across the Operator/Service
  Company sector.

The future of AADE is bright, we have achieved a
great deal, however.. WE ARE A VOLUNTEER
ORGANIZATION, and will continue to thrive as long
as the VOLUNTER base is sustained.
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Questions?Comments?