Magnum MonthlyIntercompany Newsletter

Please send your stories, photos, and feedback to The Marketing Department at marketing@womusa.com

DECEMBER2011

ISSUE 03

1

M A G N U MTECHNOLOGYC E N T E R

WOM’s first Subsea Intervention System sits outside of the m a n u f a c t u r i n g facility in 2004.

Willie Kinnear is WOM Inc.’s Technical Director, a role in which he provides leadership in sales and in the development of WOM’s subsea product line. He has been with WOM for 20 years and working in the oil industry for 32 years.

The first deployment of the SIS

The SIS sits on the deck of the Q4000.

Q4000 of Helix ESG

the accident at BP’s Macondo Well and the Deepwater Horizon drilling rig. This event showed the world how damaging a failure can be and how reliable equipment is absolutely critical.

Few companies are able and willing to take up the risk and the technical challenge. As a result, there are great returns to be made in selling subsea equipment. Conventional surface oil equipment has long been a commodity

These are really, really exciting times for the company. I have just returned from Aberdeen where WOM signed a contract to provide a new intervention system to Helix U.K. WOM’s subsea technology is experiencing great success and rapid expansion as oil companies seek out innovative technologies to improve safety and reduce cost. Risk and difficulty are high in the area of subsea applications. The risk is that liabilities are extremely high in the event of an equipment failure. The difficulty is the technical challenge of creating equipment that can operate several thousands of feet below the ocean’s surface.We cannot talk about subsea without mentioning

WOM’s Success in SubseaTaking up the challenge of deep-water technologiesFeaturing Willie Kinnear, Technical Director, WOM USA

market in which the profit margins are quite small. WOM has been and will continue to be successful because we manufacture high-quality, specialized equipment. This is why subsea is such an attractive opportunity for the growth of the company.We came to be a supplier of subsea equipment through a fortunate turn of events. In 2003, Schlumberger contracted WOM to build block valves for a unitized subsea intervention

Helix Energy Solutions Group, Inc. provides life-of-field services and development solutions to offshore energy producers worldwide.

[from Helix ESG website]

The Q4000 is a unique multi-purpose oil field construction and intervention vessel commissioned in 1999 by Cal Dive International (now Helix ESG) and was built at the Keppel AmFELS shipyard in Brownsville, Texas. She was delivered in 2002 and is operated by Helix Energy Solutions Group.

The vessel performs a wide variety of tasks, including subsea completion, decommissioning and coiled-tubing deployment, and she is specifically designed for oil well intervention and construction.

Q4000 is currently in the Gulf of Mexico participating in the response to the Deepwater Horizon oil spill. The Q4000 was used in a successful static kill procedure, where mud, followed by cement, was pumped into the well, sealing the leak at the Macondo Well.

[from Wikipedia.org]

system. One year later, Schlumberger decided to withdraw from this market and terminate the project. Schlumberger offered to sell the remaining equipment and the project to WOM. We completed the project and sold the first system to Helix Energy Solutions Group. After the sale, Helix asked WOM to operate the system. This was the origin of our team of technicians, which are now 24 in number, who rotate offshore to operate

the equipment. The system has been successfully operated on Helix’s Q4000 since 2004.With our manufacturing capabilities, our successful track record, and the skyrocketing demand in the market, WOM is poised to be an important supplier of specialized subsea equipment. In my 30 years in the oil industry, I’ve never seen business grow so much as in the last year and a half.

The Customer and the Application of the First Subsea Intervention System

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Please send your stories, photos, and feedback to The Marketing Department at marketing@womusa.com

DECEMBER 2011 ISSUE 03

2

Due to the demands for expansion, WOM Subsea is utilizing a 12,000 square foot building in addition to its work area and assembly pad at WOM’s factory on Cunningham Road.

Bill Burbank stands next to the Lower Riser Package. The LRP is only one part of the total system. The completed system would be too tall to fully assemble under this roof.

The Success of the Subsea Intervention SystemFeaturing Bill Burbank, Subsea Operation Manager, WOM USA

Today, we are making WOM’s second unitized subsea intervention system in a strategic partnership with Helix Energy Solutions Group. Because of the success of the first system, we are now having discussions about the creation of several more systems. Historically, WOM has been very successful at increasing sales with existing customers.

Our after-sales service has also been successful. In the subsea part of the company, we have 24 dedicated technicians that we rotate on and offshore to provide services for the equipment.My area of specialization is in the technical aspects of building and operating the equipment. There are two important innovations that we are undertaking with the subsea intervention system. The first innovation is the development of a wireline system, which is an alternative to the current riser design. The second innovation is the upgrade of the SIS control system from piloted hydraulics to a MUX system (multiplex electro-hydraulic control system; pronounced “mucks”). In the current method of operation, the operator opens a valve, which moves a piece of equipment under the water. Afterwards, an ROV (remotely-operated underwater vehicle, like a

subsea robot) checks visual indicators on the subsea valves. The problem with this method of operation is the amount of time is takes. In an emergency situation, the operator must act quickly. In fact, operators are mandated by regulatory bodies to complete an emergency disconnect in a certain amount of time. Operators must comply or the equipment can’t be used. The speed of the MUX system addresses this concern.

MUX controls use electronic signals and computer logic to operate the system, rather than piloted hydraulics which we are now using. The hydraulics drive all of the big iron, but there are smaller components which can be driven by EH systems (electro-hydraulic), even at 10,000 feet of water. The electronic signals travel much faster than hydraulic fluid over those distances. Also, rather than working directly with hydraulic valves, we can use the MUX

system via a computer interface. Once the EH system is up and running, it can work longer than a piloted hydraulic system. Finally, the overall health and longevity of the EH system are superior.WOM built its first SIS with piloted hydraulics in 2003. It has been operated on Helix’s Q4000 since that time. Helix later retrofitted the SIS with a MUX system and tested it on the surface. We are seeking to commission the upgraded system in the near future.

Bill Burbank is WOM Inc.’s Subsea Operation Manager. He manages the manufacture of subsea equipment and the technicians who operate the equipment on the customers’ rigs and ships. He has 25 years of experience in the oilfield. He ran his first set of tools with his father on a weekend while still in high school. He loved the fun of the work and it became all he wanted to do, so he started with Schaffer at the age of 17. He spent the first 13 years in the field doing production and drilling on land and offshore. He has been a manager for the last 12 years.

Additionally, we are working in partnership with Magnum Subsea Systems, a WOM group company, to promote their advanced subsea engineering, including the BridgeTree and subsea Christmas trees.

While we are still very early into the development of these subsea technologies, WOM is growing at tremendous speed. We’ll have more news to share in the next six months.

Subsea Intervention SystemA subsea intervention system (SIS) is a package that controls live wells during wireline or coil-tubing operations. It permits the use and changing of tools in drilling operations while isolating wellbore pressure. The SIS has the advantage of enabling a quick disconnect in the event of an emergency. The SIS consists of two major components: an emergency disconnect package (EDP, located at the bottom) and a lower-riser package (LRP, located on the top).It is also called an intervention riser system or IRS.

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Please send your stories, photos, and feedback to The Marketing Department at marketing@womusa.com

DECEMBER 2011 ISSUE 03

3

Anand Kalimuthu has been an engineer in the oil industry for 17 years. He joined WOM in 1999 and became Engineering Manager in 2005.

Reaching for Higher StandardsFeaturing Anand Kalimuthu, Engineering Manager, WOM USA

The Results of the Global Engineering SummitFeaturing Anand Kalimuthu, Engineering Manager, WOM USA

After the massive accident with BP’s Deepwater Horizon rig at the Macondo Well, there has been a push to increase regulations, standards, and mandatory inspections. The end user, usually a major oil company, must have a complete and thorough understanding of the regulations so they can operate the appropriate equipment. The major oil companies are trying to find suppliers who can provide the pressure control equipment certified at the higher standards. In my opinion, the industry is headed in the right direction, though manufacturers must design and build new products which comply with the stringent rules and regulations. What this means for WOM is that we have to gear up our product line to be compliant with the new standards. Now, purchasing equipment with the right certifications is more important than price under the new highly-regulated environment, especially in offshore drilling. Redundancy is one other factor in choosing equipment and so our Magnum Dual-Seal

technology falls right in place.

We have seen an increase in the requests for gas testing of equipment and WOM has been successful in passing these critical tests.

For certain valves that WOM manufactures, regulatory agencies are now mandating an American Petroleum Institute standard called “API 6AV1 Specification for Verification Test of Wellhead Surface Safety Valves and Underwater Safety Valves for Offshore Service.” WOM must test and seek certification for our equipment under this standard, which involves a sand-slurry test. WOM does not have the specialized testing equipment for the 6AV1 so the valve is sent to a test lab. Fortunately for WOM, some of our valves are qualified under API 6AV1 due to testing performed in the past.

Lastly, third party inspection is now much more common. In total, this means a longer lead time and more cost for the end-user, though in return they have a higher level of confidence in

the performance of the equipment.

A new effort we are making is in Research & Development. We now have an R&D department with dedicated personnel and equipment. Previously, the Engineering Department created designs in response to the needs of customers, then built the equipment, tested and shipped it. We have been fortunate to supply equipment without much R&D, however we don’t wish to be passive

in front of the higher standards. Equipment will be designed and tested to qualify PR2, which includes number of pressure and temperature cycles. WOM’s R & D department will have a new environmental chamber early next year to carry out all the PR2, high and low temperature tests. Qualifying and certifying a wider range of products is a big undertaking and an important investment in WOM’s future.

WOM has grown through saying “yes” to the

The meeting also resulted in a consensus on how to better manage data from a centralized location. These decisions, in cooperation with the continuing implementation of SyteLine in all WOM locations, will greatly improve control and coordination while

the work of Engineering, Manufacturing, Sales and Inventory. After considerable discussion, Mr. Puranik made the decision to adopt a new part numbering system, a decision that will benefit the entire company.

They reached decisions on updating our valves to comply with the most recent API 6A 20th edition guidelines for equipment in the oil industry. The major challenge was arriving at the right materials for the NACE-compliant H2S trim inside of our gate valve product line.Lastly, the Engineering managers discussed software and data management. The group agreed on a standard software package for engineering applications.

After arriving at an understanding of the work being done at each location, they discussed teamwork among all locations. Houston receives the bulk of new orders, so it feels the greatest pressure. Engineers at other locations will assist by taking on the projects for which they are best suited. Now, each Engineering manager has a better understanding of the talent at each location and has improved communication with the total WOM group.

So far as technical matters, they arrived at a consensus on revising the part numbering system. For several years we have been considering changing to a more optimal system, one that would better coordinate

On November 29th and 30th, 2011, Engineering managers of the WOM group companies met in Houston, Texas. The goal of the meeting was to share knowledge and reach a consensus on how to advance WOM’s engineering capabilities.

On the first day, each attendee gave a presentation in which he introduced himself and his WOM location, including their people, resources, and projects. The engineers have come from a variety of backgrounds and companies, including Cameron, FMC, and GE Oil & Gas. In their initial discussions, they were able to share work practices and arrive at best practices for WOM’s own engineering departments.

allowing WOM to smoothly scale up its operations.

The Global Engineering Summit was a success and there will be another such meeting in mid-2012.

customers’ new requests and the challenges they bring in. Looking back at the last ten years, WOM’s growth has been and is skyrocketing. This is incredible growth, especially for a manufacturing company. I admire and look up to Mr. Puranik for his leadership during all of this. With his support we will strive to meet the new and stringent higher standards the industry demands.

[From back row, left] Vignesh, Lay, Anand, Grady, Johnny, Vishal (Subsea Group), James, Pal[2nd row] Ratna, Keith, Dublas, Shiva (WOM India) [1st row] Lindsey, Gicela, Daynaris, Nitin (WOM India)

Magnum Monthly

Please send your stories, photos, and feedback to The Marketing Department at marketing@womusa.com

DECEMBER 2011 ISSUE 03

4

In November, Mr. Sudhir Puranik and the employees of WOM India celebrated the opening of a new machine shop in Pune. This new facility enables WOM to keep pace with the rapidly growing demand for our premium equipment.

The total area of shop is 24,000 square feet which provides room for the many new CNC (Computer Numeric Control) machines and previously purchased CNC

The employees of WOM in Houston have been celebrating the season’s holidays. For Thanksgiving, there was a “pot-luck” lunch where employees brought home-cooked meals and purchased food to share with their coworkers. As is typical to our culturally diverse workforce, there was traditional American food, American-Hispanic dishes, and Indian cuisine. For the Christmas holiday, the employees held a decorating contest in their offices and were visited by Santa Claus and Mrs. Claus.

machines. The machines are arranged according to the “Cell Concept” for different product lines such as gate valves, BOPs, and ball valves. This innovative layout makes for minimum material movement and increased production speed.

The manufacturing space is equipped with 2 overhead cranes with 10-ton and 15-ton capacity. It also has 12 jib cranes of 2-ton capacity for loading & unloading the jobs on bigger machines,

which will minimize downtime.

The office area (1,600 square feet) will accommodate 40 personnel from manufacturing, inspection and planning. The building has separate conference rooms for meetings and trainings.

The construction of the shop was completed in 1 year with special efforts from Ninad Oak & Raju Mainkar.

WOM India’s new machine shop in Pune, India.

Mr. Sudhir Puranik cuts the ribbon during the opening ceremony. Mr. Sudhir Puranik stands with employees of WOM India.

A Thanksgiving, American dessertsB Thanksgiving, Indian cuisineC Christmas Office Party, Engineering Department’s decorationsD Christmas Office Party, Danny Fuller Jr. (RRS Dept.) with Mr. & Mrs. Claus (Fergusons)E Christmas Office Party, Gicela, Mr. Grinch, and Lindsey in the Engineering DepartmentF Thanksgiving, Meal in the Shipping & Receiving DepartmentG Christmas Office Party, Children of WOM employeesH Christmas Office Party, the office of Shivaram Kulkarni (CIO)

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New Machine Shop for WOM IndiaBy Neelesh Musale, Management Executive, WOM India

Celebrating the End-of-Year Holidays in Houston