Shell Exploration and Production Company 2010 North Louisiana Wells Contractor HSSE Forum

1. Shell Exploration and Production Company2010 North Louisiana Wells Contractor HSSE Forum June 30, 2010 Shreveport Convention Center

2. Shell Exploration and Production Company2010 North Louisiana Wells Contractor HSSE Forum Welcome and Safety Briefing Yesim Jonsson CP Category Manager

3. Forum Agenda • Welcome and Safety Briefing, Yesim Jonsson 9:00 – 9:10 • Opening Comments, Dave Carpenter 9:10 – 9:20 • Goal Zero, Life Saving Rules, Jim Miller 9:20 – 9:50 • Lifting and Hoisting Standard, Rodger Simmons 9:50 – 10:20 • Break 10:20 – 10:30 • DROPS, Mark Price 10:30 – 11:00 • Contractor HSSE Management Process, Mike McRill 11:00 – 11:30 • Road Transportation – Journey Management, Mark Chustz 11:30 – 12:00 • Break (Lunch) 12:00 – 12:30 • Feedback Session, Q&A, Jim Miller 12:30 – 12:50 • Closing Remarks, Dave Carpenter 12:50 – 13:00

4. Shell Attendees Dave Carpenter – Well Delivery Manager Mark Chustz – Drilling Superintendent Jim Miller – Drilling Superintendent Mark Price – Drilling Superintendent Rodger Simmons – Completions Superintendent Yesim Jonsson – CP Category Manager Mike Mc Rill – HSSE Specialist, CSMP Steve Ellis - HSSE Technician Tom Ulrich – Construction Superintendent Roman Esqueda – Senior Road Transportation Assistant

5. Shell Exploration and Production Company2010 North Louisiana Wells Contractor HSSE Forum Opening Comments Dave Carpenter Well Delivery Manager

6. Magnolia - AMI Geologically Complex Approx Loc Field Office • Shell Operations • 2008-2009 spud 28 wells • Majority of wells in J Block • Average of 4 rigs, ramped to 7 E09 • EnCana Operations • 2008-2009 spud 65 wells • Adcock & Bolan • Began drilling southern AMI • 2010 combined 170-180 wells (budget) • Shell will average 10 rigs • D&C Challenges or 2010 & beyond: • Safe Rampup & Improving HSE • More subsurface complexity • Hotter wells • Well design (ECA, H2S, Cost) • Conversion to Development (PAD) • D&C Optimization for Cost/Performance • Water Management • Development Pilots H2S Area? Deeper, hotter

7. Footer: Title may be placed here or disclaimer if required. May sit up to two lines in depth. May appear on Title pg. HSE Incidents & Events – North Louisiana

8. Shell Exploration and Production Company2010 North Louisiana Wells Contractor HSSE Forum Goal Zero, Life Saving Rules Jim Miller Drilling Superintendent

9. Leadership Core Pack Final version 5 Updated 5/03/10

10. Summary • Aim is to prevent harmto people • 12 high-risk operationsat work • Consistent set of rules > culture of compliance • Not new. Most staff adhere already every day • Mandatory Compliance for work-related activities • Applicableto all operations under Shell’s operational and/or governance control • Minority interest JVs encouragedto participate • Each reported non-compliance will be investigated • Failure to comply will result in disciplinary action, up to and including termination of employment for Shell employees or, for employees of contractors or sub-contractors, removal from site and disqualification from future Shell work. • Supervisors are held accountableto communicate and ensure compliance Life-Saving Rules Slide 10

11. Respecting and Valuing our People • Shell General Business Principles: our shared core values of honesty, integrity and respect for people, underpin all the work we do and are the foundation of our Business Principles • Our Golden Rules – You and I: • Comply with the law, standards and procedures • Intervene on unsafe or non-compliant actions • Respect our neighbours Goal Zero means no harm to people Slide 11

12. Fact Goal Zero No Harm B 350+ Fatalities 2000 – 2008 Compliance with the rules would have saved many of these lives A Slide 12

13. Where are we? No Harm Goal Zero B • We have 12clear and consistentLife-Saving Rules • We expect everyone to complywith these Rules • We are investigatingeach potential violation • We are holding people accountable: management, supervisors, staff, contractors, sub-contractors Slide 13

14. Life-Saving Rules – what are they? Verify isolation before work begins and use the specified life protecting equipment Obtain authorisation before entering a confined space Obtain authorisation before overriding or disabling safety critical equipment Work with a valid work permit when required Conduct gas tests when required Protect yourself against a fall when working at height 1 2 3 4 5 6 7 8 9 10 11 12 Do not walk under a suspended load Do not smoke outside designated smoking areas No alcohol or drugs while working or driving While driving, do not use your phone and do not exceed speed limits Wear your seat belt Follow prescribed Journey Management Plan Note: Commuting, alcohol in social settings and smoking in office environments are out of scope Slide 14

15. Consequences of Rule-breaking • Incidents and rule-breaking will be investigated thoroughly • Failure to complywith any Life-Saving Rulewill result in disciplinary action. • For Shell employees this includes termination of employment. • For contractors this includes removal from Shell sites and no longer working for Shell companies. • If the violator is aware of the rule or required procedure through training, experience or communication, and did not comply with that rule or procedure, the maximum appropriate disciplinary actionwill be applied. • In addition, if a supervisor sets the conditions for rule breaking or fails to follow through if one is broken, maximum appropriate disciplinary action will apply. Slide 15

16. Consequences of Rule-breaking • The investigation will take into account where the violation took place. • For violations in high-risk operations we apply the general principle that if you choose not to comply, you choose not to work for Shell. • High-risk is defined as: • all industrial operations – see rules 1 to 9 • for professional drivers under our operational control – see rules 9 to12 • all business driving in defined ‘high-risk road environments’ – see rules 9 to12 • For violations in lower risk areas, disciplinary action ranges from a verbal/written warning, suspension from duties, reduced IPF, and up to and including termination of employment for staff; or removal from site and disqualification from future Shell work for employees of contractors or sub-contractors. Slide 16

17. The Role of Leaders • Know the Life-Saving Rules– purpose, application and consequences for non-compliance • Ensure and verify all Shell employees and all contractors within your remit have been verifiably briefed • Communicate, communicate, communicate • Leadfrom the front and through personal example • Face upto the hard people decisions • Verify, measure and continuously improve compliance Slide 17

18. Implementation • “Business drives …”Business leaders supported by HSSE, HR and CX are accountable for communicating the Rules and ensuring compliance • “… Country coordinates …”Country Coordination Teams (CCT) led by Country Chair are accountable for one, integrated country approach • “… HR and CX support.”Country HR is accountable for ensuring consistency in application of disciplinary action and CX support CCT in establishing an integrated message • Timeline: • July 1, 2009: Life-Saving Rules fully enforced • March – May 2010: Leaders to re-engage with employees and contractors (via contract holders) on where we are in our Life-Saving Rules journey • Q2-Q4 2010: Ongoing engagement on the Rules through mini-campaigns Slide 18

19. Life-Saving Rules and other rules • Golden Rulesremain • Life-Saving Rules are mandatory minimum requirements • Any existing rule that duplicates any Life-Saving Rule must be replaced by the relevant Life-Saving Rule • Other equally important job or site-specific rules should not be called Life-Saving Rules • The Life-Saving Rules do not replace or invalidatethe other business, operational and safety rules in force at your workplace, or release you from your duty to comply with these Slide 19

20. Life-Saving Rules – 2009 performance 1205 Life-Saving Rules violations (~200/month) were reported globally between July and December 2009 Most violations in road safety (mobile phone use and speeding), followed by personal safety (working at height, alcohol and drugs use) We are serious about following through on the consequences of rule breaking: all employees who violated the Rules were subject to maximum appropriate disciplinary action up to and including dismissal we dismissed a significant number of employees as a result of non-compliance and will continue to do so contractors who violated the Rules were removed from site and in some cases, complaint letters were sent to contractor companies

21. Life-Saving Rules – how we measure success Success is NOT measured by the number of employee and contractor dismissals Success is fewer injuries and fatalities because of compliance with the rules • Shell had its best ever safety performance in 2009 with Life-Saving Rules playing a role • Successful intervention in over 1200 violations has helped prevent injury and save lives

23. Shell Exploration and Production Company2010 North Louisiana Wells Contractor HSSE Forum Lifting and Hoisting Standard Rodger Simmons Completions Superintendent

24. Purpose To prevent incidents associated with lifting and hoisting. This standard establishes Shell Exploration and Production Company’s (SEPCo) requirements for the: • Operation, maintenance, testing, certification, inspection, and design of lifting equipment, and • The competency and qualifications of individuals involved with these operations. Applicability This standard applies to work performed on: • SEPCo well locations, • Leases, or • Right-of-ways.

26. Appendix E: Ten Questions for a Safe Lift Lift Sponsor When planning and executing lifting operations, the Lift Sponsor shall do the following: • Use the Lift Categorization and Work Authorization Table. • Ensure that the lift area(s) is: • controlled to ensure individuals are safeguarded from entering the path of the load, and • adequately sized for load’s size and weight. • Verify that the answers to Appendix E: Ten Questions for a Safe Lift are addressed in a Toolbox Talk. • Ensure applicable lift planning requirements contained in this section are met.

27. Lift Risk Categorization Table

28. Training Onshore Mobile Rigger / General Lifting Appliance Operation and Rigging ( Combined ) NCCCO Equivalency Aerial Platform Operation ( manlift ) Gin Pole Truck / Auto Crane Operation and Rigging Powered Industrial Truck Operation Powered Overhead Crane Operation and Rigging Man-Riding Winch Operation

29. Slings – Synthetic Must have Frequent and Periodic Inspections. • Frequent Inspection - Prior to use the QP shall complete frequent, undocumented inspections as follows: • Check for defects such as damage and deterioration and verify is has current certification. • Slings without a valid certification will note be used. • Note: Any sling without a certification tag must be removed from service and recorded in the inventory. The sling must be re-certified prior to use. Slings must be removed from service if any inadequacy is found. • Periodic Inspection - Are required to: • be replaced annually and have a Certificate of Conformity ( CoC) available upon request indicating the sling is less than 1 yr old. Logged into sling inventory list. Stored in an enclosed area to minimize exposure to moisture, UV rays and chemicals. • should have a legible tag marked with the working load and certification and manufacture date and be inspected by a Qualified Rigger to ensure that the flowing does not exist: • cuts, tears, or abrasion, • fraying or bursting of stitching • penetration of foreign bodies • damage from heat or chemicals, and • distortion or excessive wear of the metal eyes, where fitted

30. Slings – Wire Rope Must have Frequent and Periodic Inspections. • Frequent Inspection - Prior to use the QP shall complete frequent, undocumented inspections as follows: • Check for defects such as damage and corrosion. Check for proper configuration (the lifting assembly and associated hardware, as load tested). Ensure the sling has current certification. • Note: Any sling without a certification tag must be removed from service and recorded in the inventory. The sling must be re-certified prior to use. Slings must be removed from service if any inadequacy is found. • Periodic Inspection - The QP shall perform and document periodic inspections as follows:: • File sling annual inspection records and certification papers must accompany slings. • Certification of Wire Tope Slings – Certification tags must list the following: • Sling manufacture • Working load limit • Proof test certification number • Sling length and diameter • Date of proof test • Rated load for the type of hitches and the angle upon which it is based • Slings used to pre-sling cargo must bear a certification tag not more than one year old. The certification tag must clearly indicate certification date.

31. Sling Inventory • An up-to-date sling inventory of all slings kept on location must be readily available for audit. The inventory must contain the following information: • Certificate number • Date of certification • Working load limit • Basic description of sling (size, length, etc. • Name of manufacture / certifying test facility

32. Miscellaneous lifting hardware • All below the hook lifting devices and rigging hardware are subject to Frequent and Periodic Inspections similar to slings. • Such as: • Spreader Bars / Special lifting devices • Chain slings • Eyebolts • Turnbuckles • Shackles • Hooks

33. Mobile Cranes • During lifting operations the QO (Qualified Operator) shall not hoist a load over personnel. ( LIFE SAVING RULE ) • Obtain a Safe Work Permit approved at the SEPCo Supervisor level or above for bypassing the boom kick-out, and anti-two blocking or other safety devices. • Frequent Inspections - The QP shall perform daily and monthly documented inspections prior to use. • Periodic Inspections – shall be documented as follows: • Permanently affix a tag to the equipment showing that it passed inspection. The tag must include: • Date of inspection • Person who performed inspection • Unit or serial number • Date the inspection expires • Tag Lines - must be used on all lifts for mobile crane operations.

34. Gin Pole Trucks • Frequent Inspections - The QP shall perform daily and monthly undocumented inspections prior to use. • Periodic Inspections – shall be documented as follows: • Permanently affix a tag to the equipment showing that it passed inspection. The tag must include: • Date of inspection • Person who performed inspection • Unit or serial number • Date the inspection expires • Inspect critical items such as: • hoisting machinery • sheaves • hooks • chains • ropes

35. Powered Industrial Trucks ( Forklifts ) and Aerial Platforms • Frequent Inspections - The QP shall perform daily and monthly undocumented inspections prior to use. • Periodic Inspections – shall be documented as follows: • Permanently affix a tag to the equipment showing that it passed inspection. The tag must include: • Date of inspection • Person who performed inspection • Unit or serial number • Date the inspection expires

38. UACONTRACTOR.COM

39. Shell Exploration and Production Company2010 North Louisiana Wells Contractor HSSE Forum Break 10 Minutes

40. Shell Exploration and Production Company2010 North Louisiana Wells Contractor HSSE Forum DROPS Mark Price Drilling Superintendent

41. Shell NLA Dropped Object Prevention Scheme DROPS

42. Shell NLA Dropped Object Prevention Scheme Who are these guys?

43. Ben Franklin (1706 – 1790) - Founding Father - Political theorist - Author - Inventor “…in this world nothing can be said to be certain, except death and taxes.” - Letter to Jean-Baptiste Leroy (13 November 1789)

44. Let’s add one other thing to be certain of: GRAVITY

45. Want to take a guess now? Need a hint?

46. Sir Isaac Newton (1643 – 1727) - Physicist - Mathematician - Astronomer - Natural philosopher - “Theory” of Gravitation In our business, gravity is a LAW!

47. Breaking the law involves serious consequences: Onshore Gas 2009: 80 HIPOs from Dropped Objects Onshore Gas 2010 YTD: 67 HIPOs Two fatalities: Wyoming 6-24-2008 (dropped joint of DP) South Texas 4-6-2009 (Equip dropped from forklift)

48. EP 2009-9039 – Prevention of Dropped ObjectsSponsor: Peter Sharpe Sets out the mandatory requirements to prevent harm to personnel and damage to equipment from dropped objects in the execution of Shell’s drilling, completion and well intervention activities

49. Requirements for DROPs: • DROPS Lead for each location • Systematic DROPs inspection program • Worksite hazard management for DROPs: • Tubular handling checklist • Pipe clamps on forklifts • Secondary retention devices • Derrick equipment inventories • Maintenance management • Tethered tools used at height

50. Requirements for DROPs: • Complete register of lifting equipment • Incident reporting using DROPs Calculator • No-Go Zones • Red Zones • Forbidden Equipment & Practices list