A PUBLICATION OF FORUM ENERGY TECHNOLOGIES
4
getting leaner
6
WIN
7
new products
September 2016
OPEN FORUM
September 2016 Volume 6 Number 1
Open Forum is published for Forum Energy
Technologies VIPs — our employees and
our customers.
Thanks to everyone who contributed to this issue.
If we missed something you sent -- or news you
wish you had sent – please let us know. We’ll be
glad to include it in the next issue.
Submit company news tips, human interest
stories, community involvement information,
photos and other items of interest to the Editor:
Donna Smith
Director of Marketing & Communications
920 Memorial City Way, Suite 1000
Houston, TX 77024
[email protected]
281.949.2514
Contributors:
Kevin Clothier, Erin Collins, Carl Daniel, Darin
Harvey and Jim McCulloch
IN THIS ISSUE
1 3 Reporting Segments Change
1 4 Lean Updates
1 5 Supply Chain
6WIN
7 New Products
8 Personnel Changes
9 Core Values
10 After Hours 1
ABOUT THE COVER
Employees of the Process Technologies group
stand proudly in front of one of the eight Edge
II desalters units shipped to Egypt as part of the
Cairo Oil Refinery Company’s expansion project.
Picture left to right are: Travis Yates, Isis Mejias,
Tom Collins, Melanie Yackel and Jonathan Boul.
Not pictured but part of the team are: James
Batchelor, Mitch Heim, Rosie Perez and Jesus
Sanchez.
Please print a few copies of this issue to put in the
break room for those who do not have access to a
computer in their normal work duties.
C E O
C O R N E R
It has now been five months since oil prices were at their
bottom. There has been a slow, unsteady rise since then,
although not to a level that is likely to change activity
levels meaningfully. This can be seen in the U.S., where
the number of working drilling rigs has been increasing for the past few weeks, but only marginally. This is
not enough to change the big picture but, nonetheless,
these are positive signs.
As expected, however, there is good reason to be optimistic in the longer term.
Oil and gas production levels have been declining, especially in the U.S., and
inventory storage levels have also begun to decrease. Demand is clearly outpacing production. The lower level of drilling and completion activity is causing the
slowdown in production and supply, aided by Canadian wildfires and turmoil in
Nigeria, Libya and Venezuela.
Natural gas prices have also seen a rise, a positive sign following four years of decline. For the first time ever, more electric power in the U.S. is now being generated by natural gas than with coal, which is much better for the environment.
As promising as the signs are, the rest of 2016 will still be challenging for the
oil services sector and for Forum. Our customers have very limited spending
budgets for 2016 and will be unable to place many new orders for our equipment.
Companies will move cautiously to increase spending and will be limited by capital and labor shortages. We are now hopeful that commodity prices will continue
their upward movement and our customers will be more bullish as they prepare
their budgets for 2017. Confidence is beginning to recover, but needs to improve
further before there is an increase in spending. Be ready, however, as surprises in
the market are more likely to be positive ones over the course of the next several
months.
The good news is that Forum is well positioned to benefit from any upturn.
Energy prices and sector activity have always been cyclical and this is not going to
change in the future. There are clearly better times ahead for the industry and for
Forum.
I would like to thank everyone for their hard work and dedication during this
unprecedented downturn in our industry. We realize the sacrifices that have been
made and continue to be made every day. Our employees are Forum’s best asset
and have been a crucial factor in our successfully weathering this storm.
Cris Gaut, Chairman and CEO
FORUM ENERGY TECHNOLOGIES, INC.
920 Memorial City Way, Suite 1000
Houston, TX 77024
P R E P A R I N G
F O R
T H E
F U T U R E
Reporting Segments Change
In February we announced a new reporting structure beginning with the first quarter 2016. Forum will report its results of operations in three reporting segments: Drilling & Subsea, Completions, and Production & Infrastructure. The new reporting segments
align with distinct activity drivers and customers of our product groups, and correspond with the manner in which management is
now evaluating operating performance. Completions includes Downhole, Flow Equipment and Well Intervention products.
Here’s the new structure and how the legacy companies fall into place.
DRILLING & SUBSEA
James Bement
SVP - Drilling
COMPLETIONS
Prady Iyyanki
President & COO
PRODUCTION & INFRASTRUCTURE
Bryan Suprenant
SVP - Completions
Keith Barnard
SVP - P&I
Access Oil Tools
Dynacon
Cannon Services
AMT
Certified Technical
Services
ABZ Valve
ADI
Forum Subsea Rentals
Davis-Lynch
Global Tubing
Howe-Baker
Electrostatic Seperation
DSI
AMC
GEMS
J-Mac Tool
M-Co
PBV
AOI Instrumentation
Moffat Engineering
Phoinix Global
MIDCO Fabricators
ProTech
TITAN
Quadrant Valve
& Actuators
ProDrill
Forum Packers
Wireline Solutions
Baker SPD
Perry
Quality Wireline
& Cable
Blohm + Voss
Specialist ROV
SVP Products
CraneSafe
Sub-Atlantic
Vanoil
GaugePlus
Syntech Technology
Wood Flowline
Products
Merrimac
VMAX Technologies
OBI
Visual Soft
Valve Stock
P-Quip
Pipe Wranglers
RB Pipetech
Tri-Point
Open Forum
September 2016 3
P R E P A R I N G
F O R
T H E
F U T U R E
Lean Initiatives Goes
Company Wide
Lean training and thinking at Forum has
come a long way in one year. From its start
in the Production Equipment business
line, Lean has now gone company wide.
Even the executive team has participated in a four hour education session. The
core idea of a lean culture is to maximize customer value while minimizing
waste. Lean thinking changes the focus
of management from optimizing separate
technologies, assets and vertical departments to optimizing the flow of products
and services through entire value streams
that flow horizontally across technologies,
assets and departs to the customer.
All manufacturing vice presidents,
directors and plant managers have now attended a one day course focusing on Lean
Culture. Over 1300 employees worldwide
have been trained on “one piece flow” and
“eight wastes” and over 150 have been
through a 3 day Lean Boot Camp.
So what has this accomplished? Year to
date we have realized Lean Savings of
$770K in manufacturing, with an estimated $3 million for the full year. And when
our business picks up, the savings will be
much higher.
Erin Collins, Operations Improvement
Manager for Production and Infrastructure has been joined by Adrian Singleton,
Lean Operations Improvement Manager.
Many of you have seen him at your local
facility as he has facilitated eight successful Kaizen events as well as 6S activities
throughout Forum.
4
Septemberr 2016
Open Forum
The Lean Steering Committee is shown here with employees at Bryan, TX.
The Lean Steering Committee is led by
Larry Maurer, Vice President of Manufacturing and includes:
• Ken Brown, Plant Manager
To learn more about Lean check out their
webpage at: http://fetconnect.f-e-t.com/
home/teams/LeanTrainingActivites/.
There you will find a Lean Book list, Savings Tracker and Lean Training Forms.
• Erin Collins, Operations Improvement Manager
• David Gilmore, Director of Manufacturing - Drilling
• Stephen Hardman, Manufacturing
Engineering Manager - Stimulation
• Darin Harvey, Vice President - Procurement
• Bill Mero, Vice President - Manufacturing, Production Equipment
• Ian Porter, Director of Manufacturing
- Subsea
• Adrian Singleton, Lean Operations
Improvement Manager
• Alex Zimmermann, Plant Manager
Adrian Singleton has over 10 years of Lean application experience and has been helping to drive
the Lean Culture throughout Forum for the past
six months. Adrian has held many roles in his career including Human Resources Management,
Production Management and Supply Chain
Management to give him a well-rounded approach to successful Lean implementation.
P R E P A R I N G
F O R
T H E
F U T U R E
Supply Chain Update
Forum is continuing to grow and prepare for the future by building a dynamic
sourcing and procurement team. We
are rapidly changing from a transactional
organization to a strategic organization
through the use of technology, analytics,
best practices, industry expertise, and
education.
Over the past year, under Darin Harvey’s
leadership, Forum has put into place many
new tools, initiatives, and teams as part of
our journey to move toward a world-class
supply chain organization.
•
We have implemented Zycus spend
analysis software to begin to take
a holistic view of the Forum spend
across all business units and sites
globally.
•
We have developed a category management structure to help ensure
expertise and effective sourcing for
our major categories/commodities.
•
We are rationalizing our supply base
to select the BEST suppliers – resulting in improved cost as well as
service, quality, and delivery.
•
We have started a training program to
educate supply chain professionals on
negotiation skills, best practices, and
ways to be more efficient.
•
We have started to utilize lean principles with our supply base to reduce
lead-times and inventory while
increasing our agility and flexibility to
serve the customer.
Although a major priority has been
determining ways to reduce costs during
the downturn, the supply chain team is
also focused on preparing for the upturn.
By selecting and cultivating relationships
with our best suppliers, we are preparing
to have the right capacity and preferred
pricing when the market returns. By educating our buyers and implementing best
practice procedures, we are ensuring that
we will have the right staff with the right
skills to excel in the upturn. By improving lead-times and reducing inventory
levels, Forum has more resources to invest
in the growth of the company.
The Forum Sourcing and Procurement
Team think of their goals as the Four C’s:
•
Culture: One Forum motivated by
continuous improvement, accountability, and a good place to work.
•
Customer Service: viewing all
stakeholders – internal and external
– as customers and ensuring we are
aligning our goals and objectives to
meet their needs.
•
Competitive Advantage: utilize
supply chain as a lever to help Forum
create a competitive advantage for the
business to realize profitable growth.
•
Cost: obtaining materials for the best
possible VALUE – lowest total cost of
ownership not just price.
As we prepare for the market upturn, the
Sourcing and Procurement Team will
continue to seek the best value for Forum
from all of our suppliers. We look forward
to developing relationships with key
partners who will help us grow and thrive
in the future. Continuing to improve
our employees’ skill sets so they are well
prepared to succeed at Forum is another
important goal.
Another crucial part of our supply chain
efficiency efforts is inventory management. Companies today must be nimble
enough to react to changes in customer
demand and do it with as little inventory as possible to capitalize on a better
cash position. Excess raw materials and
finished goods tie up cash. Like most of
the equipment companies in the oilfield,
Forum was caught with high inventory
levels since the downturn happened so
quickly. To address these issues, Adam
Szczepanski was recently appointed Vice
President – Inventory & Planning. In his
new role he is responsible to work with
the businesses to reduce current inventory
levels by developing sales and inventory management processes, converting
current inventory to cash, and working
with the supply chain to reduce lead times.
In order to successfully accomplish these
goals, new processes and reporting tools
will need to be put into place. If you
haven’t met Adam out in the field yet, you
probably will soon.
Open Forum September 2016 5
W I N
–
W O M E N ’ S
I N I T I A T I V E
N E T W O R K
If you aren’t a woman at Forum you
may have heard of WIN, but aren’t sure
what it stands for.
WIN (Women’s Initiative Network) was
formed in August of 2015. Its mission
is to encourage and support women to
achieve their best potential with the ultimate goal of developing future company
and community leaders. Oil and gas has
lagged behind other industries on diversity. The percentage of women working
in the industry is low compared to tech
and healthcare; the number of women in
leadership roles is even smaller. The major
oil and gas companies have made some
progress on countering these numbers,
but service and product companies have
been slower to follow.
Forum’s WIN group hopes to counter this
trend. The founders of WIN decided to
create an organization at Forum to foster
and support women. WIN leadership is
comprised of:
•
Christi Dowd, Director of Finance
Process & Controls
•
Sumer Inman, Sr. Manager Enterprise
Applications
•
Laura Tackaberry, HR and
Compensation Specialist
•
Meaghan Yorro, Business Process
Leader
Sponsors of WIN include: Evelyn Angelle,
Prady Iyyanki, Michael Danford and Cris
Gaut.
6
September 2016
Open Forum
WIN’s goals include:
•
•
Nicki Nicholls, Global Business
Director, FSR
•
Debbie Arneil, EH TSC Manager
Develop future leaders
Retain and recruit women
•
Support company values and the
community
•
Career development and mentorship
The first leadership summit was held
October 29, 2015 in Houston. Evelyn
Angelle, who serves on Forum’s Board,
was the keynote speaker. She also participated in the panel discussion of
three women leaders from the industry
- “Mentorship and Career Development:
How did you get here?” A December
breakfast meeting featured James Bement
and Bryan Suprenant who spoke on how
to find the right mentor.
In March of this year, the group held the
first UK Summit with keynote speaker
Jeanette Forbes, CEO of PCL Group.
Local WIN leadership includes:
•
•
Mandy Aitchison, HR Director
Eastern Hemisphere
Other 2016 events include: Lunch and
Learns with Larry Maurer, Donovan
Campbell, and Mike Danford; the sponsorship of a rest stop for Pursuit in March;
and a Mission Control event for Pursuit in
July. Planned events for the rest of the year
include:
•
Mentoring circles
•
2016 WIN Summit
•
Lunch and Learns with Jim Harris
and Lyle Williams
•
JDFR- UK events
Be on the lookout for upcoming events
and reach out to leadership if you have any
suggestions or program ideas. And a male
perspective is always welcome.
N E W
P R O D U C T
D E V E L O P M E N T
Partnering with
Customers to Provide
Solutions
Adding New Products –
Internally and Externally
Downhole, now a part of the Completions
segment, has been busy adding new products for their customers. Two exciting
additions include a pending joint venture
with Deepwater Oil Tools and the purchase of Team Oil Tools’ wholesale packer
business.
Deepwater’s, SeaCure® cementing tool
enables the inner string to be engaged into
the float shoe with casings and liners for
superior cementing performance. Freerotation when in compression safely engages the wellhead running tool. Because
the tool enables torques transmission in
tension, the inner string can be engaged or
disengaged from the float receptacle.
Benefits:
•
•
•
•
•
Eliminates the shoetrack
Less contaminated slurry interface
More efficient displacement
No reliance on wellhead tooling or
cement port seals
Improved drill out performance and
minimized risk of cement block stuck
BHA risk/BHA damage
SeaCure helps operators reduce well
construction costs by making cementing
faster and less risky.
7
September 2016 Summer 2016
The acquisition of Team Oil Tools’ wholesale packer business adds a key element to
our portfolio. Packers are used to isolate
multiple zones in open or cased hole
applications by forming a seal between
the outside of the production tubing and
the inside of the casing, liner or wellbore
wall. Packers are essential to the basic
functioning of most wells. Forum will
now be manufacturing as well as distributing them and are a key component to
offering complete product packages to our
customers.
Internally, we are busy at work designing
products that our customers need to be
more efficient and operate safer. These
include:
•
Composite centralizers
•
J-latch auto fill valve
•
Packer for the ME market
•
Dissolving frac balls and plug
components
•
Composite ratcheting mandrel frac
plug
•
Next Gen concept Float System
Downhole is positioning itself as a leader
in innovation, reliability and a complete
solutions provider.
Drilling Technologies recently worked
with Offshore Technology Development
(OTD), a subsidiary of Keppel Offshore
& Marine Ltd., to develop the latest in
hydraulic catwalk technology for offshore
rigs. The partnership offers operators an
offshore catwalk with best-in-class cycle
times for moving drill pipe and completion tubulars from the pipe storage area up
to the drill floor.
The automated system requires no physical connection with the drill floor module
and moves transversely independent of
the drilling module when repositioning
port/starboard. This can significantly reduce safety risks for the drilling crew and
improve drilling efficiency. This innovative
solution is optimized for the KFELS mod
V-B and Super B jack-up rigs and the new
catwalk technology can be easily retrofitted on an existing rig.
Forum has always been focused on
understanding our customers’ challenges
and finding the right solution, even in the
most extreme drilling environments. The
OTD/Forum catwalk also offers the widest
range of pipe handling capabilities, faster
cycle times and improved safety by reducing manpower requirements.
C H A N G E S
A T
F O R U M
Forum Increases
Presence in the Middle
East
Egypt
• Needs to spend $23.5B on infrastruc•
ture
Developing gas fields
In the ME, a local presence is crucial.
Customers want products manufactured
locally. To that end Forum is opening
a facility in Dammam, Saudi Arabia.
Multiple product lines will be assembled, warehoused, serviced and recertified there. This will allow for premium
pricing, increased market share and better
delivery times.
Our new facility in Damman
As most of you know, Carl Daniel, former
Vice President of Production Equipment,
recently relocated to the Middle East to
spearhead Forum’s growth initiatives in
this active market. Unlike other parts of
the world this market has actively been
adding rigs.
Carl has hit the ground running and
reported back to a recent Leadership Summit on what he has learned about the ME
market which is controlled by the local
national oil company in each country.
Kuwait Petroleum Company
• Has oil and gas projects in the works
for over seven billion
• Plans to produce 1MM bbl/pd by
2020
• Plans to produce 2B SCFD by 2020
United Arab Emirates
• Plans .75 MM bbl/pd by 2020
• Emphasis on offshore drilling
• Fujairah Refinery project is major
opportunity
Saudi Arabia
Keith Barnard Appointed
SVP of Production and
Infrastructure
Keith Barnard became our Senior Vice
President of Production & Infrastructure
in January of this year and brings an
array of experience including Six Sigma
and Master Black Belt Training, Project
Management Certification and Global
Sourcing Management.
Keith, a native Houstonian, began his
career with General Electric after receiving
his degree in electrical engineering. His
first position was as materials manager
but was soon promoted to Plant Manager.
He then moved to Dresser Industries in
Houston where he was General Manager
and implemented many of the Six Sigma
concepts he had learned at GE.
After Dresser, Keith worked for Flowserve
as Vice President and General Manager of
their China operations including manufacturing, marketing, sales and M&A
activities.
Welcome Keith Barnard our new senior vice president of Production and Infrastructure.
He next served as President of Sunbelt
Supply Co., a world leader in the supply
and distribution of valves and automation.
From there he worked at Halliburton as
Senior Director of Strategy and Marketing
for the Production and Completions
Division and later as Global Vice President
of Multi-Chem, Halliburton’s oilfield
chemical business.
At Forum, Keith brings his wealth of experience to Production and Infrastructure
which includes Valve Solutions. His
direct reports at Valves include; Rusty
Knight, Director Sales – North America;
Maury Mills, VP International Sales;
Dhaval Mistry, Director Engineering;
Darren Schneider, General Manager
Canada; Charles Steffes, Brand Manager;
Michael Donoghue, Brand Manager and
at Production Equipment, Bill Mero,
VP Manufacturing & Operations; Tom
Collins, VP Electrostatic Process and,
Gauthier Pierozak, Director Business
Development. Keith is a devoted Aggie
and lives in The Woodlands with his
family.
• Spends $33B per year
• Plan to produce 2MM bbl/pd by 2020
• Planned 18B SCFD gas production
by 2020
Open Forum
September 2016
8
C O R E
V A L U E S
Integrity
by Jim McCulloch
Our core values define the type of company we want to be. We want to be known
by everyone inside and outside the company as a place where we do everything we
can to makes sure that No One Gets Hurt,
that we are a Good Place to Work, and
where our Customer Focus drives us to
meet and exceed our customer’s expectations. As we have discussed our core
values in the past, we have not said much
about Integrity. Integrity is a core value,
but what does that mean? The dictionary
defines Integrity as the quality of being
fair; a firm adherence to a code of moral
values, and describes these as synonyms:
•
•
•
•
•
•
Being honest
Having honor
Holding to a set of moral principles
Being ethical
Always telling the truth
Staying trustworthy
The behaviors that underlie our core value
of Integrity are complying with both the
letter and spirit of the law and our policies,
always doing the right thing, only making
promises that you can keep and taking
actions that you can be proud of. We also
empower all of our coworkers to challenge any statement or action that violates
this value or any other, but to do so with
respect. No one is above accountability.
And if you are uncomfortable reporting a
violation to your supervisor, please use the
employee hotline.
Forum is a relatively new company and we
are still developing our corporate culture.
To drive our ethical culture we must:
•
9
Elevate integrity above financial and
operational priorities. Our safety
culture is strong enough now that
we all know that no one is allowed
to sacrifice safety for a financial or
operational reason. We need to have
the same attitude about Integrity.
September 2016 Summer 2016
A T
W O R K
•
Be aware of our Code of Conduct and
policies. Compliance with our policies
is a requirement of integrity.
•
Identify areas of potential ethical hazards. Think about those areas where
people may be willing to cut corners,
or “fudge the truth”.
•
Constantly focus and report even
small issues. Like the safety pyramid,
pay attention to the small issues before they develop into big ones.
•
Be involved; hold yourself and others
accountable. Tell your coworker, or
your manager or HR, and you can
always call the hotline.
•
Have leadership accountable and
committed. We expect our leaders,
all the way to Cris and Prady, to be as
committed to Integrity as we are to
safety, and to “walk the talk”. No one
is above accountability.
Potential ethical hazards include expense
reports, accounting entries, record keeping, time entries (including PTO), use
of company property and company time
and conflicts of interest, among others.
Sometimes the temptation is just too great
to cut corners, or make up for mistakes
with false entries, or claim you have done
a test or finished a task, or claim extra on
your expense report. We need to help
each other avoid these ethical hazards,
and to report violations when you see
them. If you have any questions, you can
refer to our Code of Conduct, Core Values
and company policies, all of which can be
found on ForumConnect. If you still have
doubts or questions, contact your HR rep
or Legal.
We all have a hand in making Forum the
company we want it to be. We have come
a long way, but we are not there yet. Let’s
work together to finish the job.
The right tool for the job
Every year a large number of workers
suffer injuries when working with hand
tools. Statistics taken from internal
incident investigations reveal that a high
percentage of these injuries occur when
the employee is using the wrong tool for
the job. The Guthrie OK, Production
Equipment location decided to take a look
at a specific task.
Historically, employees used a hammer
and wrench combination or had to hold a
large pneumatic impact wrench weighing
about 45 lbs. for a long period of time.
Both of those methods required much
manual effort and carried multiple safety
risks. After some research the employees
came up with a new hydraulic torque
wrench that reduces many of the hazards.
The hydraulic torque wrench shown is
a new method that reduces the weight
down to eight lbs. According to the sites
General Manager Craig Drago, “Safety
was the # 1 factor when we decided to
purchase the hydraulic torque wrench.
Pneumatic impacts are heavy and awkward to use. The hammer wrench and
sledge hammer method would work a
man entirely too hard and needless to say,
the employee’s safety would be at a huge
risk. By using a hydraulic torque wrench
we reduce the potential for back sprains/
strains, shoulder injuries, and impact and
vibration injuries to the hands of employees.” For more information on this
upgrade, contact the Guthrie location.
FORUM ENERGY TECHNOLOGIES, INC.
920 Memorial City Way, Suite 1000
Houston, TX 77024
A F T E R
H O U R S
Having Fun, Helping Others
Robert Dugal, Business Development Manager - Drilling Equipment, is one of the
founding directors of the Oilman’s Hill Country Ride. The charity organization was
founded in 2004 to raise money to support the men and women of the U.S. military
branches. It was conceived as an invitational event where oilfield folks could come together for fun, charity and networking. Since then the group has raised over $700,000.
This year’s Oilman’s Hill Country Ride year raised approximately $40,000. Already,
$20,000 has been distributed to Louisiana Cares, an organization based in Louisiana
that caters 100% to soldiers returning from active duty and their families, in helping to
restore a normal life for them. The Wounded Warrior Project received $5,000 and the
check presentation shown above was to Houston Marine Moms in the amount of $15,000.
Robert Dugal, far left, presents a check for
$15,000 to Houston Marine Moms from the
Oilman’s Hill Country Ride.