HIGH-TECH DIMENSIONS OF ENERGY Piotr Galitzine Chairman, TMK IPSCO USRBC Annual Meeting October 21, 2010

2 TMK Global Strength o 22 production sites o 46,000 employees o 6.4M tons of pipe-making capacity o ~ $5 billion annual revenue 3

3 The United States and Russia are the global leaders in oil and gas drilling. TMK’s product mix is geared to meet the needs of the energy industry. Energy 70% TMK’s strategic positioning made it the steel tubular industry leader in 2009, selling over 3 million tons in a down market. TMK Uniquely Positioned to be the Leading Supplier of Energy Tubulars

4 Top 5 States = 76% of Rig Count TMK IPSCO Poised for Growth Today drilling is centered on the shale plays which are believed to contain as much as a third of the United States’ technically recoverable gas resources. Source: EIA Modern Shale Gas Primer, April 2009 Smith Technologies

5 Driven by technological advances in horizontal drilling and hydraulic fracturing, the natural gas industry has become more efficient—producing more natural gas using fewer rigs. Source: EIA Short-Term Energy Outlook, Smith Technologies Today’s Energy Environment New Market Dynamics Since no increase in natural gas consumption is part of the Short- Term Energy Outlook, the natural gas rig count may never return to 2007 – 2008 levels.

6 Source: EIA Short Term Energy Outlook, Credit Suisse The industry has traditionally viewed $5 to $6 as the economic drilling price of gas, but a recent Credit Suisse study estimates surprisingly low break-even costs for the major shales. Today’s Energy Environment Lower Break-even Costs Encouraging Drilling Lower break-even costs will allow the higher rig count to continue despite lower natural gas price forecasts. 8

7 Aquifer ¼ mile radius 5,000 – 10,000 ft 8,000 – 12,000 ft Multiple frac zones ULTRA - SF Hydrofracturing: 3,000 psi/5,000 psi/25,000 psi Frequency: 10X/25X Hydrofracking

8 Steam out Oil In Two Staged Pairs (Initial) Two Staged Pairs (final) With Wedge Well SAGD Pair (side view) Advances in Steam Assisted Gravity Drained (SAGD) Wells (e.g., Cenovus Energy Inc., Calgary) Wedge Wells

9 Oil In Slot-Sawing: Another approach to increasing flow pathways in the zone of hydrogen recovery Cutting Cable Slit Area

10 Source: Smith Technologies Rig Count Today’s Energy Environment Oil Driving Growth in Rig Count 32% 26% 21% 18% TX ND KS OK NM Top 5 States = 83% of oil rig count Both the oil and gas rig counts have rebounded in 2010, but on the back of high crude oil prices, the oil rig count has grown to levels unseen since The technologies pioneered in the gas shales have been used to unlock the oil shales. The Bakken shale of North Dakota has a 96% horizontal rig count.

11 Source: Company estimates Competitors continue to announce tubular and finishing capacity additions over the next two years. By the end of 2012, North America will potentially have enough capacity to support 2,400 rigs. New Challenges North American Capacity Increasing

12 Source: EIA Short-Term Energy Outlook, September 2010 The EIA has held the crude oil and natural gas price forecasts in the same range as Early Outlook Commodity Prices Resembling 2010 Oil prices remain stronger than recent years while natural gas prices are lower due to the large supply of accessible shale gas. 15

13 Source: New York Times, EIA 2011 Early Outlook Canadian Oil Sands Gaining Momentum Oil Sands 21% 12% 11% 3% Today Canada is the source of over 20% of U.S. crude oil imports; it’s estimated that half of Canadian imports come from the oil sands. The IHS Cambridge Energy Research Associates project that the oil sands will account for 36% of U.S. oil imports by the year Today, four Latin American countries supply another 30% of U.S. crude oil imports...

14 TMK IPSCO has a demonstrated ability to engineer customized solutions allowing our customers to access new markets like the shale plays. Our team of technical experts is continually working to provide the best value in pipe and premium connections to the energy industry as it evolves. TMK IPSCO’s 2011 Outlook Innovative Solutions Driving Growth

15 Coal Nat Gas Petroleum Renewables Nuclear 48% 22% 18% The EIA’s Annual Energy Outlook predicts that by the year 2035, coal will still comprise 22% of U.S. energy consumption while renewables grow from 7 to 11%. Sources: EIA May 2010 Monthly Energy Review, Annual Energy Outlook 2010 Natural gas is the cleanest-burning fossil fuel, emitting half the pollutants of coal. Given the current political and economic climate, there is much incentive for increased use of natural gas as the “bridge fuel.” Electric Power Consumption in trillion Btu CO 2 Emissions - Electric Power in millions of metric tons 11% 1% TMK IPSCO’s Long-term Prospects Natural Gas – The Key to a Greener Future

TMK IPSCO: Committed to Grow with the Energy Industry