1. OCTG Market Update January 2016

2. Mission
Be the industry leader in the supply of OCTG and customized services to the energy industry
Vision
Be the Premier partner delivering value through innovative supply chain management & customized solutions to optimize total cost of ownership
Values
Integrity
Innovation
Expertise
Efficient
Responsive

3. US Average Rig Count
Baker Hughes

4. OCTG CONSUMPTION VS DEMAND
2.34 Million
8.0
292,670
Preston Pipe Report

5. OCTG CONSUMPTION VS DEMAND
8.0
Preston Pipe Report

6. OCTG MARKET PRICING TREND
$2192
$1930
OCTG PRICE PER TON
Since January 2012
OCTG = %
2015 YTD = -30%
Trend line average consists of Pipe Logix 7" 29# HCP LT&C & 9-5/8" 53.50# HCP LT&C, OCTG Situation Report 7" 29# S/P LT&C & 7-5/8' 29.70# S/P LT&C, and 9-5/8" 53.50# P-110 LT&C.

7. Seamless Alloy Casing Price Trend with US Rig Count 2010 - 2015
OCTG PRICE PER TON
RIG COUNT

8. Seamless Alloy OCTG vs WTI Oil

9. HRC = Preston Pipe Report
OCTG & Hot Rolled Coil
$879
$2192
OCTG
COIL
$374
$1369
Trend line average consists of Pipe Logix 7" 29# HCP LT&C & 9-5/8" 53.50# HCP LT&C, OCTG Situation Report 7" 29# S/P LT&C & 7-5/8' 29.70# S/P LT&C, and 9-5/8" 53.50# P-110 LT&C.
HRC = Preston Pipe Report

10. OCTG & #1 Heavy Melt Scrap
$1369
$145
HMS #1 = AMM

11. OCTG & Coke
195
175
$1369
Steelonthenet.com. fob export prices for blast furnace coke shipped from Poland and the Czech Republic in Euros/Metric tonne

12. OCTG & Iron Ore
$135
$1369
Iron Ore Fines Price in USD/MT. InfoMine.com.

13. Annual Total Consumption

14. Annual Consumption per Rig per Month
54%
Efficiency Gain

15. OCTG Supply and Consumption 2015 PROJECTION

16. US TOTAL OCTG INVENTORY ANALYSIS

17. US RIG COUNT: Story of 4 Cycles
-25% 2009
-45% 1986
+36% 1999
-58% 2015

18. Story of 5 Cycles Numbers from January, not from peak.
1982
Numbers from January, not from peak.
1982 Biggest rig loss at 1727 rigs.
2015 Biggest % loss at 58%.
-39%
1986
2015
2009
-25%
-45%
+36%
-58%
1999

19. US TOTAL OCTG SUPPLY 2009 vs 2015 Positive signs:
1) Total supply single month finally below 2009.
2) Preston estimates Dec Import at 51,000 tons.

20. 2009 vs 2015 Inventory Change
Inventory drawn down much faster in 2009 than 2015.
Still in excess of 8 months total supply.
1 Million tons excess inventory.
Net effective new demand for 2016 is approx 2 million tons.

21. OCTG Average 2015

22. OCTG 2015

23. TOTAL OCTG IMPORTS YTD (thru OCTOBER 2015)

24. TOTAL OCTG IMPORTS YTD (thru OCTOBER 2015)
-65%

25. Tonnage Delta 2015 vs 2014 (Thru October)