BANDERA DRILLING CO., INC.

COMMITMENT TO SAFETY

Bandera president, Ray Brazzel, continues the tradition of updating the equipment used on Bandera drilling units. Each improvement is made with the goal to make the work place more efficient and taking safety to the next level. The automated Iron Derrickman, Iron Floodhand, hydraulic cathead and air brakes are installed on all drilling units. Each rig is designed with safety in mind and all equipment is inspected on a regular basis.

SAFETY TRAINING

Bandera employees are required to complete a series of training courses prior to being assigned to a rig and must update their training regularly. Applicants must pass a mental alertness test and drug screen before being offered a position, and if hired go through a new hire orientation, "Rig Pass" accredited with the IADC. All rigs are equipped with a TV and Safety DVD Library. The safety department sends out weekly safety topics and selects one of the videos to be viewed.

ANNUAL TRAINING INCLUDES:

First Aid/CPR
H2S

OSHA Compliance
Well Control/MMS

ACCREDITED IADC RIG PASS TRAINING AND CERTIFICATION PROGRAM INCLUDES:

Drug/Weapon Policy
Confined Space
Personal Protective Equipment
Environmental and Health Control
OSHA Standards
Bloodborne Pathogens
Hazard Communication
Spill Prevention Control
Transportation of Hazardous Materials
Lockout/Tagout

P.O.I.S.E. PROGRAM

Bandera has implemented our own Behavioral Based Safety Program, P.O.I.S.E. (Proactive Observations Improve Safety Efforts). The program is utilized by supervisors and employees monitoring one another to stop at-risk behaviors. At-risk behaviors contribute to 96% of all accidents in the work place. By making P.O.I.S.E. observations employees and supervisors observe incorrect work habits, stop the operation and continue with proper work procedures. Bandera continues to work toward a safe work place with a goal of zero accidents.

PERSONAL PROTECTIVE EQUIPMENT

All personnel on a Bandera location are required to wear proper Personal Protective Equipment. This includes head, foot, eye protection and proper clothing. Hard hats, safety glasses and uniforms are issued to each employee. In addition, employees can earn gloves, steel toed boots and coveralls for working safely as a team over an established time frame.

SAFETY MEETINGS

Daily - Drillers start the tour by holding a short safety meeting with the crew including information from the operator, recent company communication, recent incidents (causes and corrections) and safe equipment operating procedures.

Weekly ? Drillers read the ?Weekly Safety Topic? with crews and write employee suggestions on the bottom of the Safety Topic Sheet.

Monthly ? Toolpushers hold at least one safety meeting with each crew covering all the above with emphasis placed on company communication. Documentation of meetings is filed with the HSE Director.

SAFETY RECORD

Workers Compensation Experience Modifer

2008 - .71
2007 - .73
2006 - .77
2005 - .95
2004 - .99

2003 - 1.03
2002 - 1.00
2001 - .89
2000 - .89