Agenda How is Canary’s Global

1. Canary Overview Sourcing Strategy

2. Manufacturing Capabilities Targeted Executed?
3. Spend by Vendors/Equipment Type
4. Cost Savings Objectives
June 7, 2023
5. 2020-22 A 3-yr Review of Spend by Supplier by: John Long
6. Payment Tracking – Status
7. Supplier Segmentation by Regions
8. Team Travel Plans for OTC Asia 2023
9. LT Non-China Sourcing Roadmap

Appendix:
- 2022 Report – CCPPI Oct 27th
 Canary
1820 S. Missouri
OKC, OK 73129
PH# 405-519-0004
FAX# 405-670-1697
jlong@CanaryUSA.com Business Overview
Canary designs, manufactures, sells and rents a range of
highly engineered wellhead and pressure control equipment.
Its products are sold and rented principally for onshore
unconventional oil and gas wells and are utilized during the
drilling, completion and production phases of its customers’
wells. In addition, it provides field services for all its products
and rental items to assist with the installation, maintenance
and handling of the wellhead and pressure control equipment.
Canary operates 17 service centers in the United States,
which are strategically located in the key oil and gas
producing regions, including all the major basin Permian,
SCOOP/STACK, Marcellus, Utica, Eagle Ford and Bakken,
among other areas
 Key Product Lines: wellheads, frac stacks,
zipper manifolds and production trees
Various Configurations

11” 5M

25.0”
2” LP 11” 5M

25
.0 2” LP
9-5/8” Casing ”

9-5/8”
Casing

2-3/8” Tubing

2-3/8” Tubing
 Production tree Christmas tree
2-1/16” 5,000#
BHTA

2-1/16” 5,000#
2-1/16” 5,000# CROSS

2-1/16” 5,000#

2-1/16” 5,000#

7” 10m x 2-1/16”
5m A5P
 Conventional Wellhead Systems
Innovations for faster, safer and more efficient solutions
Although not our primary product offering, Canary Wellhead designs and manufactures
a complete line of conventional API 6A wellhead products to meet our customers’
drilling requirements. Our broad range of configurations is suited to a variety of
pressure ratings and trim requirements.
Conventional Wellhead products are available in working pressure ranging from 2,000
psi to 15,000 psi, with operating temperatures
from -75° F to +350° F. They are suitable for HP/HT
critical service with sealing provided by condition-
appropriate metal-to-metal or elastomer seals. The
systems are engineered with detailed, documented
running procedures for proper field installation.
CONVENTIONAL WELLHEAD PRODUCTS INCLUDE:
•Casing Heads
•Casing Spools
•Tubing Heads
•Casing Hangers
•Secondary Seals
•Tubing Hangers
•Tubing Head Adapters
•Test Plugs/Wear Bushings
 Frac Equipment Rentals
Performance driven frac valves, zipper manifolds, flow
crosses, goatheads
Canary Wellhead has engineered a frac valve product line that is specifically designed for the demanding
conditions present in multi-stage frac operations. The results of these innovative features are more up
time and less costly equipment repairs.
FRAC VALVE FEATURES:
•Improved gate design – minimizes sand build-up during frac operations
•Dual body flush ports
•Dual seat seal design
•Low-torque, ball screw operation
•Redundant stem packing
Canary zipper manifolds are engineered and designed to minimize our footprint at the wellsite.
The skid-mounted manifolds are 100% Canary designed, flexible and tailored to location space
conditions. They can be configured in multiple arrangements to minimize erosion and manipulate flow to
multiple wells according to designed velocity, frac line size and characteristics of the wellbore.
Canary horizontal ‘zipper’ manifolds can be completely assembled and tested at our branch facilities,
minimizing field installation time. And, Canary zipper manifolds are engineered based on computational
fluid dynamics (CFD) modeling of components to counteract the effects of sand and frac slurry erosion.
Connections are positioned safely within reach and minimize the need for harnesses or manlifts.
Manifold valves are positioned for optimum sealing and ultimate performance.
We stock a full range of tees, crosses, goatheads and flow back products that minimize rig-up time,
improve safety, and enhance efficiency to lower operator costs.
 Flow Control Products
Production Valves
Canary Wellhead has an established history of building rugged
and high-performing production valves and flow control devices
that provide production tree reliability regardless of operating
conditions.
Canary 6A gate valves are the result of decades of manufacturing
and engineering experience. The full-bore, through-conduit design
is offered in a full range of sizes from 1 13/16” to 7 1/16” and
working pressures from 2,000 to 15,000 psi. The valves are one
piece, bi-directional, parallel-sided slab gate design with trims to
match a variety of service conditions.
 Facility Manufacturing Capability

Ideal workshop area is 3500m2 , there are 14 sets manufactured

machines(Lathes 8sets ， CNC Machining Center 6sets ), all
numerically controlled

Max machining size(OD) ： 1~98” （ 0~2500mm ）

Max machining lenght ： 1~78” （ 1~2000mm ）

Max unit weight ： 10 Tons

Machining Precision ： ±0.01mm

Overall view of workshops

 Lathes (Baseline)

PUMA5100 PUMA600 PUMA800L

VL-125 （ Vertical ） VTB-200E

（ Vertical ）
 CNC Machining Center

NHM6300 NHM8000

HM12500W DBC130
 Quality Control Capacity

Quality Control
NDT, SIZE & HARDNESS

Take a variety of testing equipment and

testing means to ensure the quality of the
products. Formulating a quality plan
according to the customer require and
product PSL level. In accordance with API
specification and contract requirements,
the inspection procedures and results will
all be recorded. The arrest point and
verification point will be determined by the
client and the third party.

All the testing equipment will be strictly

identified and calibrated. All the non
destructive tests will conduct in coordance
with the written procedures.
 Quality Control Capacity

Manufacture that builds a measuring room, Constant temperature and humidity can guarantee the precision and
life of measuring instrument.

Measuring instrument including: caliper rule 、 gauge 、 Gagemarker 、 hardness test device 、 profile
projector 、 CMM etc. Adequate instrument to ensure that all kinds of dimension could be inspected.
 Quality Control Capacity

Gagermarker measurement system profile projector PMC thread gauge

CMM Brinell hardness tester Rockwell hardness tester

 Testing Capacity

Require a hydraulic testing room in the workshop, the maximum pressure to reach 30K PSI,
can test the API 6A standard 0~20K PSI products.
 LT Non-China Sourcing Roadmap
Dongying, east of Beijing &
Yancheng, a city of Jiangsu
are key locations in China
where you can find 6A
manufacturers, which are well
connected with many others
in and nearby Shanghai.

Current State Future State: SE countries with

high concentration of forging houses
and API 6A products
 Global Sources by Regions

North/South Americas SE Asia

China
(vs. Rest of Asia)
 Canary
1820 S. Missouri Who we buy from in China?
OKC, OK 73129 Our total spend YTD Annualized exceeds $10 million in China. Though many listed below are located in
PH# 405-519-0004 Houston, a lion share of the manufacturing arms are China-based, from which we purchase either
FAX# 405-670-1697 directly or indirectly. WE have scores of Chinese vendors, however, there have been strategic few, with
jlong@CanaryUSA.com whom we sent $1 million or more over the years.

Vendor No. Name

V01473 Jackson International
V00427 Kana Energy Services
V01986 Shandong Ruite
V00074 Tech-Seal Int’l Inc
V01984 Zhuohong Petroleum
V00182 American Aaron International
V00513 OMNI VALVE COMPANY, LLC
V01475 Indeed Oil Supply
V01995 R&S Oilfield, Inc.
V01499 JIANGSU XIONGYUE PETROLEUM MECH. EQUIP. MAN CO LTD

Where are they located?

Yancheng, though a key location where you

can find 6A manufacturers, is well connected
with many of its neighboring cities, even
including Shanghai.

Shengli Oilfield and Big Three impact High concentration of forging houses + 6A’s

What are the biggest challenges?

1. tariffs, a 25% cost adder and negative impact on our company since steel is a fundamental part
of everything we do here at Canary and in the oilfield
2. rising materials cost, up 8% or more from a year ago, and still trending up
3. currency exchange risk, double-edged sword, a potential 5 to 15% impact
4. production capacity – everyone seems to be running at 100% and three shifts!
5. uncertainty of lead time due to plant shutdown - seasonally tightened environmental control,
operations like forging, casting, painting, and welding
 Canary
1820 S. Missouri

Y-o-Y Purchases by Vendors

OKC, OK 73129
PH# 405-519-0004
FAX# 405-670-1697
jlong@CanaryUSA.com
 Canary
1820 S. Missouri
OKC, OK 73129
PH# 405-519-0004
FAX# 405-670-1697
jlong@CanaryUSA.com
 Canary
1820 S. Missouri
OKC, OK 73129
PH# 405-519-0004
FAX# 405-670-1697
Critical Vendors Pmt Prioritization
jlong@CanaryUSA.com
 Ocean Shipment Overview
​New Alliance Set-up January 2023

Ocean
Alliance

THE
2M Alliance
STANDALONE
CARRIER
 Canary
1820 S. Missouri
OKC, OK 73129
PH# 405-519-0004
FAX# 405-670-1697
jlong@CanaryUSA.com

Ocean Shipment DSV Realtime Tracking

 Canary
1820 S. Missouri

Crated shipments of
OKC, OK 73129
PH# 405-519-0004
FAX# 405-670-1697
jlong@CanaryUSA.com

Gate Valves (1-13/16“ 10M FC, 2“5M, 4“5M FF, 5“3M), Valve Parts (7“ Gate & Seats etc.) Wellhead
Equipment (RLM 13“ and 11“, TC16, ESP Mandral, etc. PO49532 FZV Items)