2014 Salary Report

2014 Salary Report

2014 Salary Report Page 1 / 12 3P Energy Partners, LLC

2014 Salary Report

Contents

Introduction

Page 2

Definition of Salary

Page 5

Definition of Functions

Page 6

Market Overview

Page 8

Survey Results

Page 9

Summary

Page 11

About 3P Energy Partners

Page 12

2014 Salary Report Page 2 / 12 3P Energy Partners, LLC

2014 Salary Report

4%

24%

4%

15%

2%

26%

18%

7%Commercial - Business Development

Engineering - Drilling & Completions

Engineering - Facilities & Processing

Engineering - Reservoir & Petroleum

Engineering - Production & Operations

Geoscience - Geology

Geoscience - Geophysics

Geoscience - Petrophysics

Heath Safety & Environment

Other

Africa7%

Asia4%

Australia11%

Europe7%

Middle East15%

North America

54%

UK2%

65%

35%

UPSTREAM PROFESSIONALS

Technical

Managerial

61%

39%

People workingwithin theirregion ofresidence

People workingoutside of theirregion ofresidence

Introduction

3P Energy Partners operate exclusively within the upstream oil and gas industry. Our expertise lies in the

provision of Geologists, Geophysicists, Petrophysicists, Reservoir Engineers, Petroleum Engineers,

Production Engineers / Technologists, Drilling and Completions Engineers, Facilities / Project Engineers and

HSE professionals to our global partners in the exploration and production sector.

The purpose of the 2014 Salary Report is to provide an up-to-date review of the international oil and gas

employment market. This report covers current trends, salary benchmarking and wage disparities across the

regions, as well as the most common reasons that employees leave their place of employment.

Our target market included 1,840 upstream oil and gas professionals in both technical (65.2%) and

managerial (34.8%) positions based in North America (54.35%), UK (2.2%), Europe (6.52%), Australia (10.9%),

Asia (4.4%), Africa (6.5%) and the Middle East (15.4%).

The majority of respondents (26.1%) are primarily engaged in Geology, while 23.9% specialize in Drilling

and Completions, 17.4% are primarily involved in Geophysics and 15.2% identified their job function as

Reservoir and Petroleum Engineering.

PRIMARY

WORK REGION

GLOBAL MOBILITY JOB FUNCTIONS

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2014 Salary Report

2% 2%

39%

48%

9% None

High School Graduate

Bachelor Degree orUndergraduate Degree

MBA or Masters

PHD / MD / JD orInternational equivalent

7%

11%

17%

17%9%

39%

0 - 1 years

1 - 5 years

6 - 10 years

11 - 15 years

16 - 20 years

21+ years

7%

13%

15%

41%

15%

9%Owner / Executive / C-Level

Senior Management

Middle Management

Senior Technical

Intermediate

Entry Level

Most respondents (39.1%) have more than 20 years of experience, while 34.8% have 6 – 15 years, 17.4%

have 0 – 5 years, and 8.7% have 16 – 20 years of experience.

Nearly half of the respondents (47.8%) hold an MBA or Masters, 39.1% have a Bachelors or Undergraduate

Degree, less than one tenth (8.7%) have a PhD or doctorate and 4.3% have a high school diploma or less.

The majority of the respondents (41.3%) are at a Senior Technical level within their organization. More than

19% are either Owners, Executives or Senior Management and 15.2% are Middle Management. More than

15% are Intermediate and less than 9% are Entry Level.

7%

11%

17%

17%9%

39%

Y E A R S O F E X P E R I E N C E

0 - 1 years

1 - 5 years

6 - 10 years

11 - 15 years

16 - 20 years

21+ years

7%

13%

15%

41%

15%

9%

T I T L E / S E N I O R I T Y

Owner / Executive / C-Level

Senior Management

Middle Management

Senior Technical

Intermediate

Entry Level

YEARS OF

EXPERIENCE

EDUCATION

TITLE/SENIORITY

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2014 Salary Report

82%

9%

9%

Full Time

Part Time

Rotation

56%

21%

23%

Onshore

Offshore

Other

Respondents were asked to provide their work status: 82.6% reported that they are full-time employees,

2.7% are part-time, 10.3% are on rotation and 4.4% are self-employed.

More than half of the respondents represent the onshore sector (55.81%), while about one fifth represent

the offshore sector (20.93%) and just under a quarter of the respondents (23.26%) represent both industries.

According to the survey, there is a relatively normal distribution of employees working at different sizes of

company. More than a quarter of respondents (32.6%) work for a small company with between 0 – 20

employees and more than a quarter (30.4%) work for a larger organization with >2000 employees.

WORK STATUS

0.00%

10.00%

20.00%

30.00%

40.00%

0 - 20 21 - 100 101 - 500 501 - 1000 1001 - 2000 2000+

SIZE OF ORGANIZATION

SECTOR

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2014 Salary Report

Definition of Salary An individual’s salary package refers to their annual base salary or fees, guaranteed and/or anticipated

bonus, commission earnings or allowances, and benefits.

Basic salary, or base pay, refers to an individual’s annual fixed income, i.e. the amount paid to an employee

prior to any additional performance, overtime, or other payouts are added to the salary. Base pay is usually

paid to the employee on a monthly or bimonthly basis.

Bonus payments, or incentive-based compensation, is extra compensation or shares paid to an employee

as a reward for meeting measured performance goals. Short Term Incentive Plans (STIPs) are typically tied

to an employee’s individual performance over a given timeframe and are paid on an annual, quarterly or

project-related basis. Long Term Incentive Plans (LTIPs), on the other hand, are typically based on the

company’s performance or on an employee’s tenure with the company, i.e. stock options that vest over a

certain period of time.

Benefits typically include a pension or retirement plan, vacation time or paid time off (PTO), health coverage,

and other savings plans. In most countries, employers are required to contribute a certain percentage of

their employee’s annual base salary to their retirement fund.

NB: Data collected in local currencies have been converted to US dollars (USD) using the exchange rate as of

20 April 2014, which is the effective date of this year’s data. Salary information and other data in the report

are entirely self-reported.

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2014 Salary Report

Definition of Functions 3P focuses on the provision of Geologists, Geophysicists, Petrophysicists, Reservoir Engineers, Petroleum

Engineers, Production Operations, Drilling and Completions Engineers, Facilities / Project Engineers and HSE

professionals to our global partners in the exploration & production sector.

Geologists Petroleum Geologists conduct research on the kind of rock below the ground’s surface to determine if it is

organically rich enough to hold precursors to hydrocarbons. They are involved with the exploration,

development and production of oil and gas, specifically by mapping or searching for oil and gas locations.

Exploration / New Ventures Geologists are tasked with exploring new basins and often work with very

minimal data, relying on studies of similar depositional settings rock types, burial history, and tectonics to

support their studies and recommendations. Development Geologists conduct basin modeling and history

matching in order to create field development plans and recommend drilling locations in core areas that

are relatively close to existing producing wells. Production Geologists are responsible for the continued

production of various existing oil and gas wells, i.e. picking perforation intervals and suggest recompletions

for existing wellbores. Operations Geologists are typically on-site studying rock cuttings, core samples and

wireline data from oil and gas wells to conduct real-time or measure-while-drilling (MWD) analysis.

Geophysicists Geophysicists utilize mathematical methods to create a greater picture of the reservoir by sampling

(acquiring), processing, and interpreting seismic data that link the quantifiable physical properties of the

earth’s structure to the characteristics of the geological formation. Geophysicists take into account the

Earth’s geological structure and tectonics, i.e. rock formations, as well as fluid dynamics, such as

gravitational, electric and magnetic fields. Geophysicists are responsible for the integration of well, seismic,

geological and other field data to conduct hydrocarbon volume assessments and risking processes in order

to evaluate new acreage opportunities and/or growth areas around existing assets. They also construct and

support economic analyses for value-of-data, risk mitigation, and hydrocarbon exploitation.

Petrophysicists Petrophysicists incorporate the data of reservoir engineers and geoscientists to better understand the rock

properties of the reservoir, i.e. the lithology, porosity, water saturation, permeability and density, in order

to understand the deposits that trap and allow hydrocarbons to migrate. They typically have an

understanding of open and cased-hole log applications, interpretation, and core analysis in order to provide

support for logging operations. They utilize wireline or logging-while-drilling (LWD) methods to understand

downhole properties, in addition to utilizing reservoir studies to create a complete picture of the reservoir.

Reservoir / Petroleum Engineers Reservoir or Petroleum Engineers play a central role in evaluating the production potential of a field and

developing plans to optimize the extraction of hydrocarbons. This is known as “field development planning,”

which involves recommending well placement and cost-effective reservoir depletion schemes (such as

waterflooding or gas injection) in order to enhance the flow of hydrocarbons to the pipeline and maximize

recovery. Reservoir Engineers conduct numerical reservoir simulation modeling, well testing, workover

planning, economic modeling, and decline and PVT analysis to study the physical behavior of the reservoir’s

properties. This enables them to evaluate potential risks and estimate the recoverable volumes of

hydrocarbons, which is reported to the SEC.

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2014 Salary Report

Production and Operations Production Operations Engineers manage the interface between the reservoir and the well in order to

increase production revenue and lower operating costs. They conduct integrated asset modeling or flow

assurance analysis and observe perforations, sand control, downhole flow control, and downhole

monitoring equipment in order to optimize completion design and injection or artificial lift methods. They

also perform surveillance of the field to evaluate the overall production performance and ensure that the

operations are compliant with environmental code.

Drilling and Completions Engineers Drilling and Completions Engineers ensure that the design and operations of drilling programs are safe and

cost-efficient. Drilling and Completions Engineers work closely with the operations teams and service

providers to manage the technical aspects of the rig, i.e. casing sizes, setting depths, drilling fluids,

directional drilling, and drill bit programs. Drilling Engineers work on the design of well programs, including

cost-estimates, blow-out prevention and formation evaluation. Completions Engineers are tasked with

implementing optimization design techniques to maximize production.

Process and Facilities Engineers Process and Facilities Engineers are charged with the design, construction and maintenance of utilities and

systems to transport, and the storage and processing of hydrocarbons once they have been extracted from

the ground. They focus on quality control, scheduling and budgets, and are responsible for equipment and

systems from the wellhead to the delivery point of oil and gas. Process Engineers focus on the design and

construction projects of facilities. During the design phase, they work closely with specialized mechanical,

electrical, and chemical engineers, as well as Production Operations Engineers and HSE professionals (see

below) to ensure that the design is up to code. Facilities Engineers, on the other hand, tend to be tasked

with overall optimization of the operating system and are required to troubleshoot issues in new and

existing oil and gas facilities. Facilities Engineers often work with Reservoir and Petroleum Engineers to

discuss capacity issues.

Health, Safety and Environment Professionals Health, Safety and Environment (HSE) professionals are responsible for ensuring that the oil and gas drilling

operations are compliant with government regulations and safety codes. They provide guidelines for the

safe production and treatment of oil and gas resources. Their responsibilities include implementing safety

programs, inspecting and maintaining equipment and identifying potential hazards. They must possess

knowledge of health and safety laws, industrial processes, chemistry, and mechanics. HSE professionals can

either work in-house or represent a government agency, such as the US Occupational Safety and Health

Administration (OSHA) and are responsible for reporting on the safety of the equipment, buildings,

procedures, chemical use of handling, as well as records of past issues or accidents.

Commercial / Business Development Professionals Business / Commercial Analysts, Economists, and third-party evaluation professionals are tasked with

assessing and improving the financial efficiency of an organization. They are responsible for financial

analysis involving working capital/cash flow, market variances, A&D activity, key performance indicators,

financial modeling, and reporting. They compare the company’s performance against their competitors to

gain a better understanding of the company’s strengths, weaknesses, opportunities, and threats, and then

present their analysis to the senior management team. Identifying new market opportunities and

maintaining existing relationships are the keys to business development and the creation of long-term value

for an organization.

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2014 Salary Report

Market Overview Salaries differed across the globe due to fluctuating commodity prices, government regulation, variable

costs of living and the availability, or lack thereof, of pipelines and/or storage facilities. However, one trend

remains consistent: the increasing competition for skilled oil and gas professionals.

Australian salaries are, on average, the highest, in correlation with the higher cost of living and personal

income tax rates as well as an advancement in natural gas production. According to the Energy Information

Administration (EIA), Australia was the third largest exporter of liquefied natural gas (LNG) in 2012. The

spike in natural gas production and LNG capacity is a result of the decline in oil production from mature

basins since 2000. Australia is increasingly dependent on oil imports and new natural gas developments,

including coal seam gas (CSG) and shale. However, companies producing CSG and LNG have failed to

cooperate in the development of their processing infrastructure, which means that projects and subsequent

hiring in the oil and gas sector, have been ramping down since late 2013.

The oil and gas job market in the United States is projected to experience unparalleled growth in 2014 due

to the enhancement of operational efficiency and facility expansion in areas such as North Dakota and

California, which are enjoying the successes of the shale boom. An IHS Global Insight Report described the

US market as an improving economy — 1.7 million jobs were created by unconventional oil and gas

production in 2012, anticipated to grow to 2.5 million by 2015 and nearly 3.5 million by 2035. The Petroleum

Human Resources Council of Canada predicts a 9 - 20% increase of upstream and midstream professionals

by 2022. As gas prices make a slow recovery, the stress on the Canadian job market is lifting. However, if

the Northern Gateway and Energy East pipelines get the green light, then we may see a significant shift in

this trend. Delays in major projects such as the Keystone Pipeline project threaten more than 42,000

construction jobs.

The British Government lifted the moratorium on shale gas fracking in December 2012. The British

Geological Survey estimates between 822Tcf and 2,281 Tcf of natural gas in the Bowland Basin and in May

2013 a report by the UK’s Institute of Directors estimated that shale gas in the UK could create

approximately 74,000 new jobs. Other parts of Europe, such as Norway and the Netherlands also seem

optimistic due to the anticipated growth of offshore infrastructure in the North Sea. However, in Eastern

Europe, the market is stalling due to tensions between Russia and the Ukraine. Large international and state-

owned operators with interests in the Skifska gas field have put the exploration project in the Black Sea on

hold.

Emerging markets such as Asia, The Middle East and Africa anticipate continued growth in the petroleum

industry. China is the world's second-largest oil consumer behind the United States. The US Energy

Information Administration projects that China will surpass the United States as the largest net oil importer

by 2014, in part due to China's rising oil consumption. The Middle Eastern oil and gas job market continues

to grow despite political uncertainty in the region. The Gulf Cooperation Countries (GCC) saw as much as a

25% increase in hiring levels in 2012. The African continent has experienced limited success in oil and natural

gas exploration until recently. Kenya, having always played a vital role in the region as an oil transit hub, is

seeking to strengthen its role by making a multi-million dollar investment in its midstream and downstream

capacity.

The increase in jobs across all regions can be attributed to differing commodity prices, regulatory

environments, enhanced technology and increased construction. Employers are now faced with the

challenges associated with the increased global demand for skilled petroleum professionals with between

2014 Salary Report Page 9 / 12 3P Energy Partners, LLC

2014 Salary Report

5 – 20 years of experience. Employers are now forced to utilize international candidate mobility and

recruitment drives as well as deploying retention tactics, such as LTIPs and career development.

Survey Results Average Base Pay: Geoscience (Geologists, Geophysicists and Petrophysicists)

Years of Experience HIGH AVERAGE LOW

0 – 5 $145,000 $110,000 $60,000

6 – 10 $180,000 $134,000 $119,000

11 – 15 $215,000 $151,000 $120,000

16 – 20 $230,000 $191,000 $165,000

21+ $260,000 $206,000 $179,000

Average Base Pay: Engineers (Reservoir / Petroleum, Production / Operations, Drilling &

Completions, Facilities & Process)

Years of Experience HIGH AVERAGE LOW

0 – 5 $131,000 $93,000 $72,000

6 – 10 $169,000 $138,000 $91,000

11 – 15 $202,000 $173,000 $131,000

16 – 20 $234,000 $184,000 $157,000

21+ $255,000 $195,000 $173,000

Average Basic Pay: Commercial, Finance and Business Development

Years of Experience HIGH AVERAGE LOW

0 – 5 $125,000 $82,000 $64,000

6 – 10 $185,000 $136,000 $126,000

11 – 15 $206,000 $136,000 $126,000

16 – 20 $247,000 $202,000 $168,000

21+ $263,0000 $220,000 $184,000

Average Basic Pay: Health, Safety & Environment

Years of Experience HIGH AVERAGE LOW

0 – 5 $106,000 $93,000 $66,000

6 – 10 $137,000 $115,000 $78,000

11 – 15 $167,000 $141,000 $133,000

16 – 20 $175,000 $156,000 $147,000

21+ $193,000 $164,000 $157,000

Average Basic Pay: Management

Seniority HIGH AVERAGE LOW

Middle Management $270,000 $255,000 $222,000

Senior Management $322,000 $290,000 $226,000

Owner or Executive $363,000 $286,000 $252,000

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2014 Salary Report

This survey reveals correlations between an individual’s base salary and years of experience as well as

highest level of education.

We did not find a significant correlation between an individual’s base salary and title. There appeared to be

a greater correlation between an individual’s title and their access to other forms of remuneration including

bonus and equity. However, we did see a correlation between an individual’s title and years of experience.

012345

BASE SALARY VS. YEARS OF EXPERIENCE

0-1 1-5 years 6-10 years 11-15 years 16-20 years >20 years

0%2%4%6%8%

10%12%

BASIC SALARY VS. QUALIFICATIONBachelors Masters PHD High School Grad

0

2

4

6

8

10

0-1 years 1-5 years 6-10 years 11-15 years 16-20 years 20+

YEARS OF EXPERIENCE VS. TITLE / SENIORITY

Entry Level IntermediateMiddle Management Senior ManagementSenior Technical Owner/Executive/ C-Level

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2014 Salary Report

There were also correlations between the years of experience and the decision to work on a full time, part

time, or rotational basis.

Summary o The average respondent had more than 21 years of experience.

o The average base salary for technical staff was $155,890.

o The average bonus payment in 2013 was 11.35%

o The average pension payment was 4.6%

o The average anticipated salary increase of base salary payment for 2014 was 7.8%

o The most common reasons for employees leaving their place of work were: career development,

salary, and culture.

o Increased competition for skilled workers on an international scale has led to an overall increase in

global mobility.

0

2

4

6

8

10

12

0-1 years 1-5 years 6-10 years 11-15 years 16-20 years 20+

YEARS OF EXPERIENCE VS. WORK SCHEDULE

Part Time Rotation Full Time

2014 Salary Report Page 12 / 12 3P Energy Partners, LLC

2014 Salary Report

About 3P Energy Partners “3P” refers to the total amount of reserves in which a company has access, i.e. the sum of all “Proven,

Probable and Possible reserves.”

3P Energy Partners prefer to head hunt candidates that are specific to our client’s need. We are able to

provide our clients with a broader talent pool by targeting probable and possible resources, i.e. head

hunted candidates, as well as proven candidates, i.e. those who are actively seeking new opportunities.

Functional Focus Geologists

Geophysicists

Petrophysicists

Reservoir Engineers

Petroleum Engineers

Production Engineers

Wellsite Operations

Drilling Engineers

Completions Engineers

Facilities / Project Engineers

Health, Safety and Environment

Service Solutions Retained – Search and Selection

Permanent Placement

Contract or Fixed Fee

Offices Australia

Suite 2, Level 2

Piccadilly Court

222 Pitt Street

Sydney, NSW 2000

North America

Mezzanine Level

113 N Church Street

Visalia, CA 93291, USA

United Kingdom

Arena House

66-68 Pentonville Road

London, N1 9HS, England

Contact 3P Phone: +1 (559) 713 6336

Email: info@3penergypartners.com