Commercial Policy CM-2.

4-2009Jun09-EXT
Rev. 4 – 23 January 2017

Grant Prideco™
NOV Wellbore Technologies
Product Management Dept.
10100 Houston Oaks Dr.
Houston, TX 77064
+1 (281) 921-3600 main
nov.com/grantprideco/

Commercial Terms and Conditions for Conversion of

Grant Prideco™ Drill Stem Products

Definition
For purposes of this document conversion is defined as: the practice of applying a Grant Prideco
(GP) proprietary rotary shouldered connection on drill pipe, HWDP or drill collars that are
different from the original end condition.

Products
On a case by case basis and only with the approval of Grant Prideco Product Management group,
the following proprietary connections, may be cut on non-Grant Prideco tubulars: GPDS™, HT™,
XT™, XT-F™, XT-M™, Delta™, uGPDS™, uXT™, GT-M™, SST™, SRT™. Other premium connections
may be approved for conversion at the discretion of Product Management. Conversion to
TurboTorque™ and TurboTorque™-M and MaXit™ connections will not be allowed.

Policy
Grant Prideco may allow the conversion of a competitor’s tubular product on a case by case basis
to allow customers remedy of an unforeseen delay in product delivery or demand. Conversion
may not be approved on competitor-manufactured material that competes directly with Grant
Prideco premium product lines.

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Conditions
GP will permit conversions provided that all the conditions listed below are satisfied:

 The drill pipe or drill stem component subject to conversion must meet the requirements
of “Grant Prideco Recommended Practice for Mechanical Properties of Drill Stem
Components”, reference Product Bulletin LA-6.XX-2009May08-EXT (latest revision). GP
original manufacture material is strongly preferred. The customer shall provide GP’s order
confirmation number for the original order OR complete material certifications for the
material if the material is not of Grant Prideco origin.
 Drill pipe for conversion must be API Premium or New class. Other components for
conversion must be of suitable quality with only reasonable wear to insure they will
provide suitable performance when threaded with Grant Prideco’s premium connections.
It is the customer’s responsibility to ensure the drill pipe and/or drill stem components
are inspected, of acceptable quality and have no other wear or damage that might make
the component unsuited for the intended applications. GP reserves the right to examine
and inspect and the right, but not the obligation, to reject product as unsuitable for
conversion based on its quality, appearance, condition of wear, past history or other
criteria that may adversely affect its performance capabilities. Verification of product
condition to meet this requirement must remain the customer’s responsibility, some
forms of damage may not be apparent from industry available inspection equipment and
techniques, such (but not limited to) exposure to corrosive environments, fatigue loading
or detrimental operating conditions.
 The tool joint/connection dimensional parameters must be acceptable for the connection
to be applied. A customer interested in converting a drill string or component shall
provide the tool joint/connection dimensional parameters to GP’s Product Management
for approval.
 Conversion work is commercially distinct from typical repair and accessory manufacturing
necessary to support GP drill stem products in the field. Conversions require engineering
evaluation pricing considerations including a conversion fee, above normal repair and
accessory manufacturing operations. Quotations for conversion should be obtained
directly from GP. Conversion fees will be invoiced directly by GP. If a licensee provides the
conversion the licensee will invoice for the machine work and GP will separately invoice
for the conversion fee.
 A Grant Prideco approved manufacturing facility must perform all conversions. NOV
facilities will be given first priority. If pipe location and logistics dictate, a qualified NOV
GP licensee may provide the conversion with the approval of the NOV GP Product
Manager. GP licensees cannot quote or provide conversion jobs without permission from
GP.

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Determination of the Conversion Fee
The conversion fee is determined from the current per foot adder for a GP proprietary
connection.

For example:

 Assume a particular drill pipe originally made by GP with an API connection sells for
$60.00/foot.
 The same drill pipe with a GPDS connection might sell for $2.75 more per foot or $62.75.
 Assuming Range 2, the conversion charge per end would be $44.00/ each, (=2.75*32/2).
 This conversion fee for API to GPDS is in addition to the machine shop charge for re-
cutting the connection.

If you convert from a proprietary connection to a more expensive one (GPDS to XT for example)
we apply the difference in the current connection adders. The customer would get credit for
paying the GPDS adder as part of the original purchase. If you convert from a premium connection
to a less expensive one (XT-M to XT for example) no conversion fee is required.

If the product was not originally built by GP, a different conversion fee may apply that will be
communicated to the customer with our decision to accept the conversion.

Author Marketing & Product Management Jim Brock

Approval Marketing & Product Management Guillaume Plessis
Product Engineering Dan Hannahs
Marketing and Sales Services Nelson Allen

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