COVER STORY

Kudos
To Kudu
Industries
For 20 Years of
Innovation

From their residential garage in Calgary

in 1989, Robert and Ray Mills have built
Kudu Industries Inc. from a father-son
operation into one that now employs 240
people, with a dozen locations in Canada
and an international presence. KUDU’S PCP SYSTEMS, WHICH INCORPO-
RATE UNIQUE EQUIPMENT FEATURES AND
Kudu is the first choice in artificial lift DESIGNS, OFFER THE RIGHT SOLUTION TO
through its Progressing Cavity Pumps (a PCP OPTIMIZE PRODUCTIVITY.
is a positive displacement pump without
valves that delivers a con-
sistent flow). The company Kudu’s PCP systems,
already has approximately which incorporate unique
20 patents, with two or equipment features and
three more in the works, designs, offer the right
the most by a PCP manu- solution to optimize
facturer anywhere. productivity (see profiles of
three Kudu products with
Robert Mills, P.Eng., this story).
was one of the first people
to start working on PCP From heavy sand-laden
development. He retired crude to high aromatic
from the company last light oil, from dewatering
year, but is still involved gas wells for coalbed meth-
as Chairman of Board “IT TAKES MORE WORK TO GET THE ane projects to high water
and is called in for special OIL OUT OF THE GROUND HERE,” cuts, from Steam-Assisted
projects, “He’s a great SAYS RAY MILLS, KUDU CEO. Gravity Drainage (SAGD)
ambassador,” says Ray. projects to horizontal,
8 The Roughneck • March 09
 COVER STORY
1977: Robert A.R Mills began
1979: The R&D on PCP systems for oil wells.
slant and directional wells, Kudu PCPs can
first PCP’s increase and improve production.
were installed 1989: KUDU Industries was
in Canada to founded by Robert and Ray
“It takes more work to get the oil out of
pump heavy, Mills to distribute PCP’s.
sand-laden the ground here,” says Ray Mills, CEO. “In
crude oil. 1989: KUDU opens first Canada we also have very high operating
office/shop outside of Calgary
costs compared to other countries so opera-
in Provost/Macklin.
tors are looking for cost-effective solutions
1992: KUDU introduces like PCPs.”
PCP’s to light oil markets and
1992: continues to lead in the application
KUDU opens of PCP’s in light oil wells.
Mills’ career with Kudu began as Sales
office/shop & Service Manager. His direct contact with
in Elk Point, 1993: KUDU quantifies energy company customers and their challenges
Alberta. associated with recoil on
led to innovations that greatly increased the
PCP’s and designs the first PCP
1993: KUDU Drivehead to safely dissipate economic life, in some cases by a factor of
opens office/ energy associated with recoil. two or three, of marginal medium and light
shop in oil wells.
Estevan, 1993: KUDU was selected by
Saskatchewan. Shell Oil’s research department
in The Hague to develop a PCP In 1993, Mills moved to California to lead
system with a RH-300 HP-30T Kudu’s growth strategy in the United States.
1994: KUDU Drivehead to lift 1000m3/day
opens office/ from 1700m wells in Oman.
The American market was difficult as PCP sys-
shop in Taber, tems were considered new technology, and
Alberta. 1997: Approximately 40% of as such, risky. Mills overcame the difficulties
Canada’s 50,000 oil wells are
and successfully introduced PCP technol-
using PCP’s for artificial lift and
Canada is 80% of the World ogy and established operations in California,
1997: market for this technology. Texas and Wyoming. Customers included:
KUDU opens Shell, PG & E, Unocal, Evergreen, Merit Oil &
office/shop
in Brooks, 1998: KUDU introduces a Gas and Kerr McGee.
Alberta. manufacturing concept known
as Lean Thinking (Toyota Mills returned to Canada in 1995 as Vice
manufacturing method).
President Sales & Operations. He imple-
1998: Operations are further mented an aggressive growth strategy that
streamlined through the doubled the size of the company by the end
1998: KUDU introduction of ISO 9001.
of 1997.
opens office/
shop in Slave
Lake, Alberta. 1999: KUDU acquires Chriscor But in 1998 Kudu needed to restructure
Downhole Tools and became as it was struggling with the sudden decline
the only PCP supplier that
manufactures all the
of the price of oil and the challenges left
components of a PCP system. over from its rapid growth. The company was
forced to lay off about half its staff.
2000: KUDU opens first
office/shop in Lloydminster,
Alberta/Saskatchewan. “We lost a lot of good people and a lot of
2001: KUDU opens office/shop momentum. I never want to do that again,”
in Kindersley, Saskatchewan. Mills tells The Roughneck.
The Roughneck • March 09 9
 THE PCP CONTROL ALGORITHM ENABLES THE WELL MANAGER TO CHANGE, MONITOR AND
MEASURE CRITICAL ELEMENTS TO ENSURE MAXIMUM PRODUCTIVITY IS ACHIEVED.

PCP WELL MANAGER – says. “If torque becomes an issue, the al-
MAXIMIZE PRODUCTION, gorithm takes control of the pump’s speed
AUTOMATICALLY MONITOR AND based on trend parameters.”
ADJUST PUMP SPEED & PROTECT
AGAINST PUMP OFF Key benefits are:

Introduced in 2008, Kudu’s PCP Well • Optimize well production;

Manager maximizes production through
smart well technology. Well Manager reacts
specifically to a customer’s operation by
adjusting pump speed, monitoring torque
and measuring flow rates. “Controlling
PCPs with the Well Manager helps reduce
premature pump failures due to pump off
and decreases the field monitoring of fluid
levels,” explains Kudu Industries CEO Ray
Mills. “The PCP Well Manager is CSA ap-
proved as well as IPC and ISO certified.”
The PCP control algorithm enables the
Well Manager to change, monitor and
measure critical elements to ensure maxi-
mum productivity is achieved. “The Well
Manager algorithm controls well speed
based on measured production rates,” he
10 The Roughneck • March 09
• Protect against pump off;
• Provide torque protection;
• Log historical data;
• Analyze well data and performance;
and
• User-friendly keypad and display.
The PCP Well Manager’s data logging
provides real-time centralized information
by using a Supervisory Control and Data
Acquisition (SCADA) system. This diag-
nostic tool enables the user to view and
implement changes remotely.
“SCADA offers a comprehensive inter-
face between the user and well by provid-
ing the information you want, when and
where you need it,” says Mills.

2001: Acquired
Marathon Power Units
2001:
KUDU 2002: Introduction of the PCM
opens Vulcain for thermal applications.
office/shop
in Kindersley, 2002: KUDU acquires
Saskatchewan. Dynamic Pump.
2003: KUDU opens
offices in Kazakhstan.
2003:
KUDU opens 2003: KUDU becomes a world
office/ class manufacturer winning the
shop in Innovation Insights Award from
Sedgewick, the National Research Council.
Alberta.
2004: KUDU opens
office in Australia.
2005: KUDU
opens office/
shop in 2006: KUDU and Husky Energy
Bonnyville, form a research partnership to
Alberta. develop automated swabbing
system for pumping oil wells. Testing
was completed in the same year
and was a technical success.
2006: KUDU re-opens
largest field store in
Lloydminster to service and
manufacture PCP equipment
for local heavy oil market.
2007: Introduction of Tough Coat
rotors a proprietary technology
that uses a spray metal coating
that provides significantly
2007: KUDU increased resistance to corrosion
opens office/ and abrasion compared to
shop in Peace the typical chrome rotor.
River, Alberta.
2008: Introduced the PCP Well
Manager that maximizes production
2008: using smart well technology.
Increased
operations 2008: KUDU leads R&D in
in Russia. PCP’s by holding over 20 patents
in the artificial lift field.
2008: KUDU is awarded
2008: KUDU Calgary Manufacturing Industry’s
opens an 2008 Best Employer for medium
office in sized manufacturers.
Oman.
2009: KUDU opens a
second office in Australia.
The Roughneck • March 09
COVER STORY
“We learned lessons from our near-
death experience in the late 1990s when
oil prices collapsed and we grew rapidly,
beyond our means,” he remembers. “First
and foremost it’s important to plan and
have everyone understand the plan. We
lost sight of that. We also had to upgrade
our management skills.”
To that end, Kudu got smart. It turned to
Lean Thinking and ISO.
LEAN THINKING & ISO
Robert and Ray Mills contacted Chuck
Harrision, a manufacturing consultant
and industrial technology advisor with the
Industrial Research Assistance Program.
An initiative of the National Research
Council, IRAP works closely with small- and
medium-sized enterprises, helping them
grow their businesses, increase their com-
petitiveness and enhance their impact in
the marketplace.
IRAP had previously helped Kudu to
hire engineering students for a number of
research projects. This time, however, IRAP
ushered in major changes for the way the
company went about its business. Harrison
pointed to the need for “lean manufactur-
ing,” maintaining a much smaller volume
of ready materials and products in order to
reduce overall operating costs.
“We don’t stockpile inventory on the
shop floor anymore,” says Ray Mills. “We have
overhead bridge cranes to move inventory
as needed. Consequently we have freed up
significant space. Now that we have room
on the floor, instead of contracting out our
machining, we purchased our own machine
tools, we’ve trained people and are doing
it ourselves.” Mills calls this transformation
“High Performance Culture.”
11
VULCAIN – THE HIGH
TEMPERATURE PCP
Enhanced oil recovery methods, such as
Steam-Assisted Gravity Drainage (SAGD),
Cyclic Steam Stimulation (CSS), steam drive,
solvent and electric heating, allow produc-
tion of highly viscous crude oil at elevated
temperatures. “The choice of artificial lift
technique is critical to overall well perfor-
mance,” says Ray Mills, who co-founded
Kudu Industries with his father Robert.
Since elastomer technology is tem-
perature-limited far below well require-
ments, Kudu’s solution is the Vulcain™, an
all-metal Progressing Cavity Pump (PCP)
first introduced in 2002, that extends the
temperature operating limit to 350°C.
“The current pump range covers produc-
tion rates of 30 cubic metres to 500 cubic
metres a day,” he explains. “And higher
capacity pumps are being developed.”
PCPs, with each comprised of a rotor
and stator with mating helical profiles, are
known for simplicity of design and ease of
operation. “The spinning rotor moves the
cavities up and produces fluid at a con-
stant head and variable rate depending
on the rotor RPM,” says Mills. “The Vulcain
consists of hydroformed metal stator and
matching rotor utilizing special metallurgy
to resist wear and maximize run life.”
Operating advantages include:
• Pumps a wide range of viscosities, tem-
peratures, pressures and flow rates;
• Ability to steam through the pump;
• No rod fall problems;
• Will not gas lock;
* Simple installation and operation;
• Continuous power demand;
• Low maintenance;
12 The Roughneck • March 09
• Low internal shear rates (less agitation
of fluid); and
• Low Net Positive Suction Head (NPSH).
PCPs, which typically use a third the
power of an electronic submersible pump
and half the power of a pump jack, have
a reduced environmental impact. Lower
power consumption means less green-
house gas associated with your operation.
“Our rotary seal packing diminishes the
risk of onsite leakage,” he says. “And the
system’s small footprint reduces its impact
on the landscape.”
Kudu can provide the complete pack-
age: Vulcain PCP, Kudu drivehead with oryx
seal, torque anchor, optional hollow rods
and the PCP Well Manager.
“Our driveheads are manufactured
in our ISO certified facility in Calgary.
The oryx seal is a critical element to the
thermal package due to its wide tempera-
ture range, zero leakage rate and minimal
environmental impact,” Mills explains. “The
PCP Well Manager optimizes produc-
tion by measuring flow rates, monitoring
torque and adjusting pump speed. It
utilizes smart well technology that reacts
to your well.”
CONTROLLING PCPS WITH THE WELL MANAGER
HELPS REDUCE PREMATURE PUMP FAILURES
DUE TO PUMP OFF AND DECREASES THE FIELD
MONITORING OF FLUID LEVELS.

Harrison also recommended that Kudu
adopt ISO-9001 standards, written proce-
dures to guarantee performance and quality
of production. This dramatic restructuring
also led to streamlined decision-making pro-
cesses, which entailed greater participation
by teams of people working closely together.
These changes vastly improved Kudu’s
prospects. Annual sales are impressive,
the firm made three acquisitions (Dy-
namic Pump, Chriscor Downhole Tools and
Marathon Power Units) and has almost no
bank debt.
EXCELLENCE RECOGNIZED
Kudu is now more sustainable, able to sur-
2 PM Page 1
vive a nine-month downturn with everyone
onboard. And there is the personal touch
with each and every customer. Highly trained
Kudu personnel make sure that all equip-
ment is properly installed so that maximum
results are realized.
At the moment the lion’s share of com-
pany business is domestic. That said, Kudu
is broadening the range of its products and
clients in the international marketplace. But
there is a learning curve, much like there
was in the early days in Canada, to enlighten
customers about the benefits of artificial lift,
especially when reduced production was
never a concern. PCPs are novel.
“We really have to work hard to get
people to listen, then there is follow up. That
hard work has paid off since we are the most
technically competent,” Mills explains. “When-
ever there’s a tough application, people turn
hrough innovativeto us.
designs ”that benefit KUDU holds over 20 patents usingtive
anadian field stores and multiple global This strong commitment for advancing Progressing Cavity Pump technology exemplifies
onds to your operating environment. KUDU’s dedication to quality and customer
ts have the best service standard in
Going
lable for troubleshooting international, most recently to
and training.
Mexico, has been a business panacea.
mize your production through smart
Butto the surface since 1989.
Bringing solutions
www.kudupump.com
usts pump speed,Canada is still
monitors torque and first and foremost.
ump failures due to pump off and the
ogged in real time and enables you to The Roughneck • March 09
COVER STORY
“My hope is to continue to grow here
at home and internationally,” Mills ac-
knowledges. “While the Western Canada
Sedimentary Basin is mature, there are still
opportunities for growth since it makes the
best business sense to get more production
from existing wells.”
Two other key company personnel are
Hans Gjerdrum, Director International
Business Development, and Kim Kappler,
P.Eng., Engineering Manager.
In addition to Kudu’s Calgary manufac-
turing centre and 12 Canadian locations
(Bonnyville, Brooks, Elk Point, Estevan,
Kindersley, Lloydminster, Macklin, Peace
River, Sedgewick, Slave Lake, Taber and Wa-
basca), it has offices in Kazakhstan, Russia,
Oman, South and Central America as well
as authorized agents and distributors in the
U.S., South America, Europe and Japan.
Kudu, which always focuses on safety
and quality, gives back by encouraging the
development of educational activities in
the communities where its employees and
customers work and live.
Kudu’s excellence has not gone un-
noticed. The National Research Council of
Canada awarded the company with the
Innovation Insights Award for manufactur-
ing practices. In addition, Kudu was named
as one of Canada’s Top 50 Best Managed
Private Companies in Canada.
Everyone at Kudu is in charge of ensuring
that customers here and around the world
are raving fans by understanding and meet-
ing their needs through providing innova-
PCPCavity
Progressing solutions, technical
Pumps in the artificial lift field. support and
performance. service.
13

FIVE YEARS OF FIELD TESTING PROVED TOUGH
COAT IS UNSCATHED BY ABRASIVE AND
CORROSIVE CONDITIONS.
LEAN MANUFACTURING MAINTAINS A MUCH
SMALLER VOLUME OF READY MATERIALS AND
PRODUCTS IN ORDER TO REDUCE OVERALL
OPERATING COSTS.
14 The Roughneck • March 09
”KUDU TOUGH COAT – REDEFINE
YOUR PCP
Tough Coat™ is a revolutionary spray
metal coating applied to PCP rotors using
advanced proprietary technology. “Tough
Coat rotors provide significantly improved
resistance to corrosion and abrasion com-
pared to the industry practice of electro-
plating chrome,” explains Ray Mills, who
has led Kudu through dynamic organiza-
tional changes to become a model of Lean
manufacturing. “The result is longer rotor
life with less degradation of efficiency over
time. The benefits are lower operation
expenses and higher production.”
Introduced in 2007, Tough Coat rotors,
which are excellent in highly corrosive
environments, provide long pump life,
low operating costs and high resistance
to abrasives. “Five years of field testing
proved Tough Coat is unscathed by abra-
sive and corrosive conditions,” he says.
Tough Coat rotors have been used
since 2003 for companies such as Harvest
Energy Trust, EnCana Corp., Talisman
Energy, Provident Energy Trust, CNRL, Rife
Resources, Apache Energy, Husky Energy,
Nexen, Penn West Energy Trust and Advan-
tage Energy Income Fund.