Global Presentation

© 2011 Lufkin Industries, Inc.

 Company Overview

Businesses: Energy Service Company

Oil and Gas Artificial Lift
Provides products, services and automation for multiple
forms of artificial lift in global turnkey applications for oil &
gas production. Traditionally known for beam pumping
units for rod lift, now offers gas lift and plunger lift.

Mechanical Power Transmission

Serving the energy and industrial sectors with engineered
gearing solutions and fluid film bearings.

Ticker NASDAQ: LUFK

Market Cap (9/22/11) $1.7 billion
Stock Price (9/22/11) $56.82
Annual Dividend $0.50
Countries Served 40+
Employees 3,382
Headquarters Lufkin, Texas
© 2011 Lufkin Industries, Inc. 2
 Key Lufkin Milestones

1902 – Lufkin founded to manufacture railroad & sawmill equipment

1925 – Launched pumping unit manufacturing business

1939 – Acquired Martin Wagon Co., establishing trailer business

1939 – Created industrial gear businesses to serve mill customers

1990 – Became a publicly traded company

1997 – Acquired Fannie Lee Mitchell, an oil field service company

1998 – Acquired Comelor, French gear manufacturer

1998 – Acquired Nabla, establishing oil field automation business

1999 – Acquired Delta-X (expands oil field automation)

2003 – Acquired Lufkin Argentina

2008 – Exited trailer business

2009 – (Mar) Acquired International Lift Systems (ILS)

2009 – (Jul) Acquired Rotating Machinery Technology (RMT)

2010 – (Nov) Acquired Petro Hydraulic Lift Systems (PHL)

2011 – (Aug) Acquired Pentagon Optimization Services, Inc.

2011 – (Sep) Announced Quinn’s Oilfield Supply Acquisition

© 2011 Lufkin Industries, Inc.

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 Times have changed

2009 – March

Acquired International Lift Systems (ILS)

2009 – July

Acquired Rotating Machinery Technology (RMT)

2010 – November

Acquired Petro Hydraulic Lift Systems (PHL)

2011 – August

Acquired Pentagon Optimization Services, Inc.

2011 – September

Acquired Quinn’s Oilfield Supply Acquisition

2012 – February

Acquired Datac/Realflex
2012– March

Acquired Zenith

© 2012 Lufkin Industries, Inc.

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Power Transmission Sectors

© 2011 Lufkin Industries, Inc.

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 Global Artificial Lift Market

• $6.4 billion in 2010

• With acquisitions, Lufkin’s share of rod lift market based on revenue equals 36%
• Plunger, Gas Lift and Hydraulic share ~ 10%

2%

20% ESP ($3,635)

PCP ($487)

Other ($355)

4% Gas Lift ($265)

4% 57% Plunger Lift ($255)

6% Rod Lift ($1,245)

8% Hydraulic ($135)

Source: Spears & Associates, 43%

Oilfield Market Report, October 2010
© 2011 Lufkin Industries, Inc. 6
Geographic Expansion: Romania Project Update

Machining / Fabrication Facility

Aftermarket
Fa cility / Offic
es

Main Pl
ant Offices

© 2011 Lufkin Industries, Inc.

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 Artificial Lift Products and Services

© 2011 Lufkin Industries, Inc.

Artificial Lift

Rod Lift

Lufkin Products
• Beam Pumping Units
• Sucker Rod Pumps
• Automation
• Service
• Completion Products (Tubing Anchors)

Rod lift is best suited for the following

range of conditions:
•Operating Depth: 100’ to 16,000’
•Operating Volume: 5 – 5,000 BPD
•Operating Temperature: 100°-550° F
•Corrosion Handling: Good to Excellent
•Primarily Onshore Application
• Limitations: High Production Volumes,
Highly deviated wells

© 2011 Lufkin Industries, Inc.

Artificial Lift

Gas Lift & Gas Well Deliquification

Lufkin Products
• Mandrels
• Valves
• Packers

Gas Lift is best suited for the

following range of conditions:
• Operating Depth: 5,000’ to 15,000’
• Operating Volume: 50 – 30,000 BPD
• Operating Temperature: 100°-400° F
• Corrosion Handling: Good to Excellent
• Excellent offshore application;
also used onshore
• Limitations: Requires Gas Infrastructure,
Not Practical to Well Depletion

© 2011 Lufkin Industries, Inc.

Artificial Lift

Plunger Lift

Lufkin Products
• Plungers
• Lubricators
• Controllers

Plunger Lift is best suited for the following

range of conditions:
• Operating Depth: 1,000’ to 19,000’
• Operating Volume: 1 – 200 BPD
• Operating Temperature: 100°-400° F
• Corrosion Handling: Excellent
• Onshore application
• Limitations: Production Rate, Adjustability

© 2011 Lufkin Industries, Inc.

Artificial Lift

Progressive Cavity Pump

Lufkin Products
• Controller
• Drive Heads
• PCP Pumps

Progressive Cavity Pump is best suited for

the following range of conditions:
•Operating Depth: 500’ to 10,000’
•Operating Volume: 5 – 3,000 BPD
•Operating Temperature: 75°-250° F
•Corrosion Handling: Fair
•Can be used onshore or offshore
• Limitations: Chemicals, Gas, Temperature,
Production Rate, Reliability, High
Production Volumes, Highly deviated wells

© 2011 Lufkin Industries, Inc.

Artificial Lift

Services

Lufkin Services offers high quality and high

value to maximize productivity and efficiency
• Globally located in key-producing regions
• Quick response time
• Trained service technicians with safety as a
priority

Services Offered:
•Well analysis to ensure proper Artificial Lift
application
•Installation
•OEM replacement parts
•Pumping unit repair (all brands)
•Inspection and Preventative Maintenance
•Machine shop repair
•Customer training opportunities by industry
experts

© 2011 Lufkin Industries, Inc.

Artificial Lift

Automation

Field Automation and Well Optimization

•Increases operating performance and
optimizes well efficiency
•Reduces lifting costs
•Maximizes return on producing assets

Products and Services:

• Pump-off controllers
• Injection well controllers
• Progressing Cavity Pump controllers
• Variable speed drives
• Motor control panels
• Design/Analysis software

© 2011 Lufkin Industries, Inc.

 Optimization-Desired Benefits
Increased production

• Improved production rate

• Extended run-life of equipment - Less production interruptions

Reduced costs

• Increased lift efficiency by minimizing energy usage

• Less maintenance, run/pull work (minimizing HSE associated costs)

• Less additional CAPEX to replace equipment (extended equipment life)

Decline Curve
Increase producing time - Decrease downtime
Optimized artificial lift
configuration
Volume

time
Artificial Lift Support

Secure SCADA

• Pipeline SCADA Systems

• Wellhead Control Systems
• Platform Automation
• Pipeline Management Solutions
• Water / Wastewater
• Power / Utilities

© 2012 Lufkin Industries, Inc.

Artificial Lift Support

Well Monitoring

• Artificial Lift Monitoring Systems

• Reservoir Monitoring Systems
• ESP Bypass Systems
• Auto Flow Valves
• Specialty and Dual ESP
Completions
• Z-Sight Auto Well Surveillance
System
• Z-Trendz Data Management

© 2012 Lufkin Industries, Inc.

Questions & Answers