The strength of a company's commitment to health, safety and the environment is determined by the conviction
of its management and the execution of its HSE system by all of its employees. A well-conceived, constantly
evolving and improving HSE Management System is critical to providing a timely, relevant framework for
excellence in HSE standards and performance. INTERSTATE implemented a completely new HSE Management
System in November, 2003. Not only has this new system served as a detailed reference for our HSE
philosophy and performance requirements, it also contains detailed evaluation tools to measure constant
improvement in HSE performance. We are determined to be the leader in HSE performance in industry. The
Company's HSE Management System has been designed to be world-class, to the benefit of the Company, its
employees and our customers. We will settle for nothing less.

Element One: Commitment, Leadership, and Accountability
Element One of the HSE Management System defines INTERSTATE's commitments to health, safety and the
environment at both a Company and personal level. Our employees are the Company's most important asset.
Preventing occupational injuries and illnesses and protection of the environment are of such consequence that
management will provide all the facilities and support reasonably required to ensure success. INTERSTATE's
Management accepts the responsibility for leadership of the health, safety and environmental program, for its
effectiveness and improvement and for providing for the safeguards required to ensure safe, environmentally
responsible working conditions. The Company's ultimate goal is to eliminate all injuries and environmental
incidents from the work place. "It is our mission to improve the positive HSE culture that already exists within our
company. We must encourage active and visible employee participation in HSE programs, promote creative
solutions to HSE issues and involve everyone in our workforce in the decision-making process." – Riaz Ahmad
Malik, Director

Element Two: Policies and Objectives
Element Two consists of policies and objectives. The policies are INTERSTATE's global statements of intent for
health, safety and environmental protection. They are the standards INTERSTATE has set and will meet.
Guided by the policies, employees will set objectives for all functions, departments and locations within the
company. As a Company and on an individual employee level, we will monitor and measure our HSE
performance to ensure that we are continually meeting objectives and improving the system.

Element Three: Organization and Responsibilities
Under INTERSTATE's HSE Management System, every individual employee is individually responsible for
working safely, in an environmentally responsible manner and ensuring that fellow employees do the same. HSE
responsibilities have the same priority as operational decisions and they must be treated with equal importance.
Management accepts the responsibility for leadership of the health, safety and environmental program, for its
effectiveness and improvement, and for providing for the safeguards required to ensure safe, environmentally
responsible conditions.
Supervisors are responsible for developing the proper attitudes towards health, safety and environment in them
as well as directing those whom they supervise toward this goal. Supervisors are responsible locally for
ensuring that all operations are performed with the utmost regard for the health and safety of personnel and
protection of the environment.
All employees are responsible for wholehearted, genuine cooperation with every aspect of the health, safety
and environmental program. This includes compliance with all rules and regulations and continuous, safe,
environmentally responsible job performance.

Element Four: Design and Planning
Good HSE practices do not just happen. They have to be properly planned and executed. They should never
be treated as afterthoughts. INTERSTATE employees and management must consider HSE implications at each
stage of the planning process in everything they do. No job is so urgent or so important that it is worth the risk
of injury to any individual or damage to the environment. The Company's goal is to eliminate significant risk
during the planning process.

Element Five: Risk Assessment and Management
Risk assessment and risk management are a pro-active, aggressive approach to HSE issues. Rather than
focusing on accident statistics, the Company focuses primarily on the identification of hazards, the assessment
of risks and the control of those risks to prevent accidents from happening. The difference between an accident
and a near miss is often just plain luck. INTERSTATE cannot have a safe, successful environmentally
responsible operation based on luck. The Company must ensure that all HSE incidents are reported and
thoroughly investigated. We all must use what we learn from these incidents to prevent them from ever recurring.

Element Six: Contractor and Supplier Management
Whenever INTERSTATE uses third-parties to supply materials, equipment or services, the Company must
ensure that these third parties meet the standards of excellence INTERSTATE and our customers require. In
evaluating potential contractors we must ask, “How well do they demonstrate and adhere to effective HSE
practices? Can they conduct their services in a manner that is consistent with INTERSTATE HSE policies and
with the contractual requirements of the work they are performing?" We are judged not only on the performance
of our employees but also on the overall performance of our contractors. Element 6 provides a uniform
evaluation system for contractors.

Element Seven: Safe Systems of Work
Safe systems of work include both safety and occupational health issues. Element Seven provides information
and guidance on safety issues related to the purchase and use of work equipment, work permits, lockout/tag
out, confined-space entry, transport of hazardous materials, driver safety and other key safety issues. An
effective management of change process is also an integral part of employee safety. The occupational health
section covers information and guidance on medical services, personnel exposure to physical, chemical and
biological hazards and more specific issues such as the safe handling of drilling and completion fluids.
INTERSTATE developed these procedures to eliminate or minimize the HSE risks associated with our
operational processes.

Element Eight: Documentation and Performance Reviews
Element Eight details a complete system for incident reporting, documentation and investigation. It also covers
information management and records. The past is prologue. Only by learning from their mistakes and
communicating what they learn can employees prevent re-occurrence of injuries and environmental incidents.
By maintaining detailed, accurate records INTERSTATE will target, measure and report on specific operations
so we can benchmark our performance and make sure that INTERSTATE is always improving. Finally, this
element details safety incentive programs.

Element Nine: Monitoring and Continual Improvement
Element Nine provides a system of assessment, monitoring and continuous improvement of the HSE
Management System itself. The information obtained during assessments (both comprehensive inspections and
audits) is used to improve performance. Following assessments, we develop action plans. The effectiveness of
the action plans is documented in subsequent management reports and regular management reviews. Key HSE
lessons learned are shared throughout the worldwide INTERSTATE network.
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