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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