1. 2005 ANNUAL REPORT
C O O P E R C A M E R O N C O R P O R AT I O N • 2 0 0 5 A N N UA L R E P O RT
BALANCE
13 3 3 We s t Lo o p S o u t h • Su i t e 1 70 0 • H o u s t o n , Te x a s 7 70 2 7
7 13- 5 13-3 3 0 0 • w w w.c o o p e r c a m e r o n.c o m

2. DIRECTORS OFFICERS
SHELDON R. ERIKSON COOPER CAMERON CAMERON COOPER COMPRESSION
Chairman of the Board,
SHELDON R. ERIKSON JACK B. MOORE ROBERT J. RAJESKI
President and Chief Executive Officer,
Cooper Cameron Corporation Chairman, President and President* President**
Houston, Texas Chief Executive Officer
STEVEN P. BEATTY JEFFREY G. ALTAMARI
NATHAN M. AVERY FRANKLIN MYERS Vice President, Finance Vice President, Finance
STRUCTURE
Investor Senior Vice President and
HAROLD E. CONWAY, JR. JOHN C. BARTOS
Houston, Texas Chief Financial Officer
President, Drilling Systems Vice President, Engineering and
C. BAKER CUNNINGHAM R. SCOTT AMANN Product Development
HAL J. GOLDIE
President and Chief Executive Officer, Vice President,
RONALD J. FLECKNOE
Belden CDT Inc. (retired) Investor Relations President, Subsea Systems
The three divisions of Cooper Cameron offer balanced solutions to customers worldwide. Clayton, Missouri Vice President, Aftermarket Sales
WILLIAM C. LEMMER GARY M. HALVERSON
PETER J. FLUOR EDWARD E. ROPER
Vice President, President, Surface Systems
Chairman and Chief Executive Officer, General Counsel and Secretary Vice President, Marketing and
BRITT O. SCHMIDT
Texas Crude Energy, Inc. New Unit Sales
ERIK PEYRER
Houston, Texas Vice President and General
Cooper Cameron is a leading international manufacturer of oil and gas CYNTHIA D. SPARKMAN
Vice President, Manager, Flow Control
LAMAR NORSWORTHY
pressure control equipment, including valves, wellheads, controls, chokes, Business Development, Vice President,
S. JOE VINSON
Chairman and Chief Executive Officer, Asia Pacific and Middle East Human Resources
blowout preventers and assembled systems for oil and gas drilling, production Holly Corporation Vice President,
JANE C. SCHMITT RICHARD E. STEGALL
Dallas, Texas Human Resources
and transmission used in onshore, offshore and subsea applications, and Vice President, Vice President, Operations
MICHAEL E. PATRICK EDWARD E. WILL
Human Resources
provides oil and gas separation, metering and flow measurement equipment. WAYNE T. WOOTTON
Vice President and Chief Vice President, Marketing
CHARLES M. SLEDGE
Investment Officer, Vice President, Supply Chain
Cooper Cameron is also a leading manufacturer of centrifugal air compressors, Meadows Foundation, Inc. COOPER CAMERON VALVES
Vice President and
Dallas, Texas PETRECO
Corporate Controller
integral and separable gas compressors and turbochargers. JOHN D. CARNE
DAVID ROSS III DALTON L. THOMAS BRADFORD W. GOEBEL
President*
Investor Vice President, President
Houston, Texas WILLIAM B. FINDLAY
Cameron engineers and manufactures systems used in Cooper Compression makes engines and compressors Operations Support
LESLIE A. HILLER
President, Engineered Valves
BRUCE W. WILKINSON
oil and gas production and drilling in onshore, offshore for the oil and gas production, gas transmission and Vice President and General
Chairman and Chief Executive Officer, KEVIN FLEMING Manager, Western Hemisphere
and subsea applications, provides separation equipment process markets, manufactures and services centrifugal air McDermott International, Inc. Vice President,
Houston, Texas MITCHELL K. ULREY
and furnishes aftermarket parts and service to the energy compression equipment for manufacturing and process Human Resources
Vice President, Finance
industry worldwide. applications, and provides aftermarket parts and service PATRICK C. HOLLEY
DAVID R. ZACHARIAH
Cooper Cameron Valves is a leading global provider of Vice President and General
for a wide range of compression equipment.
Manager, Measurement Vice President and General
valves, related products and services for the oil and gas Manager, Eastern Hemisphere
DAVID R. MEFFORD
production, transmission, refining and process markets. Cooper Cameron’s website: www.coopercameron.com *Also, Senior Vice President,
Vice President, Engineering
Cooper Cameron Corporation
REMBERT B. MORELAND
**Also, Vice President,
Vice President, Marketing
Cooper Cameron Corporation
JAN L. ROTHFUSZ
Vice President, International Sales
R. SCOTT ROWE
Vice President, Operations
RICHARD A. STEANS
Vice President, Finance
JAMES E. WRIGHT
President, Distributed and
Process Valves

4. FINANCIAL Highlights and balances for year s ending December 31
2005 2004 2003
($ thousands except per share, number of shares and employees)
Revenues ................................................................................................................................... $2,517,847 $2,092,845 $1,634,346
Earnings before interest, taxes,
depreciation and amortization (EBITDA) ................................................................. 340,303 228,639 164,127
EBITDA (as a percent of revenues) ........................................................................................... 13.5% 10.9% 10.0%
Income before cumulative effect of
accounting change .................................................................................................................. 171,130 94,415 57,241
Cumulative effect of accounting change .................................................................................. — — 12,209
Net income ...................................................................................................................................... 171,130 94,415 69,450
Earnings per share:1
Basic before cumulative effect of accounting change .................................................. 1.55 0.89 0.53
Cumulative effect of accounting change ............................................................................. — — 0.11
Basic ......................................................................................................................................................... 1.55 0.89 0.64
Diluted before cumulative effect of accounting change ............................................. 1.52 0.88 0.52
Cumulative effect of accounting change .............................................................................. — — 0.10
Diluted .................................................................................................................................................... 1.52 0.88 0.62
Shares utilized in calculation of earnings per share:1
Basic ...................................................................................................................................... 110,732,000 106,545,000 108,806,000
Diluted ................................................................................................................................ 112,608,000 107,708,000 119,601,000
Capital expenditures ..................................................................................................................... 77,508 53,481 64,665
Return on average common equity ........................................................................................... 12.4% 8.2% 6.4%
As of December 31:
Total assets .................................................................................................................................. $3,098,562 $ 2,356,430 $ 2,140,685
Net debt-to-capitalization2 .................................................................................................................. 5.3% 16.3% 12.0%
Stockholders’ equity ................................................................................................................. 1,594,763 1,228,247 1,136,723
Shares outstanding3 .......................................................................................................... 115,629,117 53,137,8154 53,803,0584
Number of employees ................................................................................................................. 12,200 8,800 7,700
1
Basic and diluted shares utilized in the calculation of earnings per share and per share amounts have been revised to reflect the 2-for-1 stock split effective
December 15, 2005.
2
Net of cash and short-term investments.
3
Net of treasury shares.
4
Reflects share counts prior to stock split.
3

5. Our operating and financial performance in 2005 was very good.
The combination of a robust market across our business lines and
solid performance from all of our divisions generated some of our
best financial results ever. As a result, our stock price reached new
In this letter a year ago, I referenced the impact that $40/barrel oil and $6/mcf natural gas were having on
highs, and our board authorized a 2-for-1 stock split (the second
our business. I resisted the temptation to refer to those prices as “high” or to forecast where they might go in
the future; instead, I related that we were prepared to deal with whatever might happen with prices, activity
in our history) effective in December 2005.
and spending in the oilpatch. With oil prices above $60/barrel and natural gas around $10/mcf at the close
of 2005, I believe our results demonstrate that we struck the appropriate balance in the way we approached
DIRECTION
our business. I will again avoid the temptation to forecast what may happen with prices in 2006.
To the stockholders of Cooper Cameron
Spending on oil and gas exploration and development Following are some of our recent milestones:
is the single largest factor influencing our business, and • Cooper Cameron’s 2005 earnings per share
through the end of 2005, our customers were showing increased to a record $1.52 (adjusted for our stock
no signs of reducing their activity. Industry benchmarks split), up 73 percent from a year ago.
like worldwide rig counts and exploration and production • Total revenues set a new record at $2.52 billion.
spending showed steady growth throughout the year. Our • Orders reached more than $3.46 billion, and
business and the commodities (crude oil and natural gas) backlog more than doubled to $2.16 billion; both of
that drive our customers’ behavior typically run in cycles those are also records.
that last for a little more than three years. The positive • Since the beginning of 2005 we have spent more
phase of this current cycle has extended well beyond that than $300 million on acquisitions — including
time frame. Some observers have begun to use terms $217 million on the Dresser acquisition — and still
like “paradigm shift” or “secular growth” to describe the have one of the best balance sheets in the industry.
business; we will maintain our balanced approach to
managing our operations. In other words, we will continue At this time a year ago, we had planned to include in our
our productivity enhancement steps, which effectively add financial results an expense related to stock option grants
capacity without adding roofline and help us manage costs made to our employees as a part of their compensation. In
in the event of a change in the direction of the cycle. early 2005, however, companies were allowed to choose to
phase-in such recognition.We elected to defer adoption of
this expense recognition until the first quarter of this year,
and we expect to record approximately $0.10 per share
for stock-based compensation expense during 2006.
4

6. I personally believe that the true financial impact of stock While natural gas productive capacity is forecast to increase in
Cooper Compression’s revenues and earnings were their highest Cash generation maintains balance sheet integrity
options is already reflected in a company’s results when share 2006 as the industry recovers from the storms of 2005, LNG
in more than five years. Their energy-related business benefited, We have always emphasized the importance of cash flow in
count increases due to options being exercised (of course, such continues to make up a larger, but overall still small, percentage
in both aftermarket and new equipment, from activity in the U.S. taking advantage of opportunities in our business. In recent
exercises generally occur because the stock price has gone up). of supply. Supply growth from LNG will need to continue so as
natural gas markets. Increased revenues in the air compression years, our people have done an outstanding job of focusing on
Since we are now required to recognize some assigned expense, to avoid continuing price shocks. During 2005, LNG imports
side were the result of the high backlog that existed entering generating cash — and earnings — in our day-to-day operations.
we have reduced the use of stock options in our compensation accounted for about three percent of U.S. natural gas supplies; by
2005 and the ongoing strong demand in international markets That has given us the freedom to search out uses for cash, rather
programs so our earnings will not be overly burdened. We regret 2007, it is forecast to exceed five percent. The addition of LNG
for industrial compression equipment. than worrying about sources of funds. Beyond daily funding
doing so, because options are an effective means of aligning conversion facilities should provide additional opportunities for requirements and capital spending, our primary options have
employees’ interests with that of stockholders; if the stock goes some of our products, particularly in Cooper Cameron Valves.
With the natural gas markets continuing to drive North been share repurchase and acquisitions; this past year, we spent
higher, everyone benefits. Many of our employees are also American business and global manufacturing activity supporting more on the latter than in any single year in our history, and thus
stockholders, and they are innately aware of the impact that solid When commodity prices reach historical highs, the tendency is
international air compression orders, Cooper Compression limited our repurchases of our own shares.
operating and financial performance has on stock price. to expect them to moderate. Growth in demand for natural gas
should see another year of gains in both revenues and profits.
is expected to resume in 2006, increasing in line with a stronger
New product introductions and further attention to cost We spent more than $300 million on acquisitions, including
Markets should lead to further improvement in 2006 economy in the U.S. Still, with storage levels relatively high and the
reduction efforts will also be important to their bottom line. approximately $217 million on the Dresser transaction, and our
Our Cameron division’s total revenues reached a record $1,508 possibility of domestic production increasing slightly, prices may balance sheet is still one of the strongest in the industry. We
Hurricanes have minimal impact on operations
million during 2005 as the drilling and surface product lines hit come down. Natural gas remains primarily a North American will manage our businesses in a manner that emphasizes fiscal
new highs. Subsea revenues declined modestly from year-ago We were fortunate that Cooper Cameron’s manufacturing market commodity, but development of international gas responsibility. While the integration of the Dresser acquisition
levels, as we did not have as much large-scale project business operations experienced no significant damage from the reserves and increased funding of LNG will be required in the will require much of our near-term focus, we will continue to
delivered in 2005 as in 2004. devastating hurricanes that hit the Gulf Coast region in August future and will have an increasing impact on upstream activity and on evaluate acquisitions and stock repurchases as uses of cash. As
and September. While the storms’ paths missed our primary our businesses. of year-end 2005, we had five million shares remaining under our
Cameron finished the year with record orders by a wide margin facilities and we had no injuries to employees, a number of board-authorized share repurchase program.
Basic economics continue to rule world oil markets
and entered 2006 with a backlog nearly twice the level of a our people experienced personal losses of property and the
The vast majority of our business is tied directly to exploration Balancing expectations
year ago. Some of those orders are for projects that will be attendant disruption in their day-to-day activities. In response,
and production of oil, and we have a presence in nearly every Numerous stakeholders have a vested interest in how our
delivered over the next couple of years, but the vast majority we established a fund at the Company to aid those employees
energy-producing region in the world. Global demand for oil businesses perform and how we treat each of our constituents.
of that backlog should be turned into revenue by year-end. Our and their families who needed help with their recovery and
increased by about 1.5 percent during 2005. While China’s Balancing the needs and expectations of customers, employees,
challenge is to convert that backlog into revenues efficiently restoration efforts. Within a week or so after the hurricanes,
demand growth is expected to continue to moderate in 2006, partners, suppliers and investors is a challenging task, but I and the
and profitably. Meanwhile, the level of inquiries and orders from our facilities were all back to normal operations, and the financial
it will still be a primary driver of incremental oil demand, and rest of our employees know that our reputation is at risk if we
customers for Cameron products showed no signs of slowing impact on our results was minimal.
U.S. consumption is forecast to increase in both 2006 and 2007. allow our response to one party’s needs to come at the expense
as of early 2006.
Projected gains in production capacity are anticipated to temper of another’s. We appreciate your support and understanding as
Restoration of productive capacity, LNG supplies
prices in 2006, but the oil markets are in a fragile state. Political we deal with the challenges this market brings to us and work to
needed to address gas demand growth
During 2005, Cooper CameronValves (CCV) did an outstanding
upheaval, economic crises or weather could all have significant continue to deliver quality and value on all fronts.
Natural gas prices in the U.S. were clearly affected by the
job of incorporating the late-2004 acquisition of several valve
impact on an already unsettled market.
disruptions in productive capacity from the hurricanes in
manufacturing businesses (the PCC acquisition) and a flow
Sincerely,
the Gulf. While U.S. gas demand did not increase significantly
measurement business acquired in mid-2005 (NuFlo).As a result
A year ago, we speculated that higher oil prices might dampen
during the year — about 22 trillion cubic feet (Tcf) were
of these acquisitions and continuing strength in the valve markets,
global economic activity; that did not happen. The global
used in 2005, similar to 2004’s consumption — damage
CCV’s revenues gained nearly 80 percent year-over-year.
economy appeared to readily absorb the price shock. If both
to gas infrastructure in the Gulf of Mexico had a very real
OPEC and non-OPEC suppliers are able to increase production Sheldon R. Erikson
impact on deliverability, leading to new highs in prices. When
Now, we are asking them to perform once again by integrating
in the next couple of years in line with current expectations, Chairman of the Board,
combined with operators’ struggles to replace production
the Dresser acquisition facilities into CCV. This $217 million
perhaps prices will subside. If not, we will almost certainly President and Chief Executive Officer
with new reserves, the need for additional supplies, particularly
acquisition is the largest and most challenging we have undertaken
reach a point where high prices cause demand destruction,
liquefied natural gas (LNG), becomes more apparent.
to date. It more than doubles CCV’s revenue base from their
and the commodity markets will respond accordingly. Whatever
2004 levels, and at year-end 2005, CCV’s backlog was $469
the case, we realize that our business remains highly dependent
million, compared with only $123 million at year-end 2004.
on a number of factors over which we have no control,
including global demand, inventory levels, geopolitical influences
and weather.
6 7

7. Different constituents have varying expectations. Employees and the financial community are two of the
EXPECTATIONS
PECTATIO
E ATIO
AT O
Company’s constituents that have a material stake in Cooper Cameron’s long-term success.
ce sh
As VP of Human Resources, Jane Schmitt has overall Franklin Myers has also been with Cooper Cameron since
responsibility for managing Cooper Cameron’s efforts its inception in 1995, and has served in a couple of different
to attract and retain the best people available for roles during his tenure. In his current position as Senior VP
our widespread operations. With more than 12,000 and Chief Financial Officer of the Company, much of his
employees spread over numerous countries, Jane and time is spent with representatives of the financial community,
her associates at the Company’s division offices balance including commercial bankers, who help the Company
the competitive environment, local standards and laws finance its operations; investment bankers, who may bring
and internal requirements in their efforts to insure that acquisitions or other financial proposals to him; industry
employee needs are fairly addressed. Having been with analysts, who are looking for the factors that differentiate
Cooper Cameron since its creation ten years ago, Jane Cooper Cameron from other companies in the oil service
understands the challenges of dealing with an industry business; and investors, who have a vested interest in the
that — due to its reliance on commodity prices — is Company’s prospects and performance. One of Franklin’s
overwhelmingly cyclical, and entails a unique set of staffing challenges is to ensure balance in the allocation of the
and employee relations issues. Company’s financial resources so that the best interests of
these constituents are addressed and we take full advantage
of Cooper Cameron’s financial flexibility in order to maximize
returns to all stakeholders… including employees.
9

8. Our basic business is the safe and responsible manufacture of equipment used in the energy business and in
other industrial applications. Technological innovation and continually improving manufacturing processes allow
our products to meet our customers’ needs for safety, reliability and economic and environmental efficiency.
COMMITMENT
Our goal: Deliver more value while consuming fewer resources and protecting people and the environment.
We believe that embracing safe and responsible practices is the As an employer and local citizen:
right thing to do and represents a balanced commitment that is • We employ more than 12,000 people worldwide, and
Cooper Cameron has established itself as a good corporate citizen ever ywhere we operate.
important to the continuing success of our business. provide competitive wages, benefits and job opportunities
in the more than 100 countries where we operate.
Balance in this context doesn’t mean that we must give up
• All of our employees strive to fulfill one of our most
something in one area in order to accomplish our goals
important values,“No one gets hurt. Nothing gets
in another. It means that we strive to achieve operational
harmed,” in the performance of their jobs.
excellence, use all the tools and resources available to us to
• We spend millions of dollars on goods and services with
maximize the benefits that accrue from a safe and well-managed
local contractors and suppliers, and we expect them to
workplace, and minimize the risk of any negative impact on our
adhere to our ethical standards and to local laws.
stakeholders — including employees, customers, shareholders
• We support local and national charitable efforts with
and the environment.
financial and in-kind contributions, and we encourage
and fund employees who volunteer their support to
As a publicly owned company and significant participant in
local organizations.
the global economy, we recognize we have a responsibility to
create value for our investors and customers. As a concerned
As a major player in international energy markets:
corporate citizen, we recognize we have a responsibility to
• Many of our facilities have been recognized for their safety
provide for our employees and the communities in which
records, and a number have posted five years or more of
we operate. As a member of the global community, we also
operation without a single lost-time incident.
recognize we have the responsibility to operate in a manner that
• Our HS&E programs include extensive training, education
protects people and the environment and preserves the planet
and review processes under a framework that applies
for future generations.
strict criteria across all of our operations.
• Our emphasis on safe and responsible standards supports
Achieving the goals of economic growth and financial
our customers’ need to produce, process and deliver their
performance, respect for social issues and care of the
products in environmentally-friendly ways.
environment are the guiding principles of how we run our
business. Our commitment to these pillars of sustainable
Our Standards of Conduct Policy sets out the principles under
development is demonstrated in the following:
which we conduct our global activities. Copies of the Standards
As a steward of assets for our investors: are made available to all employees, who are expected to comply
• We have demonstrated our ability to consistently meet with these guidelines in every aspect of their work.
and exceed our investors’ expectations.
Cooper Cameron’s long-term operating performance,
• Our financial performance confirms our success in
the disclosure standards we are required to meet and the
generating earnings and managing cash flow.
enhanced transparency of financial reporting rules provide our
• We have one of the healthiest balance sheets in the industry.
constituents with substantial insight into the social, economic and
As an equipment and services provider: environmental impacts of Cooper Cameron’s operations. Our
• Our products are noted for their quality, safety and board of directors regularly reviews the Company’s performance
long-term reliability. from a social responsibility perspective, and is committed to
• We have won awards from government and industry providing the processes, facilities, standards, training, discipline
organizations for innovation and technological and work culture to ensure that “No one gets hurt. Nothing
advancement. gets harmed.”
• Many of our technology innovations deliver greater
value to customers, consume fewer resources and are
Our products are essential to meeting present and future
more environmentally and ecologically efficient.
• We strive to comply with the highest ethical standards
energy and other industrial needs in environmentally and
and the local laws and guidelines in the many locales
where we do business.
socially responsible ways.
10

9. The performance of Cooper Cameron’s products is critical to the success of our customers. In many
PROCESS
cases, if our equipment doesn’t perform, our customers’ profitability is directly affected.
Appropriate balance in the allocation of resources leads to deliver y of quality products that provide value.
While we have established a reputation as a provider During 2006, we plan to embark on our most ambitious
of high-quality, reliable products, we realize that the capital expenditure program to date. We expect to spend
need to deliver value to customers must be balanced as much as $130 to $150 million this year, with the majority
with the responsibility to deliver value to shareholders. of those funds directed toward upgrading machine tools,
Concurrently, we have always looked for ways to do things applying more efficient technologies to manufacturing
better, or faster, or at lower cost. processes and generally making more effective use of
our resources. This effort is a direct result of the current
Cooper Cameron’s Six Sigma program was launched in heightened demand for product from our customers,
2000 with the goal of making constant improvement in and will allow us to essentially increase capacity without
quality and productivity “The way we run our business.” investing in additional roofline. It will also serve us, and our
Six Sigma provides the methodology, tools and support shareholders, in the event of a slowing in business activity
to allow our employees to improve business processes by effectively lowering our manufacturing costs.
across the Company. There are now more than 140
employees in the Company who have qualified as “Black
Belts” — trained to measure, analyze, improve and control
processes in order to increase productivity, reduce costs
and maximize customer satisfaction.
13

10. Cameron is one of the world’s leading providers of systems and equipment
used to control pressures and direct flows of oil and gas wells. Its products are
employed in a wide variety of operating environments,including basic onshore
fields, highly complex onshore and offshore environments, deepwater subsea
applications and ultra-high temperature geothermal operations.
Products — Surface and subsea production systems, Customers — Oil and gas majors, national oil companies,
PERFORMANCE
blowout preventers, drilling and production control independent producers, engineering and construction
systems, oil and gas separation equipment, gate valves, companies, drilling contractors, rental companies and
actuators, chokes, wellheads, drilling riser and aftermarket geothermal energy producers.
parts and services.
S TAT I S TI C A L/ O P E RATI N G H I G H LI G H T S ($ millions)
2005 2004 2003
Revenues .......................................................................................................... $1,507.8 .................. $1,402.8 .................. $1,018.5
EBITDA .................................................................................................................... 222.7 ......................... 170.2 ......................... 114.6
EBITDA (as a percent of revenues) .............................................................. 14.8% ........................ 12.1% ........................ 11.2%
Capital expenditures ........................................................................................... 49.8 ............................ 28.9 ............................ 40.2
Orders .................................................................................................................. 2,301.1 ..................... 1,274.4 ..................... 1,082.4
Backlog (as of year-end) ................................................................................... 1,503.6 ......................... 752.9 ......................... 771.8
14

11. Cameron continued to deliver new surface technology for
During 2005, Cameron upgraded several drilling aftermarket
FINANCIAL OVERVIEW - Cameron’s revenues increased to $1,507.8 million in 2005, up seven percent
traditional North Sea customers. BP plans to use Cameron’s
locations with new machine tools, including Berwick, Louisiana;
from $1,402.8 million in 2004. EBITDA was up 31 percent from a year ago, at $222.7 million, compared premium land and platform wellhead system,the SSMC model,on
Oklahoma City; Macae, Brazil and Vera Cruz, Mexico. The Rock
with 2004’s $170.2 million. EBITDA as a percent of revenues was 14.8 percent in 2005, up from 12.1 their Claire platform, and will use Cameron’s Conductor Sharing
Springs, Wyoming facility will be upgraded and expanded to
Wellheads (CSW), which allow multiple completions in a single
address the growing natural gas market in the Northern Rockies.
percent. Orders totaled $2,301.1 million, up 81 percent from the prior year.
well slot, for use in the expansion of the BP Magnus platform in
Plans are also in development for a new facility in India to service
the North Sea. Statoil Norway engaged Cameron in a program
a major customer in the region.
Cameron organization realigned Drilling Systems to extend the life of the Statfjord field by incorporating artificial
In late 2005,Cameron changed its organization to a more product- Cameron is a leading global supplier of integrated drilling Surface Systems lift technologies as wells are re-entered for workover.
specific alignment to better address the dramatic growth across systems for land, offshore, platform and subsea applications, Cameron is the global market leader in supplying surface
its business lines. Cameron now has four distinct business units: and is committed to providing its worldwide drilling customers Customers in the growing natural gas markets in the Middle East
equipment, including wellheads, Christmas trees and chokes used
Drilling Systems, Surface Systems, Subsea Systems and Flow with innovative system solutions that are safe, reliable and cost- on land or installed on offshore platforms, and has the largest acknowledged Cameron’s performance and technical capabilities
Control, as well as its separation systems provider, Petreco. effective. Drilling equipment designed and manufactured by installed base of surface equipment in the industry. with significant contract awards for wellhead systems in Qatar,
Cameron includes ram and annular blowout preventers (BOPs), Abu Dhabi and Saudi Arabia. Rig activity in the Saudi Arabian
Cameron’s prior structure split management responsibilities on
drilling risers, drilling valves, choke and kill manifolds, surface and Steady increases in rig count, well completions and workovers markets continues to grow at a rapid rate; Cameron’s total orders
both a product and geographic basis. Under the new organization,
subsea BOP control systems, multiplexed electro-hydraulic across the North American region provided a constant flow of in the region doubled in 2005. In addition, Cameron booked the
each business unit has global responsibility for specific product
(MUX) control systems, and diverter systems. Cameron also business for Cameron throughout the year. Prices were raised on first CSW systems to be used in a Mideast project outside Egypt,
lines. The new alignment encourages greater responsiveness
provides services under CAMCHEC™, an inspection system surface wellhead equipment in response to continuing increases with an award for 10 systems to be installed in Abu Dhabi.
to customers’ needs in product-specific markets; focuses each
that allows drilling contractors to inspect drilling riser on in raw material and transportation costs. Several of Cameron’s
unit’s managers on identifying cost reduction opportunities that
their rigs offline, saving time and money on maintenance and larger customers requested longer-term supply agreements In Asia, Cameron supplied more than 100 wellhead systems to
benefit their products and processes; and ensures that technology
unnecessary transportation. in exchange for security of equipment supply and in hopes of Total Indonesia as part of a continuing supply agreement; and the
advancements and expansion opportunities in specific product
minimizing cost inflation in their supply chains. Company booked orders from Woodside in Australia and from
lines are spread across global boundaries. During 2005, Cameron’s drilling business experienced a level
STOS in New Zealand, both representing market share gains in
of activity not seen since the early 1980s. Cameron continued
This product- and systems-driven organization will allow Cameron’s performance in the delivery of new equipment and these respective regions.
to book orders for new surface BOPs for land rigs, continuing
Cameron to better serve customers’ needs and support the in providing service has allowed the surface organization to
a trend that had begun in 2004, as the industry embarked on
Subsea Systems
attainment of growth and profit targets for the coming years, record market share gains in numerous regions; the Company’s
what appeared to be a multi-year capital expansion to make up
while leveraging off the strength of the Company’s global network field training program has grown through an employee referral Cameron has been a key player in the subsea industry since
for years of limited reinvestment. The offshore drilling market
of manufacturing and aftermarket locations. program, allowing Cameron to staff the service organization its beginning more than forty years ago, and continues to be a
was already picking up, but the arrival of Hurricanes Katrina
appropriately in response to growing demand; and the sales leader in providing subsea wellheads, Christmas trees, manifolds
Operating milestones and Rita in August and September put a considerable strain
staff has received targeted training in sales order management in and production controls, as well as complete production systems,
Significant accomplishments in the Cameron division during on the industry. The storms damaged or destroyed more than
order to better deal with the pace of business. to the industry. Cameron’s Subsea Systems organization, created
2005 included the following: 30 mobile offshore drilling units in the Gulf of Mexico, with an
in 2005, has global responsibility for R&D, engineering, sales,
• Cameron was awarded Total’s AKPO project, the largest estimated eight jackups deemed to be total losses. By year-end,
North American activity was punctuated by the 2005 hurricanes manufacturing, installation and aftermarket support for subsea
Subsea Systems project to date, with a value of more than 50 new offshore rig orders had been placed, including 33 jackups,
in the Gulf of Mexico. The related disruption and damage to products and systems, and performs the role previously filled
$350 million. 14 semi-submersibles, two drillships and one tender rig with
customer facilities created a need for Cameron’s service by Cameron Offshore Systems in providing customers with
• In early 2005, Cameron’s Leeds, England facility produced options to build an additional 17 units.
organization to shift its focus from new installations to performing integrated solutions to subsea field development requirements
its 600th subsea tree — 400 of which have been the
critical workover and restoration activities. Cameron played an under engineering, procurement and construction (EPC)
Cameron booked orders for two complete subsea drilling
patented SpoolTree™ design.
important role in supporting customers’ efforts to restore oil contracts.
systems in 2005; the Stena Drill Max, a drillship, and Eastern
• Cameron’s multi-patented all-electric subsea production
and gas production as safely and as quickly as possible.
Drilling’s West E-Drill, a semi-submersible. Both will be outfitted
system, CameronDC™, received two notable awards
Timely execution of projects in backlog continued as a primary
with Cameron’s 18-3/4 inch, 15,000 psi subsea stacks, a MUX
during 2005: the “Spotlight on New Technology” award
Eastern Hemisphere surface markets grew steadily during 2005, focus in 2005, driven by delivery of multiple major subsea
control system and Cameron’s patented LoadKing™ riser system.
from the Offshore Technology Conference and World Oil’s
with Cameron providing equipment to new developments systems in West Africa. Cameron delivered a total of 100 subsea
Several more complete subsea system bookings are anticipated
“Innovative Thinkers” award.
in Azerbaijan, Sakhalin Island, Russia and North Africa. BP’s trees during the year, including several under project agreements,
in early 2006, and Cameron expects to continue to book its
• Cameron’s Six Sigma program now includes 100 Black
Azerbaijan unit awarded Cameron the contract to supply as well as many for small field developments requiring as few as
historic market share of such business.
Belts and more than 650 Green Belts who serve as internal
SSMC wellhead and surface SpoolTree systems for four 48- one to five subsea trees. Capacity expansions in Leeds, England,
consultants, applying productivity improvement techniques
slot platform installations in the Caspian Sea. Cameron was Taubate, Brazil and Berwick, Louisiana will support expected
Cameron’s long-time leading market position in drilling has
to create benefits for Cameron and its customers. Six
involved in the first stages of exploration on Sakhalin Island; this deliveries during 2006 of more than 130 subsea trees and
created the largest installed base of BOPs in the industry. With
Sigma projects routinely generate significant savings and
has grown into an arrangement for the supply of wellheads and associated manifolds, production controls and other equipment.
safety and reliability issues reinforcing demand for parts and
productivity improvements for both Cameron and
trees for ExxonMobil’s Chayvo field, and the supply contract for
service from original equipment manufacturers, Cameron offers
its customers.
gas wells on the Orlan offshore platform. Following the opening
worldwide aftermarket services under the CAMSERV™ brand
• The ongoing integration of the Sterom facility in
of Libyan markets to U.S. companies, Cameron’s North African
and provides replacement parts for drilling equipment through a
Romania, acquired in an acquisition in late 2004, has
business activities have expanded to include project awards
comprehensive global network.
provided the Company with significant incremental
from Total, Wintershall and Woodside in this growing region.
manufacturing capacity at very low cost.
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12. Cameron played an important role in ExxonMobil’s ability to bring Flow Control Petreco
The majority of Cameron’s subsea tree orders during 2005,
its Kizomba B subsea project on production six months ahead of other than AKPO, were for relatively small projects and Cameron’s Flow Control business provides chokes and actuators Petreco produces highly engineered equipment, systems and
plan by meeting an accelerated delivery schedule. Additionally, extensions to existing fields. Although a significant number of for the surface and subsea production and drilling markets, as services for oil, gas, water and solids separation, and provides
Cameron delivered all of the equipment for the ExxonMobil subsea development projects are under consideration, the well as drilling choke control panels and surface wellhead fully integrated systems and individual components to operators
Erha project in Nigeria on target and provided ExxonMobil’s Erha timing remains uncertain. With many of those larger projects safety systems. Flow Control provides these products for in oil- and gas-producing regions worldwide. In October 2005,
North project with subsea systems within a 14-month window, not expected to be awarded until 2007 or later, subsea tree Cameron installations as well as those serviced by other tree Petreco added to its offerings with the acquisition of the Howe-
creating an opportunity for ExxonMobil to generate significant orders during 2006 will likely be comprised of a number of manufacturers, and has benefited from the market’s acceptance Baker line of electrostatic desalting, dehydration and distillate
additions to production from the Erha Field. Cameron’s “design smaller projects. of its new product offerings and from overall increases in drilling treating products. Petreco’s products are sold to contractors and
one, build many” philosophy, as demonstrated in these projects, and completion activity worldwide. to end-users for both onshore and offshore applications, with
has proven valuable to both Cameron and its customers. Cameron’s history of innovation in the industry is highlighted by more than half of its revenues coming from offshore projects.
the global acceptance and use of its SpoolTree horizontal subsea In 2005, Flow Control sold its first electric surface actuator,
Other subsea activity during the year included Husky’s White production system design, developed and patented by Cameron which offers operators an environmentally-friendly actuation Deliveries during 2005 included a major produced water treating
Rose project offshore Newfoundland, which began production in the early 1990s, and now a standard for subsea completions. package and reduces the costs and maintenance problems and produced gas dehydration system for aTotal project offshore
in 2005, and where all 15 trees for the first phase of the project associated with hydraulic power units and hydraulic tubing runs. West Africa; advanced produced water filtration equipment
have been delivered. Although much of Cameron’s subsea Cameron’s latest innovation is CameronDC™, the industry’s first Operators in remote areas who are faced with the challenges for a new water injection project in Kuwait; oil, water and gas
equipment, including the subsea control modules, had been all-electric, direct current-powered subsea production system, of temperature extremes can expect both increased diagnostic processing equipment for the P-51 and P-52 Petrobras projects
placed on the sea floor as much as 18 months earlier, the system which was introduced at the Offshore Technology Conference capability and greater reliability from integrating this electric in Brazil; and the world’s largest MEG reclamation unit, which will
worked as designed at startup. Husky has now ordered additional in 2004. By eliminating hydraulically controlled actuators, the actuator into their existing systems. be used to purify, reclaim and regenerate ethylene glycol used in
equipment to support future expansions of this field. system is designed to provide greater reliability and cost savings separating water from gas, and is currently being installed in the
and give operators the ability to extend stepouts on multi-well Also during 2005, Flow Control introduced a new three-inch Gulf of Mexico.
Offshore Brazil, Cameron completed delivery of several subsea developments far beyond traditional limits. Several operators underbalanced drilling choke, the DR30, in response to drilling
systems to Petrobras, and was awarded a total of 16 trees are evaluating possible applications for the system, and one has customers’ increasing demand for higher-capacity chokes for Petreco recorded its fourth consecutive year of record orders
for future delivery, securing a record year-end backlog in the engaged Cameron’s engineering staff to perform the upfront use in underbalanced drilling applications. The initial unit has and revenue, including the largest order in the Company’s
Brazilian market. Petrobras designated Cameron as a “Supplier system design work on a funded basis for possible installation in been delivered and there should be significant opportunities for history. Petreco received an order in excess of $55 million —
of Choice” for subsea trees and tools based on Cameron’s an existing field in 2006. additional sales into this market in 2006 and beyond. more than double the previous record — to supply oil, water
history of consistently achieving on-time delivery, as well as its and gas processing equipment for the Petrobras P-53 project
performance in quality, aftermarket support and service and the During 2005, Cameron introduced a new subsea controls Bookings in the Flow Control business were up nearly 90 percent in Brazil. Other significant orders received in 2005 included an
Company’s health, safety and environmental record. Cameron is system that combines the traditional subsea control module during 2005. While orders increased across all the Company’s order for six electrostatic dehydrators for a major new oil field
expanding its manufacturing facility in Taubate, Brazil, based on and the subsea accumulator module in a single package, allowing product offerings, the surface wellhead safety system area was in Saudi Arabia, a produced gas treating system for a major field
demand from Petrobras as well as projects planned by foreign for more efficient operation of the subsea tree and manifold particularly strong, with bookings more than doubling during the expansion in the U.K. North Sea and an order for enhanced
operators in Brazil. valves. Additionally, a new state-of-the-art subsea test chamber year, driven by activity in the Mideast and Asian markets. In the produced water treating and filtration equipment for a major
in Cameron’s controls engineering facility in Celle, Germany fourth quarter of 2005, Flow Control established a dedicated expansion project in California.
In the North Sea, Cameron was awarded a seven-year facilitates testing of the Company’s control systems. sales force that will target growing its business outside of the
frame agreement from BG for their fields in the region, traditional Cameron installations. The combination of this focused Petreco’s orders were up 44 percent over 2004, with projects in
as well as certain other locations. In addition, Cameron Also in 2005, Cameron launched its updated CAMTROL subsea sales effort and continuing strong global activity is expected to South America providing the largest increase, followed by Europe
is now in the ninth year of a frame agreement with BP control module, which includes new electronics, lower power lead to continued growth in bookings with operators, engineering and North America; orders in the former Soviet Union and the
Exploration to provide subsea trees, wellheads and associated demand, a DC power option and fiber optic communications houses and other tree suppliers in 2006. Middle East declined from a year ago. Petreco finished 2005 with
services in the U.K. North Sea. During 2005, BP placed orders to further increase reliability and enable extended offset the highest year-end backlog in its history.
for ten subsea trees for installation in various North Sea fields, developments and high-bandwidth intelligent completions. During the second half of 2005, the Longford, Ireland plant
and BP also used the frame agreement principles for the expansion was completed, increasing manufacturing capacity by In 2005, Cameron and Petreco formed a joint technology
procurement of six water injection trees for use in the Azerbaijan approximately 20 percent. By the end of 2005, Flow Control development team to pursue market opportunities in the
sector of the Caspian Sea. had hired most of the additional personnel required to increase subsea processing area. The group is focused on leveraging
production. The global market for all Flow Control products is Cameron’s proven capabilities in subsea equipment design and
Cameron’s most significant order for 2005 was the expected to continue to grow in 2006 as customers increase Petreco’s well-established processing and separation technology
largest subsea EPC contract awarded to date: Total’s their spending on both upstream and midstream oil and gas for seabed applications.
AKPO project, offshore Nigeria. The contract includes 39 projects in response to commodity prices.
subsea trees and associated subsea chokes, 10 manifolds,
insulated horizontal connection systems, MUX subsea
production controls and intervention and workover systems.
The initial contract is valued at more than $350 million.
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