Right Size Right People Right Rigs Right Markets

Right Size
Right People
Right Rigs
Right Markets
Corporate Presentation – March 2016
Disclaimer
Advisory Regarding Forward-Looking Statements
This presentation contains forward-looking statements based upon current expectations that involve
a number of business risks and uncertainties. These statements are not guarantees of future
performance and are subject to certain risks and the user should not place undue reliance on these
forward-looking statements as there can be no assurance that the plans, initiatives or expectations
upon which they are based will occur.
The factors that could cause results to differ materially include, but are not limited to, political and
economic conditions, crude oil and natural gas prices, foreign currency and interest rate fluctuations,
weather conditions, the Company’s defense of lawsuits and the ability of oil and natural gas
companies to pay accounts receivable balances and raise capital or other unforeseen conditions
which could impact on the use of the services supplied by the Company.
Users are cautioned that the foregoing list of important factors is not exhaustive. Unpredictable or
unknown factors not discussed in this presentation could also have material adverse effects on
forward-looking statements. Although the Company believes that the expectations conveyed by the
forward-looking statements are reasonable based on information available to it on the date such
forward-looking statements are made, no assurances can be given as to future results, levels of
activity and achievements. Except as required by law, the Company assumes no obligation to update
forward-looking statements should circumstances or the Company’s estimates or opinions change.
TSX : ESI
Right Sized
−
Business has been right sized to ensure profitability over the
long haul at significantly depressed utilization levels
Right People
−
Ensign’s Global Skill Standard (GSS) sets industry standard for
competency based training
Right Rigs
−
$4bln invested to replenish worldwide fleet with hi-tech/hi-perf
ADR rigs
Right Markets
−
Revenue diversification and balance in key markets around
the world
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Geographic Diversification
Revenue
Geographic Segmentation
Canada
United States
International
22%
34%
44%
Canada
United States
90%
MENA
Drilling & Rig Services
Kurdistan
10%
Libya
Completion &
Production Services
Oman
Venezuela
Australia
MAJOR ASSET SNAPSHOT
Argentina
As of March 31, 2016
•
•
•
•
•
213 Drilling Rigs
116 Servicing Rigs
78 Directional Drilling Kits
97 Frac Flow Back Units
27 Core & Seasonal Rigs
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Drilling & Rig Services – North America
163
Drilling Rigs
Horn River
Montney
78
Oil Sands
Cardium
Utica
Jonah
Piceance
Monterey
Niobrara
Granite
Wash
Barnett
Permian
90
31
47
Directional Drilling Kits
Bakken
San
Joaquin
Basin
73
Marcellus
Woodford
Haynesville
Tuscaloosa
Eagle Ford
As of March 31, 2016
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27
27
Core &
Seasonal Rigs
United States
Canada
Drilling & Rig Services - International
48
Substantial & growing international presence
Drilling Rigs
# rigs
60
50
40
MENA
30
Drilling rigs – 13
20
2002
2007
2012
2016
AUSTRALIA
VENEZUELA
Drilling rigs – 20
Drilling rigs – 8
ARGENTINA
Drilling rigs – 7
Workover rigs – 2
As of March 31, 2016
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Completion & Production Services
116
Servicing Rigs
Montney
72
44
Horn River
Oil Sands
Cardium
Bakken
Utica
San
Joaquin
Basin
Niobrara
Jonah
Piceance
Monterey
Granite
Wash
Barnett
Permian
Woodford
97
Frac Flow Units
50
Marcellus
Haynesville
Tuscaloosa
Eagle Ford
As of March 31, 2016
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47
United States
Canada
Fleet Transition
350
300
Cumulative newbuilds (incl. major retrofits)
Rig Fleet from Acquisitions (less decommissions)
PAD rigs
Horsepower
1200
1000
250
$4 bln
# Rigs
200
600
150
400
100
200
50
0
0
After decommissions, average age of fleet is ± 10 years old.
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Horsepower
800
Drilling Rigs by Type
200
80%
180
70%
160
60%
140
50%
120
100
40%
80
30%
60
20%
40
10%
20
0
0%
2009
2010
2011
ADR® Type
2012
2013
Seasonal Fleet
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2014
2015
ADR %
2016
Solid Customer Base - Worldwide
30%
70%
Worldwide Majors / NOC
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Mid Cap / Juniors
Standardized Crew Training Worldwide
• Lower cost
• Higher efficiency
Service Quality Delivery
Superior
Level of
Service
Consistency
Worldwide
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Ability to Innovate & Apply Technology
Speciality Rigs
Natural Gas
ASR – Slant
Well Service Rig
Driller’s Cabin
ADR® Controls Intelligence
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Self Moving Pad Rigs
Off-line Stand Building
ADR® – The Rig Type with More
• Walk with accuracy
– The ADR walks on both X + Y axis,
for the best mobility and flexibility
of any rig on the market
Depth Flexibility
1000 HP
• Safety from the ground up
– The ADR is designed and built by
Ensign, a worldwide leader in
oilfield safety
1500 HP
• Move in less time
2000 HP
– The ADR transports faster than
other full-sized rigs
• Drill Efficiently
– The ADR lets you build stands
offline, while you drill
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Directional Drilling Services
- the move to lower cost integrated services
•
•
•
•
•
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Full Service Provider
In-house repair facilities
Patented design mud motors
Best in class MTBF
Growing organic opportunity
Well Performance Optimization
• Well Optimization teams based
in US and Canada
• Real time coordination
with clients
• Reduced well costs
• Value added integrated service
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Safety Awareness
M Manhours
10
9.09
LTI Freq
TRI Freq
25
9
20
8
7.13
7
5.57
6
15
Man Hours
Injury Frequency (200,000 man hours)
7.09
4.65
5
4.00
4
10
3.21
3
3.11
2.45
2.21
2
1.46
1.23
1.36
1.67
1.14
1
0.86
1.96
5
1.07
0.70
0.47
0.56
0.63
2009
2010
2011
0.49
0.36
0.47
2012
2013
2014
0.27
0
0
2003
2004
2005
2006
2007
2008
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2015
Dividends per Common Share
16% Compound Annual Growth Rate
$0.60
$0.50
$0.40
$0.30
• 2011
$0.3900 per share
• 2012
$0.4250 per share
• 2013
$0.4475 per share
• 2014
$0.4725 per share
• 2015
$0.4800 per share
Current Yield 7.7%
$0.20
$0.10
$0.00
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Debt Metrics
$ millions, December 31
2,500
Net Debt (Short Term Debt + Long Term Debt - Cash)
Equity
Net Debt / Equity
Net Debt / Adjusted EBITDA
2.5
NBV/Market CAP
2,000
2.0
1,500
1.5
1,000
1.0
500
0.5
0
0.0
2010
2011
2012
2013
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2014
2015
Revenue - EBITDA
$ millions, 12 months ended December 31
EBITDA (adjusted)
2500
Revenue
2000
1500
1000
500
0
EPS 1
1 Estimate based
2012
2013
2014
2015
2016e¹
1.42
0.84
0.47
0.68
(1.13) – 0.50
on range of analysts forecasts
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Strategically Positioned for the Future!
Right Rigs
− maintain high quality fleet and continue to manage fleet within
the context of supporting Ensign’s brand
Right People
− retain our best people, maintain our employee data base and
continue Global Skills Training (GST) program
Right Balance Sheet
− insure we build ample liquidity by reducing debt and conserve
capital
Right Strategy
− continue down the path of vertical integration and well
optimization
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Summary – Why Ensign?
•
•
•
•
•
•
•
management aligned with shareholders (high level of ownership)
consistent dividend history
well positioned globally
best positioned for opportunistic growth in 2016
low fixed cost/high variable cost business model
conservative balance sheet
ADR® fleet worldwide ensures high utilization
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ensignenergy.com
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