Drilling Rigs - Ensign Energy Services Inc.

CORPORATE
PRESENTATION
December 2014
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.
Current Operations
2014 YTD Revenue
Geographic Segmentation
27%
29%
Canada
United States
44%
90%
Canada
United States
International
Kurdistan
10%
Drilling & Rig
Services
Completion &
Production Services
Libya
Oman
Venezuela
Australia
New Zealand
Major Assets Snapshot
Argentina
•
•
•
•
•
272 Drill Rigs
136 Service Rigs
77 Directional Drilling Kits
96 Frac Flow Back Units
26 Core Rigs
Expanding US Footprint
$1,000,000
22% CAGR
$900,000
$800,000
Revenue (‘000’s)
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$-
2009
2010
2011
2012
2013
Expanding Int’l Footprint
$600,000
16% CAGR
$500,000
• Largest drilling
contractor in
Australia
$400,000
• Solid footprint
in Oman
$300,000
• Established
in Kurdistan
$200,000
$100,000
$-
2009
2010
2011
2012
2013
Drilling & Rig Services
North America
213
110 103
Drilling Rigs
77
Horn River
Oil Sands
Montney
Directional Drilling Kits
Cardium
Bakken
Utica
San
Joaquin
Basin
Jonah
Monterey
Granite
Wash
Barnett
Permian
At August 15, 2014
26
Core Rigs
Niobrara
Piceance
47
30
Marcellus
Woodford
Haynesville
Tuscaloosa
Eagle Ford
26
United States
Canada
Drilling & Rig Services
International
59
Drilling Rigs
Substantial & Growing International Presence
MENA
Drill rigs – 15
VENEZUELA
Drill rigs – 7
Workover rigs – 1
ARGENTINA
Drill rigs – 6
Workover rigs – 4
At August 15, 2014
AUSTRALIA
Drill rigs – 22
Workover rigs – 2
NEW ZEALAND
Drill rigs – 1
Workover rigs – 1
Completion & Production
Services
136
Service Rigs
44
92
Horn River
Oil Sands
Montney
Cardium
Bakken
Utica
San
Joaquin
Basin
Niobrara
Jonah
Piceance
Granite
Wash
Barnett
Monterey
Permian
At August 15, 2014
Woodford
Marcellus
96
Frac Flow Units
50
Haynesville
Tuscaloosa
Eagle Ford
United States
Canada
46
How has the cost split of drilling a
well changed in the last 20 years?
Today
20 years ago
Low Complexity
Vertical Wellbores
Other
Drill Rig
High Complexity
Horizontal Wellbores
Other
Directional Drilling
Site Preparation
Environmental Services
Supervision / Engineering
Fluid / Handling Disposal
Mud
Transportation
Rentals
Directional Drilling Growth
Ensign DD Kits on Ensign Rigs
Directional and horizontal
Ensign’s Fleet
Vertical
Ensign Directional Drilling Services Growth
100
80%
90
70%
70
60%
60
50
50%
40
40%
30
20
30%
20%
10
2008
2009
2010
Note: 35% of Ensign DD Kits work on Competitor Rigs
2011
2012
2013
0
# Kits (Ensign)
80
Trends
AC Rigs Continue to Gain Market Share
900
AC Drive Rigs
SCR Rigs
Mechanical Rigs
800
700
600
500
400
300
2Q11
1Q12
1Q13
1Q14
Note: The above estimates corresponding to rig activity for rigs > 600 HP are derived from multiple sources including Rig Data,
Smith Bits, and corporate filings.
Ensign’s Continuous New Build
Program
• Deliver 34 newbuild ADR’s
by June 2016
– 24 ADR®-1500S
– 10 ADR®-850
• Flexibility to increase our
production cadence
• Balance sheet flexibility
to fund into the future
• This approach has allowed
us to quickly respond to
increased ADR® demand
Fleet Transition
350
1,600
1,400
300
1,200
250
1,000
800
150
600
100
400
50
-
200
1990
1995
New Builds
2000
2009
2014
Rig Fleet (from Acquisitions)
2019E
HP
-
HP
# Rigs
200
Ability to innovate & apply
technology
Driller’s Cabin
Self Moving Pad Rigs
Speciality Rigs
Off-line Stand Building
ADR® Controls Intelligence
Natural Gas
BOP Handling and
Off-line Test Systems
Safety Awareness
10
9
8
7.09
LTI Freq
25
TRI Freq
20
7.13
7
5.57
6
15
4.65
5
4.00
4
3.21
2.45
3
2
1.46
1.23
1.36
1.14
1
0
2003
2004
2005
2006
0.86
2007
0.70
2008
0.47
2009
10
3.11
2.21
0.56
2010
0.63
2011
0.49
2012
2.25
1.67
0.36
2013
5
0.46
Q3 14
0
Man Hours
Injury Frequency (200,000 man hours)
M Manhours
9.09
Dividends per Common Share
$0.50
$0.45
$0.40
$0.35
$0.30
$0.25
$0.20
16% Compound Annual Growth Rate
•
•
•
•
•
2009
2010
2011
2012
2013
$0.3425 per share
$0.3575 per share
$0.3900 per share
$0.4250 per share
$0.4475 per share
$0.15
$0.10
$0.05
$0.00
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Net Debt to Equity
$ millions, December 31
2,500
Net Debt (Short Term Debt + Long Term Debt - Cash)
Equity
2,000
1,500
1,000
500
0
2009¹
1 Not
restated for IFRS
2010
2011
2012
2013
Revenue
$ millions, 12 months ended December 31
2,500
2,000
1,500
1,000
500
0
2009¹
1 Not
restated for IFRS
2010
2 Estimate
2011
based on range of analysts forecasts
2012
2013
2014e²
Financial Metrics
$ millions, 12 months ended December 31
15
ROE
10
5
700
EBITDA (adjusted)
0
Income
600
2009¹ 2010
2011
2012
2013 2014e²
500
400
300
200
100
0
EPS per share
1 Not
2009¹
2010
0.82
0.78
restated for IFRS
2 Estimate
2011
1.39
based on range of analysts forecasts
2012
2013
2014e²
1.42
0.84
0.85 – 1.14
Financial Summary
$ millions, three and nine months ended September 30
3rd Quarter
2014
2013
543.0
583.3
Revenue
123.1
Adjusted EBITDA
137.3
33.7
Income
26.5
$0.22
Per share
$0.17
34.9
Adj. Net Income
36.1
$0.23
Per share
$0.24
105.9
Cash flow
132.2
$0.69
Per share
$0.87
16.9
Dividends
18.0
Per share
$0.1175 $0.1100
89.0
Capital expenditures
168.0
Acquisitions
-
Q3 YTD
%
%
2013 change
change 2014
7 1,719.1 1,562.0
10
12 394.5
373.3
6
(21) 102.2
102.0
(23) $0.6710 $0.6711
3 104.4
116.0
(10)
4 $0.68
$0.76
(11)
25 359.6
334.4
8
26 $2.35
$2.19
7
7
50.6
7
54.1
7 $0.3525 $0.3300
7
89 425.7
235.3
81
76.4 (100)
-
Future Growth Strategy –
Taking a Bigger Piece of the Pie
Rig
Non-Rig Costs
Typical rig today represents
1/3 total daily well costs
• Expand ADR® fleet worldwide
• Expand integrated rig –
directional drilling value
proposition
• Expand market presence in
every current market
• Dove-tail complementary
services
• Earn a bigger part of the daily
revenue opportunity while on
location
High Quality Fleet
- Designed by Ensign, for Ensign
2000 HP
1500 HP
1000 HP
850 HP
WWW.ENSIGNENERGY.COM
Thank You