Corporate Presentation - Ensign Energy Services Inc.

Corporate Presentation
July 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
Revenue – Geographic
Segmentation – 1Q14
36%
24%
Canada
United States
42%
International
Canada
United States
Kurdistan
Libya
Drilling & Rig Services
90%
10%
Oman
Venezuela
Gabon
Completion &
Production Services
Australia
New Zealand
Major Assets Snapshot
Argentina
•
•
•
•
•
275 Drill Rigs
136 Service Rigs
77 Directional Drilling Kits
96 Frac Flow Back Units
30 Core Rigs
Drilling & Rig Services
– North America
215
111 104
Drilling Rigs
Horn River
Montney
77
Oil Sands
Cardium
Bakken
San
Joaquin
Basin
Jonah
Piceance
Monterey
Niobrara
Granite
Wash
Barnett
Permian
At May 12, 2014
Utica
Woodford
Marcellus
Haynesville
Tuscaloosa
Eagle Ford
48
29
Directional Drilling Kits
30
Core Rigs
100
United States
Canada
Drilling & Rig Services
- International
Substantial & Growing International Presence
60
Drilling Rigs
MENA
Drill rigs – 15
VENEZUELA
Drill rigs – 7
Workover rigs – 1
ARGENTINA
Drill rigs – 6
Workover rigs – 4
At May 12, 2014
AUSTRALIA
Drill rigs – 23
Workover rigs – 2
NEW ZEALAND
Drill rigs – 1
Workover rigs – 1
Completion & Production Services
136
Service Rigs
45
Horn River
Montney
91
Oil Sands
Cardium
Bakken
Jonah
San
Joaquin Piceance
Basin
Monterey
Niobrara
Granite
Wash
Barnett
Permian
At at May 12, 2014
Utica
Woodford
Marcellus
Haynesville
Tuscaloosa
96
Frac Flow Units
50
46
Eagle Ford
United States
Canada
How has the cost split of drilling a
well changed in the last 20 years?
Today
20 years ago
Other
Drill Rig
Low Complexity
Vertical Wellbores
High Complexity
Horizontal Wellbores
Other
Directional Drilling
Site Preparation
Environmental Services
Supervision / Engineering
Fluid / Handling Disposal
Mud
Transportation
Rentals
Trends - Directional Drillers
on almost all rigs
Ensign DD Kits on Ensign Rigs
Ensign’s Fleet
Directional and horizontal
Vertical
100
Ensign Directional Drilling Services Growth
90
70%
80
70
60%
60
50
50%
40
40%
30
20
30%
10
0
20%
2008
2009
2010
2011
2012
2013
# 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
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.
1Q14
Ensign’s Continuous New Build
Program
 Deliver 26 newbuild ADR’s
by end 2015
 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
Ensign continues to expand
technical innovation
100%
Utilization
90%
# ADR®
300
• YOY Growth of ADR® Fleet
• High Utilization on ADR® Fleet
150
0
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
9.09
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
1.67
1.77
0.36
0.42
2013
Q1 14
5
0
Man Hours
Injury Frequency (200,000 man hours)
M Manhours
Dividends per Common Share
$0.50
$0.45
$0.40
16% Compound Annual Growth Rate
$0.35
$0.30
$0.25
• 2009 $0.3425 per share
$0.20
• 2010 $0.3575 per share
$0.15
• 2011 $0.3900 per share
$0.10
• 2012 $0.4250 per share
$0.05
• 2013 $0.4475 per share
$0.00
Debt to Equity
$ millions, December 31
2,500
Debt LT (Excludes revolving operating facility)
Equity
70%
60%
50%
40%
30%
20%
10%
0%
ESI
Peer A
2,000
1,500
1,000
500
1 Not
0
restated for IFRS 2009¹
2010
2011
2012
2013
Peer B
Peer C
Revenue
$ millions, 12 months ended December 31
2,500
2,000
1,500
1,000
500
0
1 Not
restated for IFRS
2009¹
2 Estimate
2010
based on range of analysts forecasts
2011
2012
2013
2014e²
Newbuild Capex - Investing in
the Business
1,400,000,000
Maintenance Capex
1,200,000,000
New Rigs
1,000,000,000
800,000,000
600,000,000
400,000,000
200,000,000
-
2008
2009
2010
2011
2012
2013
Financial Metrics
15
$ millions, 12 months ended December 31
10
ROE
5
700
0
600
EBITDA
(adjusted)
500
Income
2009¹ 2010
2011
2012
2013 2014e²
400
300
200
100
0
EPS per share
1 Not
restated for IFRS
2009¹
0.82
2 Estimate
2010
0.78
based on range of analysts forecasts
2011
2012
2013
2014e²
1.39
1.42
0.84
0.94 – 1.24
Financial Summary
$ millions, three months ended March 31
1st Quarter
2014
Revenue
Adjusted EBITDA
Income
Per share
Cash flow
Per share
Dividends
Per share
Capital expenditures
2013
581.1
624.2
164.4
160.1
65.0
60.4
$0.43
$0.40
139.8
137.0
$0.92
$0.90
16.9
18.0
$0.1175 $0.1100
62.8
120.8
%
change
7
(3)
(7)
(7)
(2)
(2)
7
7
92
Future Growth Strategy –
Taking a Bigger Piece of the Pie
 Expand ADR® fleet worldwide
Rig
Non-Rig Costs
 Expand integrated rig – directional
drilling value proposition
 Expand market presence in every
current market
 Dove-tail complementary services
Typical rig today represents
1/3 total daily well costs
 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
750 HP
ensignenergy.com
Thank You