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NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc.

North American Energy Partners Inc. · Nov 3, 2011 · 35 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 1
    Investor Presentation November 2011 Rod Ruston President and CEO
  2. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 2
    Forward-Looking Statements The information provided in this presentation contains forward-looking statements and information which reflect the current view of North American Energy Partners with respect to future events and financial…
  3. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 3
    Overview Heavy Construction and Mining Founded in 1953 TSX and NYSE listings: NOA Current share price: 7.33 52 week high/low: 14.23/4.70 Market capitalization: 208 million Shares outstanding: 36 million 52 week average…
  4. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 4
    Presentation Agenda Oil sands realities Opportunities About the company Financial results Segment performance and opportunities 4
  5. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 5
    Reality 1: Oil Sands Mines Keep Operating Low sensitivity to oil prices Competitive unit costs achieved at full capacity High risk of employee loss/ plant damage during shutdowns 5
  6. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 6
    Reality 2: SAGD Will Not Replace Mining SAGD and mining are geologically distinct processes Mining SAGD Typical size: 100-300k bpd Typical size: 10-50k bpd Base load production to feed upgrader Supplements mining production Draws on…
  7. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 7
    Reality 3: Producers Outsource Seasonal work Part-time labour requirement Short-term equipment requirement Outsource Specialized knowledge & equipment Non core to oil production 7
  8. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 8
    Reality 4: Demand is Growing 8
  9. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 9
    The Opportunity Largest heavy construction and mining contractor in high growth oil sands market Poised to benefit from recently announced oil sands development Position further entrenched by recent competitor difficulties…
  10. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 10
    Long-Term Contracts 3-year master services agreement 3-year muskeg removal contract 4-year master services agreement covering mining services & construction 5-year master services agreement covering mining services &…
  11. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 11
    About the Company Largest Construction & Mining Contractor in the Oil Sands Expertise Revenue by End Market 30+ years in Northern Albertas harsh 9% operating environment 6% Knowledge to come up with best solutions for customers…
  12. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 12
    First On, Last Off Project Development Phase (3-4 years) Ongoing Operations Phase (30-40 years) Initial mine site development, project site Overburden removal, mine infrastructure development, development, airstrips, pipeline…
  13. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 13
    Swing Supplier NAEP achieves higher equipment utilization rates by working on every major site in the oil sands Single Customer Fixed production capacity Excess production requirement Multiple Customers NAEP demand 13
  14. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 14
    Mine Services Active Mine Muskeg & Topsoil Overburden Ore Service NAEP Client Season Haul Truck (tonnes) Ore Mining Year-round 300 - 400 Overburden Removal Year-round 240 - 400 Muskeg (Removal/Remediation) Winter* 100 -…
  15. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 15
    Active on Every Oil Sands Mining Site Current Activity: 10-year overburden removal Future Opportunities: Phase 2 Kearl and dyke construction (currently inactive due Expansion Project (earthworks), long-term to plant fire), mine…
  16. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 16
    Project Lifecycles Project Development Recurring Services Engineering Commissioning and Design and Start-up Proceeding Initial Operational Delayed Construction Phase Syncrude - Base Syncrude - Aurora Syncrude Aurora South Exxon -…
  17. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 17
    Tailings & Environmental Services Engineered Earth Fluids Transfer & Pipeline & infrastructure Hydraulic Transport Structures Pond Closure & Tailings Management Final Reclamation Land Reforming 17
  18. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 18
    Fluid Fine Tailings Inventory Projections New regulations require dramatic reduction in tailings inventory FFT Inventory (millions m3) Bitumen Production (millions bbls/d) 6,000 3.0 Forecast Mined Bitumen Production 5,000 2.5 4,000…
  19. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 19
    Low Risk/High Growth Business Model Construction & Mining Piling Pipeline Recurring services Leveraged to high- Suited to cyclical provide stable base growth construction industry with low markets capital commitment Oil sands…
  20. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 20
    Financial Performance Rolling LTM Revenue Rolling LTM EBITDA* C () millions C () millions 17% 17% 16% 14% 12% 10% 10% 9% 10% 904 862 858 868 879 798 124 120 122 751 761 716 114 105 87 84 83 78 Sep Dec Mar Jun Sep Dec…
  21. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 21
    Operating Leases Significant growth in operating lease portfolio during 2008-2010 Operating lease expense directly impacts Consolidated EBITDA Operating Lease Portfolio Impact of Operating Leases Lease Additions Lease Expense…
  22. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 22
    Operating Leases Pros: Cons: Low cost financing Accelerated amortization Readily accessible Consolidated EBITDA impact Large Truck Example Operating Lease Purchase Lease Term / Asset Life 5 years 12 years Purchase Price 5.0M 5.0M…
  23. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 23
    Operating Leases 66 million of potential equity value in operating lease portfolio Potential equity value can be realized through future earnings Current Lease Portfolio Value () millions 250 224 200 66 million of potential…
  24. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 24
    Heavy Construction & Mining Revenue and Gross Margin % New contracts and increased tailings and environmental work helped offset reduced overburden removal activity at Canadian Natural () millions 800 716 700 666 667 600 500…
  25. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 25
    Heavy Construction & Mining Outlook Strong work volumes anticipated through balance of fiscal year Heavy demand for overburden and muskeg removal work under new and existing contracts Margin expansion constrained by equipment…
  26. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 26
    Oil Sands Opportunities Production capacity Oil Sands Investment increasing () billions 35 All active oil sands mines expected to be operating 30 29 27 27 later this year 26 25 Kearl mine scheduled to begin production in 2012…
  27. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 27
    Piling Revenue and Gross Margin % Q2 2012 revenue up 85.1%, reflecting improved weather, increased market demand and contribution from Cyntech operations Significant margin improvement in Q2 and first half () millions 200 180 160 155…
  28. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 28
    Piling Outlook Rebounding commercial and industrial construction sectors Large backlog of projects contributing to high Q3 activity levels Normal seasonal slowdown anticipated in Q4, followed by return to stronger activity levels in…
  29. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 29
    Pipeline Revenue and Gross Margin % Revenue and margins in current period driven by two new pipeline contracts in BC and Alberta () millions 125 101 100 85 75 50 38 36 25 25 22% (16%) (4%) 0% 3% 0 FY 2009 FY 2010 FY…
  30. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 30
    Pipeline Outlook New pipeline projects expected to contribute improved revenues and margins Timeline on one project has been extended to Spring Improved competitive environment More bidding opportunities Increasing customer…
  31. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 31
    Investment Highlights Largest construction and mining contractor in the oil sands Solid core business of recurring services with high barriers to entry and near-term growth potential Investment in Canadas oil sands without direct…
  32. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 32
    Thank you
  33. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 33
    Appendix
  34. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 34
    Pipeline Construction Opportunities TMX Project 2011 TCPL (Tanghe Creek-Sloat) 38 km (48) Anchor Loop Plains Midstream (Rainbow Pipeline II) 301 km (10/12) TMX-2 Enbridge (L18) 95 km (30) TMX-3 Enbridge (Husky (Sunrise)) Norealis…
  35. NOVEMBER 2011 INVESTOR PRESENTATION – North American Energy Partners Inc. – slide 35
    Active on Every Oil Sands Mining Site Current Activity: 10-year overburden removal Future Opportunities: Phase 2 Kearl and dyke construction (currently inactive due Expansion Project (earthworks), long-term to plant fire), mine…

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