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CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc.

Carbo Ceramics Inc. · Dec 7, 2011 · 39 slides

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  1. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 1
    CARBO is the worlds largest supplier of ceramic proppant, the provider of the industrys most popular fracture simulation software, and a provider of fracture design and consulting a provider of fracture design and consulting services.…
  2. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 2
    Company Business Profile CARBO has the leading products that make oil & gas wells produce better and increase recovery (EUR) We are an oilfield services technology company selling p products globally g y We manage the business…
  3. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 3
    CARBO People and Places Products/services sold in 50 countries Ceramic proppant manufacturing plants: Ceramic proppant manufacturing plants: USA (Eufaula, AL; Toomsboro, GA; McIntyre, GA) Russia (Kopeysk), China (Louyang) Resin…
  4. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 4
    Our Main Mission We make oil & gas wells produce We make oil & gas wells produce better and increase recovery (EUR) (EUR)
  5. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 5
    CARBO improves the effectiveness of fracs 1 Frac Design Software Highest Conductivity Proppant High Conductivity Proppant Improve Frac Completions E&P Value: Expert Fracpro Frac Frac Increased Consultants For For…
  6. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 6
    CARBO is the world leader in Proppant We provide the highest quality, highest conductivity Ceramic Proppant in the world, since 1979 W We provide the broadest product range of Ceramic Proppant to id th b d t d t fC i P tt…
  7. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 7
    Ceramic Proppant Business
  8. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 8
    Ceramic Proppant Sales vs Capacity Lbs (Millions) Lbs (Millions) 2,250 CRR Manufacturing Capacity (YE) 2,000 CRR Ceramic Sales Volume 1,750 1,500 1,250 1,000 750 500 250 0 Toomsboro line 4 was completed in…
  9. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 9
    Our Ceramic Proppant Value Proposition What should an E&P Operator expect using CARBOs Ceramic Proppant versus a sand based Proppant 9 20%+ Increase in Production Rates 9 20%+ Increase in Estimated Ultimate Recovery (EUR) 9 High ROI…
  10. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 10
    Economic Conductivity To Match Any Reservoir General Application General Application Lightest weight ceramic proppant on the market. CARBOHYDROPROP Best slickwater fracturing proppant. Economic lightweight ceramic proppant for…
  11. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 11
    The Conductivity of Proppants used in the Oil & Gas Industry A technical primer on which Proppants make wells have higher production & recovery (EUR)
  12. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 12
    Economic Conductivity Proppant Types & Conductivity Highest Production, EUR, IRR Highest Conductivity Engineered, Manufactured Product High strength (minimizes crush) Tier 1 High Conductivity Uniform size and shape Ceramic…
  13. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 13
    Resin Coated Sand (RCS) Proppant Business
  14. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 14
    CARBOBOND RCS Adding a growth business Broaden our Economic Conductivity range (more wells) Client Broaden E&P client contact ((capture more spend) p p ) Broaden product price points Our Distribution System Leverage Our…
  15. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 15
    CARBOBOND RCS Growth Plan Grow our capacity to 1 billion lbs before year end 2012 Plants 100M Lbs New Iberia Line 1 Producing RCC & RCS since 2010 300M Lbs New Iberia Line 2 Production of RCS by YE 2011 600M Lbs Marshfield, WI…
  16. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 16
    EndofYear Proppant Capacity Lbs M 2,200 2,000 400 CRR Resin Coated Proppant Capacity (YE) 1 800 1,800 CRR Ceramic Proppant Capacity (YE) CRR Ceramic Sales Volume 1,600 1,400 1,200 1,000 800 600 400 200 0 2000 2001 2002…
  17. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 17
    Product Development Increased focus and investment in product development Dual Dual focus of inventing new products and focus of inventing new products and adding technology to existing products Recent product introductions…
  18. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 18
    The O&G industry growth What has evolved in shales What has evolved in shales What the positive impact is for CARBO Why the need for higher conductivity Why the need for higher conductivity Field examples of Production and EUR…
  19. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 19
    Cracking the Code of shales In the last few years, two main breakthroughs: Dramatically increased the Reservoir Contact Area with Horizontal Drilling Horizontal Drilling Greatly Greatly increased the Conductivity of Fracs,…
  20. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 20
    Positive Impact on Proppant Demand Impact of greatly increasing the Reservoir Contact Area: Vertical Well Horizontal Well 250 000+ lbs/stage 250,000+ lbs/stage 250 000+ lbs/stage 250,000+ lbs/stage 1 frac stage 1030+ frac stages Total…
  21. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 21
    Why do Shales & Tight Sands need Conductivity Very Low Permeability High Pressure & Temperature High Pressure & Temperature Multiphase Flow Transverse Fracs
  22. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 22
    Permeability Keeps Getting Lower millidarcies microdarcies nanodarcies 1 md 1 md .001 md .001 md .000001 md .000001 md
  23. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 23
    Transverse Fracs Challenge: Limited Intersection between Wellbore and Fracture Limited Intersection between Wellbore and Fracture A Horizontal Well with a Transverse Intersecting Frac has enormous fluid velocity, and nearwellbore…
  24. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 24
    ECONOMIC CONDUCTIVITY Haynesville Shale 2000 CARBO's Hydroprop (14 wells) well avg 1800 Others' Proppant (32 wells) 1600 MCF), per w 1400 1200 duction (MM 1000 22% increase 21 months 800 Add l production in the…
  25. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 25
    ECONOMIC CONDUCTIVITY Bakken Shale Wells utilizing ceramic proppant producing 2x the production of Sand wells. 250,000 125,000 additional bbls 60/bbl Ceramic Proppant = 7.5 million in INCREMENTAL value 200,000 ulative Oil,…
  26. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 26
    ECONOMIC CONDUCTIVITY Eagle Ford Shale 200,000 Addl production in the first 12 months ell avg 180,000 is 63,000 BOE (per well) a 52% increase OE), per we 160 000 160,000 140,000 CARBO wells generate an incremental…
  27. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 27
  28. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 28
    Falcon TechnologiesTM Falcon Technologies was acquired in Oct 2009 Falcon provides Spill Prevention & Containment Containments, tank lining, tank bases Proprietary polyurea technology Growth expectations are 20%+ annually G…
  29. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 29
    Falcon Technologies Value Proposition Risk Mitigation Environmental Stewardship Operating Cost Reduction Public Image Enhancement Environmental Best Practice Eliminates product loss EPA Publication: Average spill 1,300…
  30. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 30
    Geographical Expansion Focus on Resource Plays Services Today in: Permian Barnett Woodford Fayetteville Haynesville Marcellus Eagle Ford Eagle Ford Possible future expansion into other resource plays into other resource…
  31. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 31
    Financial Results
  32. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 32
    CARBO Financials 750 3,000 170 Revenue M Net Income M 156 700 2,800 160 NAM Total Rigcount Cash from Operations * 650 2,600 150 587 140 600 2,400 130 550 2,200 118 120 500 473 2,000 110 110 450 1,800 100 388 400 1,600 90 87 342…
  33. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 33
    CARBO Financials 650 7.50 7.50 Revenue M Earnings Per Share Cashflow Per Share 6.74 600 587 7.00 7.00 6.50 6.50 550 6.00 6.00 500 473 5.50 5.50 5.09 450 5.00 5.00 4.80 400 388 4.50 4.50 342 350 4.00 4.00 300 3.57 284 3.40…
  34. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 34
    Condensed Balance Sheet in 000s September 30, 2011 December 31, 2010 (U (Unaudited) dit d) (A dit d) (Audited) ASSETS Cash and cash equivalents 39,677 46,656 Other current assets 257,445 190,999 Property, plant and equipment,…
  35. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 35
    Dividends Increased Last 11 Years Per Share Per Share Shares Shares Millions 1.00 30.0 Dividends Paid Per Share 0.90 27.0 Shares Outstanding 0.80 24.0 0.70 21.0 0.60 18.0 0.50 15.0 0.88 0.40 0.76 12.0 0.70 0.30…
  36. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 36
    Investing for Future Growth Ceramic Capacity Falcon Expansion Resin Coating Growth Continue to lead in worldwide Continue to lead in worldwide Continue to lead the industry Continue to lead the industry Continue to lead in resin…
  37. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 37
    Strategy Continue to Grow the ceramic proppant franchise Continue to inform E&P Operators of the value of Conductivity and increase ceramic market share Continue to produce the highest Conductivity and Quality proppants Continue to…
  38. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 38
    CARBO is the worlds largest supplier of ceramic proppant, the provider of the industrys most popular fracture simulation software, and a provider of fracture design and consulting a provider of fracture design and consulting services.…
  39. CAPITAL ONE SOUTHCOAST 6TH ANNUAL ENERGY CONFERENCE – Carbo Ceramics Inc. – slide 39
    Cash Flow from Operations Reconciliation Results from Continuing Operations i 000 in 000s For the years ended Dec 31 2005 2006 2007 2008 2009 2010 TTM Net Income 45,463 52,245 49,641 60,405 52,810 78,716 117,834 Plus:…

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