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February 2013 Investor Presentation – Titan Energy Services Limited

Titan Energy Services Limited · Feb 4, 2013 · 37 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. February 2013 Investor Presentation – Titan Energy Services Limited – slide 1
    Acquisition of Hofco Oil Field Services and Equity Capital Raising February 2013
  2. February 2013 Investor Presentation – Titan Energy Services Limited – slide 2
    Table of contents PAGE NO. 1. Executive Summary 4 2. Hofco Oilfield Services 6 3. Industry Overview and Opportunities 15 4. Titan Overview 18 5. Titan Half Year Results and Trading Update 24 6. Equity Raising 29 3
  3. February 2013 Investor Presentation – Titan Energy Services Limited – slide 3
    1. Executive Summary
  4. February 2013 Investor Presentation – Titan Energy Services Limited – slide 4
    1. Executive summary Titan Energy Services (ASX:TTN) (Titan) is an oil and gas field services company focused on the rapidly growing CSG to LNG industry in QLD Since listing on ASX, Titan has successfully integrated RCH and has…
  5. February 2013 Investor Presentation – Titan Energy Services Limited – slide 5
    2. Hofco Oil Field Services
  6. February 2013 Investor Presentation – Titan Energy Services Limited – slide 6
    2. Transaction overview Titan will acquire Hofco for cash of 21.7m1 on a cash free and debt free basis, comprised as follows: 15.9m upfront 5.8m deferred consideration (payable at the earlier of Hofcos audited FY13 financial…
  7. February 2013 Investor Presentation – Titan Energy Services Limited – slide 7
    2. Hofco business overview Hofco is a leading directional drilling equipment and down hole tool rental provider in QLD, currently focused on the CSG sector Established in 1980 by its vendor, Ian Hofmeier Run by a respected and…
  8. February 2013 Investor Presentation – Titan Energy Services Limited – slide 8
    2. Hofco business model In FY12, approximately 95% of Hofcos revenue was generated from equipment hire The specialised nature of the equipment has led to lower utilisation rates (c.50%) compared to Atlas Drilling and RCH, however…
  9. February 2013 Investor Presentation – Titan Energy Services Limited – slide 9
    2. Hofco customers Hofco does not have customer concentration issues Throughout FY11, FY12 and FY13YTD, the Companys top 10 customers represented on average approximately 53% of total revenues Hofco distributes and services a wide…
  10. February 2013 Investor Presentation – Titan Energy Services Limited – slide 10
    2. Strategic rationale and growth potential Diversification Stated objective of acquiring or starting an oil and gas equipment rental business strengthens Titans position as a diversified oil and gas services company Market…
  11. February 2013 Investor Presentation – Titan Energy Services Limited – slide 11
    2. Hofco financials Pro forma P&L Hofcos historical results and its pro forma combined revenue and earnings with Titan for FY13 are set out below Hofcos FY12 result included 2 large contracts. Similar sized contracts are not expected…
  12. February 2013 Investor Presentation – Titan Energy Services Limited – slide 12
    2. Hofco financials - Pro forma Balance Sheet Million Titan Hofco Pro forma As at 31 Dec 2012, Titan had net debt 31 Dec 31 Dec (Incl. Hofco) of 10.3m and gearing(7) of 27% 2012(1) 2012(2) 2012(3) Cash and cash equivalents 0.9 2.1(4)…
  13. February 2013 Investor Presentation – Titan Energy Services Limited – slide 13
    2. Hofco business highlights Strong margins (74% in FY12) Due to its market positioning, service ethic, low overheads and specialised nature of equipment Low capital intensity Drilling tools and supplies have long useful life…
  14. February 2013 Investor Presentation – Titan Energy Services Limited – slide 14
    3. Industry Overview and Opportunities
  15. February 2013 Investor Presentation – Titan Energy Services Limited – slide 15
    3. Industry overview and opportunities The Hofco acquisition will allow Titan to further leverage the committed expenditure in QLD CSG- LNG Titans target market of CSG-LNG drilling continues to grow 4 major LNG projects are…
  16. February 2013 Investor Presentation – Titan Energy Services Limited – slide 16
    3. Industry overview and opportunities (contd) QLD CSG production Queensland andand CSG production consumption forecast consumption forecast 2,500 2,000 QLD CSG-LNG production and Queensland CSG Production (PJ/a) 1,500…
  17. February 2013 Investor Presentation – Titan Energy Services Limited – slide 17
    4. Titan Overview
  18. February 2013 Investor Presentation – Titan Energy Services Limited – slide 18
    4. Atlas Drilling Commenced in 2007 with its first rig Strong reputation for offering highly mobile, flexible and productive drilling packages Operating two owned rigs and a third rig under an Operating & Maintenance (O&M) contract…
  19. February 2013 Investor Presentation – Titan Energy Services Limited – slide 19
    4. Atlas Drilling order book As the 4 major LNG projects in QLD move closer to production, demand for CSG drilling rigs has increased significantly Atlas Drilling has been able to secure longer term contracts for its rigs and expand…
  20. February 2013 Investor Presentation – Titan Energy Services Limited – slide 20
    4. RCH overview RCH is a containerised portable camps business catering to CSG related services and infrastructure companies Acquired in September 2011 (effective 1 July 2011) with capacity of 110 rooms Post acquisition, Titan…
  21. February 2013 Investor Presentation – Titan Energy Services Limited – slide 21
    4. RCH overview (continued) RCHs containerised accommodation units are specifically suited to the oil and gas drilling sector as Contracts: they are easily and rapidly mobilised Current contracts range from 3 to 18 months (average 6…
  22. February 2013 Investor Presentation – Titan Energy Services Limited – slide 22
    4. Nektar Remote Hospitality Established by Titan in April 2012 Nektar offers high quality catering and camp management services to remote accommodation service providers Low capital intensive business which will target remote…
  23. February 2013 Investor Presentation – Titan Energy Services Limited – slide 23
    5. Titan 1H FY13 Results and Trading Update
  24. February 2013 Investor Presentation – Titan Energy Services Limited – slide 24
    5. Financial overview Profit & Loss Million Actual Actual % Change 1H FY13 1H FY12 Revenue 29.6 15.0 97% EBITDA 6.5 2.4 (1) 171% EBITDA margin % 22.0% 16.0% EBIT 4.3 0.7 514% EBIT margin % 14.5% 4.7% 9.7% Net Profit Before Tax…
  25. February 2013 Investor Presentation – Titan Energy Services Limited – slide 25
    5. Financial overview Balance Sheet Million 31 December 30 June As at 31 December 2012, Titan had 2012 2012 net debt of 10.3m and gearing(1) of 27% Cash and cash equivalents 0.9 1.4 Receivables 13.3 6.5 Receivables have increased…
  26. February 2013 Investor Presentation – Titan Energy Services Limited – slide 26
    5. Financial overview working capital and cashflow Million Actual Cashflow from operations and additional 30 Dec debt funding utilised to grow the business 2012 Capex through the period used to fund the Cash flow from operations 2.5…
  27. February 2013 Investor Presentation – Titan Energy Services Limited – slide 27
    5. FY13 outlook Expecting a stronger remainder of the year due to: Fourth drill rig package to be in operation Atlas Drilling utilisation expected to remain strong driven by major oil and gas company contracts RCH starting the half…
  28. February 2013 Investor Presentation – Titan Energy Services Limited – slide 28
    6. Equity Raising
  29. February 2013 Investor Presentation – Titan Energy Services Limited – slide 29
    6. Acquisition funding The Hofco acquisition will funded by a combination of equity and operating cash flow: Approximately 7.0m from a non renounceable entitlement offer at an issue price of 0.95; Approximately 11.0m placement to…
  30. February 2013 Investor Presentation – Titan Energy Services Limited – slide 30
    6. Placement details 11m placement to institutional and sophisticated investors Placement c.3.9m shares unconditional under Titans existing placement capacity structure c.6.6m shares conditional on approval at EGM Placement shares…
  31. February 2013 Investor Presentation – Titan Energy Services Limited – slide 31
    6. Entitlement Offer details 1 for 4 pro-rata non-renounceable entitlement offer (Entitlement Offer) to raise approximately 7.0m through Entitlement Offer the issue of approximately 7.4m shares Structure and Size Shares issued under…
  32. February 2013 Investor Presentation – Titan Energy Services Limited – slide 32
    6. Indicative timetable Entitlement Offer and Placement Date Trading halt commences Thursday 31 January 2013 Bookbuild opens Thursday 31 January 2013 Bookbuild closes Friday 1 February 2013 Announce capital raising and…
  33. February 2013 Investor Presentation – Titan Energy Services Limited – slide 33
    6. Key risk factors Operational risks (continued) Reliance on key personnel Titan Energy Services progress in pursuing its objectives could be dramatically influenced by the loss of key personnel or a failure to secure and retain…
  34. February 2013 Investor Presentation – Titan Energy Services Limited – slide 34
    6. Key risk factors Operational risks (continued) Sustainability of growth and margins The sustainability of growth and the level of profit margins from operations are dependent to a degree on the Companys ability to secure new…
  35. February 2013 Investor Presentation – Titan Energy Services Limited – slide 35
    6. Key risk factors Acquisition risks (continued) Reliance on information provided Titan undertook a due diligence process in respect of Hofco, which relied in part on the review of financial and other information provided by the…
  36. February 2013 Investor Presentation – Titan Energy Services Limited – slide 36
    6. Key risk factors Acquisition risks (continued) Acquisition accounting In accounting for the acquisition in the pro-forma combined balance sheet, Hofco has performed a preliminary fair value assessment of all of the assets,…
  37. February 2013 Investor Presentation – Titan Energy Services Limited – slide 37
    6. Selling restrictions This Presentation has been prepared for information purposes only and is not a prospectus, disclosure document or other offering document under Australian law or under any other law. The distribution of this…

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