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MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation

Precision Drilling Corporation · May 14, 2014 · 29 slides

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Slides

  1. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 1
    UBH Presentation AGM Investor May 14, 2014 1
  2. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 2
    Precision Drilling Overview 2013 Revenue: 2 Billion Location Leading North American horizontal driller U.S. 43% 50% Canada 223 High Performance Tier 1 rigs 7% International Delivering for high return growth investments…
  3. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 3
    May North American Market Update Tier 1 demand strong, pricing firm and renewals moving to higher dayrates. Tier 1 utilization approximately 90%. Precision operates 205 Tier 1 rigs with 18 additional announced deliveries through…
  4. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 4
    Transition to Oil Drilling 2,000 1,800 1,600 U.S. Active Land Rig Count 1,400 1,200 1,000 800 600 400 200 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: BHI Gas Oil 5
  5. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 5
    Canadian Activity Update 800 700 Canadian Active Land Rig Count 600 2011 500 400 300 200 100 2009 0 5 Year Range 2009 - Present 2012 2013 2014 Source: BHI 6
  6. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 6
    Positioned In Most Active North American Regions Positioned in Most Active North American Regions Dots representative of areas where Precision has had operations within the past two years 7
  7. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 7
    Canadian LNG Opportunity Proposed projects 14 16Bcf/day Longer-term demand source Require deeper Tier 1 rigs Opportunity for 20 to 25 rigs per Bcf of export capacity ST-1200 and ST-1500 rigs ideal for type of development Pad…
  8. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 8
    Superior Value for Resource Customers Resource Exploitation Customer Needs Lower Well Costs/Efficiency Safety & Environmental Industrialized Predictability/Repeatability Process Long-Term Partner People Technology Systems…
  9. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 9
    Precisions Development Drilling Performance Precisions Success in Unconventional Basin Marcellus Rig Count 18 160 16 140 Precisions Active Rig Count Industry Average Rig Count 14 120 12 100 10 80 8 60 6 40 4…
  10. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 10
    High Performance People Average TTM Retention Drilling Rigs (US & Canada) experience (April 2014) Superintendent 17 yrs 85% Rig Manager 15 yrs 91% Driller 8 yrs 88% For 2013, 255 Precision drilling rigs and 207…
  11. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 11
    Precision Systems at Work in 2013 Toughnecks talent Precision acquisition program construction processed 44,274 of 2 ST-3000 applications and rigs in Dubai hired 2,798 people 3,992 employees completed training through…
  12. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 12
    Precisions Tier 1 Super Series Fleet High Performance Horizontal Drilling Machines Super Triple 1500 1 Super Triple 1200 2 Super Single Rapid mobility: Walking/skidding system Location to location Smart design: Small…
  13. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 13
    Super Triple: From Concept to Field 14
  14. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 14
    ST-1500 in Bakken Support complex Drilling module Utility Corridor 15
  15. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 15
    Growth in Tier1 Super Series Fleet Tier 1 rigs Additional Tier1 Rigs Beginning of year Tier 1 99 223 +130 200 23 188 12 118 44 144 28 116 109 7 6 16 200 188 144 109 116 Total Tier 1 223 1 93 Tier 2 102 Tier 3 23 Dec…
  16. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 16
    Precision Horizontal Leadership Percentage of Horizontal/Directional Wells United States 1,2 Canada 3 87% 94% 78% 81% Precision Industry Precision Industry 1. Precision Q1 2014 Average. 2. Baker Hughes rig count average…
  17. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 17
    Precision Tier 1 growth in U.S. Unconventional Development Active Tier 1 Rigs 80 70 + 38 Rigs Permian 60 50 Marcellus 40 Eagle Ford 30 Williston Haynesville 20 Cana Woodford Mississippian 10 Barnett DJ-Niobrara Other 0…
  18. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 18
    Precision Directional Services Canada and U.S. Capacity of approximately 90 concurrent jobs Integrated service 19
  19. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 19
    Mexico / Middle East Drilling Footprint Middle East 3 active rigs in Kingdom of Saudi Arabia 2 active rigs in Kurdistan 2 newbuild rigs being deployed to Kuwait 1 newbuild contract deployment late 2014 Focus on deep high pressure…
  20. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 20
    International Growth Revenue 50 Initiated Kurdistan with 2 Rigs 40 International Revenue (million) Deployed additional 27% CAGR 3 Rigs to Mexico 30 Initiated Saudi with 3 Rigs 20 10 0 Q112 Q212 Q312 Q412…
  21. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 21
    Contract Coverage Increasing 160 Average Term Contract by Quarter International Canada US 140 120 100 80 60 40 20 0 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 22
  22. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 22
    Completion & Production Largest well service provider in Canada and growing presence in U.S. 210 Well Service and Snubbing Rigs 12 Coil Tubing units Large fleet of high value rental equipment Camps and Catering Excellent footprint…
  23. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 23
    TTM Revenue and EBITDA Trending Up TTM Revenue TTM EBITDA (millions) (millions) 2,200 +5% 800 2,000 700 +7% 1,800 600 1,600 1,400 500 1,200 400 1,000 800 300 600 200 400 100 200 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1…
  24. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 24
    Precisions Canadian Dayrate Growth Average Quarterly Dayrate 24,000 22,000 Q4 20,000 Q3 Q2 Q1 18,000 16,000 Year over year, quarterly average increase of 11% from 2010 to 2013 14,000 12,000 2010 2011 2012 2013…
  25. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 25
    Revenue and Activity Growth in Flat Rig Count Environment 268 250 244 2,200 224 226 PD U.S. and International Revenue ( millions) 217 215 204 205 199 200 2,000 U.S. Industry Avg. Rig Count * 150 1,800 100…
  26. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 26
    Capital Spending Highlights 1 2014 Planned Capital Spending Expansion & Upgrades Construction and delivery of 16 Maintenance & Infrastructure newbuild Super Series rigs 7 to U.S. 6 to Canada 199 3 to the Middle East 195 320…
  27. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 27
    Balance Sheet Flexibility Available liquidity as of 3/31/2014 2 Attractive Capital Structure 1 Debt to total capital: 37% 1,065 Interest coverage: 6.9x 106 Cash Long maturity, low cost debt Average interest rate of 6.6% Covenant…
  28. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 28
    Precision Drilling Corporation Overview Leading North American horizontal driller 223 High Performance Tier 1 rigs Delivering high return growth investments Increasing shareholder returns (dividend and share price)…
  29. MAY 2014 ANNUAL GENERAL MEETING – Precision Drilling Corporation – slide 29
    800, 525-8th Avenue S.W. Calgary, Alberta, Canada T2P 1G1 Telephone: 403.716.4500 Facsimile: 403.264.0251 www.precisiondrilling.com 30

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