A Focused Story 3 Coil Tubing Largest masted coil tubing fleet in Canada Innovative fleet leading edge High barriers to entry in masted coil market Completion Downhole Tools (Tryton Tools) and Top 5 in Canada Conventional and…
EBITDAS 4 100 80 Millions 60 40 74 74 66 68 49 20 29 26 10 0 2009 2010 2011 2012 2013 2014 2015E(1) 2016E(1) Actual Analyst Consensus (1) 2015 and 2016 is analyst consensus at June 24/15; Essential is covered by…
Financial Strength 5 Debt Outstanding Debt / EBITDAS 39 million 0.7x (May 5/15) (Debt at May 5/15; EBITDAS TTM to Mar 31/15) Credit Facility: 100 million with a syndicate of four lenders May 31/17 maturity 35 million…
Balanced Capital Deployment 6 Unused Credit 2015 EBITDAS Capacity 26 million 61 million (Analyst Consensus Jun 24/15) (May 5/15) 2015 Capital Program - 21 million Annual Dividend - 15 million (0.03/share quarterly)
2015 Outlook 7 Industry slowdown Lower E&P capital spending due to low oil and Pricing pressure on services natural gas prices Extent and duration of downturn is highly uncertain Essentials Response - Focus on what Essential can…
Where Earnings are Generated 8 Q1/15 Revenue - 70 MM* Q1/15 Gross Margin - 15 MM* Downhole Service Rigs Downhole Tools Tools & & Rentals Rentals 15 MM 24 MM 7 MM Well Coil Well Servicing Service 11 MM 32 MM Gross…
2015 Capital Budget 10 21 million including 13 million growth and 8 million maintenance Growth capital: completing and putting into service 1 Gen III and 4 additional Gen IV masted coil tubing rigs over the next 18 months…
Investing in High Demand Equipment 11 Capital Spending (millions) 2013A 2014A 2015B Growth 32 32 13 Maintenance/infrastructure 15 14 8 Total 47 46 21 2014A 2015B New Assets Additions Additions In-service(1) Masted coil tubing…
Fracturing Market: Essentials Role 12 The number of long-reach horizontal wells increases the demand for Essentials masted coil tubing rigs In the well completion phase, masted coil tubing rigs are used for: Pre-Fracturing…
Masted Coil Tubing: Build Program 13 Gen III/IV build program (2013 to 2016 expected delivery): 4 Gen III rigs / 6 Gen IV rigs Increased reel capacity - longer and larger diameter coil; unique safety features Record depth: Gen III -…
Masted Coil Tubing: Evolution 14 Gen II/III/IV Specifications Size Gen II Gen III Gen IV Number of rigs at Mar 31/15 14 3 2 2 coil 5,500 m 8,400 m 11,200 m 2 3/8 coil 3,500 m 6,300 m 7,900 m 2 5/8 coil 2,900 m 4,900 m 6,400 m Mast…
Well Drilling Comparison 15 Deeper Wells: Longer and Larger Diameter Coil Tubing
Essential Provides Full Service Completions 16 Essential equipment on-site: 1 Gen III and 1 Gen II masted coil tubing rig (milling out multi-stage frac balls and seats) 2 fluid pumpers, 2 nitrogen pumpers, 1 chemical van…
Completion of Horizontal Wells 17 Coil Tubing Service Rig Works while well is flowing and Use of kill fluid to service a well under pressure Deals with a wide variety of well Continuous coil - no threaded bore applications…
Production Work-overs: Service Rigs 18 The growing number of horizontal wells may increase the demand for service rigs for future work-over services Maintenance work (rod and pump changes) on vertical wells typically use a…
Downhole Tools & Rentals 19 Proven Business Model: High return on low capital investment 24 million of tools inventory Smaller employee base Technical business; significant barriers to entry High quality service and key…
Downhole Tools 20 MSFS Tools used for Horizontal Completions: Primary tool: Ball & Seat Other tools: Viking sliding sleeve, MaxFracTM Conventional Tools: Dominant role in the Canadian market Offers insights into customer well…
Operating Areas 21 CANADA U.S.A. Coverage Across Key Oil and Gas Basins
Corporate Data 22 June 24/15 Trading price 1.15 Market capitalization 145 million Enterprise value (based on May 5/15 debt) 184 million Dividend yield 10.4% EV/2015 EBITDAS (analyst consensus)(1) 7.0x EV/2016 EBITDAS (analyst…
Key Takeaways 23 Operational Focus Capital program focused on masted coil tubing rigs suitable for long-reach horizontal wells Downhole tools and rentals new tools and U.S. market Managing the Industry Downturn Strong balance…
Garnet Amundson 1100, 250 2nd Street SW President, Chief Executive Officer & Director Calgary, Alberta T2P 0C1 (403) 513-7272 Karen Perasalo serviceessentialenergy.ca Investor Relations TSX:ESN www.essentialenergy.ca
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