EURASIA DRILLING COMPANY LTD VTB Capital Investment Forum RUSSIA CALLING Moscow October 5-7, 2011
Agenda EDC Overview Overview: EDC at a glance Investment case Investment Case Performance and positioning Strategic Focus EDCs Position Summary Q&A Strategic Focus Summary Q&A 3
EDC at a glance EDC Overview THE LARGEST DRILLING COMPANY IN RUSSIA AND THE CIS Financial highlights 1H2011 Growth Revenue US 1,265 million +47% vs. 1H2010 Investment Case EBITDA US 267 million +29% vs. 1H2010 Net Income US 151…
Geographic presence EDC Overview Head Office Regional/Branch Office Support Base Operational Areas Investment Case TIMAN-PECHORA Usinsk EASTERN SIBERIA Kogalym EDCs Position Moscow WESTERN SIBERIA VOLGA-URALS…
Russian market EDC Overview Russias onshore market by meters drilled (mln) 2013F Drilling volumes in Russia grew at 2012F more than 8% between 2006-2010 2011F As per REnergyCo, demand for Investment Case 2010 drilling is expected…
Russian oil industry EDC Overview Russias crude oil production (kbpd) 12 60 The crude oil production from 10 50 Brownfields accounts for 85-90% Production from Greenfields of Russias total output, but has 8 40 Investment Case…
Drilling complexity is increasing EDC Overview Customers demanding hi-spec rigs Fleets must be modern Depths/complexity increasing Fleets must be heavier Assets are becoming scarce Fleets must be more efficient Logistics more…
Horizontal drilling EDC Overview Horizontal drilling volumes in Russia (th. meters) Migration toward exploitation of 2010 more challenging geologies and isolated oil reserves requires 2009 more sophisticated drilling 2008…
Operating performance EDC Overview EDC drilling volume performance (th. meters) EDC Actual 4,800 LUKoil-Bureniye 4,103 19% CAGR in drilling EDC Forecasts 4,041 3,753 volumes during EDCs history Investment Case 3,269 as an…
Rig fleet and CAPEX EDC Overview EDC capital expenditures (US mln) EDC rig fleet 400 Actual 100-125 T 160-175 T 200-225 T 250-270 T 320-400 T 450 T about 350m 0 350 327 2011E 320 1,000 300 284 Investment Case 2,000 Max.…
Market share (by meters drilled) EDC Overview 2007 (at IPO) 1H 2010 1H 2011 EDC 22% EDC 24% EDC 25% All others 37% All others 28% All others 27% Investment Case * SurgutNG 23% SurgutNG 25% SurgutNG 24% EDCs Position…
Customer diversification (by meters drilled) EDC Overview 2007 (at IPO) 1H 2010 1H 2011 Other 1% 1% Other 1% 3% Other 4% 8% 11% 20% Investment Case 15% 27% 19% EDCs Position 76% 60% 54% In 2007 the share of non-Lukoil…
Debt profile EDC Overview Debt structure 1,000 899 800 To finance the announced acquisitions the Company raised the following debt 600 late in 2010 and during 1H11: 404 US (million) 400 Investment Case 284 263 3-years…
Key strategic focus EDC Overview Acquire up to two in-house and/or SLB drilling assets will add 3-4% FY independent drilling companies Slavneft drilling assets will add a further 3-4% FY Increase market Continue to invest in fleet…
Strategic Alliance with SLB EDC Overview Transaction with Schlumberger closed April 28th, 2011 Total value of transaction US 260 million Assets transfer, plus cash consideration of US 173 from EDC to SLB Investment Case EDC…
Caspian Sea jack-up market EDC Overview Demand for jack-ups growing in all STATOIL Exploration Caspian sectors served by EDC: NCOC (Exxon) In the Russian sector, Lukoil has Exploration made a number of discoveries and CMOC…
Offshore operations EDC Overview ASTRA jack up rig TRIDENT 20 jack up rig Baker Marine (BMC) 150 H Keppel FELS CS Mod V cantilever jack-up cantilever jack-up Operates in water depths up Operates in water depths up to 150 feet and…
Outlook EDC Overview 2011 financials Total revenue for 2011 is forecast to reach approx. US 2.6 billion EBITDA margins are expected to be c. 22% Capital expenditures are not expected to exceed US 350 million, excluding acquisitions…
Forward calendar & contacts EDC Overview 2011 upcoming events October 5-7 VTB Capital Investment Forum RUSSIA CALLING October 25 AGM (Florence, Italy) Investment Case October 3Q Results Update November 14-18 BoAm Merrill Lynch…
Q&A EDC Overview Investment Case EDCs Position Strategic Focus Summary Q&A 22
Appendices EDC Overview Investment Case EDCs Position Strategic Focus Summary Q&A 23
Appendix: Worlds largest drillers EDC Overview --550-- Nabors Industries LTD M --4.9-- Helmrich & Payne, Inc R Investment Case A I --364-- Precision Drilling Corp --4.3-- Nabors Industries LTD R G --350-- Patterson UTI…
Appendix EDC Overview The Russian oil industry entering a new phase mbd Phase 1 Phase 2 Phase 3 Phase 4 12,000 Collapse of Soviet Well re-activation and Growth stalls Tax reform Union leads to huge fall hydro-fracturing due to higher…
Appendix: Income Statement EDC Overview 2007 2008 2009 2010 1H 2010 1H 2011 in US thousands Audited Audited Audited Audited Unaudited Unaudited Av. Exchange Rate RUB/USD 25.6 24.9 31.7 30.4 30.1 28.6 Total Revenue 1,492,189…
Appendix: Balance Sheet EDC Overview 2007 2008 2009 2010 30-Jun-11 in US thousands Audited Audited Audited Audited Unaudited ASSETS Current Assets Cash 343,089 279,430 433,724 629,466 533,607 Trade Accounts Receivable, net 230,888…
Appendix: Cash Flow Statement EDC Overview 2007 2008 2009 2010 1H 2010 1H 2011 in US thousands Audited Audited Audited Audited Unaudited Unaudited Net Income 168,544 220,933 165,490 207,353 104,810 150,601 Non-cash Adjustments…
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