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Credit Suisse Conference – Nine Energy Service

Nine Energy Service · Feb 12, 2019 · 29 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. Credit Suisse Conference – Nine Energy Service – slide 1
    NINE ENERGY SERVICE CREDIT SUISSE CONFERENCE FEBRUARY 2019 1
  2. Credit Suisse Conference – Nine Energy Service – slide 2
    COMPANY OVERVIEW
  3. Credit Suisse Conference – Nine Energy Service – slide 3
    NINE COMPANY OVERVIEW OUR COMPANY Focused on ROIC Leveraged to increasing completion intensity including mega-well pads, lateral lengths and stage count Super lateral, deep reach capable service offering and focus Agnostic to…
  4. Credit Suisse Conference – Nine Energy Service – slide 4
    NINES UNIQUE STRATEGY Sustainability Returns (ROIC) Mitigation of financial risk Cash flow generative Capital Intensity Capital Light Wellsite Execution Customer Legitimacy Real-time information R&D 5
  5. Credit Suisse Conference – Nine Energy Service – slide 5
    DRIVING VALUE FOR CONSTITUENTS CUSTOMERS Ability to decrease cost to complete and increase EUR EMPLOYEES INVESTORS Socioeconomic Financial movement & career Sustainability progression & Returns 6
  6. Credit Suisse Conference – Nine Energy Service – slide 6
    TECHNOLOGY-DRIVEN COMPLETIONS OFFERING Nine is capable of addressing 100% of the onshore wells drilled in North America, regardless of completion type PRE & POST STIMULATION HORIZONTAL LATERAL TOE OF THE WELL Large Diameter Coil +…
  7. Credit Suisse Conference – Nine Energy Service – slide 7
    PREMIER ISOLATION TOOL PROVIDER Able to serve the entire addressable isolation tool (isolation tool = plug) market with proven dissolvable and composite offerings (1 frac stage = 1 plug) 2019E NA Stage Count: 699,3771 2 market share…
  8. Credit Suisse Conference – Nine Energy Service – slide 8
    INTEGRATED COMPLETIONS SOLUTION NINE CAN HELP OPERATORS DESIGN AND EXECUTE THE MOST COST-EFFICIENT AND PRODUCTIVE DEEP-REACH LATERALS THROUGH BROAD OFFERING OF COMPLETION TOOL PORTFOLIO ILLUSTRATIVE HYBRID WELLBORE SOLUTION FlowGun…
  9. Credit Suisse Conference – Nine Energy Service – slide 9
    SUSTAINABLE VALUE PROPOSITION OF SERVICE & TECHNOLOGY Service and technology drives efficiencies and lowers total cost of ownership for operators SERVICE/TECHNOLOGY PERFORMANCE DAYS SAVED REVENUE GENERATION FOR OPERATORS1 ScorpionTM…
  10. Credit Suisse Conference – Nine Energy Service – slide 10
    ADVANCEMENTS IN CEMENTING SOLUTIONS Nine is on the cutting-edge of slurry design and execution SLURRY HIGHLIGHTS Light-density slurry engineered to build strength 60% faster and deliver 40% higher compressive strength than similar…
  11. Credit Suisse Conference – Nine Energy Service – slide 11
    MULTI-WELL PADS CONCENTRATE RISK BARRIERS TO ENTRY CONTINUE TO INCREASE SINGLE-WELL PAD COMPLETIONS MULTI-WELL PAD COMPLETIONS LONGER LATERALS TIGHTER SPACING PAD DRILLING l l Concentration of dollars / pad + exponential impact…
  12. Credit Suisse Conference – Nine Energy Service – slide 12
    BROAD FOOTPRINT ENABLES TECHNOLOGY LEADERSHIP FOOTPRINT IN EVERY MAJOR NAM BASIN significant benefit to potential strategic partners through distribution volume Canada 4% EXCELLENT NAM REACH CAPABILITY proximity to the…
  13. Credit Suisse Conference – Nine Energy Service – slide 13
    BARRIERS TO ENTRY THROUGH TECHNOLOGY AND SERVICE HOW DOES NINE BUILD MOATS AROUND THE BUSINESS Service + technology / equipment + people to service the longest laterals today and tomorrow COMPLETION SOLUTIONS PERFORMANCE BARRIERS…
  14. Credit Suisse Conference – Nine Energy Service – slide 14
    PROOF OF PERFORMANCE Majority Of Nines Completion Work Is Long Laterals Has Led To Increased Efficiencies And Higher Barriers To Entry 16% 167% 48 14.5 78% 164% 27 6% 5.5 2014 Q3 2018 2014 2017 2014 Q3 2018 2 Nine US…
  15. Credit Suisse Conference – Nine Energy Service – slide 15
    CUSTOMERS WHO TRUST US Diverse, blue-chip customer base with minimal concentration COMPLETION PRODUCTION 16
  16. Credit Suisse Conference – Nine Energy Service – slide 16
    PROFESSIONALIZED HSE PROGRAM IMPROVED HSE REPORTING AND PERFORMANCE ACROSS SERVICE LINES Nine TRIR1 2.47 67% Reduction 1.50 1.44 1.26 0.8 2014 2015 2016 2017 2018 YTD (Q3) 1Does not include Magnum 17
  17. Credit Suisse Conference – Nine Energy Service – slide 17
    RETURNS-FOCUSED GROWTH PHILOSOPHY Balance of Organic Growth and Strategic M&A: Augment technology portfolio + Enhance NAM footprint ORGANIC GROWTH DISCIPLINED M&A Strategic expansion of existing service lines within NAM Continue to…
  18. Credit Suisse Conference – Nine Energy Service – slide 18
    FINANCIAL OVERVIEW 19
  19. Credit Suisse Conference – Nine Energy Service – slide 19
    NINE STANDALONE 2018 FINANCIAL PERFORMANCE 2018 QUARTERLY RESULTS LEGACY NINE (MM) Revenue Adjusted EBITDA +6% 218 38 +25% 206 +27% +18% 31 174 24 Q1 18 Q2 18 Q3 18 Q1 18 Q2 18 Q3 18 Adj. EBITDA 14% 15% 18% Margin Net…
  20. Credit Suisse Conference – Nine Energy Service – slide 20
    PRO FORMA FINANCIAL OVERVIEW (mm) NINE MAGNUM PRO FORMA1 903 759 544 633 REVENUE 283 340 57 90 145 2016 2017 1H 2018 2016 2017 1H 2018 2016 2017 1H 2018 ADJUSTED EBITDA 153 109 83 60 44 10 2 23 12 2016 2017 1H…
  21. Credit Suisse Conference – Nine Energy Service – slide 21
    PRO FORMA CAPITALIZATION (9/30/18) In conjunction with the Magnum transaction, which closed on October 25, 2018, Nine put a new capital structure in place with long-dated maturities and enhanced financial flexibility PRO FORMA…
  22. Credit Suisse Conference – Nine Energy Service – slide 22
    UNIQUE VALUE PROPOSITION Completions focused Technology and service differentiation Ability to service the most technically demanding wells Returns-focused business philosophy Access to entire addressable market Leading market…
  23. Credit Suisse Conference – Nine Energy Service – slide 23
    CLOSE TO PERFECTION. FAR FROM ORDINARY. DRIVEN TO SUCCEED. 24
  24. Credit Suisse Conference – Nine Energy Service – slide 24
    APPENDIX
  25. Credit Suisse Conference – Nine Energy Service – slide 25
    NINE STANDALONE ADJ. EBITDA RECONCILIATION Six months Six months Three Months Ended Year ended December 31 ended ended June 30, December 31, ( mm unless otherwise noted) 30-Sep-18 30-Jun-18 31-Mar-18 2017 2016 2015 2014 20141 20141…
  26. Credit Suisse Conference – Nine Energy Service – slide 26
    NINE STANDALONE ROIC RECONCILIATION Three Months Ended Three Months Ended Three Months Ended Year Ended December 31 ( MM UNLESS OTHERWISE NOTED) 30-Sep-18 30-Jun-18 31-Mar-18 2014 After-tax net operating profit reconciliation: Income…
  27. Credit Suisse Conference – Nine Energy Service – slide 27
    MAGNUM STANDALONE ADJ. EBITDA RECONCILIATION ( mm unless otherwise noted) 2016 2017 1H'18 EBITDA Reconciliation Net income (loss) 1 22 21 Interest expense 0 0 0 Depreciation 1 1 0.4 Income tax expense (benefit) 0 0 1 EBITDA 2 23 22…
  28. Credit Suisse Conference – Nine Energy Service – slide 28
    NINE PRO FORMA ADJ. EBITDA RECONCILIATION ( mm unless otherwise noted) 2017 1H'18 EBITDA Reconciliation Net income (loss) (71) 15 Interest expense 36 18 Depreciation 55 27 Amortization 19 9 Income tax expense (benefit) (7) 3…
  29. Credit Suisse Conference – Nine Energy Service – slide 29
    MAGNUM OIL TOOLS OVERVIEW On October 25, 2018 Nine acquired Magnum Oil Tools Transaction is accretive to EPS, margins and long-term ROIC, and will significantly enhance Nines free cash flow generation while reducing capital and labor…

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