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RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc.

Independence Contract Drilling, Inc. · Jun 5, 2019 · 25 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. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 1
    2019 RBC Capital Markets Global Energy and Power Conference June 4-5, 2019 www.icdrilling.com
  2. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 2
    Investment Thesis Sectors only pure-play, pad-optimal growth story focused solely on North Americas most attractive oil and gas basins Sidewinder strategic combination more than doubled fleet size by Scale, combining complementary…
  3. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 3
    Corporate Snapshot Proforma Capitalization & Liquidity: 3/31/19 Sectors only pure play, pad-optimal (2) USMM, unless otherwise noted growth story Share Price (/Share) 1.83 Share Outstanding (MM) 77.1 Fleet composed of 32…
  4. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 4
    2Q19 Update ICD continues to successfully recontract rigs, executing extensions or new contracts during 2Q19 for ten rigs, with durations ranging up to one year for five contract renewals ICD in the process of completing one…
  5. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 5
    2Q19 Update Continued Utilization issues associated with customer budget and commodity price uncertainty continue during 2Q19 and are expected to continue through at least 3Q19 ICD 2Q19 rig utilization of marketed rigs expected to…
  6. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 6
    ICD Today: Nothing has Changed but Everything is Different Post combination, ICDs strategic focus and operational priorities remain unchanged, but our ability to generate free cash flow and investor returns increased dramatically Pre…
  7. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 7
    Fleet & Operational Footprint 14 300 Series ShaleDriller Rigs(1) 1500 HP drawworks; 25K+ racking / 1M lb hook with only modest capex Oklahoma Three pump / four engine capable; drilling Arkansas optimization software capable New…
  8. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 8
    Geographic Mix and Customer Relationships Active Rig Count by Basin Strong Customer Base ICD Customers 25% 75% Permian Haynesville (7 rigs) / Eagleford (1 rig) 9
  9. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 9
    Market Overview: Long-term View Oil prices generally range bound in Investor and capital market sentiment Continued innovation results in US shale forces E&Ps to focus on financial returns the 50bbl to 70bbl WTI range, plays becoming…
  10. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 10
    Pad-Optimal Drilling Fleet Characteristics Omni-Directional Walking 1500 HP Drawworks High-Pressure Mud Systems (7500 psi) Fast Moving AC Programmable Flexibility to provide differing equipment packages to meet particular…
  11. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 11
    Meaningful Player in Consolidating Pad-Optimal Market Market Share ICD Target Markets TX & 1,200 Operating Rigs(1) Contiguous States Operating Rigs Pad-Optimal & Upgradeable (1)(2) 1,000 800 600 ICD 400 PDS HP 200…
  12. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 12
    Drivers Towards Returns / Free Cash Flow Through Oil and Gas Cycle Operational and Financial Post combination integration substantially complete 6/30/19 Synergies from Sidewinder Expect realization of runrate synergies of 10 million+…
  13. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 13
    Synergy Realization Driving Overhead Efficiencies SG&A Expense as a % of Revenue 14% 12% Full realization of strategic combination 10% synergies expected 3Q19 8% 6% 4% 2% 0% ICD 3Q'18: Pre-SW ICD 1Q'19 Other…
  14. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 14
    Free Cash Flow Generation Table summarizes ICD indicative free INDICATIVE FREE CASH FLOW (1) cash flow across a variety of revenue Rigs Operating / Utilization Revenue Per per day and rig utilization Day 18 20 22 24 26 28 30…
  15. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 15
    M&A Opportunities Sidewinder combination illustrates Pad-optimal / upgradeable operating rigs in ICD how consolidating transactions target markets of Texas and contiguous states owned by private or public drilling contractors with…
  16. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 16
    Financial Liquidity 130 million term loan Financial Liquidity Five-year term millions No amortization At March 31, 2019 Additional 15 million delayed- Cash 12.5 draw availability Minimal financial covenants Undrawn Revolver…
  17. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 17
    Closing Summary Maintaining a Pad-Optimal drilling fleetwhile increasing Returns and Free Cash Flow by focusing on operational excellence and executable high-return internal Growth opportunities High-quality pad-optimal drilling…
  18. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 18
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  19. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 19
    Balance Sheet March 31, 2019 December 31, 2018 Assets Cash and cash equivalents 12,549 12,247 Accounts receivable, net 42,137 41,987 Inventories 2,738 2,693 Assets held for sale 19,369 19,711 Prepaid expenses and other current…
  20. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 20
    Income Statement Three Months Ended March 31, December 31, 2019 2018 2018 Revenues 60,358 25,627 62,789 Costs and expenses Operating costs 39,333 18,926 39,908 Selling, general and administrative 4,545 3,479 5,030…
  21. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 21
    Non-GAAP Financial Measures Adjusted net income and loss, EBITDA and adjusted EBITDA are supplemental non-GAAP financial measure that are used by management and external users of our financial statements, such as industry analysts,…
  22. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 22
    Non-GAAP Financial Measures Reconciliation of Net Loss to Adjusted Net Income (Loss): (Unaudite d) Thre e M onths Ended March 31, March 31, De cember 31, 2019 2018 2018 Pe r Per Pe r Amount Amount Amount Share Share Share (in…
  23. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 23
    Non-GAAP Financial Measures (1) In the first quarter of 2019, we recorded an impairment to assets held for sale of 2.0 million to reflect the proceeds received when these assets were sold at auction in April 2019. In the fourth…
  24. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 24
    Non-GAAP Financial Measures Three M onths Ended March 31, March 31, December 31, 2019 2018 2018 Number of marketed rigs end of period (1) 32 14 32 Rig operating days (2) 2,728.1 1,259.4 2,817.5 Average number of operating rigs (3)…
  25. RBC Capital Markets Global Energy and Power Conference – Independence Contract Drilling, Inc. – slide 25
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