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March 2020 Corporate Presentation – Precision Drilling Corporation

Precision Drilling Corporation · Mar 20, 2020 · 34 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. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 1
    *Rig 576, Loving County TX, Permian Basin TSX: PDTSX: PD NYSE: NYSE:PDS PDS PRECISION DRILLING CORPORATION March 2020 1
  2. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 2
    Precisions Response Plan for COVID-19 Workforce Safety Top priority of protecting health and safety of our employees & communities we operate in o Providing all employees access to clear and consistent communications, a Crisis…
  3. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 3
    Precision Exercises Strict Fiscal Discipline for Downturn Emphasis on preserving strong liquidity position o Closed 2019 with over 700 million in liquidity: 75 million in cash + undrawn US500 million revolver o Recently extended…
  4. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 4
    Creating Shareholder Value GENERATING STRONG FREE CASH FLOW FROM LONG-LIFE ASSETS HIGHER EQUITY VALUATION THROUGH TARGETED CASH FLOW DELEVERAGING OPERATIONAL EXCELLENCE IN LAND DRILLING DIGITAL TECHNOLOGY LEADERSHIP AS…
  5. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 5
    Precision At A Glance PRECISION DRILLING HIGH PERFORMANCE +30% FCF Yield in 2019 LAND DRILLER Aggressive Debt Reduction & Share Repurchases STRONG GLOBAL SCALE Modern & Standardized Fleet 227 Drilling Rigs: Diversified Customer…
  6. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 6
    Precisions Proven Track Record Delivering on Strategic Priorities 7
  7. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 7
    Precisions 2020 Strategic Priorities Creating Shareholder Value REDUCE DEBT WITH FREE CASH FLOW Generate strong free cash flow and utilize 100 million to 150 million 1. to reduce debt in 2020. Raised long-term debt reduction target to…
  8. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 8
    2020 STRATEGIC PRIORITY 1 GENERATE STRONG FREE CASH FLOW TO REDUCE DEBT Generate strong free cash flow and utilize 100 million to 150 million to reduce debt in 2020 UPDATE 2020 debt reduction of 41 million as of March 24 plan…
  9. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 9
    Sequentially Strong Financial Performance & Cash Generation ACTIVITY REVENUE ADJUSTED EBITDA 48,251 1,541 1,541 47,455 392 375 REVENUE (MILLIONS) EBITDA (MILLIONS) 42,282 1,321 DRILLING DAYS 305 26,851 1,003…
  10. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 10
    Free Cash Flow Generation SUPER SERIES RIGS ADDED FREE CASH FLOW TRANSITION1 114 SUPER SERIES 300 RIGS ADDED 221 222 224 227 20112016: CRITICAL 217 Intl 201 INVESTMENT PERIOD 182 169 U.S. FCF (MILLIONS) 112 0 Canada…
  11. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 11
    2020 Capital Plan 2020 PLAN PREVIOUSLY SET AT 95 MILLION MAINTENANCE & EXPANSION & UPGRADES INFRASTRUCTURE 2020 PLAN: AlphaAutomation systems Maintenance spend highly 48 MILLION Contract-secured upgrades to correlated to…
  12. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 12
    Precisions Balance Sheet Management Creating Stronger Capital Structure DEBT REDUCTION PROGRESS1 DECREASING ANNUAL INTEREST EXPENSE1 412 MILLION DEBT 110 CURRENT AVG COST OF DEBT 6.75% 1.6 REDUCTION SINCE 20182 Long-term Debt…
  13. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 13
    2020 STRATEGIC PRIORITY 2 OPERATIONAL EXCELLENCE Deliver operational excellence in all aspects of our business, operations, financial and environment, social and governance (ESG) UPDATE Ended 2019 with record level U.S. and…
  14. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 14
    Precisions Competitive Positioning PRECISION SYSTEMS + HIGHLY SKILLED RIG SUPER SERIES RIGS SCALE CREWS 15
  15. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 15
    Recruiting, Training & Retention Competitive Advantage for Precision FIELD RECRUITING A CORE FOCUS 238,399 Applications processed 2013-2019 (24,677 Applications in 2019) 1,200 1,400 Screened candidates in the system TECH…
  16. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 16
    United States FREE CASH FLOW, SCALE, MARKET SHARE GROWTH Diversified across Lower 48, active in all unconventional plays U.S. Market Share1 9% 69 available ST 1500 & ST 1200 Super Series rigs 8% Precision Alpha Technologies…
  17. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 17
    Canada STRONG FREE CASH FLOW, SCALE & MARKET SHARE Generated 1.9 billion in free cash flow since 20102 156 Canadian Market Share1 Virtually no upgrade capital spending planned in 2020 30% 269 28% Precisions Alpha Technologies…
  18. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 18
    International ESTABLISHED SCALE, STABLE CASH FLOW 13 TOTAL RIGS IN MIDDLE EAST (INCLUDES KUWAIT NEW BUILD) Kuwait Rig 905 7 NEWBUILD RIGS DEPLOYED SINCE 2014 Sixth Kuwait newbuild deployed July 1, 2019 Targeting IOCs and…
  19. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 19
    Completion & Production Largest service rig provider in the WCSB and established presence in the U.S. Well positioned for free cash flow 63% Y/Y increase in total C&P EBITDA in 2019 IMPROVING CASH FLOW Precision Well…
  20. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 20
    Environmental, Social, Governance (ESG) Activities Significantly enhance ESG disclosure included in most recent Information Circular, Annual Report and Annual Information Form PEOPLE GOVERNANCE COMMUNITY ENVIRONMENT Extensive…
  21. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 21
    2020 STRATEGIC PRIORITY 3 TECHNOLOGY AS A DIFFERENTIATOR Leverage Alpha technology platform as competitive differentiator and source of financial returns for Precision UPDATE Previously announced commercialization of 34…
  22. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 22
    AlphaAutomation Case Study: Adding Pipe While Drilling Ahead CONSISTENT Driller No AlphaAutomation PREDICTABLE REPEATABLE Time Sequence For Each Joint Hole Depth Rig 560 - Job 114 49% TIME SAVINGS PER CONNECTION…
  23. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 23
    AlphaApps - Precision Offering Full Suite Of Drilling Performance Apps 15 APPLICATIONS ROP 7 OPEN-SOURCE PLATFORM CAN HOST 3RD PARTY OPTIMIZATION DEVELOPED APPS ON-BOTTOM DIRECTIONAL 4 APPS DRILLING 1 MECHANICS EQUIPMENT 2…
  24. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 24
    Alpha Technology Commercialization Revenue Potential REINFORCED COMPETITIVE REVENUE IMPACT FLEET PULL THROUGH ADVANTAGE New technologies will Each technology is a service strengthen competitive Pull through on existing rigs and…
  25. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 25
    Creating Shareholder Value GENERATING STRONG FREE CASH FLOW FROM LONG-LIFE ASSETS HIGHER EQUITY VALUATION THROUGH TARGETED CASH FLOW DELEVERAGING OPERATIONAL EXCELLENCE IN LAND DRILLING DIGITAL TECHNOLOGY LEADERSHIP AS…
  26. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 26
    Appendix 27
  27. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 27
    Advanced Rig Technology PRECISION IS A RIG TECHNOLOGY LEADER 1 25,000 + FT RACKING CAPACITY 2 ALPHA AUTOMATION + ALPHA APPS* 3 DRILLING EQUIPMENT CONTROL SYSTEM* 6 4 HIGH SPEED DOWNHOLE DATA* 5 OMNI-PAD WALKING SYSTEM 6…
  28. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 28
    Precisions Balance Sheet Management SENIOR DEBT MATURITY PROFILE1 (in millions) NO MATURITIES UNTIL DECEMBER 2021 US370 US345 US308 AVERAGE COST OF DEBT OF 6.75% 7.75% 5.25% 7.125% US66 6.5% 2019 2020 2021 2022 2023…
  29. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 29
    Revenue and Cash Flow Visibility and Stability TOP 50 CUSTOMERS1 PUBLIC CUSTOMER BASE 58% PRIVATE HIGH-EFFICIENCY DEVELPMENT DRILLING FOR PUBLIC, LARGE PRIVATE AND NATIONAL OIL COMPANIES 30% NATIONAL OIL COMPANIES 17% Canada…
  30. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 30
    U.S. Market Share Transition Top 5 Drillers Other Drillers 80% 62% 58% 58% 57% 60% 54% U.S. MARKET SHARE 52% 48% 46% 40% 42% 43% 42% 38% 20% 2014 2015 2016 2017 2018 2019 CUSTOMER DEMAND FOR…
  31. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 31
    Systems & Scale DRIVING OPERATIONAL EXCELLENCE AND LOWER COSTS IT Infrastructure Manufacturing + and ERP Capital Projects Supports Increased Data Flows Engineering Operating Efficiencies Project Management Fixed Cost Leverage…
  32. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 32
    Precisions Super Series Investments Driving U.S. Market Share Gains1 70 8.5% 8.0% 60 Cumulative New Builds/Major Upgrades 7.5% 50 7.0% U.S. Market Share 40 6.5% 30 6.0% 5.5% 20 5.0% 10 4.5% 0 4.0% 2012 2013…
  33. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 33
    Historical North American Drilling Activity U.S. LAND RIG COUNT CANADIAN LAND RIG COUNT 10 YEAR HISTORY 5 YEAR HISTORY 2,000 800 2012-2017 Range 1,804 2014 2014 Average 1,800 Active Rigs 700 2016 As of 1/10/2020 rig 2017 1,600…
  34. March 2020 Corporate Presentation – Precision Drilling Corporation – slide 34
    Current State Wide Dispersion of Well Results Currently wide ranging days to drill Automation tightens the range and reduces overall drill times For PD strong utilization, incremental revenue and competitive…

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