Independence 1 Contract Drilling, Inc. ICD Investor Presentation March 2022
Presentation Outline 3 1. Company Background: Pure-Play, 100% Pad- Optimal, Super-Spec U.S. Land Contract Driller 2. Very Constructive Market Dynamics and Outlook 3. Drivers of Returns and Free Cash Flow in Current Market…
4 COMPANY BACKGROUND Pure-Play, 100% Pad-Optimal, Super-Spec U.S. Land Contract Driller
Introduction: ICD 5 Sectors only publicly-traded, pure-play, Pad-Optimal, Super-Spec drilling contractor focused solely on North Americas most attractive oil and natural gas basins Marketed fleet comprised entirely of Pad-Optimal,…
Rig Fleet & Geographic Markets 6 ICD Operations Strategically Focused on the Most 14 300 Series ShaleDriller Rigs Prolific Oil and Natural Gas Producing Regions in 1,500 2,000 HP drawworks; 25K+ racking / 1M lb. hook with only modest…
Maximizing Returns By Strategically Marketing ICD Fleet Across Target Markets 7 Oklahoma Arkansas New Mexico Texas Permian Delaware Louisiana Basin 300 Series Target Market Haynesville/ETX 300 Series Target Market…
Geographic Mix / Customers Relationships 8 Current ICD Operating Rigs By Basin Strong Customer Base Recent ICD Customers Haynesville / ETX 5 1 Permian 12 1 (1) Occidental Petroleum Corporation via Anadarko…
9 Very Constructive Market Dynamics and Outlook
Defining a Pad-Optimal Super-Spec Rig 10 Omni-Directional Walking 1500 HP Drawworks High-Pressure Mud Systems (7500 psi) Fast Moving AC Programmable Fleet must have flexibility to provide differing Total U.S. Pad-Optimal…
Drivers for Expected Improvements in Pad-Optimal Utilization / Dayrates 11 Accelerating rig count with improving fundamentals Constructive oil supply / natural gas demand fundamentals Rapidly decreasing drilled-but-uncompleted…
U.S. Land Rig Count has Trailed Commodity Price Recovery but Continues to Accelerate 13 U.S. Average Land Rig Count vs WTI 1,200 120 1,000 100 800 80 600 60 400 40 200 20 0 0 Q1'17 Q2'17 Q3'17 Q4'17…
Decreasing DUC Inventories Should Drive Incremental Drilling Activity 14 U.S. Drilled-But-Uncompleted Well (DUC) Inventory Compared to Completed Wells Over Time 10,000 2,000 9,000 1,800 1,600 Completed Wells 8,000 DUC…
Pad Optimal Fleet Utilization Now Exceeding 80% Drives Incremental Dayrate Increases 15 500 450 In a market in which the incremental Estimated Pad Optimal Supply(1) rig generally sets the spot market 400 price, the following…
16 Drivers of Returns and Free Cash Flow in Current Market
Drivers Of Returns & Free Cash Flow Through Oil and Gas Cycle 17 Recent refinancing unlocks ICD ability to reactivate Pad-Optimal, Super-Spec rigs Improving into an extremely tight, constructive Super-Spec market Fleet Three…
300 Series Rigs Lead Transformation of Operating Fleet Compared to Pre-COVID levels 18 ICD Operating Fleet Composition 30 ICD 300 Series Rigs Operational 13% 300 Goal: Rigs meeting these specs command highest dayrates when Series…
ICD Margins Expanding in Market Recovery 19 In a continuing market recovery and improving rig 22,000 count environment, the following factors are positively impacting ICD revenues, costs, and margin per day compared to Pre-COVID…
ICD Operating Leverage Potential in an Improving Market 20 000s ICD has significant operating leverage 100,000 Adjusted Annualized EBITDA Potential potential in an improving market in Across Various Rig Margin Per Day which…
21 Balance Sheet / Recent Debt Financing Untaps Imbedded Value
Recent Debt Refinancing Themes 22 Refinancing completed March 18, 2022 significantly de-risks ICD balance sheet Prior to refinancing, near-term debt maturities and balance sheet risk impeded investor interest and ICDs ability to…
Refinancing Untapping Value in ICD Rig Fleet 24 The refinancing checked all the boxes to ensure that ICD has the runway to achieve its financial and operational goals Eliminated Near-Term Maturities Extends debt maturity to March…
Immediate Liquidity Boost 25 New Convertible Notes provide PIK option and significant cash interest savings in the future which can be deployed to accretively reinvest in the business. Unfunded accordion also provides capital…
Clear Path to Deleveraging 26 Rising Dayrates Drive Lower Leverage Multiples (Annualized EBITDA in millions) (Debt in millions) 200 Debt / EBITDA Multiples 200 4.5x 3.0x 2.3x Total Debt Principal + One Year PIK(1) 150…
Significant Potential Value Uplift 27 Significant potential for uplift as the overhang related to our prior leverage profile gives way to imbedded value in our premier fleet. Newbuild Super-Spec rigs estimated to cost 25M to 30M+…
Significant Potential Value Uplift 28 Even assuming full conversion of the Illustration of potential stockholder upside assuming full conversion of convertible notes convertible notes, significant upside exists (000s except per share…
ICD Positioning in a Consolidating Market 29 ICD well positioned to participate 140 in industry consolidation activity Number of Operating Super-Spec or AC Rigs Convertible into Super-Spec Rigs as it develops during the current…
30 ESG
ESG and Sustainability Focused 31 100% of ICD marketed rigs are dual-fuel enabled and high-line capable, permitting substantial reduction and elimination of GHG emissions at the wellsite from rig operations 100% of ICD rigs utilize…
ICD ShaleDriller Rigs Substantially Reduce and Eliminate GHG Emissions at the Wellsite 32 Utilizing natural gas rather Similar to an electric car, In 2019, ICD converted all of its than diesel substantially utilizing the electric grid…
33 Highest Asset Quality 100% Super Spec - Pad Optimal Marketed Fleet with Best Geographic Focus Fleet 100% Dual-Fuel Enabled / Electric Hi- Line Geographic Locations Capable: Substantial Focused on Most Prolific GHG…
Loading...
