A Focused Story 3 Canadas largest public pure play well service company Completion and production focus Coil Tubing Downhole Tools Service Rigs 1 in Canada Top 5 in Canada 8 in Canada Innovative fleet Conventional and…
Industry Growth Opportunities 4 Innovative Cost Equipment Effective and Solutions Processes Deep, Long-reach LNG Horizontal Export Wells Production Workovers Trained, Safety Experienced Crews Lead to our Growth…
Growth Opportunities 5 Deep LNG Production Organic U.S. Horizontal Development Workovers Expansion Wells Coil tubing Coil tubing Coil tubing Downhole Downhole Downhole Downhole tools tools tools tools Service rigs…
Strong Balance Sheet 6 Debt Outstanding Debt / EBITDA 45 MM 0.7x (Mar 5/14) Credit Facility: 100 million May 30/14 maturity (renewal discussions underway) 35 million accordion (subject to lenders consent) Strong Balance…
Operating Areas 7 Coverage across the key Canadian basins
Deep Horizontal Wells: Industry 8 Deeper wells in the Duvernay, Horn River, Montney and Bakken require longer and larger diameter coil tubing Multi-stage fracturing tools for horizontal completions The need for maintenance is…
Well Drilling Comparison 9 Industry Trend: deeper wells - longer and larger diameter coil tubing
Deep Coil Tubing: Our Opportunity 10 New Generation III/IV Rigs Increased reel capacity - longer and larger diameter coil Unique safety features Reel trailer (prototype for Gen IV) reached record depth at 5,988 m using 2 5/8…
Masted Deep Coil Tubing: Evolution 11 Gen II/III/IV Specifications Gen II Size Gen III Gen IV (Current Fleet) 2 coil 5,500 m 8,400 m 11,200 m 2 3/8 coil 3,500 m 5,700 m 7,900 m 2 5/8 coil 2,900 m 4,900 m 6,400 m Mast height (ground to…
Deep Coil Tubing 12 Reel Trailer (2012) a prototype for the Gen IV masted coil tubing rig Innovation for customer success
Gen IV Coil Rig Layout 13 Mast/ Injector Control Room CT Reel Rig Generator Wellheads Picker Unit
Completion of Horizontal Wells 14 Coil Tubing Service Rig Works while well is flowing and under Use of kill fluid to service a well pressure Deals with a wide variety of well bore Continuous coil - no threaded applications…
LNG Development 15 Development of reserves in the Montney, Horn River and Duvernay basins for LNG is expected to increase the demand for oilfield services Complex wells - long reach horizontals, larger diameter casing, high…
SAGD Opportunity 16 Currently 3 service rigs working for SAGD customers Approximately 60 service rigs of the 1,100 in the WCSB are focused on SAGD Completions and maintenance work Ancillary rental equipment: 13 5/8 BOPs…
Downhole Tools 17 Proven Canadian business model: High return on low capital investment 20 million of inventory; pickup trucks 100 employees Technical business; significant barriers to entry Growth driven by: Production work…
Downhole Tools 18 Multi-stage fracturing (Tryton MSFS) for horizontal well completions dual and single element Keys to success: Experienced tool hands (requires diverse rig experience) Service and relationships High quality tool…
Downhole Tools: U.S. Expansion 19 Expanding into the U.S.: 3 shops and a Houston sales office Proven technology: U.S. and Canadian manufacturers 2013 initial investment; upside potential
Where Earnings are Generated 20 2013 Revenue 2013 Gross Margin (% of Total Revenue) (% of Total Gross Margin) Downhole Downhole Tools Tools & & Rentals Rentals Service Rigs 111 MM 36 MM 98 MM Well Coil Well Servicing…
EBITDA 22 100 80 Millions 60 99 40 81 74 74 66 20 29 10 0 2009 2010 2011 2012 2013 2014E(1) 2015E(1) Actual Analyst Consensus (1) 2014 and 2015 is analyst consensus at Mar 7/14; Essential is covered by 10…
Investing in High Demand Equipment 23 Capital Spending (millions) 2012 2013 2014(1) Growth 38 32 33 Maintenance/infrastructure 14 15 17 Total 52 47 50 2013 2014(1) New Assets Additions Additions In-service Q1(2)/Q2/Q3 Deep…
Balanced Capital Deployment 24 Unused Credit EBITDA Capacity 66 million 55 million (2013) (Mar 5/14) 2014 Capital Program - 50 million Dividend - 15 million (annualized) Share Buyback
Corporate Data 25 Mar 7/14 Trading price 2.74 Market capitalization 344 million Enterprise value (based on Mar 5/14 debt) 389 million Dividend yield 4.4% Replacement cost(1) 2.70 EV/2014 EBITDA (analyst consensus)(2) 4.8x EV/2015…
Key Takeaways 26 Growth Prospects Deep horizontal wells, LNG, production workovers and organic U.S. expansion Financial Capacity to Facilitate Growth Low debt Return to Shareholders Dividend paying 4.4% yield Share buyback…
Garnet Amundson 1100, 250 2nd Street SW President & Chief Executive Officer Calgary, Alberta T2P 0C1 (403) 513-7272 Karen Perasalo serviceessentialenergy.ca Investor Relations TSX:ESN www.essentialenergy.ca
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