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Analyst Day – Basic Energy Services Inc.

Basic Energy Services Inc. · May 29, 2014 · 67 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. Analyst Day – Basic Energy Services Inc. – slide 1
    Basic Energy Services Analyst Day Houston, TX May 29, 2014 OUR LIFES WORK IS THE LIFE OF THE WELLTM NYSE: BAS
  2. Analyst Day – Basic Energy Services Inc. – slide 2
    Agenda 8:30 Welcome Roe Patterson 8:45 Organizational Structure Roe Patterson Review of BAS Business Strategy Recent Developments Customer Information 9:30 Pumping Services Overview Tim Dame 10:20 Break 10:35 Well Servicing,…
  3. Analyst Day – Basic Energy Services Inc. – slide 3
    Emergency Exits Map for The Houstonian You are here 3
  4. Analyst Day – Basic Energy Services Inc. – slide 4
    Introductions Roe Patterson President & CEO Alan Krenek Sr Vice President, CFO & Treasurer Jim Newman Sr Vice President, Region Operations Tim Dame Vice President, Pumping Services Division Cody Bissett Vice President, Controller & CAO…
  5. Analyst Day – Basic Energy Services Inc. – slide 5
    Recent Development Increase in 2014 Capital Budget Due to the Improving Completion Activity Environment and Customer Demand, we are Increasing our 2014 Capital Budget to 285 Million This 50 Million Increase Includes the Purchase of…
  6. Analyst Day – Basic Energy Services Inc. – slide 6
    Bottom-Up Approach Strategic Decisions Local Leadership, National Strength Decentralized Management Expansion Customer Wages and Pricing Acquisition Capex Equipment Capex-Equipment Candidates Demand Rships Qualified Based on…
  7. Analyst Day – Basic Energy Services Inc. – slide 7
    BAS Proven Growth Strategy Establish & Maintain Leadership Positions in Core Operating Areas Business model is based on well counts in active oil and gas regions Strive to be number one or two player in every market we compete in…
  8. Analyst Day – Basic Energy Services Inc. – slide 8
    Diverse Customer Mix Revenue by Our Customer Group Active Rigs by Well Type Lower 48 14% 12% Customer Revenue Grouping to Basic 37% 25% Large 31% 55% 6 mm 63% 63% Medium 65 k < 6 mm Small < 65 k Directional Horizontal…
  9. Analyst Day – Basic Energy Services Inc. – slide 9
    Diverse Capability Mix Large Customers Medium Customers Small Customers 14% 1% 11% 6% 3% 18% 27% 28% 26% 25% 32% 23% 26% 30% 30% Well Servicing Fluid Services Other C & R Contract Drilling Fracing Services Capability Matrix…
  10. Analyst Day – Basic Energy Services Inc. – slide 10
    Permian Basin - Activity Profile Active Rigs Permits Filed Active Wells 6% 8% 15% 35% 29% 40% 59% 63% 45% Directional Horizontal Vertical 21% 14% 31% 79% 69% 86% 11 Rig, Permit, and Well Data Sourced from…
  11. Analyst Day – Basic Energy Services Inc. – slide 11
    Pumping Services Division Tim Dame - Vice President, Pumping Services Division 12
  12. Analyst Day – Basic Energy Services Inc. – slide 12
    Pumping Services Division Represents 35% of BAS current revenue stream HHP 250,000 Approximately 400,000 HHP by December 31, 2014 200,000 2014 Expansion with services for 150,000 Fracturing 100,000 Year end '13 Cementing 50,000…
  13. Analyst Day – Basic Energy Services Inc. – slide 13
    Pumping Services Horsepower Allocation 297,000 Total HHP 400,000 Total HHP Dec 31, 2013 HHP by District Dec 31, 2014 HHP by District* ArkLaTex 43,600 6,800 40,200 6,700 ArkLaTex MidCon MidCon 67,200 134,200 215,400 Permian…
  14. Analyst Day – Basic Energy Services Inc. – slide 14
    Frac Spread Configuration 120 bpm Frac Spread 100 bpm Frac Spread Competition BAS Frac Spread 15
  15. Analyst Day – Basic Energy Services Inc. – slide 15
    Frac Services Strategy Target 100 bpm and Smaller Market 100 bpm market is likely to remain a significant portion of the overall frac market for the foreseeable future Reputation as dependable, high-quality service provider eases…
  16. Analyst Day – Basic Energy Services Inc. – slide 16
    Coil Tubing 60% 20,000 (000s) BAS operates 14 Coil units: Coil Tubing 18,000 50% 16,000 Rocky Mountain: 10 40% 14,000 12,000 Mid-Con: 3 30% 10,000 Revenue Permian Basin: 1 8,000 20% 6,000 Margin % 2014 additions include adding two 2…
  17. Analyst Day – Basic Energy Services Inc. – slide 17
    Pumping Services - Summary Frac Services BAS Frac fleet is strategically positioned to perform fracs at a rate of 100 bpm or less, 6500-7000 psi (pressure), up to 600 tons, and largely day light jobs BAS focus on this market results…
  18. Analyst Day – Basic Energy Services Inc. – slide 18
    Questions & Answers 19
  19. Analyst Day – Basic Energy Services Inc. – slide 19
    Break Will resume in 15 minutes 20
  20. Analyst Day – Basic Energy Services Inc. – slide 20
    Well Servicing Fluid Services Rental & Fishing Drilling Jim Newman Sr. Vice President, Region Operations 21
  21. Analyst Day – Basic Energy Services Inc. – slide 21
    Well Servicing - Overview Workover Swab Plugging Total 41 Well Servicing locations Permian Basin 174 - 20 194 nation wide representing 28% Rocky Mountain 57 1 - 58 of BAS current revenue stream Mid-Con 46 - - 46 Gulf Coast 32 2 9 43 421…
  22. Analyst Day – Basic Energy Services Inc. – slide 22
    Well Servicing Strategy: Class IV Rig is the Workhorse 66% of BAS fleet is Class IV or larger Of Rigs 300 250 200 150 100 50 0 Class 1 Class 2 Class 3 Class 4 Class 5 Horizontal & Vertical Primarily Vertical…
  23. Analyst Day – Basic Energy Services Inc. – slide 23
    Well Services Strategy BAS Well Servicing Fleet Has Stable Returns Existing well count and density drive our Well Servicing business Completion work averages less than 15% overall Majority of work is maintenance & workover on…
  24. Analyst Day – Basic Energy Services Inc. – slide 24
    BAS Fleet Demographics BAS has one of the largest late model Age of Class IV & V as of 123114 horizontally capable fleets in the market 11% 77% of BAS fleet is made up of 3 brands 2% 2009 or Newer with Taylor representing 56% of…
  25. Analyst Day – Basic Energy Services Inc. – slide 25
    Quarterly WS Rig Hours Indexed to 1Q12 vs. Peers 120% 100% 80% BAS KEG NBR 60% Note: Key Energy Services (KEG) and Nabors Well Servicing (NBR) hours are US only 40% Note: Key Energy Services (KEG) and Nabors Well…
  26. Analyst Day – Basic Energy Services Inc. – slide 26
    Fluid Services Overview Transport/Vac Kill Truck Hot Oiler Frac Tanks 52 Fluid Service yards nationwide Permian Basin 371 59 35 1,193 represent 27% of BAS current Ark-La-Tex 172 5 4 771 revenue stream Rocky Mountain 111 - 29 766 1,014…
  27. Analyst Day – Basic Energy Services Inc. – slide 27
    Fluid Services Strategy: Salt Water Disposal Network SWDs + Trucking = BAS Fluid Service Strategy 82 SWDs Over 540,000 barrels of daily disposal capacity Strategically located in close proximity to customers producing wells SWD…
  28. Analyst Day – Basic Energy Services Inc. – slide 28
    Quarterly Truck Hours Indexed to 1Q12 vs. Peers 125% 100% 75% 50% 25% BAS KEG FES 0% 1Q12 2Q 3Q 4Q 1Q13 2Q 3Q 4Q 1Q14 29
  29. Analyst Day – Basic Energy Services Inc. – slide 29
    Contract Drilling 12 Rig Fleet Customized to the Permian Basin Market Area Revenue Fleet of 12 drilling rigs in the Permian Basin 18 One 16 Two preset casing rig 1,200HP SCR rigs 14 12 Millions 10 8 6 4 Three 2 Six…
  30. Analyst Day – Basic Energy Services Inc. – slide 30
    Rental & Fishing Tools Represents 9% of BAS current revenue stream 20 Nationwide rental stores: Permian: 10 Mid-Con: 6 Rocky Mountain: 3 Appalachian: 1 Equipment: Swivels: 140 Pumps: 107 Catwalks: 42 Hydraulic Blowout…
  31. Analyst Day – Basic Energy Services Inc. – slide 31
    Rental & Fishing Tools Strategy More bites at the apple Higher utilization from more cased- hole versus more open-hole work Synergy with Well Servicing opportunities Higher demand Well count driven Higher barrier to entry with…
  32. Analyst Day – Basic Energy Services Inc. – slide 32
    Rigs / Trucks / RAFT / Drilling - Summary Well Servicing BAS Well Servicing fleet is versatile and suitable for work through the life cycle of a well from completion, well servicing, complex workovers, and finally, to plugging &…
  33. Analyst Day – Basic Energy Services Inc. – slide 33
    Significant Presence in the Permian Basin Represents about 43% of BAS current revenue stream BAS presence in the Permian Basin dates to its founding in 1992 Levelland Provides a significant market for the full range Loco Hills of…
  34. Analyst Day – Basic Energy Services Inc. – slide 34
    Permian Basin - Activity Profile Active Rigs Permits Filed Active Wells 6% 15% 8% 35% 40% 59% 29% 45% 63% Directional Horizontal Vertical 21% 14% 31% 79% 69% 86% 35 Rig, Permit, and Well Data Sourced from…
  35. Analyst Day – Basic Energy Services Inc. – slide 35
    Mid-Continent Pawhuska Fairview Cushing Woodward Waukomis El Reno Lindsay Ada Duncan Electra Knox City Gainesville Decatur Bridgeport Breckenridge Aspermont Jacksboro Weatherford Sweet Water Abilene Cisco…
  36. Analyst Day – Basic Energy Services Inc. – slide 36
    Mid-Continent Activity Profile Active Rigs Permits Filed Active Wells 7% 6% 3% 22% 33% 52% 42% 64% 71% Directional Horizontal Vertical 46% 33% 36% 54% 67% 64% 37 Rig, Permit, and Well Data Sourced from…
  37. Analyst Day – Basic Energy Services Inc. – slide 37
    Ark-La-Tex Conway El Dorado Talco Longview Minden Kilgore Overton Deberry Tenaha Teague Well Servicing Rigs Fluid Trucks / Frac Tanks Pumping Services Snubbing SWDs 38
  38. Analyst Day – Basic Energy Services Inc. – slide 38
    Gulf Coast Dayton Beaumont Columbus Hallettsville Corpus Christ Victoria P&A Kenedy Pearsall Laredo Refugio Alice Bishop Premont Well Servicing Rigs Fluid Trucks / Frac Tanks SWDs Pumping Services 39
  39. Analyst Day – Basic Energy Services Inc. – slide 39
    Rocky Mountain & Appalachia Ross Sidney Williston Watford Glendive Belfield Bellaire Waynesburg Gillette Edgerton Casper La Barge Wamsutter Rock Springs Roosevelt Vernal Greeley Rangely Fort Lupton Ft Morgan Stim Ft…
  40. Analyst Day – Basic Energy Services Inc. – slide 40
    Questions & Answers 41
  41. Analyst Day – Basic Energy Services Inc. – slide 41
    Manufacturing Capability Brett Taylor - Vice President, Manufacturing & Equipment 42
  42. Analyst Day – Basic Energy Services Inc. – slide 42
    Manufacturing Capabilities Taylor brand represents approximately 56% of BAS rig fleet Flexible production adapts to market demand or configuration ISO 9001 and API Q1/4F certified facility Lean manufacturing, strategic…
  43. Analyst Day – Basic Energy Services Inc. – slide 43
    Refurbishing Facilities BAS evaluates refurbishing candidates based on suitability, functionality, cost and marketability Before Internal refurbishing for all rigs and cement pumping equipment Integrated scheduling reduces…
  44. Analyst Day – Basic Energy Services Inc. – slide 44
    Machining Facilities Machine Shop Services: Fishing and Rental Tool manufacturing Re-cutting of drill pipe threads BOP refurbishing Modern equipment includes 2 CNC mills, 5 CNC Lathes, multiple manual machines, with phosphate…
  45. Analyst Day – Basic Energy Services Inc. – slide 45
    Questions & Answers 46
  46. Analyst Day – Basic Energy Services Inc. – slide 46
    Safety Performance Trampas Poldrack Vice President, Safety & Operations Support 47
  47. Analyst Day – Basic Energy Services Inc. – slide 47
    Safety Leadership Team Corporate Level Vice President Safety & Training Director of Environmental/Regulatory Compliance Corporate DOT Manager Division/Region Level HSE Managers (7) DOT Managers (7) Field Level Safety…
  48. Analyst Day – Basic Energy Services Inc. – slide 48
    HSE Initiatives Company-Wide Risk Assessments New Safety Management System 49
  49. Analyst Day – Basic Energy Services Inc. – slide 49
    Safety Management System 50
  50. Analyst Day – Basic Energy Services Inc. – slide 50
    Safety Management System Management & Leadership: Behavior Based Safety Observation STOP Cards 6,000 field observations per month (average) 51
  51. Analyst Day – Basic Energy Services Inc. – slide 51
    Safety Management System Compliance & Training: New Hire Orientation Short Service Employee Program Competency Training 52
  52. Analyst Day – Basic Energy Services Inc. – slide 52
    Safety Management System Incident Review & Case Management: Notification Investigation Reporting 53
  53. Analyst Day – Basic Energy Services Inc. – slide 53
    Safety Management System Fleet Safety: Professional Driver Training GPS monitoring Scorecard 54
  54. Analyst Day – Basic Energy Services Inc. – slide 54
    Safety Management System Inspections & Audits Formal Process Inspection Reports Deficiency Tracking 55
  55. Analyst Day – Basic Energy Services Inc. – slide 55
    Safety Management System Rewards & Recognition Individual/Team recognition SPOT/Monthly Awards Positive Re-enforcement 56
  56. Analyst Day – Basic Energy Services Inc. – slide 56
    Safety Management System 57
  57. Analyst Day – Basic Energy Services Inc. – slide 57
    Questions & Answers 58
  58. Analyst Day – Basic Energy Services Inc. – slide 58
    Acquisition Strategy, Financial Policy & Organization Alan Krenek Sr. Vice President, CFO & Treasurer 59
  59. Analyst Day – Basic Energy Services Inc. – slide 59
    Successful Acquisition Process We dont solicit deals The target has to be for sale Screening process First screen Does equipment/services fit within our core businesses Second screen Can acquired organization integrate into the BAS…
  60. Analyst Day – Basic Energy Services Inc. – slide 60
    BAS Financial Policy Disciplined Growth Strategy with Capital Structure in Mind Capital expenditures paid through existing cash balances and cash flow Acquisitions under 25 million paid through existing cash balance Acquisitions over…
  61. Analyst Day – Basic Energy Services Inc. – slide 61
    Debt Reduction Possibilities With Our High Debt-to-Book Capitalization, We Have Set Goals to Reduce Our Debt Load The 2019 Bonds First Call Date is February 2015 Breakage fee is coming down substantially as we near the first call…
  62. Analyst Day – Basic Energy Services Inc. – slide 62
    BAS Bond Trading Trends Price YTW 110 9.0 % 7.75% Senior Notes 106.50 8.0 % 105 Due 2019 7.0 % 100 6.0 % 95 5.0 % 4.0 % 90 3.80 % 3.0 % 85 2.0 % May-13 Aug-13 Nov-13 Feb-14 May-14 May-13 Aug-13 Nov-13 Feb-14…
  63. Analyst Day – Basic Energy Services Inc. – slide 63
    Financial System Drives Timely Reporting We Migrated to SAP Across the Total Organization in 2009 Needed System that Could Facilitate Multi-office, Decentralized Operations 100+ field locations Equipment Utilization Reports are…
  64. Analyst Day – Basic Energy Services Inc. – slide 64
    Flat Organization Creates Efficiency and Effectiveness CORPORATE ORGANZATION IN FORT WORTH, TEXAS Accounting & Information Human HSE Sales & Manufacturing Finance Technology Resources Marketing & Procurement Information Flows…
  65. Analyst Day – Basic Energy Services Inc. – slide 65
    Efficiency in Handling High Volume of Transactions We monitor credit status of 2,000+ customers and process over 36,000 sales invoices each month. DSO consistently between 60 and 65. 66
  66. Analyst Day – Basic Energy Services Inc. – slide 66
    Guidance Second Quarter Revenue Expected to be Up 56% Sequentially Projected Segment Profit Margin Trends for 2014 Completion & Remedial margins was 37% for 1Q14 We anticipate margin to move toward 40% as we progress through 2014…
  67. Analyst Day – Basic Energy Services Inc. – slide 67
    Questions & Answers 68

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