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Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc.

Dril-Quip, Inc. · Mar 23, 2015 · 24 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. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 1
    Dril-Quip,Inc. Dril-Quip, Inc. Scotia Howard Weil 43rd Annual Energy Conference March 23, 2015 New Orleans, Louisiana
  2. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 2
    DRQ - Investment Highlights Pure play in worldwide offshore market Robust backlog Superior margins Strong balance sheet Experienced management team Well positioned to navigate industry cycles and exploit opportunities
  3. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 3
    Products and Services Summary SUBSEA EQUIPMENT 1 Specialty Connectors 2 Mudline Suspension Jack-Up TLP Spar 3 Subsea Wellheads 4 Tie-Back Connectors 13 17 13 17 Platform 12 5 Template Systems FPSO 12 14 Semi 12 14 Drillship 13 17…
  4. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 4
    Subsea Well Systems Utilized on all subsea wells drilled with floating rigs Subsea Wellheads Specialty Connectors Liner Hangers
  5. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 5
    Dry Tree Completion Systems Utilized by SPARs and TLPs Surface Trees Surface Wellheads Riser Tensioners Production Risers Tie-Back Connectors Subsea Wellheads Specialty Connectors Liner Hangers
  6. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 6
    Subsea Completion Systems Utilized in subsea field developments Subsea Trees Control Systems Subsea Manifolds Subsea Wellheads Specialty Connectors Liner Hangers
  7. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 7
    Strong Global Presence Located worldwide to serve key demand centers Eastern Hemisphere Headquarters Aberdeen, Scotland World Headquarters Houston, Texas Asia-Pacific Headquarters Maca, Brazil Singapore Dril-Quip…
  8. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 8
    Suppliers Offshore Operators
  9. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 9
    Consistent Track Record of Growth 400 1,000 Number of Working Floating Rigs 350 900 300 800 Revenue (millions) 250 700 200 600 150 500 100 400 50 300 0 200 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014…
  10. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 10
    DRQ Revenues, Wells Drilled and Day Rates 1,000 800 DRQ Revenue (Millions) & Floating Rig 875 700 750 600 Day Rate (Thousands) 625 500 Number of Wells 500 400 375 300 250 200 125 100 0 0 2005 2006 2007 2008…
  11. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 11
    Contracted Floating Rig Fleet 2007 2016E 300 High Case Average Number of Rigs 280 260 Base Case 240 220 Low Case 200 180 160 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E Projected Floaters Contracted…
  12. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 12
    Floating Rig Fleet by Water Depth 2010 2016E By year end 2015, there will be more ultra-deepwater rigs than all other floating rigs combined. 350 300 Floating Rigs 250 139 160 111 127 181 202 84 of Fleet 200…
  13. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 13
    Floating Rig Drilling Activity 400 800 350 700 300 600 Number of Floating Rigs Number of Wells /Trees 250 500 200 400 150 300 100 200 50 100 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total Floating…
  14. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 14
    Worldwide Subsea Tree Awards Forecast 600 500 400 Number of Trees 300 200 100 0 2013 2014 2015E 2016E 2017E 2018E 2019E Actual Tree Awards Forecast Tree Awards Source: Quest Offshore Resources, Base Case Scenario, Feb…
  15. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 15
    Vertically Integrated Manufacturing Purchase Raw Forge Materials Rough Machine Heat Treat Finishing Finishing Finishing Finishing Operations Operations Operations Operations Houston Aberdeen Singapore Brazil
  16. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 16
    Machinery and Equipment Rebuilding Purchase used equipment Refurbish in-house with new CNC controls Purpose-built machine tools Resulting in reduced capital expenditures
  17. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 17
    Manufacturing Locations Houston Eldridge (218 acres) Aberdeen, Scotland (24 acres) Singapore (11 acres) Maca, Brazil (11 acres)
  18. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 18
    Machines and Machinists 400 1.50 1.45 350 1.40 1.35 Number 300 1.30 Ratio 1.25 250 1.20 1.15 200 1.10 1.05 150 1.00 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Machinists Machines Ratio
  19. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 19
    Strong Balance Sheet Offers Flexibility (Millions of US) Assets 12/31/14 12/31/13 Cash 299 384 Other current assets 828 695 Property, plant and equipment, net 310 305 Other assets 12 11 Total assets 1,449 1,395 Liabilities and…
  20. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 20
    Condensed Consolidated Statements of Income Year ended December 31, (000s of US) 2014 2013 Revenues 930,957 872,372 Cost and expenses: Cost of sales 55.2% 513,527 58.9% 513,906 S, G & A 92,762 94,806 Engineering 45,920 40,115…
  21. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 21
    Revenue and Backlog 1000 Revenue (mm) 872 931 800 733 Consistent revenue growth 600 540 566 601 through industry cycles 400 200 Record 2014 revenues 0 totaled 931 million 2009 2010 2011 2012 2013 2014 1400 Backlog (mm) 1,200…
  22. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 22
    Superior Margins vs. Peers* 35.0% EBIT (Operating Income) Margin ** (%) 29.9% 30.0% 24.5% 25.6% 25.0% 21.6% 22.1% 20.0% 15.0% 10.0% 5.0% 0.0% 2010 2011 2012 2013 2014 Dril-Quip Average of Peer Group Superior margins due…
  23. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 23
    Capital Allocation Overview 200 million in stock buybacks: 4Q 2013 to 4Q 2014 300 million cash-on-hand 12/31/2014 No long-term debt 12/31/2014 100 million buyback authorization 03/01/2015 Significant positive cash flow…
  24. Howard Weil 43rd Annual Energy Conference – Dril-Quip, Inc. – slide 24
    Looking Ahead Use free cash flow and balance sheet to enhance share- holder value through stock repurchases and potential M&As Use superior margins to maintain / grow market share Leverage engineering resources for new product…

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