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…
Where Earnings are Generated 4 2014 Revenue - 351 MM* 2014 Gross Margin - 87 MM* (% of Total Revenue) (% of Total Gross Margin) Downhole Downhole Tools Tools & & Rentals Rentals Service Rigs 121 MM 40 MM 93 MM Well Coil…
2015 Outlook 5 Industry slowdown due to low oil and natural gas prices Lower exploration and production capital spending Pricing pressure on services Activity has slowed in the first quarter of 2015 Essentials response:…
2015 Capital Budget 6 2015 capital budget: 21 million including 13 million growth and 8 million maintenance Growth capital: completing and putting into service 4 Gen IV masted coil tubing rigs Deferral of 3 previously announced…
Investing in High Demand Equipment 7 Capital Spending (millions) 2013A 2014A 2015B Growth 32 32 13 Maintenance/infrastructure 15 14 8 Total 47 46 21 2014A 2015B New Assets Additions Additions In-service(1) Masted coil tubing…
Fracturing Market: Essentials Role 8 The number of long-reach horizontal wells increases the demand for Essentials masted coil tubing rigs In the well completion phase, masted coil tubing rigs are used for: Pre-Fracturing…
Masted Coil Tubing: Build Program 9 Gen III/IV build program (2013 to 2016 expected delivery): Equipment expected in-service by the end of H1/16: 3 Gen III rigs / 6 Gen IV rigs Equipment deferred: 1 Gen III rig / 2 Gen IV rigs…
Masted Coil Tubing: Evolution 10 Gen II/III/IV Specifications Size Gen II Gen III Gen IV Number of rigs at Dec 31/14 14 3 2 2 coil 5,500 m 8,400 m 11,200 m 2 3/8 coil 3,500 m 6,300 m 7,900 m 2 5/8 coil 2,900 m 4,900 m 6,400 m Mast…
Essential Provides Full Service Completions 11 Essential equipment on-site: 1 Gen III and 1 Gen II masted coil tubing rig (milling out multi-stage frac balls and seats) 2 fluid pumpers, 2 nitrogen pumpers, 1 chemical van…
Completion of Horizontal Wells 12 Coil Tubing Service Rig Works while well is flowing and Use of kill fluid to service a well under pressure Deals with a wide variety of well Continuous coil - no threaded bore applications…
Production Work-overs: Service Rigs 13 The growing number of horizontal wells may increase the demand for service rigs for future work-over services Typically oil-focused An ever building inventory of older, high decline wells…
Downhole Tools & Rentals 14 Proven Business Model: High return on low capital investment 26 million of tools inventory Smaller employee base Technical business; significant barriers to entry Opportunity in: Drilling-related work…
Downhole Tools 15 MSFS Tools used for Horizontal Completions: Ball & Seat technology forms the core of Essentials MSFS tool offering but customers are also seeking new completion techniques Viking sliding sleeve coil-actuated…
Downhole Tools 16 Keys to Success: Experienced tool hands (requires diverse rig experience) Service and relationships High quality tool design quality control assembly, testing and installation Ball & seat and new tools to meet…
Operating Areas 17 CANADA U.S.A. Coverage Across Key Oil and Gas Basins
EBITDAS 19 100 80 Millions 60 40 74 74 66 68 52 20 34 29 10 0 2009 2010 2011 2012 2013 2014 2015E(1) 2016E(1) Actual Analyst Consensus (1) 2015 and 2016 is analyst consensus at Mar 19/15; Essential is covered…
Financial Strength 20 Debt Outstanding Debt / EBITDAS 44 million 0.7x (Mar 4/15) (Debt at Mar 4/15; EBITDAS TTM to Dec 31/14) Credit Facility: 100 million with a syndicate of four lenders May 31/17 maturity 35 million…
Balanced Capital Deployment 21 Unused Credit 2015 EBITDAS Capacity 34 million 56 million (Analyst Consensus Mar 19/15) (Mar 4/15) 2015 Capital Program - 21 million Annual Dividend - 15 million (0.03/share quarterly) Share…
Corporate Data 22 Mar 19/15 Trading price 1.03 Market capitalization 130 million Enterprise value (based on Mar 4/15 debt) 174 million Dividend yield 11.7% Replacement cost 3.00/share EV/2015 EBITDAS (analyst consensus)(1) 5.1x EV/2016…
Key Takeaways 23 Operational Focus Capital program focused on masted coil tubing rigs suitable for long- reach horizontal wells Downhole tools and rentals new tools and U.S. market Managing the Industry Downturn Strong balance…
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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