High Arctic Energy Services Inc · TSX:HWO
High Arctic Energy Services — Investor Presentation (May 2013)
25 slides from High Arctic Energy Services's investor presentation, May 2013
Slide 1: High Arctic Energy Services Corporate Presentation
High Arctic Energy Services Corporate Presentation Symbol: HWO
Slide 2: Disclaimer
Disclaimer This presentation may contain information which is forward-looking and is subject to important risks and uncertainties. The results or events predicted in this information may differ from actual results or events. Actual results may differ materially from management expectations, as proje
Slide 3: Corporate Profile
Corporate Profile High Arctic Energy Services Inc. (“HWO” of the “Company”) is a growth oriented, dividend paying company whose principal focus is to provide contract drilling and specialized well completion services, equipment rentals and related services to the oil and gas industry in Western Cana
Slide 4: Investment Highlights
Investment Highlights • Deep value investment opportunity – currently trading at 2.83 x trailing EV/EBITDA • Proven management team and board of directors who have redirected the operations of the Company from near insolvency to a financially strong entity • Industry leading net income margin (17.8%
Slide 5: Corporate Strategy
Corporate Strategy High Arctic Energy Services looks to be the market leader in chosen specialty niche markets – defined by either location or service offerings Papua New Guinea Canada • Leading oil field service provider in • Leading provider of snubbing services the country in the Western Canadian
Slide 6: Canadian Operations
Canadian Operations • Snubbing units – 15 stand alone units and 5 rig assist units • 3 underbalanced workover rigs – UB 250k High Rate N2 Pumper • 1 high rate and 11 low rate nitrogen pumpers • 5 nitrogen transporters Stand Alone/Rig Assist UB 250k Units Nitrogen Pumpers Nitrogen Transport Page 6
Slide 7: Canadian Service Offerings
Canadian Service Offerings 1. Snubbing – See slides 8 and 9 2. Underbalanced Workover Rig (UB 250k) – Many multi-fracked horizontal well bores in excess of 5,000 meters cannot be completed with coil tubing due to frictioning out. The UB 250k can be utilized to mill out bridge plugs in excess of 6,00
Slide 8: What is Snubbing?
What is Snubbing? • Snubbing is the use of hydraulic force to push pipe against the snub force created by the well pressure. The push force is required until the total tubing weight is greater than snub force excreted on the tubing • The pushing capacity of the snubbing unit is also useful on long h
Slide 9: Where is Snubbing Required?
Where is Snubbing Required? Producing Wells • Allows work over operations on live wells without the use of damaging kill fluids • Recompletion of aged wells. Snubbing is the most common method to install smaller diameter tubing strings under pressure to increase the flowing velocity in depleted well
Slide 10: UB 250k vs. Coil Tubing Length
UB 250k vs. Coil Tubing Length Page 10
Slide 11: Canadian Customers
Canadian Customers Working with large domestic and multi-national producers provides stability throughout oil and gas pricing cycles Page 11
Slide 12: Papua New Guinea Overview
Papua New Guinea Overview • Independent, established democracy and a stable business jurisdiction • Recognized as the 7th fastest growing economy in the world in 2011 • Part of the Commonwealth (former territory of Australia) • Abundant in metals, hydrocarbons and minerals • Population: ~7.0 million
Slide 13: PNG Political Landscape
PNG Political Landscape • Parliamentary system with Prime Minister • Recent political struggle over the Prime Minister resolved peacefully and within the law • Open to foreign capital and investment • No restrictions on repatriation of foreign profits • Judicial and court system modeled after Austra
Slide 14: Why PNG for High Arctic
Why PNG for High Arctic PNG OSL / Exxon - LNG Project • Commenced in 2010 with first LNG sales on track for 2014 • Project budget: $19.0 USD billion • Exxon is the operator (33.2%) and partners include: – OSL (29.0%) – PNG government (16.8%) – Santos Ltd. (13.5%) – Nippon Oil (Japan) (4.7%) – PNG la
Slide 15: Who is Oil Search Limited (OSL)?
Who is Oil Search Limited (OSL)? • Public oil and gas exploration company (OSH-A) headquartered in Sydney, Australia • Market capitalization of $9.5 billion ($USD) • Current net production ~18,500 boe/d (only oil) • Operating in PNG since 1929 • PNG’s largest producer and most active operator • PNG
Slide 16: PNG Operations
PNG Operations • Pynyang region – HWO rig 103 • Hides region – Nabors drilling rigs • Kutubu region (OSL operations ) HWO rig 104 and 102 • Interoil – smaller rigs owned by Interoil Page 16
Slide 17: High Arctic in PNG
High Arctic in PNG • Manage 2 heli-portable drilling rigs (rigs #103 and #104) for OSL, contracted through Dec 2013 [contract renewal is currently in process] • Own and manage the only heli-portable hydraulic workover rig in the country (rig #102) contracted until May 2014 • Exclusive provider of Du
Slide 18: PNG Current Customers
PNG Current Customers • Working with large domestic and multi-national producers provides stability throughout oil and gas pricing cycles Page 18
Slide 19: Corporate Strategy Summary
Corporate Strategy Summary 1. Continue to invest free cash flow into organic growth opportunities with strong financial returns • expand PNG matting, equipment rentals and camp service offering • expand existing service offerings in nitrogen and equipment rentals in Canada • maintain leading edge sn
Slide 20: Historical Financial Summary
Historical Financial Summary Financial Performance – LTM Trailing (in $ CDN millions) Jun, 2011 Sep, 2011 Dec, 2011 Mar, 2012 Jun, 2012 Sep, 2012 Dec, 2012 Mar 2013 CDN Revenue 41.3 43.3 47.0 50.1 50.2 52.2 47.2 43.4 PNG Revenue 81.8 80.1 80.2 83.4 88.0 92.5 99.0 105.4 Total Revenue 123.1 123.4 127.
Slide 21: Appendix A – Management Bios
Appendix A – Management Bios Bruce Thiessen, CEO/Director Bruce Thiessen has been with High Arctic Energy Services for 18 years, serving as CEO since early 2009. Prior to this he served as the Company’s VP of Marketing. Before joining High Arctic, Mr. Thiessen was with a major oilfield services comp
Slide 22: Appendix A – Management Bios
Appendix A – Management Bios Daniel Beaulieu , VP Canadian Operations Dan Beaulieu joined High Arctic in January 2012 as VP of Canadian Operations. Prior to joining High Arctic Energy Services, he held a position of region business unit manager at Weatherford where he managed various integrated prod
Slide 23: Appendix B - Directors Bios
Appendix B - Directors Bios • Michael Binnion, Chairman – President and CEO of Questerre Energy Corporation (QEC-T) since November 2000. • Daniel Bordessa, Independent – Partner, Cyrus Capital Partners LP and Managing Director, Cyrus Capital Partners Europe, LLP since March, 2005. • Christopher Warr
Slide 24: PNG Images
PNG Images Hydraulic Workover Rig 102 Rig 104 Rig 103 Leap Frog Page 24
Slide 25: Contact Info
Contact Info High Arctic Energy Services Inc. 8112 Edgar Industrial Drive Red Deer, AB Canada T4P 3R2 Website: www.haes.ca Bruce Thiessen, CEO Ken Olson, CFO Ph: (403) 340-9825 Ph: (403) 340-9825 Email: bruce.thiessen@haes.ca Email: ken.olson@haes.ca Trading Symbol: HWO - T Banker: HSBC Bank of Cana
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