Hunting PLC · LSE:HTG
Hunting — H1 2010 Earnings Presentation
38 slides from Hunting's earnings presentation, 2010
Slide 1: 2010 Half Year Results
j eZ HUNTING 2010 Half Year Results
Slide 2: 2010 Half Year Results Summary
2010 Half Year Results Summary* H1 H2 H1 2010 2009 2009 £m £m £m Revenue 214.2 150.9 209.0 EBITDA 30.9 14% 21.1 14% 29.5 14% Profit from operations 22.0 13.8 22.0 Finance income (expense) 0.8 (1.4) 3.2 Profit before tax 23.2 13.1 25.4 Effective tax rate 31% 32% 32% Basic earnings per share 11.2p 6.0
Slide 3: Segmental Results
Segmental Results* H1 H2 2010 2009 Profit Profit from from Revenue Operations Margin Revenue Operations Margin £m £m % £m £m % Hunting Energy Services Well Construction 41.9 2.9 7% 29.0 (0.2) - Well Completion 107.5 10.9 10% 71.0 7.5 11% Well Intervention 29.6 4.2 14% 17.1 2.2 13% Exploration and Pr
Slide 4: Exceptional Items
Exceptional Items 2010 £m Oil and gas reserve impairment 2.7 Dry hole costs 2.9 Acquisition costs 1.6 Continuing operations 7.2 Tax credits (2.1) Foreign exchange loss on CAN$ tax provision 3.9 Continuing and discontinued operations 9.0 4
Slide 5: Balance Sheet
Balance Sheet June December 2010 2009 £m £m Intangible assets & goodwill 61.7 59.1 Property, plant and equipment 133.1 121.4 Available for sale financial assets 31.7 29.8 Working capital 113.4 72.3 Provisions (67.4) (78.9) Other (12.8) (6.9) Net cash 314.1 365.0 NET ASSETS 573.8 561.8 5
Slide 6: Capital Expenditure
Capital Expenditure H1 Full Year 2010 2009 £m £m Hunting Energy Services Well Construction 7.4 9.1 Well Completion 7.2 8.3 Well Intervention 1.0 1.8 Exploration & Production 2.9 1.9 Others 0.6 0.5 19.1 21.6 Split: Maintenance 6.2 9.9 New Business 12.9 11.7 19.1 21.6 6
Slide 7: Capital Expenditure
Capital Expenditure 2010 £m Well Construction Casper facility - US 1.7 Conroe facility - US 1.5 Pennsylvania facility - US 1.3 Tools, equipment & other 2.9 Well Completion Wuxi facility - China 1.6 Tools, equipment & other 5.6 Well Intervention National Coupling expansion 0.7 Tools, equipment & othe
Slide 8: Use of Gibson Energy Sale Proceeds
Use of Gibson Energy Sale Proceeds 2010 £m Repay debt as at completion 166.0 2009 capital expenditure 21.6 2010 projected capital expenditure 43.5 Capital projects due to complete in 2010/2012 Restructure Scottish facilities 16.5 Restructure Casper, Wyoming facilities 5.1 Wuxi facility China 5.0 Dri
Slide 9: Cash Flow
Cash Flow H1 H2 H1 2010 2009 2009 £m £m £m Profit from operations 22.0 13.8 22.0 Depreciation and amortisation 8.9 7.3 7.5 Changes in working capital (38.1) (10.8) 22.7 Interest and tax (1.7) 0.6 (7.6) Capital expenditure (19.1) (10.7) (10.9) Acquisitions / disposals (0.7) (4.6) (15.8) Dividend paid
Slide 10: Global Footprint
Global Footprint HUNTING @ Well Construction @ Well Completion @ Well Intervention @ Other . \ 10
Slide 11: Operational / Acquisition Strategy
Operational / Acquisition Strategy 11
Slide 12: Organic Growth
Organic Growth Casper, Wyoming Conroe, Texas Fordoun, Scotland Latrobe, Pennsylvania Wuxi, China 12
Slide 13: Acquisition: Innova-Extel
Acquisition: Innova-Extel 13
Slide 14: Profile: Innova and Extel
Profile Innova • Established 1989 • 100,000 square feet manufacturing facility • 300+ employees Extel • Established 2006 • 81,000 square feet manufacturing facility • 50+ employees Combined forecast 2010 revenue - $100-110 million 14
Slide 15: Innova Capabilities
Innova Capabilities Management Material Electronic Manufacturing Services • Component Handling • Surface Mount Assembly • Through Hole Facility • PCB Inspection • PCB Cleaning • Verification & Acceptance Testing • In-Circuit Testing • Quality Assurance • Engineering & Support Services • Additional P
Slide 16: Well Construction
Well Construction Profit from Operations £m H1 2009 H2 2009 H1 2010 3.5 (0.2) 2.9 Highlights Premium connection sales and marketing agreement signed with Arcelor Mittal for their new seamless OCTG mill in Saudi Arabia One expansion and two new facilities for Drilling Tools in the US New facili
Slide 17: Well Construction Product Integration Points
Well Construction Product Integration Points Unconventional Gas Land Rigs Deepwater Drilling Tools + OCTG + Premium Connections Mud Motors Carbon SEAL-LOCK Drill Collars Alloy TKC Shock Tools Chrome Licensed Threads APRS 17
Slide 18: Global Shale Reserve Estimates
Global Shale Reserve Estimates Source : Schlumberger 18
Slide 19: Footprint Servicing Shale and Tight Gas Plays
Footprint Servicing Shale and Tight Gas Plays Source : Hunting 19
Slide 20: Well Completion
Well Completion Profit from Operations £m H1 2009 H2 2009 H1 2010 12.8 7.5 10.9 Highlights Lean manufacturing initiatives started in all facilities Wedge-lock and 40-40 RTC connections tested and commercial 20
Slide 21: Technology Development 40-40 RTC
Technology Development 40-40 RTC • Enhanced design for positive torque stop • Trouble free running • Ideal for Shale Plays 21
Slide 22: Technology Development WEDGE-LOCK
Technology Development WEDGE-LOCK • The only high torque integral flush connection qualified to the most severe level of ISO 13679 • The only high torque integral connection which has a dedicated metal to metal seal for external pressure retention • The only high torque integral connection which doe
Slide 23: Well Completion Product Integration Points
Well Completion Product Integration Points Unconventional Gas Land Rigs Deepwater Accessory Specialty Tubular Manufacturing + Threading + Systems Completion Accessories SEAL-LOCK Deepwater Facilities Assembly TKC Managed Inventory Print Part Work Licensed Threads Completion Design Polished Bore Rece
Slide 24: Well Intervention
Well Intervention Profit from Operations £m H1 2009 H2 2009 H1 2010 1.8 2.2 4.2 Highlights Chemical Injection Systems 8 units shipped – 2 for BP Gulf of Mexico relief wells Integration of Welltonic (late 2009 acquisition) throughout organisation 24
Slide 25: Well Intervention Product Integration Points
Well Intervention Product Integration Points Work Over Coiled Tubing Subsea Manufacturing + Thru-Tubing Tools + Subsea Pressure Control Equip Coiled Tubing Tools Chemical Injection System OEM Tools Coiled Tubing Motors Hydraulic Valves E-Line Tools Hydraulic Couplings Slickline Tools Weldment Servic
Slide 26: Gibson Shipbrokers
Gibson Shipbrokers Enlarged geographic coverage with new Oslo office and reinvigorated Chinese presence in Shanghai Continued staff development and tailoring to meet the anticipated market demand Profit from Operations £m H1 2009 H2 2009 H1 2010 0.3 0.4 0.5 26
Slide 27: Others
Others Exploration and Production Profit from Operations £m H1 2009 H2 2009 H1 2010 - 0.3 0.4 Field Aviation Profit from Operations £m H1 2009 H2 2009 H1 2010 3.6 3.6 3.1 27
Slide 28: U.S. Land Rig Count
U.S. Land Rig Count* 2500 2000 oe 2 1860 & 1787 Z 1500 oo S [aa S 4000 : 4117 2 € 5 z 500 0 2006 2007 2008 2009 * Source: M-1 Swaco and Simmons Research 2010 28 2011 2012 HUNTING BB Actual ) Estimated Projected
Slide 29: Horizontal Rig Count
Horizontal Rig Count* HUNTING 1600 70% 57.7% ~ 60% 2 5 1200 Z 50% 2 | Horizontal rigs as a iad 40% percentage of total rot 9 US rig count Fe 800 30.1% ae 19 3 30% = IB Average number ro) 576.8 : ‘ . 16.4% 20% of horizontal rigs oO fo 2 400 E 10.1% 390.5 0) %o z T% 7.8% 10% 58.7 170.3 —_ oe] ; 2002 2
Slide 30: International Land Rig Count
International Land Rig Count* 30
Slide 31: International Offshore Rig Count
International Offshore Rig Count* 31
Slide 32: US Lower 48 Dry Gas Supply Outlook by Type
US Lower 48 Dry Gas Supply Outlook by Type* 32
Slide 33: World Energy Outlook 2008-09
World Energy Outlook 2008-09* 33
Slide 34: Global Oil Demand
Global Oil Demand* HUNTING Million B/D 120 100 80 BD Actual a0 !)) Projected 40 20 0 2009 2010 2011 2012 2015 2020 2025 * Source: EIA 34
Slide 35: Worldwide Deepwater Discoveries
Worldwide Deepwater Discoveries* 35
Slide 36: Global Subsea Systems Capex
Global Subsea Systems Capex * Source: Quest Offshore Resources 36
Slide 37: IOC Reserve Replacement Ratio versus E&P Spending
IOC Reserve Replacement Ratio versus E&P Spending* 37
Slide 38: EF wuntinc
EF wuntinc