Key Energy Services Inc · OTC:KEGX
Key Energy Services — Investor Presentation (June 2016)
33 slides from Key Energy Services's investor presentation, Jun 15, 2016
Slide 1: Key Energy Services Business Overview
Exhibit 99.1 KEY KNOWS Business February Overview 2016 HOW Presentation
Slide 2: Safe Harbor
Safe Harbor Key® This statements. Key’s future Whenever Readers limited expectations fundamentals further technological compliance fines markets operations; used investments, ability pressures, Because looking operations Exchange 2forward-looking press in orcurrent operational Energy to unexpected t
Slide 3: Key's Suite of Services Across the Well Life Cycle
Key’s Key® Abandonment Intervention Production Completion •Drilling 3Tools Services KeyServices Multiple Rig Coiled Fishing FluidEnergy Suite Energy Management Tubing &touch Rental ofServices Services Services points brings and Throughout continuity together theof the Life service equipment of a thr
Slide 4: A Sharpened Focus on Regional Organization
AAsharpened •Key® Rockies 2% West 94% Permian 76% 10% 7% Central 50% 18% 4% Gulf 33% 26% 20% Northeast 32% 16% 28% U.S. Basins Regions 21% 55% 24% 4Note: newly-optimized 4% Rigs Coast Coast All Energy 2015 2015 2015 figures Fluid 2015 2015 2015 focus Revenue Revenue Services Revenue Revenue Manageme
Slide 5: Key Energy Services Business Highlights
Key Key® Strong Experienced, Leader Well-positioned Top Assets, Developed 5K ey® customers Energy Energy reputation in differentiated onshore, aServices differentiated operations-focused Services represent toasbenefit rig-based aBusiness technology high well-capitalized from asset value well Highlig
Slide 6: Key Value Proposition Across the Well Life Cycle
Key®Value High 6Production Cycle Energy Across Service Services the forWell Maximizing Life
Slide 7: Rig Business - Asset Overview
Rig Business •–Asset Regional Key® regions Revenue Region 91% Oil 9% Gas Commodity Other Permian Bakken California Drilling (1) 7(2) Rig Services Over Rigs Fleet Patented Workover Completion Recompletion Maintenance Plugging Services Enhanced Revenue Rigs Services Services Details Gas Oil Energy enc
Slide 8: Rig Business - Key Trends
Rig •Trends Key Key® #1 30% Others #5 #2 #3 Historical Avg. $80 $600 $700 $679 $673 $800 $789 $120 $900 –F $0 $100 $20 $200 $40 $300 $400 $377 $60 $500 Top FY2015 FY2014 FY2013 OXY Drilling (1) 8#(2) Revenue 4Y2012 California Growing Horizontal Key’s 30% 5% 15% 14% 6% As Per Services 5has Positionin
Slide 9: Coiled Tubing Business - Asset Overview
Coiled –•Business Fleet Total > < 22% 2” Regional 39% Key® Revenue Basins regions Other Region 68% 32% Gas Commodity 6% Oil Eagle 17% 12% Marcellus California 8% Haynesville 20% Permian Drilling 30% (1) 9(2) Key’s Services Completion Maintenance Plugging 2”Units As Revenue 7% Units Status1 Units For
Slide 10: Coiled Tubing - Key Trends
Coiled •Trends Key Key® #5 9#4 #3 #6 #2 41 #1 Others 12 Historical Avg. $150 $80 $173 $193 $200 $216 $120 $250 Revenue –F $0 $20 $50 $40 $90 $100 $60 Top FY2015 FY2014 FY2013 Chesapeake AERA® OXY MARATHON Drilling (1) (2) (3) 10Y2012 Industry Growth Demand Have %%As Meaningfully Per 5has Positioning
Slide 11: Fishing and Rental Business - Asset Overview
Fishing Business –•Asset Regional Key® regions Revenue Gas Commodity Oil Region Permian 19% Other California 26% Drilling (1) (2) 11Rental Onshore Extensive 684 Fishing SmartTong Hydra-Walk Sand-X Each Revenue Excludes 67% 33% Haynesville blowout Details Gas Oil Energy isBasins and Completion equipm
Slide 12: Fishing and Rental - Key Trends
Fishing •Trends Key Key® #1 25 2Others #10 3#2 #9 #8 4#3 #7 #5 5#4 #6 Historical Revenue $250 $80 $265 $300 $324 $350 $356 $120 $400 Avg. $150 $152 $60 $200 –F $0 $50 $20 $100 $40 Top FY2015 FY2014 FY2013 Chevron Drilling (1) (2) 12Y2012 Recent Regional Majority %9610 23 % 11 As Per 5has Positioning
Slide 13: Fluid Management Business - Asset Overview
Fluid Business Transportation Temporary Disposal Asset Approximately ~900 Own ~70 Strategy Regional Key® regions Top Chevron Drilling (1) 13 As saltwater 5and fluid Management Details Customers1 Energy ofBasins Completion is OXY of Q4 Overview Presence lease trucks to on-site flowback 2015. locate d
Slide 14: Fluid Management - Key Trends
Fluid Key® Trends Performance Relatively Competitive Emerging Key Key’s Logistical $Historical $400 $80 $272 $300 $350 $354 Avg. $250 –F $0 $50 $20 $100 $40 $150 $153 $60 $200 Revenue FY2015 FY2014 FY2013 Gas Region Commodity Permian Haynesville Cline California Other Drilling (1) 14Y2012 120 Revenu
Slide 15: Controlling the Costs
Key® Energy Controlling 15 theServices Costs
Slide 16: The Key Organization
Organization Key® The 2014 LOB Sales, Quality Q3 118 All 2015 Employees Optimization Q1 Removed Market 2016 Area Service Functional 16 ‘15 ‘16 Market (19%) LOB Directors -HSE, driven, Energy 2015 VPs Managers / Service management 125 G&A resources and who HR, are Markets Evolution /Services (25%) Ac
Slide 17: Cost Optimization - Headcount and Rig Hours
Cost Key® U.S. 7Rig 15,000 30,000 45,000 60,000 75,000 90,000 105,000 120,000 135,000 0H 1,000 2,000 3,000 4,000 5,000 6,000 Direct Feb-16 Jan-16 Dec-15 Nov-15 Oct-15 Sep-15 Aug-15 Jul-15 Jun-15 May-15 Apr-15 Mar-15 Feb-15 Jan-15 Dec-14 Nov-14 Oct-14 17 ,000 eadcount Hours headcount Headcount Optimi
Slide 18: Cost Optimization - G&A
Cost G&A Key® U.S. G&A Leases, $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 Q1-15 Total 18 Optimization People ($ Energy Q2-15 taxes, mimllions) Expenses Expenses Q3-15 utilities, Services – G&A Q4-15 software FCPAQ1-16 Expenses P Q2-16 Professional P Q3-16 Fees P Q4-16 ex FPCA P Facilities & Taxes
Slide 19: Well-Positioned to Weather the Storm
Key® Energy Services Well-Positioned 19 Storm to Weather the
Slide 20: Market Trends - US Land Rigs vs. WTI Price
Market Key® $Total 500 1,000 1,500 2,000 2,500 –A $20.00 $40.00 $60.00 $80.00 $100.00 $120.00 $140.00 2000 US Source: 20 160.00 vg.Land WTI 2001 US Land Energy Trends Baker Land Rigs Price 2002 Rigs Services WTI Hughes, Rigs ($/bbl) in 2003 US vs.2004 Bloomberg. WTI2005 Price2006 2007 2008 2009 2010
Slide 21: Core Production Enhancement Strategy
Key21Core Key’s Life-Cycle Service Drilling Key® Well Production Time Abandonment Source: 21 Servicing (years) core Energy Activity Key &Strategy Completion production of Enhancement Energy an Services &OilofServices, Well Production enhancement Inc.Enhancement business is primarily focused on exten
Slide 22: Attractive Production Response Economics
Attractive Key® Compelling Payback 0W 50 100 150 200 250 300 350 13-month Production $30 Source: Note: 223ell5$40 Service 7Excludes Energy 9Key $50 Period Payback 11Economics Response 13 economics Energy $60 Payback Services 15 scenarios (days) $70 17Services. 19 (bbls/day) $80 of Period at21 Produc
Slide 23: Increasing Demand for Production Enhancement
Increasing Key U.S. Average 2.0 Up Down 90,000 Number 2000 Avg Source: 23 23 ~35% 1.5 Daily Energy base 2001 ~30% 1.0 80,000 Drilling of Daily production since Oil Demand 0.5 2002 Wells Services since Production 0.0 70,000 Production 2011 Info. 2003 2011 forhas 60,000 2004 Production been (Vert. (bb
Slide 24: Selected Horizontal Well Wave
Selected Key Wave Horizontal 100,000 HZ ~68k 2000 Cumulative Source: 24 24 well Energy 2001 HZ ofDrilling 90,000 count older U.S. wells 2002 Wells HZ Services Onshore horizontal up to Wells 80,000 Info. 2003 enter ~4x >4 2004 since Oil 70,000 well oil Years Shale 2005 2010 maintenance wells 60,000 O
Slide 25: Key's Rig Fleet Well-Positioned to Capture Growth
Key25 Key’s Rig 60,000 Class 2014 50,990 26,094 Central Source: 25 Hours Well-Positioned Energy holds Q 4class 50,000 Rigs Production Gulf 1Key 2014 a4market-leading Services Energy by Coast rig 40,000 QMarket fleet 2 Permian Hours 2014 Services, toleads 30,000 Capture –QProduction Up3the position B
Slide 26: Project Cipher Discussion Materials April 2016
Project DISCUSSION April Highly Not For Preliminary Discussion for 2016 Confidential Cipher Distribution Draft MATERIALS Purposes – Subject Only to Material Change
Slide 27: Business Plan Overview
Business Highly Not For Preliminary Subject Management Projected Revenue Given Oil Activity Non-Completion Completion Price Levels(2) Reach Normalized Return Pricing $35-40/bbl Modest Stay Improve Costs > (1) 2(2) Fixed G&A E.g., Price Discussion for atLevels uncertainty $60/bbl to 2016 Confidential
Slide 28: Capital Structure Overview
Business Highly Not For Preliminary Subject 2017-2020 2016 Capex Growth Pricing Includes FCPA Capital > ($ Debt ABL Term Sr Total Less: Net (1) 3(2) Assumes No in Unsecured Term $46mm Discussion Debt for millions) Maturity Revolver(1) FCPA Debt Loan(2) Cash Confidential Structure Scenario Distributi
Slide 29: Pricing Scenario ($35-$40) Financials
Pricing ($35-$40 Highly Not For Preliminary Subject 2016E 2015A Revenue COGS Gross G&A EBITDA Non-Cash Adj. % Capex(1) Taxes Unlevered Existing Other Levered Beginning Change Ending LTM 4(1)YoY Margin Net Discussion for EBITDA Leverage Interest Fixed (203) Income (132) (15) 36 Profit 2017E H1 (715)
Slide 30: Financial Summary
Summary Highly Not For Preliminary Subject REVENUE $2,500 $1,960 GROSS $700 42% $477 $651 $78 $157 ADJ. $450 30% –% $269 $427 $48 $166 ($ CAPEX(2) $480 FY12 $430 (1) 5(2)Adj. Gross in Excludes Net Discussion for $124 $14 36% 24% millions) $600 $381 $360 $279 $400 $161 EBITDA(1) FY13 $2,000 $1,592 EB
Slide 31: Pricing Scenario ($40-$50) Financials
Pricing ($35-$40 Highly Not For Preliminary Subject 2016E 2015A Revenue COGS Gross G&A EBITDA Non-Cash Adj. % Capex(1) Taxes Unlevered Existing Other Levered Beginning Change Ending LTM 6(1)YoY Margin Net Discussion for EBITDA Leverage Interest Fixed (203) Income (132) (15) 36 Profit 2017E H1 (715)
Slide 32: Financial Summary
Summary Highly Not For Preliminary Subject REVENUE $2,500 $1,960 GROSS $700 42% $651 ADJ. $450 25% –% $427 ($ CAPEX(2) $480 FY12 $430 (1) 7(2)Adj. Gross in Excludes Net Discussion for 36% 20% millions) $600 $477 $360 $256 $400 $161 EBITDA(1) FY13 $2,000 $1,592 EBITDA Confidential of Distribution to
Slide 33: 2016 Liquidity Forecast
2016 Highly Not For Preliminary Subject LIQUIDITY ($ Jan-16 2016E Revenues Expenses EBITDA Changes Capex Unlevered Bond Bank Other Levered Cash 8Note: inDiscussion for millions) Liquidity Balance Debt Assumes Payments 0(1) 12Feb-16 Confidential Distribution to 0Cash in 0($3) 0(44) $41 (1) Material F
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