High Arctic Energy Services Inc · TSX:HWO
High Arctic Energy Services — Investor Presentation (March 2015)
26 slides from High Arctic Energy Services's investor presentation, March 2015
Slide 1: High Arctic Energy Services Investor Presentation
High Arctic Energy Services Investor 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: Investment Highlights
Investment Highlights Shares outstanding (as at Mar 20, 2015): 55,430,652 Share Price (as at Mar 20, 2015): $3.60 Market Cap : $199.6 million Net Cash (as at Dec 31, 2014): $37.2 million Enterprise Value: $162.4 million Trailing 12 Month EBITDA: $49.3 million EV / EBITDA Multiple: 3.29x (TTM) Annual
Slide 4: Locations
Locations Grande Prairie Red Deer Calgary Corporate Office Papua New Guinea Canada: Snubbing & Nitrogen Services & Equipment Rentals Brisbane Papua New Guinea: Drilling Services & Equipment Rentals Page 4
Slide 5: Papua New Guinea
Papua New Guinea • Independent, established democracy and a stable business jurisdiction • Part of the British Commonwealth with a Parliamentary Government • Welcoming to foreign capital and investment • No restrictions on repatriation of foreign profits • Currently experiencing rapid growth from re
Slide 6: PNG Opportunity
PNG Opportunity • PNG is one of the lowest cost LNG providers in Asia • Close proximity to the Asian LNG market • Long term demand for energy in Asia continues • Over 20 tcf of discovered gas in country, only 9 tcf of which is under development • Government and leading producers planning for a new L
Slide 7: PNG LNG development…
PNG LNG development… P’nyang : Highlands – Hides, Juha, Kutubu Elk/Antelope : Exxon/OSL - Reserves Exxon / OSL – Supporting current LNG Plant InterOil, Total, OSL for LNG expansion Reserves for major LNG expansion Forelands : Talisman, Santos, Mitsubishi, Heritage, Horizon Potential source for third
Slide 8: PNG Drilling Services
PNG Drilling Services Rig 102 – HWO owned – Rig is currently stacked – Only hydraulic workover rig in PNG Rig 103 – leased from OSL – Under contract with OSL through June 30, 2016 (three year term) – Have twice renewed the 3 year contracts with OSL – Rig is currently on assignment to InterOil Rig 10
Slide 9: PNG Drilling Services
PNG Drilling Services Rig 115 – HWO owned – AC self-erecting 1500 HP heli-portable triple – 2 year drilling services contract with InterOil commencing with spud of first well – Targeted spud date April – 2015 – Anticipated annualized revenue of $30M USD for rig with camp Rig 116 – HWO owned – AC sel
Slide 10: Competitive Drilling Landscape
Competitive Drilling Landscape Land Rigs: • Nabors Drilling – 2 Triples for use in the Hides field – departing PNG in 2015 • Western Drilling – modified for limited heli use 1 Rig circa mid 1980’s Heli-Portable Rigs: • High Arctic 2 Rigs (115 & 116) circa 2010 2 Rigs under contract from OSL (1
Slide 11: Dura-Base Matting
Dura-Base Matting • Approximately 9800 rental mats in PNG • PNG distributor rights • The largest rental supplier of Dura-Base mats outside of the USA • Possible expansion into similar countries with challenging environments Page 11
Slide 12: Equipment Rentals
Equipment Rentals Camp services – 6 camps contracted • HWO operates and manages; • Two 93 man Heli-portable drilling rig camps • Two 32 man Heli-portable leap frog camps (under contract - OSL owned) • HWO owns and manages; • One double-deck 104 man Heli-portable man camp (under contract with OSL) •
Slide 13: PNG Customers
PNG Customers • Public oil and gas exploration company • Public integrated oil and gas company (OSH-A) headquartered in Sydney, Australia (IOC-NYSE) headquartered in Port • Market capitalization of $12.7 billion (USD) Moresby & Singapore • Operating in PNG since 1929 • Market capitalization of $3 bi
Slide 14: PNG Revenue Performance
PNG Revenue Performance Million USD Drilling Revenue 90 • Drilling and related services will 80 experience a step change when 70 60 Rig 115 & Rig 116 are deployed. 50 40 • New rigs can add $30M of 30 20 revenue per year per rig with 10 full utilization - 2010 2011 2012 2013 2014 Rental Revenue • Ren
Slide 15: Canadian Operations
Canadian Operations What is Snubbing Jointed Pipe Snubbing • Snubbing is the use of hydraulic force to push pipe against the snub force created by the well pressure. PIPE • Snubbing permits live operations without SLIPS killing the well thus avoiding formation damage and bringing the well on stream
Slide 16: Snubbing Growth Opportunities
Snubbing Growth Opportunities • LNG plant approvals will drive demand for natural gas feedstock • High Arctic is well positioned to provide the needed completion services for these wells to our existing clients. These wells will require snubbing services Page 16
Slide 17: Canadian Snubbing Services
Canadian Snubbing Services 15 Stand Alone & 3 Rig Assist Units Currently marketing 9 units 2014 utilization 37% Page 17
Slide 18: Canadian Nitrogen Services
Canadian Nitrogen Services 11 Low Rate Nitrogen Pumpers Applications: Snubbing Support; • Wellbore displacements • Well head pressure testing • Underbalanced milling & drilling Other Completions work; 5 Nitrogen Transports • Nitrified acid stimulation • Wellbore fracturing and stimulation • Coiled t
Slide 19: Canadian Equipment Rentals
Canadian Equipment Rentals • 15 K BOP packages; • Double gate BOP’s • Single gate BOP’s • Blind shear rams • High temp pipe rams • 10 K BOP packages; • Double gate BOP’s • Single gate BOP’s • Blind shear rams • High temp pipe rams • Boilers • Pumps • Class III Support Trailers Growth opportunity to
Slide 20: Canadian Revenue Performance
Canadian Revenue Performance 60 Millions 50 2.5 12.1 40 1.9 9.9 Rentals 30 N2 33.7 Snubbing 29.0 20 10 - 2009 2010 2011 2012 2013 2014 Page 20
Slide 21: Dividend History
Dividend History Payout Ratio $0.018 Approx. 26% Payout Ratio $0.017 Approx. 24% $0.016 $0.015 Payout Ratio Monthly Dividend Approx. 22% $0.014 $0.013 Payout Ratio $0.012 Approx. 18% $0.011 Monthly Dividend $0.010 $0.009 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 De
Slide 22: Historical Financial Summary
Historical Financial Summary Financial Performance – TTM (in $ CDN millions) Mar, 2013 Jun, 2013 Sep, 2013 Dec, 2013 Mar, 2014 Jun, 2014 Sep, 2014 Dec, 2014 CDN Revenue 43.4 43.5 38.9 40.8 40.9 44.3 45.6 48.3 PNG Revenue 105.4 108.6 113.7 111.9 111.5 115.0 118.7 123.5 Total Revenue 148.8 152.1 152.6
Slide 23: Appendix A – Executive Management
Appendix A – Executive Management Tim Braun, CEO Tim Braun joined High Arctic in July 2014 as Chief Executive Officer. Mr Braun has over 33 years of oilfield services sector experience primarily with several large drilling contractors. Most recently, he spent eight years as a senior executive with a
Slide 24: Appendix A – Executive Management
Appendix A – Executive Management Daniel Beaulieu, COO Canadian Operations Mr. Beaulieu joined High Arctic in January 2012 as Vice President of Canadian Operations. Prior to joining High Arctic, he held the position of region business unit manager at Weatherford where he managed various integrated p
Slide 25: Appendix B - Directors
Appendix B - Directors • Michael Binnion, Chairman – President and CEO of Questerre Energy Corporation (QEC-T) • Daniel Bordessa, Independent – Partner, Cyrus Capital Partners LP and Managing Director, Cyrus Capital Partners Europe • Thomas Alford, Independent – Former President & CEO of Iroc Energy
Slide 26: Contact Info
Contact Info High Arctic Energy Services Inc. 444 – 5th Avenue SW, Suite 2010 Calgary, AB Canada T2P 2T8 Website: www.haes.ca Tim Braun, CEO Ken Olson, CFO Ph: (403) 340-9825 Ph: (403) 340-9825 Email: tim.braun@haes.ca Email: ken.olson@haes.ca Trading Symbol: HWO - T Banker: HSBC Bank of Canada Audi
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