Ranger Energy Services, Inc. · NYSE:RNGR
Ranger Energy Services — Johnson Rice Energy Conference 2017
26 slides from Ranger Energy Services's conference presentation, Sep 27, 2017
Slide 1: Johnson Rice Energy Conference
Johnson Rice Energy Conference New Orleans September 27, 2017
Slide 2: Important Disclosures
Important Disclosures CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This presentation contains certain statements that may be deemed to be “forward-looking statements” within the meaning of applicable federal securities laws. All statements, other than statements of historical facts, that add
Slide 3: Company Overview
Company Overview NOV: 30 rigs Well Historical Ranger: Services 65 rigs 95% ‘16 Pro Forma Total Fleet: Revenue 144 rigs(1) Processing Solutions 5% ESCO: 49 rigs Ranger is focused on the high-spec service rig market: fleet designed for modern unconventional horizontal wells – Production-related work
Slide 4: Management Team Leverages Extensive OFS Operations and M&A Experience
Management Team Leverages Extensive OFS Operations and M&A Experience Pete Miller, Chairman – Over 36 years of industry experience, with over 300 M&A transactions – Currently serves as Executive Chairman of DistributionNOW, and was previously President and CEO of National Oilwell Varco – Chairman
Slide 5: Pure-Play High-Spec Well Service Rig Provider
Pure-Play High-Spec Well Service Rig Provider Mast: – Running three joints of pipe, at 90’, requires mast heights greater than 102’ – Increased mast ratings (>200,000 lbs for high- spec rigs) needed to support weights associated with long horizontal completions – All new-build rigs have mast heights
Slide 6: Key Market Trends
Key Market Trends Ranger is uniquely positioned to capitalize on current market trends A Modern Well Design Necessitates High-Spec Service Rigs B Demand Growing Along with Horizontal Completion and Production Spending 6
Slide 7: Modern Well Design Trends Require High-Spec Service Rigs
A Modern Well Design Trends Require High- Spec Service Rigs From Q1 2010 through Q4 2016, average lateral lengths have increased by 88%, 72% and 24% in the Permian, Rockies and Bakken regions, respectively ~45% of horizontal well completion drill-outs were completed with well service rigs in 201
Slide 8: Completions Market
B Completions Market DUC Backlog Horizontal Wells Drilled 7,000 6,000 5,000 25 4,000 20 3,000 15 2,000 10 1,000 5 - 0 Jan-14 Sep-14 May-15 Jan-16 Sep-16 May-17 Bakken Eagle Ford Haynesville Marcellus Niobrara Permian Utica (000 of wells) Currently ~6,000 Drilled uncompleted (“DUC”) wells on hand p
Slide 9: Production Market
B Production Market From 2012-2016, production from horizontal wells >3 years old grew from 4% to 16% of total U.S. output. Additionally, the majority of wells completed today are horizontal and require workover and well maintenance to sustain production as they age Onshore Lower 48 U.S. Crude O
Slide 10: High-Spec Service Rig Demand Overview
B High-Spec Service Rig Demand Overview The contribution of high-spec rigs as a percentage of total service rigs continues to increase Bifurcation of the market: dramatic drop in demand for low-spec rigs Demand for high-spec rigs is expected to grow as inventory and age of unconventional wells
Slide 11: Key Investment Highlights
Key Investment Highlights 1 High-Spec Well Service Rig Provider with Growing Fleet 2 Full-Cycle Well Services and Proprietary Processing Solutions 3 Deep Relationships with Blue-Chip E&P Customers Across Multi-Basin Footprint 4 Strong Balance Sheet provides Financial Flexibility to Support Growth Pl
Slide 12: High-Spec Well Service Rig Provider
1 High-Spec Well Service Rig Provider Ranger has a modern fleet of high-spec well service rigs(1) – More than one third of the fleet has been built since 2014 – 81% of Ranger’s fleet has an operating capacity of 500 HP or more 99% (1) 143 High-Spec Rigs – Expected to add 21 new-build NOV rigs for
Slide 13: High-Spec Well Service Rig Provider (Continued)
1 High-Spec Well Service Rig Provider (Continued) 213 2Q’17 Service Rig Utilization 128 (Hours/rig/month)(1) 99 85 62 RNGR PES BAS CJ KEG Source: Company filings, IBES consensus, Coras Oilfield Research, Spears & Associates. (1) 2Q’17 Ranger utilization is not pro forma for ESCO acquisition. Please
Slide 14: Ranger Services Across Full Life of Well
2 Ranger Services Across Full Life of Well 1 Well Completion Support 3 Workover Completion services utilized subsequent to hydraulic fracturing Major well work conducted multiple times throughout life of well but prior to placing a well into production – Recompletion or re-frac of existing zones
Slide 15: Proprietary Processing Solutions Critical Bridge
2 Proprietary Processing Solutions Critical Bridge • Ranger’s modular processing equipment provides critical midstream functions in basins where D&C activity has outpaced infrastructure buildout • Ranger’s proprietary equipment is designed to process natural gas to meet pipeline specifications, extr
Slide 16: Blue-Chip Customer Base
3 Blue-Chip Customer Base Pro Forma ESCO acquisition (1)(2) Top 3 customers 37% 2016 Revenue by Other customer(1) 63% Headquarters Field locations(1) (1) Combined, consolidated revenues pro forma for closing of ESCO acquisition. (2) Ranger Stand alone 2016 revenue breakdown: Top 3 customers (EOG Res
Slide 17: Financial Philosophy
Financial Philosophy 1 Committed to maintaining a conservative balance sheet with low leverage • No bank debt post-IPO with $7M seller note • Increases ability to re-invest in the business throughout the cycle 2 Preserve sufficient liquidity to operate the business and execute growth objectives • Hi
Slide 18: Sources, Uses, Pro Forma Capitalization
Sources, Uses, Pro Forma Capitalization Sources and Uses Pro Forma Capitalization As of Transaction As Adjusted ($ in millio ns) Sources ($ in millio ns) 3/31/17 Adjustments 3/31/17 (1) Gross Proceeds from this Offering $85.0 Cash and Cash Equivalents $2.0 $24.7 $26.7 (1) Cash on Hand 9.9 Long-Term
Slide 19: ESCO Acquisition Overview
4 ESCO Acquisition Overview Adding Scale to Ranger’s High-Spec Service Rig Fleet ESCO’s service rig fleet includes 49 high-spec service rigs, ranging in horsepower from 475 – 630 HHP with mast heights between 104’ – 112’ Provides meaningful geographic diversification for Ranger’s fleet – Triples
Slide 20: Q1 / Q2 - Financial Comparison
Q1 / Q2 - Financial Comparison Quarterly Financial Comparison Quarterly Financial Highlights Revenue increased 15% from Q1 to Q2 Combination of increase in hours per month per rig of 10% to 213 Other non-rig revenue Gross Margin increased to 22% from 18% in Q1 EBITDA increased through incr
Slide 21: 2017 Q1 / Q2 - Financial Results
2017 Q1 / Q2 - Financial Results Ranger Energy Services Condensed I/S Quarterly Financial Highlights Revenue growth driven by increased rig utilization and non rig revenue Rig utilization as measured by average monthly hours per rig increased to 213 from 194. Closed Q2 with 73 rigs, with the a
Slide 22: Appendix
Appendix Privileged & Strictly Confidential 22
Slide 23: 2017 Q2 – Adjusted EBITDA Reconciliation
2017 Q2 – Adjusted EBITDA Reconciliation Ranger Energy Services Adjusted EBITDA Adjusted EBITDA Summary Three Months Ended Three Months Ended June 30, 2017 March 31, 2017 Change $ Well Services Processing Solutions Total Well Services Processing Solutions Total Well Services Processing Solutions Tot
Slide 24: 2017 Q2 – Gross Profit Reconciliation
2017 Q2 – Gross Profit Reconciliation Ranger Energy Services Gross Profit 24
Slide 25: Utilization Calculation
Utilization Calculation We measure rig utilization by total monthly rig hours worked in a particular period per rig in service, which we refer to as our average hours per rig – Mid-month convention: A rig placed into service during a month (meaning that we have taken delivery of the rig) is assume
Slide 26: Ranger Leads the Way
ENERGY SERVICES * ———— oe Ranger Leads the Way
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