Akita Drilling Ltd. Class A · TSX:AKT
Akita Drilling Ltd. Class A — Merger or Acquisition (June 2018)
18 slides from Akita Drilling Ltd. Class A's merger presentation, June 2018
Slide 1: AKITA and Xtreme to Combine Into a Premier North American Land Drilling Contractor
AKITA and Xtreme to Combine Into a Premier North American Land Drilling Contractor June 2018 1
Slide 2: Forward-Looking Statements Disclaimer
Forward-Looking Statements Disclaimer Certain statements contained in this presentation constitute FOFI (as defined herein) and "forward-looking information" as defined under applicable securities laws. When used in this presentation, the words "may", "would", "could", "will", "intend", "plan", "ant
Slide 3: AKITA / Xtreme Proposed Combination Summary
AKITA / Xtreme Proposed Combination Summary – Xtreme shareholders shall receive 0.29 Class A non-voting AKITA common share and $0.59 cash consideration for each Xtreme common share – An Xtreme shareholder may elect to receive a different combination of AKITA Class A share and cash, in each case subj
Slide 4: AKITA Positioned as a North American Leader
AKITA Positioned as a North American Leader – Leading intermediate pure play North American drilling company focused on high spec assets – Excellent mix of top tier Canadian and U.S. customers Market Leader – Presence in major resource basins in North America – Increased depth of operational experti
Slide 5: Company Snapshot
Company Snapshot Pro Forma Class A / Common Shares Outstanding - FD (Millions) 16.3 75.6 38.2 Share Price - June 4, 2018 $6.76 $1.95 $6.76 Class B Shares Outstanding - FD (Millions) 1.7 n.a. 1.7 Share Price - June 4, 2018 $7.21 n.a. $7.21 Market Cap ($ Millions) $122 $147 $270 Net Debt ($ Millions)
Slide 6: Significant Synergies and Efficiencies
Significant Synergies and Efficiencies Estimated $8 million in annual synergies and efficiencies expected – $8.0 million in cost synergies expected from the reduction of corporate overhead (rent, public listing & reporting cost, professional fees), redundancies and from operational efficiencies thro
Slide 7: AKITA / Xtreme Pro Forma Capitalization
AKITA / Xtreme Pro Forma Capitalization – The combination is expected to increase liquidity, enhance market profile to attract a broader investor base, and improve access to capital markets – Combined entity will have relatively low leverage compared to its peers $1,500 250% Total Debt / Market Cap
Slide 8: AKITA / Xtreme Pro Forma Relative Valuation
AKITA / Xtreme Pro Forma Relative Valuation – U.S. focused drillers with high quality fleets trade at a meaningful premium which supports AKITA’s recent strategic entry into the U.S. as well as the combination with Xtreme’s high-spec and premium-spec U.S. rig fleet Land Rig Multiples for North Ameri
Slide 9: Returning Capital to Shareholders
Returning Capital to Shareholders Cumulative Dividends Paid to AKITA Shareholders(1) $12.00 Total Dividends per Share $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 (1) Calculation is based on 1 AKITA Class A share in 1996; AKITA’s shares underwent a 2:1 stock split in 2005 9
Slide 10: AKITA's Experienced Management
AKITA’s Experienced Management Management Biography Years of Team Service Mr. Ruud was appointed President and Chief Executive Officer of AKITA in July 2009 and has been a senior officer since the company’s formation. Mr. Ruud has extensive drilling knowledge, both in Canada and internationally, and
Slide 11: AKITA's Experienced Management Cont'd
AKITA’s Experienced Management Cont’d Management Biography Years of Team Service Mr. Hensel was appointed Vice President, Marketing in May 2009 and previously served as the Vice President, Marketing for the South from May 2006 to April 2009. Mr. Hensel is responsible for the attainment of term drill
Slide 12: Scale on Both Sides of the Border
Scale on Both Sides of the Border AKITA’s Fleet Xtreme’s Fleet – 14 Pad Triples – 3 850 XE’s – 2 Triples – 10 XDR 500’s – 3 Pad Doubles – 3 XDR 300’s – 4 Doubles – 1 Pad Single – 4 Singles 28 rigs(1) 16 rigs(2) Total Combined Fleet of 44 Rigs(1)(2) (1) 5 rigs are under JV (26.75 rigs are net to AKIT
Slide 13: Strategic Fit
Strategic Fit – No overlapping geography NE BC / NW AB between AKITA Rig #31, 37, 44, 56, 61 Northern AB and Xtreme Rig # 21, 25, 26, 27, 28, 57 Northern Foothills Rig # 22, 41, 45 Eastern AB / – Pro forma Western SK Rig # 6, 8, 12, 14, Company will Central AB 30, 32, 38, 40 Rig # 34, 35, 47 benefit
Slide 14: High Spec Combined Fleet
High Spec Combined Fleet Hook Load Total ≥ 750,000 lbs 4 4 8 500,000 – 10 11 21 749,999 lbs <500,000 lbs 12 3 15 Total 26 18 44 14
Slide 15: Benchmarking Rig Specifications
Benchmarking Rig Specifications Super Spec Rigs Premier Spec Rigs H&P Independence Nabors Model Flex Rig Shale Driller PACE M800 850XE Rig 90 Max Hook Load 750,000 lbs 750,000 lbs 800,000 lbs 850,000 lbs 1,250,000 lbs Drill Pipe Racking 25,000 ft 20,000 ft 30,000 ft 30,000 ft 30,000 ft Capacity Setb
Slide 16: Land Drilling Competitive Landscape
Land Drilling Competitive Landscape U.S. and Canada On-shore Rig Count 400 347 294 300 270 231 200 154 134 111 95 100 67 44 50 35 6 8 9 12 14 16 18 0 Source: Company filings and disclosure AKITA (Post Merger) rig count includes 3 AC single rigs held for sale by Xtreme 16
Slide 17: Transaction Highlights
Transaction Highlights – Focus on high-spec drilling rigs and disciplined operations – Presence in major resource basins in North America – Scale to build and optimize fleet in high growth basins – Highly experienced team with 25 years track record at AKITA – Return of capital to shareholders throug
Slide 18: For further information, contact
For further information, contact: AKITA Drilling Ltd. Karl Ruud President and Chief Executive Officer (403) 292-7979 Darcy Reynolds Vice President, Finance and Chief Financial Officer (403) 292-7530 Xtreme Drilling Corp. Matt Porter President and Chief Executive Officer (281) 994-4600 [email protected]