Western Energy Services Corp. · TSX:WRG
Western Energy Services — Investor Presentation (September 2015)
24 slides from Western Energy Services's investor presentation, September 2015
Slide 1: Investor Presentation
Investor Presentation September 2015
Slide 2: Disclaimer
Disclaimer FORWARD-LOOKING INFORMATION This presentation may contain certain statements or disclosures relating to Western Energy Services Corp. (“Western”) that are based on the expectations of its management as well as assumptions made by and information currently available to Western which may co
Slide 3: Company Snapshot
Company Snapshot Contract Drilling Western Energy Services (WRG) Fleet of 57 drilling rigs Share Price1 $5.05 • 52 based in Canada 52-week high/low $10.52 / $3.03 • 5 based in the United Shares outstanding2 79 million States Market capitalization $399 million Well Servicing Enterprise value $580 mil
Slide 4: Business Highlights
Business Highlights Modern Seven pad Efficient drilling rigs Long Reach in fleet (ELR™) fleet SAGD Eight customized slant service rig service packages rigs 123 total rigs Assets managed Innovative and serviced product by pressure designs control specialists 4
Slide 5: Conservative Financial Position
Conservative Financial Position Cash balance – $80 million of working capital (as at June 30, 2015) Net Debt to EBITDA of 1.1 for FY 2014 – Net Debt to trailing 12 month adjusted EBITDA 1.3 to 1 (as at June 30, 2015) – Onside with all covenants – No scheduled long-term debt repayments until January
Slide 6: Returning Cash to Shareholders
Returning Cash to Shareholders Dividend History 70 25% Consistent quarterly dividend of 60 Cumulative Dividend ($ millions) $0.075/share 50 20% TTM Payout Ratio – Annualized yield of 5.9% (as of 40 15% September 9, 2015) 30 10% – Over $63 million in dividends 20 5% declared since dividend policy was
Slide 7: Market Trends
Market Trends Unconventional resource plays continue to be focus for Canada and United States Canadian Industry Drilling Rigs by Class Deeper and higher capacity drilling rigs are currently most in demand Duvernay 141 Customers continue to focus on drilling 19% efficiencies, capacity, rig features a
Slide 8: Montney and Duvernay Focused Fleet
Montney and Duvernay Focused Fleet Western’s Rig Fleet by Class Industry Rig Fleet by Classification Duvernay 100% 13 23% 15% 15% 90% 23% 19% 22% Cardium 25 44% 80% 39% 10% 10% 70% 29% Montney 19 60% 33% 33% 14% 50% Western’s % of Industry 40% 81% 75% 68% 30% 56% Cardium Cardium 5% 44% 47% 20% Montn
Slide 9: Superior Utilization for Montney and Duvernay Class Rigs
Superior Utilization for Montney and Duvernay Class Rigs Montney class and Duvernay class Cardium Rig Class Utilization 100% rigs are the most sought after in 80% Canada 60% 40% 20% – These rig classes continue to 0% generate above industry average utilization Cardium Industry • ~1,500 bps Montney p
Slide 10: Premium Drilling and Well Servicing Utilization
Premium Drilling and Well Servicing Utilization Western’s drilling and well servicing rig fleets have consistently realized above average utilization Canadian Drilling Rig Utilization Rates Canadian Service Rig Utilization Rates 100% 70% 90% 60% 80% 70% 50% 60% 40% 50% 30% 40% 30% 20% 20% 10% 10% 0%
Slide 11: Western's Customer Base
Western’s Customer Base Consolidated YTD Revenues Western has a diversified revenue stream comprised Canadian Natural of over 250 customers Resources 12% – Clients include a wide- Other Progress array of public, private 9% 36% and multinational ARC companies 7% Emerald Oil 6% Enerplus 6% Advantage 2
Slide 12: Operating Highlights
Operating Highlights Second Quarter Year to Date June 30 Operating Highlights 2015 2014 %∆ 2015 2014 %∆ Contract Drilling Canadian Operations Rig fleet (end of period) 49 49 - 49 49 - Operating Revenue per Revenue Day (CDN$) 20,589 26,285 (22%) 25,015 26,368 (5%) Drilling rig utilization - Revenue D
Slide 13: Financial Highlights
Financial Highlights Second Quarter Six Months Ended June 30 Year Ended December 31 Financial Highlights (000s CDN$) 2015 2014 %∆ 2015 2014 %∆ 2014 2013 2012 2011 Operating Revenue 30,719 77,352 (60%) 131,677 226,979 (42%) 474,120 353,124 282,856 237,428 Gross Margin 10,403 31,206 (67%) 58,294 98,83
Slide 14: Balance Sheet Overview
Balance Sheet Overview Consolidated Balance Sheet ('000s) June 30, 2015 December 31, 2014 Cash and other current assets $ 112,926 $ 158,823 Property and equipment 840,231 827,306 Goodwill and other 72,619 70,989 Total assets $ 1,025,776 $ 1,057,118 Current liabilities $ 33,308 $ 80,487 Long term deb
Slide 15: 2015 Budgeted Capital Expenditures
2015 Budgeted Capital Expenditures $42 Million Budgeted Capital Spending Capital Spending By Entity $25 $4 $23 Stoneham Drilling 2% $20 $19 $12 $19 Aero Rental Services 12% $15 Eagle Well $ Millions Servicing 14% $10 $7 $5 Horizon Drilling 72% $0 Expansion Capital Maintenance Capital H1 2015 Capex 2
Slide 16: Performance Driven Culture
Performance Driven Culture Well Managed Service Company Strategic thinking embedded in every decision Best-in-class People and Equipment From start to finish, every project, every person, is selected to support our performance driven focus Capacity for Sustainable Growth Strong balance sheet and tra
Slide 17: Appendix
Western ENERGY SERVICES CORP. Appendix
Slide 18: Canadian Drilling Industry Statistics
Canadian Drilling Industry Statistics Operating Days Horizontal Wells Drilled 158,427 180,000 YTD Full-Year 8,391 145,272 9,000 7,726 160,000 134,835 131,021 7,214 8,000 124,613 7,048 121,023 120,221 119,300 140,000 7,000 120,000 6,000 4,955 100,000 4,486 78,005 5,000 4,025 3,810 66,376 80,000 3,331
Slide 19: Historical Canadian Well Data
Historical Canadian Well Data Average Well Length by Province YTD 2015 Average Well Length AB SK BC MB WCSB 4,500 4,000 3,718 4,000 3,500 3,398 3,300 Average Well Length (Metres per Well) 3,500 3,000 Average Well Length (Metres) 3,000 2,500 2,435 2,279 2,253 2,500 2,000 2,000 1,500 1,500 1,000 1,000
Slide 20: 2015 Drilling Stats
2015 Drilling Stats YTD Utilization YTD Metres Drilled per Rig 30% 14,000 26% 26% 25% 11,928 12,000 23% 10,679 10,000 20% 19% 9,076 8,508 8,415 Metres per Rig 16% 8,000 15% 7,155 15% 6,000 10% 4,000 5% 2,000 0% 0 Trinidad Western Nabors Precision Ensign Savanna Trinidad Western Savanna Precision Nab
Slide 21: Provincial Well Licenses Issued
Provincial Well Licenses Issued 2005 to 2015 YTD 2015 vs. YTD 2014 AB SK BC MB WCSB YTD 2014 YTD 2015 30,000 5,000 4,500 25,000 4,000 3,500 20,000 Licenses Issued Licenses Issued 3,000 15,000 (48%) 2,500 2,000 10,000 1,500 (38%) 5,000 1,000 (4%) 500 (37%) 0 2005 2006 2007 2008 2009 2010 2011 2012 20
Slide 22: YTD 2015 Metres Drilled by Province
YTD 2015 Metres Drilled by Province Western Trinidad + CanElson Savanna Precision Ensign AB SK BC MB 0 200,000 400,000 600,000 800,000 Source: June Warren-Nickle's Energy Group Note: Year-to-date through July 2015. 22
Slide 23: Drilling Rig Contractors Market Share
Drilling Rig Contractors Market Share YTD 2014 Market Share YTD 2015 Market Share Closing Rig Count 25% 200 180 20% 160 Market Share (Operating Days) 140 15% 120 Rig Count 100 10% 80 60 5% 40 20 0% 0 Precision Ensign Nabors Savanna Trinidad Western Akita CanElson Source:CAODC 23
Slide 24: Contact
Alex R.N. MacAusland Jeffrey K. Bowers President & CEO Senior VP Finance & CFO Western Energy Services Corp. 1700, 215 – 9th Avenue SW Calgary, Alberta T2P 1K3 Telephone: (403) 984-5916 www.wesc.ca 24
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