High Arctic Energy Services Inc · TSX:HWO
High Arctic Energy Services — Investor Presentation (May 2018)
18 slides from High Arctic Energy Services's investor presentation, May 2018
Slide 1: Investor Presentation May 2018
Investor Presentation May 2018 TSX : HWO
Slide 2: Disclaimer
2 DISCLAIMER Certain information contained within this These statements are derived from certain this presentation and statements made in presentation and statements made in assumptions and analyses made by the conjunction with this presentation are conjunction with this presentation, including Corp
Slide 3: Corporate Snapshot
3 Shares Outstanding (March 31, 2018): 53.1 million CORPORATE Share Price (May 9, 2018): $4.22 SNAPSHOT Market Cap (May 9, 2018): $222.0 million Cash Balances (March 31, 2018): $19.7 million Working Capital (March 31, 2018): $57.6 million Adjusted EBITDA (March 31, 2018): $13.7 Million Annual Divide
Slide 4: Track Record of Shareholder Returns
4 4 N O D E B T | F R E E C A S H F L O W | O R G A N I C G R O W T H | D E F E N S I B L E M A R K E T S T R A C K R E C O R D O F Shareholder Returns DISTRIBUTIONS TO SHAREHOLDERS (per share) INDEXED SHARE PRICE PERFORMANCE Distributions per share ($) $0.25 300% $0.20 $0.20 $0.20 250% $4.27 per Sh
Slide 5: Track Record of Profitable Growth
4 5 T I E R 1 S T R A T E G Y : D E F E N S I B L E N I C H E S , B E T T E R M A R G I N , S A F E T Y & P E R F O R M A N C E T I E R 1 R E S U L T S L E A D S T O P E R F O R M A N C E I N T R A C K R E C O R D O F : Track Record of Profitable Growth REVENUE ADJUSTED EBITDA (as at December 31, 20
Slide 6: Why High Arctic
6 Why High Arctic Specialty niche operations with significant barriers to entry Ten year history of profitable operations with superior returns on equity Very strong balance sheet with access to $102.6 million in liquidity, which includes non-cash Working Capital Continued Growth in Canada Six years
Slide 7: Business Overview
7 PNG Business • Dominant market position for contract drilling, well Overview completion and rental services in PNG • Provides services in PNG to super majors and regional energy companies under long-term contracts High Arctic Energy Services is • PNG’s enviable position as a low cost provider of L
Slide 8: Canadian Operations
8 GEOGRAPHICAL FOOTPRINT Acheson Canadian Operations Montney Cold Lake Oil Sands Grande Prairie Cold Lake Quality Equipment Whitecourt Lloydminster Cardium Total Marketed Duvernay Service Rigs 85 57 OUR CUSTOMERS Snubbing 18 8 Nitrogen Pumpers 12 7 Nitrogen Bulkers 5 3 Rental Equipment 1,050 1,050 G
Slide 9: Canadian Industry Capital Expenditures Drilling vs Operating
9 Canadian Industry Capital Expenditures Drilling vs Operating 30,000 100.00 90.00 25,000 80.00 Operating Cap Ex 70.00 20,000 Peak to Trough Wellhead Oil Prices $Cdn Capital Spending $millions up 25% 60.00 15,000 Drilling Cap Ex 50.00 Peak to Trough down 67% 40.00 10,000 30.00 Drilling Cap Ex Drilli
Slide 10: Concord Well Servicing
10 Concord Well Servicing • High quality asset base, defensive barrier to entry, superior 1100 actual DECLINING MARKET SUPPLY utilization and top tier safety and performance 1050 1000 • Operates one of the largest fleets of service rigs in WCSB 950 900 • Solid client base that includes international
Slide 11: Papua New Guinea
11 Papua New Guinea Overview – One of the world’s great emerging markets • Part of the British Commonwealth with a parliamentary government Oil and Gas Activities – Long History, with New Growth • After early years of “Turner Valley-type” exploration, PNG found it’s Leduc – World class wells • Drill
Slide 12: LNG Prices and the Long Term PNG Advantage
LNG Prices USD per mmbtu 10 12 0 2 4 6 8 12/01/14 1/01/15 2/01/15 Source: Bluegold Research 3/01/15 4/01/15 5/01/15 6/01/15 THE LONG TERM PNG ADVANTAGE 7/01/15 8/01/15 9/01/15 LNG Development Japan 10/01/15 11/01/15 12/01/15 1/01/16 China 2/01/16 3/01/16 4/01/16 5/01/16 6/01/16 7/01/16 8/01/16 Unite
Slide 13: LNG Development
13 Projected Gas Demand LNG Development THE LONG TERM PNG ADVANTAGE LNG Overview – Growing • PNG’s LNG projects are advantageously situated to supply Asian buyers • PNG is one of the strongest emerging markets driven by its large gas reserves delivered by some of the world most successful energy com
Slide 14: PNG Outlook & Development: Building a Country
14 PNG Outlook & Development: Building a Country NATURAL GAS + OIL PRODUCTION PNG LNG: Elk-Antelope: • Exxon is the operator • Ownership: TOTAL, Exxon and OSL • Total forecast production includes 9.0 • Proven certification of 5.2tcf tcf of natural gas and 200+ million bbls • Development wells requir
Slide 15: PNG Equipment Rentals
15 PNG Equipment Rentals Matting • Inventory exceeding 10,000 rental mats in PNG • High Arctic has PNG distributor rights • Possible expansion into other countries with similar challenging environments Camp Services • Owns and manages two 103 man Heli-portable man camps • Operates and manages two 93
Slide 16: Financial Summary
16 Financial Summary • Higher percentage of contribution from Canada • Well positioned for a turn around Quarter Ended March 31 Year Ended December 31 $millions 2018 2017 % Change 2017 (except per share amounts) Consolidated Revenue 53.7 64.8 (17%) 210.2 Canada 26.1 25.4 2.8% 91.1 International 27.6
Slide 17: Outlook
17 Outlook Continue growth Solidify High Arctic’s opportunities in the Actively pursue leading position in WCSB through the accretive acquisition PNG as the driller of recently acquired opportunities within choice service rig platform the North American (Concord Well energy services sector Servicing
Slide 18: Contact us
Contact us J Cameron Bailey, President & CEO Ph: (587) 318-3826 Email: [email protected] Analyst Coverage Head Office Cormark Securities Jason Zhang 700 – 2nd Street SW, Suite 500 Industrial Alliance Elias Foscolos Calgary, AB Canada T2P 2W1 National Bank Greg Coleman Paradigm Capital Jason Tucker
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