CARBO Ceramics — Investor Presentation (September 2013)
62 slides from CARBO Ceramics's investor presentation, Sep 19, 2013
Slide 1: Global oilfield services technology company
is a global Oilfield Services Technology Company providing industry leading products and services for Production Enhancement and Environmental Spill Prevention Exhibit 99.1 – Environmental Spill Prevention and Containment – Production Enhancement
Slide 2: Forward Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Any written or oral statements made by the Company or on behalf of the Company in conjunction with this presentation may include forward-looking statements which reflect the Company's curren
Slide 3: A leading production enhancement company
• Frac Conductivity & Durability • Production Assurance • Production Intelligence • Flow Enhancement • Well Site Supervision • Frac Diagnostics & Optimization • Field Development Optimization • Reservoir & Formation Analysis • Frac Design • Economic Optimization • Reservoir Performance • Post Job An
Slide 4: Fracpro: most widely used frac design software
• Is the industry’s most widely used hydraulic fracturing design software, clients include E&P Operators, Service Companies, Universities • Provides Frac Design, Economic Optimization, Reservoir Performance and Post Job Analysis. Ties all the information together during the frac process.
Slide 5: Technology to build a frac that lasts the life of the well
1979 2013 Technology to “Build a Frac” that lasts the Life-of-the-Well New Proppant Developed in 2013 5 CARBO HSP® CARBO PROP® CARBO ECONOPROP® CARBO LITE® CARBO HYDROPROP® CARBO NRT® CARBO BOND® LITE SCALE GUARD ™
Slide 6: Field consulting and production improvement
7850 7900 7950 8000 8050 8100 8150 8200 8250 25 175 GR 0 75 IDPH K-20/22 sand K-25U sand Mudstone K-25L Upper K-25L Upper K-25L sand Rocktype 50 100 150 200 250 300 7850 7900 7950 8000 8050 8100 8150 8200 8250 0 0.50 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 Proppant Concentration (lb/ft²) © 2011 HALLIBUR
Slide 7: Production Enhancement Technology
Production Enhancement Technology
Slide 8: Proppant technology platforms
Ceramics Proppant Technology Platforms Proppant Delivered Flow Enhancement Proppant Delivered Production Intelligence “More Space to Flow” Higher EUR Production IRR Resin Coated Products Proppant Delivered Production Assurance
Slide 9: New Ultra Strength Proppant – KRYPTOSPHERE
New Ultra Strength Proppant – KRYPTO SPHERE TM Breakthrough innovation. We have developed the strongest, highest conductivity proppant ever made. The original development request made by a Major E&P: It is the only proppant that can withstand the pressures of these very high impact wells, and provid
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Slide 11: Conductivity at 20,000 psi Closure Stress
Conductivity at 20,000 psi Closure Stress Conductivity, md-ft 8 8 KRYPTOSPHERE H25 HSP 20/40
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Slide 13: KRYPTOSPHERE H25 vs 20/40 HSP
100 Wt% i 20/40 HSP Mi KRYPTOSPHERE H25 18 20 25 30 (Mesh size) 40 50
Slide 14: Proppant technology platforms
Ceramics Proppant Technology Platforms Proppant Delivered Flow Enhancement Proppant Delivered Production Intelligence “More Space to Flow” Higher EUR Production IRR Resin Coated Products Proppant Delivered Production Assurance
Slide 15: Production Assurance Platform
Platform focus: Production Assurance Platform • Use proppants to maintain base production by preventing precipitates/solids from forming in the frac, wellbore, or surface equipment • Examples: Scale, paraffin, etc.
Slide 16: Production Assurance - SCALE GUARD
• Provides Production Assurance by preventing scale from building up during the life of the well • Placed throughout the frac, as part of standard fracturing process • Scale inhibitor is efficiently released into the production stream from our infused Porous Proppant (patented) Production Assurance
Slide 17: Production Intelligence platform
Platform Focus: • Utilizing proppants to define propped fracture geometry • Long term production determination and granularity by zone/frac Production Intelligence
Slide 18: Production Intelligence - CARBO NRT
Production Intelligence - CARBO NRT CARBO NRT is a Non-Radioactive Traceable Proppant (patented) • Identifies the proppant coverage of the stimulated interval, as well as propped frac height • Identifies proppant coverage in gravel pack applications (offshore wells) • Saves time and money – no speci
Slide 19: Flow Enhancement platform
Platform Focus: • Enhance the production of gas and liquids which flow from the reservoir into the frac and up the wellbore • Reduce effects caused by relative permeability, capillary pressures, interfacial tensions and damage from foreign substances • Products in development Flow Enhancement
Slide 20: Engineered to protect
engineered to protect
Slide 21: Falcon Technologies Overview
Falcon Technologies Overview Business Falcon Liner ® Products
Slide 22: Falcon Technologies
Falcon Technologies We Design spill prevention and containment products that reduce E&P Operators environmental risks. We Build products with proprietary polyurea material to last the life of the well site, and lower L.O.E. costs. • Containments • Water Impoundments • Tank Lining, Tank Bases • Locat
Slide 23: Expanding Geographic Footprint
Expanding Geographic Footprint
Slide 24: Clients are changing from high risk containments
Clients are Changing from High Risk Containments like this Un-lined, permeable dirt berm Tanks sitting on pea gravel & corroding Un-lined tanks corroding inside & outside
Slide 25: After recent rain storms in Colorado
After Recent Rain Storms in Colorado Falcon “Contained” HDPE “Not Contained”
Slide 26: Liner choices
Liner Choices Falcon Liner HDPE Dirt Protects from a spill for the life of the well • Minimal containment capabilities • No containment of spill Minimal maintenance • Replace every 2 to 3 years • Regular maintenance required Resistant to punctures, UV, and temperature extremes • Easily cut and punct
Slide 27: Falcon differentiators
Falcon Differentiators Engineered to Protect Commitment to Quality and Customer Service Training Program Track Record
Slide 28: Solid Engineering, R&D and Construction
Solid Engineering, R&D and Construction
Slide 29: Track Record
Track Record Installations through June 2013 Secondary Containments – Over 5,800 installed Tank Bases – Over 8,700 installed Tank Liners – Over 8,700 installed 100% Environmental Success
Slide 30: Falcon Secondary Containments
Falcon Secondary Containments All walls have been developed and tested through FEA then deflection testing Seamless Falcon Liner applied on flooring and walls Over 5,800 installations
Slide 31: Wyoming
Wyoming
Slide 32: Oklahoma
Oklahoma
Slide 33: Colorado
Colorado
Slide 34: Falcon Tank Bases
Falcon Tank Bases Foam core encapsulated in polyurea Over 8,700 in the field Lightweight 2-man installation No remediation in case of spill
Slide 35: Location Liners
Location Liners Falcon Liner with a temporary berm used during completions Multi-well package
Slide 36: ePads
ePads Falcon Liner Durable Multiple use Enhanced environmental protection 6” enclosed foam berm
Slide 37: Water Impoundments
Water Impoundments Falcon Liner – Water treatment – Produced water storage – Multi-year installation for fresh water Four installations completed in West Texas
Slide 38: Marketing and Sales
Marketing and Sales
Slide 39: Fracpro and StrataGen
Fracpro and StrataGen
Slide 40: A leading production enhancement company
• Frac Conductivity & Durability • Production Assurance • Production Intelligence • Flow Enhancement • Well Site Supervision • Frac Diagnostics & Optimization • Field Development Optimization • Reservoir & Formation Analysis • Frac Design • Economic Optimization • Reservoir Performance • Post Job An
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Slide 42: Field Consulting
Field Consulting • Execution of current design and optimization during and after the stimulation • Frac design, on location quality assurance & control, diagnostic testing, RT data transmission, post treatment evaluation and optimization • Primary goal is to increase Production and EUR • All Degreed
Slide 43: Office Consulting & DANA
Office Consulting & DANA • Office based consulting to design frac treatments from all data available • Apply best technology to optimize IRR by improvement in Production and EUR • Unique workflows developed which incorporate reservoir, geology, production, completion and frac, drilling • Experience
Slide 44: Integration / Processing, Modeling / Discovery
Integration/ Processing Modeling/ Discovery Production Maps (som) Cluster Analysis Data Gathering Data Screening | Data Processing Data Modeling Model Selection e Model Geoloy Neural Networks al Bivariate Analysis Performance ps Criteria Petrophysics Economics ——— *Validation Been Missing Data ‘Anal
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Slide 46: Fracpro
Fracpro Fracpro is a software program used for hydraulic fracture design. Give it information on what is being pumped and the wellbore and reservoir parameters and it tells you the estimated fracture geometry and production rate. It runs quickly on any PC, is used all over the world and comes in 3 l
Slide 47: Customers Use of Fracpro
Customers Use of Fracpro • Estimate Value Created by Completion • Detailed Completion Procedure • Monitor and Record During Completion • Learn from Analysis of the Completion • Optimize the Future Completions • Record the Different Completions in a Well • Facilitate Reporting and Data Storage
Slide 48: Software Suite
Software Suite • Products – Fracpro – FracproXCHANGE – FracproREMOTE – Stimpro
Slide 49: Software Suite: Fracpro
Software Suite • Products – Fracpro • Full Fracture Simulator – Before, During and After Job – Strong Analytical Tool – Multi-Treatment Horizontal Wells – Built in Reservoir Simulator – Connection to Eclipse, IMEX, QL – Diagnostic Utilities – Reports; Database Tools; Plots; XL • Languages – English
Slide 50: Software Suite: FracproXCHANGE
Software Suite • Products – Fracpro – FracproXCHANGE • Reduced Feature Fracpro – Used in Frac Van for Display – Multi-Treatment Horizontal Wells – Uses Same Input and Database Files as Fracpro – Real-Time Emphasis – Has Diagnostic and Data Utilities • Languages – English – Chinese – Russian
Slide 51: Software Suite: FracproREMOTE
Software Suite • Products – Fracpro – FracproXCHANGE – FracproREMOTE • iPAD Application – Connects to PC Using Fracpro – Allows Real-Time Monitoring – Direct TCP-IP Connection – Introduced 1 Year Ago • Languages – English
Slide 52: FracproXCHANGE and FracproREMOTE
FracproXCHANGE on location Well Site Inputs = FracproREMOTE Fraepro for mobility forthe office
Slide 53: Software Suite: Stimpro
Software Suite • Products – Fracpro – FracproXCHANGE – FracproREMOTE – Stimpro • Full Matrix Acid Simulator – Design, Monitor, Analysis – Sandstone and Carbonate – Determines Skin Reduction – Identifies Acid Compatibility – Configurable for New Rock/Fluid – Same Reports; Plots; XL • Languages – Engl
Slide 54: Fracpro future enhancements
• Fracpro – Shale Modeling – Finite Difference Fluid Flow • Fracpro 3D - Finite Element Fracture Model – Coupled with Finite Difference Fluid Model Future Enhancements
Slide 55: Industry Technology Needs
• Horizontal Wells have transverse fracs and more stages (high delta velocity, high delta pressure, and more reservoir contact area) • Liquids-rich Wells, make up the majority of wells drilled, and have much higher drawdown pressure through the frac • Deeper Wells are being drilled which have higher
Slide 56: Deeper, horizontal, liquids-rich wells drive ceramic growth
Deeper, Horizontal, Liquids-rich Wells Drive Ceramic Growth Sources: Spears & BHI for wells in U.S.
Slide 57: CARBO business and technology growth drivers
• Production Enhancement business strategy of growing intellectual capital and intellectual property focused on “Design-Build-Optimize Fracs” • Developing Technology to increase Production and EUR in wells – KRYPTOSPHERE solves client deep-water and ultra high stress formations proppant needs – Pote
Slide 58: New products drive ceramic proppant growth
New Products Drive Ceramic Proppant Growth Lbs M
Slide 59: Manufacturing capacity and ceramic sales volume
tami CRR Manufacturing Capacity (YE) —CRR Ceramic Sales Volume
Slide 60: CARBO Financials
CARBO Financials * Cash from operations is equal to net income plus depreciation and amortization and non-cash stock compensation
Slide 61: Dividends
Dividends Increased - 13 Years $ Per Share Shares - Millions
Slide 62: Cash Flow from Operations Reconciliation
Cash Flow from Operations Reconciliation $ in 000s Cash flow from operations equals net income plus depreciation and amortization plus non-cash stock based compensation. Results from Continuing Operations Net Income 45,463 $ 52,245 $ 49,641 $ 60,405 $ 52,810 $ 78,716 $ 130,136 $ 105,933 $ Plus: depr
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