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Investor Presentation March 2015
This document contains statements that constitute forward-looking statements within the meaning of applicable securities legislation. These forward-looking statements include, among others, the Company’s prospects, expected revenues, expenses, profits, expected developments and strategies for its operations, and other expectations, beliefs, plans, goals, objectives, assumptions, information and statements about possible future events, conditions, results of operations or performance. These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “achieve”, “achievable,” “believe,” “estimate,” “expect,” “intend”, “plan”, “planned”, and other similar terms and phrases. Forward-looking statements are based on current expectations, estimates, projections and assumptions that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks and uncertainties include: fluctuating prices for crude oil and natural gas; changes in drilling activity; general global economic, political and business conditions; weather conditions; regulatory changes; and availability of products, qualified personnel, manufacturing capacity and raw materials. If any of these uncertainties materialize, or if assumptions are incorrect, actual results may vary materially from those expected.
FORWARD LOOKING STATEMENTS
2
45%
42%
13%
OVERVIEW OF TRICAN
Large, world-wide, full service pressure pumping company
International • Russia (majority)
• Kazakhstan
• Australia
• Norway
• Saudi Arabia
REVENUE BY GEOGRAPHY Year ending December 31, 2014
International
USA
Canada
3
TRICAN STRENGTHS
4
TRICAN STRENGTHS
5
Focus on safety, technology, and operational performance
Significant earnings potential on existing assets
1,193,000 HP available fracturing capacity
• 280,000 HP currently idle
94 Cement & 37 Acid Units
35 Coiled Tubing & 72 N2 Units
* Expected horsepower based on current capital budget.
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
2007 2008 2009 2010 2011 2012 2013 2014 2015*
Historical Fracturing HP
TRICAN STRENGTHS
Our people are our strength – 6,000 skilled employees worldwide
Named one of Canada’s Top Employers for Young People for 2013, one of Canada’s Top Employers for 2014 and 2015, and one of Canada’s Top Family Friendly Employers for 2014
Hiring and training people are key to growth
Total hours of training for new hire orientation and upgrading over the last 11 years: 1,431,369
6
STRENGTHS – FULL SERVICES
Service Line % of 2014 Revenue (at December 31, 2014)
Fracturing 79%
Cementing 11%
Nitrogen 4%
Coiled Tubing 3%
Acidizing & Specialty Chemicals
2%
Industrial & Pipeline Services
1%
7
COMPETITIVE ADVANTAGES
Customer-focused provider of technical solutions
• Separate ourselves with technology
• Named one of Canada’s top 100 Corporate R&D spenders in 2012, 2013 and 2014 (by Research Infosource Inc.)
• Product development is a quick, customer-focused process
• Strong regional technical teams that understand the customers’ needs
Operational excellence
8
AREAS OF OPERATION
Canada
United States
Russia
Kazakhstan
Norway
Australia
Saudi Arabia
9
CANADA
10
GEOGRAPHIC COVERAGE
Horn River Shale
Montney Shale
Bakken Shale
Cardium Tight Oil
Viking Tight Oil
Lower Shaunavon Tight Oil
HIGH LEVEL
RED EARTH
GRANDE PRAIRIE
WHITECOURT HINTON
FORT ST. JOHN
NISKU LLOYDMINSTER
RED DEER PROVOST DRUMHELLER
BROOKS
MEDICINE HAT
ESTEVAN
British Columbia Alberta Saskatchewan
FORT NELSON
Tight Gas
Duvernay Shale
DRAYTON VALLEY
CALGARY
Manitoba
BRANDON
Spearfish
11
CANADA EQUIPMENT
Current Available Canadian fleet
• 440,000 fracturing HP
• 55 Cementing units
• 38 N2 Pumpers
• 19 Acid Units
• 16 Coil Units
Expect to park 20% – 25% of total fleet by the end of Q1 2015
12
* Anticipated HP at year-end based on approved budgets, which are subject to change
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
2008 2009 2010 2011 2012 2013 2014 2015*
Canadian HP Growth
CANADA - OUTLOOK
Strong activity in early Q1 2015 but slowing down significantly in March
Expect pricing drop of 10% in Q1 2015; pressure throughout 2015
Spring break-up expected to start early and end late
Substantial activity drop in second half of 2015 as customers’ cash flows are reduced
Well positioned with a number of clients in all major growth regions
Technical and operational strength will protect customer base
13
USA
14
HOUSTON
MATHIS
GEOGRAPHIC COVERAGE - FRACTURING
15
Barnett: 1 crew Eagle Ford: 1 crews
Permian: 3 crews Oklahoma: 1 crew
Marcellus: 4 crews Bakken: 1 crews
Current active USA HP: 465,000
Bakken MINOT
Utica
Marcellus
ODESSA
Permian
SHAWNEE
Mid-Con
SPRINGTOWN
Barnett
Eagle Ford
USA EQUIPMENT
Current active U.S. fleet • 465,000 fracturing HP
• 9 Cement units
• 10 Acid units
• 6 Coil units
• 11 N2 units
Parked 4 Fracturing crews in Q1 • Permian, Eagle Ford, Bakken,
Haynesville
• 150,000 HP
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USA – OUTLOOK
Rig count will drop throughout 2015
Expect pricing decline of 15% – 20%
Will reduce costs and size of operations as required
Strong management team and lower cost structure than last downturn
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COST CONTROL
Initiated significant cost control measures in late 2014
Salary reduction effective Feb. 1, 2015 • $28m in expected savings
Negotiating cost reductions with all
North American suppliers • Targeting 10%-15% savings
Reduced people and infrastructure to
match drop in active equipment
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• Reduced North American staff by approximately 30%
Will continue to right size North American operations based on demand
RUSSIA
19
RUSSIA AND THE FSU
Started operations in 2000
One of the largest fracturing companies in Russia
Primarily work on oil wells
All work is on 1 or 3 year contracts
Services: • Fracturing 88%
• Coiled Tubing 6%
• Cementing 4%
• Nitrogen 2%
20
RUSSIA AND THE FSU
21
NOVY URENGOY GUBKINSKY
RADUZHNY
NIZHNEVARTOVSK
NYAGAN
NEFTEYUGANSK
KRASNOYARSK
IRKUTSK
KUEDA VCNG
MOSCOW
EAST SIBERIA VOLGO-URALS
CAUCASUS
ARCTIC SHELF (BARENTS, PECHORA, KARA SEA)
CASPIAN OFFSHORE
OTHER REGIONS OF WEST SIBERIA
Traditional regions for oil production Regions of growth Operational Base Representative Office
RUSSIA - 2015
Strong technical and operational business
Future growth in Eastern Siberia to fill new Chinese pipeline
Russia/Ukraine conflict has not caused any operational disruptions thus far; will continue to monitor effects of sanctions
22
2015 tendering complete • Slight increase in year-over-year activity
Ruble decline will impact Canadian dollar revenue by 40% – 50% • Most costs in Rubles so no appreciable drop in margin percentages
INTERNATIONAL
23
INTERNATIONAL
Australia • Cement and environmental
services
• Slow first half of 2015 with growth in second half
• LNG driven gas market
Kazakhstan • Fracturing services
• Good profitability
• Looking for growth opportunities
24
INTERNATIONAL
Norway • Completion tools only
• Strong acceptance of completion tool technology in North Sea
• Anticipate stable 2015 demand
Middle East • Started coiled tubing operations in
Q2 2014
• Looking to add additional contracts in 2015
Colombia • Suspended operations in early
2015
25
INNOVATION
26
INNOVATION
Trican focuses on separating itself with technology
MVP FracTM
• Patented chemical solution that reduces proppant settling in slick water fracs
• Strong market acceptance in Canada; looking to expand into other regions
27
• MVP FracTM used in 20% of all wells fractured by Trican in Canada in 2014: up 100% vs. 2013; approximately $200 million in frac revenue
• Recent case studies show 20% increased production in the Cardium and 30% increased production in the Montney
COMPLETION TOOLS
Operations in Norway, USA and Canada
Offer multistage frac tools, completion and intervention tools for both open hole and cemented installations
Competitive advantage with patented completion system that has capacity for 240 cemented stages
28
Strong year-over-year growth in 2014
2015 demand will be impacted by low oil prices but have market share opportunities
TRICAN RESERVOIR SOLUTIONS
Geological Solutions • Offer unconventional rock analysis,
core testing and rock mechanics
Reservoir Solutions • Reservoir model that integrates
geological and frac data to optimize long-term reservoir recoverability
29
SUSTAINABLE INNOVATION
EcoClean Fluids • Continuing to expand our line of
environmentally friendly fracturing fluids
Water Management and Reduction • Developed a 100% recycled water
crosslinked fluid solution with no mechanical treatment
• Developed Bakken market using recycled water solutions
30
FINANCIAL OVERVIEW
31
DEBT STRUCTURE
Industry leading debt structure • Mix of variable and fixed rate • Low cost – average rate of 5.2% on notes • Balanced maturity dates ranging from 2016
to 2021
Current outstanding and available debt at December 31, 2014
• USD $300 million and CAD $80 million in fixed rate notes payable
- A portion of the USD notes are hedged
• CAD $575 million revolving credit facility • $300 million of cash and available debt
32
Managing cash flow and balance sheet a key focus in 2015
Dividend of $0.30/year
Total capital spend for 2015 expected to be $50 to $60 million
Working capital release in 2015 expected to provide significant cash inflows
Will pay down debt in first half of 2015
33
CASH FLOW
INVESTMENT ADVANTAGES
Significant earnings potential on existing assets
Low capital expenditures in 2015
Strong Canadian business that historically weathers the storm
Strong management team that has managed through numerous cycles
Geographical diversification
Focus on cost control
34
SUMMARY
Number of Outstanding Shares (as of Feb. 27, 2015): • 148.9 million
Average Daily Volume (one month period): • 1,153,825 (as of February 27, 2015)
Directors/Officers Ownership: • 2.0% (approx. - diluted basis)
Market Cap: • $650 Million as of February 27, 2015
Pay a semi-annual dividend of $0.15 per share
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Investor Presentation March 2015