I. Results Overview. II. Company Outlook

Transcription

1 March 2018

2 Disclaimer The information contained in this presentation is intended solely for your own reference only. In addition, the information includes projections and forward-looking statements that reflect the Company's current views with respect to future events and financial performance. These views are based on assumptions subject to various risks. No assurance can be given that future events will occur, that projections will be achieved, or that the Company's assumptions are correct. Actual results may differ materially from those projected. Past track record cannot be used as guidance for future performances. 2

3 I. Results Overview II. Company Outlook

4 Market Environment In 2017, average oil price of Brent increased by 21% over 2016 and WTI increased by 17% In 2017, global upstream E&P spending increased by approximately 8% over 2016 In the oilfield services industry, the supply still outstripped the demand Oil prices slowly rebounded in 2017 Global upstream E&P spending grew in Unit:USD billion Sources: IHS Report Sources: IHS Report 4

5 Annual Financial Performance 1 Turnaround from Loss to Profit in 2017 RMB(million) Revenue 17, ,085.5 Operating Profit 1,427.5 (11,367.7) Net Profit(Incl. Impairment) 71.2 (11,459.5) Net Profit(Excl. Impairment) (3,186.7) RMB(million) Total Assets 73, ,544.1 Total Liabilities 39, ,247.7 Shareholders Equity 34, ,296.4 Available cash sufficient 2 :RMB 11.9billion Debt-to-capital ratio:45.3% Distribution policy for :0.06 yuan per share 1. All above financial data are from the audited financial report prepared by the Company under HKFRS. 2. Available cash includes cash equivalents and available-for-sale financial assets. 3. The distribution proposal is subject to the approval at the 2017 annual general meeting of the Company. Remark: Financial data as up to December 31,

6 Business Strategies COSL Proactively Responded to the Challenges Secured the core clients in offshore China, enhanced the market share for all businesses Adhered to "Belt and Road policy, revenue increased yoy Accelerated technological serialization and industrialization, speed up transformation of technological results Reduced CAPEX substantially, and maintain robust financial strengths and healthy cash flow 6

7 Segments Performance 1 Drilling segment had breakthroughs both in clients and markets. The average calendar day utilization rate and average daily income rose by 5.4% yoy and 3.3% yoy respectively. Well services and marine support segments made more contributions, recording an increase with revenue rising by 17.9% and 25.1%, yoy. Geophysical and surveying segment enhanced the efforts in international market expansion by securing a number of 3D acquisition and processing contracts. Drilling 2017 Revenue Contribution Well Services 32 jack-ups 11 semi-subs 3 accommodation rigs 5 module rigs 50.0% 0.0% 38.5% 37.8% Drilling Well Services 14.0% Marine Support 9.7% Geophysical and Surveying Logging, drilling and completion fluids, directional drilling, cementing, completion, well workover, etc. Unit:RMB million Marine Support 91 self-owned utility vessels 34 utility vessels managed Comparison of Profit 2016 Drilling Well Services 2016 Marine Support Geophysical and Surveying Geophysical and Surveying 6 seismic vessels (46 streamers) 1 ocean bottom cable team 5 surveying vessels Remark : The financial data as up to December 31,

8 Achievements in Market Expansion Domestic Market Overseas Market Continued to consolidate leading position in offshore China, increasing 1 new service area and 4 new clients Utilization rate of self-owned vessels was over 90% 140 new overseas contracts, 4 new markets, 24 new clients 4 new markets: Papua New Guinea, Argentina, Cameroon and Kuwait Successfully completed the 3D acquisition IPM project for two new clients Successfully secured two tenders for IPM services projects 24 new clients: Kangean in Indonesia, Fieldwood in Americas, Lundin in Europe, RAKGAS in the UAE etc. Continued to expand cementing market of land oilfields Application of self-developed technology entered into new area for the first time Leading Position in Offshore China 100% Drilling Well Services Marine Support Geophysical and Surveying 8

9 R&D Commercialization Technological breakthroughs EFDT 1 Incongruous Pushing Sticking Releasing Device acquired Canada PTC International Patent Lare diameter rotary coring tool acquired the large-sized core of Φ1.5 x2.75 LDI/INP logging tool was put into operation in South China Sea Gas Hydrate drilling sampling technology completed the world's first deep water gas hydrate solid-state fluidization test Horizontal broadband acquisition technology enhanced quality of seismic data Subsea BOP risk identification technology reduced operation risks Boost Capacity Large-scale applications of D+W system. Operation volume increased by 90%. COCEM cementing slurry system successful applied on ultra deep water well and ultra high temperature well Conventional well completion tools underwent upgraded, covering all types of wells in China Offshore Oilfield MWD transmission speed increased to 8~10bps, enabling data (Number of patent in aggregate) 463 Number of patents continued to rise Unit: patent transmission for high-end surveying EFDT : Enhanced formation dynamic tester 9

10 QHSE and Public Contribution Excellent OSHA safety management indicator ensured highquality operations Maritime rescue Participated in maritime rescues for 26 times, rescued 13 vessels and 72 people in distress Effectively promoted environmental protection Actively participated in public environmental activities Actively integrate into local culture and made charitable contributions Built Hope Primary Schools Cared for autistic children Donate for the earthquake-stricken areas in Mexico Voluntary teaching in Kenya Excellent OSHA safety management indicator According to OSHA, coefficient 1 is equivalent to one accident per 200,000 man-hours 10

11 Awards and Recognitions June 2017, COSL won Certificate of Excellence in Investor Relations from HKIRA February 2017, COSL won the Best Corporate Governance award in the 2017 China Financial Market Listed Companies Award January 2017, COSL won the Best Investor Relations award of Golden Hong Kong Stocks Awards April 2017, COSL won the Best Board of Directors of Investor Relations of China Main Board Listed Companies for the second consecutive year Constituent stock of Heng Sheng (China A) Corporate Sustainability Index; and constituent stock of Heng Sheng Corporate Sustainability Benchmark Index April 2017, the 2016 annual report of COSL won the Gold Award of Vision Awards and many awards from LACP 11

12 I. Results Overview II. Company Outlook

13 Operational Environment CAPEX growth of oil and gas companies, especially on the onshore and deep-water According to IHS Report, the utilization rate of the semi-subs increased significantly in 2018 CAPEX forecast for global upstream oil and gas companies Global Utilization Rates of Drilling Rigs Unit:USD billion Onshore Business Deep-water Source:IHS Report Source:IHS Report 13

14 Medium-term Development Plan 2018 Medium-term targets Domestic market: Focus on new workload and requirements International Market: further strengthen the overseas regional management and scale Maintaining cost competitiveness: through reducing management cost, strengthening technology and optimizing assets Implement service upgrade: Provide with comprehensive solution plan Domestic International 50/50 Technology Equipment COSL will leverage on the synergies and cost advantages; Adhere to prudent financial policies; Realize the goal of 50/50 mix. 14

15 Overseas Development COSL Superior and COSL Force acquired drilling contract (2018~) HYSY751 acquired Seismic Survey contract (2018~) Integration and Stimulation projects (2018~) NH8 acquired drilling contract (2018~) The Far East Europe The Americas The Middle East Southeast Asia Canadian Nexen Logging Integrated Contract (2017~2019) COSL Confidence Acquired Drilling Contract (2018~) HYSY760 acquired Seismic Survey contract (2018~) COSL Pioneer acquired Nexen Drilling Contract (2018~) COSL Innovator acquired Lundin Drilling Contract (2018~) COSL Promoter executed Statoil drilling contract (2018~) COSL Prospector received the LOA(2018~) Africa NH9 acquired Drilling Contract (2018~) HYSY937 acquired Drilling Contract (2018~) HYSY721 acquired Seismic Survey contract (2018~) COSL Seeker acquired Drilling contract (2018~) HYSY720 acquired Seismic Survey contract (2018~) 15

16 Glad tidings COSLFORCE enters the UAE market On March 6 th, successfully provided service in UAE NH9 provides service for KANGEAN ENERGY On March 12 th, provided drilling and completion service COSLPROSPECTOR arrived in Norway Received the LOA. Operation is expected to commence in mid-may COSLPIONEER conducts sea trials In late March, going to provide drilling service for Nexen COSL SEEKER is heading to West Africa In early April, going to provide drilling service in Cameroon Efficient operation in Missan Oilfield On March 10 th, completed well drilling project 10 days earlier to help with follow-up services 16

17 Glad tidings First-class offshore wind power exploration technology Acquired offshore wind power exploration projects in Jiangsu, Liaoning and Guangdong, etc. Widely application of cementing technology in Mexico On March 7 th, cementing operation was well acclaimed Application of organic blockage technology in Southeast Asia and Mid-east market Acquired production, coiled tubing and wire line operation contracts of Husky Reached sales intention with International Company On March 19 th, signed intention-to-sell agreement on high-end logging equipment Make a good start in Indonesia market In January, continuously win bids on cable logging and directional drilling, D+W system and logging service projects in Indonesia 17

18 Rig Operation Status (Up to 22 Mar 2018) Operation location Drilling Rig 16 Jack-ups 1 Jack-up(Gift) 1 Jack-up(Kaixuan) 2018 Q1 Q2 Q3 Q4 Contracts in the year Domestic 1 Jack-up(HYSY943) 1 Jack-up(BH7) 1 Jack-up(HYSY941) 2Semi-subs(NH2/NH5) Contracts in the year 1 Semi-sub(NH6) 1 Semi-sub(NH7) - 1 Semi-sub(HYSY981) 2 Jack-ups (Superior/Craft) 1 Jack-up(HYSY937) Contracts in the year 1 Jack-up(Strike) International 1 Jack-up(Force) 1 Jack-up(Seeker) 1 Jack-up(Confidence) 1 Semi-sub(Promoter) 1 Semi-sub(Innovator) Contracts in the year 1 Semi-sub(Pioneer) 1 Semi-sub(NH8) 1 Semi-sub(NH9) Jack-ups Semi-sub Remark:2 Semi-subs(Prospector/HYSY982)and 4 Jack-ups(HYSY936/Boss/Power/Hunter)are in bidding or negotiation processes, respective contracts have yet to be concluded. 18

19 Prudent Financial Policy Capital and Interest Repayment Companies Middy's S&P Fitch 4 majors oil companies Schlumberger A1(Stable) AA-(Stable) - Halliburton Baa1(Stable) BBB+(Stable) - Baker Hughes A3(Stable) A-(Stable) - Weatherford B3(Neg.) B(Neg.) CCC COSL Baa1(Neg.) BBB(Stable) A(Stable) Capital Expenditure Plan Diamond Ba3(Neg.) B+(Neg.) - Ensco B2(Neg.) B+(Neg.) - 7.5b b Unit: RMB 2.5b ~2.5b offshore drilling Noble Baa3(Stable) B(Neg.) BBB-(Stable) Rowan B2(Neg.) B+(Neg.) - Transocean B2(Neg.) B(Neg.) B+(Neg.) E Remarks: long-term unamortized expenses excluded Seadrill B1(Stable) CCC+(Neg.) - Source:Bloomberg and rating reports 19

20 Core Competitiveness Enhanced Industrial Market Share New Operation Model Optimize growth dimensions Restructure Asset structure Leading in Prudent cost management Implement differentiated and diversified development New Emerging Markets Domestic + International Focus on domestic market + expand global footprint Offshore + Onshore Expansion of the offshore market + seizing for onshore business opportunities Traditional Needs + Elevated Service New Competitive Framework Massive investment expenditure on oil and gas industry Slow recovery at industry level 20

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