Howard Weil s 36th Annual Energy Conference April 2008

Transcription

1 Howard Weil s 36th Annual Energy Conference April

2 Corporate Information Julio M. Quintana President and Chief Executive Officer Tony Tripodo Executive Vice President and Chief Financial Officer Tesco Corporation 3993 W. Sam Houston Pkwy. N., Suite 100 Houston, TX Phone: (713) Fax: (713) Web: Forward Looking Statement This presentation contains statements that may constitute forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of These statements include, among others, statements regarding expectations of future revenue, activities, capital expenditures, earnings and technical results. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated. These risks include, but are not limited to: the background risks of the drilling services industry (e.g. operational risks; potential delays or changes in plans with respect to customers exploration or development projects or capital expenditures; the uncertainty of estimates and projections relating to levels of rental activities; uncertainty of estimates and projections of costs and expenses; risks in conducting foreign operations (e.g. political and fiscal instability) and exchange rate fluctuations); uncertainty and risks in technical results and performance of technology; and other uncertainties. Investor Relations Contact Kristi Rector (713) kristi_rector@tescocorp.com 2

3 TESCO at a Glance Global leader in design and delivery of technology-based solutions for the drilling industry Two segments: Top Drives Casing Services Seven acquisitions from 2005 to 2007 expand Tubular Services footprintf Global reach: 1900 employees in 27 key oilfield locations Founded in 1986; IPO in 1993 Listed: NASDAQ (TESO) TSX (TEO) 52 week stock price range $ day average stock price $22.22 Market Cap $916 million * Note: All $ shown in this presentation are in U.S. $ 3

4 TESCO Delivers We are delivering growth and earnings $462 $386 $203 $133 $ Revenue 4

5 TESCO Delivers We are delivering growth and earnings $61 $49 $31 $32 $18 $8 ($16)($16) $2 ($6) * Operating Income * Includes $6.2M of PAT re: Q3 tax adjustments. Net Income 5

6 TESCO-Financially Sound Millions $ USD Strong Balance Sheet (December 31, 2007) EBITDA* Cash $ EBITDA $37 Debt $81 Net Debt $ EBITDA $85 Equity $305 Net Debt/Book Cap.* 16% 2007 EBITDA $79 Unused capacity in credit facility * Non GAAP Measure 6

7 Business Segments TOP DRIVES Rental Sales Aftermarket Sales and Service Revenue CASING SERVICES Tubular Services - Casing Running - Completions CASING DRILLING Segment Operating Income 2007 Casing Services Top Drive $173 Top Drive $289 $69 Casing Services $21 Millions $ USD Total $462 Total $90* * Excludes Corporate and Other Segment 7

8 Geographic Revenue Breakdown EAME Asia $27 Pacific $34 Latin America $23 Canada $47 U.S. $255 EAME $27 Asia Pacific $51 Latin America $41 Canada $60 U.S. $283 Millions $ USD Total $386 Total $462 International (Non-U.S./Canada) revenues increased 43% in 2007 and are expected to increase at a faster rate than overall revenues. Note: U.S. and Canadian revenues include product sales of equipment to customers, although the equipment may be ultimately destined to international al locations. 8

9 Top Drives - Global Invented portable Top Drive Created Top Drive rental market Will rent or sell Top Drives Hydraulic Electric Growing Aftermarket Sales and Service business Other Canrig TESCO* NOV Other TESCO Units Installed Rental Market * Net of TESCO s s fleet of 110 rental units 9

10 Top Drives Historical Performance Units Sold Revenue (Mil $) $92 $126 $219 $

11 Top Drives Revenue Breakdown Rental $102 Sales $81 Rental $110 Sales $127 AMSS $36 Millions $ USD AMSS $52 Total $219 Total $289 11

12 Top Drive Market Offshore Rigs Land Rigs Offshore Rigs with Top Drives 95% Land Rigs without Top Drives 55% Land Rigs with Top Drives 45% Offshore Rigs without Top Drives 5% Total Rigs: 700 Total Rigs: 5,000* * Includes China & FSU; two large markets with minimal complements of Top Drives Sources: BHI Rig Count, MI Rig Count, Schlumberger Rig Count, TESCO Research and Estimates 12

13 Casing Services CASING DRILLING Proprietary technology allows wells to be simultaneously drilled and cased Retrievable (exclusive to TESCO) - Interval or complete well Non-Retrievable (TESCO, et al) - Interval with drillable shoe Tubular Services Conventional Casing Running, tubing installation and completions services Proprietary technology associated with sub-sea sea completions Multiple Control Line Running System (MCLRS ) Proprietary Casing Drive System (CDS ) ) technology greatly increases efficiency and safety 13

14 Casing Services Revenue Breakdown CASING DRILLING $14 CASING DRILLING $15 Proprietary** $48 Conventional $95 Proprietary $63 Conventional $95 Millions $ USD Total $157 Total $173 NOTE: 1) 2006 CASING DRILLING excludes $9.0 of revenues associated with discontinued rig operations. 2) Proprietary Casing Running revenues include MCLRS which has historically been classified as conventional. 14

15 Conventional Casing Running 15

16 TESCO Proprietary Casing Running 16

17 Extending our Tubular Services Leadership CDS Based Cementing MCLRS 17

18 Tubular Service Metrics Approximately $1.7+ billion market 2007 Proprietary Revenue = $63 million Less than 5% penetration of Proprietary Services 3890 jobs run to date with CDS Proprietary CDS requires a Top Drive (any Top Drive) Approximately 250,000 total Casing Running jobs/year in industry 177 CDS units in fleet at end of Q Typical revenue (varies with size and depth): Onshore: $15,000 - $18,000 per job Offshore: $45,000 - $50,000 per job 18

19 CASING DRILLING Technology CONVENTIONAL DRILLING PROCESS CASING DRILLING PROCESS 19

20 CASING DRILLING Plastering Effect 20

21 CASING DRILLING Accomplishments 21

22 CASING DRILLING Accomplishments Created a commercial product Drilled 397+ wells to date Drilled 56 directional wells Drilled 10 horizontal or near horizontal wells Have drilled 19 Offshore wells 22

23 CASING DRILLING Market TESCO believes this potential market is measured in billions $ Today s s market is between $40-50 million On an ongoing onshore project: $1.5 to $2.5 million / rig-year On an ongoing offshore rotary steerable project: $6 to $10 million / rig-year Should ultimately apply cost effectively to most difficult wells ls drilled* Current technology should apply cost effectively to thousands of wells Our offering focuses on: Onshore trouble/difficult wells Offshore rotary steerable wells * Difficult wells as defined by Spears and Associates are 20-25% 25% of all wells drilled. 23

24 2008 Objectives Focus on improving margins and profitability Expand size of rental Top Drive fleet to 120+ units Accelerate growth of proprietary CDS technology Broaden base of CASING DRILLING business Leverage 2007 investments in infrastructure to drive high growth rates Widen technology lead with retrievable systems Expand geographical reach of MCLRS technology Focus organization on ROCE (Return of Capital Employed) 24

25 Howard Weil s 36th Annual Energy Conference April