Investor Presentation January 2014

Transcription

1 Investor Presentation January 2014

2 Forward-looking Information Certain information contained within this presentation and statements made in conjunction with this presentation, including information and statements that contain words such as anticipates, can, may, believe or believes, forecast, will and similar expressions, are forward-looking statements. These statements may include, but are not limited to, future capital expenditures, future financial resources, future oil and gas well activity, outcome of specific events and trends in the oil and gas industry. These statements are derived from certain assumptions and analyses made by the Company based on its experience and interpretation of historical trends, current conditions and expected future developments, and other factors that it believes are appropriate in the circumstances. These statements or predictions are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from the Company s expectations. These risks and uncertainties include the items discussed under the heading Business Risks in the Company s 2012 Annual Report and most recently filed Annual Information Form. Consequently, all of the forward-looking information contained within this presentation and statements made in conjunction with this presentation are qualified by these cautionary statements and there can be no assurance that actual results or developments anticipated by the Company will be realized or that they will have the expected consequences or effects on the Company or its business or operations. Other than as required by applicable securities laws, the Company assumes no obligation to update publicly any such forward-looking information or statements, whether as a result of new information, future events or otherwise. 2

3 Calfrac Snapshot TSX: CFW International service provider with operations in Canada, United States, Russia, Mexico, Argentina and Colombia Market capitalization (01/06/2014) Shares Outstanding (9/30/2013) C$1.4 billion 46.1 million Shares held by Directors / Management 25% Dividend (Quarterly) World Wide Fleet $0.25 / share 1,182,500 HHP 37 Coiled Tubing Units 30 Cementing Units 3

4 Pressure Pumping Focus Revenue by Service Line Q YTD Fracturing has been and will continue to be our focus. Fracturing has been one of the single largest beneficiaries of unconventional development. Fracturing has evolved from being 10-15% of the well cost to between 30-50% of the well cost in many unconventional wells. Coiled tubing and cementing have been entry points into other international markets. Fracturing 92% Coiled Tubing 5% Cementing 3% 4

5 Worldwide Operations CANADA Canada Equipment Fleet: 16 fracturing spreads totalling 389,000 horsepower 21 coiled tubing crews RUSSIA UNITED STATES MEXICO COLOMBIA Latin America Equipment Fleet: 5 fracturing spreads totalling 81,000 horsepower 13 cementing crews 3 coiled tubing crews United States Equipment Fleet: 15 fracturing spreads totalling 658,500 horsepower 17 cementing crews 6 deep coiled tubing crews ARGENTINA Russia Equipment Fleet: 6 fracturing spreads totalling 54,000 horsepower 7 deep coiled tubing crews 5

6 Focused on the World s Largest Shale Resources Calfrac is well positioned in four of the top six shale markets in the world. 1,161 Tcf of Technically Recoverable Shale Gas 1,115 Horizontal technology poised to be deployed internationally Established operations in each segment with relationships with many of the largest operators Represents significant longterm growth potential. USA China Argentina Algeria Canada Mexico Source: EIA 6

7 Technological Innovation is Our Goal Fluid Systems for Today s Oil Development CleanTech : A unique, proprietary gel system that offers superior proppant suspension and enhanced clean up for optimum production. 28% Acid Package: DAS-100 acid system is a HCl acid system formulated for use in carbonate formations without creating sludging or emulsions. Environmentally Friendly Fluid Systems Ongoing development of fluid systems which contain no hazardous materials. Reduced fresh water demand through the development of systems tolerant of highly saline produced and recycled waters. Recently deployed 10 new green fluid products. 7

8 Technological Innovation is Our Goal (cont.) Flowloop Friction Simulators Flow loops used to optimize friction reducers, confirm compatibility with other additives and to evaluate/develop new materials. Dual Fuel Fracturing Pumps Use natural gas as a replacement for diesel, resulting in significantly lower operating costs. Field trial with a major operator completed in Q4. Sand Storm 580,000 lbs. storage capacity 40% greater than traditional systems, with resulting efficiencies. Improved environmental and air quality standard. 8

9 Canada 9

10 Canada Latest Developments Technology continues to mature in light oil plays using horizontal wells with multi-stage fracturing treatments. Activity remains strong in the liquid-rich plays of northwest Alberta. Signed a multi-year minimum commitment contract for three fracturing spreads with Progress Energy Canada Ltd. Calfrac participating in early stage development of several emerging oil and liquids-rich plays. Particularly active in Duvernay development. Pad development and move towards 24-hour operations becoming more prominent. LNG exports expected to drive additional long-term growth. 10

11 Western Canada Crude Oil Resource Plays at a Glance Cardium Crew size: 12,500-35,000 HP # Fracs/Well: Stage size: tonnes Viking Crew size: 6,000-9,000 HP # Fracs/Well: Stage size: tonnes Sask. British Columbia Cardium Alberta Edson Beaverhill Lake Red Deer Calgary Viking Beaverhill Lake Crew size: 20,000-30,000 HP # Fracs/Well: Stage size: m 3 Bakken Crew size: 4,000-6,000 HP # Fracs/Well: Stage size: 5-10 tonnes Calfrac regional/district office Major basin/unconventional play Estevan Bakken 11

12 Western Canada Natural Gas Resource Plays at a Glance Horn River Crew size: 40,000-50,000 HP # Fracs/well: Stage size: tonnes British Columbia Deep Basin Crew size: 12,000-25,000 HP # Fracs/Well: Stage size: tonnes Horn River Dawson Creek Fort Nelson Montney Deep Basin Grande Prairie Edson Alberta Duvernay Red Deer Montney Crew size: 15,000-30,000 HP # Fracs/Well: Stage size: tonnes Duvernay Crew size: 30,000-40,000 HP # Fracs/Well: Stage size: tonnes Calfrac district office Major basin/unconventional play 12

13 Canada Horsepower Statistics Horsepower requirements for Western Canada continue to increase. 400,000 Annual Horsepower Calfrac s market share is between 20-25%. 300,000 Multi-well pads and move towards 24-hour operations continue to drive high equipment utilization. 200,000 Represents one of the most modern fleets in western Canada. 100,

14 United States 14

15 United States Latest Developments In the Marcellus, customer activity and equipment utilization remains high. Strong contract coverage. Currently operate four fracturing spreads and two deep coiled tubing units in the region. Commenced full-time operations in the North Dakota Bakken in Q Currently operate three fracturing crews. Signed a multi-year minimum commitment contract with one of the largest producers in the area. Early participant in the emerging Niobrara oil shale play. Calfrac s long standing presence and local infrastructure ideally positioned to service growth in this play. Recently acquired the operating assets of Mission Well Services, LLC, an Eagle Ford pumping services provider. Acquisition provides the platform for further growth in additional basins in Texas. 15

16 United States Horsepower Statistics Horizontal activity/service intensity continues to drive demand for horsepower. 500,000 Annual Horsepower Recent horsepower deployment largely focused on liquids opportunities. Majority of capacity additions have been supported by contracts. 400, , , ,000 Strategy has been focused on creating scale of operations in each region

17 U.S. Operations Geographic Breakdown Williston Bakken Bakken 3 Fracturing Spreads totalling 92,000 horsepower 1 Coiled Tubing Crew North Dakota Wyoming Utah Oklahoma Pennsylvania W. Virginia Calfrac regional/district office Major basin/unconventional play Calfrac service area Arkansas Jonah Rockies 3 Fracturing Spreads totalling 99,000 horsepower Denver Julesburg Niobrara Platteville Grand Junction Denver Piceance Eagle Ford 3 Fracturing Spreads totalling 157,500 horsepower 3 Coiled Tubing Crews Barnett Texas Woodford San Antonio Eagle Ford Fayetteville Beebe Haynesville Fayetteville 2 Fracturing Spreads totalling 102,000 horsepower 11 Cementing Crews Marcellus 4 Fracturing Spreads totalling 208,000 horsepower 6 Cementing Crews 2 Coiled Tubing Crews Marcellus Philipsburg Smithfield 17

18 Russia 18

19 Russia Russia Equipment Fleet 6 fracturing spreads totalling 54,000 horsepower 7 deep coiled tubing units Usinsk Moscow Noyabrsk Khanty Mansiysk Nefteugansk Western Siberia Calfrac regional/district office Major basin 19

20 Calfrac in Russia Latest Developments 2014 tender status expect continued high utilization. Recently expanded with a significant new customer in the Usinsk region. Blend of annual and multi-year contracts. Substantial long-term growth potential: Russia is one of the largest oil and natural gas producing countries in the world Application of horizontal technology provides further growth opportunities. Currently, approximately 30 percent of work is on horizontal wells. Expect further growth in 2014 and beyond. 20

21 Latin America 21

22 Latin America Operations at a Glance Mexico Equipment Fleet 3 fracturing spreads totalling 45,000 horsepower 2 cementing crews Bogota Colombia Equipment Fleet 4 cementing crews Mexico City Reynosa Poza Rica Argentina Equipment Fleet 2 fracturing spreads totalling 36,000 horsepower 7 cementing crews 3 coiled tubing crews Catriel Neuquén Buenos Aires Calfrac regional/district office Las Heras 22

23 Calfrac in Latin America Mexico Experienced strong completion activity in 2011 and Activity in the northern region has significantly decreased in late 2013 due to budgetary constraints. Tremendous opportunity to deploy latest technological advancement to improve play economics. In the early stages of incorporating horizontal well design in developing current reservoirs. Expect further growth in Argentina Providing cementing services since Commenced coiled tubing operations in Commenced fracturing operations in May Recently received a commitment with the largest operator in Argentina for fracturing services targeting tight gas. Emerging shale gas/tight oil opportunities. Colombia Commenced cementing operations in late Oilfield activity expected to increase in 2014 and beyond. 23

24 Calfrac Revenue & EBITDA Growth Revenue CAGR of 28% from Growth (C$ MM) Canada and the U.S. have led growth. Acquisitions, improved utilization and pricing have driven growth. Oil-focused activity becoming a larger portion of revenue base. Revenue 1,600 1,400 1,200 1, EBITDA Increases driven by changes in service intensity Revenue EBITDA 24

25 Revenue Breakdown 2012 International exposure: One of few independent pressure pumpers with an international growth platform. Mitigates risk profile: International operations provided strength in 2009 in the midst of weakness in North America. United States 40% Revenue by Operating Segment Latin America 7% Russia 7% Provides commodity diversification: Russia, Mexico and Colombia largely focused on oil development. Provides model/management to pursue other international opportunities. Canada 46% Total Revenue: C$1.6 billion 25

26 Financial Overview Income Statement For the Nine Months Ended September 30 (C$ millions except per share amounts) % Change Revenue 1, ,227.7 (10) Operating Income (39) Net Income (81) Earnings Per Share (Diluted) $ 0.35 $ 1.92 (85) Balance Sheet - As at September 30, 2013 Working Capital Total Assets 1,596.7 Long-Term Debt Total Equity Available Credit Facilities

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