China Oilfield Services Limited. May 2009

Transcription

1 China Oilfield Services Limited May

2 Disclaimer The information contained in our presentation is intended solely for your personal reference. In addition, such information contains 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. 1

3 Agenda 1 Company Background 2 Results Review Company Outlook

4 Company Profile The leading integrated oilfield services provider in offshore China, with more than 20 years E&P experience. Listed in Hong Kong under the ticker 2883 since 2002, listed in Shanghai under the ticker since 2007 Keeping dominant position in offshore China market, while exploring global market with competitive edge. 3

5 As a Leading Integrated Oilfield Services Provider Drilling Revenue Breakdown 60% Well Services 20 jack-ups + 3 semis + 2 accommodation rigs + 6 land rigs + 4 module rigs 12% 7% 21% Integrated well services Marine Support & Transportation (MS&T) 62% Profit Breakdown Geophysical 12% 8% 18% Over 80 working vessels + 3 oil tankers + 5 chemical carriers 4 8 seismic vessels + 4 comprehensive offshore survey vessels Facilities figures are based on 1Q2009

6 Leading Position in China, with Solid Customer Base Shares in Offshore China Market 1 Selected high-quality domestic and PSC clients 100% 80% ROCKOIL 60% 40% 20% Absolute Competitive Edge 60% 70% 80% Selected well-known international clients 0% Drilling W ell M S & T G eophysical PNOC Services COSL Others 1. As at 31 December

7 Sound Track Records Revenue Net profit (RMB mn) (RMB mn) CAGR 28% 9,008 12, CAGR 42% 2,238 3, , ,726 3,062 3,824 4, ,

8 CAPEX to Satisfy Increasing Demand CAPEX since listing Domestic & overseas CAPEX breakdown in 2009 (RMB mn) 8,000 7,150 7,000 6,000 5,833 31% Overseas 5,000 4,410 4,000 3,000 2,000 2,071 2,715 2,580 3,465 3,250 69% Domestic 1,000 1,321 1, E COSL CDE 7

9 Agenda 1 Company Background 2 Results Review Company Outlook

10 Global Macro-economy in Doldrums in 2008 Slowdown in global economic growth Fluctuation of Intl Oil Price 18% 16% 14% 16.8% 13.0% USD/Barrel % 10% 10.2% 10.7% 9.0% % 80 6% 4% 5.3% 4.9% 5.1% 5.0% 3.7% % 20 0% Jan-08 Mar-08 May-08 Jun-08 Aug-08 Oct-08 Dec-08 Grow th Rate for World GDP Grow th Rate for China GDP WTI Crude Oil Price Source:IMF,National Bureau of Statistics of China Source: Bloomberg Global financial crisis triggered by the sub-prime crisis in the US has significantly eroded real economies around the world. Developed countries slipped into recessions, and economic growth in emerging countries and other developing countries also experienced acute declines. China s economic growth slowed down by 4 pp year-on-year 9 International crude oil prices have been fluctuating substantially, price went up to hit historical high at US$147.27/barrel in mid-2008, but then quickly plunged to a 5-year low during the second half. Average WTI crude price in 2008 was US$99.9/barrel

11 2008 Results Overview in RMB mn Change% Revenue 12, , % Operating profit 3, , % Operating profit margin 29.90% 31.39% 1.49pp Net profit 3, , % EPS (RMB cent) % Net operating cashflow 4, , % Cash & cash equivalents 4, , % Total assets 56, , % Total debts 36, , % Shareholders equity 19, , % ROE 16.80% 19.86% 3.06 pp Total liability / Total assets 65.00% 25.40% pp Total debts / equity % 15.35% pp 10

12 Driving Factors for Revenue Growth RMB mn Segmental contribution MS&T ( 8%) Geophysical (14%) 12,430 12,143 Regional contribution 9,008 9,242 9,008 Overseas (45%) Driving factor China (55%) New facilities Work volume Price M&A Well Services (15%) +3135mn,34.8% Drilling (63%) Overseas businesses spanning in 212 countries and regions, generating RMB3,040 mn in revenue, up 85% y-o-y

13 Rapid Growth in Four Core Segments 34.8% growth in revenue 28.4% growth in operating profit (RMB mn) 12,000 6, , % 1,614 1,442 1,374 2,733 2,270 5,920 3, % 17.4% 20.4% 51.0% (RMB mn) 7,000 3, , % , % 20.0% 20.5% 42.2% Drilling Well Services MS&T Geophysical Drilling Well Services MS&T Geophysical 12

14 Highlights in Four Core Segments Drilling Well Services The world s 8 th largest drilling fleet in operation High utilization rate of drilling fleet: Calendar day utilization rate 91.1% for jack-ups, 100% for semis: both achieved available day utilization rate of 100% Price grew steadily : Average day-revenue for jack-ups was US$116,000, up 48.7% yoy. US$179,000 for semis, up 26.1%. Outstanding contribution from overseas operations and well-developed onshore businesses Operations in the domestic market approaching full capacity Introduced new services in overseas operations, such as directional drilling technical support for overseas clients Revenue contributions from proprietary technologies (ELIS,FCT, etc) Obtained 38 patents in 2008, of which 9 are innovation patents, boosting the total no. of patents to 117, of which 34 are innovation patents Marine Support & Transportation Boasts largest & most comprehensive offshore support and transportation fleet in China - lowered costs by procuring facilities domestically - leased facilities from external sources to meet demand when in-house equipment were inadequate Service rates grew steadily High utilization rate: average available day utilization rate was 99.3%, calendar day utilization rate was 94.8% Strong domestic demand Geophysical Continuous breakthroughs in overseas operation Highly efficient operations from new vessels, data collection saw volume increased - Asia s most advanced 8-streamer survey vessel COSL719 commenced operation in March, completed 3D Data collection volume aggregating 3,113 sq.km. 13

15 CDE Integration Progress Principles of Integration Key Integration highlights Smooth transition, retaining core personnel Streamline CDE s corporate structure and lower administrative cost Positioning for both short and long term, taking international dimensions into consideration Adjust company organization structure Stabilize core team. establish mechanisms in compensation, motivation and evaluation Decide on management approach and procedures Complete integration on financial reporting systems Facilitate construction of semis Phase I (completed) :Before completion, established a preliminary integration plan A three-phase integration Phase II (completed):implemented and concluded the preliminary plan within 100 days after completion, developed a long-term integration plan Phase III:Implement the long-term integration plan within the first 1-2 years 14

16 Significant Upgrading of Operation Capabilities after Integration (No. of rigs) Range of operating depths of COSL s drilling rigs Less/equal to 250 feet Approx.300 feet 375 feet 400 feet less/equal to 1500 feet 2500 feet 5000 feet (Option) feet Existing Under construction Transocean Noble Diamond Offshore ENSCO Jack-up The world s 8th largest drilling service provider Jack-ups Semi-submersibles Drillships Pride Source: ODS report as at Feb Platforms consist of jack-ups, semis and drillships, excluding platform under construction 31 Herculers Offshore Rowan No.8 COSL Aban Offshore Seadrill Semi Comparable average fleet age of major players Age in Years COSL Ensco Transocean Pride Noble Diamond Source: Company report

17 Continuous Improvement on QHSE COSL s OSHA (score on the record) was 0.26, maintaining a low level by industry standards COSL achieved an outstanding environmental protection record with no pollution accident (e.g. oil spillage) in 2008 Health: The foundation for our corporate success Safety: Our persistent promise 0.80 OSHA 0.60 QHSE Quality: In pursuit of high quality Environment: Be a responsible international citizen

18 Fulfilling Social Responsibilities The Company and its staff actively participated in public welfare activities Donations for relief of earthquakestricken people in Wenchuan, Sichuan aggregated RMB26.4 million Donated RMB12 million in Hope Schools in Hainan Province Improved the management of COSL Hope Schools in Mancheng and Luanping Extended care to the society and staff members; launched regular Giving Warmth and Love and other activities for the poor and distressed Established a COSL Academy of Technology aiming at nurturing talents to become professionals, enhancing the current training curriculum 17

19 Agenda 1 Company Background 2 Results Review Company Outlook

20 Opportunities to Come With Challenges in the Oilfield Services Market in 2009 Declining global demand for drilling equipment Downward pressure on global day rates % 95% 97% 95% 94% 92% 91% 100% 95% 1200 Day Rate Index (LHS) WTI (RHS) US$/bbl % % % % 70% % Dec-08 Jan-09 Dec % 0 04/01 05/01 06/01 07/01 08/01 09/01 30 Source: Upstream, Bloomberg Global offshore rig usage (vessels) Demand to supply ratio(%) Remark: Day rate index of 1 Jan 2004=100 Source:Report by ODS-PETRODATA., Feb 2009 Jack-up: ODS predicted the global demand/supply ratio of jack-ups will be 86.8% in 2009 and 85.4% in 2010 Semi: ODS predicted slight shortage of deep-water capacities in 2009, continuing into 2010 with a demand/ supply ratio at 100.4% Steady growth in demand for drilling in the offshore market in China As the economy and the oil price remained sluggish and global supply for drilling platforms increases, competition for contracts is expected to intensify. Global day rates for jackups has already been declining, and that of semis are under pressure as well Due to its clientele and geographical reach, COSL s day rates are more resilient to risks than that of its international peers 19

21 Demand for Oil and Gas Exploration Services from China Continued to Grow Some of the COSL s major clients Barclay Capital concluded after surveying 357 oil and gas companies that global investment in oil and gas exploration in 2009 will amount to a total of USD400b, 12% lower than USD454b in 2008 China s rapid economic development created strong demand for energy with CAGR averaged 7% between 2001 and 2008, while the country meets 50% of its crude oil demand with imports. With demand being maintained at high levels, investments in oil and gas exploration will sustain CAPEX of some of COSL s clients in 2009 (USD billion) 18.0 Brisk exploration activities are seen in offshore China; Major COSL clients are keeping their CAPEX for 2009 intact or slightly higher than previous levels Husky (South east Asia) Anadarko BG G roup CNOOC Woodside Conoco Phillips 2008P 2009E PEMEX CNOOC expects not to reduce investments in its major businesses in the next 3 years. Its CAPEX in 2009 will reach USD 6.77b, 19% higher than last year, of which no less than 97% will be appropriated to exploration, exploitation and production CAPEX. Projected CAPEX of PetroChina in 2009 will be same as 2008, at RMB200b annually in the next few years Source: The mentioned oil companies 20

22 Drivers for COSL s Sustainable Development in New Capacity streaming in in 2 High facility utilization rates 3 Acquisition synergies 4 Ongoing overseas exploration 5 Accountable management team 21

23 1 COSL s New Equipment in 2009 Well services MS&T Well services equipment such as ELIS and FCT 2 liftboats to be built To partially complete building 18 utility vessels in 6 caegories Completed building and delivery of the Indonesian barge project COSL Drilling services 375ft Jack-up rig COSL Confidence commenced operation A 400ft jack-up rig COSL Strike to be delieved A 350ft jack-up rig to be delieved A 200ft jack-up rig to be delieved 22

24 2 High facility utilization rates Surge in operating days of drilling rigs 12,000 Rapid growth of work volume of well services Well services index 10,000 8,000 6,000 4,000 2, ,080 4, ,442 1,098 4, E Jack-ups Semi-submersibles module rigs Land rigs Accomodation platform Sustained growth of MS &T E Remarks: Well services volumn index in 2007=100 Expansion in work volume of geophysical services Days 40,000 Sq km 49,448 35,000 30,000 40,800 37,810 25, ,742 30,800 20,000 15,000 10,000 24,229 23,626 20,800 10,800 9,649 13,592 5, E Self-own vessels Leased vessels E 3D data collection 2D data collection

25 3 Synergies from Acquisition Integrated services improved COSL concentrates on on providing clients with high value-added and integrated oilfield services. COSL will capitalize on on the high quality drilling equipment of of CDE to to increase market share and explore cross-selling opportunities, enabling all all business segments to to grow.. COSL will benefit from different segments and stages of of the industry and its its overall competitiveness will be be enhanced Leading position in offshore China market ensured Drilling rigs of of CDE will operate in in offshore China after acquisition and the leading position of of COSL in in this market is is consolidated. Meanwhile, the work volume of of cementing and drilling mud will be be quickly improved. More vessels for MS&T will be be needed to to meet the demand for standby services, transportation, etc. Cost structure optimized COSL will continue to to implement a a core cost-oriented strategy and optimize its its cost structure in in areas of of operation, merchandising, R&D, administration, finance, human resources and maintenance in in order to to ensure further business development Operational efficiency enhanced Following the acquisition, COSL will see competitive edges of of its its units better complement one another to to optimize the efficiency on on asset utilisation, and further enhance operational efficiency, quality of of work as as well as as profitability 24

26 4 Ongoing Overseas Development Ongoing overseas expansion into 21 countries and regions - Consolidate operation in SE Asia and Gulf of Mexico - Accelerate business development efforts in the Middle East, Russia and Africa Leveraging the business platform of CDE, especially in the high-end market in North Sea Explore new business opportunities and explore new service offerings RMB mn 5,000 4,000 3,000 2,000 1,000 - Revenue from overseas business ,104 1,645 3, E Geographical distribution of business Norway Operating regions overseas Gulf of Mexico China Vietnam Australia Indonesia 25

27 5 Highly Qualified Management Team Rich industrial and managerial experience Extensive recognition in industry Extensive managerial experience in Chinese oilfield services industry 2003 Named one of the 10 Best Managed Companies 25 years of experience in servicing international oil companies 10 years of experience in international operation Outstanding managerial efficiency and performance 中国企业联合会中国企业家协会 2005 Best CFO in Asian Oil Industry 2006 Entrepreneur of the Year one of the 30 stocks with highest investment potential 2007 one of the top 100 listed companies in China by value 2008 one of the 25 stocks with the best performance in Greater China in

28 1Q 2009 Results Review RMB mn 1Q2009 1Q2008 Change% Revenue 3, , % Net profit % EPS (RMB cent) % Interest bearing debt 4,981 2, % Gearing ratio 140% 14.6% Note: All above data are prepared in accordance with PRC accounting standards. 27

29 Thank You! 28