Investor Presentation Third Quarter 2013 KCA Deutag is a leading international drilling and engineering company working onshore and offshore with a focus on safety, quality and operational performance www.kcadeutag.com
Disclaimer The distribution of this presentation in certain jurisdictions may be restricted by law. Persons into whose possession this presentation comes are required to inform themselves about and to observe any such restrictions. This presentation contains forward-looking statements concerning KCA DEUTAG. These forward-looking statements are based on management’s current expectations, estimates and projections. They are subject to a number of assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from any future results and developments expressed or implied by such forward-looking statements. KCA DEUTAG has no obligation to periodically update or release any revisions to the forward-looking statements contained in this presentation to reflect events or circumstances after the date of this presentation. 1
Agenda 1 Introduction and key highlights 2 Health, safety and environmental performance 3 Business overview 4 Group results and contract backlog 5 Summary 2
Key Highlights • Group revenue and EBITDA of $538m (Q3 2012: $405m) and $74m (Q3 2012: $55m) respectively in Q3 2013. • KCA Deutag continues to benefit from robust Oil and Gas industry outlook, underpinned by forecast continued growth in global energy demand. • Glen Esk now warm stacked in Ghana. • Very significant contract award for Land Drilling in Middle East, contributing an estimated $340m to our backlog. • Decrease in Net Debt / LTM EBITDA leverage from 5.0x to 4.8x. 3
Diversified business across both onshore and offshore Onshore (c.50% of EBITDA) Offshore (c.50% of EBITDA) Land Drilling Bentec Platform Services RDS MODUs description Segment � Design and manufacture � Leading global platform � Leading International � Design and refurbishment � Owns and operates fleet of premium land rigs and service operator outside of premium drilling contractor of offshore drilling facilities of 2 jack-ups and 3 barge key components North America and MODUs type self erecting tender � High end fleet of 54 drilling (SET) rigs � Capacity for 12-16 rigs � 39 platform rigs under � Engineering from concept and 9 workover rigs and 36 top drives p.a., management to commission � Track record of executing increasing in 2013 � Operations in UK North � Employs over 800 complex wells in harsh � Provision of after sales Sea, Norway, Russia, environments engineers and support services Azerbaijan and Angola staff across the globe 2% 9% 8% 17% YTD 2013 EBITDA 27% 47% ✓ ✓ ✓ Contract tenor 1 – 5 years + options n/a 3 – 5 years + options n/a 1 – 3 years Asset- light Over 50% of EBITDA generated in asset light businesses EBITDA stated before normalisation adjustments and excluding central overheads. 4
Strong market position and balanced portfolio of assets across existing growth markets Azerbaijan 7 platforms Norway 10 UK North platforms Sea 15 St. platforms Johns Russia 15 drilling rigs Bergen Tyumen Aberdeen (HQ) Stavanger Netherlands Bad Houston 2 drilling rigs Bentheim London Sakhalin Germany Kazakhstan Ben Loyal 3 platforms 3 drilling Albania Jack-up rig 1 drilling rig rigs 1 drilling rig Spain Baku 1 drilling Iraq / rig Kurdistan Algeria 4 drilling rigs 6 drilling Pakistan rigs 2012 EBITDA split by region 1 Myanmar Track record in key regions 2 drilling rigs Libya Dubai 1 platform Oman 5 drilling rigs Oman Other Years Glen Affric Nigeria 6 drilling rigs 8% SET rig 120 6 drilling rigs Middle East North Sea and Brunei Glen Esk Glen Tanar Gabon 13% Europe 28% 1 drilling rig 90 SET rig SET rig 1 drilling rig Ben Rinnes Kuala Lumpur Russia Angola 125 60 Jack-up rig 3 platforms 16% Africa 2 30 54 49 18% 39 Caspian 17% 14 0 Europe North Middle North Russia Africa East Sea Source: Company information Regional offices Note: Excludes workover rigs 1 Does not account for central overheads of $52m; Land Drilling Platform Services RDS offices MODUs Bentec 2 Excluding Libya 5
Health, safety and environmental performance Total Recordable Incident Rate Improvement 1.6 • 12 month rolling Total Recordable Incident Rate 1.4 TRIR (average) (TRIR) for Q3 2013 was TRIR per 200,000 man hours 0.56 injuries per 200,000 1.2 man hours worked. 1.0 0.8 • No TRIR incidents gave 0.6 rise to significant injuries, but they do serve as a 0.4 reminder that KCA Deutag cannot become 0.2 complacent, despite its excellent recent HSE 0.0 record. 6
Significant new contracts – Land Drilling, Middle East Operation of three new build fast moving land rigs in the Middle East, which Contract nature will be constructed by Bentec. Contract length & Initial five year award, with mutually agreeable extension options. timeframes Customer Global oil major Initial contract award is worth c.$220m. Estimated backlog of $340m Contract value including options. “These rigs will support a very high profile development within the Middle East. Given the desire for best in class drilling efficiency and safety, we are extremely excited to be partnered with a Global Oil Major on this project. This is a very significant land drilling contract for KCA Deutag and I am especially proud of the many employees and functional teams that contributed to its award. Drilling will commence in quarter 4 of 2014.. ” Andy Hendry, President, Land Drilling 7
Land Drilling Financial Performance to 30 September 2013 Q3 Q3 2013 2012 Var Var 2013 2012 YTD YTD $m $m $m $m $m $m Revenue 175 141 34 485 408 77 EBITDA 43 34 9 111 100 11 • Sustained strong Q3 performance with utilisation at 92%* • Strong results from Russia where the third and last of the 3 new rigs commenced operations on schedule in August. • Improved performance in Europe due to higher rig utilisation. • Higher EBITDA from Middle East driven by delivery of a new rig in North Iraq in Q3 2012. • Higher revenue and EBITDA in Africa due to delivery of two new rigs in Algeria (full quarter of revenues in Q3 2013). • Higher activity in Libya but with negative EBITDA due to start- up and logistics costs. *92% utilisation excludes the 5 Libyan rigs (re-entry to the Libyan market is ongoing). 8 Including the 5 Libyan rigs the utilisation figure is 86%.
Land rig utilisation As at 30 September 2013 Overview Land drilling rig fleet utilisation and breakdown • Leading international provider of onshore drilling and Average Land Rig Utilisation 1 workover operations. 100% 92% 89% • Operates in c.16 countries across Russia/CIS, Middle 80% 72% 72% East North Africa and Western Europe. Rig Utilisation • Track record of executing complex, deviated wells in 60% harsh environments and emerging markets. 40% • Sustained focus on premium land drilling, with 98% of current drilling rig fleet � 1,000 HP and 89% fitted with top 20% drives. 0% 2010 2011 2012 2013 YTD Year Average utilisation Rigs by region 2 Rigs by HP 2 � 3,000 � 999 HP Europe 13% HP 2% 7% 1,000- 1,499 HP Middle Africa 24% East 33% 24% 1,500-2,999 HP Russia/CIS 67% 30% ¹ Excludes rigs based in Libya. 2 Excludes 9 workover rigs. 9
Bentec Financial Performance to 30 September 2013 Q3 Q3 2013 2012 Var Var 2013 2012 YTD YTD $m $m $m $m $m $m Revenue 49 28 21 168 112 56 EBITDA 5 1 4 18 8 10 • Strong year on year revenue and EBITDA growth sustained. • Good progress made on manufacture and assembly of rigs earmarked for Algeria (one delivered in Q3, further three being delivered in Q4). • One rig was commissioned for a third party in Russia in Q3. • New Zealand rig is on schedule to be delivered by the year end. 10
Platform Services Financial Performance to 30 September 2013 Q3 Q3 2013 2012 Var Var 2013 2012 YTD YTD $m $m $m $m $m $m Revenue 184 147 37 539 429 110 EBITDA 23 20 3 62 62 - • Continued strong performance across all locations. • Commenced operations on Daewoo Shwe contract towards the end of Q2, our first Platform contract in the Far East. • Sustained strong performance in Norway, largely driven by new Statoil contract, albeit at lower margins due to the higher reimbursable content. • Increased activity in UK operations saw improved results over the prior quarter, although similar to the prior year. • Strong results from Sakhalin where EBITDA was improved due to increased pricing and reduced costs. 11
RDS Financial Performance to 30 September 2013 Q3 Q3 2013 2012 Var Var 2013 2012 YTD YTD $m $m $m $m $m $m Revenue 93 66 27 259 202 57 EBITDA 13 9 4 39 24 15 • RDS continues to benefit from robust demand for premium engineering design services to the offshore sector. • Very strong performance on a number of high profile projects, including the Hebron project in Canada, BP Clair, the Chirag Oil Project in Azerbaijan and projects for Statoil in Norway as well as the Mariner field platform in the UKNS. • Significant increase in the level of activity in North America, particularly on the Hebron contract. 12
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