Investor Presentation Third Quarter 2014 KCA Deutag is a leading - PowerPoint PPT Presentation

Investor Presentation Third Quarter 2014 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 Key Highlights 1 Commercial Developments 2 Business Overview 3 Group Results 4 Summary 5 2

Q3 Key highlights KCA Deutag is a leading international drilling and engineering company working onshore and offshore with a focus on safety, quality and operational performance Group revenue and EBITDA of $520.0m (Q3 2013: $537.7m) and $73.5m 1 (Q3 2013: $73.7m) respectively, driving improved YTD EBITDA of $243.3m (YTD EBITDA Q3 2013: $192.5m) 2 LTM EBITDA of $352m, a 30% year over year improvement 3 Major contract win for our land business Contract backlog of $8.8bn (as at 1 October 2014) across a blue chip 4 customer base Significant year-on-year reduction in Net debt/LTM EBITDA leverage – from 5 4.75x at Q3 2013 to 3.6x by Q3 2014 3

Market-leading international drilling & engineering company Integrated Land Drilling Offshore Drilling Services & Design $191m LTM EBITDA (54% of total) ¹ $159m LTM EBITDA (46% of total) ¹ Land Drilling Bentec Platform Services Rig Design Services (RDS) • Leading international • Design and manufacture of • Leading global platform service • Rig design engineering from premium drilling rig owner high-end premium land rigs and operator outside North America concept to commission and operator components • Operations: Russia, Africa, • Facilities: Germany, Russia, • Operations: UK North Sea, • Offices: Aberdeen, Baku, Middle East, Europe and SE Oman Norway, Azerbaijan, Russia, SE Bergen, Houston, London Asia Asia and Africa Design & Design & Own & Operate Own & Operate Manage Manage Manufacture Engineering • Staff: c.780 engineers • Rigs: High end fleet of • Facilities: Capacity for • Staff: c.3,100 managing and support staff 53 drilling rigs, 4 12-16 rigs and 50 top drilling operations on 40 workover rigs drives p.a. platforms • 94% of new rigs since • Approx. 60% of 2007 have been built by platforms designed or Bentec refurbished by RDS ¹ LTM EBITDA pre-exceptional items, excluding MODUs and after reallocation of support costs previously shown as central overheads. EBITDA by segment for 2013 has been re-presented to reallocate support costs which were previously shown as central overheads 4 (such as HR, Supply Chain and IT costs) to the operational business segments. 2014 figures are presented on the same basis.

Lukoil T-506: the perfect spud • Contract awarded for one new build, 320T 1,500HP cluster-slider rig to operate on the Yuzhno-Lyzhskoe field within the Komi Republic of Russia • This rig was secured on a 3 year USD day rate contract with 2x1 year extensions • The contract was received at the end of 2013 and the rig was built in Bentec’s Tyumen facility in Russia with some key components provided from Germany • The build was completed on budget by the end of August and it was mobilised to location during September • The Land Drilling team successfully spudded the rig on location on 1 October 2014: the first of a 10 day window allowed by our contract The success of this project demonstrates the excellent integration between the Bentec and Land Drilling businesses driving successful and timely delivery to our client 5

Continued strong market position and balanced portfolio of assets across highly attractive international markets PRESENCE IN KEY AREAS 150 126 120 90 Years 55 50 60 40 15 30 0 Europe North Middle North Sea Russia Africa East Russia North Sea St. 16 Rigs /Norway 26 Plat. Johns Russia Sakhalin Bergen 3 Plat. Tyumen Stavanger Aberdeen (HQ) Europe & Caspian Caspian Houston 7 Plat. 8 Rigs London Bad Ben Loyal Bentheim jack-up rig Middle East Baku 14 Rigs Myanmar 1 Plat. Africa 14 Rigs LTM Q3 2014 EBITDA split by region Brunei Dubai 1 Rig Nizwa Other Far Angola 7% East 3 Plat. Europe 7% Middle 24% Ben Rinnes East jack-up rig 10% Caspian Russia 13% 21% Africa 18% Regional offices Land Drilling Platform Services RDS offices MODUs Bentec 1 LTM EBITDA excludes results from the Ben Avon jack-up which was disposed of in March 2013 and is stated before normalisation adjustments and excluding central overheads. 6 Map excludes work over land rigs, defined as being below 900HP.

KCAD well positioned to benefit from current sector trends Themes KCAD relevance Supporting data Canadian Oil Sands • KCAD operates in drilling environments with low US Shale Oil breakeven oil prices Arctic Oil Focused on Coal to Liquid • Operating in regions with oil revenue critical to Brazil Pre-Salt (Deepwater) production drilling US Shale Gas government budgets EOR with attractive Deepwater • Operating production platforms where the economics Shallow Water¹ KCAD majority of capex has already been invested Other Conventional Oil¹ core markets Onshore Middle East (opex focus) $0 $20 $40 $60 $80 $100 Breakeven Oil Price (US$/bbl) International Rig Count (Y-o-Y) North America Rig Count (Y-o-Y) 3% CAGR 2006-18 6,000 4,500 • Rig counts steadily increased over the last 2 6% CAGR 2006-18 Strong 28% decline years 4,500 1% decline 2008-09 3,000 international land 2008-09 3,000 • No exposure to US market, where rig count drilling environment 1,500 levels are much more volatile 1,500 0 0 Forecast Growth KCAD • High specification equipment can drill vertical 62% 2014-2018 target and longer wells, supporting project economics market Increased drilling by improving the recovery complexity driving 21% 14% • Increased reservoir and drilling complexity is demand and margins driving the demand for high specification rigs, including top drive equipment Top Drives Deviated Wells Total Wells Source: Douglas Westwood, April 2014 ¹ Majority of conventional and shallow water projects are commercial below $50/bbl. 7

Health, safety and environmental performance Total recordable incident rate improvement 1.6 KCAD TRIR IADC industry average at end of Q3 1.4 0.81 2 for 2013 2014 was 0.40 1 injuries TRIR per 200,000 man hours per 200,000 1.2 man hours worked 1 0.8 0.6 0.4 0.2 TRIR (average) 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 • Sustained progress made on improving TRIR performance • The Group reaches 0.40 TRIR for the first time 1 Total Recordable Incident Rate per 200,000 man hours. This is a rolling 12 month average. 2 KCAD Total Recordable Incident Rate is directly comparable with IADC’s Total Recordables (RCRD) statistic. 8 IADC figures are annual and are not released until after year end, therefore no 2014 information is available. Note: IADC stands for International Association of Drilling Contractors.

T-47: 7+ years without Lost Time Incident • On 15th January 2014, the crews of Rig T-47 in Kazakhstan reached the key milestone of 7 years without a Lost Time Incident. This milestone has continued through the year to this quarter end • This achievement is all the more impressive when taking into consideration the difficult climatic extremes (-35 o C in winter and +45 o C in summer). • Lost Time Incidents can result in penalties and non-payment of day rate which in turn lower our returns on projects • Low incident rates are a key criteria that we are measured against when tendering for new work, so continued low health and safety scores are vital to the success of our business 9