KCA Deutag J.P. Morgan Global High Yield & Leveraged Finance Conference February / March 2016 Private & Confidential – Not for Onward Distribution www.kcadeutag.com
Disclaimer This presentation has been prepared by KCA Deutag Alpha Limited (the “Company”) . No reliance may be placed for any purposes whatsoever on the information contained in this presentation or on its completeness. Although care has been taken to ensure that the facts stated in this presentation are accurate, and that the opinions expressed are fair and reasonable, the contents of this presentation have not been subject to any independent audit or review or been verified by the Company or its advisers. Accordingly, neither the Company, nor affiliated partnerships or bodies corporate, nor any of the Company's advisers, nor the directors, shareholders, managers, partners, employees or agents of any of them, makes any representation or warranty, express or implied, as to the accuracy, reasonableness or completeness of the information contained herein. All such parties and entities expressly disclaim any and all liability for, or based on or relating to any such information contained in, or errors in or omissions from, this presentation or based on or relating to the use of the presentation or otherwise arising in connection with it. This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire any securities or an inducement to enter into investment activity. No part of this document, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This presentation may include certain forward-looking statements, estimates, predictions, influences and projections with respect to anticipated future performance and as to the market for products or services which may reflect various assumptions made by the management of the Company. These assumptions may or may not prove to be correct and no representation is made as to the accuracy of such statements, estimates, predictions, influences and projections. These statements and forecasts involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Accordingly, forward-looking statements are not guarantees of future performance and actual results of operations, financial condition and liquidity and the development of the industry in which it operates which may differ materially from those made in or suggested by the forward-looking statements in this presentation. Furthermore, the information and opinions contained in this presentation are subject to change without notice and the Company and its adviser assumes no responsibility or obligation to update this presentation or any of the forward-looking statements contained herein. The information contained within the accompanying presentation is confidential and must not be disclosed to any third party without the prior written consent of the Company. The unauthorised disclosure of this presentation or any information contained in or relating to it could damage the interests of the Company and/or its affiliates and advisers and have serious consequences. The information contained in this document is provided as at the date of this document and is subject to change without notice. This presentation contains non-IFRS measures and ratios that are not required by, or presented in accordance with, IFRS. The Company presents non-IFRS measures because it believes that they and similar measures are widely used by certain investors, analysts and other interested parties as supplemental measures of performance and liquidity. The non-IFRS measures may not be comparable to other similarly titled measures of other companies and have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of the operating result as reported under IFRS. Non-IFRS measures and ratios are not measurements of the Company's performance or liquidity under IFRS and should not be considered as alternatives to profit for the year or any other performance measures derived in accordance with IFRS or any other generally accepted accounting principles or as alternatives to cash flow from operating, investing or financing activities. Private & Confidential – Not for Onward Distribution 2
1 Company Overview Private & Confidential – Not for Onward Distribution www.kcadeutag.com
Market-leading international drilling & engineering company Integrated Land Drilling Offshore Drilling Services & Design US$172.1m EBITDA (53.9% of total) ¹ US$115.5m EBITDA (36.2% of total) ¹ Land Drilling Bentec Platform Services Rig Design Services (RDS) • • • • Leading international Design and manufacture of Leading global platform drilling Rig design engineering from premium drilling rig owner high-end premium land rigs and service operator outside North concept to commission and operator components America • • • • 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, St. Asia Asia and Africa Johns Design & Design & Own & Operate Manage Manufacture Engineering • Staff: c.300 engineers • Rigs: High end fleet of • Facilities: Capacity for • Staff: c.3,000 managing and support staff 54 drilling rigs, 2 12-16 rigs and 50 top drilling operations on 41 workover rigs drives 2 p.a. platforms • 96% of new rigs since • Approx. 60% of 2007 have been built by platforms designed or Bentec refurbished by RDS ¹ LTM EBITDA, % split of total including MODUs, before corporate costs/ other of $36.8m. Note: MODUs LTM EBITDA $31.4m represented 9.8% of total EBITDA before corporate costs 2 High-specification mechanical equipment turning the drill string Private & Confidential – Not for Onward Distribution 4
Operating across a balanced and diverse range of countries Canada 1 Plat. Russia North Sea St. 16 Rigs /Norway Johns 27 Plat. Russia Sakhalin Bergen 3 Plat. Tyumen Aberdeen (HQ) Europe & Caspian Kazakhstan Houston 7 Plat. 7 Rigs London Bad Bentheim Middle East Baku 16 Rigs Africa 13 Rigs Brunei LTM Q3 2015 EBITDA split by region Dubai 2 Rigs Nizwa Angola 3 Plat. Years of operation in key markets 150 128 Ben Rinnes jack-up rig 120 Years 90 57 52 42 60 17 30 0 Europe North Middle North Sea Russia Africa East Regional offices Land Drilling Platform Services RDS offices MODUs Bentec Facilities Map excludes work over land rigs, defined as being below 900HP 5 Private & Confidential – Not for Onward Distribution
High-quality customer base Customer diversification – LTM Q3 2015 Key customers by division Integrated Offshore Drilling Services & Land Drilling Design Others IOC NOC NOC NOC NOC NOC NOC NOC IOC NOC c.25% of revenue¹ Diversified long-term customer base predominantly with IOCs and NOCs ¹ c.25% of the revenues are generated from Shell, BP & Statoil Private & Confidential – Not for Onward Distribution 6
Operating in markets less impacted by the oil price reduction Themes KCAD relevance Supporting data • KCAD operates in many drilling environments with lower lifting costs • Oil revenues are often critical to Focused on government budgets in these production markets drilling in • The Platforms business is resilient markets working on production platforms where the majority of the capex has already been invested (opex focus) • KCAD has no exposure to the US Strong market, where rig count levels are international much more volatile and the land drilling market is generally more environment commoditised Source: Marginal production costs: Knoema, Rig count: Baker Hughes Private & Confidential – Not for Onward Distribution 7
Strong industry track-record of excellent HSE performance Historical total recordable incident rate (TRIR) • KCAD has continued to achieve excellent safety results • The group has consistently performed ahead of industry peers in the International Association of Drilling Contractors (IADC) • Maintaining high safety and operational standards is a key priority for the business • Even in today’s market this is still a key differentiator for customers when selecting a partner for operations in challenging environments KCAD HSE statistics vs IADC (Q3 2015) Source: International Association of Drilling Contractors (IADC) Note: TRIR stands for Total Recordable Incident Rate (per 200,000 man hours); LTIR stands for Lost Time Incident Rate. 1 Total Recordable Incident Rate is directly comparable with IADC’s Total Recordables (RCRD) statistic Private & Confidential – Not for Onward Distribution 8
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