Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 PRESS RELEASE - NEXTIER OILFIELD SOLUTIONS INC. | exhibit991pressrelease.htm |
| EX-10.3 - EXHIBIT 10.3 - NEXTIER OILFIELD SOLUTIONS INC. | exhibit103amendmentandwaiv.htm |
| EX-10.2 - EXHIBIT 10.2 - NEXTIER OILFIELD SOLUTIONS INC. | exhibit102commitmentletter.htm |
| EX-10.1 - EXHIBIT 10.1 - NEXTIER OILFIELD SOLUTIONS INC. | exhibit101purchaseagreement.htm |
| 8-K - 8-K 1.01 ROCKPILE ACQUISITION - NEXTIER OILFIELD SOLUTIONS INC. | form8-kprojectbison.htm |
0
Acquisition of RockPile Energy
May 18, 2017
1
Forward Looking Statements
Cautionary Statement Regarding Forward-Looking Statements
This presentation contains forward-looking statements which are protected as forward-looking statements under the Private Securities Litigation Reform
Act of 1995 that are not limited to historical facts, but reflect Keane Group, Inc.’s (“Keane” or the "Company") current beliefs, expectations or intentions
regarding future events, including statements about the proposed acquisition by Keane of RockPile Energy Services, LLC (“RockPile”) (the “proposed
transaction”). Words such as "may," "will," "could," "should," "expect," "plan," "project," "intend," "anticipate," "believe," "estimate," "predict," "potential,"
"pursuant," "target," "continue," and similar expressions are intended to identify such forward-looking statements. The statements in this presentation that
are not historical statements, including statements regarding the expected timetable for completing the proposed transaction, benefits and synergies of
the proposed transaction, costs and other anticipated financial impacts of the proposed transaction; capitalization and debt of Keane in connection with
the proposed transaction, the combined company's plans, objectives, future opportunities for the combined company and services, future financial
performance and operating results and any other statements regarding Keane’s future expectations, beliefs, plans, objectives, financial conditions,
assumptions or future events or performance that are not historical facts, are forward-looking statements within the meaning of the federal securities
laws. These statements are subject to numerous risks and uncertainties, many of which are beyond Keane’s control, which could cause actual results to
differ materially from the results expressed or implied by the statements. These risks and uncertainties include, but are not limited to: the timing to
consummate the proposed transaction; satisfaction of the conditions to closing of the proposed transaction may not be satisfied or that the closing of the
proposed transaction otherwise does not occur; the risk that a regulatory approval that may be required for the proposed transaction is not obtained or is
obtained subject to conditions that are not anticipated; the diversion of management time on transaction-related issues; the ultimate timing, outcome and
results of integrating the operations of Keane and RockPile; the effects of the business combination of Keane and RockPile, including the combined
company's future financial condition, results of operations, strategy and plans; potential adverse reactions or changes to business relationships resulting
from the announcement or completion of the proposed transaction; expected synergies and other benefits from the proposed transaction and the ability of
Keane to realize such synergies and other benefits; expectations regarding regulatory approval of the transaction; results of litigation, settlements and
investigations; actions by third parties, including governmental agencies; volatility in customer spending and in oil and natural gas prices, which could
adversely affect demand for Keane’s and RockPile’s services and their associated effect on rates, utilization, margins and planned capital expenditures;
global economic conditions; excess availability of pressure pumping equipment, including as a result of low commodity prices, reactivation or
construction; liabilities from operations; decline in, and ability to realize, backlog; equipment specialization and new technologies; adverse industry
conditions; adverse credit and equity market conditions; difficulty in building and deploying new equipment; difficulty in integrating acquisitions; shortages,
delays in delivery and interruptions of supply of equipment, supplies and materials; weather; loss of, or reduction in business with, key customers; legal
proceedings; ability to effectively identify and enter new markets; governmental regulation; and ability to retain management and field personnel.
Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from
time to time in Keane’s Securities and Exchange (“SEC”) filings, including the most recently filed Forms 10-Q and 10-K. Keane’s filings may be obtained
by contacting Keane or the SEC or through Keane’s web site at http://www.keanegrp.com or through the SEC's Electronic Data Gathering and Analysis
Retrieval System (EDGAR) at http://www.sec.gov. Keane undertakes no obligation to publicly update or revise any forward-looking statement.
Nothing in this presentation shall constitute a solicitation to buy or an offer to sell shares of Keane's common stock. In addition, certain information with
respect to RockPile has been included in this presentation for illustrative purposes only.
2
Acquisition Summary
Overview Keane to acquire all shares of RockPile in a cash and stock transaction
Consideration
Fixed consideration of $284.5mm comprised of:
– $135mm cash (additional term loan and cash on balance sheet)1
– $123mm stock (fixed amount of 8,684,210 common shares issued to seller)2
– $26.5mm CAPEX for 30,000 new HHP (~$880 per HHP)
– $9mm in deposits previously paid by seller to be reimbursed by Keane at closing3
Contingent consideration of up to $20mm via Contingent Value Right (“CVR”)4
Valuation Approximately $1,000 per HHP for 245,000 HHP and bundled wireline units5
Combined
Ownership
Sponsor and Management 64.7%, Public 27.5%, RockPile 7.8%
Governance White Deer, existing RockPile majority owner, will receive one board observer right
Approvals Standard regulatory approvals and other closing conditions
Timing Expected to close by July 31, 2017
1 Excludes transaction fees and deposit on new frac fleet on order. 2 Based on Keane stock price as of market close 5/17/2017. Actual value amount of stock consideration to be
determined upon transaction closing. Newly issued shares subject to a 6-month lockup. 3 Remaining $17.5mm to be paid over the build cycle. 4 CVR shall mature on nine month
anniversary of closing date. Subject to certain conditions, payment amount will be equal to the difference between (i) $19.00 and (ii) the trading price of Keane's common stock
during a trading period ending on the nine-month maturity date of the right. 5 Valuation based on total fixed consideration of $284.5mm, less value attributable to ancillary assets
(cementing and workover) and estimated acquired working capital. Total purchased horsepower of 245,000 HHP includes 30,000 HHP on order by RockPile with dedicated customer
commencing in Q4 2017.
3
Acquisition Delivers Value & Growth
Acquiring 245,000 HHP for ~$1,000 per HHP1,2
Fully utilized completion platform with equipment, talent, customers, facilities & positive EBITDA
Increases scale with a high-quality combined fleet of ~1.2 million HHP2 distributed across key basins;
enhances depth in Permian and Bakken
Established, high quality customer base with no overlap
Provides growth via adjacent services with cementing and workover product lines
Similar cultures, values and vision with best-in-class management team
Strong balance sheet and liquidity positioning Keane for further growth
1 Valuation based on total fixed consideration of $284.5mm, less value attributable to ancillary assets (cementing and workover) and estimated acquired working
capital. 2 Includes 30,000 HHP on order by RockPile with dedicated customer commencing in Q4 2017.
4
Prudent Investment in Current Market
1 Valuation based on total fixed consideration of $284.5mm, less value attributable to ancillary assets (cementing and workover) and estimated acquired working
capital. 2 Keane valuation based on market value as of 5/17/2017. 3 Peer valuation based on market value as of 5/17/2017 and includes RPC, PTEN and PUMP.
Investing in a proven platform at newbuild economics
RockPile
Acquisition
Tier 4
Newbuild
Keane
Valuation
Peer
Valuation
Facilities
+ EBITDA
Technology
Customers
Talent
Equipment
~$1,000
/ HHP1
~$1,000
/ HHP
~$1,600
/ HHP
~$1,800
/ HHP
Equipment
2 3
5
Keane Company Overview
944,000
Hydraulic Horsepower
23
Wireline Trucks
78%
Utilized
58%
Bundled
About Keane Group
High quality fleet of modern completions
equipment
Blue-chip customer relationships
Focus on high-efficiency completions
Reputation for best-in-class service quality
and industry-leading safety
Diversified footprint with exposure across key
basins
Best-in-class management team with
extensive industry experience
Engineered solutions expand value
proposition and differentiate offering
Note: Asset statistics as of quarter ended March 31, 2017.
7
Coiled Tubing Units
Maintaining
optionality
14
Cementing Units
Maintaining
Optionality
6
RockPile Company Overview
245,000
Hydraulic Horsepower1
8
Wireline Trucks
12
Workover Rigs
10
Cementing Units
1 Includes 30,000 HHP on order by RockPile with dedicated customer commencing in Q4 2017.
100%
Utilized
100%
Utilized
100%
Utilized
40%
Utilized
About RockPile Energy Services
Growing and integrated provider of completion
services with focus on pressure pumping and
wireline
Fully utilized completion services fleet; track-
record of customer and geographic expansion
Seasoned management team
Deeply rooted in the Bakken complimented by
recent successful expansion to the Permian
30,000 HHP on order scheduled for Q4 2017
delivery; to be deployed under dedicated
agreement with existing customer
7
The New Keane: Assets & Capital
~1,200,000
Hydraulic Horsepower
31
Wireline Trucks
7
Coiled Tubing Units
12
Workover Rigs
24
Cementing Units
Pro-forma Discussion
Cash balance for quarter ended March 31, 2017
reduced by $21.6mm1 of cash funding from Keane
balance sheet with remaining portion from expansion
of term loan facility
Additional $135mm in term loans with existing lender
Net debt of $228mm; maintains low leverage profile
given EBITDA generation of combined business
Liquidity in excess of $210mm
Potential to further expand revolver commitment post-
closing, further increasing liquidity position
Pro-forma capitalization position
1 $21.6mm use of cash includes $9mm for new fleet CAPEX, $12.6mm of estimated transaction fees and expenses.
In $ millions
Pro-forma
3/31/17
Cash 64.2$
Senior Secured Term Loan 150.0$
Additional Term Loan 135.0
Total Term Debt 285.0
Capital Leases 7.4
T tal Debt 292.4$
Net Debt 228.2$
Liquidity
Cash 64.2$
Revolver Borrowing Base 147.2
Total Liquidity 211.4$
8
Enhanced Profile through Combination
SCOOP / STACK
Keane: ~90,000 HHP
1 Includes 30,000 HHP on order by RockPile with dedicated customer commencing in Q4 2017. 2 Springtown Equipment Center.
Acquisition deepens asset position in the prolific Permian and Bakken basins
Marcellus / Utica
Keane: ~270,000 HHP
Bakken:
Keane: ~170,000 HHP
RockPile: ~145,000 HHP
Combined: ~315,000 HHP
Springtown2
Keane: ~100,000 HHP
Permian:
Keane: ~315,000 HHP
RockPile: ~100,000 HHP
Combined: ~415,000 HHP
23%
35%
8%26%
8%
Permian
Marcellus / Utica
~1,200,000 HHP
1
Pro-forma
SCOOP / STACK
Bakken
Springtown2