Attached files
| file | filename |
|---|---|
| 8-K - 8-K - PIONEER ENERGY SERVICES CORP | a8kinvpres9-26x17.htm |
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
2017 JOHNSON RICE ENERGY CONFERENCE
SEPTEMBER 2017
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Forward-looking Statements
This presentation contains various forward-looking statements and information that are based on management’s current expectations and assumptions about
future events. Forward-looking statements are generally accompanied by words such as “estimate,” “project,” “predict,” “expect,” “anticipate,” “plan,”
“intend,” “seek,” “will,” “should,” “goal” and other words that convey the uncertainty of future events and outcomes. Forward-looking information includes,
among other matters, statements regarding the Company’s anticipated performance, quality of assets, rig utilization rate, capital spending by oil and gas
companies, and the Company's international operations.
Although the Company believes that the expectations and assumptions reflected in such forward-looking statements are reasonable, it can give no assurance
that such expectations and assumptions will prove to have been correct. Such statements are subject to certain risks, uncertainties and assumptions, including
general economic and business conditions and industry trends, levels and volatility of oil and gas prices, the continued demand for drilling services or
production services in the geographic areas where we operate, decisions about exploration and development projects to be made by oil and gas exploration
and production companies, the highly competitive nature of our business, technological advancements and trends in our industry and improvements in our
competitors’ equipment, the loss of one or more of our major clients or a decrease in their demand for our services, future compliance with covenants under
our senior secured revolving credit facility and our senior notes, operating hazards inherent in our operations, the supply of marketable drilling rigs, well
servicing rigs, coiled tubing and wireline units within the industry, the continued availability of drilling rig, well servicing rig, coiled tubing and wireline unit
components, the continued availability of qualified personnel, the success or failure of our acquisition strategy, including our ability to finance acquisitions,
manage growth and effectively integrate acquisitions, the political, economic, regulatory and other uncertainties encountered by our operations, and changes
in, or our failure or inability to comply with, governmental regulations, including those relating to the environment.
Should one or more of these risks, contingencies or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary
materially from those expected. Many of these factors have been discussed in more detail in the Company's annual report on Form 10-K for the fiscal year
ended December 31, 2016. Other unpredictable or unknown factors that the Company has not discussed in this presentation or in its filings with the Securities
and Exchange Commission could also have material adverse effects on actual results of matters that are the subject of the forward-looking statements. All
forward-looking statements speak only as the date on which they are made and the Company undertakes no duty to update or revise any forward-looking
statements. We advise investors to use caution and common sense when considering our forward-looking statements.
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ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Pioneer Energy Services – Diversified Services
% of TTM REVENUE
(1) TTM revenue as of June 30, 2017
(2) Market Capitalization and Enterprise Value as of September 25, 2017
DRILLING SERVICES
Drilling Services - US 16 Rigs
Drilling Services – Colombia 8 Rigs
Total Drilling 24 Rigs
PRODUCTION SERVICES
Well Servicing 125 Rigs
Wireline 118 Units
Coiled Tubing 14 Units
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TTM REVENUE1: $343 MILLION
MARKET CAPITALIZATION2: $193 MILLION
ENTERPRISE VALUE2: $575 MILLION
SERVICE LINES: LAND DRILLING, WELL SERVICING,
WIRELINE, COILED TUBING
EMPLOYEES: 1,800
COMPANY OVERVIEW
Drilling - US
33%
Drilling - Colombia
7%
Wireline
32%
Well Servicing
22%
Coiled Tubing
7%
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Premium Shale-Oriented Assets
4
US DRILLING SERVICES PRODUCTION SERVICES
• Fleet comprised of 100% pad-capable AC rigs
• Versatile and competitive 1,500 horsepower
AC drilling rigs with:
• 2,000hp mud pumps and 7,500psi mud
systems with bi-fuel capability
• Capable of moving in less than three days
from release to acceptance by the operator
on new pad
• Can walk 150’ x 50’ while racking over
24,000’ of 5” drill pipe
• Premium shale-capable equipment
• 100% of well servicing fleet is 550-
600hp with 104’, 112’, 116’ or 121’
masts
• Full suite of coiled tubing offerings
from 1 1/4” to 2 5/8” coil
• Balanced exposure to completion
and production-oriented activity in
major shale plays
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Balanced Revenue Mix Between Completion and
Remedial Services
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COILED TUBING WIRELINE WELL SERVICES
PRODUCTION SERVICES TOTAL
Completion
63%
Remedial
38%
Completion
58%
Remedial
42%
Completion
18%
Remedial
82%
Completion
48%
Remedial
52%
Note: Based on Q2 2017
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Apache
12%
Whiting
10%
PDC
4%
Other
74%
Established Customer Base with Premier Customers
KEY CUSTOMERS
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2016A REVENUES BY CUSTOMER
• Long-standing, high quality client relationships with a diverse group of large independent oil and gas
exploration and production companies
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Industry-Leading Safety
• For many years, Pioneer has been a leader in safety. Our commitment to industry-leading
safety helps us retain high-quality employees, broaden our client base, and reduce
operating costs.
• Pioneer recognized by IADC as the safest land contract driller in 2015 of the top 15 busiest
contractors
0
1
2
3
4
5
2010 2011 2012 2013 2014 2015 2016 2017
YTD
PES - US IADC & AESC- without PES
Total Recordable Incident Rate
(injuries per 200,000 man-hours)
7
Source: IADC/AESC
Production Services
(Annual AESC Safety Awards)
2016
1st place – Coiled Tubing (Division IV)
3rd place – Wireline (Division IV)
2015
1st place – Wireline (Division IV)
3rd place – Well Servicing (Division IV)
2014
2nd place – Well Servicing (Division V)
2013
1st place – Well Servicing (Division V)
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Recent Updates
8
% Hz:
% Completions:
• August quarter-to-date utilization was 78%. Current utilization is 83%.
• In Colombia, six of eight rigs are under term contract. Four rigs are currently working with remaining two rigs
expected to mobilize and begin working during the middle of the fourth quarter of 2017.
• Hurricane Harvey negatively impacted production services gulf coast operations revenues by approximately $3.0
million, which was partially offset by better than expected pricing and activity during the quarter.
• Well Servicing August quarter-to-date utilization was 42% as compared to 47% in the prior quarter. September
month-to-date utilization is 46%.
DRILLING
PRODUCTION SERVICES
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
PRODUCTION
SERVICES
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ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Well Servicing
• Of the top-tier well servicing providers, Pioneer
has the:
• Highest average hourly rate
• Highest average horsepower fleet with all
rigs either 550hp or 600hp
• Highest percentage of taller mast rigs with
all masts either 104’, 112’, 116’, or 121’ in
height
• 100% of rigs are capable of working in the
unconventional plays
• Established in the Bakken, Eagle Ford,
Fayetteville, Permian, Niobrara and along the
Texas/Louisiana Gulf Coast
• Average age of 6.5 years, including 36 built in
last 3 years
SERVICE OVERVIEW OPERATING LOCATIONS – 125 RIGS
REVENUE PER RIG HOUR¹
10 (1) Simmons & Co; Based on YTD 2017 metrics.
$314
$370
$463
$506
BAS KEG CJES PES
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Open/Cased
Hole Logging
7%
Mechanical
Services
31% Plug/Shoot
62%
Wireline
• Estimated to be 6th largest wireline company in the
world and one of the most active U.S. wireline
companies¹
• Majority of revenue derived from cased-hole
operations that include perforating, logging, and
pipe recovery
• Established in the Bakken, Eagle Ford, Niobrara,
Mid-Continent, Permian, and onshore/offshore
Louisiana
(1) QYResearch; Global Wireline Services Market; Sep 2017
(2) Based on Q2 2017 revenue
SERVICE OVERVIEW OPERATING LOCATIONS – 118 UNITS
DIVERSIFIED SERVICE OFFERINGS2
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ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Coiled Tubing
• Fleet currently provides an array of services with
coil capabilities ranging from 1 1/4” to 2 5/8” coiled
tubing
• Established in the Eagle Ford, Niobrara and
onshore/offshore Louisiana
• Average age: 6.6 years
SERVICE OVERVIEW OPERATING LOCATIONS
UNIT COUNT1: 14 COIL UNITS
(1) Coil unit size is based on most common configuration; all units are capable of running 2” and <2” coil 12
1
2
5
6
2 5/8" 2 3/8" 2" < 2"
Onshore
10
Offshore
4
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
DRILLING
SERVICES
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ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Drilling Services
FLEET CHARACTERISTICS OPERATING LOCATIONS
TOTAL RIG FLEET UTILIZATION1
14
7
1 2
4
6
7
1
2
8
6
100%
100%
94%
94%
100%
100%
AC
Pad-Ready
Walking
≥1,500HP Drawworks
7,500psi Mud System
Contracted
U.S. FLEET
100%
100%
75%
100%
75%
SCR
Pad-Ready
Walking
≥1,500HP Drawworks
Contracted
COLOMBIA FLEET
(1) Red indicates active rigs; two additional rigs in Colombia are
contracted and will begin work in Q4 2017.
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
• Rig Move Average (25 moves):
• 2 calendar days from release to acceptance
• 32 miles average mobilization
• Highest average margin per day of public land drillers (Q2 2017)
Drilling Services - US
15
TOP PERFORMER
• 1,500 HP Drawworks
• 24,500 ft 5” Racking Capacity
• 7,500 psi Mud System
• Two 2,000 HP Mud Pumps
• Ready for 3rd Mud Pump (if needed)
• Three Cat 3512C Engine Gensets
• Ready for 4th Engine Genset (if needed)
• Omnidirectional Walking System with full setback
RIG SPECIFICATIONS
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Drilling Services - US
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• NOV Amphion Integrated Control System
• Structure/Tool Management System
• 4 Channel Auto Driller
• Twister
• Modular Scalable System
• MD Totco RigSense Ready – Expanded Data Acquisition
and Information Management System
• NOV SoftSpeed II Option – Stick Slip Mitigation
• NOV NOVOS Option:
• Single Rig Optimization
• Remote Auto Driller Management
• Slip to Slip Process Automation
• Wired Drill Pipe Compatibility
• TrueDrill: Auto Driller that utilizes downhole
• DrillShark: Automated Dynamic MSE
Optimization
• Field Optimization
• Automatically distributes learnings to other
Amphion Systems for field optimization
NOVOS
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
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ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Balance Sheet and Cash Flow Management
• Completed equity offering in December 2016 with net proceeds of $65.4 million applied
to outstanding borrowings under the credit facility
• Reduced total debt approximately $170 million since the first quarter of 2013
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$89
$300
$0
$100
$200
$300
$400
2016 2017 2018 2019 2020 2021 2022
($
m
ill
io
n
s)
Debt Maturities
(as of 8/1/17)
Credit Facility 6.125% Senior Notes
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Historical Financial Results
REVENUE / ADJUSTED EBITDA ($ millions) CAPEX SPEND ($ millions)
Note: All data points reflect calendar year and trailing twelve months information derived from 10-K and 10-Q filings.
Please refer to Reconciliation of Net Income to Adjusted EBITDA
19
$960
$1,055
$541
$277
$343
$235
$277
$111
$14 $23
$0
$125
$250
$375
$500
$625
$750
$875
$1,000
$1,125
2013 2014 2015 2016 2017 TTM
Revenue Adjusted EBITDA
$165
$175
$160
$32
$40
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
2013 2014 2015 2016 2017 YTD
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Liquidity and Capital Structure
June 30th, 2017
($ millions) Actual
Cash $ 6.9
Senior Secured Revolving Credit Facility due 2019 88.7
6.125% Senior Unsecured Notes due 2022 300.0
Other1 (5.6)
Total Debt $ 383.1
Shareholders' Equity 237.9
Total Capitalization $ 621.0
(1) Unamortized debt issuance costs
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ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Reconciliation of Net Income to Adjusted EBITDA
Adjusted EBITDA represents income (loss) before interest expense, income tax (expense) benefit, depreciation and amortization, loss on extinguishment of
debt, impairments, and the Colombian Net Equity Tax. Adjusted EBITDA is a non-GAAP measure that our management uses to facilitate period-to-period
comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers. We believe that this measure is
useful to investors and analysts in allowing for greater transparency of our core operating performance and makes it easier to compare our results with those
of other companies within our industry. Adjusted EBITDA should not be considered (a) in isolation of, or as a substitute for, net income (loss), (b) as an
indication of cash flows from operating activities or (c) as a measure of liquidity. In addition, Adjusted EBITDA does not represent funds available for
discretionary use. Adjusted EBITDA may not be comparable to other similarly titled measures reported by other companies. A reconciliation of net income (loss)
as reported to Adjusted EBITDA is included in the tables below:
21
($ in millions) 2012 2013 2014 2015 2016
Net Income (Loss) 30.0 (35.9) (38.0) (155.1) (128.4)
Depreciation & Amortization 164.7 187.9 183.4 150.9 114.3
Net Interest 37.0 48.3 38.8 21.2 25.9
Loss on Extinguishment of Debt - - 31.2 2.2 0.3
Impairment Expense 1.1 54.3 73.0 129.2 12.8
Income Tax Expense (Benefit) 16.4 (19.8) (11.3) (37.6) (10.7)
Adjusted EBITDA 249.3 234.7 277.1 110.8 14.2
($ in millions)
Q3
2016
Q4
2016
Q1
2017
Q2
2017 TTM
Net Inco (Loss) (34.6) (36.1) (25.1) (20.2) (116.0)
Depreciation & Amortization 28.7 26.9 25.0 24.7 105.3
Net Interest 6.7 6.6 6.1 6.4 25.8
Impairment Expense 4.3 8.6 - 0.8 13.6
Loss on Extinguishment of Debt - - - - -
Income Tax Expense (Benefit) (1.7) (5.1) 0.0 1.1 (5.6)
Adjusted EBITDA 3.3 0.9 6.0 12.9 23.1
Year-Ending December 31,
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx