Post on 29-Jan-2022
FOCUS DISCIPLINE GROWTH
• • •
Annual Meeting of Shareholders
May 17, 2018
FOCUS DISCIPLINE GROWTH
FOCUS DISCIPLINE GROWTH
• • •Cautionary Statements
Forward-Looking Information
Certain information presented in these remarks and in this presentation that is not historical factual information and/or based on current views
and assumptions and is subject to uncertainties may constitute forward-looking information within the meaning of securities laws. Actual results
could differ materially from a conclusion, forecast or projection contained in such forward-looking information. Forward-looking information may
relate to our future outlook and anticipated events or results and may include statements about Total Energy Services Inc. or its subsidiaries
(“Total Energy” or “Total”), including business operations, strategy and expected financial performance and condition. Forward-looking
statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as could",
"should", "can", "anticipate", "estimate", "intend", "plan", "expect", "believe", "will", "may", "continue", "project", "potential" and similar expressions
and statements, or negative versions thereof. In addition, any statement that may be made concerning future financial performance, ongoing
business strategies or prospects, and possible future action on our part, is also a forward-looking statement. Undue reliance should not be
placed on forward-looking information and statements. Whether actual results, performance or achievements will conform to our expectations
and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results to differ materially from
our expectations.
Certain material factors or assumptions were also applied in drawing a conclusion or making a forecast or projection as reflected in such
forward-looking information. Additional information about the material factors that could cause actual results to differ materially from the
conclusions, forecasts or projections in the forward looking information, details regarding the material factors or assumptions that were applied
in drawing such conclusions or making such forecasts or projections, and more exhaustive information on the risks and uncertainties can be
found in Total’s continuous disclosure documents, including but not limited to its most recent Annual Information Form which is available on
www.sedar.com
Non-IFRS Measures
EBITDA means earnings before interest, taxes, depreciation and amortization and is equal to net income before income taxes plus finance costs
plus depreciation minus finance income. Cashflow means cash provided by operations before changes in non-cash working capital items.
EBITDA is not a recognized measure under International Financial Reporting Standards (“IFRS”). Management believes that in addition to net
income, EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Company’s primary business
activities prior to consideration of how those activities are financed, amortized or how the results are taxed in various jurisdictions. Readers
should be cautioned, however, that EBITDA should not be construed as an alternative to net income determined in accordance with IFRS as an
indicator of Total Energy’s performance. Total Energy’s method of calculating EBITDA may differ from other organizations and, accordingly,
EBITDA may not be comparable to measures used by other organizations.
FOCUS DISCIPLINE GROWTH
• • •Corporate Information
Shares outstanding (at May 16, 2018) 46.2 million
Options outstanding (at May 16, 2018, $13.51 weighted avg. exercise price ) 3.3 million
Market capitalization (basic, at $12.50 share price) $580 million
Working Capital (1) (at March 31, 2018) $54.9 million
Long-term debt (2) (at March 31, 2018) $247.1 million
Property, Plant & Equipment (at March 31, 2018) $786.4 million
Director/Officer ownership,% 5.6%
Common share dividend $0.06/quarter
(1) Working capital equals current assets minus current liabilities. (2) Long-term debt plus obligations under capital leases, excluding current portion.
FOCUS DISCIPLINE GROWTH
• • •Corporate Highlights
• Savanna integration substantially complete – expect at least $14
million of 2018 operating and SG&A cost savings (40% above original
$10 million target)
• Increased primary bank credit facilities to $290 million and extended
term to June 2021
• Refinanced $144.1 million of SVY debt resulting in ≈$5.0 million of
annual interest savings
• $67.5 million of SVY 7% notes to be repaid on May 25,2018 with
expected additional annual interest savings of ≈$2.0
• Commenced asset rationalization and relocation process in Q4 2017
• Entered into strategic alliance with Pason Systems to collaborate in
the development and deployment of drilling automation and
optimization technologies
• Record CPS sales backlog of $207.0 million at March 31, 2018
FOCUS DISCIPLINE GROWTH
• • •Historical Financial Performance(in thousands of CDN dollars, except per share amounts and shares outstanding)
3 months ended
March 31
Year ended
December 31
2018 2017 2017 (5) 2016
Revenue $ 205,215 $ 84,532 $ 604,662 $ 197,800
EBITDA (1) 27,655 7,942 71,604 14,041
Cashflow 21,149 7,821 76,571 15,717
Net Income 3,328 (853) (3,703) (11,914)
Per Share, Diluted
EBITDA(1) $ 0.60 $ 0.25 $ 1.71 $ 0.45
Cashflow 0.46 0.25 1.82 0.51
Net Earnings 0.07 (0.03) (0.05) (0.38)
Total Assets $1,065,499 $ 635,240 $1,066,781 $ 522,599
Working Capital (2) 54,906 77,158 54,892 71,770
Long-term Debt (3) 247,087 58,053 257,845 46,557
Net Debt (4) 192,181 nil 202,953 nil
Shareholder’s Equity 550,732 466,149 546,574 364,302
Shares Outstanding (diluted, 000’s) 46,241 31,489 41,963 30,967(1) As defined under “Non-IFRS Measures”.(2) Working capital equals current assets minus current liabilities.(3) Long-term debt and obligations under finance leases, excluding current portions thereof.(4) Net Debt equals long-term debt plus obligations under finance leases plus current liabilities minus current assets. (5) Includes Savanna results from April 5, 2017.
FOCUS DISCIPLINE GROWTH
• • •Q1 2018 Segment Performance(in thousands of CDN dollars unless otherwise indicated)
Three months ended
March 31, 2018
CDS RTS CPS WS Corporate Consolidated
Revenue $ 60,980 $ 22,312 $ 85,118 $ 36,805 $ - $ 205,215
% of Consolidated 30% 11% 41% 18%
EBITDA $ 9,158 $ 4,599 $ 8,123 $ 9,685 $ (3,910) $ 27,655
EBITDA Margin 15.0% 20.6% 9.5% 26.3% 13.5%
Total Assets $ 462,672 $ 245,077 $ 197,264 $ 145,308 $ 15,178 $1,605,499
FOCUS DISCIPLINE GROWTH
• • •2017 Segment Performance(in thousands of CDN dollars unless otherwise indicated)
Year ended
December 31, 2017(1)
CDS RTS CPS WS(1)
Corporate Consolidated
Revenue $ 158,051 $ 68,867 $ 266,376 $ 111,368 $ - $ 604,662
% of Consolidated 26% 11% 44% 19%
EBITDA $ 17,325 $ 14,157 $ 28,152 $ 28,699 $ (16,729)(2) $ 71,604
EBITDA Margin 11.0% 20.6% 10.6% 25.8% 11.8%
Total Assets $ 460,712 $ 239,876 $ 201,392 $ 142,574 $ 22,227 $1,066,781
(1) Includes Savanna results from April 5, 2017. WS was established with acquisition of Savanna.(2) Includes $7.6 million of non-recurring expenses related to the acquisition and integration of Savanna.
FOCUS DISCIPLINE GROWTH
• • •Revenue Diversification
Canada50%United
States33%
Australia17%
Q1 2018 Revenue by Country
Canada55%
United States27%
Australia18%
2017 Revenue by Country
CDS30%
RTS11%
CPS41%
WS18%
Q1 2018 Revenue by Segment
CDS27%
RTS11%CPS
44%
WS18%
2017 Revenue by Segment
FOCUS DISCIPLINE GROWTH
• • •
Operations Infrastructure
CurrentLocations
Australia
FOCUS DISCIPLINE GROWTH
• • •Contract Drilling ServicesSavanna Drilling
• Diversified drilling rig fleet:
• Triples include 3 AC Velox and 1 mechanical
• Mechanical doubles have drilled 6,000 meter Duvernay and Montney horizontal wells
• Australian rigs purpose built for niche onshore CSG drilling market
• Rig fleet supported by extensive fleet of owned top drives, walking systems, pumps and
other ancillary equipment required to operate in most North American resource plays
• Fleet rationalization underway – disposed of 3 idle US rigs in Q1 2018
• Relocated 2 rigs from NEUS and 1 rig from Canada to Texas/Colorado in Q1 2018
• TDS fleet well positioned to meet increased drilling activity in W3/W4 oil plays
By type By Geography
Triples 4
AC doubles 15 Canada 86
Mechanical doubles 51 United States 25
Australian shallow 5 Australia 5
TDS and singles 41
116 116
FOCUS DISCIPLINE GROWTH
• • •
• Leading provider of surface rental equipment and general oilfield
hauling in Western Canada with growing US presence
• Provide equipment and transportation services used in the drilling,
completion and production of oil and natural gas wells
• Current fleet of ~ 11,000 pieces of major rental equipment (excluding
access mats) and 112 heavy trucks based in 26 branch locations
throughout North America
• Continued relocation of equipment to US for higher rates and
utilization
• Pursue strategic consolidation opportunities to achieve
synergies/economies of scale
• Target high ROI organic investment opportunities
Rentals and Transportation ServicesTotal Oilfield Rentals
FOCUS DISCIPLINE GROWTH
• • •Compression and Process Services
In business since 1988, Bidell is a
leading manufacturer of natural gas
compression equipment servicing
Canada, the NW US, NE US and
select international markets
All equipment offered for sale and
rental, including Bidell’s patented
NOMAD line of large HP mobile
compressor packages
Extensive parts and service
infrastructure in Western Canada
with a growing presence in the NW
US - full parts inventory, exchange
programs, overhaul and retrofit
services
Full scope and scale 100,000 sq ft
production facility in Weirton, WV
Authorized Packager/Distributor for
Ariel, Caterpillar and Waukesha
Established Spectrum in late 2012 to
provide additional exposure to North
American energy infrastructure build
Acquisition of Opsco Manufacturing
in Q1 2013 materially increased
market presence
Offer full service project
management, engineering, design
and procurement services
Specialize in design and fabrication
of large capacity dehydration,
regeneration, separation, line
heaters, free water knock outs and
custom manufactured process
equipment
FOCUS DISCIPLINE GROWTH
• • •Well ServicingSavanna Well Servicing
• Operates a fleet of 87 service rigs across Western Canada, Northwest United
States and Australia
• Competitive Canadian service rig fleet supported by extensive infrastructure
• US service rigs have well established presence in the Bakken
• Australian service rigs incorporate latest technologies and are capable of
working in any existing onshore basin
• Fleet rationalization underway – disposed of 2 idle US service rigs in Q1 2018
By type By Geography
Singles 38 Canada 57
Doubles 36 United States 18
Australian spec 9 Australia 12
Flush-by 4
87 87
FOCUS DISCIPLINE GROWTH
• • •
2018 Capital Expenditure Budget
$48 million 2018 capital budget:
• $24.0 million for equipment maintenance and upgrades
- includes $4.0 million of capital leases for light duty vehicles
• $24.0 million of growth capital:
- primarily targeting continued international expansion and
compression rental fleet additions in CPS segment
• $7.6 million of capital expenditures in Q1 2018
• $1.25 million of net proceeds from sale of idle equipment pursuant to asset
rationalization program
FOCUS DISCIPLINE GROWTH
• • •
Contact Information
For further information about Total Energy Services Inc., contact:
Daniel Halyk, President & CEO,phone: (403) 216-3921, email: dhalyk@totalenergy.ca
or
Yuliya Gorbach, VP Finance & CFOphone: (403) 216-3920, email: ygorbach@totalenergy.ca
www.totalenergy.ca
TOTAL ENERGY, BIDELL, BIDELL EQUIPMENT, NOMAD, SPECTRUM PROCESS SYSTEMS and the Total Energy, Bidell, and Spectrum are registered trademarks of Total Energy Services Inc.