Attached files
| file | filename |
|---|---|
| 8-K - 8-K - PIONEER ENERGY SERVICES CORP | a8kinvpres01-05x17.htm |
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
GOLDMAN SACHS GLOBAL ENERGY CONFERENCE 2017
January 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 proposed offering and 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, 2015. 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 September 30, 2016
(2) Market Capitalization as of January 4, 2017; debt and cash as of September 30, 2016
DRILLING SERVICES
Drilling Services - US 16 Rigs
Drilling Services – Colombia 8 Rigs
Total Drilling 24 Rigs
PRODUCTION SERVICES
Well Servicing 125 Rigs
Wireline 114 Units
Coiled Tubing 17 Units
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Production
Services
55%
Drilling -
Colombia
3%
Drilling -
US
42%
TTM REVENUE1: $310 MILLION
MARKET CAPITALIZATION2: $529 MILLION
ENTERPRISE VALUE2: $926 MILLION
SERVICE LINES: LAND DRILLING, WELL SERVICING,
WIRELINE, COILED TUBING
EMPLOYEES: 1,509
COMPANY OVERVIEW
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Recent Updates
Overall
• Finalized sale of three SCR walking rigs previously announced for aggregate gross proceeds of
$11.0 million.
• Completed equity offering in December resulting in net proceeds of $65.4 million. All proceeds
from the rig sales and equity offering were applied to reduce borrowings under the revolving
credit facility. Current revolver balance is $39.7 million.
Fourth Quarter Guidance
• Drilling Services margin per day expected to be at the high-end or exceed the guided range of
$6,500 to $7,000.
• Production Services revenue expected to be flat to down approximately 2% as compared to
guidance of flat to up 3%.
• Production Services gross margin % is expected to be approximately 13 to 16% as compared to
guidance of 20 to 22%, due to start-up costs related to activity increases in late December and
unanticipated costs associated with recovering well servicing drill pipe lost in a wellbore in
December.
• Despite lower production services margin guidance, we expect to maintain compliance with
the credit facility covenants.
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ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Recent Updates
Drilling
• Of the four remaining SCR rigs in the US, two were retired with components to be used as
spare parts inventory, and two were designated as held-for-sale effective 12/31/16.
• Current marketed US fleet is 100% pad-capable AC rigs.
• Current utilization is 71% based on a fleet of 24 rigs.
Production Services
• Well servicing fourth quarter utilization was 40% as compared to 41% in the prior quarter.
Expect to put 10 to 15 additional rigs back to work by the end of January.
• Coiled tubing fourth quarter utilization was 21% as compared to 22% in the prior quarter.
• Reactivated five additional wireline units in late December to meet January demand.
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ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Key Investment Highlights
• Exposure to the full well life cycle:
• Drilling
• Completions
• Workovers
• On-going well maintenance
• Premium shale-oriented assets in all business lines with balanced exposure to
completion and maintenance activity
• Drilling - 100% of current fleet is pad-capable
• Well Servicing - 100% of fleet 550-600hp and tall-masted
• Wireline – Well-positioned in the Eagle Ford, Bakken and Niobrara
• Coiled Tubing - 75% of on-shore units offer larger diameter coil
• Conservative approach to cash flow and balance sheet management with
continued focus on delevering
• Industry-leading safety results
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ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Fleet Composition
DRILLING SERVICES1
WELL SERVICING
WIRELINE
COILED TUBING
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(1) Since year-end 2011, added 15 AC rigs and disposed of 55 non-AC rigs which includes six designated as held-for-sale as of 12/31/16
Note: all counts are as of year-end
6
10
13 13
17 17
2011 2012 2013 2014 2015 2016
89
108 109
116
125 125
2011 2012 2013 2014 2015 2016
105
120 119
120
125
114
2011 2012 2013 2014 2015 2016
64
69
62
53
31
24
2011 2012 2013 2014 2015 2016
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Exposure to the Full Well Life Cycle
Plug and Perforate Toe Prep Drilling
Maintenance until
Plug and Abandon
Drill Out Plugs Complete and
Install Artificial Lift
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ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Premium Shale-Oriented Assets
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US DRILLING SERVICES PRODUCTION SERVICES
• Fleet comprised of 100% pad-capable AC
rigs
• One of the most versatile and competitive
1,500 horsepower AC drilling rigs on the
market
• 2,000hp mud pumps and 7,500psi mud
systems with bi-fuel capability
• Moves in less than three days from release
to acceptance by the operator on new pad
• Walks 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’ or 116’ 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
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
• Paid down $60 million on the revolving credit facility in 2015 and reduced total debt
approximately $220 million since the first quarter of 2013
• Amended the revolving credit facility in the second quarter of 2016
• Minimum EBITDA covenant introduced from the fourth quarter of 2016 through the second
quarter of 2017
• Adjusted Senior Debt to EBITDA (ratio excludes unsecured debt) and Interest Coverage ratios
through maturity
• Total commitments of $150 million
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$40
$300
$0
$100
$200
$300
$400
2016 2017 2018 2019 2020 2021 2022
($
m
ill
io
n
s)
Debt Maturities
(as of 1/4/17)
Credit Facility 6.125% Senior Notes
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 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
PES - US Land IADC - US Land without PES
Total Recordable Incident Rate
(injuries per 200,000 man-hours)
11
Source: IADC
Well Servicing
(Annual AESC Safety Awards)
2015
3rd place (Division IV)
2014
2nd place (Division V)
2013
1st place (Division V)
Wireline
(Annual AESC Safety Awards)
2015
1st place
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 utilization rate
• 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’ or 116’ in height
• 100% of rigs are capable of working in the
unconventional plays
• Established in the Bakken, Eagle Ford,
Fayetteville, and along the Texas/Louisiana
Gulf Coast
(1) Year-end rig count
SERVICE OVERVIEW OPERATING LOCATIONS
FLEET GROWTH1
13
89
108 109
116
125 125
2011 2012 2013 2014 2015 2016
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Wireline
• Leading market share position in a number
of key geographic markets
• Majority of revenue derived from cased-
hole operations that include perforating,
logging, and pipe recovery
• Established in the Bakken, Eagle Ford,
Niobrara, Mississippian, and
onshore/offshore Louisiana
(1) Based on Q3 2016 revenue
(2) Year-end unit count
SERVICE OVERVIEW OPERATING LOCATIONS
FLEET GROWTH2 DIVERSIFIED SERVICE OFFERINGS1
14
Open/Cased
Hole Logging
Mechanical
Services
Plug/Shoot 105
120
119
120
125
114
2011 2012 2013 2014 2015 2016
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Coiled Tubing
• Significant player in the offshore coiled tubing
market
• 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 and
onshore/offshore Louisiana
SERVICE OVERVIEW OPERATING LOCATIONS
UNIT COUNT1: 17 FLEET GROWTH2
(1) Coil unit size is based on most common configuration; all units are capable of running
2” and <2” coil
(2) Year-end rig count
Onshore
Units
12
Offshore
Units
5
15
1
2
7 7
2 5/8" 2 3/8" 2" < 2"
6
10
13 13
17 17
2011 2012 2013 2014 2015 2016
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
1,500HP AC NEW-BUILD TECHNOLOGY OPERATING LOCATIONS
TOTAL RIG FLEET UTILIZATION
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• Walks 150’ in X-direction and 50’ in Y-direction
while racking over 24,000’ of 5” drill pipe
• 2,000hp mud pumps and 7,500psi mud system
• Moves in less than three days from release to
acceptance by operator on a new pad
• Bi-fuel capable
• Dark-sky compliant
*red indicates active rigs
6
1 1
4 5
7
1
2
8
6
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
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 Adjusted EBITDA to Net Income
19
$919
$960
$1,055
$541
$310
$249 $235
$277
$111
$33
$0
$125
$250
$375
$500
$625
$750
$875
$1,000
$1,125
2012 2013 2014 2015 Q3 2016
TTM
Revenue Adjusted EBITDA
$364
$165
$175
$160
$26
$0
$50
$100
$150
$200
$250
$300
$350
$400
2012 2013 2014 2015 2016 Sep
YTD
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Liquidity and Capital Structure
September 30th, 2016
($ millions) Actual
Cash $ 9.7
Senior Secured Revolving Credit Facility due 2019 106.5
6.125% Senior Unsecured Notes due 2022 300.0
Other1 (7.0)
Total Debt $ 399.5
Shareholders' Equity 251.1
Total Capitalization $ 650.6
Senior Consolidated Leverage Ratio2 (excludes unsecured debt) 3.1x
Interest Coverage Ratio2 1.6x
(1) Unamortized debt issuance costs
(2) Senior consolidated leverage ratio and interest coverage ratio as reported in Form 10-Q for the quarter ending September 30, 2016; calculated in accordance with the
covenants on the senior secured revolving credit facility
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ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx
Reconciliation of Adjusted EBITDA to Net Income
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:
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($ in millions) 2011 2012 2013 2014 2015
Net Income (Loss) 11.2 30.0 (35.9) (38.0) (155.1)
Colombian Net Equity Tax 7.3 - - - -
Depreciation & Amortization 132.8 164.7 187.9 183.4 150.9
Net Interest 29.7 37.0 48.3 38.8 21.2
Loss on Extinguishment of Debt - - - 31.2 2.2
Impairment Expense 0.5 1.1 54.3 73.0 129.2
Income Tax (Expense) Benefit 9.7 16.4 (19.8) (11.3) (37.6)
Adjusted EBITDA 191.2 249.3 234.7 277.1 110.8
($ in millions)
Q4
2015
Q1
2016
Q2
2016
Q3
2016 TTM
N t Inco e (Loss) (48.3) (27.7) (30.0) (34.6) (140.6)
D pr ciation & Amortization 35.4 29.8 28.9 28.7 122.8
Net Interest 5.1 6.3 6.4 6.7 24.4
Impairment Expense 49.5 - - 4.3 53.8
Loss on Extinguishment of Debt 2.2 - 0.3 - 2.5
Income Tax (Expense) Benefit (23.9) (2.0) (2.0) (1.7) (29.5)
Adjusted EBITDA 20.0 6.4 3.6 3.3 33.3
Year-Ending December 31,
ibdroot\Projects\IBD-NY\thaw2016\595552_1\06. Road Show\PES Company Presentation GS EQUITY v02.pptx