Attached files
| file | filename |
|---|---|
| EX-99.2 - EXHIBIT 99.2 - PIONEER ENERGY SERVICES CORP | ex992pr-termloanandablanno.htm |
| 8-K - 8-K - PIONEER ENERGY SERVICES CORP | a8kpreliminarycommitments1.htm |
IBDROOT\PROJECTS\IBD-NY\TOPKNOT2017\607628_1\14. Lenders Presentation\PES Lenders Presentation v16.pptx
$175mm Term Loan Financing
Lenders’ Presentation
October 2017
IBDROOT\PROJECTS\IBD-NY\TOPKNOT2017\607628_1\14. Lenders Presentation\PES Lenders Presentation v16.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 and its subsequent quarterly reports on Form 10-Q. 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.
2
IBDROOT\PROJECTS\IBD-NY\TOPKNOT2017\607628_1\14. Lenders Presentation\PES Lenders Presentation v16.pptx
COMPANY OVERVIEW
AND CREDIT HIGHLIGHTS
3
IBDROOT\PROJECTS\IBD-NY\TOPKNOT2017\607628_1\14. Lenders Presentation\PES Lenders Presentation v16.pptx
Pioneer Energy Services – Diversified Services
% of TTM REVENUE
(1) TTM Revenue as of 30-Jun-2017.
(2) Market Capitalization as of 10-Oct-2017; Enterprise Value based on estimated cash and debt balances as of 30-Sep-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
4
TTM REVENUE1: $343 MILLION
MARKET CAPITALIZATION2: $174 MILLION
ENTERPRISE VALUE2: $561 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\TOPKNOT2017\607628_1\14. Lenders Presentation\PES Lenders Presentation v16.pptx
Key Credit Highlights
5
Premium onshore assets that provide exposure to life-cycle of the well
• Production services earns revenues from completion of a well through abandonment
• Drilling services provides exposure to increased activity levels in commodity recovery
• Demand for Pioneer’s assets demonstrated by utilization through the cycle
• Successful high grading of fleet positions the company well to meet customer demand
Diverse geographical footprint
• Strong exposure to many leading basins in North America
• Provides company with optionality to re-deploy assets over time as E&P companies improve economics in
various basins
Established and diverse customer base
• Only two customers with >5% of revenue contribution
• Strong mix of large cap independents and emerging high growth E&Ps
Industry leading safety track record
Improving outlook for onshore services demand
• Longer laterals / more complex wells driving increased demand for services
• EBITDA margins beginning to show recovery
Disciplined management team, committed to preserving financial flexibility of the
company
• Executed $65 million equity offering in 2016
• Repaid $170 million debt since the first quarter of 2013
• The company’s capital expenditures are primarily maintenance, resulting in additional FCF that can be
used to pay down debt
1
2
3
4
5
6
IBDROOT\PROJECTS\IBD-NY\TOPKNOT2017\607628_1\14. Lenders Presentation\PES Lenders Presentation v16.pptx
Premium Shale-Oriented Assets
6
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
1
IBDROOT\PROJECTS\IBD-NY\TOPKNOT2017\607628_1\14. Lenders Presentation\PES Lenders Presentation v16.pptx
100% 100% 100% 100%
78%
92%
100%
2012 2013 2014 2015 2016 2017 YTD 2017
Current
1,871
1,706 1,805
947
485
840
2012 2013 2014 2015 2016 2017 Current
Drilling Services Historical Utilization and Outlook
• Utilization recovered faster than U.S. land rig count, and currently stands at 100%
• Drilling services are provided through a mix of term and spot contracts; provides visibility to cash
flow and upside exposure to improving cycle
7
Source: IADC/AESC
(1) Includes downtime for 2 AC rigs while being upgraded in 2016. (2) Term contract extends to May 2020 (3) Term contract extends to November 2019
PES HISTORICAL AC U.S. DRILLING UTILIZATION TERM CONTRACTED RIG COVERAGE
Term ( > 6 Month Contract) Spot (Well to Well Contract)
1
HISTORICAL U.S. LAND RIG COUNT
1
U.S. DRILLING FLEET
2017 2018 2019
Rig Q4 Q1 Q2 Q3 Q4 Q1
1 $19,500 $19,500 $19,500 $19,500 $19,500
2 $17,000 $17,000 $17,000 $17,000 $17,000
3 $19,500 $19,500 $19,500 $19,500 $19,500
4 $28,800 $28,800 $28,800 $28,800 $28,800
5 $17,500 $17,500 $17,500 $17,500 $17,500
6 $28,800 $28,800 $28,800 $28,800
7 $28,800 $28,800 $28,800 $28,800
8 $19,900 $19,900 $19,900
9 $27,950 $27,950
10 $19,000
11 $15,750
12 $19,000
13 $18,000
14 $19,500
15 $19,500
16 $18,000
COLOMBIA FLEET
2017 2018 2019
Rig Q4 Q1 Q2 Q3 Q4 Q1
17²
18³
19
20
21
22
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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
8
1
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Balanced Revenue Mix Between Completion and
Remedial Services
9
1
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 revenue for the quarter ended 30-Jun-2017.
IBDROOT\PROJECTS\IBD-NY\TOPKNOT2017\607628_1\14. Lenders Presentation\PES Lenders Presentation v16.pptx
Diverse Geographical Footprint
COILED TUBING
10
WIRELINE SERVICES LAND DRILLING
WELL SERVICE
• Footprint is focused on Onshore US, but is diversified by Basin
2
West Texas
35%
Appalachia
24%
Colombia
21%
Bakken
13%
South Texas
7%
Eagle Ford
66%
Gulf Coast
23%
Haynesville
12%
Note: The charts above refer to revenue contribution by basin / producing area; based on revenue for the quarter ended 30-Jun-2017.
Rockies
29%
Bakken
21%
Haynesville
20%
Eagle Ford
11%
Mid-Continent
8%
Other
7%
Gulf Coast
5%
Eagle Ford
43%
Other
41%
Bakken
12%
Gulf Coast
4%
IBDROOT\PROJECTS\IBD-NY\TOPKNOT2017\607628_1\14. Lenders Presentation\PES Lenders Presentation v16.pptx
Apache
12%
Whiting
10%
PDC
4%
Other
74%
Established Customer Base with Premier Customers
KEY CUSTOMERS
11
2016A REVENUES BY CUSTOMER
• Long-standing, high quality client relationships with a diverse group of large independent oil and gas
exploration and production companies
3
IBDROOT\PROJECTS\IBD-NY\TOPKNOT2017\607628_1\14. Lenders Presentation\PES Lenders Presentation v16.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)
12
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)
4
IBDROOT\PROJECTS\IBD-NY\TOPKNOT2017\607628_1\14. Lenders Presentation\PES Lenders Presentation v16.pptx
Improving Outlook for Onshore Services Demand
13
5
Source: Goldman Sachs Investment Research
% Completions:
• Demand for completion and production services expected to increase despite slower
growth in rig count
• Increased activity levels are driving demand for PES services
NEW WELLS DRILLED FRAC STAGES U.S. LAND RIG COUNT
1,805
947
485
840 822
864 871
2014 2015 2016 2017E 2018E 2019E 2020E
37,833
20,264
10,094
17,013 17,050
18,357
18,970
2014 2015 2016 2017E 2018E 2019E 2020E
580,235
378,060
210,621
418,915
514,025
588,363
634,417
2014 2015 2016 2017E 2018E 2019E 2020E
IBDROOT\PROJECTS\IBD-NY\TOPKNOT2017\607628_1\14. Lenders Presentation\PES Lenders Presentation v16.pptx
23.7 x
11.7 x
7.9 x
4.7 x 3.8 x
24.4 x
14.1 x
9.5 x
5.6 x
4.6 x
2016A¹ LTM 2017E 2018E 2019E
Net Debt Total Debt
Conservative Approach to Cash Flow and Liquidity
Management
14
6
• Delevering balance sheet with $69mm equity offering in 2016, reduced capital expenditures and costs through downturn
• $175mm term loan increases near term liquidity and provides bridge to future deleveraging through equity issuance and
asset sales
DEBT / ADJUSTED EBITDA TOTAL DEBT OVER TIME ($MM)
$ 519
$ 500
$ 455
$ 395
$ 346
$ 398
2012 2013 2014 2015 2016 Prelim.
30-Sep-17
Note: LTM, 2017E, 2018E and 2019E Debt / Adj. EBITDA multiples assume total ($475.0mm) and net ($394.8mm) debt balances that are pro forma for the contemplated
transaction. LTM Adj. EBITDA represents midpoint of range of PES’ anticipated LTM Adj. EBITDA as of 30-Sep-2017. 2017E, 2018E and 2019E Adj. EBITDA projections per
IBES analyst consensus as of 10-Oct-2017.
(1) Reflects cash and debt balances as of 31-Dec-2016 and 2016A Adjusted EBITDA of $14.2mm.
Pro Forma
IBDROOT\PROJECTS\IBD-NY\TOPKNOT2017\607628_1\14. Lenders Presentation\PES Lenders Presentation v16.pptx
Historical Financial Results
REVENUE / ADJUSTED EBITDA ($ millions) CAPEX SPEND ($ millions)
Note: All data points reflect calendar year and trailing twelve months information derived from 10-K and 10-Q filings.
(1) As of 30-Jun-2017.
15
$960
$1,055
$541
$277
$343
$235
$277
$111
$14 $23
2013 2014 2015 2016 2017 TTM
Revenue Adjusted EBITDA
Q2
$165
$175
$160
$32
$40
2013 2014 2015 2016 2017 YTDQ2 1 1
IBDROOT\PROJECTS\IBD-NY\TOPKNOT2017\607628_1\14. Lenders Presentation\PES Lenders Presentation v16.pptx
APPENDIX
16
IBDROOT\PROJECTS\IBD-NY\TOPKNOT2017\607628_1\14. Lenders Presentation\PES Lenders Presentation v16.pptx
Company Overview
17
% Hz:
% Completions:
• Pioneer Energy Services (“PES” or the “Company”) provides land-based drilling services and production services
to a diverse group of exploration and production companies in the United States and internationally in Colombia
• PES operates through two main business segments including:
— Drilling Services Segment, which provides contract land drilling services, and
— Production Services Segment, which provides well servicing, wireline and coiled tubing services
• Drilling Services Segment
— PES has a current fleet of 24 drilling rigs, 100% of which are pad-capable
o US Fleet: Comprised of 16 AC walking rigs built within the last five years and specifically designed to optimize pad drilling
o Colombia Fleet: Comprised of 8 SCR rigs (ideally suited for conventional operations, pad capable)
• Production Services Segment
— Well Servicing: Consists of a rig fleet of 125 rigs which provide services in order to establish production in
newly-drilled wells and to maintain production over the useful lives of active wells PES’s rig fleet routinely
performs completion services, maintenance and workover services, and plugging and abandonment
operations
— Wireline Services: Consists of a fleet of 118 wireline units which mainly provide services such as perforating,
logging and pipe recovery. PES has a leading market share position in a number of key geographic markets
include the Bakken, Eagle Ford, Niobrara, Gulf Coast and onshore/offshore Louisiana
— Coiled Tubing Services: Consists of a fleet of 14 coiled tubing units primarily servicing the Gulf Coast,
Niobrara, and Eagle Ford.
IBDROOT\PROJECTS\IBD-NY\TOPKNOT2017\607628_1\14. Lenders Presentation\PES Lenders Presentation v16.pptx
DRILLING
SERVICES
18
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Drilling Services
FLEET CHARACTERISTICS OPERATING LOCATIONS – 24 RIGS
TOTAL RIG FLEET UTILIZATION¹
19
(1) Red indicates active rigs; two additional rigs in Colombia are
contracted and scheduled to begin work in Q4 2017.
100%
100%
94%
94%
100%
100%
AC
Pad-Ready
Walking
≥1,500HP Drawworks
7,500psi Mud System
Contracted
U.S. FLEET
75 %
100 %
75 %
100 %
100 %
Contracted
1,500+ HP Drawworks
Walking
Pad-Ready
SCR
COLOMBIA FLEET
7
1
2
4
6
7
1
2
8
6
Permian Eagle
Ford/STX
Bakken Colombia Appalachia
IBDROOT\PROJECTS\IBD-NY\TOPKNOT2017\607628_1\14. Lenders Presentation\PES Lenders Presentation v16.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
20
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\TOPKNOT2017\607628_1\14. Lenders Presentation\PES Lenders Presentation v16.pptx
Drilling Services
21
• 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
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PRODUCTION
SERVICES
22
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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
23 (1) Simmons & Co; Based on YTD 2017 metrics.
$314
$370
$463
$506
BAS KEG CJES PES
Peer Avg: $382
IBDROOT\PROJECTS\IBD-NY\TOPKNOT2017\607628_1\14. Lenders Presentation\PES Lenders Presentation v16.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
24
IBDROOT\PROJECTS\IBD-NY\TOPKNOT2017\607628_1\14. Lenders Presentation\PES Lenders Presentation v16.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 25
1
2
5
6
2 5/8" 2 3/8" 2" < 2"
Onshore
10
Offshore
4
IBDROOT\PROJECTS\IBD-NY\TOPKNOT2017\607628_1\14. Lenders Presentation\PES Lenders Presentation v16.pptx