Estrella International EnergyEnergy Services Ltd. · Estrella International EnergyEnergy Services...
Transcript of Estrella International EnergyEnergy Services Ltd. · Estrella International EnergyEnergy Services...
Estrella International Energy Services LtdEnergy Services Ltd.
Corporate UpdateMarch 2011
TSX‐V: EEN.V
Disclaimer: Forward Looking Statements
Certain statements included or incorporated by reference in this presentation constitute forward‐looking statements orforward‐looking information under applicable securities legislation. Such forward–looking statements or informationare provided for the purpose of providing information about management's current expectations and plans relating tothe future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such asmaking investment decisions. Forward‐looking statements or information typically contain statements with words suchas "anticipate", "believe", "expect“, "plan", "intend", "estimate", "propose", "project“, “seek”, “continue”, “forecast”,“may”, “will”, “potential”, “could”, “should” or similar words suggesting future outcomes or statements regarding anoutlook. Forward‐looking statements or information in this presentation include, but are not limited to, statements ori f i i h b i d bj i i i i l d h i i h f i linformation with respect to: business strategy and objectives; acquisition plans and the timing thereof; capitalexpenditures; net revenue; operating and other costs; and taxes.
Forward‐looking statements or information are based on a number of factors and assumptions that have been used todevelop such statements and information but which may prove to be incorrect. Although Estrella Overseas Ltd. (thep y p g“Company”) believes that the expectations reflected in such forward‐looking statements or information are reasonable,undue reliance should not be placed on forward‐looking statements because the Company can give no assurance thatsuch expectations will prove to be correct. In addition to other factors and assumptions which may be identified in thispresentation, assumptions have been made regarding, among other things: the impact of increasing competition; thegeneral stability of the economic and political environment in which the Company operates or plans to operate; thetimely receipt of any required regulatory approvals; and the ability of the Company to obtain qualified staff, andequipment in a timely and cost‐efficient manner.
Forward‐looking statements or information are based on current expectations, estimates and projections that involve anumber of risks and uncertainties which could cause actual results to differ materially from those anticipated by thenumber of risks and uncertainties which could cause actual results to differ materially from those anticipated by theCompany and described in the forward‐looking statements or information.
The forward‐looking statements or information contained in this presentation are made as of the date hereof and theCompany undertakes no obligation to update publicly or revise any forward‐looking statements or information, whetheras a result of new information future events or otherwise unless required by applicable securities laws The forward
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as a result of new information, future events or otherwise unless required by applicable securities laws. The forward‐looking statements or information contained in this presentation are expressly qualified by this cautionary statement.
Disclaimer: Privileged Information
This presentation may contain information concerning Estrella of a material nature that has not been generallydisclosed. This information is being provided to you in the necessary course of the business of Estrella in connectionwith proposed business or professional activities to be conducted between Estrella and you. You understand that thisinformation is being provided to you on the understanding that you are considered a person or company which is in a“special relationship” with Estrella, as defined in the applicable securities laws, and as such, you may not purchase or sellany securities of Estrella with knowledge of a material information, nor disclose any material information concerningEstrella, that has not been generally disclosed. Any failure to adhere to such prohibitions against such trading andtipping could expose you to criminal and civil liability.
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Latin American OFS company, growing consistently i since 2005
R id i l i th l t fi ith Rapid regional expansion over the last five years, with our customers support
Public company (TSX:EEN.V) with Latin America based bi‐lingual and bi‐cultural managementbased bi lingual and bi cultural management
‐Operate at the highest level of service quality‐Operate with global experience and local know howp g p
‐Vision
To set the standard of excellence by which all other service companies in Latin America are measured
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p
Ser mejor, hacermas
Contents• Our services and who we are• Why South America and why services?• Why South America and why services?• Overview and investment highlights• Capitalization• Capitalization• Expansion success
S M j H M• Ser Mejor, Hacer Mas
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Diversified Service OfferingDrilling and Workover Rigs• 350 – 1200 HP modern rig fleet
• Modern portable self erecting • Modern, portable, self erecting rigs (no cranes required)
• Automation • No external anchor lines• High efficiency, low emission
engines
T l d S iTools and Services:• Directional Drilling & Tool RentalC l ti d W k• Completion and Workover
Engineering & ConsultingW ll d i d i i• Well design and engineering
• Project management and field operations management
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World Class O.F.S. Team
Management Title ExperienceW L Ch i & CEO f l b l OFS i SLB Warren Levy Chairman & CEO 15 years of global OFS experience – SLB Christian Bauwens CFO 18 years of corporate finance / CM experience (GM/Nissan/BNP)Guillermo Lamacraft Senior Advisor 35 years of experience in regional Oil & GasMatthew Holdeman VP, Engineering 25 years of experience, SLB & BHI (IPM & QHSE) Gary Pidcock VP New Ventures 28 years of experience, onshore and offshore, (SLB, BP, Gulf,
PlusPetrol) ‐Camisea Project Manager Luis Aviles VP Sales & Marketing 27 years (SLB) in operational & management rolesGiovanni Rios GM, Peru 15 years of experience(SLB, Oxy), 17 countries ‐MWD/LWDPatrick Galletti GM Arg/Chile/Para 10 years of experience(SLB) ‐MWD/LWD ‐ 3 regionsWade Maingot GM Col 26 years in industry, 6 countries in South America (SLB)Wade Maingot GM Col 26 years in industry, 6 countries in South America (SLB)Jesus Orozco GM STS 12 years in industry.
Directors TitleWarren Le Chairman & CEOWarren Levy Chairman & CEOChristian Bauwens Director & CFOCarlos Contreras,Sr. Director 30 years of oil & gas experience (Oxy). Former Energy Minister,
BoliviaAndrew Fentress Director Partner, Medley Capital (Shareholder nominated director)Gustavo Garrido Director Managing Partner at large M&A law firm in Buenos AriesJohn Zaozirny Director Vice Chair at Canaccord, former Alberta Minister of Energy
Director of Pacific Rubiales, PetroAmericas and othersRemo Mancini Director Former MPP (Ontario), 30 years of experience in
business/government
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business/government
With new Colombian acquisitions: 800 employees, 15 nationalities
LocationsArgentina
Comodoro Rivadavia –Ops Base 2005 Buenos Aires – Headquarters 2005
Neuquen –Ops Base 2006 ECN Storage Yard 2007
Punta Arenas –Ops Base 2005Chile
ECN – Storage Yard 200725 de Mayo – Living Camp 2007Kaike – Storage Yard 2008
Santiago – Sales Office 2009C l St Y d
Barranca
Peru
Colombia
Calama – Storage Yard 2009
Lima – Sales Office 2008El Altos de Talara –Ops Base 2010
Bogota – Sales Office 2010Yopal –Ops Base 2010
6 8 6 8 6 8 6 8 6 8 6 8
BoliviaBarranca Bermejo –Ops Base 2010Yopal Ops Base 2010
Santa Cruz de la Sierra – Sales Office 2010Paraguay Asuncion – Sales Office 2010
6 8 2005 2006 2007 2008 2009 2010 20112005 2006 2007 2008 2009 2010 20112005 2006 2007 2008 2009 2010 20112005 2006 2007 2008 2009 2010 20112005 2006 2007 2008 2009 2010 20112005 2006 2007 2008 2009 2010 2011
Current Deployed Rig FleetArgentina 551P – 550 HP AC Portable Drilling Rig
S HP P bl W k Ri
2005 2006 2007 2008 2009 2010 2011
Chile
101S – 350 HP Portable Workover Rig 102S – 350 HP Portable Workover Rig103S – 350 HP Portable Workover Rig
1201P – 1200 HP AC Geothermal Drilling Rig
l lPeru
Colombia
Maple1* – 2000 HP DC Heli Rig552P – 550 HP Ultra Portable Drilling Rig351 – 350 HP Light Drilling, Heavy Workover
STS Acquisition – 5 Workover RigsPL/Z Acquisition – 4 Drilling / 8 Workover Rigs
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*Rig Leased from Customer – sold in 2010
Punta Arenas Bolivia 1001P – 1000 HP Drilling Rig
Colombia
STS1 250 HP Workover IdleSTS2 440 HP Workover On ContractSTS3 350 HP Workover On ContractSTS4 375 HP Workover On ContractSTS HP W k O C t t
Rig FleetColombia STS5 375 HP Workover On Contract
PL1 550 HP Drilling On ContractPL2 350 HP Workover On Contract PL10 450 HP Workover On Contract PL11 450 HP Workover On Contract
Barranca
PL12 350 HP Workover On Contract PL20 550 HP Drilling/WO On ContractPL21 550 HP Drilling/WO On ContractZ2 550 HP Drilling On ContractZ3 350 HP Workover On ContractZ3 350 HP Workover On ContractZ4 900 HP Drilling On ContractZ5 550 HP Drilling In RefitZ6 250 HP Workover Idle
351 350 HP Drilling/WO Mobilizing552 550 HP Drilling On Contract
Peru
Bolivia
1001 1000 HP Drilling Mobilizing
101 350 HP Workover On Contract102 350 HP Workover On Contract
Argentina
35103 350 HP Workover On Contract551 550 HP Drilling On Contract
1201 1200 HP Drilling On Contract
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Chile.
1201 1200 HP Drilling On ContractPunta Arenas
25 Rigs – 8 Drilling 3 Drl/Wo 14 Workover88% contracted, 4% in refit
Directional Drilling
Job Capacity:A ti
Barranca
Argentina: 5 Chile: 3Peru: 2Colombia: 2
i i l d i
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Punta Arenas Directional and Service Bases
Engineering Services
Barranca
O Ge SM
CountryOil &
Gas
eothermal
Solution Mining
l
Argentina
Chile Chile
Peru
Colombia
Canada
Kenya
d j
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Punta Arenas Current and Past ProjectsSize = relative revenue
Capabilities and ExperienceOil & Gas• Current presence in six Latin American markets• Multiple service offering and integrated project readyMultiple service offering and integrated project ready• Proven ability to grow around the region• Globally experienced team, all resident in the region and all Bi or Tri‐
lingual – experience in every Latin American market where wells have lingual experience in every Latin American market where wells have been drilled
Non Standard Expertise Non Standard Expertise • World class team in remote and non standard projects• Geothermal and mining experience and capabilities
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Why Focus on Latin American• Less volatile than global market•Up by > 50% in last six years and expected to continue to grow• E&P operators have > $10 billion in E&P commitments in 2011 on land• Democratization of block bidding has facilitated entry of juniors and mid sized• Democratization of block bidding has facilitated entry of juniors and mid sizedplayers.• Numerous remote and challenging projects, antiquated equipment andincreasing customer demands to improveg p• Must have a regional footprint to take advantage of sustained growth
300035004000
Active Drilling Rig Count
10001500200025003000
World
L i A
05001000 Latin Am
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The Operating Markets
Hot Poised for Steady PoliticallyHot Markets
Poised for Growth
Steady State
Politically Challenges LimitingLimiting Activity
Colombia Peru – 2012 Brazil – Venezuelajungle drilling &
near shore Offshore focus of Petrobras
Bolivia Chile – Trinidad Ecuador –Geothermal
boomactivity, but not
stable
Argentina – Central AmericaArgentina 2011 Elections
Central America
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The Geothermal MarketGlobal Production Base• US, Indonesia, Philippines, Mexico,
New Zealand, Italy, Kenya, Central America• 10 7 GW of installed capacity• 10.7 GW of installed capacity• Steady growth for the last 30+ yearsSustainable Growth• Each 40 MW plant requires 8-15 wells
Virtually zero carbon footprint• Virtually zero carbon footprint• Long plant life and excellent baseload power
(>95% uptime on production)Latin American Potential
C t d l t i C t l A i d Chil
Source: US Geological Survey Only part of the “Ring of Fire” without current • Current developments in Central America and Chile,
greenfields projects in Peru and Argentina• Chile has stated goal of 3000 MW of installed power by 2015
geothermal production
Global Geothermal Production30 years of steady growth
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Diversified Market Presence• Only active rig and directional player in the rapidly growing
GeothermalMarket• Argentina seeing geothermal interest in San Juan, Salta, Jujuy,
Estrela Rig 1201 drilling a geothermal well in northern
g g g , , j y,Neuquén. One production project underway.
geot e al ell o t eChile at 4500 m of altitude
Proved that a modern automated rig can t f i t outperform in remote
geothermal operations
Rig is now mobilizing t t tonto a new contract
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Ri Ti / V l P h D l M d P i A i
Case Study – Full Service Capabilities• Rio Tinto / Vale ‐ Potash Development – Mendoza Province, Argentina• Estrella got involved in late 2005
– Initial work to evaluate feasibility of a directionally drilled development, Later to design and have fabricated a custom built , fully automated 1000 HP AC walking rig
– Field taken to 16 well pads, saving hundreds of millions on infrastructure costs and being featured in Rio Tinto’s quarterly update to investors as a case study in reduced environmental impact
• 5 years later‐ Estrella continues to supervise the rig operation and provide engineering support
• Recently awarded phase II rig construction project to design and build two additional rigs and awarded early engineering work in the Vale Saskatchewan Potash project
Manipulator Crane
Each circle is 2 wells
1000 x 16 well pads
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Loyal Customer Base• Long term, sustained customer relations• Many of our new country entries have been facilitated by existing
customers• Only Key customers that have fallen off the list have stopped E&P
operations (March & Maple)
YEAR Customers > 1 MM in Revenue
2005 ‐
62006 ‐
2007 PRC / Oxy
2008 PRC / Oxy / PetroAndina / Maple / March
2009 PRC / Oxy / PetroAndina / ENAP / ENG / Maple2009 PRC / Oxy / PetroAndina / ENAP / ENG / Maple
2010 PRC / Oxy / PetroAndina / ENAP / ENG / GeoPark / PlusPetrol / Ecopetrol
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Ownership• Stable Management with strong alignment with investor base
• 15 million share position escrowed against price performance (vesting at 4 million at $1 30, 6 million at $1 40 and 5 million at $2 00)4 million at $1.30, 6 million at $1.40 and 5 million at $2.00)
• Management and early principal investor (Medley) have majority control of Estrella both on a common stock basis and fully diluted basis
Capitalization
Basic Shares – Management1 15.0Million
Basic Shares – Medley 39.6 Million
Basic Shares ‐ Public 47.6 Million
Basic Shares –Total 102.2 Million
Share Price (CDN$) 2 $0.80
Market Capitalization $82 Million
Long Term Debt3 $32 + $15 Million
1. Management shares are escrowed against share price performance2. Closing price as of Feb 23, 20103. Credit Suisse provided a senior secured loan facility of $32 million USD. Under certain conditions, this facility could be
expanded up to $80 million USD. An additional $15 Million convertible debenture is expected to be closed this week.4. Associated with the STS acquisition, the shareholders of STS were issued 4.75 Million preferred shares with a $1 / share
conversion price
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conversion price5. The company has 38.7 Million warrants outstanding at $1.5 / warrant6. The company issued warrants to Credit Suisse in conjunction with the long term debt facility. These warrants have a strike
price of $0.91 / warrant7. The company will issue warrants to the Convertible Debenture investors with a strike price of $0.80 / warrant.
Expansion Experience and Plans
Expansion• Successful growth in six countries • Successful growth in six countries • Successful deployment of rigs in three countries • Contin e organic gro th of rig and ser ice tool • Continue organic growth of rig and service tool
fleet– Plan to deploy an additional 4‐5 rigs in coming year, grow Plan to deploy an additional 4 5 rigs in coming year, grow
fleet to 35+ rigs in near term– Plan to expand service tool fleet during 2011, and grow to
number 3 provider in the regionnumber 3 provider in the region– Targeted growth for consulting business in areas high pull
through potential – become a viable alternative to the big four service companies four service companies
• Objective for 2009/2010 – reduce relative risk exposure to Argentina
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Expansion Experience and Plans
Acquisition• March 2010 – acquired single rig operating entity in Chile from partner• November 2010 – acquired STS de los Andes
– Colombia based 5 rig company– Existing contracts with Ecopetrol and Occidental– Strong base off which to grow in high overhead marketStrong base off which to grow in high overhead market– 15 MM in cash and 4,75 MM in preferred shares issued at $1/share– Purchase Price (inclusive of cancelled debt) approx $20 MM– Proforma EBITDA of > $5 MM
• January 2011 acquired Petroland and Zigma• January 2011 – acquired Petroland and Zigma– Colombia based 7 and 5 rig companies respectively – 4 drilling, 2 drilling/workover and 6 workover rigs– Purchase 49% in Jan for 10.3 MM– Option to purchase an addition 11% now for 2.3 MM– Balance of 40% due in Q1 2012 and based off of actual performance of companies,
half paid in shares and half in cash
– Implied purchase price based on 49% and 11% options (inclusive of debt) Implied purchase price based on 49% and 11% options (inclusive of debt) approx $33.8 MM
– Proforma EBITDA of > 7 ‐ 9 MM
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• 2011 Proforma cashflows > 80% from Peru, Colombia and Chile
Why Estrella ?People and Presence People and Presence
• Only small service provider with a fully Latin American based team
• International and home grown talent
• World class capabilities for remote and non‐standard projectsp j
• Sustained, proven growth around the region for the last five years
• Close ties with the local communities and • Close ties with the local communities and commitment to local employment
• Successfully executing organic and i i i b d hacquisition based growth
Clients
• We work and grow alongside our customersg g
• Long standing, close customer relations
• Customer driven solutions
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• Contract discipline
Why Estrella ?Safety / Quality / Environment
• Focused on high quality, efficient equipment
• The youngest and most automated rig and equipment fleet in Latin • The youngest and most automated rig and equipment fleet in Latin America
• Diversified geographic and market presence including key niches of th l d t h d l tgeothermal and potash development
• We are relentless in the pursuit of setting the standard for quality, safety and environmental performance
• opportunities are abundant, obtaining growth that can be sustained is the only acceptable goalsustained is the only acceptable goal
Be better,
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domore
Estrella International Energy Services Ltd.
Warren Levy Christian BauwensChairman & CEO [email protected] [email protected]@estrellasp.com [email protected]
Phone: +5411 5217 5250 Phone: +5411 5217 5250 Fax: +5411 5217 5280
www estrellasp comwww.estrellasp.com
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