Investor Presentation | June 2012
FORWARD LOOKING INFORMATIONThis presentation contains certain forward-looking statements and forward-looking information (...
COMPANY OVERVIEW   Aveda Transportation and Energy Services (“Aveda” or the “Company”) is a growing provider of specializ...
MANAGEMENT AND BOARD OF DIRECTORS                       Management                                             Independent...
MANAGEMENT TRACK RECORD    David Werklund founded CCS Corporation (now Tervita Corporation) in 1984 and built it largely ...
CAPITALIZATION SNAPSHOT                            Capitalization                                                         ...
OILFIELD HAULING MARKET                                                      More than 2,500 Active Rigs in North America(...
NORTH AMERICAN OPERATIONS   Eight offices located in the heart                                                           ...
OILFIELD HAULING OVERVIEW     Modern, well maintained fleet        2011: 390 pieces of equipment in fleet (114          ...
OILFIELD HAULING CASE STUDY Aveda has outperformed its competitors as a result of:      Newer, more specialized equipmen...
OILFIELD RENTALS OVERVIEW       Modern, well maintained equipment with 360        pieces in the rentals fleet       Curr...
GROWTH STRATEGYCapital Expenditure Program $16 million capital budget for 2012      $14 million for organic oilfield hau...
FINANCIAL PERFORMANCE: REVENUE                 Aveda experienced 81% growth in 2011 revenue vs. 2010                 Exp...
FINANCIAL PERFORMANCE: EBITDA   Higher utilization across North America                        Annual EBITDA ($mm)       ...
RECAPITALIZATION OVERVIEW    December 2011 Transaction Overview                  Proforma Werklund Capital Ownership   $3...
ATTRACTIVE VALUATION*Source: Factset, Bloomberg and company filings1) Share price as of May 17, 20122) Enterprise Value ca...
INVESTMENT HIGHLIGHTS   Proven management team with a history of value creation   Solid industry fundamentals supported ...
CONTACT                    Bharat Mahajan, CA                   Chief Financial Officer          Aveda Transportation and ...
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Aveda Energy Investor Presentation

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Aveda Energy Investor Presentation

  1. 1. Investor Presentation | June 2012
  2. 2. FORWARD LOOKING INFORMATIONThis presentation contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements")within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements.Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "could", "believe", "plan", "intend", "objective","continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should" or similar words, including negatives thereof, suggesting futureoutcomes. In particular, this presentation contains forward-looking statements relating to: future growth; results of operations; operational and financialperformance; projected capital expenditures and commitments and the financing thereof; expansion; increases in revenue; equipment delivery and deploymentdates; effect of rebranding; geographic allocation of equipment; customer commitments; ability to establish a working relationship with third party suppliers;expectations regarding the Corporations ability to raise capital and to increase its equipment fleet; benefits associated with financial results; activity levels; businessstrategy; successful integration of structural changes; restructuring plans; organic growth potential; acquisitions and availability of insurance coverage. Avedabelieves the expectations reflected in such forward-looking statements are reasonable as of the date hereof but no assurance can be given that these expectationswill prove to be correct and such forward-looking statements should not be unduly relied upon.Various material factors and assumptions are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements.Those material factors and assumptions are based on information currently available to Aveda, including information obtained from third party industry analysts andother third party sources. In some instances, material assumptions and material factors are presented elsewhere in this presentation in connection with theforward-looking statements. Readers are cautioned that the following list of material factors and assumptions is not exhaustive. Specific material factors andassumptions include, but are not limited to:• the performance of Aveda’s businesses, including current business and economic trends;• oil and natural gas commodity prices and production levels;• capital expenditure programs and other expenditures by Aveda and its customers:• the ability of Aveda to retain and hire qualified personnel;• the ability of Aveda to obtain parts, consumables, equipment, technology, and supplies in a timely manner to carry out its activities;• the ability of Aveda to maintain good working relationships with key suppliers;• the ability of Aveda to market its services successfully to existing and new customers;• the ability of Aveda to obtain timely financing on acceptable terms;• currency exchange and interest rates;• risks associated with foreign operations;• changes under governmental regulatory regimes and tax, environmental and other laws in Canada and the United States; and• a stable competitive environment.Forward-looking statements are not a guarantee of future performance and involve a number of risks and uncertainties, some of which are described herein. Suchforward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Aveda’s actual performance and financial results infuture periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks anduncertainties include, but are not limited to, the risks identified by Aveda’s annual information form and management discussion and analysis for the year endedDecember 31, 2011 (the "MD&A") and contained herein under the heading "Risk Factors". Any forward-looking statements are made as of the date hereof and,except as required by law, Aveda assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise. 2
  3. 3. COMPANY OVERVIEW Aveda Transportation and Energy Services (“Aveda” or the “Company”) is a growing provider of specialized oilfield hauling and rentals to the US and Western Canadian oil and gas industry Aveda was founded in 1994, went public in 2006 and was recapitalized in 2011 The Company is well positioned to take advantage of attractive organic and acquisition growth opportunities throughout North America Multiple cross-over business opportunities achieved through oilfield hauling and rental business units Oilfield Hauling Oilfield Rentals Rig moving  Matting Heavy hauling  Tanks Hot shot services  Light towers 3
  4. 4. MANAGEMENT AND BOARD OF DIRECTORS Management Independent Board MembersDavid Werklund – Chairman, Interim President and CEO Martin Cheyne Has been the Chairman of Aveda since 2006 and was appointed  Has more than 25 years of diversified oil and gas experience Interim President and CEO of Aveda in September 2011  Founder of DeeThree Exploration Ltd. Began career in 1965 at Shell Canada as a Production Operator  Former President and Director of Dual Exploration Inc. and Devlan Founder and Chairman of the Board of Directors of CCS Exploration Inc.; both purchased by Cyries Exploration Inc. Corporation (now Tervita Corporation) Co-Founder of Concord Well Servicing Doug McCartney Founder & Executive Chairman of Werklund Capital  Managing Partner of Burstall Winger LLP The 2005 Ernst & Youngs Canadian Entrepreneur of the Year  Practices in the areas of securities and corporate finance andBharat Mahajan – CFO corporate and commercial law Joined Aveda in October 2011  Director or officer of several public and private companies Held several positions with Magna International overseeing various international growth initiatives Paul Shelley Former CFO of several oilfield service companies, including WellPoint Systems Inc. and Norex Exploration Services Inc.  President of Convinco Financial Ltd.  Former Senior Vice President, Corporate Development at Kos Corp. Investments Ltd.Wayne Thompson – Vice President, Operations  25 years experience finance experience with GE Capital and RBC More than 40 years of oilfield experience Previously President DC Energy Oilfield Rentals Former owner and CEO Radar Well Servicing 4
  5. 5. MANAGEMENT TRACK RECORD David Werklund founded CCS Corporation (now Tervita Corporation) in 1984 and built it largely through the consolidation of several oilfield services companies and organic growth CCS privatized in 2007 for approximately C$3.5 billion (the largest Trust privatization in Canadian history) Historical Shareholder Returns CCS Selected Historical Acquisitions CAGR Total Return CCS 24% 2490% Source: FactSet 5
  6. 6. CAPITALIZATION SNAPSHOT Capitalization Balance Sheet Summary (1) Share price (June 4, 2012) $2.80 Operating Line Available ($mm) $12.3 Shares Outstanding Basic (mm)(1) 10.0 Property and Equipment ($mm) $35.3 Shares Outstanding Fully Diluted (mm)(1) 10.7 Working Capital ($mm) $22.5 FD Market Capitalization ($mm) $30.1 Total Assets/Tangible Assets ($mm) $67.2/$66.8 Net Debt ($mm)(1) Loans and Borrowings $22.7 Convertible Debenture (face)(2) $4.7 Shareholder Summary (1)(4) Cash(1)(3) -$11.9 Werklund Capital Corp 36.7% Total Net Debt ($mm) $15.5 Other Insiders 16.5% Enterprise Value ($mm) $45.6 Total Insiders 53.2%(1) At March 31, 2012 and accounts for June 2012 $8mm bought deal financing(2) Convertible into 1,850,980 common shares at $2.55(3) Includes potential cash from exercise of all options and warrants of $2.7 million and adjusted for proceeds from June 2012 financing(4) Calculated based on total basic shares outstanding as at March 31, 2012 6
  7. 7. OILFIELD HAULING MARKET More than 2,500 Active Rigs in North America(1) North American Active Aveda has a targeted growth Land Rig Count(1) plan that is focused on targeting WCSB 2012 2,565 oil/liquid rich weighted basins 2011 2,252 across North America 2010 1,772 Based on a recent market 616 2009 1,826 analysis, Aveda estimates each Bakken rig moves approximately 1.4 times per month or 17 times per 207 year (42,500 moves per year) Aveda’s reputation, customer 137 Marcellus relationships and quality service results in high utilization of its Barnett transportation equipment 55 Active in Play / Region Recently Opened Office 301 Expansion Opportunity 256 Eagle Ford Oil Focused Permian NGL Focused 7 (1) Active rigs as at January 31, 2012; as per Baker Hughes & CAODC
  8. 8. NORTH AMERICAN OPERATIONS Eight offices located in the heart Oilfield Hauling Locations of the key North American resource plays Significant expansion opportunities especially in U.S. markets Flexible workforce can be SLAVE LAKE transferred cross border to high activity areas GRAND PRAIRIE Experienced team of more than 200 employees NISKU MELITA Asset Allocation CALGARY MINERAL WELLS WILLIAMSPORT 30% PLEASANTON 70% 8 U.S. Canada
  9. 9. OILFIELD HAULING OVERVIEW Modern, well maintained fleet  2011: 390 pieces of equipment in fleet (114 power units)  2012: 63 pieces of equipment on order (25 power units) 203 employees (120 drivers) Fragmented industry makes for attractive consolidation opportunities Primary competitors include TransForce, Mullen, Flint and regional specialty haulers 390 Pieces of Equipment in Hauling Fleet Blue Chip Customer Base Trailer 276 Winch Tractor 71 Bed Truck 26 Picker 15 All-Terrain 2 0 50 100 150 200 250 300 9
  10. 10. OILFIELD HAULING CASE STUDY Aveda has outperformed its competitors as a result of:  Newer, more specialized equipment  Experienced personnel  Planning and communications  Ability to meet industry demands for heavier equipment and larger loads 40 mile rig move – Marcellus Shale (1) Competitor Aveda 11 days 4 days The Result:  11% price premium for Aveda  64% reduction in rig downtime for customer (1) 1,250 hp, jackknife triple rig, ~ 70 loads 10
  11. 11. OILFIELD RENTALS OVERVIEW Modern, well maintained equipment with 360 pieces in the rentals fleet Currently contributes approximately 5% of total revenue Plan to build critical mass though the acquisition of competitors with similar or complementary equipment Typical acquisition multiples identified at 1.5x to 3.2x TTM EBITDA 360 Pieces of Equipment in Rental Fleet Blue Chip Customer Base Rig Mats 162 400 Bbl Tanks 92 Light Towers 62Miscellaneous 37 Generators 8 0 50 100 150 200 11
  12. 12. GROWTH STRATEGYCapital Expenditure Program $16 million capital budget for 2012  $14 million for organic oilfield hauling fleet expansion  Investing $1 million in transportation management systems  Allocating $1 million for facility and leasehold improvementsOrganic Growth Initiatives Additional $10 million in near term growth CapEx being evaluated Existing Customers  Rig moving and ancillary equipment (e.g. tanks, trailers, etc.)  Implement transportation management systems (e.g. GPS, satellite communications) Expansion into New Areas  Target high activity resource plays focused on oil and NGL explorationGrowth Through Acquisitions Additional $15 - $35 million in near term growth CapEx being evaluated Acquire complementary fleets in both new and existing geographies Typical acquisition multiples of 1.5x to 3.5x TTM EBITDA 12
  13. 13. FINANCIAL PERFORMANCE: REVENUE  Aveda experienced 81% growth in 2011 revenue vs. 2010  Expansion into U.S. resource plays and increasing utilization  Growth in number of rigs in key operating areas/plays 2011 vs. 2010  Western Canada up 13%, Marcellus up 4% Annual Historical Revenue ($mm) 2011 Revenue by Geography $80 $72.2 $70 $60 $49.2 58%Revenue ($mm) $50 42% $39.8 $40 $33.9 $30 $25.9 $20 $10 $0 Canada US 2007 2008 2009 2010 2011 13
  14. 14. FINANCIAL PERFORMANCE: EBITDA Higher utilization across North America Annual EBITDA ($mm) $12.0 $11.3 24% Premium pricing in key resource plays $10.0 20% 16% $8.0 16% EBITDA Margin EBITDA ($mm) Operational efficiencies resulting in increased margins $6.0 11% 12% $4.0 6% 8% $4.2 $2.0 4% $2.1 $0.0 0% 2009 2010 2011 14
  15. 15. RECAPITALIZATION OVERVIEW December 2011 Transaction Overview Proforma Werklund Capital Ownership $3.0mm Common Shares Pre Financing WCC Ownership % (1)  With Werklund Capital @ $2.40 per share 3.5mm shares 28.2% $4.7mm Convertible Debenture Add: Equity Financing  With Werklund Capital @ 4%, due Dec 0.1mm shares 0.9% 2014, convertible @ $2.55 Add: Convertible Debentures (assume exercised) $35.0mm Operating Facility 1.9mm shares 14.6%  With PNC Bank @ prime + 1.25% Add: Dilutive Securities $5.0mm Accordion 0.2mm shares 1.3%  With PNC Bank @ prime + 1.25% Total Share Ownership (FD) (Post May 2012 financing) 5.7mm shares 45.1% 1)Assumes 12.7mm shares post conversion of the convertible debentures and exercise of options and warrants. Closed $48 million in financing 15
  16. 16. ATTRACTIVE VALUATION*Source: Factset, Bloomberg and company filings1) Share price as of May 17, 20122) Enterprise Value calculated as market cap plus total debt minus cash3) Estimates based on consensus research estimates 16
  17. 17. INVESTMENT HIGHLIGHTS Proven management team with a history of value creation Solid industry fundamentals supported by strong commodity prices Clean balance sheet to support near-term growth initiatives Significant growth opportunities across emerging oil-weighted resource plays Flexible and experienced workforce to capture a range of growth opportunities 17
  18. 18. CONTACT Bharat Mahajan, CA Chief Financial Officer Aveda Transportation and Energy Services Suite 725, 435 – 4th Avenue SW Calgary, AB T2P 3A8 (403) 264-5769 bharat.mahajan@avedaenergy.com 18
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