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    Edc presentation dr_ultimate_oil_services_and_e&p_conf Edc presentation dr_ultimate_oil_services_and_e&p_conf Presentation Transcript

    • Eurasia Drilling Company Limited Eurasia Drilling Company Limited Dahlman Rose conference Excellence in Service - Leadership in Growth 3rd December 2012
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Disclaimer The materials contained herein (the “Materials”) have been prepared by Eurasia Drilling Company Limited (the “Company”) and its subsidiaries and associates (the “Group”) solely for use at presentations in December 2012. By accepting the Materials or attending such presentation, you are agreeing to maintain absolute confidentiality regarding the information disclosed in the Materials and further agree to the following limitations and notifications. The information contained in the Materials does not purport to be comprehensive and has not been independently verified. The information set out herein is subject to updating, completion, revision, verification and amendment and such information may change materially. The Company is under no obligation to update or keep current the information contained in the Materials or in the presentation to which it relates and any opinions expressed in them are subject to change without notice. The Company and its affiliates, advisors and representatives shall have no liability whatsoever (in negligence or otherwise) for any loss whatsoever arising from any use of the Materials. The Materials are strictly confidential and do not constitute or form part of, and should not be construed as, an offer, solicitation or invitation to subscribe for, underwrite or otherwise acquire, any securities of the Company or any member of the Group nor should they or any part of them form the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities of the Company or any member of the Group or global depositary receipts representing the Company’s shares nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. This document is neither an advertisement nor a prospectus. The Materials have been provided to you solely for your information and background and are subject to amendment. The Materials (or any part of them) may not be reproduced or redistributed, passed on, or the contents otherwise divulged, directly or indirectly, to any other person or published in whole or in part for any purpose without the prior written consent of the Company. Failure to comply with this restriction may constitute a violation of applicable securities laws. The Materials are directed only at (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, (the “Order”) or (ii) high net worth entities, and other persons to whom they may lawfully be communicated, falling within Article 49(2) of the Order (all such persons together being referred to as “relevant persons”). Any investment activity to which the materials relate is available only to, and will be engaged in only with relevant persons. Any person who is not a relevant person should not act or rely on the Materials or any of their contents. Neither the Company’s share nor global depositary receipts representing the same have been, nor will they be, registered under the U.S. Securities Act of 1933, as amended, or under the applicable securities laws of Australia, Canada or Japan. Any such securities may not be offered or sold in the United States or to, or for the account or benefit of, US persons except pursuant to an exemption from registration and, subject to certain exceptions, may not be offered or sold within Australia, Canada or Japan. No representation or warranty, expressed or implied, is made by the Company and any of its affiliates as to the fairness, accuracy, reasonableness or completeness of the information contained herein and no reliance should be placed on it. Neither the Company nor any other person accepts any liability for any loss howsoever arising, directly or indirectly, from reliance on the Materials. The Materials include forward-looking statements which are based on current expectations and projections about future events. These forward-looking statements are subject to risks, uncertainties and assumptions about the Company and its subsidiaries and investments, including, among other things, the Group’s results of operations, the development of its business, trends in the oil field services industry, and future capital expenditures and acquisitions. In light of these risks, uncertainties and assumptions, the events in the forward-looking statements may not occur. Neither the Company nor any other member of the Group undertakes to publish any revisions to any forward-looking statements to reflect events that occur or circumstances that arise after the date of the Materials. In particular, we note that, unless indicated otherwise, the market and competitive data in these Materials have been prepared by REnergy CO (“REnergy”) and Douglas-Westwood Limited (“Douglas-Westwood”), a global consulting and services organisation focused on the energy and marine industries. REnergy and Douglas Westwood compiled the historical data presented in these Materials from a variety of published and in-house sources, including interviews and discussions with market participants, market research, web-based research and competitor annual accounts. REnergy compiled their projections for the market and competitive data beyond 2011 in part on the basis of such historical data and in part on the basis of their assumptions and methodology. In light of the absence of publicly available information on a significant proportion of participants in the industry, many of whom are small and/or privately owned operators, the data on market sizes and projected growth rates should be viewed with caution. The Materials are not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. The Materials are not for publication, release or distribution in Australia, Canada, Japan or the United States. 2
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Leading Drilling Company Largest onshore driller and only independent Russian offshore driller EDCL Investment Highlights – Key Attributes Leading Management High operational expertise and insightful strategic vision Strong Results Established track record of profitable growth and cash flow generation Quality Rig Fleet Flexible, efficient and relevant equipment Expanding Prospects Exposure to high growth domestic markets & increasing international opportunities 3
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited The EDCL Story – Market Leader in a Leading Market Phase I 2005 – Q3 2008 Growth and Efficiency Phase II Q4 2008 – 2009 Crisis Response Phase III 2010 – 2012 Re-gearing for Growth Phase IV 2013 – 2015 + Delivering Growth Market Environment • Rapid production growth • Soaring commodity prices • Hyrdofrac effectiveness declining • Oil price collapse • Significant cuts in upstream capex • Weakening of Ruble • Oil price recovery • Boost in upstream capex • Govt. drive for stable oil production • Industry restructuring • Drive to maintain Russian oil production • Increasing complexity of drilling • Ageing & incompatible Russian rig fleet Strategy • Grow volumes • Grow market share • Boost margins through operating efficiency • Sustain volumes • Preserve margins • Reduce capex to maintain B/S strength • Continue investment in rig fleet • Focus on core strengths • Develop offshore capability • Extend leadership position • On-going investment in rigs & infrastructure • Further enhancement of productivity & expertise Achievements • Metres drilled +138% (2008 vs 2005) • Revenues +211% (2008 vs 2005) • Margins 11.9% to 21.5% (2005 to 2008) • Metres drilled in 2009 -6.7% • Margins 21.5% to 23.1% (2008 - 2009) • 2009 capex down 67% • Share buy-back • 2010 capex rose to $284m from $107m in 2009 • Schlumberger alliance • 2 jack-up rigs ordered ? 4
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited EDCL Investment Case – Consistent Profitable Growth Leadership - market leading position in innovation and growth Secure fundamentals – stable core market environment – less volatile than other major drilling markets Growth - multiple growth opportunities in both core markets and developing markets Higher value for our customers – investment & partnerships enhancing the customer proposition Efficiency – long experience of driving operational efficiencies with more benefits to accrue Commitment to strong shareholder returns – leadership position and prudent financial management will continue to deliver strong free cash flow; focus on shareholder returns 5 Source: Company data Source: Company data 40 80 120 160 200 240 280 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 $m Ave YoY growth of 38% in qtrly EBITDA 0% 5% 10% 15% 20% 25% 30% 2005 2006 2007 2008 2009 2010 2011 EDC ROCE WACC= 12.8%
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Market Outlook – Structural Themes 1. Expanding prospects • Russian economy highly dependent upon oil and gas industry (ca. 50% State revenues) • Sustaining oil production requires more aggressive drilling – estimated 7-10% pa drilling growth required • Migration to more remote greenfield regions where operations, logistics and geology can be more challenging • Offshore opportunities in Caspian sea and other areas Source: REnergyCO 2012 Source: REnergyCO 2012 -4 1 6 11 16 21 26 31 36 6 8 10 12 Russian oil production v. development drilling Crude Oil Production (lhs) Development Drilling (rhs) m bpd m metres -150 050 250 450 650 850 1050 1250 1450 1650 2012F 2013F 2014F 2015F 2016F 2017F Incremental oil production by region Other TyumenTomsk East Siberia Timan Pechora YamalNenets Volga-Urals KhantyMansisk 000’s bpd 6
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Market Outlook – Structural Themes 2. Ageing rig fleet ill-suited for increasing drilling complexity 7 The Russian drilling fleet Average depth of Russian wells (metres) Rig additions to Russian fleet • Industry issues ‐ Many existing onshore rigs approaching end of 25 year useful life ‐ Fewer rigs capable of drilling deeper and more complex wells ‐ Industry facing massive investment requirement in next 5 years EDC Total Russian Fleet Average age 12 16 Average drilling depth 3,500 3,100 2,010 2,140 2,380 2,380 2,410 2,610 2,650 2,730 2,690 2,850 2,930 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Douglas Westwood 2012 Source: Douglas Westwood 2012, Company estimates Source: REnergyCO 2012 0 50 100 150 200 250 300 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012F No.ofrigs
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Market Outlook – Structural Themes 3. Industry Structure • Drilling industry less cyclical than western ‘spot’ markets 8 0 500 1,000 1,500 2,000 2,500 Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Russia vs. North American drilling activity North America Rig Count Russia Volumes (m/mo) Source: Baker Hughes Inc./REnergyCO 2012 (km/mo)
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Russia Rest of World • L-T contract model ‐ Lower volatility of pricing and margins • Spot market ‐ Higher pricing & demand volatility • Turnkey ‐ Optimal for simple drilling solutions • Dayrate ‐ Optimal for more complex solutions • Static, basic and ageing rig fleet ‐ Low efficiency and low utilisation • Versatile, mobile rigs ‐ Transition will increase utilisation • Mostly small independent players, c40% of market are in-house ‐ EDC can sustain leadership for longer • All independent, for-profit ‐ More competitive market • Full service ‐ Integrated project management model • Discrete service providers ‐ Specialisation “Surprisingly similar, but also very different” Russian business model differs to RoW - playing to EDC’s strengths 9
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited 2008/09 Case Study – Russian market and RoW Russian drilling market characteristics result in less volatility 10 EDC Experience North America Experience Volumes 2009 metres drilled decreased 7% 2009 average rig count decreased 42% Pricing Essentially flat Day rates declined Customers Oil companies in Russia broadly able to maintain capex; sheltered from oil price fall by decline in Rbl/US$ fx rate Significant capex cuts; major impact on rig counts Costs EDC cut costs and preserved margins Margin collapsed 50 70 90 110 130 150 170 190 210 230 250 2007 2008 2009 2010 2011 EDC v. North American peers: active rigs Active Rigs US Peers Active Rigs EDC 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 2007 2008 2009 2010 2011 EDC v. North American peers: net income margin Net Income Margin US Peers Net Income Margin EDC Sources: Company data, published annual reports for PTEN, HP, ESI & PD (NBR does not publish rig utilization) Sources: Company audited results; published annual reports for PTEN, HP, ESI, PD & NBR
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Market Outlook – Structural Themes 4. Competition • In-house operations being privatized or sold but challenges of: ‐ Ageing assets with limited capabilities ‐ Cost centre vs customer service attitude ‐ Infrastructure & mobility requirements ‐ Financial leverage constraints Russian drilling market share 2007* 11 • International operators: ‐ Barriers to entry ‐ Logistical challenges ‐ Integration issues Russian drilling market share 2012 (1H)* *by metres drilled Source: CDU TEK and Company estimates Source: REnergyCO 2012 22.3% 58.4% 19.3% EDC In-house All other independents 28.5% 39.9% 31.6% EDC In-house All other independents Russian drilling market*: 2007 – 2012F +49% EDC market share*: 2007 – 2012 22% to 29%
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Market Outlook – Structural Themes Offshore developments – Caspian Sea 12 LUKOIL discoveries in Russian sector Numerous blocks in exploration in Kazakh waters and Turkmenistan in development phase 3 jack-up rigs currently in operation (2013 demand expected to be 6-7 rigs) Approx 3% of world oil reserves Barriers to entry – time and costs to deliver new jack-up rig Medium term – further exploration development and production plans
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited EDC Strategic Response 1. Grow the business from a Leadership Position • Strategic Leadership ‐ Bought LUKOIL’s drilling assets in late 2004 ‐ Successful IPO in 2007 ‐ Successfully diversifying customer base • Market Share Leadership ‐ 1 in 4 wells in Russia drilled by EDCL ‐ EDCL owns 2 of the 3 available jack-ups in the Caspian Sea • Efficiency Leadership ‐ Margins have more than doubled since 2005 ‐ Youngest and most versatile rig fleet in Russia EDC continues to grow faster than the Market - 1,000 2,000 3,000 4,000 5,000 2005 2011 Metres drilled 18.8% CAGR '000 mtrs Mkt - 11.8% CAGR - 400 800 1,200 1,600 2,000 2,400 2,800 2005 2011 Revenues 26.3% CAGR $m Mkt - 15.7% CAGR 13 Source: REnergyCO 2012/Company data Source: REnergyCO 2012/Company data
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited EDC Strategic Response 2. Focus on the most attractive Growth Opportunities • Strong revenue growth dynamic in core markets • Other large medium-term opportunities – tight oil and Arctic • Exploring international opportunities 3. Maintain our Leadership in Innovation and Efficiency • Investing in our rig fleet • Investing in our people • Building partnerships to enhance our service 4. Improve capability to offer more higher-value services • Opportunistic acquisitions at the right price • Strategic alliances 14
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Customers as Partners – Anticipating their needs Customers evolving needs • Maintaining brownfield production becoming an increasingly complex problem • Huge growth in horizontal drilling, underbalanced drilling, complex wells • Shift towards greenfield production, offshore and shale • Customer’s increasing challenges require a different approach to risk sharing EDC development • Stronger, heavier and more versatile fleet • Relationship with Schlumberger • New model to proportionately share risk 15 Conventional vertical well Complex horizontal well Flow rate (bbs/day) 291 787 IRR at Urals blend = US $100/bb 15% 28% Case Study Much higher flow rates make advanced drilling attractive for our customers Gazprom Q2 2012 results; Credit Suisse estimates
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Drilling Market – Growing complexity of customer needs 16 0 2 4 6 8 10 12 14 16 18 20 2005 2006 2007 2008 2009 2010 2011 2012F 2013F 2014F 2015F Russian onshore drilling US$ billions Vertical & Deviated Horizontal Sidetracking Workover & Well Servicing 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 US drilling rig count by well type (%) Horizontal Conventional Source: Baker Hughes Inc. Source: REnergyCO 2012 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Russia horizontal and conventional drilling (%) Conventional Drilling Horizontal Drilling Source: REnergyCO 2012 US$ bn 1,184 1,475 1,549 1,649 1,387 1,792 2,235 3,000 3,600 4,000 4,400 2005 2006 2007 2008 2009 2010 2011 2012F 2013F 2014F 2015F Horizontal drilling in Russia (‘000 metres) Source: REnergyCO 2012
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Substantial Medium-term Market Opportunities • Tight oil/ Bajenov shale play ‐ Western Siberia up to 60-140bn barrels ‐ Geography aligns with EDC network infrastructure ‐ Modern rigs required to efficiently address complexities of tight oil Distribution of geological formations 17 Self-Sourced Bazhenov Fractured Reservoirs Assessment Unit 11740102 West Siberian Basin Geologic Province 1174 Source: Bank of America Merrill Lynch Source: Rosneft
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Margin Improvement Potential – Focus on Rig Utilisation Efficient utilisation of assets is a key driver of EDC profitability 18 Support organisation optimisation • Divested transport & well services • Support base consolidation program throughout operations • Supply chain rationalisation • Current programs include: ‐ Relocation of Zhirnovsk infrastructure 600km closer to rig teams Further utilisation improvements • Faster moving rigs • 1 Rig/1 Crew strategy • Migrating from crew-based scheduling to rig- based scheduling 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2005 2006 2007 2008 2009 2010 2011 9M-12 Drilling fleet utilisation (excludes Sidetrack rigs) Active Moving/ Rig-up/dn Total Utilised Source: Company data
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Enhancing the Proposition via Acquisitions & Partnerships Acquisitions and partnerships to extend geographic reach, expand complementary services or enable higher quality offering for customers 19 Schlumberger (SLB) transaction Case Study Bought: 19 drilling, 23 sidetracking and 34 workover rigs • Young, high-spec rig fleet • Significant additional sidetrack and workover capacity • Very high quality crews Sold: drilling services business (directional drilling & measurement, cementing and drilling fluids) • Non-core • High benefit from provision by SLB Other benefits realised • Closer alignment with all SLB product lines • Greater efficiencies in customer service • Enhanced offshore service capability • Strategic Alliance to capture future projects
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Financial Performance – Strong Growth with High ROCE Key Messages • Strong, consistent growth since 2007 • Outperforming market in metres drilled, revenues and EBITDA • Preserving high ROCE • Record results in Q3 2012 Robust core business Record results Q3 2012 20 9M 2011 9M 2012 Change (%) Metres drilled (000’s) 3,668,942 4,582,644 +25 Revenues (US$m) 2,042 2,402 +17 EBITDA (US$m) 447 614 +37 2007 2011 CAGR (%) Metres drilled (000’s) 3,269 4,777 +9.95 Revenues (US$m) 1,492 2,752 +16.5 EBITDA (US$m) 313.8 597.2 +17.5 EPS (US$) 1.15 1.89 +13.2 ROCE(%)* - 24.2% N/A *ROCE is calculated as Income from operations divided by capital employed (total shareholders’ equity plus net debt)
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Capex geared to meet the most complex customer needs • 32 new onshore rigs expected in next 3 years: ‐ 26 heavy-weight rigs ‐ 6 light-weight/mobile rigs • Up to 30 medium-weight rigs for retrofitting • Jack-up rig orders ‐ $235m per rig ‐ Neptune due for delivery mid-2013 ‐ On budget ‐ Mercury due for delivery end 2014 • Other ‐ North Iraq in 2012/13 Capital Expenditure 21 $m 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 2007 2008 2009 2010 2011 2012F 2013F 2014F 2015F Onshore- Maintenance Onshore- Investment Offshore Other- onshore
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Incremental Growth Opportunities 22 • Bolt-on acquisitions in core markets • Tight oil opportunity (Bazhenov) – MOU with LUKOIL/SLB • MENA – 3rd largest onshore market globally – Acquisition led strategy • Offshore – Caspian – Arctic Strong Balance Sheet and established Partnerships enhance our long-term optionality 0 500 1,000 1,500 2,000 2,500 3,000 0 250 500 750 1,000 1,250 1,500 2007 2008 2009 2010 2011 2012F 2013F 2014F 2015F 2016F Rig counts in Russia and other major markets Russia (lhs) MENA (lhs) N.America (rhs) No.ofRigs Source: Douglas Westwood 2012
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Disciplined M&A Methodology Strategic criteria • Complementary to existing portfolio • Enhance service offering Financial criteria • EBITDA accretive immediately • Earnings accretive immediately • IRR high teens ‐ Unlevered ‐ After tax 23 Purchase of Transocean jack-up IRR(E) +17% vs IRR(A) +20% Asset swap with Schlumberger $105m EBITDA first full year for $260m purchase price Recent acquisitions generating attractive returns
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Near-term Outlook 2012 full year guidance • October update: ‐ Revenues: US $3.175bn (implying yoy growth of over 15%) ‐ EBITDA margin: at least 24.3% (up from 21.7% in 2011) ‐ Metres drilled: over 5.8 mln metres 2013 and forward revenue visibility • Healthy backlog/pipeline growing strongly • 68% of 2013 tentative budgeted revenue contracted or about to be contracted • c. 60% of revenues p.a. in 2014-2015 expected under long-term contracts ‐ Negotiating Framework Agreement with LUKOIL (2013-2015) ‐ Long-term agreement with LUKOIL for workover services (2010-2015) ‐ Long-term agreement with TNK-BP for drilling (2012-2014) ‐ Long-term agreement with LUKOIL for LSP-1 platform (2012-2017) ‐ Agreement with Petronas (Turkmenistan) in the Caspian offshore (2013-2015) 24
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Outlook for 2015 – 3 Year Target Growth Metrics EDCL Core Business *ROCE is calculated as Income from operations divided by capital employed (total shareholders’ equity plus net debt) Upside Opportunities • Bolt on acquisitions within core operating area • Strategic acquisitions in MENA area • Incremental demand from tight oil drilling • Movement into Northern Offshore Waters or further expansion into Caspian • Increase payout ratio 25 2007 2012(E) 3 Year Target Range Revenues (US$ m) 1,492 3,175 4,500-5,200 EBITDA Margin (%) 21.0 24.3 26 to 28 PAT Margin (%) 11.3 12.0 13 to 15 Net Debt/EBITDA (x) (0.2) 0.4 0.1 ROCE (%) 24.6 23.0 22 to 25*
    • Eurasia Drilling Company Limited 26 Q&A
    • Eurasia Drilling Company Limited 27 APPENDIX
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited EDCL History 28APPENDIX OAO LUKOIL-Burenie formed, LUKOIL’s in- house drilling division 1996–2003 LUKOIL-Burenie drilling business developed December 2004 EDC acquired LUKOIL- Burenie Acquired ASTRA jack-up rig from LUKOIL Acquired 28 W/O rigs from SLB Operations began on LUKOIL’s Yu.Korchagin platform Acquired two West Siberia W/O businesses from LUKOIL (163 rigs) Acquired OOO Meridian (21 W/O rigs) in Komi Republic Ordered NEPTUNE jack-up from Lamprell (mid-2013 delivery) Acquired Kaliningrad drilling business from LUKOIL (4 rigs) SATURN jack-up rig acquired from Transocean Schlumberger (SLB) asset transaction and strategic alliance in Russia and CIS (19 drilling, 23 sidetrack & 34 W/O rigs) November 2007 EDC IPO on LSE Ordered MERCURY jack-up from Lamprell (late-2014 delivery) Entered Iraq acquiring 2+1 drilling rigs 2012 2011 2010 2009 2008 2007 2006 2004 1996-2003 1995
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited EDCL – Strong Presence in All Regions Geography of operations APPENDIX 29 Head Office Regional/Branch Office Support Base Operational Areas
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited EDCL’s Conservative Debt Profile • Substantial debt headroom • Strong FCF generation • Net debt/EBITDA stable and not to exceed approx. 1.2x if large acquisition • EDCL US$ debt rated ‘BB/B’ (positive outlook) by S&P and ‘BB’ (stable outlook) by Fitch APPENDIX 30 $m 2007 2008 2009 2010 2011 2012 (E) Net cash (debt) 59 17 252 226 (244) (368) Net debt/EBITDA (0.19x) (0.04x) (0.79x) (0.52x) 0.41x 0.48x Free cash flow (146) (17) 303 39 26 - Capex 320 255 177 225 417 c. 600
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Russian Onshore – EDCL fleet EDC’s fleet modernisation programme is focussed on: • Refurbishment of Medium Pad/Cluster rigs ‐ Workhorses of West Siberia far into the future • Replacement of Light Stationary rigs with Mobile units ‐ Sidetracks, smaller field development & brownfield in-fill • Replacement of Heavy Stationary rigs with predominantly Heavy Pad/Cluster rigs ‐ Deeper plays, ERD & complex wells EDCL fleet spread now …. And expected in the future 31 Source: Company data, (EDC rig fleet as of beginning 2012) Source: Company data Source: Company data Rig Type 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Tot.Rigs Statio nary 1 3 1 2 4 6 1 1 1 6 6 2 34 M o bile 2 1 1 3 6 6 2 4 5 8 38 M o bile 4 2 6 P ad/ C luster 4 9 7 20 10 5 3 1 1 2 1 1 3 5 3 6 12 1 3 6 103 Statio nary 1 3 1 3 1 1 2 2 14 Statio nary 1 3 1 8 5 3 2 3 4 2 32 P ad/ C luster 3 1 2 4 1 1 2 5 4 8 31 Totals 1 3 5 10 22 30 18 18 9 3 3 3 2 4 8 7 5 11 8 6 17 32 6 9 18 258 Weight Range Light 80-180 M T Medium 200-270 M T Heavy 320-450 M T EDCL fleet age 2012 34% 15% 3% 20% 28% Up to 5 years 5-10 years 10-15 years 15-20 years >20 years 38% 27% 13% 3% 19% Up to 5 years 5-10 years 10-15 years 15-20 years >20 years EDCL fleet age 2015 (E) APPENDIX
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Presentation Team • Chief Operating Officer of EDC since January 2010. • 26 years in oilfield services sector. • From 2009 to 2010 served as Senior Vice President of the Drilling Services Group at Schlumberger Russia. • Before joining Schlumberger since 2007 Mr. Sampiev was President and a member of the Board of Directors of the PetroAlliance Company Ltd. • Holds a degree of Comprehensive Mechanization of Field Development from Groznyi Oil Institute. APPENDIX 32 Murat Sampiev Chief Operating Officer
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Presentation Team APPENDIX 33 • Chief Financial Officer of EDC since July 2008. • Board member of EDC since 2011. • Chairman of the Board of Directors of Vanguard Natural Resources LLC. • Member of the Board of Directors of Transocean Ltd. from November 2007 until June 2011. • Member of the Board of Directors of Boots and Coots Inc. from August 1999 until September 2010. • Formerly, President and CEO of Prime Natural Resources Inc. from June 2001 until April 2007. • Certified Public Accountant and member of the Society of Exploration Geophysicists. • Bachelor of Science in Business-University of Colorado, Magna cum Laude. Masters in Taxation-University of Denver. W. Richard Anderson Chief Financial Officer of EDC
    • Eurasia Drilling Company LimitedEurasia Drilling Company Limited Presentation Team • Vice President Marketing and Investor Relations of EDC since July 2008; VP Marketing of EDC since April 2008. • Over 30 years of experience in the oilfield services sector. • Prior to joining EDC, Mr. Kruschwitz was employed by Baker Hughes Inc. and its forerunners since 1981. • Most recently Mr. Kruschwitz served as Country Director for Baker Hughes in Nigeria, followed by an assignment as Global Account Manager for ExxonMobil worldwide. • Mr. Kruschwitz has extensive management, marketing and operational experience on a global basis, including postings in the Middle East, the Far East, Central Asia, Europe, North Africa, West Africa and North America. • Bachelor of Arts, Cum Laude and Fellow in Chemistry from Jamestown College. APPENDIX 34 Kim Kruschwitz Vice President, Marketing & Investor Relations