Eurasia Drilling Capital Markets Day Highlights Growth
1. Eurasia Drilling Company Limited
Eurasia Drilling
Company Limited
Capital Markets Day
Excellence in Service -
Leadership in Growth
14th November 2012
2. 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”)
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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
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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
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DISCLAIMER 2
4. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Agenda
• 10.00am: Plan for the Day, Kim Kruschwitz, VP Marketing & IR
• Introduction and Investment Highlights– Alexander Djaparidze, CEO
• Outlook and Strategy – Kim Kruschwitz, VP Marketing & IR
• Onshore and Offshore Operations – Murat Sampiev, COO
• Q&A
• Coffee Break
• Marketing and Business Development – Kim Kruschwitz, VP Marketing & IR
• Financial Performance and Target Framework – Richard Anderson, CFO
• Summary and Outlook – Alexander Djaparidze, CEO
• Q&A
• 1.15pm: Buffet Lunch
PLAN FOR THE DAY 4
5. Eurasia Drilling Company Limited 5
INTRODUCTION AND
INVESTMENT HIGHLIGHTS
Alexander Djaparidze, CEO
6. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
EDC History
6INTRODUCTION AND INVESTMENT HIGHLIGHTS
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
7. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
EDC Strategy at IPO
7INTRODUCTION AND INVESTMENT HIGHLIGHTS
8. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
EDC‟s 2007 IPO Agenda – The Scorecard
• “Organic growth and efficiency improvement”
Metres drilled grew organically by 15% CAGR during 2007 to 2012 period
EBITDA margin grew 21% between IPO and 2012E
Metres drilled per crew per day up 40% vs. 2006
• “Continued focus on drilling services and potential selective expansion into closely
related services”
Our market share is now 29% vs. 20% in 2006 (based on metres drilled)
Horizontal drilling volumes tripled since 2007 (from c. 300K to c. 900K in 2012E)
The number of sidetracking jobs quadrupled between 2007 and 2012E
In 2011 did an asset swap with SLB; other “bolt-on” acquisitions
• Secure access to land rig manufacturing capacity”
Fabricated LeTourneau equipped “Yermak” at LUKOIL Kaliningrad facility
Secured alternative sources of rig supply
INTRODUCTION AND INVESTMENT HIGHLIGHTS 8
9. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
EDC‟s 2007 IPO Agenda – Scorecard (continued)
• Further growth of customer base and expansion into new markets”
Metres drilled for LUKOIL, our largest customer, grew 40% from 2007 to 2012E
Metres drilled for non-LUKOIL customers nearly quadrupled since IPO
Commenced drilling in Iraq in July 2012
• “Strategic expansion in offshore drilling”
EDC is the only Russian independent offshore drilling contractor
We now have 2 jack-up rigs plus 2 under construction compared to 1 in 2007
INTRODUCTION AND INVESTMENT HIGHLIGHTS 9
10. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Leading Drilling Company
Largest onshore driller and only
independent Russian offshore
driller
EDC 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
INTRODUCTION AND INVESTMENT HIGHLIGHTS 10
11. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
EDC Investment Highlights - Implications
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
INTRODUCTION AND INVESTMENT HIGHLIGHTS 11
Source: Company data Source: Company data
40
80
120
160
200
240
280
1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12
$m Ave YoY growth of 38% in qtrly
EBITDA
0%
5%
10%
15%
20%
25%
30%
2005 2006 2007 2008 2009 2010 2011
EDC ROCE
WACC=
12.8%
13. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
The Story So Far - Phase 1 Growth & Efficiency
OUTLOOK AND STRATEGY 13
Phase I
2005 – Q3 2008
Growth and Efficiency
Market
Environment
• Rapid production
growth
• Soaring commodity
prices
• Hyrdofrac
effectiveness declining
Strategy • Grow volumes
• Grow market share
• Boost margins through
operating efficiency
Achievements • Metres drilled +138%
(2008 vs 2005)
• Revenues +211%
(2008 vs 2005)
• Margins 11.9% to
21.5% (2005 to 2008)
0
20
40
60
80
100
120
5
6
7
8
9
10
11
Russian oil production v. Urals price
mbd Crude Oil Production (lhs) US$/bbl Urals Blend (rhs)
0%
5%
10%
15%
20%
25%
30%
35%
40%
2
4
6
8
10
12
14
16
18
20
22 Russian development drilling v. EDC market share
mln metres Development Drilling (lhs) % EDC Mkt Share (rhs)
Source: REnergyCo 2012, Bloomberg
Source: REnergyCo 2012, CDU TEK, Company data
14. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
The Story So Far - Phase 2 Crisis Response
OUTLOOK AND STRATEGY 14
Phase II
Q4 2008 – 2009
Crisis Response
Market
Environment
• Oil price collapse
• Significant cuts in
upstream capex
• Weakening of Ruble
Strategy • Sustain volumes
• Preserve margins
• Reduce capex to
maintain B/S strength
Achievements • Metres drilled in 2009
-6.7%
• Margins 21.5% to
23.1% (2008 - 2009)
• 2009 capex down 67%
• Share buy-back
0%
5%
10%
15%
20%
25%
30%
35%
40%
2
4
6
8
10
12
14
16
18
20
22 Russian development drilling v. EDC market share
mln metres Development Drilling (lhs) % EDC Mkt Share (rhs)
0
20
40
60
80
100
120
5
6
7
8
9
10
11
Russian oil production v. Urals price
mbd Crude Oil Production (lhs) US$/bbl Urals Blend (rhs)
Source: REnergyCo 2012, Bloomberg
Source: REnergyCo 2012, CDU TEK, Company data
15. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
The Story So Far - Phase 3 Re-Gearing for Growth
OUTLOOK AND STRATEGY 15
Phase III
2010 – 2012
Re-gearing for Growth
Market
Environment
• Oil price recovery
• Boost in upstream
capex
• Govt. drive for stable
oil production
• Industry restructuring
Strategy • Continue investment
in rig fleet
• Focus on core
strengths
• Develop offshore
capability
Achievements • 2010 capex rose to
$284m from $107m in
2009
• Schlumberger alliance
• 2 jack-up rigs ordered
0%
5%
10%
15%
20%
25%
30%
35%
40%
2
4
6
8
10
12
14
16
18
20
22
Russian development drilling v. EDC market share
mln metres Development Drilling (lhs) % EDC Mkt Share (rhs)
0
20
40
60
80
100
120
5
6
7
8
9
10
11
Russian oil production v. Urals price
mbd Crude Oil Production (lhs) US$/bbl Urals Blend (rhs)
Source: REnergyCo 2012, Bloomberg
Source: REnergyCo 2012, CDU TEK, Company data
16. 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
OUTLOOK AND STRATEGY
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
16
17. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Market Outlook – Structural Themes
Geography of operations
OUTLOOK AND STRATEGY 17
Head Office
Regional/Branch Office
Support Base
Operational Areas
19. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Market Outlook – Structural Themes
Offshore developments – Caspian Sea
OUTLOOK AND STRATEGY 19
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
20. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Market Outlook – Structural Themes
2. Ageing rig fleet ill-suited for increasing drilling complexity
OUTLOOK AND STRATEGY 20
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
21. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Market Outlook – Structural Themes
3. Industry Structure
• Drilling industry less cyclical than western „spot‟ markets
OUTLOOK AND STRATEGY 21
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)
22. 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*
OUTLOOK AND STRATEGY 22
• 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%
23. 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
OUTLOOK AND STRATEGY
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
23
Source: REnergyCO 2012/Company data
Source: REnergyCO 2012/Company data
24. 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
OUTLOOK AND STRATEGY 24
25. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
EDC Strategic Response
4. Leverage the characteristics of Russia‟s market to become our customer‟s
partner
• Seeking to develop long-term relationships
• Anticipating our customer‟s changing needs
5. Improving capability to offer more higher-value services
• Investment
• Strategic alliances
6. On-going focus on driving operating efficiencies
• For client benefit
• For EDC benefit
25OUTLOOK AND STRATEGY
Re-engineering the contractual model
26. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
The Next Phase – Further significant opportunities
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
?
OUTLOOK AND STRATEGY 26
28. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Russian Onshore – The Legacy
Historic context of OFS market
• Structure
‐ In-house cost-centres
‐ Geographically focused/full service lines
incl. drilling
‐ Metreage/well count quotas: commerciality
not considered
• Strategy
‐ Priority to develop new fields and grow
production as quickly as possible
‐ Limited consideration given to suitability of
fleet and utilisation of rig asset base
‐ Huge underutilised rig fleet throughout
Russia (Soviet era manufacture)
28ONSHORE AND OFFSHORE OPERATIONS
Source: REnergyCO 2012
0
5
10
15
20
25
30
35
40
3
4
5
6
7
8
9
10
11
Russian oil production and Development drilling
Crude Oil Production (lhs) Development Drilling (rhs)
mbd m metres
29. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Russian Onshore – Structural Dynamics
Russia‟s strategic imperative to maintain oil production levels is driving higher
drilling volumes as oil becomes harder to extract from maturing brownfields…
ONSHORE AND OFFSHORE OPERATIONS 29
• Maturity of brownfields…
‐ Declining well productivity &
reservoir pressures
‐ Increasing water-cut
‐ Requirement for infill drilling and
sidetracking operations
• Declining effectiveness of
hydrofracs on existing wells
‐ Intensive use of technology from
2000 to 2006
‐ Best candidates stimulated
multiple times 0
20
40
60
80
100
120
2004 2005 2006 2007 2008 2009 2010 2011
Additional production from hydrofracs declining
-
50
100
150
200
250
300
350
400
2001 2003 2005 2007 2009 2011
Barrels produced per metre drilledbarrels
Productivity peak
Productivity per metre declining
at ca. 8% pa
Source: REnergyCO 2012
Source: REnergyCO 2012
m barrels
30. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Russian Onshore – Structural Dynamics
More complex drilling services and the search for oil in new and more
challenging environments will grow in importance
ONSHORE AND OFFSHORE OPERATIONS 30
Source: Company data
-
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
18.00
20.00
2007 2008 2009 2010 2011
Upstream capex per boe
Brownfield Greenfield
$/boe
• Capex drivers in greenfield regions:
‐ Lack of infrastructure
‐ More complex geology, deeper reservoirs and
slower ROP
‐ Remote location logistics
• Well depth trend in Russia
‐ Deeper/longer well trend
‐ Average well depths exceeding 3,000 metres
‐ Drilling contractors & OFS companies need to
respond
Typically heavier, more modern rigs required
Source: REnergyCO 2012
2,600
2,650
2,700
2,750
2,800
2,850
2,900
2,950
3,000
3,050
3,100
3,150
AverageMeasuredWellDepth(metres)
EDC well depth
Russia Land W.Siberia
31. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Russian Onshore – Rigs
Over 60% of Russian rig fleet estimated to reach maximum operational life over
next 10 years
ONSHORE AND OFFSHORE OPERATIONS 31
Russian fleet age profile
Ageing legacy rigs less capable of meeting new drilling challenges
24%
10%
3%
4%
59%
< 5 years
5-10 years
10-15 years
15-20 years
>20 years
Source: Douglas Westwood 2012
Source: Company estimates
11%
16%
48%
8%
15%
2%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
100 T 175 T 200 T 250 T 320 T 450 T
Max.DepthinMeters
Light Medium Heavy
500 hp 750 hp 1,000 hp 1,200 hp 1,500 hp 2,000 hp
Russian fleet capacity profile
32. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Russian Onshore – Rigs
Most “traditional” Russian rigs will not meet the drilling requirements of a
growing % of fields
ONSHORE AND OFFSHORE OPERATIONS 32
“Typical” Russian drilling
spread
• Uralmash-3000 series or
equivalent
‐ Domestic built rig; 15-25 years
old
‐ 160-200 MT hook load
‐ 750-1,000 hp (500-750 kW)
‐ Non-variable AC electric drive
‐ No Top Drive
‐ Awkward/slow assembly and
disassembly
• Simple solids control (mud
cleaning) system
• Duplex mud pumps
• Limited rotary drilling
Limitations v. modern rig
• Shallower wells
‐ Up to 3,000 metres
• Slower drilling speeds
• Less mobile
• Limited horizontal well
capacity
• Higher maintenance
cost/downtime
• Energy inefficient
33. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Russian Onshore – Rigs
Modern rigs “fit for purpose”
ONSHORE AND OFFSHORE OPERATIONS 33
“Modern” drilling spread
• AC VFD “Cluster”
‐ Foreign designed & built rig;
1-8 years old
‐ 320-450 MT hook load
‐ 1,500-2,000 hp (1,000-1,500
kW)
‐ Variable Frequency Drive
(VFD) controls
‐ Top Drive
‐ Automatic pipe handling
• 3 stage solids control system
• Large capacity triplex mud
pumps
• Rotary drilling
‐ Conventional or Top Drive
Advantages v. older rig
• Deeper wells
‐ 5,000 metres or more
• Increased ROP
• Very mobile between well
pads
• Excellent horizontal &
multiple well capacity
• Low maintenance costs
and downtime
• More energy efficient
• Safe well control in high
pressure areas
Most capable and efficient solution for deeper and more complex drilling needs
34. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Russian Onshore – EDC 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
EDC fleet spread now …. And expected in the future
ONSHORE AND OFFSHORE OPERATIONS 34
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
EDC 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
EDC fleet age 2015(E)
35. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Russian Onshore – Operating Efficiency
EDC crew efficiency focus
• Industry leading health and safety standards
‐ EDC LTI rate consistently lower than IADC global LTI rate
• Ongoing crew training to enhance output
‐ 2012 hired Aberdeen Drilling School to perform in-house drilling
optimisation training
• Crew performance incentivisation
ONSHORE AND OFFSHORE OPERATIONS 35
50.0
60.0
70.0
80.0
90.0
100.0
110.0
120.0
2005 2006 2007 2008 2009 2010 2011 2012 (E)
EDC metres drilled per crew per daymetres
Source: Company data
EDC Crew Training Centre
Expl. drilling up
65% Y-o-Y
Horiz. Metres up
30%
Expl. drilling up
17% Y-o-Y Horiz.
Metres up 102%
36. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Russian Onshore – Utilisation
Efficient utilisation of assets is a key driver of EDC profitability
ONSHORE AND OFFSHORE OPERATIONS 36
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
37. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Russian Onshore – Workover and Sidetracking
• Enhancing recovery from existing wells
• 14% of current revenues
• Attractive growth segment
• Complementary to existing core drilling
competence
• EDC proposition enhanced by high quality
Schlumberger assets
ONSHORE AND OFFSHORE OPERATIONS 37
2007 2012
EDC
Workover rigs 88 390
Workover & completion crews 48 303
Sidetracking crews 11 30
Other Operators
Workover rigs 3,240 2,950
Workover & completion crews 2,595 2,601
Source: Company data/REnergyCo 2012
Source: REnergyCo 2012
0
1000
2000
3000
4000
5000
6000
2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E 2015E
Russian Workover & Sidetracking market (US$m)
Russian Workover Market Russian Sidetracking Market
38. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Russia & CIS offshore – Caspian Sea
Current EDC Assets
• ASTRA
‐ BMC-150-H jack-up rig
‐ 150 ft. (45 m) water depth
‐ 15,000 ft. (4,570 m) drilling depth
• SATURN
‐ Keppel Fells CS Mod V jack-up
‐ 350 ft. (107 m) water depth
‐ 26,000 ft. (7,925 m) drilling depth
• Yuri Korchagin Platform
‐ EDC drilling contractor
‐ SLB drilling services contractor
Le Tourneau Super 116E Rigs under construction
• 1st new jack-up NEPTUNE due for delivery mid-2013
• 2nd new jack-up MERCURY due for delivery end-2014
• Deeper water (350 ft./107m) and drilling (30,000 ft./9,150m) capability
than competing new-builds
ONSHORE AND OFFSHORE OPERATIONS 38
39. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Acquisitions and Partnerships
Acquisitions and partnerships to extend geographic reach, expand
complementary services or enable higher quality offering for customers
ONSHORE AND OFFSHORE OPERATIONS 39
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
41. Eurasia Drilling Company Limited 41
MARKETING AND BUSINESS
DEVELOPMENT
Kim Kruschwitz, VP IR and Marketing
42. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Market Context – significant changes in just 8 years
MARKETING AND BUSINESS DEVELOPMENT 42
• Primarily in-house operators pre-2005, cost centre focus
‐ Initial transformation – shedding non-core activities
‐ Improving utilisation and efficiency
• Competitor privatisations/spin-offs
2004
2012
Source: US EIASource: REnergyCO 2012
0
5
10
15
20
25
30
35
40
3
4
5
6
7
8
9
10
11
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012F
Russian oil production and development drilling
Crude Oil Production (lhs) Development Drilling (rhs)
mbd
m metres
0
10
20
30
40
50
60
70
3
4
5
6
7
8
9
10
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
US oil production and development drilling
Crude Oil Production (lhs) Crude Oil Development Drilling (rhs)
mbd m metres
43. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
“Surprisingly similar, but also very different”
Russian onshore drilling models have key differences to RoW that play to
EDC‟s strengths
43MARKETING AND BUSINESS DEVELOPMENT
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
44. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
2008/09 Case Study – Russian market and RoW
Russian drilling market characteristics result in less volatility
MARKETING AND BUSINESS DEVELOPMENT 44
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
45. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Evolution of EDC Customer Mix - Onshore
• Spun out of LUKOIL in 2004
• LUKOIL now <60% of revenues
• Schlumberger deal has increased importance of Rosneft in customer mix
• As green field becomes more important we will evolve our service offering to meet
customer requirements
MARKETING AND BUSINESS DEVELOPMENT 45
1%
82%
17%
2006 Customer mix
8%
56%
10%
25%
2%
2012 Customer mix
Other
Other
Sources: Company data Sources: Company data
46. 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
46MARKETING AND BUSINESS DEVELOPMENT
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
47. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Re-engineering customer relationships and sharing risk
intelligently
• Longer-term agreements improve revenue visibility
‐ LUKOIL onshore drilling, completion and workover
‐ TNK-BP Orenburg
‐ Gazpromneft West Siberia
‐ Caspian (Korchagin LOP, Petronas, ASTRA)
• Introducing greater flexibility to Framework Agreements
‐ Price to market
‐ More optimal deployment of assets
• A new approach to risk sharing
‐ Shift to day-rate for complex/challenging wells
‐ Retain turnkey pricing model for routine development drilling
MARKETING AND BUSINESS DEVELOPMENT 47
Anticipated changes to the architecture of LUKOIL Framework Agreement mirror evolution of
EDC‟s businesses
49. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Why we drill horizontally and frac
MARKETING AND BUSINESS DEVELOPMENT 49
30m vertical 8 ½„” wellbore = 20.3 m2
2000m of 6 1/4” OH horizontal = 1000 m2
30m radial hydraulic fracture = 2,830 m2
20 stages (30m radial hydraulic fractures )
= 56,600m2
Source: Baker Hughes Inc.
50. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Russian Onshore – EDC 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
EDC fleet spread now …. And expected in the future
MARKETING AND BUSINESS DEVELOPMENT 50
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
EDC 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
EDC fleet age 2015 (E)
51. 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
51MARKETING AND BUSINESS DEVELOPMENT
Self-Sourced Bazhenov
Fractured Reservoirs
Assessment Unit
11740102
West Siberian Basin
Geologic Province 1174
Source: Bank of America Merrill Lynch Source: Rosneft
52. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Substantial Medium-term Market Opportunities – the US
Experience
• Recent US experience in tight oil
• Bakken and Eagleford plays show rapid
growth potential of tight oil
‐ Bakken play in North Dakota saw rig
numbers grow from 50 to 174 in only three
years
• US Market structure different to Russia
‐ More US independent players resulting in
greater volatility
• Bajenov shale play total reserves
estimated at 60bn – 140bn bbs, at least
size of entire US tight oil reserves
52MARKETING AND BUSINESS DEVELOPMENT
0
20
40
60
80
100
120
140
160
180
200
0
100
200
300
400
500
600
700
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012YTD
Bakken tight oil dynamics
North Dakota
Crude Oil Production(lhs) Rig Count(rhs)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
0
50
100
150
200
250
300
2008 2009 2010 2011 2012 YTD
Eagle Ford drilling dynamics
Texas
Crude Oil Production (lhs) Drilling Permits (rhs)
Sources: BHI, US EIA
Source: Railroad Commission, TX
kbp
kbp
53. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Incremental Growth Opportunities
MARKETING AND BUSINESS DEVELOPMENT 53
• 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
54. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Russian Oilfield Services in 2020 – Our Vision
• What will the industry look like?
‐ Competitive structure
‐ Geographic profile
‐ Service mix
‐ Onshore v offshore
• The big strategic issues operators and service companies will face
‐ Reservoir maturity, water cuts, maintaining pressure
‐ Logistics
‐ Asset and service quality
• The contract model – will it have changed?
‐ Turnkey v dayrate
‐ L-T contract v spot market
MARKETING AND BUSINESS DEVELOPMENT 54
56. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Growing from strength…
Key Messages
• Strong growth 2007/2011
• Outperforming market in
metres drilled, revenues
and EBITDA
• Preserving high ROCE
returns
• Record results in Q3 2012
Robust core business
Record results Q3 2012
56FINANCIALS
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)
57. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Key Financial Highlights
• Transformation of EDC‟s
business reflected in
robust operating and
financial results
• Resilience of core
business and strong
operational management
seen during 2009 global
financial crisis
• Conservative balance
sheet and strong free
cash flow
• Investing in further
opportunities for organic
growth
• Strongly positioned for
opportunistic acquisitions
Strong track record
FINANCIALS 57
2007 2008 2009 2010 2011
Metres drilled (000‟s) 3,269 4,041 3,753 4,103 4,777
Revenues (US$m) 1,492 2,102 1,382 1,812 2,752
EBITDA (US$m) 313.8 452.7 319.8 435.9 597.2
EBITDA margin (%) 21.0 21.5 23.1 24.1 21.7
EPS (US$) 1.15 1.61 1.24 1.44 1.89
Dividend per share (US$) N/A 0.25 0.25 0.31 0.47
Net Debt: EBITDA (0.2) (0.04) (0.8) (0.5) 0.4
Capex (US$m) 319.7 327.0 106.8 283.8 399.9
58. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Significant Capex program focused on evolving fleet to meet
the most demanding and 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
EDC capital expenditure
58FINANCIALS
$m
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2007 2008 2009 2010 2011 2012F 2013F 2014F 2015F
Onshore- Maintenance Onshore- Investment
Offshore Other- onshore
59. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
EDC‟s Conservative Debt Profile
• Substantial debt headroom
• Strong FCF generation
• Net debt/EBITDA stable and not to exceed approx. 1.2x if large acquisition
• EDC US$ debt rated „BB/B‟ (positive outlook) by S&P and „BB‟ (stable outlook) by
Fitch
FINANCIALS 59
$m 2007 2008 2009 2010 2011 2012 (E)
Net cash (debt) 59 17 252 226 (244) (368)
Net debt/EBITDA (0.19x) (0.04x) (0.79x) (0.52x) 0.41x 0.48x
Free cash flow (146) (17) 303 39 26 -
Capex 320 255 177 225 417 c. 600
60. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Debt Maturity Profile
• May refinance part of
2013 debt as current
market conditions are
supportive
• Broadly naturally
hedged
60FINANCIALS
0
50
100
150
200
250
2012 2013 2014 2015 2016 2017 and
thereafter
US$(million)
RUB denominated debt USD denominated debt Shareholder Debt, USD
175
118
68
34
155
203
d
61. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Management Incentive Plan
• Old Incentive Plan was a modified SAR plan
‐ Did not work effectively due to stock price volatility
• New Plan was tied to meeting yearly EPS targets with thee years vesting
‐ EPS closely aligns management goals with shareholders
‐ Vesting provides a “Golden Handcuff” feature
FINANCIALS 61
62. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Disciplined M&A Methodology
Financial criteria
• EBITDA accretive immediately
• Earnings accretive immediately
• IRR high teens
‐ Unlevered
‐ After tax
FINANCIALS 62
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
63. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Steady Growth in Yearly Dividends
63FINANCIALS
• Growth business
• Historically progressive dividend with current payout ratio of 20-25% of earnings
• Strong alignment with shareholder interests – share buyback and special dividend of
$179m ($1.22 per share) in 2010 (not shown above).
25 25
31
47
0
10
20
30
40
50
2008 2009 2010 2011
Dividendpershare(UScents)
64. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Outlook
2012 full year guidance
• October update:
‐ Revenues: US $3.175 bln
‐ EBITDA margin: at least 24.3%
‐ 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)
FINANCIALS 64
65. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Base assumptions underlying EDC‟s 3 Year Target growth
framework
• Urals blend oil price $70-$120 pb
• Ruble stable at Rbs 31.5/US$
• Rbs and US$ interest rates broadly unchanged
• Russian wage and cost inflation +5%-7% pa
• Onshore drilling growth broadly in line with REnergy forecasts
• Stable pricing environment, but with change in drilling mix
FINANCIALS 65
67. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Outlook for 2015 – 3 Year Target Growth Metrics
EDC Core Business
*ROCE is calculated as Income from operations divided by capital employed (total shareholders‟ equity plus net debt)
EDC Upside
• 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
SUMMARY AND OUTLOOK 67
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*
68. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
EDC Investment Highlights
Leadership
Secure fundamentals
Growth
Higher value for our customers
Efficiency
Commitment to strong Shareholder Returns
68SUMMARY AND OUTLOOK
71. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Presentation Team
• One of the founders of EDC in 2002 and its current Chief Executive
Officer.
• Board member of EDC since 2002.
• Dr. Djaparidze served as the President of PetroAlliance Services
Company Limited (which he also helped found) from 1995 to 2007
and was Executive Chairman of the Board of Directors from
February 2007 until 2009.
• From 1990 until 1995 he served as Managing Director of MD SEIS,
a Russian-US joint venture oilfield services company.
• Dr. Djaparidze holds a degree in Mining Engineering and
Geophysics from Gubkin Russian State University of Oil and Gas
where he obtained his Doctorate of Science.
• In 2006, he was awarded the Russian Federation prize for special
achievements in science and technology.
APPENDIX 71
Alexander Djaparidze
Chief Executive Officer
72. 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 72
Murat Sampiev
Chief Operating Officer
73. Eurasia Drilling Company LimitedEurasia Drilling Company Limited
Presentation Team
APPENDIX 73
• 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
74. 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 74
Kim Kruschwitz
Vice President, Marketing
& Investor Relations