confidential umw oil & gas corporation berhad -...
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Overview
3
• 1988 Establishment of UMW Oilpipe Services Sdn Bhd marks
our foray into the oil and gas business
• 2002 UMW Oil & Gas division was established
• 12 November 2012 UMW Oil & Gas Corporation Sdn Bhd incorporated in
Malaysia as a private limited company
• 14 May 2013 UMW Oil & Gas Corporation Sdn Bhd converted into a
public company
• 1 November 2013 UMW Oil & Gas Corporation Bhd Listed in Bursa Malaysia
• Staff Strength 719 (as at 31 Dec 2013)
Background
Financial Performance 2013
• Revenue RM 737 Million / USD 234 Million
• PBT RM 205 Million / USD 65 Million
• PAT RM 192 Million / USD 61 Million
Exchange rate 31.12.2013 : RM 3.1504 = USD 1
Share price performance
4
Key Data as at 24.2.2014
Issue Price RM 2.80
52 Week High
52 Week Low
RM 4.63
RM 3.10
Issued shares 2.62 Billion
Market Capitalisation RM 9.4 Billion
52 week high: RM 4.63 10.2.2014
Provide drilling services for both exploration and development activities
Semi-submersible drilling rig - Jointly-own and operate one semi-submersible drilling rig
Premium jack-up drilling rigs - Currently owns seven premium jack-up drilling rigs
UMW-OG’s market share(2)
Malaysia
5%
Business overview
5
Portfolio of high quality assets and premium-focused business Source: (1) 10 February 2014 : UMW Petrodril puchased an advanced hydraulic workover unit (HWU) from Canadian Energy Equipment Manufacturing (CEEM). UMWOG expects to take delivery of the HWU by
Q42014 (2) ODS petrodata as at 21 February 2014 (3) Douglas-Westwood annual average contracted rig count from 2009-2012 (4) Douglas Westwood: Based on threading market share on average over 2009-2012.
Drilling services Oilfield services
Provide OCTG threading, inspection and repair services
Facilities in Malaysia, Thailand, China and Turkmenistan
6 plants in 4 countries
Offshore drilling OCTG threading,
Inspection & repair services
Provide workover, repair and maintenance services for oil ad gas wells
Also provides agency services for specialised equipment and services for overseas clients
Own and operate four Hydraulic
Workover Units(1)
Hydraulic workover
SEA
36%
11%
Malaysia SEA
< 1%
UMW-OG’s market share(4)
Threading - Malaysia
Threading - China
11%
UMW-OG’s market share(3)
We are a Malaysian-based multinational oil & gas (“O&G”) player focused on providing drilling and oilfield services for the upstream sector of the O&G industry
29%
Local 66%
International 34%
First domestic owner and operator of jack-up drilling rigs in Malaysia
Sole Malaysian Owner & Operator of HWUs
Complementary oilfield services business
UMWOG at a glance
6
Drilling services 94%
Oilfield services 6%
Revenue breakdown for 2013
(1) 6 February 2014: UMWOG entered into a Vessel Construction Agreement with Keppel FELS Limited ("Keppel FELS") for the design, engineering and construction of a Rig Vessel, KFELS B Class jackup rig, for a cash consideration of US$218 million. UMWOG expects to take delivery of the drilling rig by the end of September 2015. 12 February 2014: UMWOG entered into a Sale and Purchase Agreement with Tianjin Haiheng for the purchase of two jack-up drilling rigs for a total purchase consideration of US$434 Million. UMWOG expects to take delivery of the drilling rigs by September 2014 and December 2014.
(2) 10 February 2014 : UMW Petrodril puchased an advanced hydraulic workover unit (HWU) from Canadian Energy Equipment Manufacturing (CEEM). UMWOG expects to take delivery of the HWU by Q42014
(3) OCTG = Oil country tubular goods
1 semi-submersible drilling rig
7 premium jack-up drilling rigs(1)
PETRONAS-licensed
5 Hydraulic Workover Units (“HWUs”) (2)
PETRONAS-licensed provider of HWU services
Provides OCTG(3) threading, inspection and repair services
6 Plants in 4 countries (Malaysia, Thailand, Turkmenistan and China)
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Gait I
Workover rig hp: 400
Gait II
Workover rig hp: 600
Gait III
Workover rig hp: :600
Gait V
Workover rig hp: 600
NAGA 1
Semisubmersible Rig
Water depth: 1000ft
NAGA 2
Jack-up Rig
Water depth: 350 ft
8 Offshore Rigs
5 Workover rigs
Our assets : Drilling Operations
NAGA 3
Jack-up Rig
Water depth: 350 ft
NAGA 4
Jack-up Rig
Water depth: 400 ft
NAGA 5
Jack-up Rig
Water depth: 400 ft
Gait VI
Workover rig hp: 600
Delivery: Q4 2014
NAGA 8
Jack-up Rig
Water depth: 400 ft
Delivery : Sept 2015
NAGA 6
Jack-up Rig
Water depth: 375 ft
Delivery : Q32014
NAGA 7
Jack-up Rig
Water depth: 375 ft
Delivery : Q42014
7
Our assets : Oilfield Services Operations
UMW Oilpipe Services Sdn Bhd Year : 1988 Location : Labuan – West Plant & East Plant
UMW Oilpipe Services (Turkmenistan) Ltd. Year : 2006 Location : Turkmenbashi, Turkmenistan
UMW Oilfield Services (Tianjin) Co., Ltd Year : 2002 Location : Tianjin, China
UOT (Thailand) Ltd Year : 1997 Location : Songkla & Sattahip, Thailand
8
0 052 100
237 026 058
246 139 031
107 072 157
0 122 192
255 204 204
255 204 153
199 184 222
153 204 255
9
NAGA 1 –Offshore Sarawak
NAGA 3 – Offshore Labuan
NAGA 2 – Offshore Vietnam
UOS – Labuan, Malaysia
UOS-TK – Turkmenbashi, Turkmenistan
UOS-TJ – Tianjin, PRC
UOT – Songkhla and Sattahip, Thailand
Semi-submersible rig
Oilfield services operations
GAIT I – KSB, Malaysia
GAIT II – ASB, Malaysia
NAGA 4 – Offshore Sarawak
Jack-up rigs
GAIT III – KSB, Malaysia
China
Malaysia
Vietnam
Thailand
Turkmenistan
Hydraulic workover units
GAIT V – Bongkot Field, Songkhla, Thailand
Our presence
International experience and platforms facilitate further growth overseas
10
International presence
Experience with international oil and gas companies
Accumulate
knowledge of local
regulations and
relationships
Track record
enables UMW-OG
to be competitive in
bids for contracts
from international oil
and gas companies
Familiarity with
operations and
HSE(1) requirements
of international oil &
gas companies
PETRONAS Carigali
In a favourable position to undertake projects for international customers as well as Malaysian customers operating internationally
(1) HSE = Health, Safety and Environment
China
Oilfield
services
Thailand
Oilfield
services
Workover
units
Indonesia
Offshore
drilling
Workover
units
Vietnam
Offshore
drilling
Workover
units
Turkmenistan
Oilfield
services
Malaysian 96%
Foreign 4%
UMW Holdings
55.1%
PNB 9.3%
EPF 6.4%
Others 29.2%
Shareholding structure (as at 28.1.2014)
11
Institutional Vs. Individual Top 3 Shareholders
Foreign Vs. Domestic Investors
Individual 3.4%
Body Corporate
74.5%
Government 0.2%
Nominees 21.9%
Build Asset Base
Build Capabilities
Secure Market Share
Manage Day rates
& Utilisation
13
UMW-OG’s key focus areas
Drilling academy
Experienced management
Strong HSE
Increase in number of assets
Assets with higher technical capabilities
Strong in Malaysia
International experience
Ability to secure contracts
Higher asset base
Higher utilisation
Higher day rate
Balance between short and long term contracts
Optimise utilisation
Design: MSC CJ-46-X 100D
Delivery: Sept 2014
Cost: US$217 Million
Vendor: Tianjin Haiheng Shipbuilding & Offshore Engineering Service Co
Design: MSC CJ-46-X 100D
Delivery: Dec 2014
Cost: US$217 Million
Vendor: Tianjin Haiheng Shipbuilding & Offshore Engineering Service Co
Design: KFELS B Class
Delivery: Sept 2015
Cost: US$218 Million
Design, engineering and construction: KEPPEL Fels Ltd
Design: CEEM 460K AHWU
Delivery: Q4 2014
Cost: US$2.8 Million
Vendor: Canadian Energy Equipment Manufacturing FZE
14
Recent Rigs Acquisition
UMW NAGA 6, UMW NAGA 7, UMW NAGA 8 and GAIT VI
To further expand into the
broader Asia-Pacific region as
part of our plan to be a global
player
To capitalise on favourable
industry conditions with an
enlarged asset capacity
To be more efficient in our
operation and maintenance due
to common equipment and
spare parts since we have four
of similar specifications rigs in
our fleet
To capitalise on the strong
market demand for our rigs
UMW
NAGA 6
UMW
NAGA 8
UMW
NAGA 7
GAIT VI
Build Asset Base
APPROACH STRATEGY
Drilling academy was established
in collaboration with INSTEP
The Academy will be fully operational by the first quarter of 2014
Building Capabilities and Competencies 15
Build Capabilities
Land Rig
Rig Simulator
Objectives:
• Building Capabilities & Competencies
• Addressing shortage of skilled
personnel
Secure Market Share
NAGA 2
• PetroVietnam
• Country: Vietnam
• Date: June 2013
NAGA 3
• PetroVietnam
• Country: Vietnam
• Date: April 2014
NAGA 5
• NIDO
• Country: Philippines
• Date: June 2014
GAIT V
• PTTEP
• Country: Thailand
• Date: July 2013
UOS Tianjin
• Baosteel
• Country: China
• Date: August 2013
UOS Turkmenistan
• Scomi Oiltools
• Country: Turkmenistan
• Date: January 2014
16
17
2010 2011 2012 2013 2014 2015 2016 2017 2018 N
AG
A
1
NA
GA
4
N
AG
A
2
NA
GA
3
Contracted with PCSB until Aug 2018
Contracted with Petrovietnam Drilling till Mar 2015
Optional extension until Apr 2018
Deli
ve
ry
(2
00
9)
Deli
ve
ry
(20
10
)
De
live
ry
20
13
Contracted with PCSB till Apr 2013
PETRONAS Carigali
NA
GA
5
Awarded 6 week contract (December 2013) D
eli
ve
ry
Ma
y 2
01
4
Contracted with PCSB till Mar 2014
Petrovietnam for two wells (Sept 2013)
1000ft
350ft
350ft
400ft
400ft
Rated
Water
depth
Secure Contracts
PETRONAS Carigali
PETRONAS Carigali
Rigs fully contracted out to blue chip customers
>25%
18
Manage Day Rates and Utilisation
NAGA 1
PETRONAS Carigali
Contract till Nov 2015
Extension to Aug 2016
Extension to Aug 2018
30%
75%
NAGA 2 Extension to Oct
2014 + option till
Mar 2015
NAGA 3
PETRONAS Carigali
>15%
Contract for 2
wells : estimated
till Sept 2014
NAGA 4
PETRONAS Carigali : NAGA 3
PETRONAS Carigali
~5%
Contract till Apr
2016 + option
till Apr 2018
NAGA 5
PETRONAS Carigali : NAGA 3
>15%
Contract for 6 weeks :
estimated till July 2014
Securing contracts with higher day rates
19
Certifications
Commitment to Safety Practices
Total Recordable Case Frequency (TRCF)(1)
Committed to the health and safety of personnel, protection of the environment and
compliance with applicable laws and regulations
(1) For a period, the total recordable case frequency is equal to the number of recordable cases multiplied by 1,000,000 and divided by actual man hours worked. Recordable
cases consist of fatalities, permanent total or partial disabilities and lost workday cases (excluding restricted workday cases).
0.8
0.24 0.21
2012 2013 Jan-2014
UMW-OG has demonstrated a strong operational track record and a focus on Health, Safety and Environmental compliance:
Health, Safety and Environment
Policies
Quality Health, Safety & Environment Drugs & Alcohol Stop Work Smoking
Fleet Expansion & Geographical Expansion
21 Planned
Growing our fleet to capture the demand in SEA and ASEAN region
22
Long Term Short Term
• NAGA 1 :
• Contracted till 2018 NAGA 2 :
6 + 6 + 4 +
5 (option) months
• Earnings visibility
• Revenue stability • Higher Day rates
NAGA 4 :
Contracted till 2016,
extension 2018
NAGA 3:
~5 months
NAGA 5 :
6 weeks
Balancing for sustainability and capitalising on the high demand for rigs
Balancing Long Term & Short Term Contract
2013 Financial Results
24
RM Million Revenue Profit /(Loss) Before Tax Profit /(Loss) After Tax
2012 2013 2012 2013 2012 2013
Drilling Services 678 692 99 191 88 176
Oilfield Services 43 44 6 7 5 6
Others 3 1 (21) 7 (21) 10
TOTAL 724 737 84 205 72 192
2012 2013
Drilling Oilfield Others
724 737
2012 2013
Drilling Oilfield Others
84
205
2012 2013
Drilling Oilfield Others
72
192
144% growth 2% growth 167% growth
(41)
102 84
205
(48)
79 72
192
(100)
(50)
-
50
100
150
200
250
-
100
200
300
400
500
600
700
800
2010 2011 2012 2013
Drilling Oilfield Others PBT PAT
Financial Performance
25
349
550
724 737
RM Million RM Million
Rig Ownership Rig Utilisation
NAGA 1 50%
NAGA 2 100%
NAGA 3 100% -
NAGA 4 100% - - -
Hakuryu 5 BBC -
Increase in number of rigs in operations contributing to the growth
0 – 25%
utilised 26% – 50%
utilised
51% – 75%
utilised 76% – 99%
utilised
100%
utilised
212
385
539 506 36
145
161
66
-
-
-
124
101
21
24 41
2010 2011 2012 2013
Malaysia Indonesia Vietnam Others
236
512
678 692
110
35
43 44
2
3
3 1
2010 2011 2012 2013
Drilling Oilfield Others
Revenue development
26
Revenue segmentation (RM Million) Revenue by geography (RM Million)
(1) Others segment is involved in investment holdings, provision of support services, management and corporate services. (2) Other countries include Turkmenistan, Thailand, China, Singapore and others. (3) Totals may not form an arithmetic aggregate of their components due to rounding.
724
349
550
349
724
550
737 737
Robust revenue growth driven by UMWOG’s execution capabilities
32
182 185
319
2010 2011 2012 2013
Earnings development
27
9.1%
EBITDA EBITDA margin PAT/(LAT) margin PAT/(LAT)
33.2% 25.6% -13.7% 14.4% 9.9% 26.1% 43.3%
(48)
79 72
192
2010 2011 2012 2013
EBITDA (RM Million) Profit / (Loss) after tax (RM Million)
6.3
0.9 0.3
2.9
0.7
-0.1
28
Gearing Ratio Figures in times
RM 1.2 Billion cash in hand significantly reduced the gearing ratio
Net Gearing
Gross Gearing
Include inter-company advance
Exclude inter-company advance
2013 Q3 2013 2012
After internal
reorganisation After IPO
Capital expenditure (as at 18.2.2014)
29
Rigs & HWUs RM 1.9 Billion
99.0%
Plant & machinery
RM 10.9 Million 0.6%
Others RM 8.5 Million
0.4%
Developing and further expanding our asset base 2014 TOTAL CAPEX = RM 1.9 Billion