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8/4/2019 Initiation Update Jun 2011
1/39
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8/4/2019 Initiation Update Jun 2011
2/39
Oilfie
Tabl
Invest
Stock
Financ
Valuat
Invest
Ene
Oil
Off
Off
Cru
Nat
Sha
Oil
US
M & A
Resea
ld Services
of Cont
ent Summar
erformances
ials/Forecasts
ions less co
ent Themes
rgy demand
Industry capit
hore Drilling
hore constru
de oil prices:
ural gas price
le Gas US t
rig count ac
Oil and horiz
buoyant ac
ch Disclosure
Sector Rep
nts
y Selectivity
Shares trea
underpinned
pelling but
Fundament
hydrocarbon
al expenditur
Deepwater
ction capital
volatile, high
s US prices
develop fav
tivity to remai
ntal rig count
ross all subse
s .....................
ort
still required
ding water fol
by still healt
alue plays re
al drivers still
sources will
to rise furt
expenditure i
expenditure
r geopolitical
o stay soft ne
urably, Euro
n at high leve
to drive glob
tors, multipl
.......................
.......................
lowing last ye
y order book
ain ...............
very much in
ontinue to d
her in 2011 an
ncreasing.......
set to increas
risk premium
ar term ..........
e potential b
ls in 2011 and
al count high
attractive .....
.......................
.......................
ars surge ......
s .....................
.......................
place ..............
minate rising
d through to
.......................
.....................
with upside f
.......................
ut slow takeo
2012 .............
r ....................
.......................
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.......................
.......................
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energy dem
2014 ..............
.......................
.......................
undamental r
.......................
f .....................
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nd .................
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isk ..................
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20 June 2
.......................
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011
p1
.......... 2
.......... 4
.......... 7
........ 12
........ 17
........ 17
........ 19
........ 20
........ 22
........ 23
........ 25
........ 26
........ 29
........ 29
........ 31
........ 34
8/4/2019 Initiation Update Jun 2011
3/39
Oilfie
Inv
The fu
hydro
high o
gener
UK ar
Table 1:
CompaKentz
Petrofa
Huntin
Rock S
Wood
Newpa
Schoell
Global
Kentzwide r
giving
with a
for the
the dri
Petrofexpos
backlo
enhan
backlo
Huntinbalanc
activit
Howe
sector
Wooddevel
standi
shareh
and th
Rock Smarin
leader
poise
explor
servicintere
seismi
ld Services
stment
ndamental ou
arbon energ
il prices and r
tion, EPS gro
Kentz, HuntiBuy Recommen
an yc
lid Images
roup
rk Resources
er Bleckmann
Average
continues to
nge of upstr
good earnin
2012 EV/EBIT
group and a
ver for share
facs shares arre to Middle
g at around $
cing strategic
g. The premi
ng has a strone sheet and
especially in
er, our DCF
stocks given
Group : Thepments PS
g, with stron
olders but w
is supports o
Solid ImagesCSEM acqui
ship position
to benefit fr
ation activity.
s and technot as the only i
c and electro
Sector Rep
ummar
tlook for the
demand, inc
ising oil rig co
wth of aroun
ing, Petrofac,ations valuati
epresent an
am and dow
s visibility an
DA of around
tractive risk/r
rice outperf
e performing
East markets.
12.0Bn is com
moves and th
m valuation
g competitiv
ill continue t
the US. Conv
aluation is no
he relatively f
roup contin
acquisition
g market posi
still believe t
r still positive
is rated as asition busines
in the integra
m its stronge
The recent tr
logy and salendependent
agnetics. Th
ort
Sele
lobal oil fiel
reasing oil/ga
unts. These p
20% per ann
, Rock Solid In metrics
Price413p
1516p
734p
5.0p
634p
$8.1
EUR59.8
-
xcellent inve
nstream mark
the financial
6.3 times an
ward profile.
rmance.
most modest
. The groups
paratively ve
e improving
as been ero
position owi
look for acq
entional valu
t unattractive
avourable ris
es to offer so
nd Well Sup
tion. The shar
hat there is fu
stance towar
BUY. Havings, RSI has a tr
ion of data t
r financial po
ding statem
prospect piupplier of int
e groups fina
tivity sti
services com
s industry cap
ositive factor
um and solid
mages and W
PE 201115.9
14.1
24.8
n.m
18.6
10.8
20.9
19.0
tment oppor
ets and many
position of th
P/E discount
The securing
ly following la
goal to doub
y healthy. We
usiness envir
ed to some e
g to its prod
uisitive growt
tion metrics i
and we belie
/reward profi
lid growth op
ort disposal
es have perfo
rther upside
ds the stock.
emerged fro
nsformed ou
pes. With the
ition and the
nt read positi
eline growinegrated proc
ncial position
ll requir
panies remai
ital expendit
are support
financial posi
Wood Group.
PE 201
1
2
1
1
1
15
unity. The gr
geographies.
e group is ve
to the sector
of prospecti
st years stron
le recurring 2
remain posit
onment give
xtent providi
uct focus and
. The group i
ndicate a sign
e the shares
le from a geo
portunities fo
and has an
rmed well m
otential. The
the disposal
tlook as a hig
resolution of
opportunitie
ively with the
. RSI is positissing and int
is improving.
d
ns favourable
re, expectati
d by healthy
ions. Our key
012 EV/EBIT4.9
2.4
2.0
9.6
4.7
9.6
6.1
5. 0
up is compe
The order bo
ry solid. The v
do not reflec
e business wi
g performan
10 earnings
ive on the sto
the good ea
g an excellen
global footpr
s a cyclical pl
ificant premiu
are likely to o
political pers
llowing the tr
ttractive and
st recently, b
risk/reward p
of its loss ma
h end geophy
the strategic
to it in the d
group seeing
oned to takeerpretation p
We suggest t
reflecting risi
ns of volatile
rder books,
buy recomm
TDA 2011 E6.7
8.8
9.2
n.m
12.2
5.7
9.1
8. 9
itively well pl
ok is extreme
aluation rema
the fundam
l reflect such
e reflecting t
y 2015 is atta
k reflecting c
nings visibilit
t entry oppor
int. The grou
y on oil and
m valuation t
tperform oth
ective.
nsformation
ell position
oyed by the
rofile is now
king and cash
sical consulta
uncertainties,
-risking of hy
increased int
dvantage ofoducts and s
he group will
ng global
but relatively
good cash flo
endations in t
EV/EBITDA 2016.
7.
8.
4.
8.
4.
7.
6.Source: FoxD
aced servicin
ly promising,
ins compellin
ntal prospec
qualities and
he groups
inable and th
ontinued valu
y from its
tunity.
has a robust
articularly ga
o the sector.
er UK oilfield
l strategic
d competitiv
cash return to
ore favourab
draining
ncy with a
RSI is now
drocarbon
rest in its
this marketervices for
return to
20 June 2
he
23
5
4
8
8
9
4
7vies
a
g
s
be
e
e
s
le
011
p2
8/4/2019 Initiation Update Jun 2011
4/39
Oilfie
profita
revenu
Lamprbeliev
upwar
rights
which
is relat
AMECexcell
compl
remai
regard
remai
and st
gener
positiv
OutsidSchoewith m
happy
group
leadinpositi
believ
oppor
is low
Technsolid s
a bala
EUR 8,
52% d
respec
Newpmost a
Far Ea
Austra
to red
growt
price
Bakerservic
comp
prosp
.
ld Services
bility by the e
e growth we
rell is rated asto be strate
d trend of the
issue schedul
is close to the
ively expensi
C is well placent order boo
ementary gro
undervalued
ing a possibl
s compelling
ategies befo
tion are app
e.
de the UK ourl ler Bleckmananagement s
with our fore
is very well p
g competitiven. The recent
this premiu
unities and s
by historical s
ip is rated asupport to sha
ced and pro
502M, with ar
ownstream. T
tively with a
ark Resourcesttractive gro
st and Brazilia
lasian and Asi
ce debt. The
profile is no
eakness pro
Hughesis rats companies.
ny. The shar
ctive PE mult
Sector Rep
nd of 2011/1
believe that t
s a HOLD . Thically sound
groups orde
e. On adjuste
top of valuat
e with the val
with a good
k and healthy
wth however
despite the
litigation ca
ly undervalue
e becoming
aling relative
r investmentnn Oilf ie ld E qating that th
asts, current
sitioned in s
market positishare price p
valuation to
rong financia
andards and
HOLD . Prosres. Strategic
itable contra
ound 54% ex
he shares curr
rospective P
s is rated as ath opportuni
n market. Th
ian markets,
re is financial
reflected in t
ides an excel
ted as HOLDWe believe t
s currently tra
iple of 17 tim
ort
. A strong IP
e shares are
e shares havend substanti
r book and it
forecasts, th
ion range for
uation fully di
competitive
financial posi
he groups ri
ost recent st
e, despite th
but we still
ore fundam
to the sector.
stance is highquipment is ra
y continue to
trading is go
rvicing the m
on with nicheerformance h
be justified g
l position and
our DCF valu
pects looking
priorities are
t backlog wit
ected to be
ently trade o
multiple of a
a BUY . Newpies in the US
acquisition o
hich should a
headroom fo
he undeman
lent entry poi
. Baker Hugh
his to be unm
des on 2011
es.
portfolio und
undervalued
responded wlly earnings
backlog. We
e shares curr
the global oil
scounting pr
osition in its
ion. The Mac
k reward pro
rong perform
recent attra
wait further c
ntally positiv
The recent a
hly selective aated as BUY .expect the g
d, although
ajor oilfield s
products basas somewhat
iven the mor
overall qualit
tion suggest
most encour
o continue to
h key differen
xecuted in 2
2011 and 20
round 18 tim
ark is a well-p
gas shale bas
f Rheochems
llow for furth
further acqui
ing and favo
t.
s is often reg
erited given t
nd 2012 EV/
rpins the val
n a DCF basi
ell to the connhancing. Ea
believe the s
ntly trade on
ield sector w
spects follow
respective pr
tec acquisitio
ile is fairly ref
ance, but are
tive contract
onfirmation o
, although th
dmittance of
and our key rSBOsCapit
eneral industr
e believe the
rvice compa
ed upon prostretched the
speciality ori
y of the busin
s upside pote
ging, the un
bring innova
iating assets.
11 and split
12 EV/EBITD
s.
ositioned mi
ins and in int
drilling fluid
r competitiv
sition but suit
rable valuati
arded as the
he product br
BITDA multi
ation and wit
s
firmation of trnings visibilit
hares will trea
2012 EV/EBIT
ich we believ
ing the recen
duct and ge
n is strategica
lected in the
likely to be h
awards. Capef the delivera
e attractive v
he shares to
ecommendatl Markets Da
y cycle to rem
m to be cons
ies in the dir
rietary technvaluation on
entated prod
ess. However
ntial of aroun
emanding va
tive solutions
Technips co
y market 3
multiples of
-sized US oilf
rnational mar
unit in April
growth. The
able acquisiti
n compared
poor relation
eadth and ge
les of 7.5 and
h the prospec
e MIS acquisiremains go
d water durin
DA multiples
e to be fair fo
cautious tra
graphical ma
lly sound pro
urrent valuati
ld back by th
e , a strong outce of strateg
luation and c
he main mar
tions are as fonewsflow wa
ain positive.
rvative with
ctional drillin
logy and a sconventional
uct portfolio,
the prospecti
10%.
luation shoul
to clients and
tract backlo
% subsea, 9
around 7.7 an
ield services c
kets including
011 represen
groups strat
ons may be h
ith its peers.
f the major
ographical wi
6.1 times res
t of strong
ition which wd reflecting t
g the ensuing
of 8.8 times
r the time bei
ing update.
rkets with an
viding scale a
on. KBC share uncertaintie
performer,
ic objectives
ash flow
et is a further
ollows:s most positi
We are curre
pside risks. T
g market, wit
lid financialmetrics. We
superior gro
ve PE valuati
give further
further devel
is currently
offshore and
d 6.6 times
ompany with
the fast gro
ts a move int
gy is to conti
ard to find. Th
. The recent s
S oilfield
dth of the
pectively with
20 June 2
he
ng
d
s
s
e
tly
he
a
th
n
op
ing
the
ue
is
are
a
011
p3
8/4/2019 Initiation Update Jun 2011
5/39
Oilfie
Sto
The U
perfor
to foc
also b
Exhibit
We co
20% o
select
the sestocks
and fin
likelih
correl
Furthe
global
next 3
per an
knock-
Exhibit
ld Services
k Perfor
oil service s
ming sectors
s on sectors
oyed sector
2: FTSE 350 Oil S
ntinue to beli
er the 2011/
d value opp
tor as a wholand their inh
ancial recessi
od of solid g
tion and con
rmore, in the
energy dema
years, of whi
num of invest
on effect for
: Year to date S
Sector Rep
mances
ctor has perf
ith the UK m
ost sensitive
performance.
rvices Index pri
eve that the r
012 period. T
rtunities rem
e. The perforrent sensitivi
on we mainta
lobal econom
inued high le
long term we
nd, which, ac
ich 45% is exp
ment in oil an
il service co
ock and Index P
ort
Share
ormed much i
arket in 2010,
towards eco
e chart
covery cycle
he recent sha
in. Further c
ance of oilfiy to macroec
in that we are
ic growth in 2
vels of indust
continue to e
cording to th
ected to be
d gas produc
panies.
rformance Ch
treadin
n line with th
outperformin
omic recover
Source: FoxDavies
for oil service
re price perfo
rporate activi
ld sector stoonomic activit
on a new leg
011 and 2012,
y exploration
xpect strong
International
et by the oil
ion over the
ange year to dat
water
market in 20
g the UK mar
y prospects.
Exhibit 3: FT
s has further t
rmances hav
ty and consol
ks is highly vy and oil pric
of growth an
, relatively hig
activity and c
demand for t
l Energy Asso
and gas sect
eriod, which
ollowin
11 having be
ket by almost
onsolidation
E 350 Oil Servic
o go with sec
somewhat st
idation shoul
latile reflectie expectation
d on a long t
h oil prices
apital expend
e oil services
ciation (IEA),
r. The IEA est
will be requir
last ye
n one of the
50%, as inves
and takeover
s Index vs. Bren
or earnings g
retched valua
provide add
g the high cys. Following t
rm upcycle. T
o which ther
iture levels.
sector reflect
ould increas
imates that th
d, will have a
rs surg
stronger
tors continue
speculation
Oil price
Source:
rowth of arou
tions althoug
itional upside
clicality of thhe economic
his reflects th
is a degree
ing growing
55% over th
e $400 billion
very strong
Source: FoxD
20 June 2
d
as
oxDavies
nd
h
to
e
f
vies
011
p4
8/4/2019 Initiation Update Jun 2011
6/39
Oilfie
Table 2:
Exhibit
June 1
FTSE
FTSEAIM O
All Sha
AMEC
Huntin
Wood
Lampr
Petrofa
Kentz
Cape P
KBC A
OSX In
Bloom
Baker
Schlum
Hallibu
Weath
Transo
Nabors
Newpa
Bloom
Euro O
S&P Eu
Techni
Saipem
Schoell
Tenaris
TGS N
Seadrill
Subsea
CGG V
ld Services
Price Performan
5: OSX Index pric
2011
il Services Inde
il Producers InG Index
e
PLC
PLC
roup
ll PLC
c Ltd
orp Ltd
LC
vanced Techn
dex
erg US Oil Ser
ughes Inc
berger Ltd
rton Co
rford Internati
ean Ltd
Industries Ltd
rk Resources
erg EMEA Oil
il Producers In
ro 350 Index
SA
SpA
er
SA
pec Geophysi
Ltd
7 SA
eritas
Sector Rep
ce (Absolute)
e chart
x
ex
logies
ices
nal
ex
al Co
ort
Sou
1-Mont-2.8
-1.7-4.9
-3.3
-7.0
0.4
-3.6
5.1
-0.1
1.4
10.7
-4.8
-2.6
0.4
1.4
0.2
2.3
-10.0
-8.9
-3.2
7.0
-3.3
-3.7
-3.9
1.1
-2.3
-4.4
-6.2
0.6
-3.6
-7.0
3.0
rce: FoxDavies
th%
%%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
xhibit 6: OSX In
3-Month1.5%
-5.7%-9.8%
-0.2%
-3.6%
-1.8%
0.6%
27.7%
5.0%
22.5%
21.7%
0.7%
-9.7%
-5.3%
0.5%
-5.5%
4.6%
-16.1%
-21.6%
-8.6%
-10.6%
-0.2%
-7.0%
-0.4%
5.0%
2.6%
-0.3%
-2.3%
2.7%
-9.3%
-1.6%
-5.5%
dex vs. WTI Oil price
YTD-2.4%
-3.7%-18.5%
-3.5%
-6.9%
-1.2%
11.4%
14.8%
-7.6%
32.0%
30.3%
15.0%
2.8%
2.2%
22.2%
-1.5%
13.6%
-25.0%
-11.2%
6.4%
4.1%
0.4%
-4.7%
-3.3%
1.6%
-4.2%
-6.0%
-14.9%
7.6%
-9.1%
-8.9%
3.2%Source: FoxD
Source: Fo
1-Yea37.6
16.216.3
9.1
26.7
58.0
91.8
77.0
16.9
75.6
137.4
76.9
39.7
47.0
59.2
34.0
75.8
15.5
24.9
17.3
85.8
47.3
5.7
3.8
35.9
33.8
59.2
2.2
66.4
36.8
29.9
37.7
20 June 2
vies
Davies
ar
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7/39
Oilfie
Table 3:
Exhibit
June 1
FTSE
FTSEAIM O
All Sha
AMEC
Huntin
John
Lampr
Petrofa
Kentz
Cape P
KBC A
Afren P
BG GrBP PLC
Cairn E
EnQue
Essar E
Exillon
Heritag
JKX Oil
Premie
Royal
Royal
Salama
Soco In
Tullow
Ascent
BowLe
Circle
Gulf Ke
Gulfsa
Hardy
Max Pe
Rockho
San Le
Tower
ld Services
Price Performan
: FTSE Oil Servic
2011
il Services Inde
il Producers InG Index
e
PLC
PLC
ood Group PL
ll PLC
c Ltd
orp Ltd
LC
vanced Techn
LC
up PLC
nergy PLC
t PLC
nergy PLC
Energy PLC
e Oil PLC
& Gas PLC
r Oil PLC
utch Shell PLC
utch Shell PLC
nder Energy PL
ternational PL
Oil PLC
Resources PLC
en PLC
il PLC
ystone Petrole
ds Petroleum
il & Gas PLC
troleum PLC
pper Explorati
n Energy PLC
esources PLC
Sector Rep
ce (Absolute)
es Index versus
x
ex
logies
C
m Ltd
LC
n PLC
ort
&P and general
1-Mont-2.8
-1.7-4.9
-3.3
-7.0
0.4
-3.6
5.1
-0.1
1.4
10.7
-4.8
8.4
-1.7-1.2
-5.4
-6.5
-2.9
-6.1
-1.1
-7.4
0.4
-1.4
-1.5
-8.1
-1.2
-5.6
-24.0
0.9
2.3
-11.2
-9.4
-5.7
-19.0
25.9
-6.9
22.7
Indices
th%
%%
%
%
%
%
%
%
%
%
%
%
%%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
3-Month1.5%
-5.7%-9.8%
-0.2%
-3.6%
-1.8%
0.6%
27.7%
5.0%
22.5%
21.7%
0.7%
5.9%
-13.9%-6.2%
-5.2%
-17.2%
-13.4%
4.3%
-26.1%
-12.7%
-5.1%
-2.3%
-1.0%
-3.3%
1.7%
-10.5%
-33.5%
-0.5%
7.2%
12.8%
-27.1%
26.6%
-16.4%
21.6%
-22.6%
-7.0%
YTD-2.4%
-3.7%-18.5%
-3.5%
-6.9%
-1.2%
11.4%
14.8%
-7.6%
32.0%
30.3%
15.0%
6.9%
1.0%-7.8%
-5.4%
-11.3%
-28.9%
23.2%
-48.4%
-14.0%
-5.6%
-2.6%
-1.2%
-5.3%
-1.1%
-2.2%
-63.6%
-15.8%
-4.0%
-17.4%
-36.9%
-7.0%
-30.1%
-27.6%
9.1%
29.9%
Source: FoxD
Source: FoxD
1-Yea37.6
16.216.3
9.1
26.7
58.0
91.8
77.0
16.9
75.6
137.4
76.9
73.3
17.319.4
-6.4
18.6
-8.4
133.6
-34.9
8.2
51.7
13.4
18.9
4.1
-13.2
6.6
-5.0
136.5
0.4
73.5
-10.4
22.0
-13.6
-5.0
50.0
278.6
20 June 2
vies
vies
ar
011
p6
8/4/2019 Initiation Update Jun 2011
8/39
Oilfie
Fin
Our fofrom l
by det
Exhibit
For 20
books
indust
attain
contin
With
contin
Table 4:
Amec (
PetrofacWood Gr
Hunting (
LamprellKentz ($
Schoelle
Technip (
Saipem (
Subsea 7
Hunti
Kentz
Lamp
Woo
AME
Petro
Saipe
Tech
Baker
Schlu
Hallib
ld Services
ncials/F
recasts are prtest trading s
ails of the up
8: Order Books a
11 we are gen
and latest gu
ry generally e
ent of some
ued stringent
any of the co
ue to benefit
EBITDA margin
)
($m)oup ($'m)
)
($m))
r-Bleckmann (EUR)
EUR)
Eur)
($)
ng
rell
ac
m
ip
Hughes
mberger
urton
Sector Rep
orecasts
imarily basedtatements, su
ated backlog
nd Backlogs
erally assumi
idance from t
panded as 2
pricing powe
controls of c
rporates in n
from low tax
s (%) by compan
Dec-083,220
3,997nav
nav
3501,004
214
7,208
19,100
6,200
20054.8
2.9
6.1
4.2
7.5
12.4
7.0
22.6
28.7
14.6
ort
underpi
upon revenupported by o
/order books
g that under
e companies
10 progresse
r and the add
st bases.
t cash positi
harges, large
y
ec-09 Dec-103,170 3,100
8,100 12,300nav 6,000
nav nav
633 8361,497 1,602
76 131
8,018 8,502
18,730 20,505
5,900 6,400
20066.5
7.1
11.6
8.0
5.9
10.7
11.0
7.5
26.2
33.6
28.7
nned by
and marginur views on in
most recentl
lying revenue
and recent d
d. We do exp
ed value of th
ns, financial c
ly reflecting t
urrent Commen3,100 Acquist io
12,000 Back log6,000 Back log
nav New busi
1090 Boost fro1,602 Papua Ne
131 Good ord
8,502 Balanced
20,000 Record b
6,400 Complem
200716.7
6.3
16.0
8.8
5.5
12.2
12.0
5.5
26.8
36.2
26.4
still hea
trends identifidustry develo
revealed by
s increase in
iscussions wit
ect further m
e services pr
harges will n
e low tax juri
ts/Critical projectsn of Mactac boosts
of $12Bn followingof $6Bn following P
ness from Innova- E
m MIS acquisitionw Guinea projects d
er book to oilfield s
and diversified ord
cklog , well diversi
entary mix by contr
200817.8
5.9
12.5
9.3
8.0
12.6
14.2
10.8
25.9
33.0
25.6
lthy ord
ied at recent rpments. Thes
the company.
xcess of 10%,
h manageme
argin expansi
vided to oil i
t be onerous
sdictions in w
backlog
ward of 2nd phaseN acquisition
xtel acquisition
eveloping
rvice providers
r book
ied by activity, clien
act type and geogra
200916.2
7.0
9.7
8.6
8.5
15.4
15.6
9.0
15.1
29.1
19.9
r books
esult stages ae assumption
based upon
t. Margins ac
n in 2011 refl
dustry custo
and many co
ich they ope
Sour
of S.Yoloten project
t and geography
phy
2010 2017.1
6.7
16.3
8.2
8.7
14.6
16.4
12.6
18.2
26.0
22.9
nd comments are support
Source: FoxD
current order
ross the
ecting the
ers, and
panies will
rate.
ce: FoxDavies, Bloo
B
011E 20116.2 1
7.0
10.4 1
7.8
9.4
13.7 1
17.2 1
12.5 1
23.1
26.7
24.9
20 June 2
d
vies
mberg
acklog/forecasted s0.90
2.261.05
1.561.43
0.33
1.27
1.64
1.28
12 E7.1
7.1
2.3
8.3
9.8
3.7
8.0
2.9
5.2
8.7
7.1
011
p7
ales
8/4/2019 Initiation Update Jun 2011
9/39
Oilfie
Exhibit
ld Services
9: EBITDA margi
Sector Rep
s (%) by compa
ort
ny
Source:: FoxDavies, Bloom
20 June 2
berg
011
p8
8/4/2019 Initiation Update Jun 2011
10/39
Oilfie
Exhibit
Exhibit
Exhibit
ld Services
0: UK oilfield se
2: European oilfi
4: US oilfield se
Sector Rep
rvice companies-
ield service com
rvice companies
ort
EBITDA Margin
anies EBITDA m
ROA (%)
(%)
Source: FoxDavi
rgin (%)
Source: FoxDavi
Source: FoxDavi
Exhibit 11: U
s
Exhibit 13:
s
Exhibit 15: E
s
S oilfield service
K oilfield service
uropean oilfield
companies EBIT
companies ROA
service compani
DA Margin (%)
Sourc
(%)
Sourc
s ROA(%)
Sourc
20 June 2
: FoxDavies
: FoxDavies
: FoxDavies
011
p9
8/4/2019 Initiation Update Jun 2011
11/39
Oilfie
Exhibit
Exhibit
Exhibit
ld Services
6: UK Oilfield Se
8: European oilf
20: US oilfield se
Sector Rep
rvices Companie
ield service com
rvice companies
ort
s ROC (%)
anies ROC (%)
ROE (%)
Source: FoxDavi
Source: FoxDavi
Source: FoxDavi
Exhibit 17:
s
Exhibit 19:
s
Exhibit 21: E
s
S oilfield service
K Oil Services c
uropean oilfield
companies ROC
mpanies- ROE (
service compani
(%)
Sourc
)
Sourc
s ROE (%)
Sourc
20 June 2
: FoxDavies
: FoxDavies
: FoxDavies
011
p10
8/4/2019 Initiation Update Jun 2011
12/39
Oilfie
Table 5:
HuntiMReve
EBIT
EPS
DPS
EV/E
PE
Yield
Petro$MReve
EBIT
EPS
DPS
EV/E
PE
Yield
Wood$MReve
EBIT
EPS
DPS
EV/E
PE
Yield
Newp$MReve
EBIT
EPS
DPS
EV/E
PE
Yield
ld Services
Company financ
ngue
A
ITDA
fa cue
A
ITDA
d Group ue
A
ITDA
parkue
A
ITDA
Sector Rep
ial forecast sum
2010461.6
68.3
24.7
12.0
11.1
29.3
1.7
20104,354
759
162.6
43.8
9.0
14.0
1.9
20105,063
418.6
39.7
11.0
14.9
30.9
1.6
2010716.0
105.0
0.46
0.0
7.8
17.5
0.0
ort
aries and Valua
2011e509.1
84.3
29.2
12.6
9.2
24.8
1.7
2011e5,239
761
162.1
50.4
8.8
14.1
2.2
2011e5,694
444.6
56.4
12.1
12.2
18.6
1.3
2011e864.4
147.5
0.75
0.0
5.7
10.8
0.0
tion
2012e542.6
91.9
32.8
13.2
8.4
22.0
1.8
2012e5,910
852
183.5
57.9
7.5
12.4
2.5
2012e6,156
527.6
70.7
13.3
8.8
14.7
1.4
2012e971.1
163.4
0.84
0.0
4.9
9.6
0.0
Kentz$MRevenues
EBITDA
EPS
DPS
EV/EBITD
PE
Yield
RSI'000Revenues
EBITDA
EPS
DPS
EV/EBITD
PE
Yield
Schoeller EURM
Revenues
EBITDA
EPS
DPS
EV/EBITD
PE
Yield
1
A
A
r
A
Sour
2010 20057.4 1,1
81.7
40.02 4
10.00 1
7.1
17.0
1.5
2010 203,633 4
1,706 -1
-6.02
0.00
-0.9
-0.8
0.0
2010 20306.1 3
81.1 1
1.9
0.8
11.7
31.9
1.3
ce: FoxDavies, Bloo
011e 20125.3 1,2
85.6
2.83 4
0.40 1
6.7
15.9 1
1.5
011e 201,058 8,
,954 1,
-2.50
0.00
-2.7
-2.0 1
0.0
011e 20177.3 4
05.2 1
2.9
1.3
9.1
20.9 1
2.2
20 June 2
mberg
12 e1.3
0.9
.78
.82
6.3
4.9
1.6
12 e162
332
.26
.00
4.8
9.6
0.0
12 e6.3
5.8
3.8
1.7
7.4
6.1
2.8
011
p11
8/4/2019 Initiation Update Jun 2011
13/39
Oilfie
Val
Oilfiel
servic
We us
metric
The m
such a
constr
comp
should
amorti
cases
term g
Exhibit
Exhibit
ld Services
ations
service com
companies a
e a combinati
s.
ost important
s the seismic
uction. Also t
nies operate
be noted th
sation conse
ut are cautio
rowth rates a
22: FTSE 350 Oil
24: FTSE 350 Oil
Sector Rep
less co
panies from a
nd are conse
on of multipl
multiple is P
and subsea c
x rates can v
(Lamprell op
t some comp
uently inflatin
us on applyin
nd cost of cap
Services Index P
Services Index E
ort
pelling
valuation sta
uently best
s to take into
although th
mpanies havi
ry significantl
rates in the U
anies, especi
g the multipl
g this method
ital.
graph
/EBITDA ratios
but valu
dpoint are in
alued using t
account vario
PE varies sig
ng lower mul
y from one c
AE so tax is vi
lly the seismi
by reducing
ology across
Source: FoxDavi
e plays
many ways si
e traditional
us specific sh
nificantly by s
iples than th
mpany to an
irtually zero).
c companies,
EBITDA. We
the compani
Exhibit 23:
s
emain
milar to tradit
methodologi
ortcomings w
ub-sector wit
asset light-c
ther 0% to 4
EV/EBITDA
book part of
have looked
s because of
SX Index PE gra
ional manufa
s PE, EV/E
ith each of th
asset-intensi
mpanies e
% dependi
ultiple is wid
ost of goods
t DCF valuati
ignificant se
ph
cturing or
ITDA and D
e traditional
ive companie
gineering &
ng upon wher
ly used but it
sold as
ons in certain
sitivity to lon
Source:
Source: FoxD
20 June 2
F.
e
FoxDavies
vies
011
p12
8/4/2019 Initiation Update Jun 2011
14/39
Oilfie
Exhibit
Over t
to 18 t
multip
geogr
ensuin
or UK
Exhibit
Exhibit
ld Services
25: OSX Index EV
he past 10 ye
imes. There is
le tends to b
phical persp
g table indica
markets.
27: FTSE 350 Oil
29: Bloomberg E
Sector Rep
/EBITDA ratios
rs, the Europ
no strong co
high when th
ectives is gen
te that invest
ervices Index P/
EA Index P/Bo
ort
S
ean sector ha
rrelation bet
e oil price is
rally trading
ent opportu
Book graph
k graph
ource: FoxDavies
s averaged a
een the multi
ising. The foll
at relatively hi
nities are mor
Source: FoxDavi
Source: FoxDavi
Exhibit 26: Blo
P/E of approx
ple and any s
owing graphs
gh multiples
e apparent in
Exhibit 28:
s
Exhibit 30:
s
mberg EMEA Oi
imately 15 ti
ector specific
suggest that
rom a histori
the US secto
SX Index P/Boo
TSE 350 Oil Serv
l Services Index
es, with a typ
macro factor
the sector fro
al perspectiv
r than in eithe
k graph
ices Index EV/Sa
EV/EBITDA ratio
Sourc
ical range of
although th
m various
e value and th
r the Europe
Sourc
les graph
Sourc
20 June 2
: FoxDavies
1
e
n
: FoxDavies
: FoxDavies
011
p13
8/4/2019 Initiation Update Jun 2011
15/39
Oilfie
Exhibit
ld Services
31: OSX Index EV
Sector Rep
/Sales graph
ort
Source: FoxDavi
Exhibit 32:
s
loomberg EMEAIndex EV/Sales
Sourc
20 June 2
: FoxDavies
011
p14
8/4/2019 Initiation Update Jun 2011
16/39
Oilfie
Exhibit
Exhibit
17 June 2
UKAMEC
Hunting
Kentz
Lamprell
Petrofac
Wood Gr
Rock Soli
Cape
KBC
FTSE Oil
Europe
Saipem
Technip
Subsea 7
BW Offsh
Seadrill
TGS
Schoeller
BBG EM
US ($)
Baker Hu
Halliburto
Schlumb
Weatherf
Transoce
Newpark
Oil State
BBG US
Market D
FTSE All-
Euro 350
S&P 500
Sub-se
Diversif
Offshor
Land D
Equipm
Engine
Reserv
Energy
Averag
ld Services
33: Valuation tab
34: Oilfield Servi
011
up
d Images
Services
ore
-Bleckmann
A Oil Services
ghes
n
rger
ord
an
Oil Services
ata
Share
ctor
ied Oil Services
e Drillers
rillers
ent
ring & Constructi
ir Information/Se
Shipping
e
Sector Rep
le (Geographic)
es sub-sector v
Share price
(Loc)
1102
734
413
375.6
1516
634.5
5
548
68.5
35.7
71.4
134.4
11.95
182.4
143.5
59.78
69.84
46.39
82.25
17.1
61.75
8.07
69.76
ion
ismic
ort
luations
Mkt Cap
US$
5,921
1,581
778
1,218
8,483
4,877
9.0
1,045.9
62.1
22,534
11,260
8,553
1,487
15,483
2,702
1,368
30,355
42,447
111,608
12,742
19,733
729
3,573
2010a
35.8
17.1
40.9
24.8
17.8
26.7
72.7
33.7
2010a 2011e
14.9 15.8
29.3 24.8
17.0 15.9
18.1 17.6
14.0 14.1
30.9 18.6
-0.8 -2.0
13.1 12.3
17.2 9.7
18.0 17.8
18.0 17.3
18.2 18.2
19.7 23.2
- 12.7
8.1 10.5
17.2 13.7
31.9 20.9
20.3 17.9
25.9 16.9
19.4 15.3
27.2 22.0
99.7 20.1
15.9 14.1
17.5 10.8
19.1 13.6
18.9 14.1
14.1 10.3
12.3 10.4
14.5 12.9
PE
2011e
17.2
13.5
24.0
19.9
19.1
22.1
19.1
19.3
PE
2012e 2013e
13.6 12.1
22.0 20.2
14.9 14.2
12.6 10.6
12.4 11.1
14.7 13.0
19.6 3.6
10.9 9.4
9.5 -
14.8 12.8
14.6 12.8
15.1 12.7
15.1 11.8
9.1 8.7
10.1 9.7
12.0 10.9
16.1 13.0
13.9 11.6
13.1 10.6
12.0 10.2
15.9 13.2
11.2 8.3
9.8 9.5
9.6 8.6
11.1 10.5
11.7
9.2 8.6
9.2 8.5
11.3 10.3
2012e 201
12.8 11
12.8 22
13.7 9
14.6 12
11.9 10
12.7 7
31.0 23
15.6 13
2010a 2011e
11.3 9.4
11.1 9.2
7.1 6.7
13.8 13.0
9.0 8.8
14.9 12.2
-0.9 -2.7
7.0 6.8
5.8 4.0
11.3 9.9
10.3 9.1
8.4 7.7
17.2 8.8
17.9 7.6
11.7 9.9
5.0 4.3
11.7 9.1
9.4 8.5
12.5 7.5
10.7 7.7
16.2 11.3
10.8 7.5
6.4 6.7
7.8 5.7
11.8 7.3
11.6 9.2
9.5 7.8
12.5 11.4
10.0 9.1
EV/E
e 2010a
.5 10.7
.8 11.0
.0 10.0
.4 12.5
.8 13.4
.2
.2 14.3
.8 12.0
Source:
Source:
2012e 2013e
8.1 7.2
8.4 7.6
6.3 6.0
8.8 7.5
7.5 6.4
8.8 7.1
4.8 2.1
6.3 5.7
3.6 -
8.5 7.5
7.9 7.3
6.6 5.8
6.7 5.7
6.0 5.8
8.9 8.5
3.9 3.7
7.4 6.2
7.2 6.3
6.1 5.1
6.2 5.3
9.0 7.7
5.7 4.6
5.7 5.7
4.9 4.2
6.2 5.9
7.4 6.4
7.3 6.9
10.4 10.1
8.3 7.8
ITDA
2011e
7.3
8.6
6.1
9.7
8.8
8.1
13.4
8.9
EV/EBITD
: Bloomberg, FoxD
: Bloomberg, FoxD
2010a 20
2.40
1.66
1.47
1.68
1.92
1.60
0.00
2.19
2.70
1.92
1.76
2.03
0.95
0.00
8.29
19.26
1.27
2.01
0.86
0.78
1.02
0.00
0.00
0.00
0.00
0.79
3.53
4.04
2.02
Yield (%)
2012e 201
6.0
7.0
4.5
7.5
6.6
5.3
9.9
6.7
A
20 June 2
vies
vies
11e
.45
1.74
1.53
.30
.21
1.25
.00
.43
.07
.20
1.91
.08
.56
.57
.10
.14
.15
.30
.84
.78
1.18
.00
.21
.00
.00
.82
.91
.49
.24
3e
6.0
6.7
4.2
6.7
6.4
3.2
8.9
6.0
011
p15
8/4/2019 Initiation Update Jun 2011
17/39
Oilfie
Exhibit
17 June 2
Diversifie
Schlumbe
Halliburto
Baker Hu
Weatherfo
Oil States
RPC Inc
Average
Offshore
Transoce
Seadrill Lt
China Oilf
Noble Cor
Diamond
Ensco PL
Pride Inter
Average
Land Dril
Nabors In
Helmerich
Patterson-
Precision
Pioneer D
Average
Equipme
National
Tenaris S
Vallourec
Cameron
FMC Tec
Oceaneer
Average
Engineeri
Saipem S
Keppel C
Technip S
Subsea 7
Petrofac L
AMEC PL
John Woo
Average
Reservoir
CCG Veri
Petroleum
TGS Nop
ION Geop
OYO Geo
Polarcus
Average
Well Serv
Complete
Key Ener
Basic Ene
Average
Market D
FTSE All-
Euro 350
S&P 500
BBG US
FTSE Oil
BBG EME
ld Services
35: Global detail
011
d Oil Services
rger Ltd
Co
hes Inc
rd International Ltd
International Inc
Drillers
n Ltd
d
ield Services Ltd
p
ffshore Drilling Inc
national Inc
lers
ustries Ltd
& Payne Inc
UTI Energy Inc
Drilling Corp
rilling Co
nt
ilwell Varco Inc
SA
International Corp
nologies Inc
ing International Inc
ing & Construction
pA
rp Ltd
A
SA
td
C
d Group PLC
Information/Seismic
as
Geo-Services ASA
c Geophysical Co AS
hysical Corp
space Corp
td
ices
Production Services I
y Services Inc
rgy Services Inc
ta
hare
il Services
Services
A Oil Services
Sector Rep
d valuation tabl
Shar
A
c
ort
(sub-sector bas
price Mkt Cap
(Loc) US$
82.25 111,608
46.39 42,447
69.84 30,355
17.1 12,742
69.76 3,573
21.95 3,256
61.75 19,733
182.3 15,518
13.96 10,424
37.66 9,497
66.94 9,306
51.39 7,371
40.7 7,243
24.95 7,170
58.91 6,302
28.13 4,347
12.81 3,605
13.1 712
69.98 29,607
15.75 26,559
79.85 13,452
46.07 11,288
40.38 9,704
35.87 3,893
35.72 22,515
10.44 15,067
71.41 11,246
134.3 8,570
1497 8,371
1090 5,853
632 4,855
24.195 5,247
84.75 3,348
143.6 2,712
8.5 1,318
96.96 607
4.88 363
30.65 2,419
16.17 2,308
25.95 1,095
is)
1Yr
Performance
34%
76%
59%
16%
58%
129%
25%
40%
47%
25%
11%
28%
64%
17%
38%
90%
66%
102%
86%
3%
6%
23%
47%
49%
36%
34%
38%
34%
19%
29%
95%
42%
16%
71%
82%
85%
4%
107%
51%
202%
2010a 2011e
27.3 22.1
19.4 15.3
26.0 17.0
100.6 20.2
19.2 13.7
16.6 10.8
35.8 17.2
15.9 14.0
8.1 10.5
12.6 11.4
20.1 18.5
10.5 10.3
16.3 13.9
35.7 16.2
17.1 13.5
16.6 15.1
18.4 15.1
25.3 13.1
21.4 15.5
- 49.8
40.9 24.0
17.6 16.8
21.6 16.8
22.3 16.0
19.3 17.7
29.2 24.0
19.3 18.7
24.8 19.9
17.8 17.1
11.2 13.7
17.9 17.9
19.6 22.8
14.0 14.1
14.9 15.8
30.9 18.6
17.8 19.1
- 41.7
- 28.8
17.2 13.7
53.1 21.9
22.5 19.7
- -
26.7 22.1
19.0 11.4
- 19.0
- 17.6
19.0 16.0
14.1 10.3
12.3 10.4
14.4 12.8
24.1 18.9
18.0 17.8
20.3 17.8
PE
2012e 2013e
16.0 13.3
12.0 10.2
13.1 10.7
11.2 8.4
11.1 10.6
9.5 10.8
12.8 11.5
9.8 9.5
10.1 9.8
10.0 9.2
9.5 8.7
12.3 12.2
8.9 8.1
12.2 12.1
12.8 22.8
9.9 8.6
12.9 11.4
10.4 9.7
11.5 10.6
18.8 -
13.7 9.0
13.3 11.9
13.0 11.8
10.4 8.3
13.4 11.1
19.0 15.6
15.0 12.6
14.6 12.4
14.4 12.7
12.5 11.8
14.9 12.5
14.8 11.7
12.4 11.1
13.7 12.1
14.7 13.0
11.9 10.8
15.0 10.5
12.1 8.3
12.0 11.0
13.6 8.9
18.2 -
5.0 2.8
12.7 7.2
9.2 8.6
11.3 10.8
12.8 21.8
11.1 13.7
9.2 8.6
9.2 8.5
11.3 10.2
14.1 11.7
14.8 12.7
13.8 11.6
2010a 2011e
16.2 11.3
10.7 7.7
12.5 7.5
10.8 7.5
11.8 7.3
9.0 5.0
10.7 7.3
6.4 6.7
11.9 10.1
10.0 9.0
8.9 9.6
5.4 5.9
9.4 6.8
19.1 11.1
11.0 8.6
7.5 5.6
9.1 6.4
9.2 4.9
9.7 6.8
9.5 5.4
10.0 6.1
8.8 8.2
12.4 9.4
10.9 8.5
9.8 9.2
14.7 13.6
7.9 8.0
12.5 9.7
10.3 9.1
9.3 9.5
8.4 7.7
17.1 8.8
9.0 8.8
11.2 9.3
14.9 12.2
13.4 8.8
8.1 6.7
8.2 7.6
5.1 4.4
8.1 7.3
22.9 11.9
31.2 10.3
-14.6 8.1
7.8 4.9
21.4 7.0
12.6 5.2
13.9 5.7
9.6 7.8
12.5 11.4
10.0 9.1
12.9 9.2
12.5 9.9
10.3 8.5
EV/EBIT
2012e 2013e
9.0 7.7
6.2 5.3
6.1 5.1
5.7 4.6
6.2 5.9
4.4 4.9
6.0 6.0
5.7 5.7
9.1 8.6
8.1 7.6
6.3 5.9
6.5 6.3
4.1 4.0
8.5 7.9
7.0 6.7
4.6 4.2
5.6 4.9
4.1 3.8
5.6 5.3
4.3 -
4.5 4.2
6.7 6.2
7.6 6.8
5.9 5.0
7.3 6.2
11.1 9.1
6.7 5.9
7.5 6.7
7.9 7.3
8.5 7.7
6.6 5.8
6.7 5.7
7.5 6.4
8.0 7.1
8.8 7.1
6.6 6.4
5.2 4.4
5.3 4.3
4.0 3.8
5.8 3.7
11.0 -
4.0 2.9
5.3 3.2
4.2 4.0
5.1 -
4.4 5.1
4.6 4.5
7.3 6.9
10.4 10.1
8.3 7.8
7.4 6.4
8.5 7.5
7.2 6.3
DA
20 June 2
2010a 2011
1.02 1.1
0.78 0.7
0.86 0.8
0.00 0.0
0.00 0.0
0.64 1.2
0.00 4.21
1.47 1.3
1.07 1.21
2.34 1.6
7.84 5.2
2.09 2.8
0.00 0.0
0.00 0.0
0.37 0.4
0.71 0.71
0.00 0.0
0.00
0.59 0.61
1.51 1.8
1.63 2.2
0.00 0.0
0.00 0.0
0.00 0.0
1.76 1.91
3.66 3.5
2.03 2.0
0.94 0.5
1.92 2.21
2.43 2.4
1.60 1.2
0.00 0.1
0.00 1.1
19.19 3.1
0.00
0.00
0.00 0.0
0.00
0.00 0.0
0.00
3.53 3.9
4.04 4.4
2.04 2.2
0.79 0.8
1.92 2.21
2.02 2.31
Yield
011
p16
-
-
-
-
-
8/4/2019 Initiation Update Jun 2011
18/39
Oilfie
InvThe fu
and g
Histori
of futu
Energ
The re
driven
report
domin
Exhibit
Hydro
The IE
over t
appro
found.
over.
decre
ld Services
stment
ndamental dr
s exploration
cally, the leve
re oil and nat
demand
covery in worl
by non-OEC
s suggests th
ate the globa
36: World Energy
carbon supp
A suggests th
e next twent
imately half
By 2030 that
New supply is
se.
Sector Rep
hemes
ivers of oilfiel
and producti
l of explorati
ural gas price
ydrocarbon
ld demand fo
energy dem
t world ener
l energy mix,
Demand
ly easy sou
at to match t
years, to ena
f the convent
figure may ha
relatively cos
ort
Funda
services and
on activity to
n and produ
s.
sources will
oil from the
and. In the m
y demand wi
ith coal, oil
rces utilised,
is demand g
ble such gro
ional oil prod
ve increased
tly and the ch
ental d
drilling activi
ether with up
tion (E&P) ca
continue to d
adir of the e
edium/longer
ll grow by so
nd natural ga
Sourc
deepwater
owth, around
th in oil and
uction neede
o approxima
allenges of m
rivers st
ty are energy
stream capit
pital expendit
ominate risi
onomic and
term, the Int
e 40% by 20
s supplying a
Exh
: IEA
nd shale gas
$350bn has t
natural gas su
d by the end
ely two third
atching ener
ill very
demand, the
l expenditure
ure has been
ng energy de
inancial crisis
rnational En
0, with hydro
lmost 80% of
ibit 37: World Oil
growth are
o be invested
pplies. Furthe
f the next de
. The era of o
y demand an
uch in
economic cyc
s by oil and g
primarily driv
mand
has been rea
rgy Agency (I
arbon fuels c
primary energ
Demand
s
in upstream
rmore, the IE
cade has yet
btaining relat
d supply and
lace
le and levels
as companies
en by expecta
sonably robus
EA) in recent
ontinuing to
y needs.
Source
ctivity every
A estimates t
o be develop
ively cheap oi
are not likely
20 June 2
f oil
.
tions
t,
: SBO, IEA
ear
at
ed or
l is
o
011
p17
8/4/2019 Initiation Update Jun 2011
19/39
Oilfie
Exhibit
Exhibit
ld Services
38: World supply
0: Global Oil su
Sector Rep
pply/demand, sp
ort
are capacity
Sourc
Source: Sch
e: ODS Petrodata
lumberger, IEA
Exhibit 4
Exhibit 39:
: OPEC Spare ca
orld Oil Supply
pacity
Sou
20 June 2
Source: SB
rce: Schoeller Blec
011
p18
, IEA
mann
8/4/2019 Initiation Update Jun 2011
20/39
Oilfie
Oil In
The ca
2007-0
capital
and n
elevat
reserv
econo
Lookin
15%.
and C
Ameri
South
15%. Ffive ye
We be
will ris
11% C
Exhibit
Exhibit
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
US
ld Services
ustry capita
pital expendi
8, as a result
expenditure
tural gas pric
d levels. Lar
s in the Sant
mies and infr
g at 2011, on
hevron has in
noco may in
a Petrobras
East Asia, so
or example Cars in offshor
lieve as a wh
between 5-1
AGR through
2: Oil Industry
4: Global EPCI
1999 2000 2001
$M
Sector Rep
l expenditur
ture of oil and
of the econo
witha rise in e
es had reach
e NOCs gen
and Rio de
structure.
average the i
dicated that i
rease their e
nd Pemex ha
e of the NO
hina Nationaloil explorati
le we will con
0% per annu
2010-14.
APEX
APEX by Sector
Oil industry E & P Capita
2 00 2 2 00 3 2 00 4 2 0
ort
to rise fur
gas compani
ic and financ
xcess of 10%.
d their nadir i
rally led the
aniero areas)
nternational s
ts expenditur
penditure by
ve indicated
s have sugg
Offshore Oiln.
tinue to see r
. Other com
Source Industr
Sourc
l Expenditure
5 20 06 2 00 7 2 00 8
ther in 2011
ies, both NO
ial crisis and l
This increase
n 2009 and th
ay (Brazilian
as their gove
upermajors ar
e will rise som
around 25%
apital expen
sted that the
Corp has just
ising levels of
mentators are
Data, FoxDavies
e McDermott Intl
2 00 9 2 01 0 2 01 1
nd through
s and IOCs,
ck of cash an
in investmen
at over the m
company Pet
rnments wish
e expected t
e 20% to aro
nd RDS and
iture increas
ir E & P capit
announced t
expenditure.
suggesting t
Exhibi
Exhibi
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
US$
to 2014
ecreased sig
d access to c
was led by t
edium term,
robras, is inve
to use future
increase the
nd $26Bn. Ex
Exxon Mobil
s of around 2
l expenditure
at it will spen
Our assumpt
hat E&P expe
43: Oil Majors C
45: Industry spe
2 00 0 2 00 1 2 00 2
M
nificantly in 2
pital. 2010 sa
e general ex
rices would r
sting heavily
il revenues t
ir E & P expe
pectations su
oth by aroun
0% and in the
budgets will
d close to $1
ions are that
nditure could
APEX
nding breakdow
Major IOC Capital Exp
2 00 3 2 00 4 2 00 5
09, after the
w a resurgen
pectation that
emain at curr
s it seeks to
o develop the
ditures by at
ggest that To
d 10%. In Lati
Middle East
increase by a
0Bn over the
apital expen
see as much
Source: Industry
n
Source: Sch
penditure
2006 2007 2008 2
20 June 2
ise in
e in
crude
nt
xploit
ir
least
al
n
and
least
next
iture
as
data, FoxDavies
oeller Bleckman
0 09 2 01 0e 2 01 1e
011
p19
8/4/2019 Initiation Update Jun 2011
21/39
Oilfie
Offsh
Offsho
platfor
segm
floatin
pipe l
Offsho
and ul
been
need
the in
advan
expen
to fro
Exhibit
Deep
Existin
and W
but un
explos
will re
proce
enviroappro
ld Services
re Drilling
re constructi
ms, risers, infi
nted into sha
g production
ying vessels
re Drilling co
ra deepwate
ffshore and i
ith deepwat
reasing well
ed and highl
diture is expe
around 450
6: Deepwater p
ater constru
g markets inc
est Africa. Sy
its are being
ion (Macond
tart in earnes
ses by indep
nmental maned.
Sector Rep
Deepwater
n comprises
ield flowlines,
llow water co
units, subsea
nd offshore s
vers hydrocar
>1,500m. Si
is currently f
r supplying
omplexity an
y reliable tech
cted to increa
by 2015 to
roduction
tion is one of
lude the Nort
tems are con
onstructed t
oil well) in 2
t albeit with n
ndent third p
gement prog
ort
xpenditure i
offshore struc
and a variety
struction p
construction
upport vessel
on drilling in
ce 2000 mor
recasted tha
ore than 10
d reserves in t
nology. Lates
se by just few
round $75Bn.
the fastest gr
h Sea and Gu
stantly being
drill in dept
10 are well d
ew standards
arty inspecto
rams in the fu
ncreasing
tures and plat
of other ancill
latforms fixed
nd offshore
s.
various water
e than 50% of
by 2020 that
. With this co
he more rem
t industry and
er than 200%
Source: EI
owing and hi
lf of Mexico w
developed an
s of up to 12,
cumented a
well design
rs, BOP desig
ture. Since 2
forms includi
lary specialist
to the seabe
latforms incl
depths sha
all new oil an
offshore oil c
mes increasin
te and less a
consultant r
by 2015 with
Exhibit
h technically
ith medium, t
d refined and
000ft. The eff
d known but
, casing and c
n and functio
8/02/11 14 de
g subsea eq
equipment. T
, deepwater
ding FPSOs.
llow water
8/4/2019 Initiation Update Jun 2011
22/39
Oilfie
Exhibit
ld Services
8: Offshore Jac
Sector Rep
-up order book
ort
Source: EI
Exhibit 49: Deepwater apital Expenditure
Sou
20 June 2
rce: Industry Data
011
p21
8/4/2019 Initiation Update Jun 2011
23/39
Oilfie
Offsh
Globa
growt
produ
predic
Exhibit
Much
projec
projec
Exhibit
ld Services
re construct
l offshore Eng
in the comin
tion and exp
ted to be in
50: Global Offsh
of the increas
ts can be co
ts. Currently,
52: Industry Subs
Sector Rep
ion capital
ineering, Pro
g years, led b
loration incre
ater over 500
re EPCI Capex b
es in CAPEX
plex and thu
global oil pric
ea spending
ort
expenditure
urement, Co
y increases in
ses will fuel
m deep. A he
Region
Source: Infiel
ill be depen
capital inten
e trends app
set to increa
nstruction an
the pipelayin
uch of this g
althy level of
, McDermott Intl
ent on oil an
sive, needing
ar to support
se
Installation s
g and subsea
rowth with ov
hallow water
Exhibit 51:
gas prices,
higher oil pri
the growth o
pending is ex
systems sect
er half the for
activity will su
Global Offshore
s offshore an
es to suppor
f the sector.
pected to ex
rs. The impa
cast subsea
pport the sec
EPCI Capex by S
So
d especially d
the economi
erience healt
t of deepwat
projects
tor.
ctor
urce: Infield, McD
eepwater
cs of the
Source: Global Ind
20 June 2
hy
er
rmott Intl
ustries
011
p22
8/4/2019 Initiation Update Jun 2011
24/39
Oilfie
Crude
Table 6:
Crude
buoye
tensio
prices
althou
We as
before
be onenerg
Exhibit
Funda
2011 a
Middl
oil de
90% o
Ameri
Table 7:
DemaGlobaremaiOECDmediuevidenslowddestru
ld Services
oil prices: v
Crude Oil Prices
oil prices in 2
d by favourab
s in the Mid
have eased o
gh the most r
ume that pri
easing as th
a rising trend/oil reports p
53: WTI Oil price
mental oil pri
nd 2012. Non
East and Lat
and growth i
this years oi
a, will show a
Crude Oil mark
ndl demand sho
robust, led bcountries ov
m term. Currce of somewn and dem
ction
Sector Rep
latile, highe
Brent $/bbl2009
61.5/bbl
011 have refl
le supply/de
le East and N
n concerns ab
ecent OPEC
es will remai
year progres
into 2012.Thublished by t
chart
e expectatio
-OECD count
in America.
in 2011 is exp
l demand gro
much more
t dynamics
In vuldy non-rnt
and
OElevch
ort
geopolitical
cted the gen
and fundam
. Africa and c
out a slowing
isaccord has
volatile but
ses. Average
se expectatioe IEA and O
Source
s reflect mar
ries will remai
verall we are
cted to be a
wth is attribut
oderate de
ventory levelsCD stocks atels but levelnge very rapi
risk premiu
2010$80/bbl
eral expectati
ntals and an
oncerns abou
of global ec
had an elevat
lose to curre
yearly prices
ns are primarEC et al.
: FoxDavies
ket anticipatio
n the key con
expecting th
around 1.3m
ed to the non
and increase
healthys candly
with upsid
ons of health
elevated geo
t the levels of
nomic activit
ing effect on
t levels in th
re though es
ily based upo
Exhibit 54:
n of a genera
tributors to e
world econ
b/day, not to
-OECD count
of 0.2 mb/d.
NonOPECSufficient negrowth is limmature fielddeclines of aannum thisaccelerating
e fundament
2011$85-105/b
global econ
political risk p
spare capaci
and easing
rices.
short term,
timated to be
n details and
il Forward Price
l robustness i
onomic grow
my to see gr
dissimilar to
ries, whereas
supplyr term but
ited withproductiont least 5% perdecline is
al risk
1ebl
mic growth i
remium reflec
y with OPEC.
f spare OPE
ith an elevat
higher in 201
omments fro
n global econ
th, led by Chi
wth close to
that seen in
the OECD, m
OPEC suSpare capressuredisappeatension adisaccor
2011$85-11
Source: Fox
2011 and 20
ting the polit
More recentl
capacity con
d risk premiu
1 than for 201
m recent avai
Source:
omic activity i
na, India, the
4.0% in 2011.
010. More th
ainly North
upplyacity under
and can quicr. Middle Easnd OPEC
concerning.
Source: Fox
20 June 2
1-12e0/bblDavies
12
ical
cerns
m,
0 and
lable
oxDavies
n
World
n
ly
Davies
011
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Oilfie
From
remai
seen t
remaifurther
envisa
10%, o
In the
signifi
Furthe
memb
major
to con
ld Services
supply pers
so over the
be major co
high owing tnew product
ged. Also, wit
verall supply
case of OPEC
ant supply di
rmore, the m
ers are happ
supply disrup
cerns about
Sector Rep
ective we bel
edium term.
ntributors to
o natural declion is schedul
h production
growth from
there appear
sruptions. Th
rkets can ne
with funda
tions, we rem
PEC supply
ort
ieve that sup
Supply from
rowth in 201
ine, as well aed to come o
from mature
on-OPEC so
s to be ampl
recent politi
er be certain
ental crude
ain concerne
ver the medi
ly growth fro
non-OPEC so
, while Norw
technical, pon stream, it is
ields declinin
rces will rem
spare capaci
cal tensions in
of OPECs su
il prices arou
that the rece
m/longer ter
m non-OPEC
urces such as
ay, Mexico an
litical and entaking longer
g at least aro
in constraine
ty to meet it
North Africa
ply policy an
nd the $80 le
nt lack of oil i
m.
sources rema
Brazil, Canad
d the UK are
ironmental fato come into
nd 4% per an
d.
call and con
and the Midd
d strategy, d
el. Whilst we
nvestment in
ins somewhat
, Azerbaijan,
et to continu
ctors. In theproduction t
num, but mo
sequently the
le East are o
spite recent
are confiden
some OPEC c
limited and
and Kazakhst
e to decline.
edium term,an initially
re likely close
re should be
viously conc
omments tha
there will be
ountries coul
20 June 2
ill
an are
isks
whilst
to
o
rning.
t its
no
d lead
011
p24
8/4/2019 Initiation Update Jun 2011
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Oilfie
Natur
US nat
since
Table 8:
Table 9:
InvenLevellevel
Curren
of po
supply
numb
levels
In the
relativ
demaeffect
could
tight
Exhibit
ld Services
l gas prices
ural gas price
nd currently l
US Natural Gas
20$8.9/mm
US Natural Gas
ntory levelss currently atfrom a histo
t market dyn
er consumpti
augmented
r would be p
over the short
medium/long
ly clean and
d would be aould obviou
rise relatively
arkets. This s
55: US Natural G
Sector Rep
US prices t
s peaked in
anguish at ar
prices Henry
008tu
Market dynami
relatively highical perspecti
mics suggest
on and indus
y continuing
redictive of hi
/medium ter
term global
economic sou
ugmented cosly be for pric
strongly give
cenario is unli
s price chart
ort
o stay soft n
id-2008 at ar
und $4.7/m
ub $/mmBtu
2009$3.95/mmBtu
csDema
ve
IEA egrowgas snuclestron
that demand
rial activity in
increases in s
gher prices,
.
atural gas gl
rce of energy
nsiderable ifes to rise in m
the current l
kely to unfol
Source
ar term
und $11/mm
Btu.
$
andxpectations ah in demand.
een as a replaar in the longgly boost de
will remain fl
the US. With
hare gas prod
e are not exp
bal demand
compared wi
uclear fuel sost markets a
ck of gas dril
until 2013
: FoxDavies
Btu and amid
2010.7/mmBtu
re for overall. However natcement forterm whichand
at but much d
inventories g
uction a 10
ecting any si
could surge r
th the other f
urces becamnd the US thi
ling because
Exhibit 56: N
st volatility ha
$4.7
Supplatural
ould
Ampland egas rbeco
epends upon
nerally at hig
reduction i
nificant chan
flecting natu
ossil fuels and
e redundant as would be no
of weak price
atural Gas Forw
ve been on a
2011emmBtu
lye supply drivconomically csources. Proing margina
the weather
h level and wi
the current
e in US gas
al gas attrac
renewable s
nd unacceptexception. P
and conseq
rd Prices
downward tr
2$4.8/m
Source: Fox
n by abundaompetitive suction econ
lly unattractiv
Source: Fox
and general l
th more than
S gas rig co
ricing from c
iveness as a
urces. This
ble. The knorices in this m
ent likelihoo
Source: Fox
20 June 2
nd
2012emBtuDavies
talemicse
Davies
vels
ample
nt
rrent
k-onarket
of
Davies
011
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Oilfie
Shale
In rec
indep
produ
recent
mark,
Exhibit
Shale
and a
have b
emissi
Exhibit
Europ
the re
ld Services
Gas US to
nt years, shal
ndent from f
tion increase
years. Curren
hich is aroun
57: Previous ten
evelopment
mature servic
een some en
ons from ope
59: Improving U
has a relativ
ources canno
Sector Rep
evelop favo
e gas product
reign gas im
s in the last d
tly, the Henry
d $4 lower th
ears US shale pr
in the US has
sector, and
vironmental c
rations and th
shale economic
ely large reso
t be seen as l
ort
urably, Euro
ion has beco
ports, and ev
ecade, as sho
Hub spot pri
an the futures
oduction
benefitted gr
as improved
oncerns asso
e possible im
s
urce base of s
ike-for-like wi
e potential
e of huge im
n possibly be
n below, ca
ce is at $4.68/
quoted in 20
Source: EIA
eatly from tax
drilling times
iated with th
pact of hydra
Source: EIA
hale gas, con
h the larger b
ut slow take
portance in t
coming a net
be clearly se
Btu and ten y
08.
Exhibit 58:
incentives, a
and producti
drilling, such
lic fracturing
Exhibit 60: US
centrated aro
asins in the U
off
he US, with th
exporter in t
en in the cha
ear futures lie
Disparity betwe
cess to large
on rates in re
as contamin
on seismicity.
shale resources l
und central a
S, such as th
e country bec
e future. The
ge of gas fut
at around th
n future prices
tracts of und
ent years. Ho
tion of water,
ocations
d Eastern Eu
Barnett and
oming almos
impact of th
ures prices in
seven dollar
rom 2008-11
Source: FoxDacvie
veloped land
wever, there
, increased
rope. Howev
Fayetteville.
20 June 2
, Bloomberg
Source: EIA
r,
011
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Oilfie
Exhibit
Firstly,
propp
requir
associ
enviro
much l
Exhibit
Globa
regula
ld Services
61: Shale gas res
the services i
ant and other
ments for dri
ted with the
nmental conc
ess economi
63: Shale gas bre
lly, other regi
tion, but prog
Sector Rep
urces
ndustry in Eur
facilities is la
lling and frac
complexity of
erns resulting
than in the U
akeven prices
ns may be m
ress towards
ort
ope is much l
king. Concer
ing may be d
the geology,
from proble
S, and may ta
ore viable for
production is
Source:
ess mature th
ns over water
ifficult to me
the scarcity o
s in the US b
ke a much lo
shale produc
also likely to
Exhib
EIA
an in the US,
supply have a
t and disrupt
f undevelope
asins. As a re
ger time to d
ion due to si
e slow.
it 62: Shale gas r
and infrastruc
lso been voic
local supplie
d land in mai
ult of these is
evelop.
pler geolog
esources locatio
ure for movin
ed, and the e
. Further pro
land Europe
sues, shale g
S
and less stri
ns in Europe
g rigs, fluids,
xtensive wate
lems are also
and
s in Europe i
urce: Wood Macke
gent
20 June 2
Source: EIA
r
nzie
011
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Oilfie
Exhibit
USA
Europe
UK
N Afric
M East
China
India
Indone
Austral
Russia
Key: One
ld Services
64: Shale gas pr
a
sia
ia
star for lowest qualit
Sector Rep
spectivity by ge
Geology
***
*
*
***
**
**
*
**
***
***
, three stars for highe
ort
graphical marke
Gas Market
**
***
**
**
*
***
**
**
**
*
st
t.
Infrastru
***
**
**
**
*
**
*
**
**
**
ture Supp
***
**
**
*
*
**
**
***
***
***
Sou
ly Chain R
**
**
**
*
*
*
*
**
**
*
rce: FoxDavies, Oxf
gulation
ord Energy Insitut
Environmental
**
*
*
***
***
**
**
***
**
***
20 June 2
, BP
011
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Oilfie
Oil rig
One o
This tr
2008
conse
in the
Baker
and u
1,513 i
1,090
drillin
US Oil
Lookinand F
numb
contin
Lookin
Table 10
Area
US
Canad
N. Am
RoWTotal
Exhibit
ld Services
count acti
f the most im
acks the num
ith 3,557 acti
utive months
global drilling
Hughes recen
380 from 2,7
n May 2010.
ounted in M
continues to
and horizon
g forward wer East. The ri
r of new verti
uing its negat
g into 2012 w
: Worldwide Rig
rica
65: World Rig Co
Sector Rep
vity to remai
ortant indica
er of active d
e rigs. As a r
to reach its l
activity.
tly announce
50 in May 201
he internatio
y 2010. All thi
remain stron
tal rig count
expect drillincount in the
cal drilling rig
ive decline as
e see a furthe
Forecast
unt
Sour
ort
n at high lev
tors for the oi
rilling rigs in
esult of the m
w point in M
that the wor
0. The US rig
al rig count f
s data, despit
worldwide a
to drive glob
g activity in 2US will see c
s. We see th
natural gas p
r, perhaps 9-1
ce: Baker Hughes,
els in 2011 an
lfield service i
he world. Th
acro econom
y 2009 with 1
ldwide rig co
count for Ma
or May 2011
e some volati
nd in most g
al count hig
11 to increasntinued gro
oil rig count
rices remain r
0% increase i
2010 Actua
154
34
189
109299
oxDavies
d 2012
ndustry and c
global rig co
ic turmoil and
,983 active ri
nt for May 2
2011 was 1,8
as 1,151, up
lity in respect
ographical a
er
e worldwideth with the h
increasing an
elatively soft.
n the rig cou
l
Exhibit 66:
ompanies lik
unt reached i
declining oil
s. Since then,
11 was 3,130,
36, up 46 fro
2 from 1,129
ive regional a
eas.
ith particularrizontal/dire
d the natural
t again drive
2011 Fore
1
2
13
SA Rig Count
Hunting is th
s cyclical pea
prices, the rig
there is a visi
up 27 from 3
April 2011 a
in April 2011,
eas indicates
y robust activtional rig cou
gas rig count
by oil horizo
ast
00
40
40
8020
Source: B
e global rig c
k in Septemb
count fell for
ble upwards t
,103 in April 2
nd up 323 fro
and up 61 fro
that oil and g
ity in the Amnt outpacing
at similar
ntal/vertical ri
% c
Source: Baker
aker Hughes, FoxD
20 June 2
ount.
er
eight
rend
011
the
m the
as
ricashe
gs.
ange
16.5
-2.0
13.0
7.811.0
ughes
avies
011
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Oilfie
Exhibit
Exhibit
ld Services
67: US Oil Rig Co
69: International
Sector Rep
unt
Sour
(Outside US) Ri
Sour
ort
ce: Baker Hughes,
Count
ce: Baker Hughes,
oxDavies
oxDavies
Exhibit 68:
Exhibit 70: E
S Gas Rig Count
urope Rig Count
Source: B
Source: B
aker Hughes, FoxD
aker Hughes, FoxD
20 June 2
avies
avies
011
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Oilfie
M &Table 11:
Year20102010
2009
2010
2010
2010
2010
2010
2010
2010
2010
Table 12
Year20102010
2010
2010
2009
2010
2009
2010
Table 13
YearFeb 20
Dec 20
Mar 20Dec 20
Apr 201
Jun 201
Dec 20
May 20
The m
their c
comp
Transa
EV/EB
acquirand wi
mediu
respec
repres
deal t
We ex
positi
devel
better
increa
countrpositi
securi
ld Services
A bu: Oilfield Service
: Oilfield Service
: Oilfield Service