Blair Goertzen - Toromont Enerflex.pdf · 2000 2005 2010 2015 2020 2025 Bcf/d History Future Bcf/d...
Transcript of Blair Goertzen - Toromont Enerflex.pdf · 2000 2005 2010 2015 2020 2025 Bcf/d History Future Bcf/d...
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Blair GoertzenPresident & CEO
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Calgary, Alberta Nisku, Alberta Casper, Wyoming Houston, Texas Rijsenhout, Netherlands Perth Brisbane
World Leading Pure-Play Supplier of
Sales & Service Locations
Natural Gas Production and Processing Equipment
Strong Growth Platform in Key Global Markets
Sales and Service Locations >60
Countries 14
Employees 3,000
Revenue* $1.5 Billion
* 2009 Pro forma
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New Enerflex Investment Highlights
• World leading pure-play supplier of natural gas compression and
production and processing equipment
• Strong growth platform in North American shale gas, Australian CSG to
LNG and Middle East conventional gas
• Early stages of industry recovery with growing order bookings and backlog
• Highly diversified revenues by geography, customer and application
• Strong balance sheet with direct access to growth capital
• Experienced management team with a proven track record
Positioned to Deliver Superior Shareholder Value
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Natural Gas Compression Production and Processing
Wide Range of Specialty Customized Equipment
• Reciprocating and rotary screw
compression applications
• Small to large horsepower
(200 hp – 10,000 hp)
• Conventional and unconventional
plays
Maximizing throughput and Minimizing Operating Costs
• Systems for gas plants (dew point)
and refrigeration systems
• Amine systems (H2S and CO2
removal)
• Dehydration units and CO2 facilities
• Modular design for fast tracking
projects
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Wide Range of Specialty Customized Equipment
• Pipeline and storage facilities
• Power generation
• Petrochemical
Service Offering
• Mechanical for gas engine
compressors and power
generators
• Construction product installation
• Equipment operating business
Preferred Single Source Supplier6
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32%
Balanced and Diversified Revenue
Pro forma
Significant
International Expansion
Parts and Service and Rental
are Key Growth Opportunities
Product DistributionGeographic Distribution
28% 32%
40%
Canada
US
International
2009 $1.5 Billion
4%
72%
25%
Fabrication
Parts &
Services
Rentals
2009 $1.5 Billion
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Growing Order Bookings and Backlog
0
200
400
600
800
1,000
1,200
Backlog Bookings
($ millions)
Enerflex (Pro Forma)
2007 2008 2009 2010
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Early Stages of Industry Recovery8
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Management and Governance
Management
President ,International
Bill Moore
President,Canada and
Northern U.S.
Ivan Heidecker
President &
CEO
Blair Goertzen
President ,Southern
U.S.
JerryFraelic
Vice President
Finance &
CFO
James Harbilas
Director, Human
Resources
Carol Ionel
Vice President
& CIO
Greg Stewart
Board of Directors
Stephen J. Savidant(Current Toromont Board Member)
Chairman Designate
Chairman ─ ProspEx Resources Ltd.
Director ─ Empire Company Limited
Former President & CEO ─ Esprit Energy Trust
and Canadian Hunter Exploration
J. Blair Goertzen President & CEO ─ Enerflex Ltd.
Robert S. Boswell(Current Toromont Board Member)
Director, Chairman & CEO ─ Laramie Energy
LLC
Director ─ Complete Production Services inc.
Former Chairman & CEO ─ Forest Oil
Corporation
Wayne S. Hill(Current Toromont Board Member)
Former EVP ─ Toromont Industries Ltd.
H. Stanley Marshall(Current Toromont Board Member)
CEO & President ─ Fortis Inc.
Director, Chairman ─ Fortis Inc.
Director, Chairman ─ Terasen Gas Inc.
Director ─ Conference Board of Canada
Other Directors Additional independent members to be added
Proven and Experienced Leadership9
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Ivan D. HeideckerPresident, Canada &
Northern United States
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Agenda
Division Overview
Equipment Manufacturing
Service Business
Integration and Rationalization Activities
Strategic Goals
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Division OverviewMarkets We Serve
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Specialize in Cold Weather Application of Enerflex Technologies
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Division OverviewOperational Responsibilities
Compression
and Power
Production and
ProcessingRetrofit
Rentals Mechanical Service
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World Class Customers
Canada
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Strategic Advantages of Merger
• Broader geographical
coverage within Canada
• Combining of the Canadian
and Northern USA
Waukesha distributorships
• Amplified market strength
• Largest rental fleet in
Canada
• Vastly increased project
capacity
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Equipment Manufacturing
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Barlow, Calgary
Casper, Wyoming
34th Street, Calgary
Nisku, Alberta
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Equipment Manufacturing
• Leading supplier of
compression equipment into
the Canadian and Northern
USA market
• Enerflex has won the majority
of contracts for high-horse
power installations in the
Canadian market
• Proven market capabilities
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Equipment Manufacturing: Horn RiverShale Gas Play
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Northeast BC Gas Pipelines & Facilities
Montney Play
Alb
erta
McMahon
Gas Plant
South Peace
0.2 Bcf/d
Station 2
Pine River
Gas Plant
Ft. St. John
Sunrise
Pouce
CoupeGroundbirch1.1 Bcf/d
4th QTR. 2010
Swan
Lake
TupperGroundbirch
Dawson
Parkland
British
Co
lum
bia
Taylor
Dawson 0.2 Bcf/d,
staged in-service
2011-2013
BC
SK
Meikle River
Woodenhouse
North Central Corridor
Ft. Nelson
McMahon
Station 2
Pine River
Fort McMurray
Demand Region
Growing Supply Basins
TCPL Alberta System
Spectra Energy
Gas Process Plant
Proposed Gas Plant
Compressor Station
ABCabin
Slave Point
Platform
N.W.T
Alb
erta
British
Co
lum
bia
Bo
vie
Fau
lt S
yste
m
Cordova
Embayment
Horn River
Basin
Horn River Pipeline
0.6 Bcf/d Committed
2nd Qtr. 2012
Ft. Nelson
Gas Plant
North
Maxhamish
Loop
Cabin 0.4 Bcf/d,
2.4 Bcf/d Ultimate
4th Qtr. 2011
South Peace Pipeline
North Maxhamish Loop
North Central Corridor
Groundbirch Mainline
Horn River Mainline
Pacific Trail
Pipelines
Spectra Projects
TransCanada Projects
Sundown
Montney Play
Alb
erta
McMahon
Gas Plant
South Peace
0.2 Bcf/d
Station 2
Pine River
Gas Plant
Ft. St. John
Sunrise
Pouce
CoupeGroundbirch1.1 Bcf/d
4th QTR. 2010
Swan
Lake
TupperGroundbirch
Dawson
Parkland
British
Co
lum
bia
Taylor
Dawson 0.2 Bcf/d,
staged in-service
2011-2013
Montney Play
Alb
erta
McMahon
Gas Plant
South Peace
0.2 Bcf/d
Station 2
Pine River
Gas Plant
Ft. St. John
Sunrise
Pouce
CoupeGroundbirch1.1 Bcf/d
4th QTR. 2010
Swan
Lake
TupperGroundbirch
Dawson
Parkland
British
Co
lum
bia
Taylor Montney Play
Alb
erta
McMahon
Gas Plant
South Peace
0.2 Bcf/d
Station 2
Pine River
Gas Plant
Ft. St. John
Sunrise
Pouce
CoupeGroundbirch1.1 Bcf/d
4th QTR. 2010
Swan
Lake
TupperGroundbirch
Dawson
Parkland
British
Co
lum
bia
Montney Play
Alb
erta
McMahon
Gas Plant
South Peace
0.2 Bcf/d
Station 2
Pine River
Gas Plant
Ft. St. John
Sunrise
Pouce
CoupeGroundbirch1.1 Bcf/d
4th QTR. 2010
Swan
Lake
TupperGroundbirch
Dawson
Parkland
British
Co
lum
bia
Taylor
Dawson 0.2 Bcf/d,
staged in-service
2011-2013
BC
SK
Meikle River
Woodenhouse
North Central Corridor
Ft. Nelson
McMahon
Station 2
Pine River
Fort McMurray
Demand Region
Growing Supply Basins
TCPL Alberta System
Spectra Energy
Gas Process Plant
Proposed Gas Plant
Compressor Station
ABCabin
BC
SK
Meikle River
Woodenhouse
North Central Corridor
Ft. Nelson
McMahon
Station 2
Pine River
Fort McMurray
Demand Region
Growing Supply Basins
TCPL Alberta System
Spectra Energy
Gas Process Plant
Proposed Gas Plant
Compressor Station
ABCabin
Slave Point
Platform
N.W.T
Alb
erta
British
Co
lum
bia
Bo
vie
Fau
lt S
yste
m
Cordova
Embayment
Horn River
Basin
Horn River Pipeline
0.6 Bcf/d Committed
2nd Qtr. 2012
Ft. Nelson
Gas Plant
North
Maxhamish
Loop
Cabin 0.4 Bcf/d,
2.4 Bcf/d Ultimate
4th Qtr. 2011
Slave Point
Platform
N.W.T
Alb
erta
British
Co
lum
bia
Bo
vie
Fau
lt S
yste
m
Cordova
Embayment
Horn River
Basin
Horn River Pipeline
0.6 Bcf/d Committed
2nd Qtr. 2012
Ft. Nelson
Gas Plant
North
Maxhamish
Loop
Cabin 0.4 Bcf/d,
2.4 Bcf/d Ultimate
4th Qtr. 2011
South Peace Pipeline
North Maxhamish Loop
North Central Corridor
Groundbirch Mainline
Horn River Mainline
Pacific Trail
Pipelines
Spectra Projects
TransCanada Projects
South Peace Pipeline
North Maxhamish Loop
North Central Corridor
Groundbirch Mainline
Horn River Mainline
Pacific Trail
Pipelines
Spectra Projects
TransCanada Projects
South Peace Pipeline
North Maxhamish Loop
North Central Corridor
Groundbirch Mainline
Horn River Mainline
Pacific Trail
Pipelines
Spectra Projects
TransCanada Projects
Sundown
Spectra Energy
0.8 Bcf/d Committed
Gathering & Processing
Staged In-service 2012 - 2013
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Equipment Manufacturing: Horn River
• Six phase build
• Awarded Phase I - a contract
value of $80M with a delivery
of 2011
• Recently awarded the sole-
source contract for the Amine
Modules for Phase II with a
contract value of $60M
• Final 4 Phases expected to
commence one per year
starting in 2013
EnCana Cabin Gas Processing Plant
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Equipment Manufacturing: Horn River
• $25 M project
• Awarded Phase I which
included 7 modules
• Phase II will be awarded in 2011
with remaining phases coming in
2012 and 2013
• Horn River very significant source
of long term revenues
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Spectra Energy Gas Processing Plant
Horn River Shale Gas
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Equipment Manufacturing: Horn River
• Inlet Separation
• Amine Processing
• Dehydration
• Dew Point Reduction
• Acid Gas Injection
• Vapor Recovery
• Stabilizer Overheads
Pre-Manufactured Modules for Spectra Energy
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Equipment Manufacturing: Horn RiverContracts Signed to Date
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Equipment Manufacturing: Montney
• South of Horn River
extending into Alberta
• Access to infrastructure
• Providing high volumes of
compression and
processing facilities
• Liquid rich formation
requiring additional
equipment
– Presents new opportunities
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Large Tight Gas Play
Greater
Sierra
BritishColumbia Alberta
Calgary
Extended
Deep Basin
Greater
Sierra
BritishColumbia Alberta
Calgary
Extended
Deep Basin
Dawson
ARC
GroundbirchShell
TupperMurphy
Grand Prairie
Pouce CoupeBirchcliff
Talisman
Pouce Coupe
South
ParklandStorm
Fort St. John
AlbertaBritish Columbia
094A
SeptimusCrew
Monias Sunrise
Dawson Creek
Sundown
Farrell
Altares
Talisman
093P
094B
093O
Valhalla
Sinclair
La Glace
Hythe
Tight Gas
Hybrid
&
Shale
Gas
Low Gas
Concentration
Low Gas
Concentration
Conventional
Montney Gas & Oil
Swan LakeEncana
GlacierAdvantage
Dawson
ARC
GroundbirchShell
TupperMurphy
Grand Prairie
Pouce CoupeBirchcliff
Talisman
Pouce Coupe
South
ParklandStorm
Fort St. John
AlbertaBritish Columbia
094A
SeptimusCrew
Monias Sunrise
Dawson Creek
Sundown
Farrell
Altares
Talisman
093P
094B
093O
Valhalla
Sinclair
La Glace
Hythe
Tight Gas
Hybrid
&
Shale
Gas
Low Gas
Concentration
Low Gas
Concentration
Conventional
Montney Gas & Oil
Swan LakeEncana
GlacierAdvantage
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Equipment Manufacturing: MontneyContracts Signed to Date
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0
1
2
3
4
5
0
1
2
3
4
5
2000 2005 2010 2015 2020 2025
Bcf/d Bcf/dHistory Future
10%
BC Plains & Jean-Marie
Montney
Horn River
50%
40%
5%
2.5
5.2
BC Foothills
BC Deep Basin23%
19%
13%
8%
23%
8%
1% New Play
Equipment ManufacturingNortheast BC Production by Basin
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RentalsLeader in Rental Equipment
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• Largest gas compression rental company in Canada
• Currently have 570 units in our rental fleet generating
180,000 horsepower.
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Service BusinessLargest OEM Service Provider in Canada
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• Canadian market leader
• Largest distributor of parts
for Waukesha engines
• Enerflex also distributes
Altronic, Ariel, Champion,
Gemini and Frick products
30 Service Branches and 220 Service Vehicles
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Service Business - Central Services
• Built new 55,000 sq.ft.
distribution and re-manufacturing
facility in Leduc, Alberta
• Central Warehouse to distribute
parts to branches as required
• Improve efficiency
Leduc, Alberta 29
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Integration
• The Canadian Sales, Service,
Rentals and Retrofit businesses
have been fully integrated
• Calgary manufacturing,
engineering and administrative
personnel have been merged
• Currently working on
consolidating our ERP systems
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Rationalization
• Eliminated 310 employee positions
• Closed 10 overlapping service locations
• Exited 4 manufacturing facilities
• Removed 320,000 sq.ft of excess capacity by
closing 47th Street facility
• Removed 55,000 sq.ft of excess capacity by
consolidating retro-fit business
• Sold Stettler and North facilities
• Substantially reduced product inventories
• Sold Syntech operation
$32 Million in Annual Cost Savings Realized to Date
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Summary
Rationalization
Ongoing Cost Controls
Reduce Capital Employed and
Create Additional Cost Savings
+
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Strategic Goals
• Maximize our participation in Horn River and Montney gas plays
• Continue to rationalize operations to remove overlap
• Continue aggressively reducing inventories of new equipment
• Sell idle equipment in our rental fleet
• Maintain the leading market position
• Grow contract maintenance revenue as a percentage of business
• Expand capability to serve engine rebuild and exchange market
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Jerry Fraelic President, Southern United States
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Agenda
Division Overview
Equipment Manufacturing Role
Southern and Eastern U.S. Activities
Latin America Activities
2011 Expectations
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Division Overview
Markets We Serve
Division Least Affected by Merger
37
• South and East US and Latin America
– Houston main location (Packaging and Service)
– 4 remote sales offices
– 5 remote service offices
• Strategic Advantage of Merger
– Tidewater Location for International
– Lower Manufacturing Cost Base to Support
International Sales Effort
– Leverage Knowledge for Field Installations
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Division OverviewGlobal Industries
Natural Gas Compression
Natural Gas Processing
Products
• Special Gases and Fuel Gas Compressors
(H2, N2, CO2, etc.)
• Natural Gas Reciprocating and Screw
Compressors
– Engine and electric drive
– 200 to 10,000 HP
• Gas Processing Equipment
– Dew Point Plants
– Amine Plants (CO2 and H2S absorption)
– Dehydration Systems (TEG and Mole Sieve)
– Refrigeration
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Division Overview
• Pipeline and Storage are
generally large HP units
• Growth area as gas demand
increases and production
comes on line in new regions
• Well positioned for large
horsepower compression
units
Fabrication and Packaging
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Houston Assembly Plant
Division Overview
• Fully Integrated
– Sales and Applications
– Engineering
– Fabrication and Packaging
– Service and Merchandize
• Manufacturing facility
in Houston located on
30 acres of land
• 22 bays for assembly
• Approximately 380 people
on site and 500 total
Fabrication and Packaging
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41Houston Facility
Division OverviewFabrication and Packaging
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Division Overview
2010 Accomplishments
• 193 modules shipped
• 415,000 HP shipped
• 87 percent compression
• Balance process equipment
• 650,000 production hours
• Inventory Reduction
Serialized reduced 76% or by $21.2M
Typical Gas Compression Site
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Southern and Eastern U.S.
Marcellus
gas field
262 trillion cubic
feet of
recoverable gas
Haynesville
shale field
250 trillion cubic
feet of
recoverable gas
Fayetteville
gas field
20 trillion cubic
feet of
recoverable gas
Eagle Ford
sizeable quantities
of oil, lean gas and
rich gas
Sale & Service Locations Shale Gas PlaysFabrication Plants
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• Significant focus on unconventional (shale) gas
• Significant opportunities for Enerflex as gas comes online for both compression and processing
• Last week Horizontal Rigs all time high in lower 48 (continued pressure on gas price)
• Gas consumption running at very high rates 65 BCF
• LNG import capable 18.5 BCF / actual 1.5 BCF, CDN imports down
• Storage levels at all time high at 3.8TCF above 5 year average high of 3.5TCF
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Significant Customers
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Latin America
Venezuela
Bolivia
Argentina
Colombia
Peru
Chile
Venezuela
45
• South America 14% of contract bookings (sales organization)
• Risk Management– Resellers (positive cash and before ship)
– Letters of credit
– US product if possible
• National Oil Companies
• Columbia recently active (BP)
• Venezuela active (PdVSA)
• Peru (PlusPetrol)
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Latin America
Venezuela
• Second-largest natural gas reserves in
Western Hemisphere
– 176 trillion cubic feet of proven reserves
• Opportunities due to infrastructure issues
• Supply full range of equipment:
– Fuel gas compressors
– Standard compression modules
– Processing modules for amine and dew point
– Gathering equipment
– Plus all related parts and services
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Productivity
• Combines leadership training with
process improvement
– Correct information to correct people
in a timely manner
– Connect front-line to bottom-line
Management Initiatives
Continuous Improvement
Lean Manufacturing • Optimize operational efficiency
by identifying inefficiencies and
eliminating waste
Results are Measurable
HSE • Health, Safety and
Environmental Goal is 50% of
industry average
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Quality and Competitive PriceIt’s all about the People
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Outlook
• Gas Compression
– Revenues in U.S. markets steady
– Expect higher business volumes in Latin America
• Gas Processing
– Expect increase across all markets
• Expect continued orders for fuel gas systems
• Expect increased international manufactured product
• Able to expand systems & facilities to meet demanded
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Bill Moore President, International
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Agenda
Division Overview
Equipment Manufacturing
Regional Operations Reports
Outlook for 2011
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Division OverviewMarkets We Serve
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Division Overview
• Engineering Design
• Equipment Fabrication
• Onsite Construction
• Project Management
• Maintenance and
Operation Services
Specialized Goods and Services
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Division OverviewMost Active Categories
Production
and Processing
Compression
and Power
Combined Heat
and Power
Integrated
Solutions
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Manufacturing and Fabrication
• New Eagle Farm reassembly facility in Brisbane
• Build on and expand as required in the future
• Recently opened Roma Service facility
Australia
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Manufacturing and Fabrication
• Significant capacity to meet the manufacturing and
fabrication requirements of our customers with export
of our products and through local footprint
• As business volumes increase in the future, excess
capacity at our plants will be taken up as required
Summary
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Market Regions
• Most important single region
• Solid market presence
• Our projects include:
– Gas-gathering infrastructurefor LNG plants on Australia’s
northwest shelf
– Coal-seam gas compression
systems for Queensland’s local gas demand
and upstream LNG development
– Compression booster stations along most of Australia’s pipeline
network
Australasia
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Market RegionsAustralasia
Australia Major Basin Activity
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Market Regions
• Global financial crisis decelerated
project work in Australia resulting
in several delays
• Queensland Gas Corporation
awarded Enerflex their first LNG
compression and processing
order in October
– 82 modular gas compressor
packages and 3 modular TEG
dehydration packages valued at
$193 million
– Leading edge of a major ramp-up
in Australian coal seam gas
production
Australasia
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Market Regions
• 4 multi-billion projects under
development
– QGC and Santos well advanced
• Gorgon offshore project,
booked metering station on
west coast
• Epic Wullumbilla expansion
booked $30 million of
compression installation during
the third quarter
Australasia
Major CSG to LNG Projects1.Santos (GLNG)
2.Shell (Gladstone LNG)
3.Origin (APLNG)
4.QGC (QCLNG)
Queensland
GLNGGladstone LNG
QCLNG APLNG
12
34
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Market RegionsAustralasia
Gas Production Growth
Demand expected to double in 10 Years
…driven by government carbon policy and LNG export
Planned LNG
Projects
Carbon Driven Fuel Switching
10 Year Historic Average
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Market Regions
• Over 2 decades of strong presence
in Europe
• Traditional market in the Benelux
countries has been
– Combined Heat and Power (CHP)
packages
– Limited growth opportunities
• To grow in Europe:
– Take advantage of diversity of product
applications
– Strengthen service base
Europe/CIS
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Market Regions
Growth strategy includes markets:
• Power Generation
• CHP
• Natural Gas Compression
• CO2 Production
• Refrigeration Systems
Europe/CIS
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Rijsenhout, Netherlands
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Market RegionsEurope/CIS Infrastructure Investments
Netherlands consolidated operations into
one facility in Risjenhout
UK integrated regional sales
office with European team
Turkeyestablished a branch office to
support CHP plus gas compression
offerings
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Market Regions
• Smallest share of
revenue today
• Expected to lead the world
in natural gas production
over the next 20 years
• Region holds a total of
2,658 trillion cubic feet of
natural gas
• 44% of world’s proven gas
reserves
Middle East North Africa
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Market RegionsMiddle East North Africa
MENA Production and Reserves
Source: Oil & Gas Journal
-5 5 15
Other OECD
Australia/New Zealand
United States
Central/South America
No-OECD Europe/Eurasia
Africa
No-OECD Asia
Middle East
161
267
319
495
539
2,170
2,658
0 1000 2000 3000
Europe
Central/South America
North America**
Africa
Asia
Eurasia
Middle East
World Total:
6,609 trillion cubic feet
66*Graph shows change in world natural gas production and reserves by region 2010 to 2035 (Tcf)
**Does not include unconventional gas reserves in North America.
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Market Regions
• Growth will be driven by:
– LNG
– Power Generation
– Fertilizer
– Water Desalination
• Abu Dhabi office with sales,
engineering and operations
management
• Oman reached the
commencement of our BOOM
contract for BP’s Khazzan
Makarem
• Awarded a $34 million
compression order in Bahrain
with Tatweer Petroleum
Middle East North Africa
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Bahrain
Oman
UAE
Kuwait
Egypt
Qatar
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Market RegionsInternational Clients
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Strategic Goals
• Establish and implement an international strategy
for gas compression and processing equipment
including risk management
– Australasia
– MENA
• Complete the pre-qualification process for turnkey
projects
– Emirates
– Oman
– Kuwait
– Egypt
– Client prospects include Gasco, BP, Kuwait Oil
Company and Shell Egypt
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Strategic Goals
• Australia - Queensland Gas contract
– Gas compression
– TEG dehydration packages
– Potentially construction and installation works
• Middle East - BP Oman project
• Europe/CIS
– Reduce our reliance on the Benelux market for CHP
– Focus on other expanding European markets
– Grow our presence in natural gas market through
development of sales office in Moscow
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Summary
• Provision of both equipment and support services
produces attractive margins and forges close ties with
our customers
• Strategy to improve volume of higher margin business
from recurring revenue streams
• Strong relationships lead to further business and
enhances overall stability through all phases of the
business cycle
• Risk management – geographic, customer, contracts
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Summary
Well Positioned as a Pure Play Supplier of Natural Gas
and Processing Equipment
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74