Xtreme CorporateUpdate Nov2011

7/29/2019 Xtreme CorporateUpdate Nov2011

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Corporate Update

November 15, 2011


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Forward Looking

CAUTIONARY STATEMENT

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and uncertainties that could significantly impact expected or prospective results.

A discussion of risks and uncertainties is contained under the heading Forward-Lookinga emen s n e anagemen s scuss on an na ys s sec ons o reme o s

SEDAR filings including, but not limited to, the 2011 Third Interim Quarter MD&A and the2010 Annual Report.

These reports are available at:

www.xtremecoil.com

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XTREME DRILLING AND COIL SERVICES OVERVIEW

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Corporate Snapshot

TICKER: XDC (Toronto Stock Exchange)

. .

Enterprise Value: $258.1mm

3 Month Average Daily Volume: 54,008

Shares Outstanding: 65.6mm

Public Float: 38mm

Directors & Management: 11.8% Greater than 10% Shareholders: 30%

Total Assets: $375.7mm

Em lo ees: 481 11/1/11

Headquarters: Calgary, Alberta and Houston, Texas

Website: www.xtremecoil.com

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1. Market Cap as of 11/11/11 and Net Debt as of 9/30/112. As of 9/30/11


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OVERVIEW

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Xtreme Overview

XTREME DRILLING AND COIL SERVICES IS A TECHNOLOGY FOCUSED PROVIDEROF LAND BASED DRILLING AND WELL SERVICES

We provide new generation drilling rigs as well as large built for purpose coil service rigs. With thecontinuous focus on improving existing technology in the land drilling and coil services market,Xtreme has developed over 32 patents and proprietary designs for drilling and coil service rigs.

Drilling: High specification XDR drilling rigs

Operations focused in the Rocky Mountain region with growing presence in the Bakken andNiobrara unconventional shale plays.

One of the youngest high specification fleets in the land drilling industry.

Ideally suited for unconventional resource plays.

Optimized drilling and mobilization efficiencies through AC equipment, integrated skiddingpackages, small footprint design and minimized craneless loads.

Coil Services: High specification large diameter proprietary XSR coil tubing service rigs

Ideally suited for CT cleanouts, re-entry, wellbore extensions, fracturing, production logging,perforating, stimulations and other complex interventions.

Rigs are masted, utilize AC 200,000 lbs. injectors, proprietary coil reel trailers and twin1,000 hp pumps.

5 new service rigs will be deployed over the next 2 quarters.

2 service rigs currently operating under long term contract in Saudi Arabia. 6


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Operations Geographic

Canada

Bakken

5 Drilling Rigs*6 Service Rigs*

3 Drilling Rigs

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Outlook for 2011-2012

AGGRESSIVE IN PROCESS DRILLING AND COIL SERVICE FLEET EXPANSION

mm capex roug - w a ona mm expec e n

Q4 2011.

Current growth and maintenance capex budget of approximately $70mm in.

Increase XDR drilling fleet by 50% from the current 14 rig fleet to 21 rigs by

the end of 2012. Continue to build efficiencies with increased scale and focus in the Williston and

Greater DJ basins.

Launch large coil service business with the deployment of 5 XSR 200 series.

Ideally suited for unconventional plays with long lateral reach capabilities.

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Investment Overview

XTREME (XDC.T) IS A COMPELLING WILLISTON AND GREATER DJ BASIN FOCUSED DRILLING ANDCOIL SERVICE COMPANY WITH AN INTERNATIONAL PRESENCE IN THE MIDDLE EAST

ea ng ge r ng an o ec no ogy

Average fleet age of less than 3.5 years Rigs are ideally suited for major operators in

expanding resource plays due to AC

rac ve a ua on

EV / 2012 EBITDA: 3.5x vs. industry groupaverage of 4.0x

Mkt. Cap / TEV: 0.8x vs. industry group, ,

small footprint design and minimizedcraneless loads

Strong Growth Profile

.

Pipeline of attractive IRR projects At inflection point of realizing potential of

past engineering and technology R&D

70% in 2012

High Margin Coil service business expectedto increase operating margin

Expanding drilling business has signedcontracts that represent expected IRR of20%+

High margin coil service business expected

88% and consensus EBITDA growth of194% in 2012

Focused operations with leverage to oil andliquids rich plays Anticipated in next 12 months 100% of

XSR Coil service rigs in oily Williston Basinor liquids rich Greater DJ Basin of the USand 18% or 2 XSR rigs working on gas playsin the Middle East 9

1. Firstcall consensus EBITDA as of 11/11112. Industry group defined as PTEN, PDC, PD, TDG and UDRL3. TEV as of 9/30/11


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DRILLING SERVICES

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Drilling Macro Themes

DEMAND FOR RIGS HIGHLY LEVERED TO TYPE AND SIZE

ven o s a e an unconven ona r ng as p ace grea er eman s on r g

technology

Unconventional resource plays now account for 70% and growing of all land drilling

Horizontal drilling now 58% of wells being drilled and higher technology and smallerloads is the trend in virtually every play

40%

50%

Land Rig Distribution by Type Expected 12 Month Utilization by Type

DRAWWORKS HP A/C SCR MECHANICAL

601-999 95% 75% 65%

-

0%

10%

20%

, ,

1,201-1,500 98% 95% 65%

1,501-1,999 98% 95% 65%

2,000 > 95% 95% 65%

11

% of US Land Fleet

Source: Global Hunter Securities


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Drilling Segment Overview

XDR FLEET IS AMONG THE YOUNGEST AND MOST TECHNOLOGICALLYADVANCED IN THE INDUSTRY

Average Age of less than 3.5 years onentire fleet

RIG RIG TYPE STATUS LOCATIONSTARTDATE

Rig 3 XDR 200 Prep for CAN Texas

Rig 4 XDR 200 Operating Wyoming


Current utilization of 80% on 15 rigs

6 New XDR 500 ri s in rocess w/ term

Rig 6 XDR 400 Operating Colorado

Rig 7 XDR 500 Operating N Dakota




contracts Rig 12 XDR 300 Operating ColoradoRig 14 XDR 300 Operating Colorado


Rig 16 XDR 400 Operating Colorado410

XDR by Type

Rig 18 XDR 500 Operating N Dakota


Rig 20 XDR 500 In Process Colorado Q1 2012

Rig 21 XDR 500 In Process N Dakota Q1 2012

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Rig 25 XDR 500 In Process N Dakota Q2 2012

XDR 200 XDR 300 XDR 400 XDR 500


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XDR 500

Craneless 250 ton, two-stage telescopic mast andsingle piece step-down substructure

Compact AC 1500 horsepower drawworks

Integrated AC top drive which transports in mast

,

Climate controlled drillers cabin w/PLC Joystick

controls

Automated hydraulic catwalk and iron roughneckfor safe, efficient tubular handling

Integrated multi-well pad moving system

Modular design for rapid deployment

Winterized for harsh environments

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XDR 500 Detail

Climate controlled drillers cabin Variable frequency drive systemCompact 1500HP AC Drawworks

Integrated AC top drive systemAutomated hydraulic catwalk Iron roughneck pipe handling

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Integrated multi-well skid systemCraneless modular design Large capacity 1600HP pumps


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XDR Advantages and Stats

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Coil Services

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Large Coil Macro Themes

ANTICIPATED SUPPLY DEMAND IMBALANCE IN LARGE COIL SERVICE MARKET THROUGH2012

Large diameter coil units are expected tomake up an increasing portion of the majorunconventional resource com letion and

BAKKEN EAGLE FORD HAYNESVILLE

Wells Drilled 2,951 3,292 1,473

% to be Completed 98% 98% 98%

Total Completions 2,892 3,227 1,443

% of Wells Using CT 66% 66% 66%

2011

service activities

As drilling continues and wells age in theseunconventional resource la s, it is antici ated

Total Wells Using CT 1,909 2,130 953

Avg. Days per Well 7 6 7

Days Required 13,743 11,712 6,192

Total Working Days 250 250 250

CT Unit Demand 55 47 25

Total Demand 127

that well intervention or service with coil willincrease demand over the long term

Even with current industr fleet ex ansion

Total Supply 76

Implied Utilization 167%

BAKKEN EAGLE FORD HAYNESVILLE

Wells Drilled 4,083 4,500 1,264

% to be Com leted 98% 98% 98%

2012

taken into account, it is anticipated thatdemand will outstrip supply into 2013

Current economics on lar e coil service

Total Completions 4,001 4,410 1,239% of Wells Using CT 66% 66% 66%

Total Wells Using CT 2,641 2,910 818

Avg. Days per Well 8 6 7

Days Required 19,807 17,171 5,315

Total Working Days 250 250 250

units imply returns in excess of 50%

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Total Demand 169

Current Supply 124

Implied Utilization 136%Source: Global Hunter Securities


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XSR Opportunity and Overview

HORIZONTAL WELL LATERALS ARE GETTING LONGER AND NOW ACCOUNT FORMORE THAN 50% OF THE WELLS BEING DRILLED IN NORTH AMERICA

The majority of the industrys coiled tubing units are at their limit and not completingthe job.

,equipment such as AC powered injectors.

Extended lateral depths require other means of pipe transportation to handle the.

Our business opportunity has been created by combining

management with large diameter coil experience

exper ence eng neer ng an es gn eam proprietary equipment and control systems

supportive industry conditions

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XSR Initial Target Market

BAKKEN SHALE

Typical Well

Vertical Depth = 10,000 12,000 ft.

Lateral Length = 6,500 11,000 ft.

Max Measured Depth = 23,000 ft.

Plug & Perf Completion Technique

20 44 stages

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XSR 200 Ultra-Deep CT Rig

AC 200,000 lbs. injector capacity (utilizing large diameter coil)

PLC based controls that more recisel controls wei ht on bit,differential pressure and ROP

Ability to control drill/mill

Reduced motor stalls

Proprietary double-trailer configuration for transportationof the coil

Truck mounted twin um in /mixin units

Horsepower: 1,200 total

Discharge Rate: 4 BPM @ 0 psi

Dischar e Pressure: 15 000 si

Tank Sizes (3): 40 bbl total capacity

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XSR CT Reel Transport Trailer

XTREMES REEL TRAILER IS THE LARGEST CAPACITY COILED TUBINGTRANSPORT TRAILER IN THE WORLD

Capable of transporting 23,500 ft.of 2-5/8 coil

Complies with road standards in

COIL TUBING OD (in) CT WALL REEL OD/ID (in) CAPACITY WEIGHT (lb)

2-7/8 0.188 180 / 115 21140 114053

2-5/8 0.188 180 / 115 23500 114011

the United States and Canada 2-3/8 0.188 180 / 115 25970 114040

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XSR 200 Ultra-Deep CT Rig On Location

AC 200K Injector

Control Cabin & VFD

75 Mast

Engine Generator

BOPCT Reel Trailer

Carrier

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XSR Differentiating Technology

MILLING/DRILLING WITH PLC CONTROLLED VARIABLE FREQUENCY DRIVEN ACINJECTORS

Increased precision and measurability Computerized electronic driller that more precisely

,

Ability to control drill

Reduced motor stalls

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International Operations

INTERNATIONAL OPERATIONS OFFER UPSIDE POTENTIAL AND GEOGRAPHICDIVERSIFICATION

Saudi Arabia

Two XSR 200 rigs currentlyoperating for major internationalservice com an in Saudi Arabia

Margins are consistent with deepcoil North American expectations

Provides International opportunityto deploy new XSR 200 coil servicerigs

Customer Endorsement

Coiled tubing re-entry drilling program reduces drilling time by half; improvesproduction six fold

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Source: Baker Hughes; 2011 Investor and AnalystConference Presentation


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Future Free Option

CURRENTLY DEVELOPING WITH INDUSTRY PARTNER A FIT FOR PURPOSEMINING RIG

Currently in a feasibility testing phase of 50/50 joint venture

No capital contribution required under terms of the joint venture

reme con r u es eng neer ng, es gn an opera ona now e geto the partnership

Potential to capture portion of large global metals mining market

COMPANY ENTERPRISE VALUE (mm NUMBER OF RIGS LTM REVENUE PER RIG 1

Ausdrill L td. $744.5 322 $2.0

Boart Longyear Limited $1,913.6 965 $1.2

Capital Drilling Ltd $165.1 64 $0.9

Energold Drilling Corp. $124.5 94 $0.4

. . . .

Geodrill $67.0 18 $2.7Layne Christensen Co. 2 $565.0 150 $1.1

Major Drilling International $793.6 536 $0.7

Orbit Garant Drilling Inc. $164.2 140 $0.8

Swick Limited $111.9 78 $1.1

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2543

Source: Geodrill Investor Presentation November 2010

1. Industry Average utilization is between 60-70%2. LTM Revenue is comprised solely of the Mineral Exploration division, as reported in Layne Christensen Co.s financial reports.


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Financial Overview

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Strong Growth Potential

XTREME IS ON THE VERGE OF REALIZING HIGHER REVENUES AND EBITDAMARGINS BASED ON PAST R&D AND ENGINEERING EXPENDITURES

Strong Revenue Growth Potential

Current contract coverage of existing and newbuild rigs provides strong revenue clarity

Estimated that available ri s will avera e 25 in 2012

Of these rigs currently 16 or 67% have long term contracts that span into or through2012

EBITDA Growth of 4x and 50% margin expansion potential

Existing operating leverage coupled with addition of higher margin coil service divisionprovides opportunity for substantial margin expansion

In process contracted fleet expansion will drive higher EBITDA$66.5

20

$30

$40

$50

$60

$70

$22.9 $22.8

In millions of $CAD

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$0

$10 $6.2

Revenue EBITDAQ4 11 Q4 12 based on 11/11/11 Firstcall consensus


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Q3 Update Rig Contract Status

Term Contract Status (Including Committed New Builds)

14

16

18

2

2

2

cts

)

10

12

ero

fRigs

ong

-Term

Con

tr

uart

erly

Average

4

6

8

13

15 15 15 1514 14

12

6

Num

b

Alrea

dy

Un

der

L

(Es

tima

tedQ

2

5 5 5

3

21

28

XDR XSR


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Fleet Expansion

AGGRESSIVE CAPEX PROGRAM IS PROJECTED TO INCREASE FLEET BY 75% TO29 RIGS BY END OF Q4 2012

$30.00

$40.00

$50.00In millions of $CAD

$0.00

$10.00

$20.00

CAPEX

25

30

8

5

10

15

20

13

21

3

29

0

XDR XSRQ4 11 Q4 12 based on company estimates


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Corporate Information

Board of Directors

Saad Bargach 5

Managing Director, Lime Rock Partners, Houston, TX

Officers

Thomas D. WoodChairman and Interim CEO

AuditorsPricewaterhouseCoopers LLPCalgary, AB

an op . arron ,

President, Characo Corporation, Calgary, AB

Lawrence M. Hibbard2,3,4

Independent Businessman, Houston, TX

Daniel Z. Remenda 4, 5

Independent Businessman, Calgary, AB

att ew . orterChief Financial Officer

Richard D. HavingaChief Operating Officer and VicePresident, Engineering and Design

Brett Cole

anHSBC Bank Canada, Calgary, AB

SolicitorsStikeman Elliott LLP, Calgary, AB

Stock Exchange and Symbol

Peter J. Sharpe 5

Executive Vice President, WellsShell International Exploration and Production B.V.The Hague, The Netherlands

Marc L. Staniloff

2,3

Chairman and Chief Executive Officer

enera ounse

Tyson SeeligerVice President, Sales & Marketing

Martin Ramirez

Corporate Controller

,

Transfer Agent and RegistrarValiant Trust Company, Calgary, ABtoll free: +1 866 313 1872e-mail: [email protected]

-uper or o g ng orp., a gary,

Kyle W. Swingle 5

Senior Technical and Project AdvisorXtreme Coil Drilling Corp., Steamboat Springs, CO

Thomas D. Wood 1

Chairman, Xtreme Coil Drilling Corp., Calgary, AB

.Corporate Secretary

Corporate and Investor Relationstel: +1 403 450 1190e-mail: [email protected]

Shareholders and other interested

Xtreme Coil Drilling CorporationHouston, Texas, USAtel: +1 281 994 4600fax: +1 281 994 4650

Xtreme Coil Drilling Mxico, S.A. deC.V.

1 Chairman of the Board2 Audit Committee

individuals can view Xtreme Coil public

documents atwww.xtremecoildrilling.com where wehave posted drilling rigs and locations,historical information, shareholderreports, news releases, the currentcorporate presentation, as well as

Mexico

Xtreme (Luxembourg) S.A.Xtreme Equipment Group S.A.Luxembourg

Joint Ventures

ompensa on omm ee4 Governance and Nominating Committee5 Health, Safety, Environment Committee

trading and contact information..

Saudi Arabia

Lucas-Xtreme Drilling Pty Ltd.Australia


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Xtreme CorporateUpdate Nov2011

Documents

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