Annual General Meeting May 2014
2013 Operational Highlights Rig 11 built and delivered to field – October 10, 2014 Strong safety record - received Class B Safety Award from CAODC Completed Core Maintenance Audit – 87% Grade Equipment continues to be amongst the best in the Industry Strong operational team in Estevan 2013 Operational Highlights
2013 Revenue Highlights 20,767 hours worked versus budget of 23,610 hours – 55.7% COADC – 365 days x # of rigs x 10 hrs/ day/rig = 3650 hours = 100% utilization Overall revenues flat in 2013 Average revenue of $834 per hour versus budget of $844 per hour Coil Clean outs Federated-Coop Weather in Q4 2013 Revenue Highlights
2013 Expense Highlights Overall Expenses increased 11.8% Field Payroll 4.5% Field Expenses 12.3% R&M 30% Fuel 17% Safety 38% Operations 30% Salaries 55% Entertainment 79% Shop Supplies 30% Vehicles 25% G&A 42% Salaries 44% Advertising and Promo 18% IT Consulting 78% Legal 109% Entertainment 184% 2013 Expense Highlights
Peer Group and Industry 2013 Peer Group EBITDA Comparisons Central Alberta 23% Essential Energy 20% Sun Country 2013 Industry Utilization Industry 51% Sun Country 56.2% Peer Group and Industry
Q1 2014 Highlights 5541 hours versus budget of 6380 hours Weather Safety Incident Rig 2 Crew Average revenue of $833 per hour versus budget of $865 per hour Customers in Q1 were NAL, Enerplus, Lightstream, Legacy (3rigs) Elkhorn, Crescent Point, Enerplus, Openfield, Wyatt, Triland, Q1 2014 Highlights
2014 Budget Hours Sun Country Well Servicing 2014 Budget Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total # of Rigs 11 Hours Per Rig 205 170 60 135 175 210 220 215 2185 Rig Hours 2255 1870 660 1485 1925 2310 2420 2365 24035 2014 Actual 1615 1947.5 1978.5 716.0 Variance (640) (307.5) (108.5) 56.0 Year to date variance (947.5) (839.0) (783.0) 2014 Budget Hours
2014 Budget Total Revenue ($) 20,786,670 Total Field Costs ($) Total Field Costs ($) 11,604,098 Direct Margin % 44.2 Total Operations Overhead ($) 1,619,959 Total General and Admin Overhead ($) 5,875,356 Total Expenses ($) 1,909,9413 Net Income ($) 1,687,257 Gross Margin % 8.1% EBITDA ($) 6,197,425 EBITDA % 29.8% 2014 Budget
$3MM demand operating loan @ Prime plus 1. 25% $3MM demand operating loan @ Prime plus 1.25%. Currently no balance outstanding. Rig 5 paid out March 2014, expect Rig 6 to be paid out in October at latest $6.6MM outstanding demand non-revolving loan @ Prime plus 1.5% (total demand loan since 2010 is $14.5MM – have paid down $7.8MM in 4 years) Exit 2014 with $4.9MM non-revolving rig loan. Expect to make more lump sum payments later this year. HSBC Financing
No signs of slowdown in Southeast Saskatchewan at this point – wish we could predict the weather Have become one the most significant service companies in Southeast, Sask Newest fleet in the industry with very strong crews No capital expenditures in2014 Presently looking at liquidity options Preliminary discussions with 6-8 companies 2 confidentiality agreements Possible engagement of broker Future Growth
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