June 2009
Jerry Winchester President and CEO
Safe Harbor Language
This presentation contains “forward-looking statements”. These statements include the plans and objectives of management for future operations and financial objectives and expectations. These forward-looking statements are subject to inherent uncertainties in predicting future events, results and conditions. Certain factors that could cause actual results to differ materially are included in the “Risk Factors” section of the Company’s periodic filings with the U.S. Securities and Exchange Commission (SEC), and include uncertainties relating to market, industry and competitive conditions which are impossible to predict accurately, and most of which are beyond the control of the Company. Although the Company believes that the assumptions underlying the forward-looking statements included in this presentation are reasonable, any one of such assumptions could be materially inaccurate, which could render the forward-looking statements materially inaccurate. Therefore, the inclusion of such forward-looking statements should not be regarded as a representation by the Company that the operations, objectives or expectations of the Company will be achieved. This presentation also contains certain non-GAAP financial measures, including historical EBITDA, pro forma EBITDA by operating segment, and projected EBITDA. A reconciliation of historical EBITDA to consolidated net income, the nearest measure of performance calculated in accordance with GAAP for the relevant periods presented in this presentation can be found in the Company’s earnings releases posted on the Company’s Web site, the latest dated August 4, 2008. We do not reconcile projected EBITDA because of the difficulty associated with calculating future net income.
2
Boots & Coots
• • • •
Industry: Niche segment of oil and gas services Briefing: Founded in 1978, Boots & Coots has been globally known as the best emergency responders in the industry Client Base: Leading domestic and international public, private and state owned oil and gas production and explorations companies Global reach: Headquartered in Houston, TX with 15 offices and about 700 employees worldwide (NYSE Amex: WEL)
• Vision: The biggest and most preferred pressure control company in the world
3
Highlights
• LTM 2009 revenue growth of 71% to $218.9 million • 2008 EBITDA growth of 39% to $35.9 million • Approximately 80% of business is international, with a majority under long term contracts • Debt to total capital of 23.8%; debt to EBITDA of 0.8x
4
Corporate Overview
Global company with operations throughout the world
5
Business Overview
Boots & Coots’ emphasis is on niche segment of pressure control services for the oil and gas industry. Recent events toward this include • Acquisition of Hydraulic Well Control in 2006 • Acquisition of StassCo in 2007 • Start up of the pressure control rental tools in 2007 • Acquisition of John Wright Company in 2009 Revenue Mix
2007
Equipment Services 2%
2008
Equipment Services 9%
LTM 2009
Equipment Services 11% Pressure Control 48% Well Intervention 47% Well Intervention 41%
Pressure Control 35%
Pressure Control 44%
Well Intervention 63%
6
Business Breakdown By % of Revenue
GOM 5%
NA Land 15%
International 80%
LNG Related 5%
Gas Related 40%
Oil Related 55%
Offshore 45%
Onshore 55%
7
Strong Global Client Base
8
Historical Financial Summary
Revenue (Millions)
$250
209.2 218.9
EBITDA (Millions)
$45 $40 $35 $30 $25 $20 $15 $10 $5 $0
39.1 35.9
$200 $150 $100 $50 $0 2005 2006 2007 2008 LTM 2009
29.5 97.0 105.3
24.8 18.7
5.3
2005
2006
2007
2008
LTM 2009
9
Business Summary
10
Service Lines
Pressure Control Response Prevention Well Intervention Hydraulic Workover/Snubbing Equipment Services Pressure Control Rental Tools
11
Pressure Control – Response Services
• •
30 year legacy business with highly experienced personnel Leverage brand recognition and worldwide footprint to provide a wide range of products in the pressure control niche of oil field services
$25 $20 $15 $10 $5 $0 2007 2008 LTM 2009
13.3
Revenue (mm)
22.4 21.0
12
Pressure Control – Prevention Services
•
•
By 2010 some 20% of industry personnel will have less than 5 years experience, creating competency gaps
Prevention services fill these gaps in four key areas − Audit and risk management systems − Personnel development-competency programs & training − Well audits and inspections − Risk mitigation and well intervention Growth driven by delivering a service that improves production, lowers costs and provides safe work environment for the user The acquisition of John Wright Company increases our competitive edge in technology, geographic reach and client base
$90 $80 $70 $60 $50 $40 $30 $20 $10 $0
Revenue (mm)
70.4
84.4
23.5
•
2007
2008
LTM 2009
•
13
Well Intervention – Snubbing / Hydraulic Workover
•
•
Largest revenue segment for the Company-accounts for 46% of 2008 revenues
$120
Revenue (mm)
$100 $80 $60
66.6 97.2 90.4
The Company supplies equipment and personnel to perform snubbing operations for oil and natural gas well workovers Fleet of 37 units utilized primarily in snubbing / workover operations, also utilized in drilling, completion and plug and abandonment (P&A) services
•
$40 $20 $0 2007 2008 LTM 2009
14
What is Snubbing?
•
• • •
Snubbing is a process involving pushing/pulling tubular when well is live (under pressure)
Unconventional gas has driven the growth in underbalanced drilling, or drilling under pressure Snubbing minimizes the number of days and cost to complete most unconventional wells Pressure control services like snubbing reduce the risk of damaging shale or other tight gas formations common with unconventional drilling
15
Equipment Services – Pressure Control Rentals
•
• • • •
Natural extension of existing pressure control services
$25
Revenue (mm)
23.1 19.2 $20 $15 $10 $5 1.9 $0 2007 2008 LTM 2009
Organically developing rental business Adding rental offerings that complement snubbing / hydraulic workover and response business Adds an additional base of predictable cash flow High growth potential
2007 contains three months of revenue
16
Equipment Services – Pressure Control Rentals
17
Business Strategy
18
Growing Our Business
• • • • •
Continue to focus on strengthening our foothold in the pressure control niche Introduce existing customers to expanding list of products and services Attract new customers by leveraging strong brand and reputation for getting things done right Expand our prevention services initiatives, especially our Safeguard brand Pursue strategic opportunities for growth that can be created from a challenging market
19
Expand Service Lines Current Product Offerings
Drilling
Completing
Workover
Plug & Abandonment
Well Plan Engineering Risk Analysis/Training
Well Control/Emergency Response Relief Well Engineering Rig Audits/Inspections Pressure Control Rental Equipment Snubbing Flowback Hydraulic Workover Valve Drilling/Hot Tap Services Recompletion Services Damage Recovery Abandonment Services
20
Expand Service Lines – Additional Opportunities
Drilling
Completing
Workover
Plug & Abandonment
Well Plan Engineering Risk Analysis/Training Wellhead Installation/Sales Well Testing Well Control/Emergency Response Relief Well Engineering Rig Audits/Inspections Wellhead Isolation Tools Pressure Control Rental Equipment Snubbing Flowback Hydraulic Workover Coiled Tubing Valve Drilling/Hot Tap Services Slickline Recompletion Services Nitrogen Services Damage Recovery Ancillary Services Abandonment Services
21
Expand Revenue Platform
Red flag – existing operation
Yellow flag – potential operation
22
Company Strengths / Highlights
• • •
•
• •
Reputation – Strong brand name and reputation of success on which to build Strong industry dynamics – Niche player in a very defined sector of oil and gas services Diversification – Product mix - comprehensive pressure control capabilities – Global presence accounting for 80% of the Company’s business – Expansion opportunities for pressure control services in North America – Substantial growth prospects for prevention services internationally Human capital – Highly competent and experienced workforce – Erudite management team Strong growth potential Conservative capital structure
23
Jerry Winchester President and CEO