Capital Drilling Limited Corporate Presentation November 2015 - - PowerPoint PPT Presentation

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Capital Drilling Limited Corporate Presentation November 2015 - - PowerPoint PPT Presentation

Capital Drilling Limited Corporate Presentation November 2015 Disclaimer IMPORTANT NOTICE This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or


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SLIDE 1

Capital Drilling Limited

  • Corporate Presentation
  • November 2015
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SLIDE 2

Disclaimer

IMPORTANT NOTICE

  • This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of Capital Drilling Ltd. (the

“Company”), nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of the Company.

  • This document is being supplied to you solely for your information. No reliance may be placed for any purposes whatsoever on the information or opinions contained in this document or on its
  • completeness. No representation or warranty, express or implied, is given by or on behalf of the Company or any of its directors, officers or employees or any other person as to the accuracy or

completeness of the information or opinions contained in this document and no liability whatsoever is accepted by the Company or any of its members, directors, officers or employees nor any

  • ther person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith.
  • This document and its contents are confidential and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any
  • purpose. This document is only addressed to and directed at persons in member states of the European Economic Area who are “qualified investors” within the meaning of Article 2(1)(e) of the

Prospectus Directive (Directive 2003/71/EC) (“Qualified Investors”). In addition, in the United Kingdom, this document is being distributed only to, and is directed only at, Qualified Investors (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) and Qualified Investors falling within Article 49(2)(a) to (d) of the Order, and (ii) to whom it may otherwise lawfully be communicated (all such persons together being referred to as “relevant persons”). This document must not be acted on or relied on (i) in the United Kingdom, by persons who are not relevant persons, and (ii) in any member state of the European Economic Area other than the United Kingdom, by persons who are not Qualified Investors. Any investment or investment activity to which this document relates is available only to (i) in the United Kingdom, relevant persons, and (ii) in any member state of the European Economic Area other than the United Kingdom, Qualified Investors, and will be engaged in only with such persons.

  • Neither this document nor any copy of it may be taken or transmitted into the United States of America, its territories or possessions or distributed, directly or indirectly, in the United States of

America, its territories or possessions. Neither this document nor any copy of it may be taken or transmitted into Australia, Canada, Japan or the Republic of South Africa or to any securities analyst or other person in any of those jurisdictions. Any failure to comply with this restriction may constitute a violation of United States, Australian, Canadian, Japanese or South African securities law. The distribution of this document in other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and

  • bserve, any such restrictions.
  • The securities mentioned herein have not been, and will not be, registered under the US Securities Act of 1933 (the “Securities Act”), or under the applicable securities laws of Canada, Australia,

Japan or the Republic of South Africa, and may not be offered or sold in the United States (as such term is defined in Regulation S under the Securities Act) unless they are registered under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and, subject to certain exceptions, may not be offered or sold within Canada, Australia, Japan or the Republic of South Africa or to any national, resident or citizen of Canada, Australia, Japan or the Republic of South Africa. No public offer of securities in the Company is being made in the United States, Canada, Australia, Japan or the Republic of South Africa.

  • Certain statements, beliefs and opinions in this document are forward-looking, which reflect the Company’s or, as appropriate, the Company’s directors’ current expectations and projections

about future events. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described

  • herein. Forward-looking statements contained in this document regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the
  • future. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not

place undue reliance on forward-looking statements, which speak only as of the date of this document.

  • By attending the presentation to which this document relates or by accepting this document you will be taken to have represented, warranted and undertaken that: (i) you are a relevant person

(as defined above); (ii) you have read and agree to comply with the contents of this notice; and (iii) you will use the information in this document solely for evaluating your possible interest in the Company and for no other purpose.

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SLIDE 3

Trading Update

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SLIDE 4

Challenging trading conditions …

4

200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2,000 4,000 6,000 8,000 10,000 12,000 Gold - US$/oz Copper - US$/tonne Copper Spot Gold Spot

GOLD AND COPPER SPOT RATES1 REVENUE vs UTILISATION MACRO PRESSURES REMAIN

  • Industrial metals continue to test mutli-year lows
  • Golds relative resilience under threat from rising US interest rates
  • Sector access to capital remains challenging, albeit 2015 showing

improvement on prior years

  • Clients remain focused on stringent cost management and

constrained CAPEX

  • Industry utilisation rates remain at historic lows of 30 to 35%

»

Drilling rates continue to be under pressure

SIGNS OF STABILISATION, DESPITE THE HEADWINDS

  • Utilisation rates at historical lows, with exploration & delineation

drilling the weakest segments

  • Capital Drilling’s strategic focus on production drilling provides a

solid base to Group revenue, representing c70% of total revenue

  • Production contracts range between 2 and 5 years in duration
  • Quarterly revenue increases in 2015 driven by recent exploration

contract wins

1. Source: Bloomberg (as at 11 November 2015) 40.92 38.91 38.34 34.35 21.73 21.85 26.12 27.68 23.63 21.41 19.12 19.83 20.85 80% 76% 66% 62% 46% 46% 44% 45% 44% 38% 33% 34% 34% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 5 10 15 20 25 30 35 40 45 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Utilisation Revenue - US$ million

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SLIDE 5

… but Capital Drilling performing well

5

US$m

GROSS PROFIT AND MARGINS

41.1% 32.6% 32.6% 38.6% 36.3% 33.3% 35.2% 31.4% 28.1% 23.3% 34.5% 32.0% 34.5% 0% 10% 20% 30% 40% 50% 0.0 5.0 10.0 15.0 20.0 25.0 30.0 H1 09 H2 09 H1 10 H2 10 H1 11 H2 11 H1 12 H2 12 H1 13 H2 13 H1 14 H2 14 H1 15 GP (USDm) GP (%) Avg Margin

OPERATING CASH FLOW / FREE CASH FLOW

(20) (15) (10) (5) 5 10 15 20 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Cash Generated from Operations Free Cash Flow

  • 6%
  • 4%
  • 2%

0% 2% 4% 6%

  • $6
  • $4
  • $2

$0 $2 $4 $6 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Millions Net Cash (Net Debt) Net Cash (Net Debt) %

NET CASH (NET DEBT)

  • Early decisive actions taken in 2012/2013 to manage the cost base
  • Operating margins back to 7 year trend levels despite the fall in

revenue

  • Further savings being achieved in 2015 through head office, supply

chain and travel

  • Enhanced operational “ownership” through training, accountability

and monitoring at the project level

  • Entered the downturn with a well capitalized business, including over

90 rigs and $23 million in inventory

  • Stringent discipline around cost management and capital spending

reflected in positive Group cash flow

  • Record cash generation for the Group, despite the poor demand

environment

  • Margins and CAPEX discipline driving significant improvement in the

balance sheet

  • Net cash of $3.6 million at September 30, 2015

»

Repaid $8 million of the Company’s debt facility in the September quarter

»

Paid a maiden dividend in May 2015 of US1.9cps (US$2.5 million)

»

Paid a H1 2015 dividend in October 2015 of US1.1cps (US$1.5 million)

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SLIDE 6

Our goal for 2015 … Rebuild Utilisation

IMPROVE THE BUSINESS

 Managing Costs

  • Continued cost control,

margins maintained  Improve Operating Performance

  • Increased ARPOR

STRENGTHEN THE BALANCE SHEET

 Capex Discipline

  • Substantial reduction in

H1  Release Working Capital

  • Receivables & inventory

management

DELIVER GROWTH

 New Management Team

  • Transition to new CEO &

CFO  Continuous Improvement

  • Ongoing focus

REBUILD UTILISATION

  • Solid balance sheet with

cash reserves

  • Maintenance of existing

fleet, ready for deployment

  • Inventory available for

work

  • Competitive pricing

6

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SLIDE 7

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Rebuilding utilisation: Lean Operating Model

  • Lean Mobile Operating Units

»

Streamlined site personnel to operations only, with support functions engineered out

»

High standard “fit for purpose” equipment

»

Mobilise sufficient capability to sustain campaign

»

Enhanced capability at site – Financial, Safety and Inventory

  • Process & Planning

»

Key stakeholders engaged in the tendering process

»

Detailed planning prior to mobilisation

  • Execution

»

Project managed approach across mobilisation, start up &

  • n going operations

»

Specialists deployed at start up where required & extracted when operating at “steady state”

  • Continuous Improvement

»

Client agreed KPI’s & Senior Management Performance reviews

»

“Lessons Learnt” at completion of campaign

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SLIDE 8

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Case Study: Khoemacau Copper, Botswana

  • Lean Mobile Operating Units

»

High performance rigs, support equipment and full contingency

  • f inventory mobilised from neighbouring Zambia

»

Capital Drilling trained Zambian crews accompanied rig

  • Process & Planning

»

New country start up & registration

»

Detailed start up planning

»

Project Managed execution of mobilisation and drilling

  • Execution

»

Support Specialist in country for first 4 weeks of start up

»

5 weeks duration from contract sign up to commencement of drilling

»

Exceeded incumbent drillers performance in first month

»

Replaced Zambians crews with local crews when steady state achieved

  • Continuous Improvement

»

Ongoing Management Performance reviews held quarterly represented by Senior Management

»

Ongoing continued improvement of drilling performance

  • Outcome

»

Displaced 3 incumbent drilling contractors

»

Initial 3 month contract turned into 2 years SUBSEQUENT CONTRACT WINS: »

IMX Resources

»

Magnis Resources

»

BHP Billiton Peru

»

Liontown Resources

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SLIDE 9

9

Focused on a performance driven culture

  • Participants include senior representatives of the client and Capital

Drilling, along with Capital’s senior management team

  • Tracking performance against mutually agreed KPI’s, such as:

»

Rig availabilities

»

Mechanical availabilities

»

Drilling performance

»

HSE performance

»

Down time

  • Continuous

improvement process for HSE & Operational performance

  • Enhanced Contract Management at all levels

Quarterly Performance Reviews on major projects Mechanical Availability

Toolbox/Safety meeting 21% Weather 2% Waiting for equipment/consumables 5% Waiting for fuel/refueling 1% Waiting for water/refilling 13% Decision/Drill Pads/Areas/Mark Up/Access 5% Travel / Waiting for people 38% Down Hole Issues 15%

Utilisation Standby Hours

100% 99% 99% 98% 96% 97% 100% 99% 99% 99% 98% 98% 60% 80% 100% Rig 96 Rig 97 Total Rig 96 Rig 97 Total Rig 96 Rig 97 Total Rig 96 Rig 97 Total Apr-15 May-15 Jun-15 Q2 KPI 83% 87% 85% 96% 95% 95% 90% 92% 91% 91% 92% 91% 60% 80% 100% Rig 96 Rig 97 Total Rig 96 Rig 97 Total Rig 96 Rig 97 Total Rig 96 Rig 97 Total Apr-15 May-15 Jun-15 Q2 KPI

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SLIDE 10

Multi-year contracts underpin the revenue …

TANZANIA

» Commenced operations in 2006 » Blast hole, grade control, exploration, delineation and underground drilling » Contract renewed in 2015 and runs to 2020

MAURITANIA

» Commenced operations in 2010 » Exploration & delineation drilling » Contract renewed in 2015 and runs to December 2016

BOTSWANA

» Commenced operations in 2015 » Exploration & delineation drilling » Contract renewed in 2015 and runs to December 2016

EGYPT

» Commenced operations in 2005 » Blast hole, grade control & delineation drilling » Contract renewed in 2015 and runs to 2020

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SLIDE 11

11

  • Geographic focus on:

» Africa » Strategic clients in other emerging economies

  • Core long term contracts to underpin the revenue base

» Focus on multi-year blast hole and grade contracts and projects with expansion opportunities

  • Utilise base operations to target smaller exploration &

delineation opportunities, through the lean model approach

  • “Drilling Solutions” provider, not just a drilling company
  • Industry leaders on equipment, safety standards, training &

development

  • Maintain a conservative approach to gearing & focus on

cash generation

  • Provide shareholder returns through long term growth and

dividends

… Providing the platform of the Group strategy

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SLIDE 12

First Half 2015 Financial Performance

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SLIDE 13

13

Financial Overview

Revenue KPIs H1 2015 Reported H1 2015 Underlying H1 2014 Change % FY 2014 Average Fleet Size 97 97 95 2.1 96 Fleet Utilisation (%) 34 34 45 (24.4) 43 ARPOR ($) 189,000 189,000 193,000 (2.1) 188,000 Reported Earning H1 2015 Reported H1 2015 Underlying H1 2014 Change % FY 2014 Revenue ($m) 39.0 39.0 53.8 (27.5) 98.8 EBITDA ($m) 7.9 8.8 12.5 (36.8) 20.4 EBIT ($m) 0.6 1.5 4.0 (85.0) 3.9 NPAT ($m) (3.2) (0.6) 1.8 (277.8) (0.6) Basic EPS (cents) (2.4) (0.4) 1.3 284.6 (0.4) Diluted EPS (cents) (2.4) (0.4) 1.3 284.6 (0.4) Gross Profit (%) 34.5 34.5 34.5 0.0 33.4 EBITDA (%) 20.3 22.5 23.3 (12.9) 20.7 EBIT (%) 1.5 3.8 7.5 (80.0) 4.0 NPAT (%) (8.2) (1.5) 3.3 (384.5) (0.6)

  • Revenue down 27.5% to $39.0m (H1 2014: $53.8m)

» Soft utilisation driven by continued weak sector demand » Robust ARPOR reflecting continued operational improvements

  • Reported EBITDA down 36.8% to $7.9m (H1 2014: $12.5m)

» Underlying EBITDA down 29.6% to $8.8m

  • EBIT down 85% to $0.6m (H1 2014: $4.0m)

» Underlying EBIT down 62.5% to $1.5m

  • Diluted EPS down to (2.4 cps) (H1 2014: 1.3 cps)

» Underlying diluted EPS down to (0.4 cps)

  • Reported earnings impacted by tax provisions in Mauritania

($1.3m) and Zambia ($1.2m): totalling $2.5m

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SLIDE 14

14

  • Utilisation rates continue to trend at the lowest levels in Capital

Drilling’s history

  • Utilisation rates fell after exiting the Pacific Islands & contract

conclusion in Zambia; have since remained flat over 2015

Utilisation (%)

  • ARPOR remains at solid levels, improving into Q2 after the Q1

seasonal impact

  • Operational

improvements continuing to drive the solid performance

ARPOR (US$’000 per month)

‘000

  • Current fleet of 97 rigs
  • Acquired 1 new blast hole rig for deployment at the Geita Mine

(AngloGold Ashanti, Tanzania)

Fleet Growth Revenue (US$m)

  • H1 2015 revenues reduced by 13.5% compared to H2 2014
  • Revenue weakness driven by low utilisation in exploration &

delineation drilling

Revenue Metrics

11 19 25 49 60 74 85 93 95 96 10 20 30 40 50 60 70 80 90 100 Jan'06 Jan'07 Jan'08 Jan'09 Jan'10 Jan'11 Jan'12 Jan'13 Jan'14 Jan'15 29.7 29.4 28.7 46.3 59.5 71.0 79.1 79.8 72.7 43.6 53.8 45.0 39.0 10 20 30 40 50 60 70 80 1H 09 2H 09 1H 10 2H 10 1H 11 2H 11 1H 12 2H 12 1H 13 2H 13 1H 14 2H 14 1H 15

186 209 188 184 198 186 165 163 187 198 179 189 191 189 192

150 160 170 180 190 200 210 220 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15

74% 80% 76% 66% 62% 46% 45% 38% 33% 34%

20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15

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SLIDE 15

US$m US$m

GROSS PROFIT AND MARGINS EBITDA AND MARGINS

Early movers on costs, margins maintained

  • Continued to maintain operating margins at 5 year trend levels despite

lower revenue

»

Reflects continued focus on cost management

  • H1 2015 GP margin of 34.5% (H1 2014: 34.5%)
  • H1 2015 EBITDA margin of 20.3% (H1 2014: 23.3%)

»

H1 2015 underlying EBITDA margin of 22.5%

  • Lean cost structure positions the Group well to benefit from a recovery in

demand

15

41.1% 32.6% 32.6% 38.6% 36.3% 33.3% 35.2% 31.4% 28.1% 23.3% 34.5% 32.0% 34.5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 0.0 5.0 10.0 15.0 20.0 25.0 30.0 H1 09 H2 09 H1 10 H2 10 H1 11 H2 11 H1 12 H2 12 H1 13 H2 13 H1 14 H2 14 H1 15 GP (USDm) GP (%) Avg Margin 28.2% 18.8% 25.0% 27.3% 27.5% 24.9% 26.5% 20.2% 18.5% 8.1% 23.3% 17.2% 20.3% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 0.0 5.0 10.0 15.0 20.0 25.0 H1 09 H2 09 H1 10 H2 10 H1 11 H2 11 H1 12 H2 12 H1 13 H2 13 H1 14 H2 14 H1 15 EBITDA (USDm) EBITDA (%) Avg Margin

  • Reduction in Management and Administrative costs to $5.5m in H1

($6.5m H2 2014)

  • Savings from Singapore corporate office move to Mauritius, full impact

in H2 2015

  • Strategic supply agreement; locked in pricing & supply agreements

around key stock items

  • Stringent ordering & approval process maintained
  • Travel consolidated under one global provider

COST MANAGEMENT

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SLIDE 16

Cash Flow 1H 2015 $m 1H 2014 $m

EBITDA 7.9 12.5 Non-cash expenses 0.2 0.2 Operating profit before working capital changes 8.1 12.6 Working capital changes 2.2 (0.6) Cash generated from operations 10.3 12.0 Finance charges and tax payments (0.7) (1.2) Net cash generated from operating activities 9.6 10.8 Investing Activities Net cash used in investing activities (4.3) (10.7) Financing Activities Decrease in Loans (2.0) (1.1) Dividend paid (2.6)

  • Net Cash generated from financing activities

(4.6) (1.1) Net increase (decrease) in cash 0.7 (0.9) Closing cash balance 15.2 11.4

Outstanding cash generation

  • Strong cash generation from operations, despite weaker revenue
  • Operating cash flow margin of 26.5%, compared to 22.4% for the

comparable period, an improvement of 18%

  • Working capital inflow driven by receivables management &

inventory reduction

  • Cash generation allowed for maiden dividend, continued debt

reduction & interim dividend

  • Higher closing cash balance in line with improved operational

cash generation & working capital release

16

OPERATING CASH FLOW / FREE CASH FLOW

(20) (15) (10) (5) 5 10 15 20 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Cash Generated from Operations Free Cash Flow

H1 2015 NET DEBT MOVEMENTS

(0.36) 2.18 (2.0)

  • 2.0

4.0 6.0 8.0 10.0 12.0 Opening net debt EBITDA Working capital Capex Dividends paid Others Closing net cash

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SLIDE 17

Capital Expenditure: Focus on sustaining

CAPITAL EXPENDITURE

US$m

  • Reduced capital spend, purchasing one additional blast hole

rig for the Geita Mine in Tanznaia (AngloGold Ashanti)

  • Shift in focus to rig refurbishments, with 4 rigs completed
  • ver H1 2015
  • Total of 9 planned refurbishments in 2015
  • Indicative sustaining CAPEX of $5 to $7m

17

1.0 6.2 12.4 15.9 2.6 10.7 3.4 7.4 12.7 14.3 14.1 1.7 2.9

  • 5.0

10.0 15.0 20.0 25.0 30.0 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 H1 2015 H1 Capex H2 Capex

Rig 70

RIG REBUILDS

Rig 67

Before After Before After

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SLIDE 18

Balance Sheet 1H 2015 1H 2014 Change $m $m % Cash and cash equivalents 15.2 11.4 33.3 Investment 0.9

  • Receivables

14.5 27.4 (47.1) Inventory 21.8 23.2 (6.0) Property, plant and equipment 52.7 62.1 (15.1) Taxation 1.4 2.0 (30.0) Total Assets 106.5 126.1 (15.5) Payables 6.3 12.2 (48.4) Borrowings 13.1 20.3 (35.5) Taxation 2.0 0.3 566.7 Total Liabilities 21.4 32.8 (34.8) Shareholder Equity 85.1 93.3 (8.8) Net Asset Value per share (cents) 63.2 69.3 (8.8) Net Cash (Debt) ($m) 2.2 (8.9) (124.7) Gearing (Net Debt to Equity in %) 0.0 9.5 (100.0) Return on Total Assets (%) 0.4 (0.7) (157.1) Return on Invested Capital (%) (1.1) (0.9) 22.2

Our balance sheet is strong

GROSS DEBT vs NET DEBT/CASH TO EQUITY (%)

  • Continued deleveraging strategy:

»

Net Debt to Equity decreased from 9.5% in June 2014 to net cash to equity of 2.6%

»

Net cash at June 30 2015 of $2.1mn

  • Returns continue to be impacted by record low levels of rig utilisation

»

H1 2015 rig utilisation 34% (H1 2014: 45%)

  • Refinanced banking facility in February 2015, reducing the facility size

($47m to $30m) & extending the tenure to January 2018

  • The company will continue to maintain a conservative approach to

gearing with continued debt repayments in H2

18

  • 10%

0% 10% 20% 30% 40% 50%

  • 10

10 20 30 40 50 H1 09 H2 09 H1 10 H2 10 H1 11 H2 11 H1 12 H2 12 H1 13 H2 13 H1 14 H2 14 H1 15 Total Debt Net debt/cash to Equity (%)

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SLIDE 19

Interim dividend declared

Strong balance sheet Investment Return excess to Shareholders through dividends

19

  • Declared a maiden interim dividend of US 1.1cps
  • Board Approved Policy

» When determining the amount to be paid the Board will take into consideration the underlying profitability of the Company … and aim to approve an annual dividend within the range of 25-50% of the Company’s free cash flow (being operating cash flow less capital expenditure)”

  • Strong balance sheet and continued solid cash generation driving the

dividend.

  • We will continue our disciplined approach to capital management – we

remain committed to a strong balance sheet

DIVIDEND TIMETABLE

August 25, 2015 H1 2015 Results release & dividend declaration September 3, 2015 Ex-dividend date September 4, 2015 Record date October 9, 2015 Payment date

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SLIDE 20

»

Company Overview

»

Market

»

Corporate

»

Glossary

Appendices

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SLIDE 21

21

Safety Performance

  • Strong Speak Up Culture

» Improved Environment reporting » Improved Hazard ID reporting

  • Leadership Lead Initiatives:

» Introduced Safety Risk Leadership Walks supporting employees to identify job hazards that can lead to significant injury or illness » Revised Golden Rules ,TAKE 5, HAZARD ID and Vehicle Pre-start programs rolled out » Introduction of safety Icon to improve engagement on safety and make it fun – Mr and Mrs Competent Drill.

Committed to ZERO Harm

  • Significant safety achievements including:

» Tanzania (Geita Project) achieved 8 years LTI free » Mauritania (Tasiast Project) achieved 4 years LTI free

  • Renewed focus driving reduced incidents from H1 2014

» Property damage: Down from 50 to 28 » MTI reduced from 3 to 1

KPI Milestone Improvements

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SLIDE 22

Quality Partners & Projects

QUALITY CLIENTS DEVELOPMENT & PRODUCTION FOCUS QUALITY ASSETS

» Exposure to major and mid tier mining houses with strong balance sheets, quality

assets and positive cash flows

» Majors contributed 50% of H1 2015 revenue » Targeting low cost producers , long life assets and expansion opportunities » Working on top tier gold and copper assets including Tasiast (Kinross), Sukari

(Centamin), Geita (AngloGold Ashanti), North Mara (Acacia)

» History of increasing service offering as mines develop (development, grade

control, blast hole, underground)

» Continued high exposure to development (brownfield) and production drilling,

contributing 95% of H1 2015 revenue

» Provides higher relative stability and visibility to revenues as drilling activities

supported by producing asset cash flows

22

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2008 2009 2010 2011 2012 2013 2014 H1 2015 52% 53% 33% 63% 73% 58% 57% 50% 35% 41% 53% 30% 23% 39% 41% 40% 13% 6% 14% 7% 4% 3% 2% 10% Majors Mid-Tiers Juniors 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2008 2009 2010 2011 2012 2013 2014 H1 2015 6% 33% 33% 22% 23% 39% 57% 76% 70% 54% 51% 66% 64% 56% 38% 19% 24% 13% 14% 7% 7% 3% 5% 5% 2% 5% 6% 2% Production Brownfields Greenfields Energy

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SLIDE 23

SERBIA » Dundee MOZAMBIQUE » Boabab » Riversdale » Rio ERITREA » Andiamo » Chalice Gold » Sunridge DRC » Anvil » Tiger ETHIOPIA » BHP » Ethiopia Potash PAKISTAN » Antofagasta » Barrick Gold ARMENIA » Lydian

MAURITANIA

» Redblack » Knight Piesold

EGYPT

» Gippsland » Thani Dubai (AngloGold Ashanti)

Current Operations H1 2015 Regional Offices Previous Registered Offices & Operations

Capital Drilling’s Clients

BOTSWANA PERU

GHANA » Kinross PNG & SOLOMONS » Allied Gold » Barrick Gold » Oil Search » St Barbara ZAMBIA » Albidon » Barrick Gold » Equinox » First Quantum » MMG » Omega CHILE » Antofasgasta » BHP » CMP » Glencore » MMG » Polar Star

TANZANIA

» Barrick Gold » Cradle » Glencore » Mantra » MMG » Rift Valley

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SLIDE 24

Macro drivers remain highly challenging

*Source – Dealogic 1. Source: Bloomberg (as at 11 November 2015)

GOLD1 COPPER1

US$bn

Key Demand Drivers

24

1.3 4.2 8.2 9.5 13.9 15.3 28.7 47.9 44.0 52.8 47.2 42.1 20.4 16.9 17.9 15.1 0.0 10.0 20.0 30.0 40.0 50.0 60.0 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 H1 15

400 800 1,200 1,600 2,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 US$/oz Gold Spot 12-Month Trailing 2,000 4,000 6,000 8,000 10,000 12,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 US$/tonne Copper Spot 12-Month Trailing

GLOBAL MINING EQUITY CAPITAL MARKETS

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SLIDE 25

Extensive industry experience, solid complement of skills

»

25 years experience in the mining industry in Africa and Australia

»

Co-founder of Capital Drilling

»

Previous experience includes 6 years as

  • perations/general

manager for Stanley Mining Services Tanzania (Layne Christensen)

Brian Rudd Business Development

»

Over 40 years experience in the natural resources sector

»

Ex President/CEO of Adastra

»

Ex Merrill Lynch Global Co- head of Mining Investment Banking

»

NED for several AIM/ASX/TSX mineral companies

Tim Read Senior NED

Audit Chair » 30 years experience in mining » 16 years at Barrick Gold; Executive VP of Exploration and Corporate Development » Ex NED for Highland Gold, now Namakwa Diamonds & NED of Yamana Gold

Alex Davidson NED

HSE Chair » 15 years experience co- founding numerous development companies, with a focus on the resources, oil and gas, mining services and agribusiness sectors » Previously Executive Chairman and co-founder of Mirabela Nickel Ltd (ASX 200)

Craig Burton NED

REMCO Chair

EXECUTIVE DIRECTOR NON-EXECUTIVE DIRECTORS CHIEF EXECUTIVE OFFICER

»

Over 35 years experience in Mining and the oil & gas industry

»

Previous executive positions in BHPB, Imdex Limited and Halliburton Energy Services.

»

Extensive international experience

Mark Parsons CEO

Management & Board

25

»

Over 15 years experience in finance industry

»

Co-founder of Capital Drilling

»

Previously Executive Director and Head of Asian Equity Syndication and Corporate Broking at Macquarie Bank (HK) and prior to which he was a director at ABN AMRO (HK)

Jamie Boyton Chairman

CHAIRMAN

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SLIDE 26

Corporate Snapshot

CAPITAL STRUCTURE

Fully paid ordinary shares 134,603,681 Share price (as at 30 June 2015) USD0.45 Market capitalisation (undiluted) ^ USD 60.31m Cash (as at 30 June 2015) USD 15.20m Debt (as at 30 June 2015) *includes bank borrowings & O/D USD 13.07m Enterprise Value USD 58.18m

Founding Shareholders 70% Free float 30%

^ Share options and unvested share grants issued 5.47m

SHAREHOLDING BLOCKS DIRECTORS AND SENIOR MANAGEMENT

Jamie Boyton Chairman Mark Parsons Chief Executive Officer Brian Rudd Executive Director Alex Davidson Non-Executive Director Craig Burton Non-Executive Director Tim Read Non-Executive Director David Payne Chief Operating Officer Jaco Brümmer Chief Financial Officer Tony Woolfe Group Asset Manager Graham Almond Group Manager, HR & Risk Jodie North Group Manager, Production Drilling

NET ASSET VALUE PER SHARE vs SHARE PRICE

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0.55 0.52 0.52 0.59 0.66 0.69 0.71 0.68 0.69 0.67 0.63

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 H1 10 H2 10 H1 11 H2 11 H1 12 H2 12 H1 13 H2 13 H1 14 H2 14 H1 15 NAV per share Share Price in USD

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SLIDE 27

ARPOR Average Revenue Per Operating Rig Capital Expenditure Cash used on acquisition of property plant and equipment less proceeds on disposals of property plant and equipment EBIT Earnings Before Interest and Taxes/Profit from operations EBITDA Earnings Before Interest, Taxes, Depreciation/Profit from

  • perations plus depreciation

EPS Earnings Per Share Enterprise value Market capitalisation + Debt - Cash Free Cash Flow Operating cash flow (as defined above) less capital expenditure Group, Company Capital drilling and its subsidiaries KPI Key Performance Indicator HSE Health, Safety & Environmental LTI Loss Time Injury LTM Last Twelve Months Operating Cash flow Profit or loss after tax adjusted for non-cash items +/- the net change in working capital Operating Cash flow Margin Cash generated from operations / Sales MTI Medical Treatment Injury Net Debt Short Term and Long Term Debt including Bank Overdraft less Cash and Cash Equivalents NPAT Net Profit After Tax/Profit for the period (Headline) Revenue Average fleet size x Utilisation x ARPOR Return on capital employed (ROCE) LTM EBIT / (Average total assets – Average current liabilities) Return on Invested Capital (ROIC) LTM NOPAT / Average invested capital Return on Total Assets (ROTA) LTM EBIT / Average total assets Total assets Current assets plus non-current assets

The following words used in the presentation have the following meaning:

Glossary

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SLIDE 28

CAPITAL DRILLING LIMITED

Jamie Boyton

Chairman jamie.boyton@capdrill.com

Mark Parsons

Chief Executive Officer mark.parsons@capdrill.com

Mauritius

9th Floor, The CORE Ébène CyberCity Mauritius Telephone: +230-464 3250 www.capdrill.com

UK BROKER DETAILS

GMP Securities Europe LLP

Stratton House 5 Stratton Street, London W1J 8LA Telephone: +44 (0) 207 647 2800 Richard Greenfield richard.greenfield@gmpeurope.com

UK PUBLIC RELATIONS

Buchanan

107 Cheapside, London EC2V 6DN Telephone: + 44 (0) 20 7466 5000 Bobby Morse bobbym@buchanan.uk.com

Company Contact Details

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