Investor Presentation THIRD QUARTER 2018 KCA Deutag is a leadinginternational drilling and engineering company working onshore and offshore with a focus on safety, quality and operational performance 0
Disclaimer The distribution of this presentation in certain jurisdictions may be restricted by law. Persons into whose possession this presentation comes are required to inform themselves about and to observe any such restrictions. This presentation contains forward-looking statements concerning KCA These forward-looking statements are based on management’s current Deutag. expectations, estimates and projections. They are subject to a number of assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from any future results and developments expressed or implied by such forward-looking statements. KCA Deutag has no obligation to periodically update or release any revisions to the forward-looking statements contained in this presentation to reflect events or circumstances after the date of this presentation. 1
Agenda Third Quarter Investor Presentation Q3 Key Highlights 1 Operational Highlights 2 Business Update 3 Business Unit Financials 4 Group Results 5 Summary 6 Appendix 7 2
Q3 Key Highlights Q3 2018 Group revenue of $346m (1) (Q3 2017: $309m) and Q3 2018 EBITDA of $71m (1) 1 1 (Q3 2017: $55m) respectively Ongoing integration of the Omani and Saudi Arabian businesses of Dalma Energy LLC 2 2 progressing on plan 3 Several contract awards within the Land Business 3 Combined contract backlog of $6.0bn (at 1 November 2018) across a blue chip customer 4 4 base 5 5 Available liquidity of $174m at 30 September 2018 KCA Deutag is a leading international drilling and engineering company working onshore and offshore with a focus on safety, quality and operational performance (1) Financial results noted above include results from the Dalma business which was acquired 30 April 2018 3
KCA Deutag Operations are Diversified Across Global Markets Russia North Sea 17 Rigs /Norway 17 Plat Russia Canada Sakhalin 1 Plat 3 Plat Bergen Caspian Tyumen 7 Plat Aberdeen (HQ) London Bad Bentheim St. Johns Baku Middle East Europe & 41 Rigs Brunei Caspian 7 Rigs 1 Rig Dubai Nizwa Africa 11 Rigs Angola 2 Plat Geographical EBITDA Split (1) PRESENCE IN KEY AREAS 150 130 120 90 Years 59 54 44 60 19 30 0 Europe North Africa Middle East North Sea Russia Regional offices Land Drilling Offshore Services RDS offices Bentec Map shows position at 1 November 2018 (1) The % split of LTM EBITDA is calculated using total KCAD group LTM Proforma EBITDA of $321m (after corporate costs of 4 $19m)
Market Outlook by Business Unit Business Units Outlook Europe / Kazakhstan High levels of tendering continues across most markets Conversion to contract awards remains slow and highly Russia competitive Land Pricing remains under pressure Drilling Africa Utilisation levels are slowly increasing New contract awards across Europe, Russia and the Middle Middle East East Reasonable tendering activity in a competitive market Bentec Further Top Drive wins in Q3 North Sea Activity remains steady with one contract extension Offshore Services International Stable activity and new Joint Venture with Socar AQS Limited activity but tendering increasing; seeking RDS diversification opportunities 5
Ongoing Integration of the Omani and Saudi Arabian Businesses of Dalma Energy LLC Target synergies ($16m EBITDA & $2m capex) Focus on integration Continued adoption of KCA Deutag Way • Integration proceeding as planned and on time • SAP system has now been successfully rolled out in Oman and Saudi Delivering cost synergies • We have further increased our expectation of run rate EBITDA synergies from $11.8m (Q2) to $15.7m (Q3) • Full run rate synergy realisation still targeted for Q2 2019 • One third of synergies secured after of 5 months of operation EBITDA synergies by type • This equates to an annual run rate per year of c. $5m per annum Unlocking further revenue synergies • Actively engaged with customers • Opportunities for collaboration between business units 6
Strong HSSE Performance Continues IADC industry average 0.69 3 for Q2 2018 Q3 2018 0.23 1,2 3 Offshore Services alongside our client CNRI and other strategic partners win two awards at The Oil and Gas UK Awards ceremony 1 Total Recordable Incident Rate per 200,000 man hours. This is a rolling 12 month average 2 Dalma business have been incorporated from May 2018 7 3 KCAD Total Recordable Incident Rate is directly comparable with IADC’s Total Recordables (RCRD) statistic Note: IADC stands for International Association of Drilling Contractors
Stable Backlog Providing Excellent Visibility Total contract backlog as at 1 August 2018 Total contract backlog as at 1 November 2018 Total contract backlog by BU as at 1 August 2018 Total contract backlog by BU as at 1 November 2018 Note: Backlog is an estimate and may change over time depending on certain factors; Backlog reflects business that is considered to be firm, this calculation is based on assumptions deemed appropriate at the time and is subject to change. Backlog is not 8 necessarily indicative of our future revenue or earnings. KCAD backlog amounts are estimates as of 1-November-2018
Robust Offshore Services Contract Backlog 2 0 18 2 0 19 2 0 2 0 Contract Platform Client Country Assets end date status # Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Exxon Canada Hebron Mar-46 Operating 1 Equinor (Statoil) Norway CAT J (2) May-36 Operating 2 Equinor (Statoil) Norway Oseberg's (4) & Kvitebjorn Oct-28 Operating / Stacked 3/2 Exxon Angola Kizomba (2) Oct-28 Stacked 2 Point Resouces Norway Ringhorne Dec-25 Stacked 1 AIOC Azerbaijan Azeris, SD, DWG, Cop & Chirag Dec-24 Operating 7 Total UK Alwyn / Dunbar May-23 Operating / Stacked 1 /1 Nexen UK Scott Feb-23 Operating 1 COP UK Britannia Nov-22 Stacked 1 Equinor (Statoil) Norway Pipe pool management Oct-22 Active mgmt. contract CNR UK Ninian's (2) Tiffany Nov-21 Operating / Stacked 1 /2 SEIC Russia LA, PA & PB May-21 Operating 3 Enquest UK Thistle & Heather May-20 Operating / Stacked 1 /1 Firm Options Contract and rig status shown as at 1 November 2018 9 Denotes change since last earnings call
Continued Focus on Building Utilisation Historical and Forward Contracted Utilisation Utilisation in Q3 2018 was 59% and 62% in Q4 2018 Several contract wins in Europe, Russia, Oman, Iraq and UAE Utilisation includes 29 Dalma Rigs on a proforma basis from 2017 Historical utilisation represents actual utilisation calculated on a bi-monthly basis 10 Forward contracted utilisation represents the current contracted position
Land & Bentec Financial Performance Land Quarterly EBITDA ($m) Land YTD Revenue & EBITDA ($m) 35% 34% 29% 33% 38% 23% 31% 30% 33% (1) (2) Bentec Quarterly EBITDA ($m) (3) Bentec YTD Revenue & EBITDA ($m) (3) 2% 1% 0% (3%) 11% (6%) 6% 0% 1% = EBITDA Margin Source: Company information. EBITDA shown after corporate overhead allocations. Notes: (1) 2 months of Dalma only (includes $0.6m synergies) 11 (2) Includes $1.6m synergies (3) Bentec shown before eliminations
Offshore & RDS Financial Performance (1) (1) Offshore Services Quarterly EBITDA ($m) Offshore Services YTD Revenue & EBITDA ($m) 9% 10% 15% 18% 10% 13% 16% 9% 16% RDS Quarterly EBITDA ($m) RDS YTD Revenue & EBITDA ($m) 4% (1%) 0% 11% 3% 10% 1% 1% 4% = EBITDA Margin Source: Company information. EBITDA shown after corporate overhead allocations. Notes: (1) Q1 2018 EBITDA shows $12m relating to MODUs 12
KCA Deutag Group LTM EBITDA and Pro Forma LTM EBITDA Q3 2018 LTM EBITDA Q3 2018 LTM Pro Forma EBITDA LTM LTM EBITDA EBITDA $248m $321m Q3 2018 LTM EBITDA ($m) Q3 2018 LTM Pro Forma EBITDA ($m) KCAD LTM 240 KCAD LTM 240 (1) (2) Ex-Dalma (May - September) 28 Ex-Dalma LTM 101 Corporate Costs (19) Corporate Costs (19) Total 248 Total 321 (1) Q3 2018 LTM EBITDA includes $2.2m of actualised synergies (2) Q3 2018 LTM Pro Forma EBITDA includes $15.7m of Pro Forma synergies 13
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