Investor Presentation The UKs leading provider of hazardous waste - - PowerPoint PPT Presentation
Investor Presentation The UKs leading provider of hazardous waste - - PowerPoint PPT Presentation
Investor Presentation The UKs leading provider of hazardous waste management solutions November 2019 Disclaimer The information in this presentation (the " Presentation ") has not been independently verified and must not be regarded
1
Disclaimer
The information in this presentation (the "Presentation") has not been independently verified and must not be regarded as any kind of profit forecast or profit estimate. In addition, the Presentation contains forward-looking statements, which are, by their nature, inherently predictive, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. All statements that address expectations or projections about the future, including statements about operating performance, market position, industry trends, general economic conditions, expected expenditures and financial results, are forward-looking statements. Some of the forward-looking statements may be identified by words like "expects", "anticipates", "plans", "intends", "projects", "indicates" and similar expressions. Any statements contained herein that are not statements of historical fact are forward-looking statements. There are a number of factors including, but not limited to, commercial, operational, economic and financial factors, that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond Augean PLC's (the "Company") ability to control or estimate precisely, such as changes in taxation or fiscal policy, future market conditions, currency fluctuations, the behaviour of other market participants, the actions of governmental regulators, or other risk factors, such as changes in the political, social and regulatory framework in which the Company operates or in economic or technological trends or conditions on a global, regional
- r national basis. These forward-looking statements speak only as of the date of the Presentation. The Company does not undertake any
- bligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this
- presentation. Accordingly, undue reliance should not be placed on these forward-looking statements. In particular, but without prejudice to the
generality of the above, no representation or warranty is given, and no responsibility or liability is accepted, either as to the achievement or reasonableness of any future projections, forecasts, estimates or statements as to any prospects or future returns contained or referred to in the Presentation or in relation to the basis or assumptions underlying such projections or forecasts. The price of the Company’s shares and any income from them may go down as well as up and investors may not get back the full amount invested on disposal of such shares.
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88% 12% 73% 27%
Augean at a glance
Business overview Revenue and EBITDA contribution (2018A)
⚫
Augean is the UK’s leading hazardous waste management business with a strong and diverse customer base across a range of sectors and throughout the UK
⚫
Reliable and diverse revenue stream against which to
- perate key assets which are strategically located in respect
- f customers served
⚫
Augean offers the full spectrum of hazardous waste services, from disposal via hazardous landfills to treatment for recovery or re-use of waste types
⚫
Specialist critical analysis of best waste treatment / disposal routes for customers
⚫
With 40% of the UK hazardous waste landfill and three associated dedicated treatment plants, the business is underpinned by secure long term disposal facilities
⚫
Hazardous waste types treated originate from UK EfW plants, waste from construction / demolition projects, industrial processes, decommissioning of UK nuclear estate and the O&G industry
⚫
Strengthened and lean business built over the last two years with a focus on growing in key markets which are highly profitable with high EBITDA margin, cash generative and high ROCE
⚫
Investment opportunities to extend the scope and diversity of the business still remain and provide a platform to sustain good growth into the future Geographical footprint
Avonmouth Paisley Port Clarence PC Waste Recovery Park East Northants RMF Thornhaugh Great Yarmouth Dundee Aberdeen Lerwick
£80m £19m
Revenue (£m) EBITDA (£m)
The UK’s leading provider of hazardous waste management solutions
Treatment and Disposal North Sea Services
3
Group divisional overview
- Est. Mkt.
size Market niche growth Competitive advantages
Treatment & Disposal EfW residue Construction & industrial waste Radioactive waste services Treatment & recovery North Sea Services Drilling and Well Abandonment Industrial Services Waste Services
Treatment and disposal
- f by-products
generated from EfW and biomass plants (e.g. APCr ash) Treatment and disposal
- f contaminated waste
from construction / demolition activities and specialist manufacturers Disposal of low level activity radioactive waste mainly generated from decommissioning
- f UK nuclear plants
Recovery and recycling
- f oil and solvents and
the generation of secondary liquid and solid fuels from haz packaged waste Waste management waste generated from the drilling and abandonment of wells Cleaning and decontamination services, including vessel, tanks tube bundles cleaning General waste management services to active O&G rigs and platforms
- c. £1.5bn – £2bn
✓ Most competitive
pricing
✓ Unique know-how ✓ Multiple sites with
national coverage
✓ Specialist
customer and technical support team
✓ Soil washing
capabilities
✓ Only disposal site
capable of accepting radioactive hazardous waste
✓ Preparation &
cleaning pre disposal
✓ On-site Technical
Resource capability
✓ Comprehensive
treatment for all waste types
✓ Multiple sites with
national coverage
✓ Multi skilling
capabilities – allowing for a wide range of in house services
✓ Strategic
access to decommission- ning hub and know-how
✓ One-stop-shop
waste management solutions for the offshore O&G industry
Active across multiple niche and attractive hazardous waste markets, with leading positions
Divisions and waste value streams
- c. £1bn
4
Strategy post August 2017
Overall Group strategic focus
➔
Focus on extending the reach and share of existing growth niche markets
➔
Waste streams / customers profitability
➔
Maintain focus on margin and ROCE optimisation
➔
Invest where returns exceed 25%
➔
Site optimisation to drive efficiencies and increase utilisation
➔
Cost savings
➔
Drive cash
➔
Resolve HMRC
Drive growth in specialist defensible areas and support the current asset base with targeted forward investment
➔
North Sea, particularly decommissioning
➔
Support for Nuclear decommissioning
➔
Contaminated construction and demolition soils
➔
EfW residue growth — support
➔
Invest in waste stream specific treatments to develop and enhance existing key assets
5
H1 2019 Financial highlights1
Note 1 From continuing operations excluding landfill tax, exceptional items and share based payments
Adjusted revenue (excluding landfill tax) Adjusted PBT Adjusted EBITDA Adjusted EPS Net cash position of £22.8m – including £3.35m
proceeds received from the sale of East Kent
ROCE 1 2 3 4 5 6
+40%
increase H1 2019 vs H1 2018
31.6 44.2 H1 '18 H1 '19
44%
Annualised ROCE H1 2019
+100%
increase H1 2019 vs H1 2018
4.8 9.6 H1 '18 H1 '19
+71%
increase H1 2019 vs H1 2018
8.3 14.2 H1 '18 H1 '19
+114%
increase H1 2019 vs H1 2018
3.56 7.61 H1 '18 H1 '19
+178%
increase H1 2019 vs H1 2018
8.2 22.8 H1 '18 H1 '19
6
64 67 80 2016A 2017A 2018A
Group financials
Strong track record of revenue growth Industry leading margins
Treatment and Disposal North Sea Services
Revenue (£m) FCF (£m)2
Margin (%)
5% 19%
Growth (%)
EBITDA (£m) 22% 24% 17% 39% 82% 34% Significant improvement in cash generation
Cash conversion (%)
1
Notes 1 Revenue for 2016A excludes revenue generated from AIS (£5.5m), Colt (£3.5m) and East Kent (£2.7m) which are excluded from the financials reported on the continuing basis for 2017A and 2018A 2 Free Cash Flow (FCF) defined as EBITDA less capex; cash conversion defined as FCF over EBITDA
13 15 19 2016A 2017A 2018A 4 6 15 2016A 2017A 2018A
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Long-term drivers of growth
Main market drivers 8mt of EfW capacity expected to be added in the next 5-6 years - resulting in c. 410ktpa of additional EfW ash/residue needed to be treated Strategy
⚫
Win significant share of new EfW APCr treatment/disposal contracts by maintaining most competitive pricing
⚫
Continue with track record of 90% win rate HMRC taxing of soil on site, resulting in greater landfilling. Greater EA enforcement Brownfield site redevelopment
⚫
Continue to capitalise on revamped sales and commercial team
⚫
Increase market share in London by establishing a river-sea-river route to transport London’s construction soils to Port Clarence
⚫
Expand site capability ➔ Decommission of UK nuclear estate expected to steadily continue over the next 40 years
⚫
Broaden service offering / technical capabilities to become a provider of full lifecycle of radioactive waste management
⚫
Port Clarence licence extension – NORM and sort and segregation increased offering ➔ Regulatory drive to dispose of waste through recycling and recovery vs. landfill
⚫
Increase capacity utilisation at current treatment facilities
⚫
Re-focus and increase HiPods operations Waste value streams
Growth driven by favourable market trends and well-defined business strategy
EfW residue Construction & industrial waste Radioactive waste services Treatment & recovery North Sea Services Growth Rapidly increasing decommissioning market – £15-20bn spend estimated over the next 10 years of which up to c. £1bn (5% of total) is addressable by Augean
⚫
Establish Dundee as main port for decommissioning projects
⚫
Win majority of Plug & Abandonment projects by leveraging current market leading position in on-site waste support services
8
64 67 80 2016A 2017A 2018A
Key investment highlights (1/2)
⚫
Full suite of hazardous waste treatment and disposal solutions
⚫
#1 provider of EfW ash treatment and disposal with exceptional win rates
⚫
Leader in hazardous construction and demolition wastes
⚫
Key provider of waste management solutions to the North Sea O&G sector
⚫
Only company to operate with a haz and non-haz low-level radioactive waste permit and a second low level radioactive waste licence in planning for Port Clarence
UK’s leading provider of hazardous waste management solutions UK-wide network of strategically located treatment and disposal facilities Attractive financial profile… … with analysts expecting strong revenue and profit growth to continue over the forecast period
⚫
2 hazardous landfills representing 40% of remaining void in the UK, with life through to 2050 and beyond
⚫
Share of void should further increase over the next 30 years – e.g. a further 2.9m3 of void located in Kings Cliffe
⚫
100% success rate on planning permissions for new planning and development
⚫
3 well-invested treatment and recovery facilities
⚫
4 North Sea sites strategically located for the decommissioning market
+11%
Revenue CAGR 2016-18
24%
EBITDA margin 2018
44%
Annualised ROCE H1 2019
>80%
Cash conversion 2018
Revenue (£m) EBITDA (£m)
13 15 19 '16A '17A '18A
9
Key investment highlights (2/2)
⚫
Capitalising on river-sea-river route from London to Port Clarence
⚫
Potential upward pricing movement as hazardous void capacity decreases
⚫
Possible add-on services in radioactive waste
⚫
Various large government funded developing projects
⚫
Some specific large contract opportunities
Significant additional business and commercial opportunities Limited cyclicality due to business diversification across customers and end-markets
⚫
Diverse sources of wastes allows the business to be resilient to UK economic performance – EfW ash driven by general consumption – Construction and demolition strongly linked to government funded development projects – Radioactive waste consistently produced as part of long term plan for UK Nuclear estate decommissioning – North Sea decommissioning long term and a-cyclical trend
⚫
... resulting in limited downcycle from Brexit potential economic disruption
… supported by favourable long term markets trends and well defined strategy
⚫
Substantial pipeline of EfW facilities in-construction or planning, expected to add
- c. 410ktpa of ash contracts, of which Augean will continue to win a significant share
⚫
Rapidly increasing North Sea decommissioning market
⚫
Increasing share of London’s construction and demolitions wastes by establishing a river-sea-river route to landfill facilities
⚫
Steady spending on UK Nuclear decommissioning
Good revenue visibility underpinned by predicable and re-
- ccurring contracts
⚫
Revenue visibility supported by expected and foreseeable waste volumes (e.g. EfW residue)
⚫
Further visibility linked to a multitude of reoccurring short and medium term contracts underpinned by long term relationships with customers
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Update on HRMC
⚫
As at July 2019, the Group has received landfill tax assessments for its companies Augean North and Augean South for a total of £34.7m (£37.3m including interest)
⚫
In late July 2019, the Group received a final assessment of £3.1m (incl. interest) for Augean North
⚫
In early August 2019, the Group penalty notice of £4.6m for Augean South
⚫
The current total liability is c. £45m
⚫
All assessments have been appealed and no provision made
⚫
Hardship application granted for Augean North and South therefore no immediate requirement to deposit cash with HMRC
⚫
Lower Tier Tax Tribunal expected in 2020
⚫
If required, there is always a possibility to appeal
⚫
The business has taken specialist legal and tax advice over several years to ensure actions are consistent with the law and official guidance at the
- time. Based on this advice, we remain confident in our position
⚫
£0.2m cash payment on legal fees in H1 2019
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Summary
Leader UK wide network of locations Successful turnaround strategy Highly attractive investment
- pportunity
Strong performance Favourable market trends
✓ In attractive niche and highly regulated hazardous waste markets ✓ Two hazardous landfill locations accounting for 40% of current void and optionally to increase void ✓ Strategy successfully executed resulting in strong recent financial performance
✓ Strong revenue momentum, which analysts are expecting to continue going forward
✓ Growth supported by strong market trends and a targeted business strategy ✓ Multiple levers for value creation
Appendix Treatment & Disposal (“T&D”) – Additional business description
A
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T&D sub-divisional overview
Description Locations Customer types Division Sub-division
Treatment & Disposal
EfW residue Construction & industrial waste (“C&I”) Radioactive waste services (“RWS”) Treatment & recovery (“T&R”)
⚫
Treatment and disposal of the by-products from EfW and biomass plants, such as Air Pollution Control Residue (“APCr”) and bottom ash
⚫
Main treatment stabilises dredgings with APCr and disposes of them in Port Clarence and ENRMF – most cost effective treatment and preferred route for cost conscious clients. Also offering disposal for hazardous bottom ash
⚫
Application for R-Code underway
⚫
Disposes and treats contaminated waste from construction / demolition activities and the by products of industrial process
⚫
Waste types treated are mainly asbestos, contaminated waste materials and contaminated soils
⚫
Offers a wider variety of treatment types vs. competitors including soil washing TPH and PAH treatment and bioremediation
Port Clarence ENRMF, Thornhaugh Avonmouth, Paisley, Port Clarence WaRP
⚫
Treats and disposes of low level radioactive waste and Naturally Occurring Radioactive Material (“NORM”)
⚫
Waste typically originates from the decommissioning of the UK Nuclear estate and the O&G industry
⚫
Main treatment centred on disposal to landfill and decontamination of materials (including plant and equipment jet washing)
⚫
Focused on the recovery and recycling of oil and solvents and the generation
- f secondary liquid and solid fuels
⚫
Typically treats packaged / chemical / bulk liquid waste
⚫
Treatment types includes solvent plants to split waste liquid waste, oil and water treatment, chemical treatment and bio treatment to provide a road to recovery or for efficient disposal
⚫
Also provides specialist industrial cleaning services
Wide range of hazardous waste management solutions – from disposal of hazardous radioactive waste to recovery of solvents
⚫
EfW facilities
- perators
⚫
Biomass facilities
- perators
⚫
Construction, Demolition and enabling contractors
⚫
Specialist contaminated land contractors
⚫
The LLWR
⚫
Irradiation reactors, radio and pharma
⚫
O&G, mineral processing and mining
⚫
Oil and chemical refineries
⚫
Port operators
⚫
Industrial plants
⚫
Waste management providers
- A. Treatment & Disposal (“T&D”) – Additional business description
14
Avonmouth Paisley Port Clarence PC Waste Recovery Park Thornhaugh East Northants RMF
T&D map of locations
Hazardous and non-hazardous landfills Paisley
⚫
One of the largest plants in Scotland primarily serving the O&G industry
⚫
Treatment, recovery and transport facilities for oils and solvents and packaged and organic waste
⚫
Capacity of c.80kte p.a.
East Northants RMF (“ENRMF”)
⚫
Treatment and disposal facility for hazardous and non hazardous waste
⚫
Majority of waste from EfW residue with asbestos, construction soils and filter cake as main wastes types also accepted
⚫
Permitted to treat using a variety of processes e.g. stabilisation / de-hydration and bioremediation including soil washing capabilities
Thornhaugh
⚫
Non-hazardous disposal facility
⚫
Planning permissions until 2034
⚫
Includes Cook Hole landfill void – in development
Port Clarence Waste Recovery Park (“PCWRP”)
⚫
Waste Treatment and Recovery plant with a wide permit to accept varied waste types
⚫
Sort and segregation capabilities to process Nuclear waste
⚫
Planning permissions until 2024 with potential expansion for four new buildings
⚫
Current capacity for 26kte p.a.
Avonmouth
⚫
Waste Treatment and Recovery Operations since 2005/06
⚫
Wide permit accepting most waste types (organic / oils / solvents) and with discharge capabilities
Port Clarence (“PC”)
⚫
Planning permissions extended to 2026 – 1m m3 of void space –
- c. 150kt of waste accepted p.a.
⚫
Option extension to mid 2040+
UK-wide network of strategically located hazardous landfills and treatment facilities
Treatment and recovery facilities
- A. Treatment & Disposal (“T&D”) – Additional business description
⚫
Strategically located to accept construction waste from the North East and in close proximity to estuaries to accept dredgings for APCr treatment
⚫
Opened ended planning permissions for both Landfill and WRP for a period in excess of 50 years – 5.6m m3 of hazardous void space → 33+ years remaining lifespan –
- c. 90kt of waste p.a. with 100+ vehicles accepted daily
⚫
Treatment and disposal facility for hazardous and non hazardous waste
⚫
Largest hazardous landfill in the UK with long term and well established contracts
⚫
Waste types accepted include APCr, river dredgings, filter cakes, asbestos contaminated materials and drilling muds
⚫
Majority of input from contaminated soils
15
Hazardous landfills
UK hazardous landfill capacity by site Commentary
⚫
Unlike non-hazardous landfills, demand for hazardous landfills is expected to stay constant as it is the only possible disposal option for a majority of hazardous waste types
⚫
The majority of hazardous waste going to landfill is therefore expected to remain broadly stable given lack of alternative disposal methods
⚫
The UK government will not grant permits for new hazardous landfills - it will only grant timing and capacity extension (to adjacent land) to currently permitted sites
⚫
Capacity extensions are limited by the nature of the land surrounding the landfill – i.e. unlikely to be granted extensions in populous areas
⚫
Augean currently holds 40% of hazardous landfill void in the UK, through its Port Clarence and ENRMF facilities establishing it as a key player in the haz waste disposal market
⚫
Unlike most other landfill operators, Augean has a freehold on their landfill sites vs leasehold
⚫
Furthermore, Port Clarence and ENRMF have the potential to increase their void
Augean holds 40% of the remaining hazardous landfill void in the UK, with life through 2050 and beyond
Operator Planning expiry Name
Port Clarence ICI No 3 Teesport White moss Bradley Park Wins- ford Wing- moor Farm ENRMF Winterton South Folly Farm Parkgate Pinden Polmont Shotley Holdings n/a 2035 2028 n/a 2030 2025+ 2026 n/a 2023 2042 2022 2050
Comments
Not
- peratio
- nal
- c. 4 / 5
years expected life End of life / change of use Veolia lease expires in 3 years Asbestos
- nly
Asbestos
- nly
+2.9m3 from additional adjacent land
- ptioned
mt hazardous landfill void
Augean currently holds 40% of hazardous landfill void in the UK
- A. Treatment & Disposal (“T&D”) – Additional business description
Source: Tolvik
5.1 2.0 1.8 1.8 1.5 1.1 0.9 0.9 0.6 0.4 0.2 0.1
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Growth in EfW capacity and resulting ash
UK capacity gap driving increase in UK EfW… … resulting in steep increase in EfW residue
- 100
200 300 400 500 600 700 800 900 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Residual Waste EfW Woody Biomass ⚫
EfW capacity has consistently grown since 2008, when landfill tax made EfW incineration a more economical disposal route compared to landfill
⚫
Today there is still a significant capacity gap in the UK, which is currently landfilled for lack of better options
⚫
The significant capacity gap is driving the expected build up of EfW facilities in the UK – capacity is excepted to grow from 11.6mt in 2018 to 19.2mt in 2024
⚫
Additionally, the tax in Europe on RDF imports is driving further demand for EfW capacity in the UK
⚫
The forecasted increase of EfW capacity will result in significant increase in EfW residue (APCr and bottom ash) – Total APCr generated by both EfW, biomass and hazardous/clinical incinerators facilities is expected to grow by c. 85%, from c. 510kt in 2018 to c. 770kt in 2024
⚫
Average yearly APCr growth from 2014 to 2018 was 13.1%
⚫
On average, for each tonne of waste incinerated 3.5% of APCr is generated
EfW MBT Diversion / Co-Incineration RDF Exports Capacity cap Residual Waste
+8 mt
EfW capacity
The UK capacity gap is driving the build up of EfW facilities (+8 mt capacity expected), resulting in a significant increase in EfW residue needing to be treated
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Residual Waste EfW Woody Biomass Other Biomass Hazardous / Clinical Waste Source: Tolvik Source: Tolvik
- 5mt
10mt 15mt 20mt 25mt 30mt 35mt 40mt '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25 '26
- A. Treatment & Disposal (“T&D”) – Additional business description
17
211 ktpa 60 ktpa 38 ktpa 103 ktpa
- 50kt
100kt 150kt 200kt 250kt Planning Commissioning On Hold In Build
Large pipeline on potential new contracts… … supporting significant growth in volumes treated by Augean
410 ktpa
- f APCr, IBA and Fly Ash
from
37 EfW / biomass
plants
in planning/commissioning
- r construction
Large pipeline supporting topline growth
>35 EfW / biomass plants in construction or planning, which are expected to add c. 410ktpa of EfW residue in the market, of which Augean is expected to win a significant share, in line with historical win rates
⚫
Large pipeline of contracts for treatment and disposal of APCr and bottom ash, as result of 37 EfW / biomass facilities either in planning/commissioning or already under construction
EfW residue treated and disposed by Augean - historical and forecast (ktpa)
- A. Treatment & Disposal (“T&D”) – Additional business description
~150 ~190 ~210
- 100kt
200kt 300kt 2017 2018 2019 APCr Bottom ash
⚫
Volumes of APCr and bottom ash treated and disposed by Augean
Source: Tolvik
Appendix North Sea Services (“NSS”) – Additional business description
B
19
13 18 22 '16A '17A '18A
Exceptional track record of topline and profit growth, expected by analysts to continue in the forecast period
Key investment highlights for Augean NSS
⚫
Full spectrum of waste and industrial services solution to O&G
- perators in North Sea – from drill cutting management to
decontamination for infrastructure decommissioning
⚫
Leading positions across all divisions and main services lines
⚫
Strategically located facilities covering the entire UK North Sea region
⚫
£15-20bn estimated total decommissioning spend in the North Sea
- ver the next 10 years…
⚫
… of which up to c. £1bn (5% of total) is addressable by Augean
⚫
Augean is uniquely positioned in the Port of Dundee… ✓ Only operator with NORM-permitted facilities in Dundee ✓ Founding member of the Forth and Tay Decommission alliance
⚫
… which is quickly establishing itself as main decommissioning hub in the UK
⚫
With active presence in both Aberdeen and Lerwick
⚫
Experienced management team with a proven track record
Leading provider of waste and industrial services solutions to the North Sea O&G sector Current and future growth underpinned by large and rapidly accelerating decommissioning market… … of which Augean is expected to win a substantial share Led by an experienced management team, highly regarded in the industry
Revenue (£m)
- B. North Sea Services (“NSS”) – Additional business description
20
Leading provider of waste and industrial services solutions to the North Sea O&G sector, with strong track record of revenue and profit growth
Augean North Sea Services
Overview
⚫
Formed in 2012 as 70% / 30% JV between Augean and Scomi Oiltools – now 100% owned by Augean
⚫
Specialised waste management solutions provider for the containment, treatment and associated industrial cleaning of waste generated by the North Sea O&G industry
⚫
Services include: 1) full waste services solutions for both well drilling and abandonment, 2) industrial cleaning and decontamination for vessels and decommissioning projects, 3) general waste management services for
- perating rigs and platforms
⚫
Strong track record of revenue and profit growth – £22m revenue, 9.5% EBIT margin for FY18
⚫
Analysts expect significant growth to continue on the back of the North Sea decommissioning sector
⚫
Operates out of strategically located facilities in Aberdeen, Lerwick, Great Yarmouth and the Port of Dundee
⚫
Clear strategic benefits of being part of Augean Group as it can leverage its disposal sites (e.g. Port Clarence)
⚫
Leading position in all key markets – key competitors include ASCO, Taylor Industrial Services, Bilfinger, Veolia and Scotoil Services
⚫
Led by industry veteran Simon Gibb employing c. 120 people Overview of NSS locations
34 rigs
worked on
>570
wells contained
>150
pit cleaning projects
200k ft
contaminated tubulars processed
12+
years LTI free at rig sites
>4m barrels
- f wellbore wastes re-
injected Great Yarmouth Lerwick Aberdeen Dundee
- B. North Sea Services (“NSS”) – Additional business description
21
Three divisions offering the full spectrum of waste and industrial services to O&G operators in North Sea – from drill cuttings management to decontamination for infrastructure decommissioning
Divisional overview
⚫
Specialised waste management solutions for waste generated from the drilling and abandonment of wells
⚫
Services include: provision of engineers and equipment for the monitoring and handling of waste, as well as solutions for the collection, disposal and transport of well waste
⚫
Large fleet of custom built skips, conveyors, cuttings pumps and vacuum collection machines for rental
⚫
Plug & Abandonment service offering including tubular extraction monitoring and NORM contamination verification
⚫
Mainly operating out of Aberdeen facility with c. 40 employees
⚫
Industrial cleaning and decontamination services for decommissioning projects or active operating vessels and terminals
⚫
Services include 1) high-pressure jet cleaning
- f vessels (incl. PSVs), infrastructures and
terminals, 2) processing and discharge of vessel waste, 3) NORM decontamination and 4) full services for on/offshore Shutdowns & TARs
⚫
Increasingly focused on decommissioning projects by providing cleaning of topsides vessels, tubulars (valves and well heads), deep tank cleans and scrap material cleaning
⚫
Operating out of Dundee, Scotland’s main decommissioning hub
⚫
Employs c. 150 people (incl. contractors)
⚫
General waste management services provided to O&G rigs and platforms
⚫
Offering includes collection, transportation, treatment and disposal of O&G waste
⚫
Waste collected from the rig / platform is transported to a transfer & treatment facility located in one of ANSS various locations for treatment or disposal and recycling
⚫
Further services include treatment and decontamination of waste for discharge
⚫
Transfer & treatment facilities in all of Augean’s NSS locations, but Great Yarmouth and Aberdeen are the main WS facilities
Divisions / services overview Key highlights
✓ Engineers in 7 out of 23 operating drilling rigs
in the North Sea
✓ Refocusing division towards faster growing
Plug & Abandonment projects
✓ Only operator in Dundee providing full
decontamination and cleaning services for decommissioning projects
✓ Leader in both decontamination and vessel
cleaning
✓ Provider of one-stop-shop waste management
solutions for rigs and platforms – including all types of waste
✓ National and integrated offering across the UK
Drilling, Plug & Abandonment Waste Management (“DWM and P&A”) Waste Services (“WS”) Industrial Services (“IS”)
- B. North Sea Services (“NSS”) – Additional business description
22
From drilling to decommissioning
… by offering
⚫
Augean NSS was formed in 2012 to provide waste management of drill cuttings
⚫
It was able to quickly win a leading market share, by providing very competitive pricing for the management of drill cuttings
⚫
Over the last 7 years, management has successfully implemented its strategy of expanding its service offering and enter new niche markets
⚫
Examples on new services introduced: – Marine Services in 2013 – Industrial Services in 2014 – NORM decontamination in 2015 – Decommissioning services in 2016
⚫
Augean NSS is now focusing its efforts and resources on the growing and sizable decommissioning market Diversifying away waste from drilling … … and refocusing on decommissioning…
Market share of drill cutting management / disposal ⚫
Significant number of structures and wells to be decommissioned in the North Sea
⚫
… amounting to a c. £15-20bn estimated total spend over the next 10 years
⚫
Of which up to c. 5% is addressable by Augean NSS
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Full cleaning and decontamination services for decommissioning vessels, pipelines and subsea infrastructure – Tank and vessel cleaning – High-jet cleaning – Tubular cleaning and decontamination – Scrap metal for NORM decontamination – FSPO decommissioning
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Specialised industrial cleaning and NORM decontamination
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Monitoring and NORM decontamination services for P&A
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Multi skilled personnel to reduce down-time and increase P&A project efficiencies
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National coverage with network of sites located in main decommissioning hubs (Dundee) and across the country (Great Yarmouth)
£15-20bn spend over next 10 years
Source O&G UK, OGA
- £0.5bn
£1.0bn £1.5bn £2.0bn 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Diversifying away from a potentially slowing drilling market to focus on the faster growing decommissioning and well abandonment sector, expected to represent £15-20bn of spend in the next 10 years
Installations 79 5,618 km Pipelines 1,224 Wells 9,495 Mattresses 82.5 t Subsea infra. 16 FPSOs
- B. North Sea Services (“NSS”) – Additional business description
23
Dundee – The UK’s main decommission hub
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The port of Dundee is strategically located for decommissioning projects - key advantages include – Natural deep water berth allowing for large vessels to dock and remain stationary
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Other main ports in Scotland are less likely to play a major role given the scale of their commercial activities (similar for Aberdeen)
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Scottish government has ruled that all publicly-funded decommissioning
- perations will have to be done within
Scotland Dundee is a key hub for decommissioning… … in which Augean NSS plays a key role… … allowing to win major projects
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The alliance was created with the goal of positioning Dundee as the UK hub for North Sea decommissioning work
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The members of the alliance intend to jointly provide an integrated, end-to-end O&G decommissioning service
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Being a member allows Augean NSS to be the preferred supplier of cleaning and decontamination services for decommissioning projects taking place in Dundee
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Augean NSS is also the only provider in Dundee with PPC and RSA permitted facilities for NORM-related services and reception / cleaning of contaminated equipment
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Augean NSS is a founding member of the Forth and Tay decommissioning alliance in Dundee Shell Curlew Contract
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In 2019, Shell awarded Augean with the cleaning and decontamination of the Curlew Floating Production Storage and Offloading Vessel (FPSO)
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After the clean up the ship will be taken to Turkey for final dismantling and recycling
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Scope: cleaning of 30 meter deep oil and slops tanks as well as cleaning of topsides vessels, flare stack, turret and > 5,000m process pipework – includes treatment and disposal of c. 400te NORM
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All processes done in collaboration with others in the alliance – Forth Ports (quayside services) – OilMac (lifting services) – John Lawrie / Robertson’s Recycling
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Contract originally under-scoped, resulting in increased work required – e.g. 30t vs. 400t of sludge waste to be cleaned
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Contract extension with expanded scope of work could generate additional revenues of up £9m
Strongly positioned to win the significant share of the decommissioning projects, by leveraging unique position in Dundee, which is quickly establishing itself as the UK’s main decommissioning hub
- B. North Sea Services (“NSS”) – Additional business description