Issuu on Google+

SECURE INVESTOR PRESENTATION CIBC Whistler Conference

January 19, 2012

www.secure-energy.ca

TSX: SES


HISTORY • Secure’s first facility opened in October 2007. • Over 500 employees in the field and head office. • Secure’s network has grown to 15 operating facilities in Western Canada. • Secure became the largest drilling fluid service company in Western Canada with the acquisitions of Marquis Alliance and XL Fluid Systems. • Expanded into the heavy oil market with the acquisition of the Silverdale facility in Q3 2011. • Current Enterprise Value approx. $750 million Cdn.

2


FOX CREEK FULL SERVICE TERMINAL

(FST)

KEY SERVICES Crude Oil Treatment Crude Oil Marketing and Storage Produced and Waste Water Disposal Oilfield Waste Processing Oilfield Solids Disposal

3


DAWSON,BC FST FACILITY

Phase I: Produced and Waste Water Disposal

Phase II: Waste Processing and 2nd DW

Phase III: Oil treatment and pipeline (Q2/2012)

9 4


PEMBINA AREA CLASS I & II LANDFILL (“PAL”)

5


SECURE FACILITIES FULL SERVICE TERMINALS 1. 2. 3. 4. 5. 6. 7. 8. 9.

LA GLACE FOX CREEK DAWSON KOTCHO NOSEHILL OBED SOUTH GP DRAYTON SILVERDALE STAND ALONE WATER DISPOSAL FACILITIES

10. EMERSON 11. BRAZEAU 12. WILD RIVER LANDFILLS

13. SOUTH GP 14. WILLESDEN GREEN 15. PEMBINA

6


MARQUIS ALLIANCE – DRILLING SERVICES DIVISION Marquis Alliance offers clients environmental services and solids control to compliment its drilling fluids business

 Marquis Alliance (“MA”) provides a specialized and integrated service offering of three core segments: • Drilling Fluids (oil and water based mud) • Environmental Services (consulting and project management) • Solids Control (centrifuges and rental tanks)  Focusing on leading resource plays in the Canadian WCB and Northern US markets  Innovative and patented technologies leveraged to medium/deep and horizontal drilling activity which provide higher revenues and margins  Integrated Solutions are gaining new customers ie. ConocoPhillips, Shell 7


WCSB OIL & GAS WELL WATER PRODUCTION 3,000,000

Average increase of 7% per year 2,500,000

2,000,000

1,500,000

1,000,000

500,000

0 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Water produced from Gas Wells (cubic metres/month) Water produced from Oil Wells (cubic metres/day) Source: IHS Accumap

8


2011 ESTIMATED REVENUE MARKET SHARE

2011 Est. Revenue $1.5 Billion 7%7% 22% 54% 3% 14%

“Increased Outsourcing”

Secure CCS Other Newalta Producers

“Maturing Basin = Growing Volumes”

Western Canadian Conventional Oil and Gas By-Products Source: Internal estimates

9


BUSINESS STRATEGY Exploit the value chain from cradle to grave, with a focus on environmental and midstream services: • Complimentary services at FSTs (ie. drilling mud blending/recycling plants, environmental consulting). • Recycling services (ie. frac water and storage, oil based mud). • Organic growth in key under serviced and capacity constrained markets (ie. Drayton and Dawson). • Acquisitions that compliment existing network (ie. Marquis Alliance / XL and Pembina Landfill). • Acquire midstream assets and facilities from producers (ie. Emerge’s Silverdale oil treatment facility).

10


LATEST DEVELOPMENTS • Acquired Silverdale heavy oil processing facility for $18 million in Sept 2011. • Drayton FST commissioned in Oct 2011 and fully operational in Dec 2011. • Expanded South GP water disposal capacity in Nov 2011. • Expanded Fox Creek tanks and truck unloading capacity in Nov 2011. • Dawson FST Phase III construction commenced in Nov 2011. • Wild River SWD permanent facility construction commenced in Nov 2011. • Additional drilling rental equipment arriving throughout Q1 2012. • 2 FSTs and 2 Landfills currently in permitting stage.

11


REVENUE GROWTH

*Revenue figures exclude oil purchase and resale

12


BALANCE SHEET STRENGTH As at September 30, 2011 ($MMs) Positive Working Capital

57.2

Long Term Debt

74.0

Cash & Available Debt *

117.0

R12 EBITDA Consolidated Debt to EBITDA Ratio

71.5 1.23

Long Term Debt to Equity Substantial room on our debt covenants

* Assumes $50 million accordian feature is exercised

22% Yes

. 13


BORROWING CAPACITY Committed Revolving Credit Facility •

Completed syndicated credit facility August 2011*

Renewal Date: July 2014

$150 MM plus $50 MM accordion

Banker Acceptance Rate + (2% to 3%)**  Q3, 2011 Total Average Borrowing Rate = 3.5%

Primary covenant: Debt to T-12 EBITDA: < 3.0 to 1.0

* Bank Syndicate - Alberta Treasury Branch, Bank of Montreal, National Bank, HSBC, Bank of Nova Scotia, Canadian Western Bank.

** Rate dependent on the Company’s prevailing funded debt to trailing 12 month EBITDA ratio.

14


CAPITAL PROGRAM ($MMs)

Projects / Acquisitions for 2011 Organic Acquisitions Total 2011 Capital Budget

$95.0 $187.0 $282.0

2012 Capital Budget PRD Div. Organic Growth PRD Div. Sustaining Drilling Div. Organic Growth Drilling Div. Sustaining Total 2012 Capital Budget

$96.0 $2.0 $16.0 $2.0 $116.0

15


SUMMARY • Revenue growth will come from competitors, producers outsourcing and the market expansion. • Environmental and mid-stream services to complement existing facility base. • Value Added Services through acquisitions of Marquis Alliance & XL Fluids. • Facility growth will come from mostly organic built facilities and timely acquisitions. • Strong Balance Sheet to expand accretive opportunities. • Employer of choice based on leadership, corporate values and team culture.

16


FORWARD LOOKING STATEMENTS â&#x20AC;˘

Certain statements contained in this presentation regarding 2012 construction plans, capital expenditures, future facilities and expansions of services constitute "forward-looking statements". Such statements reflect the current views of Secure with respect to future events and are subject to certain risks, uncertainties and assumptions, including, without limitation, general market conditions, commodity prices, interest rates and exchange rates, seasonality of operations, growth, acquisition strategy, integration of businesses into Secure's operations, potential liabilities from acquisitions, dependence on senior management, regulation, landfill operations, competition, risk of pending and future legal proceedings, employees, labour unions, fuel costs, access to industry and technology, insurance, future capital needs, debt service and sales of additional common shares.

â&#x20AC;˘

Many other factors could also cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forwardlooking statements and readers are cautioned that the foregoing list of factors is not exhaustive. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forwardlooking statements prove incorrect, actual results may vary materially from the projections described herein. The forward-looking statements in this presentation are expressly qualified by this cautionary statement. Secure does not undertake any obligation to update or revise any of the included forwardlooking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

â&#x20AC;˘

The forward-looking statements in this document are provided for the limited purpose of enabling potential investors to evaluate an investment in the shares of Secure. Readers are cautioned that such statements may not be appropriate, and should not be used, for other purposes.

17


Investor Presentation