blair goertzen - toromont enerflex.pdf · 2000 2005 2010 2015 2020 2025 bcf/d history future bcf/d...

Blair GoertzenPresident & CEO

2

Calgary, Alberta Nisku, Alberta Casper, Wyoming Houston, Texas Rijsenhout, Netherlands Perth Brisbane

World Leading Pure-Play Supplier of

Sales & Service Locations

Natural Gas Production and Processing Equipment

Strong Growth Platform in Key Global Markets

Sales and Service Locations >60

Countries 14

Employees 3,000

Revenue* $1.5 Billion

* 2009 Pro forma

3

New Enerflex Investment Highlights

• World leading pure-play supplier of natural gas compression and

production and processing equipment

• Strong growth platform in North American shale gas, Australian CSG to

LNG and Middle East conventional gas

• Early stages of industry recovery with growing order bookings and backlog

• Highly diversified revenues by geography, customer and application

• Strong balance sheet with direct access to growth capital

• Experienced management team with a proven track record

Positioned to Deliver Superior Shareholder Value

4

Natural Gas Compression Production and Processing

Wide Range of Specialty Customized Equipment

• Reciprocating and rotary screw

compression applications

• Small to large horsepower

(200 hp – 10,000 hp)

• Conventional and unconventional

plays

Maximizing throughput and Minimizing Operating Costs

• Systems for gas plants (dew point)

and refrigeration systems

• Amine systems (H2S and CO2

removal)

• Dehydration units and CO2 facilities

• Modular design for fast tracking

projects

5

Wide Range of Specialty Customized Equipment

• Pipeline and storage facilities

• Power generation

• Petrochemical

Service Offering

• Mechanical for gas engine

compressors and power

generators

• Construction product installation

• Equipment operating business

Preferred Single Source Supplier6

32%

Balanced and Diversified Revenue

Pro forma

Significant

International Expansion

Parts and Service and Rental

are Key Growth Opportunities

Product DistributionGeographic Distribution

28% 32%

40%

Canada

US

International

2009 $1.5 Billion

4%

72%

25%

Fabrication

Parts &

Services

Rentals

2009 $1.5 Billion

7

Growing Order Bookings and Backlog

0

200

400

600

800

1,000

1,200

Backlog Bookings

($ millions)

Enerflex (Pro Forma)

2007 2008 2009 2010

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

Early Stages of Industry Recovery8

Management and Governance

Management

President ,International

Bill Moore

President,Canada and

Northern U.S.

Ivan Heidecker

President &

CEO

Blair Goertzen

President ,Southern

U.S.

JerryFraelic

Vice President

Finance &

CFO

James Harbilas

Director, Human

Resources

Carol Ionel

Vice President

& CIO

Greg Stewart

Board of Directors

Stephen J. Savidant(Current Toromont Board Member)

Chairman Designate

Chairman ─ ProspEx Resources Ltd.

Director ─ Empire Company Limited

Former President & CEO ─ Esprit Energy Trust

and Canadian Hunter Exploration

J. Blair Goertzen President & CEO ─ Enerflex Ltd.

Robert S. Boswell(Current Toromont Board Member)

Director, Chairman & CEO ─ Laramie Energy

LLC

Director ─ Complete Production Services inc.

Former Chairman & CEO ─ Forest Oil

Corporation

Wayne S. Hill(Current Toromont Board Member)

Former EVP ─ Toromont Industries Ltd.

H. Stanley Marshall(Current Toromont Board Member)

CEO & President ─ Fortis Inc.

Director, Chairman ─ Fortis Inc.

Director, Chairman ─ Terasen Gas Inc.

Director ─ Conference Board of Canada

Other Directors Additional independent members to be added

Proven and Experienced Leadership9

Ivan D. HeideckerPresident, Canada &

Northern United States

11

Agenda

Division Overview

Equipment Manufacturing

Service Business

Integration and Rationalization Activities

Strategic Goals

12

Division OverviewMarkets We Serve

13

Specialize in Cold Weather Application of Enerflex Technologies

Division OverviewOperational Responsibilities

Compression

and Power

Production and

ProcessingRetrofit

Rentals Mechanical Service

14

World Class Customers

Canada

15

Strategic Advantages of Merger

• Broader geographical

coverage within Canada

• Combining of the Canadian

and Northern USA

Waukesha distributorships

• Amplified market strength

• Largest rental fleet in

Canada

• Vastly increased project

capacity

16


17

Barlow, Calgary

Casper, Wyoming

34th Street, Calgary

Nisku, Alberta


• Leading supplier of

compression equipment into

the Canadian and Northern

USA market

• Enerflex has won the majority

of contracts for high-horse

power installations in the

Canadian market

• Proven market capabilities

18

Equipment Manufacturing: Horn RiverShale Gas Play

19

Northeast BC Gas Pipelines & Facilities

Montney Play

Alb

erta

McMahon

Gas Plant

South Peace

0.2 Bcf/d

Station 2

Pine River

Gas Plant

Ft. St. John

Sunrise

Pouce

CoupeGroundbirch1.1 Bcf/d

4th QTR. 2010

Swan

Lake

TupperGroundbirch

Dawson

Parkland

British

Co

lum

bia

Taylor

Dawson 0.2 Bcf/d,

staged in-service

2011-2013

BC

SK

Meikle River

Woodenhouse

North Central Corridor

Ft. Nelson

McMahon

Station 2

Pine River

Fort McMurray

Demand Region

Growing Supply Basins

TCPL Alberta System

Spectra Energy

Gas Process Plant

Proposed Gas Plant

Compressor Station

ABCabin

Slave Point

Platform

N.W.T

Alb

erta

British

Co

lum

bia

Bo

vie

Fau

lt S

yste

m

Cordova

Embayment

Horn River

Basin

Horn River Pipeline

0.6 Bcf/d Committed

2nd Qtr. 2012

Ft. Nelson

Gas Plant

North

Maxhamish

Loop

Cabin 0.4 Bcf/d,

2.4 Bcf/d Ultimate

4th Qtr. 2011

South Peace Pipeline

North Maxhamish Loop


Groundbirch Mainline

Horn River Mainline

Pacific Trail

Pipelines

Spectra Projects

TransCanada Projects

Sundown

Montney Play

Alb

erta

McMahon

Gas Plant

South Peace

0.2 Bcf/d

Station 2

Pine River

Gas Plant

Ft. St. John

Sunrise

Pouce


4th QTR. 2010

Swan

Lake

TupperGroundbirch

Dawson

Parkland

British

Co

lum

bia

Taylor

Dawson 0.2 Bcf/d,

staged in-service

2011-2013

Montney Play

Alb

erta

McMahon

Gas Plant

South Peace

0.2 Bcf/d

Station 2

Pine River

Gas Plant

Ft. St. John

Sunrise

Pouce


4th QTR. 2010

Swan

Lake

TupperGroundbirch

Dawson

Parkland

British

Co

lum

bia

Taylor Montney Play

Alb

erta

McMahon

Gas Plant

South Peace

0.2 Bcf/d

Station 2

Pine River

Gas Plant

Ft. St. John

Sunrise

Pouce


4th QTR. 2010

Swan

Lake

TupperGroundbirch

Dawson

Parkland

British

Co

lum

bia

Montney Play

Alb

erta

McMahon

Gas Plant

South Peace

0.2 Bcf/d

Station 2

Pine River

Gas Plant

Ft. St. John

Sunrise

Pouce


4th QTR. 2010

Swan

Lake

TupperGroundbirch

Dawson

Parkland

British

Co

lum

bia

Taylor

Dawson 0.2 Bcf/d,

staged in-service

2011-2013

BC

SK

Meikle River

Woodenhouse


Ft. Nelson

McMahon

Station 2

Pine River

Fort McMurray

Demand Region


TCPL Alberta System

Spectra Energy

Gas Process Plant

Proposed Gas Plant

Compressor Station

ABCabin

BC

SK

Meikle River

Woodenhouse


Ft. Nelson

McMahon

Station 2

Pine River

Fort McMurray

Demand Region


TCPL Alberta System

Spectra Energy

Gas Process Plant

Proposed Gas Plant

Compressor Station

ABCabin

Slave Point

Platform

N.W.T

Alb

erta

British

Co

lum

bia

Bo

vie

Fau

lt S

yste

m

Cordova

Embayment

Horn River

Basin

Horn River Pipeline

0.6 Bcf/d Committed

2nd Qtr. 2012

Ft. Nelson

Gas Plant

North

Maxhamish

Loop

Cabin 0.4 Bcf/d,

2.4 Bcf/d Ultimate

4th Qtr. 2011

Slave Point

Platform

N.W.T

Alb

erta

British

Co

lum

bia

Bo

vie

Fau

lt S

yste

m

Cordova

Embayment

Horn River

Basin

Horn River Pipeline

0.6 Bcf/d Committed

2nd Qtr. 2012

Ft. Nelson

Gas Plant

North

Maxhamish

Loop

Cabin 0.4 Bcf/d,

2.4 Bcf/d Ultimate

4th Qtr. 2011





Horn River Mainline

Pacific Trail

Pipelines

Spectra Projects






Horn River Mainline

Pacific Trail

Pipelines

Spectra Projects






Horn River Mainline

Pacific Trail

Pipelines

Spectra Projects


Sundown

Spectra Energy

0.8 Bcf/d Committed

Gathering & Processing

Staged In-service 2012 - 2013

Equipment Manufacturing: Horn River

• Six phase build

• Awarded Phase I - a contract

value of $80M with a delivery

of 2011

• Recently awarded the sole-

source contract for the Amine

Modules for Phase II with a

contract value of $60M

• Final 4 Phases expected to

commence one per year

starting in 2013

EnCana Cabin Gas Processing Plant

20


• $25 M project

• Awarded Phase I which

included 7 modules

• Phase II will be awarded in 2011

with remaining phases coming in

2012 and 2013

• Horn River very significant source

of long term revenues

21

Spectra Energy Gas Processing Plant

Horn River Shale Gas


• Inlet Separation

• Amine Processing

• Dehydration

• Dew Point Reduction

• Acid Gas Injection

• Vapor Recovery

• Stabilizer Overheads

Pre-Manufactured Modules for Spectra Energy

22

Equipment Manufacturing: Horn RiverContracts Signed to Date

23

Equipment Manufacturing: Montney

• South of Horn River

extending into Alberta

• Access to infrastructure

• Providing high volumes of

compression and

processing facilities

• Liquid rich formation

requiring additional

equipment

– Presents new opportunities

24

Large Tight Gas Play

Greater

Sierra

BritishColumbia Alberta

Calgary

Extended

Deep Basin

Greater

Sierra

BritishColumbia Alberta

Calgary

Extended

Deep Basin

Dawson

ARC

GroundbirchShell

TupperMurphy

Grand Prairie

Pouce CoupeBirchcliff

Talisman

Pouce Coupe

South

ParklandStorm

Fort St. John

AlbertaBritish Columbia

094A

SeptimusCrew

Monias Sunrise

Dawson Creek

Sundown

Farrell

Altares

Talisman

093P

094B

093O

Valhalla

Sinclair

La Glace

Hythe

Tight Gas

Hybrid

&

Shale

Gas

Low Gas

Concentration

Low Gas

Concentration

Conventional

Montney Gas & Oil

Swan LakeEncana

GlacierAdvantage

Dawson

ARC

GroundbirchShell

TupperMurphy

Grand Prairie

Pouce CoupeBirchcliff

Talisman

Pouce Coupe

South

ParklandStorm

Fort St. John

AlbertaBritish Columbia

094A

SeptimusCrew

Monias Sunrise

Dawson Creek

Sundown

Farrell

Altares

Talisman

093P

094B

093O

Valhalla

Sinclair

La Glace

Hythe

Tight Gas

Hybrid

&

Shale

Gas

Low Gas

Concentration

Low Gas

Concentration

Conventional

Montney Gas & Oil

Swan LakeEncana

GlacierAdvantage

Equipment Manufacturing: MontneyContracts Signed to Date

25

0

1

2

3

4

5

0

1

2

3

4

5

2000 2005 2010 2015 2020 2025

Bcf/d Bcf/dHistory Future

10%

BC Plains & Jean-Marie

Montney

Horn River

50%

40%

5%

2.5

5.2

BC Foothills

BC Deep Basin23%

19%

13%

8%

23%

8%

1% New Play

Equipment ManufacturingNortheast BC Production by Basin

26

RentalsLeader in Rental Equipment

27

• Largest gas compression rental company in Canada

• Currently have 570 units in our rental fleet generating

180,000 horsepower.

Service BusinessLargest OEM Service Provider in Canada

28

• Canadian market leader

• Largest distributor of parts

for Waukesha engines

• Enerflex also distributes

Altronic, Ariel, Champion,

Gemini and Frick products

30 Service Branches and 220 Service Vehicles

Service Business - Central Services

• Built new 55,000 sq.ft.

distribution and re-manufacturing

facility in Leduc, Alberta

• Central Warehouse to distribute

parts to branches as required

• Improve efficiency

Leduc, Alberta 29

Integration

• The Canadian Sales, Service,

Rentals and Retrofit businesses

have been fully integrated

• Calgary manufacturing,

engineering and administrative

personnel have been merged

• Currently working on

consolidating our ERP systems

30

Rationalization

• Eliminated 310 employee positions

• Closed 10 overlapping service locations

• Exited 4 manufacturing facilities

• Removed 320,000 sq.ft of excess capacity by

closing 47th Street facility

• Removed 55,000 sq.ft of excess capacity by

consolidating retro-fit business

• Sold Stettler and North facilities

• Substantially reduced product inventories

• Sold Syntech operation

$32 Million in Annual Cost Savings Realized to Date

31

Summary

Rationalization

Ongoing Cost Controls

Reduce Capital Employed and

Create Additional Cost Savings

+

32

Strategic Goals

• Maximize our participation in Horn River and Montney gas plays

• Continue to rationalize operations to remove overlap

• Continue aggressively reducing inventories of new equipment

• Sell idle equipment in our rental fleet

• Maintain the leading market position

• Grow contract maintenance revenue as a percentage of business

• Expand capability to serve engine rebuild and exchange market

33

Jerry Fraelic President, Southern United States

35

Agenda

Division Overview

Equipment Manufacturing Role

Southern and Eastern U.S. Activities

Latin America Activities

2011 Expectations

36

Division Overview

Markets We Serve

Division Least Affected by Merger

37

• South and East US and Latin America

– Houston main location (Packaging and Service)

– 4 remote sales offices

– 5 remote service offices

• Strategic Advantage of Merger

– Tidewater Location for International

– Lower Manufacturing Cost Base to Support

International Sales Effort

– Leverage Knowledge for Field Installations

Division OverviewGlobal Industries

Natural Gas Compression

Natural Gas Processing

Products

• Special Gases and Fuel Gas Compressors

(H2, N2, CO2, etc.)

• Natural Gas Reciprocating and Screw

Compressors

– Engine and electric drive

– 200 to 10,000 HP

• Gas Processing Equipment

– Dew Point Plants

– Amine Plants (CO2 and H2S absorption)

– Dehydration Systems (TEG and Mole Sieve)

– Refrigeration

38

Division Overview

• Pipeline and Storage are

generally large HP units

• Growth area as gas demand

increases and production

comes on line in new regions

• Well positioned for large

horsepower compression

units

Fabrication and Packaging

39

40

Houston Assembly Plant

Division Overview

• Fully Integrated

– Sales and Applications

– Engineering

– Fabrication and Packaging

– Service and Merchandize

• Manufacturing facility

in Houston located on

30 acres of land

• 22 bays for assembly

• Approximately 380 people

on site and 500 total

Fabrication and Packaging

41Houston Facility

Division OverviewFabrication and Packaging

Division Overview

2010 Accomplishments

• 193 modules shipped

• 415,000 HP shipped

• 87 percent compression

• Balance process equipment

• 650,000 production hours

• Inventory Reduction

Serialized reduced 76% or by $21.2M

Typical Gas Compression Site

42

Southern and Eastern U.S.

Marcellus

gas field

262 trillion cubic

feet of

recoverable gas

Haynesville

shale field

250 trillion cubic

feet of

recoverable gas

Fayetteville

gas field

20 trillion cubic

feet of

recoverable gas

Eagle Ford

sizeable quantities

of oil, lean gas and

rich gas

Sale & Service Locations Shale Gas PlaysFabrication Plants

43

• Significant focus on unconventional (shale) gas

• Significant opportunities for Enerflex as gas comes online for both compression and processing

• Last week Horizontal Rigs all time high in lower 48 (continued pressure on gas price)

• Gas consumption running at very high rates 65 BCF

• LNG import capable 18.5 BCF / actual 1.5 BCF, CDN imports down

• Storage levels at all time high at 3.8TCF above 5 year average high of 3.5TCF

Significant Customers

44

Latin America

Venezuela

Bolivia

Argentina

Colombia

Peru

Chile

Venezuela

45

• South America 14% of contract bookings (sales organization)

• Risk Management– Resellers (positive cash and before ship)

– Letters of credit

– US product if possible

• National Oil Companies

• Columbia recently active (BP)

• Venezuela active (PdVSA)

• Peru (PlusPetrol)

Latin America

Venezuela

• Second-largest natural gas reserves in

Western Hemisphere

– 176 trillion cubic feet of proven reserves

• Opportunities due to infrastructure issues

• Supply full range of equipment:

– Fuel gas compressors

– Standard compression modules

– Processing modules for amine and dew point

– Gathering equipment

– Plus all related parts and services

46

Productivity

• Combines leadership training with

process improvement

– Correct information to correct people

in a timely manner

– Connect front-line to bottom-line

Management Initiatives

Continuous Improvement

Lean Manufacturing • Optimize operational efficiency

by identifying inefficiencies and

eliminating waste

Results are Measurable

HSE • Health, Safety and

Environmental Goal is 50% of

industry average

47

Quality and Competitive PriceIt’s all about the People

Outlook

• Gas Compression

– Revenues in U.S. markets steady

– Expect higher business volumes in Latin America

• Gas Processing

– Expect increase across all markets

• Expect continued orders for fuel gas systems

• Expect increased international manufactured product

• Able to expand systems & facilities to meet demanded

48

Bill Moore President, International

50

Agenda

Division Overview


Regional Operations Reports

Outlook for 2011

51

Division OverviewMarkets We Serve

52

Division Overview

• Engineering Design

• Equipment Fabrication

• Onsite Construction

• Project Management

• Maintenance and

Operation Services

Specialized Goods and Services

53

Division OverviewMost Active Categories

Production

and Processing

Compression

and Power

Combined Heat

and Power

Integrated

Solutions

54

Manufacturing and Fabrication

• New Eagle Farm reassembly facility in Brisbane

• Build on and expand as required in the future

• Recently opened Roma Service facility

Australia

55

Manufacturing and Fabrication

• Significant capacity to meet the manufacturing and

fabrication requirements of our customers with export

of our products and through local footprint

• As business volumes increase in the future, excess

capacity at our plants will be taken up as required

Summary

56

Market Regions

• Most important single region

• Solid market presence

• Our projects include:

– Gas-gathering infrastructurefor LNG plants on Australia’s

northwest shelf

– Coal-seam gas compression

systems for Queensland’s local gas demand

and upstream LNG development

– Compression booster stations along most of Australia’s pipeline

network

Australasia

57

Market RegionsAustralasia

Australia Major Basin Activity

58

Market Regions

• Global financial crisis decelerated

project work in Australia resulting

in several delays

• Queensland Gas Corporation

awarded Enerflex their first LNG

compression and processing

order in October

– 82 modular gas compressor

packages and 3 modular TEG

dehydration packages valued at

$193 million

– Leading edge of a major ramp-up

in Australian coal seam gas

production

Australasia

59

Market Regions

• 4 multi-billion projects under

development

– QGC and Santos well advanced

• Gorgon offshore project,

booked metering station on

west coast

• Epic Wullumbilla expansion

booked $30 million of

compression installation during

the third quarter

Australasia

Major CSG to LNG Projects1.Santos (GLNG)

2.Shell (Gladstone LNG)

3.Origin (APLNG)

4.QGC (QCLNG)

Queensland

GLNGGladstone LNG

QCLNG APLNG

12

34

60

Market RegionsAustralasia

Gas Production Growth

Demand expected to double in 10 Years

…driven by government carbon policy and LNG export

Planned LNG

Projects

Carbon Driven Fuel Switching

10 Year Historic Average

61

Market Regions

• Over 2 decades of strong presence

in Europe

• Traditional market in the Benelux

countries has been

– Combined Heat and Power (CHP)

packages

– Limited growth opportunities

• To grow in Europe:

– Take advantage of diversity of product

applications

– Strengthen service base

Europe/CIS

62

Market Regions

Growth strategy includes markets:

• Power Generation

• CHP

• Natural Gas Compression

• CO2 Production

• Refrigeration Systems

Europe/CIS

63

Rijsenhout, Netherlands

Market RegionsEurope/CIS Infrastructure Investments

Netherlands consolidated operations into

one facility in Risjenhout

UK integrated regional sales

office with European team

Turkeyestablished a branch office to

support CHP plus gas compression

offerings

64

Market Regions

• Smallest share of

revenue today

• Expected to lead the world

in natural gas production

over the next 20 years

• Region holds a total of

2,658 trillion cubic feet of

natural gas

• 44% of world’s proven gas

reserves

Middle East North Africa

65

Market RegionsMiddle East North Africa

MENA Production and Reserves

Source: Oil & Gas Journal

-5 5 15

Other OECD

Australia/New Zealand

United States

Central/South America

No-OECD Europe/Eurasia

Africa

No-OECD Asia

Middle East

161

267

319

495

539

2,170

2,658

0 1000 2000 3000

Europe

Central/South America

North America**

Africa

Asia

Eurasia

Middle East

World Total:

6,609 trillion cubic feet

66*Graph shows change in world natural gas production and reserves by region 2010 to 2035 (Tcf)

**Does not include unconventional gas reserves in North America.

Market Regions

• Growth will be driven by:

– LNG

– Power Generation

– Fertilizer

– Water Desalination

• Abu Dhabi office with sales,

engineering and operations

management

• Oman reached the

commencement of our BOOM

contract for BP’s Khazzan

Makarem

• Awarded a $34 million

compression order in Bahrain

with Tatweer Petroleum

Middle East North Africa

67

Bahrain

Oman

UAE

Kuwait

Egypt

Qatar

Market RegionsInternational Clients

68

Strategic Goals

• Establish and implement an international strategy

for gas compression and processing equipment

including risk management

– Australasia

– MENA

• Complete the pre-qualification process for turnkey

projects

– Emirates

– Oman

– Kuwait

– Egypt

– Client prospects include Gasco, BP, Kuwait Oil

Company and Shell Egypt

69

Strategic Goals

• Australia - Queensland Gas contract

– Gas compression

– TEG dehydration packages

– Potentially construction and installation works

• Middle East - BP Oman project

• Europe/CIS

– Reduce our reliance on the Benelux market for CHP

– Focus on other expanding European markets

– Grow our presence in natural gas market through

development of sales office in Moscow

70

Summary

• Provision of both equipment and support services

produces attractive margins and forges close ties with

our customers

• Strategy to improve volume of higher margin business

from recurring revenue streams

• Strong relationships lead to further business and

enhances overall stability through all phases of the

business cycle

• Risk management – geographic, customer, contracts

71

Summary

Well Positioned as a Pure Play Supplier of Natural Gas

and Processing Equipment

blair goertzen - toromont enerflex.pdf · 2000 2005 2010 2015 2020 2025 bcf/d history future bcf/d...

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