cosl investor presentation · dominant offshore china. 6 successfully penetrate into overseas...
TRANSCRIPT
11
COSL Investor PresentationMay 2008
22
Disclaimer
The information contained in our presentation is intended solely for your personal reference. In addition, such information contains projections and forward-looking statements that reflect the Company’s current views with respect to future events and financial performance. These views are based on assumptions subject to various risks. No assurance can be given that future events will occur, that projections will be achieved, or that the Company’s assumptions are correct. Actual results may differ materially from those projected.
33
22.. Company OutlookCompany Outlook
1.1. Company OverviewCompany Overview
44
Profit Breakdown*
73 working vessels+4 oil tankers+5 chemical carriers
12 jack-ups + 3 semi-submersibles+2 onshore drilling rigs+4 module rigs
16%15%
44% 25%
8 seismic vessels + 4 survey vessels
A A UUnique nique IIntegrated ntegrated OOilfield ilfield SService ervice PProviderrovider
Revenue Breakdown*
Integrated well services
DrillingDrilling Well servicesWell services
Marine SupportMarine Support GeophysicalGeophysical
19%14%
53%
14%
* For the year ended 31 Dec, 2007
55
0%
30%
60%
90%
Drilling WellServices
MS&T Geophysical
COSL Others
Absolute D
ominance
>60% >70% >80%
Market Share in Offshore China MarketsMarket Share in Offshore China Markets
For the period ended 1Q2008
China
TianjinKorea
Guangzhou
HongKong
Philippines
BeijingOffshore China0 100 200 300 km
Shanghai
BohaiBay
Eastern South China Sea
East China
Sea
Western South China Sea
AllAll--round IPM offshore oilfield services provider with leading positround IPM offshore oilfield services provider with leading position in ion in offshore China marketsoffshore China markets
Dominant offshore China
66
Successfully Penetrate into Overseas Markets
Reinforce: Develop Middle East, Gulf of Mexico, Russia and Africa markets
Realize: Parallel development for domestic and international markets
Sustain: Leading position in offshore China marketsConsolidate: South-East Asian markets
Existing Markets
Overseas Target Markets
77
Company Performance Since Listing
354466
701821
1128
2238
891.3
0
500
1000
1500
2000
2500
3000
2002 2003 2004 2005 2006 2007 1Q2008
Net ProfitNet ProfitRMB Mn%
17.7 18 18.1 17.8
21.9
31.4
41.7
0
10
20
30
40
50
2002 2003 2004 2005 2006 2007 1Q2008
Operating Profit MarginOperating Profit Margin
COSL’s operating profit and net profit has grown by 5.8 times and 6.3 times since listing
28133153
3942
4929
6524
9242
2504.6
0
2000
4000
6000
8000
10000
2002 2003 2004 2005 2006 2007 1Q2008
RMB Mn RevenueRevenue
483 550692
850
1392
1021
2827
0
500
1000
1500
2000
2500
3000
2002 2003 2004 2005 2006 2007 1Q2008
RMB Mn Operating ProfitOperating Profit
88
Company Profitability Since Listing
8.17.3
10.3 10.8
13.6
19.9
5.7 5.8
8.1 8.79.9
12.4
0
5
10
15
20
25
2002 2003 2004 2005 2006 2007
ROA & ROEROA & ROE%
ROE ROA
7958 82319141 9664
13130
23089
0
5000
10000
15000
20000
25000
2002 2003 2004 2005 2006 2007
Total AssetTotal AssetRMB Mn
COSL’s total asset has grown by 1.9 times since listing
99
Operating Results Hit Record High (cont’d)
(RMB Mm)
Competitive cost advantageAlthough revenue and operating profit increased significantly, operating cost grew by a moderate 24.3%
Increases in operating cost were mainly due to business expansion, full capacity utilization and increasedexpenses on equipment and staff headcount
We have the confidence tomaintain growth in both top line and bottom line
Employee compensation costs Repair and maintenance costsConsumption of supplies, materials, fuels, services and othersSubcontracting expensesOperating lease expensesSelling, general and administrative expensesDepreciationOther expenses
YoY growth = 24.3%
387274
1,042900
10281
366313
357206
2,525
1,935
318
357
1,123
937
2006 2007
1010
Steady Growth in Overseas Business
0
300
600
900
1200
1500
1800
2003 2004 2005 2006 20070%2%4%6%8%10%12%14%16%18%20%
679(27.7%)
Overseas revenue keep growingOverseas revenue keep growing Overseas markets adding momentumOverseas markets adding momentum
Drilling services grew by new businesses, development in overseas market and increase in daily rateWell service grow with the increase in operation volumeMarine support and transportation services driven by in daily rate increase, and increase in operation volume of utility vessels and chemical tankersGeophysical services has increased by COSL718 in Myanmar’s significant increase in income
RMB mn RMB Mn
Overseas revenue Overseas/total
Globalization strategy
marked initial success
• By end of 1Q2008
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Positive Recognition from the Capital Market
Corporate bond credit rating: AAALong-term credit rating: AAA
The highest investment value listed company in China 2007
COSL was named a Top-30 stock with highest investment potential by Standard & Poor‘s for three consecutive years between 2005 and 2007
China Enterprise Confederation and China Enterprise Directors AssociationNamed Mr. Yuan Guangyu, CEO and President, the “Most Watched Entrepreneur for 2006”
China Enterprise China Enterprise ConfederationConfederation
China Enterprise Directors China Enterprise Directors AssociationAssociation
A Top-100 Most-respected listed Company in China in 2007
Recommended as Top 8 golden stocks
Chinese Academy of Social Sciences
International Investment Research Center
1212
Continuous Emphasis on QHSE
Health:The foundation for
our corporate success
Environment:Be a responsible
international citizenQuality:
In pursuit of high quality
QHSEQHSE
Safety:Our persistent promise
COSL’s OSHA score further improved to 0.25 (0.32 in 2006)
Unit output energy dissipation was 0.0703, down 14.6% y-o-y; Unit value-add dissipationwas 0.1116, down 18.7% y-o-y
Saved 10,804 tonnes of standard coal, met energy saving targets for the year
0.25
0.45
0.22 0.27 0.29 0.32
0.00
0.20
0.40
0.60
0.80
1.00
2002 2003 2004 2005 2006 2007
International standard:0.75
OSHA
1313
22.. Company OutlookCompany Outlook
1.1. Company OverviewCompany Overview
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International oil prices are expected to climb 1.6% per year with the surging E&P expenditure, fuelled by the growing demand of the global market.
International oil prices are expected to climb 1.6% per year witInternational oil prices are expected to climb 1.6% per year with the surging E&P h the surging E&P expenditure, fuelled by the growing demand of the global market.expenditure, fuelled by the growing demand of the global market.
International Oil Prices Hike New HeightsTrend of global demand on crude oil, E&P and oil prices
1515
217229
252
293 300323
346
187184181164 167 170 176
159139119117
836253
0
100
200
300
400
2001 2002 2003 2004 2005 2006 2007
Domestic Production Net I mport
Steady Increase in Crude Oil Demand
World demand for crude oilWorld demand for crude oil China demand for crude oilChina demand for crude oil
7.5
52.4 52.7 53.3 54.9 56.4 57.0 57.5
77.1 77.8 79.382.5 83.9 84.9 85.8
20.820.720.820.0 20.1 20.4 21.1
7.26.76.55.654.7
0
10
20
30
40
50
60
70
80
90
100
2001 2002 2003 2004 2005 2006 2007
USA China Other
CAGR:1.8%
CAGR:8.1%
Source:CEIC, China Petroleum and Chemical Industry Association Source:IEA
1616
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2002 2003 2004 2005 2006 2007E 2008E 2009E 2010E
CAPEX OPEX
Continuing Increase in World Investments in Marine Oil and Gas
Continuing Increase in World Investments in Marine Oil and Gas
Bright Future for Oil and Gas Exploration
World investments in marine oil&gas exploration and operations are expected to increase to US$144bper annum on average in next 10 years.
Average investments in deep water operations will exceed US$15B per annum. Deep waters and ultra deep waters will continue to be hot exploration spots for world oil and gas.
Investments will grow faster in West Africa, Brazil, Gulf of Mexico and Asia Pacific regions. Investments in Marine oil and gas in Asia Pacific in 2008 will increase 65% from the levels in 2002.
Exploration activities are seen to kick off in emerging marine regions including Southeast Asia.
Source: Energyfiles Ltd. Source: Oil.IN-EN.com
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Goals of COSL
20202020
20102010
Near-term goalNearNear--term goalterm goal Long-term goalLongLong--term goalterm goal
Become a top-notch international oilfield service providers
Become a topBecome a top--notch international notch international oilfield service providersoilfield service providers
An oilfield service provider with strong competences in the
international market
An oilfield service provider with An oilfield service provider with strong competences in the strong competences in the
international marketinternational market
Accelerate development of integrated capabilities. Comprehensively enhance professional capabilities
Explore new business opportunities new oilfield production services
PlansPlansExpand facilities, upgrade service capability Strengthen deep water operation capability
Increase investments in R&D to enhance COSL’s technological competitiveness
Expand scope of service, implement global development strategies
Achieve breakthroughs in technology, capacity expansion and capability upgrades through capital market operations including M&A
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Four Core Strategies
TechnologyTechnology--drivendriven Cost CompetitivenessCost Competitiveness IntegrationIntegration GGloballobal OperationOperation
A unique publicly-listed integrated oilfield service providerA unique publiclyA unique publicly--listed integrated oilfield service providerlisted integrated oilfield service provider
Strategic positioning: Expert in conventional technologiesKeen follower in advanced applicationsEnabler of highly efficient operationsContributor to cost reduction Pioneer in integrated servicesParticipant in global competitionPartner in win-win developmentServant for shareholder value
1919
CAPEX since listingCAPEX since listing: in excess of RMB 10 billion: in excess of RMB 10 billion
RMB Mil’
CAPEX to Introduce New Equipment
0
1100
2200
3300
4400
5500
2002 2003 2004 2005 2006 2007 2008
2020
2010201020082008COSL942 to operate in 2H; 4 module rigs operate for six more months; 5 onshore rigs commence operation
R&D, building, procure equipment like cementing pump, ELIS, liftboat etc.
9 new supporting vessels will commence operation in 2H
One 8-streamer seismic vessel start operation in April
20092009Jack-up COSL936 will commence operation by year end. 4 onshore rigs have half year more revenue.
R&D and procure tools for MWD, acidizing and crushing
9 new supporting vessels to operate in 1H. 2 high-powered deep water vessels will commence operation by year end
Jack-up COSL937 to operate; Four 200-feet jack-up rigs to operate in 2010 and 2011
One 12-streamer seismic vessel will commence operation
Drilling Services
Well Services
MS&TServices
Geophysical Services
Increase New Capacity
16 offshore engineering supporting vessels to bedelivered respectively in 2010 and 2011
20112011
Manage the 3000m deep water drilling rig invested by parent company in Mid 2011
1 deep water suveyvessel will commence operation
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COSL COSL –– An oilfield services company offering integrated services An oilfield services company offering integrated services spanning across drilling, development and productionspanning across drilling, development and production
Exploration Stage
Production Stage
y
Development Stage
GeophysicalMarine Support and TransportationDrilling Well Services
One Stop Solution
2222
Increase Work Throughput
Numerous market opportunities in different stages of oilfield production
Besides increase in work throughput of logging, directional drilling, cementing and well completion, acidizing, crushing, screen pipe production activities are expected to grow
Uptrend in CAPEX and OPEX of oil companies on oilfield exploration
CNOOC announced discovery of 10 new oil and gas reserves in Nov 2007
Source: CNOOC Group annual report
2323
Jack-up: USD/Day
Semi-submersible:USD/Day
Service Prices Have Room to Increase
Utilization to remain high due to strong demand, saturated capacity, good customer relationship and tight schedule management
Utilization to remain high due to strong demand, saturated capacUtilization to remain high due to strong demand, saturated capacity, ity, good customer relationship and tight schedule managementgood customer relationship and tight schedule management
20,000
40,000
60,000
80,000
2002 2003 2004 2005 2006 2007
US$78,337/day
US$142,302/day
0
40,000
80,000
120,000
160,000
2002 2003 2004 2005 2006 2007
2424
Tap the deep water segment
Expand foothold in overseas
markets
Targeted Southeast Asia, Middle East, Gulf of Mexico, Russia and Africa
Expand into onshore services, leveraging our strength in the offshore market.
Expand presence in the deep water segment following footsteps of oil companies
Consolidate existing
market share
Secure first-mover advantages in
new markets and new businesses
Explore New markets, New businesses
Penetrate into onshore markets
2525
COSL-LR7001 commenced drilling
Explore New markets, New businesses (cont’d)
2626
MarketMarket--orientedoriented
COCOSSLL’’s technologys technology--driven strategydriven strategy
Integrated Integrated InnovationInnovation
LeapfrogLeapfrogDevelopmentDevelopment
TalentTalentorientedoriented
Accelerate Technology R&D
Introduced proprietary ELIS logging system into domestic and overseas marketsEstablished the first joint laboratoryIntroduced cementing services to XinjiangProprietary “Bohai low-density-high-strength well cementing technology widely applied
COSL’s application of technologiesCOSL’s application of technologies
ConventionalCement
Low-Density,High-Strength
Cement
2727
ASDD
To start the well testing in 2Q08
Upgrade deep water operation from 500m to 1500m
PSC
Independent
Well-geared for Challenges in Deep Water
Well equipped in deep water facilitiestwo high-power deep water working vesselone 12-streamer seismic vessel One 3000m deep water drilling rig invested by parent company will under operationOne deep water survey vessel
Well prepared in technology R&DASDD technology increases the depth of the third generation submersible rigs to 1,500m
Well collaborated in human resources On-job training enables our staff experienced in deep water operation
COSL’s deep water development strategiesCOSL’s deep water development strategies
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