An Oil Expert in China

hollandmarigoldOil and Offshore

Nov 8, 2013 (3 years and 9 months ago)

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SKY CHINA PETROLEUM SERVICES LTD
Analyst Meeting
Analyst Meeting
January 2008
January 2008
An Oil Expert in China
OVERVIEW
2
Expert in Chinese Oil & Gas Market
Provides petro-engineering technical
services to oil & gas industry
Supply know-how in oil extraction, oil
well maintenance & operation
Specialist in drilling and extraction of
crude oil from marginal oilfields in China
Newly embarked
Newly embarked on the extraction and
sales of crude oil at PRC prevailing
market price
3
Beijing
Dagang
Jilin
Beijing
Liaohe
Dagang
4
Customers are subsidiaries and affiliates of China National
Petroleum Corporation (CNPC) and PetroChinaoperating
in the mainland’s Northeast
Servicing State-Owned Enterprises
CNPC–China’s largest
integrated oil & gas company
PetroChina–CNPC’smain
subsidiary, largest integrated oil
company in the world by market
capitalization
5
Strong Business Relationships
MrLiu Qingzeng
Group President & CEO
Held Senior positions in both Dagang& HaubeiOilfield
Management Bureaus
Started company in 1995 to provide oil extraction consulting
services to major players in PRC oil industry
Established a reputation for successfully increasing oil output
at Ke’erqinoilfield
6
BuildingProfits
0
5
10
15
20
25
30
2004200520061H2007
Revenue
Rising Margins
32%
32%
36%
43%
S$’m
7
Net
Margins
0
2
4
6
8
10
12
2004200520061H2007
PBT
PATMI
Rising Earnings
8
S$’m
On New Growth Tangent
9
S$’m
1H07
1H06
+/-(%)
Revenue
12.9
11.3
+15%
COS
(4.0)
(4.9)
-18%
Gross Profit
8.9
6.4
+40%
Other Operating Inc
0.20
0.16
+25%
Admin Exp
(1.7)
(1.7)
0 %
Finance Costs
(0.21)
-
-
PBT
7.2
4.8
+50%
Income Tax
(1.1)
(0.64)
+79%
Net Profits
6.0
4.1
+46%
Business Operations Snapshot
10
Business Segment
1H07
1H06
Revenue
(S$’m)
Gross
Margin (%)
Revenue
(S$’m)
Gross
Margin (%)
Petro-Engineering Services
(a) Extraction Services
-DagangOilfield
10.2
73
6.8
70
-Ke’erqin& LiaoheOilfield
-
-
4.5
37
(b) Drilling Services
0.3
93
-
-
Extraction & Sale of Crude Oil
2.5
51
-
-
Total Revenue
13.0
69
11.3
57
+12pts
+12pts
Petro-engineering services –Extraction Services
-18, 629 km
2
exploration area
-23 oil & gas fields under development
Sources: www.oilchina.com
•Stable Income
•5 year contract ending in 2010, fixed annual fee
•Working on 5km
2
area covering 178 Oil wells
•Extraction rate of 6 ton/well/day
DagangOilfield
11
12
Weak Gel Compound Oil Displacement Technology
New extraction technology comes withexclusive rights
Capabilities:-peel/strip crude oil from sandstone →
improve oil displacement efficiency
-reduce viscosity of crude oil →improve fluidity
Higher extraction yieldthan Nano-MD film displacement technology
used previously
Expect to increase outputof single well by > 15%
13
Directional Well Drilling
Exclusive use of horizontal drilling technology to
tap marginal oil wells in China
Petro-Engineering Services –Drilling Services
-Ranked 3rd oilfield in China
-26 oilfields and 9 production bases
Sources: www.oilchina.com
Co-operation with Botenaer
•5 year contract ending in 2011
•Exclusive right to rework old oil wells
using directional drills
•Remunerated based on per meter
drilling work
Liaohe
•33 Oil wells identified, more expected
to come
LiaoheOilfield
Good growth
potential from New
field in Jidong
14
Extraction & Sale of Crude Oil
-Oil bearing area of 1384.3km
2
-19 oilfields under development
Sources: www.oilchina.com
•Exclusive rights to extract oil in Song
Yuan field for another 16 years
•Extracted crude oil is sold at market
prices
•Working area of 1.68km2
•Currently operating 70 oil wells
Jilin Oilfield
29,900 barrels of
oil extracted
between May to
June 2007
Average selling
price of about
US$68.80 per
barrel between
May to June 2007
15
16
A New Twist
Positive Switch in Business Model
Provision of petro-
engineering services
Provision of drilling
technology
Extraction & Sale
of Crude Oil @
Market Prices*
*Acquisition of Song Yuan Tian Xi Harbor Oil
Exploration Co. completed in April 07
17
18
Strong Macros
19
Strong Demand for Energy Resources
Sources: www.iea.org
20
Marginal Oilfields Turning More Attractive
World Crude Oil Production, 1973-
2004
Million Barrels per Day
Sources: www.iea.org
China’s Latent Horizontal Drilling Demand
21
Over 60,000 old wells in China
> 20,000 wells can be reworked using horizontal drilling
Creating demand for specialist drilling & extraction services
Well positioned to tap window of opportunity
Undemanding P/E
22
Comparative Statistics
Companies
Price
MktCap
P/E (x)
(US$m)
Historic
Current
Forecast
SKY China
Petroleum Services
S$0.34
66.4
8.9
6.2
4.9
Sinopec
HK$8.94
19,233.4
13.4
11.3
9.9
China Oilfield Tech
S$0.55
280.1
17.1
14.8
12.2
China Oilfield Services
HK$14.88
2,928.1
49.0
30.9
23.1
PetroChina
HK$11.92
32,244.1
14.0
12.7
11.7
CNOOC
HK$12.18
69,181.6
15.5
16.5
14.0
Source: Bloomberg, consensus estimates
Strong Investment Merits
Alternative oil & gas play:
•Will benefit from rising oil demand in China, the world’s 2nd largest energy
consumer after the US
Expert in drilling & oil technology:
•An efficient drilling & engineering services provider
•Profitable even at US$28/barrel oil prices
•Diversified business base allows SKY to ride on still high crudeoil prices
Proprietary Technology
•Extraction technology used in marginal and geographical challenging
oilfields
Good proxy for China National Petroleum Corp, our largest
customer
23
24
Convertible Bond
Issue of Convertible Bonds
•To help fundthe acquisition of
new oil field located at Songyuan
City, Jilin
•Issue a US$13 millionsecured
convertible bond to Apollo Asia
Opportunity Master Fund, L.P.
•Due in 2010
•Effectively minimum return plus
profit share
25
26
Q&A