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2013 Annual Results Presentation March 2014

2013 Annual Results Presentation March 2014. Disclaimer. DISCLAIMER

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2013 Annual Results Presentation March 2014

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  1. 2013 Annual Results Presentation March 2014

  2. Disclaimer • DISCLAIMER This document does not constitute, or form part of any offer for subscription or sale of, or solicitation of any offer to subscribe for or sale of any securities SPT Energy Group, nor shall it be construed as calculated to invite any such offer, nor shall it form the basis of, nor can it be relied on in connection with, or act as an inducement to enter into any contract or commitment whatsoever. Accordingly, any decision in connection with the subscription or acquisition of securities of the Company pursuant to or in connection with any offering must be made solely on the basis of the information to be contained in the prospectus or other offering circular to be issued by the Company in connection with such offering; and no representation is made by the Company in respect of any information in this document, except as contained in such prospectus or offering circular. • FORWARD-LOOKING STATEMENTS This presentation contains certain forward-looking statements with respect to the financial condition, results of operations and business of the SPT Energy Group, the oil and gas industry in the PRC and certain of the plans and objectives of the management of the Company. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results of performance of the Company to be materially different from any future results or performance expressed or implied by such forward-looking statements. Such forward-looking statements were based on assumptions regarding the Company’s present and future business strategies and the political and economic environment in which the Company and its subsidiaries operate currently and will operate in the future. Reliance should not be placed on these forward-looking statements, which reflect the view of the Company’s management as of the date of this presentation only. • CONFIDENTIALITY This document is given to you on a confidential basis and must not be passed to, or their contents disclosed to, any other person and no copy shall be taken hereof.

  3. Agenda • 2013 Business Overview • Financial Highlights • Business Highlights • Future Outlook • Q&A

  4. 2013 Business Overview

  5. 2013 Business Overview Steady Growth in Domestic and Overseas Markets • In 2013, revenue of the Group increased by 31.9%, to RMB2,402.8 million. • Revenue from overseas markets reached RMB1,365.9 million, up 32.6% YOY, accounted for 56.8% of the total revenue; • Revenue from the domestic market reached RMB1,036.9 million, up 31% YOY, accounted for 43.2% of the total revenue. • Rapid Development of Integrated Services Business • Won the bid for the integrated drilling and well completion turnkey project of a well in a certain segment of Tarim Oilfield. It was a world-class ultra-deep, ultra-high pressure and ultra-high temperature well. • The two 5,000m drilling rigs which the Group newly invested in the oilfield located in Ordos Basin in China commenced operation successfully, and completed the integrated projects for two horizontal wells and three vertical wells. • Huge Development Potential of Emerging Markets • Entered into a long-term strategic cooperation framework agreement with Turkmenistan Amu Darya Natural Gas Company, the largest offshore natural gas exploration and development cooperation project engaged by CNPC. • Won the bid for a three-year dynamic monitoring contract with respect to Iraq AL-waha Petroleum Company and commenced on-site service in 2013. This marked the Group’s significant strategic breakthrough in the Middle East and facilitated the Group to expand to other areas in the region. • Continued to provide high-quality drilling fluid technical services for the shale gas well in Changning, Sichuan. • Set up the Institute of Geology Engineering Technology (地质工程技术院) and the Unconventional Gas Project Department (非常规气项目部). • Substantial progresses were made in the areas of R&D and manufacturing. Active Exploration of the Shale Gas Market

  6. Financial Highlights

  7. Drilling Well Completion Oil Reservoir Rapid Growth in Revenue 2009-2013 Revenue Growth Revenue（RMBmn） 2,403 CARG:27.4%

  8. Revenue Breakdown Revenue Breakdown by Business Segment （RMB’000） （RMB’000） Revenue Breakdown by Geography

  9. Strong Growth in Net Profit Net Profit Growth Net Profit Attributable to Equity Owners (RMB mn) 334.5 CAGR: 29.8% Share-based Payments Net Profit Attributable to Equity Owners Note: Excluding share-based payments

  10. Drilling Well completion Reservoir Steady Growth in EBITDA EBITDA Breakdown by Business Segment EBITDA（RMB mn） CAGR: 23.3%

  11. Condensed Consolidated Cash Flow Statement For the year ended 31 December 2013, the Group’s net cash generated from operating activities was RMB253.4 million, which is substantial increased compared with last year. The substantial improvement reflected the effort by the Group in strengthening its cash management.

  12. Business Highlights

  13. Reservoir Services Business Scope Revenue Growth （RMB mn） • Included reservoir research, dynamic monitoring, oil testing service, oil production technology as well as operation and maintenance service for underground level production equipment. CAGR: 24.5% Business Highlights in 2013 • Achieved revenue of RMB799.3 million in reservoir services segment, up 26.6% YOY • Successfully penetrated into Middle East market. Won the bid for a three-year dynamic monitoring contract with respect to Iraq AL-waha Petroleum Company and commenced on-site service in the 2013. This marked the Group’s significant strategic breakthrough in the Middle East and facilitated the Group to expand to other areas in the region. • Reinforced the position in Turkmenistan. Won the bid for a two-year tube gas sealing and testing services contract from Turkmenistan Amu Darya Natural Gas Company. • The Group has consolidated internal resources and established the Institute of Geology Engineering Technology.

  14. Well Completion Services Business Scope Revenue Growth • Specialized in providing one-stop integrated services including overall program design, completion tools selection, preparation of auxiliary materials, on-site construction work until the submission of completion report. （RMB mn） CAGR: 24.7% Business Highlights in 2013 • Well completion business achieved RMB649.7 million in revenue, up 22.2% YOY • Won the bid for the service contract relating to 35 sets high-end well completion tools of Amu Darya natural gas company in Turkmenistan in August 2013. The project’s location is the major gas source for West-East Gas Pipeline projects. • Won a bid for the contract relating to 38 sets high-end well completion tools at Longwangmiao block, Moxi segment, Anyue Gas Field in Sichuan. The project is close to the single largest marine carbonate gas reservoir discovered in China. The gas field is also a key project of natural gas production and development in Sichuan in the future.

  15. Drilling Services Business Scope Revenue Growth （RMB mn） • Provided the integrated drilling services and our drilling service operations covered drilling rig, vertical drilling, horizontal drilling, side tracking, under balance drilling, drilling fluid, cementing and FMPD technique. CAGR: 32.4% Business Highlights in 2013 • Revenue from drilling services reached RMB953.8 million in 2013, up 44.8% YOY, of which, the domestic market achieved revenue RMB546.6 million, up 74.3% YOY. • Won the bid for an integrated drilling contract in TarimOilfield. It is a world-class, ultra-high pressure and ultra-high temperature well. • The two sets of 5,000m drilling rigs the Group purchased were delivered and commenced operation in Erdos basin in China. The drilling turnkey operation of three vertical wells and two horizontal wells was successfully completed. Of which, a horizontal well completed a drilling depth of 5,628m with a horizontal section length of 2,303m, setting a record in that area.

  16. Future Outlook

  17. Strategies

  18. Market Outlook • Large scale shale gas development • China’s oil and gas market will be liberalized and the large-scale shale gas operations will be kicked off in 2014. • NDRC stated that exploration of shale gas will be reach up to 6.5 billion by 2015. • Third round of shale gas bidding will be kick off shortly going forward, and all oil majors will proactively take part in the campaign. • Over the past year, Sinopec and CNPC have done a terrific job on Shale gas development in Sichuan, and output of single shale gas well is magnificent, and number of shale gas wells will exceed 200 going forward and this will attract many oil service providers to work and undoubtedly become a growth driver for the oil and gas service provider in PRC. • Oil and gas reform • As the reform campaign of oil and gas market commenced in PRC, oil majors no longer monopoly the market and in-house oil service Companies will further give out and release their shares to private and international oil service providers, this not only provide a great opportunity for us to access the market, market is getting more transparent and market-oriented mechanism.

  19. Prospects Major tasks for 2014

  20. Q&A

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