for personal use only may 2014 - asx · information is not a prospectus and should ... the...

17
Investor Presentation May 2014 For personal use only

Upload: lethien

Post on 05-Jun-2018

214 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: For personal use only May 2014 - ASX · Information is not a prospectus and should ... The Information is presented by Hughes Drilling for use only by the company ... • 2H14 has

Investor Presentation

May 2014

For

per

sona

l use

onl

y

Page 2: For personal use only May 2014 - ASX · Information is not a prospectus and should ... The Information is presented by Hughes Drilling for use only by the company ... • 2H14 has

Disclaimer

2

The following disclaimer applies to this presentation and any ancillary documents provided containing information from or ancillary to the presentation (the Information). You are advised to read this disclaimer carefully before reading or making any other use of the Information. The Information is not a prospectus and should not be considered an offer or an invitation to acquire shares in Hughes Drilling or any other financial product. The Information is presented by Hughes Drilling for use only by the company or person to whom it is presented.

No representation or warranty, express or implied, is given by any person as to the accuracy or completeness of the Information and opinions contained herein and no responsibility or liability is accepted for the accuracy or sufficiency of any of the information or opinions, for any errors, omissions or misstatements, negligent or otherwise, or for any other communication, written or otherwise.

Forward-looking statement, opinions and estimates provided in this Information are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward-looking statements include projections, guidance on future earnings and estimates and are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. Past performance information given in this Information is given for illustrative purposes and should not be relied upon as (and is not) an indication of future performance. Hughes Drilling undertakes no obligation to revise the forward-looking statements included in this Information to reflect any future events or circumstances.

Hughes Drilling’s results are reported under Australian International Financial Reporting Standards, or AIFRS. The Information may include references to EBITDA, EBITA, EBIT and NPAT. These references should not be viewed in isolation or considered as an indication of, or as an alternative to, measures reported in accordance with AIFRS or as an indicator of operating performance or as an alternative to cash flow as a measure of liquidity.

The distribution of this Information in jurisdictions outside Australia may be restricted by law and you should observe any such restrictions. The shares of Hughes Drilling have not been and will not be registered under the United States Securities Act of 1993, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration under the US Securities Act and applicable United States securities laws.

The Information does not constitute investment, legal, accounting, regulatory, taxation or other advice and does not take into account your investment objectives or legal, accounting, regulatory, taxation or financial situation or particular needs. You are solely responsible for forming your own opinions and conclusions on such matters and the market and for making your own independent assessment of the Information. You are solely responsible for seeking independent professional advice in relation to the Information and any action taken on the basis of the Information. No responsibility or liability is accepted by Hughes Drilling or any of its officers, employees, agents or associates, nor any other person, for the Information or for any action taken by you or any of your officers, employees, agents or associates on the basis of the Information.F

or p

erso

nal u

se o

nly

Page 3: For personal use only May 2014 - ASX · Information is not a prospectus and should ... The Information is presented by Hughes Drilling for use only by the company ... • 2H14 has

3

PRODUCTION DRILLING

FOCUS

� Hughes continues to focus on production drilling contracts

� ~80% of rigs are contracted to production drilling operations on mine sites

� Remaining ~20% of rigs are contracted to water well service activities, mainly via Govt bodies

HIGH UTILISATION OF

RIGS

� East coast production drilling operations have ~85% utilisation of owned rigs

� After slow start up of several new production contracts plus cancellation of one 4 rig water well contract for Rail

Construction by a major client, West coast production and water drilling operations have ~85% utilisation of owned rigs, and

currently have an average of 8 rigs on dry hire / subcontract to meet current high demand from customers

REICHdrill

DISTRIBUTION

NETWORK EXPANDING

� East coast production drilling enquiries are at very high levels. Feedback indicates East coast rig fleet will be fully utilised.

� More rigs maybe required if Hughes’ traditional tender success rate occurs.

� West coast – since acquiring/merging with JSW, significant tenders have been submitted for possible use of Reichdrill rigs in

WA iron ore sector.

Operational Overview

STRONG PIPELINE OF

POTENTIAL NEW WORK

ON EAST AND WEST

COASTS

� REICHdrill has been focusing on re-engaging with existing customers and distributors

� REICHdrill has appointed new distributors in new territories;

� Mincon covering Sub Equatorial Africa

� Wajax Equipment covering all Canadian Provinces

� P.T. Powertrain Solutions covering Indonesia

� Midlantic Machinery covering, Central Pennsylvania, Maryland and Northern Virginia

� REICHdrill is achieving its goal of increasing its % of external sales

For

per

sona

l use

onl

y

Page 4: For personal use only May 2014 - ASX · Information is not a prospectus and should ... The Information is presented by Hughes Drilling for use only by the company ... • 2H14 has

4

Review of Operations – East Coast Contract Drilling (Hughes Drilling)

Production Blast Hole:

• Record revenue from East Coast Production Drilling for YTD to 3Q14, even though growth has softened in FY14 as expected.

• East Coast Production rig fleet has grown from 38 to 41 (compared to 38 from 27 in FY13).

• 2H14 has seen varying direction from the mine owners and major contractors seeing 3Q14 with reduced “metres drilled”. This had a direct impact on

revenue and profitability, however with current contract demand, the rig fleet is expected to be fully utilised by 4Q14 and FY15.

• It is expected that the high underlying EBITDA margins will be a little softer in 2H14, however, be in the 32.5% to 37.5% range (1H14 41.3%, 2H13 41.2% and

1H13 41.2%).

• The strong demand for Hughes service offerings can be attributed to Hughes being able offer a “one stop shop” drilling service. Hughes can offer any

combination of contract drilling and / or direct rig sale via REICHdrill, backed by a Rig Service Contract and Drill Consumables Contract via Express Hydraulics.

• Jellinbah Resources has approved an extension of the current overburden drilling contract at the Jellinbah Mine: Hughes has been working in partnership

with Jellinbah Resources since 2007 and the benefits of this long term relationship has culminated in an additional 4 years of contractual drilling services to

the Jellinbah Mine. It is intended Hughes will complete these works through existing plant, equipment and personnel.

• Yarrabee Coal Company Pty Ltd (Part of the Yancoal Australia Group) has approved a contract extension for the provision of overburden drilling services to

Yarrabee Coal Company, for an additional 2 years: This extension of continuous provision of drilling services highlights the excellent working relationship

between Hughes and Yarrabee Coal Pty Ltd.

• Hughes is currently in final negotiations with two blue chip major mining houses for the provision of new drilling service contracts in Queensland. These

contracts are long term contracts of 4 and 5 years.

• Positive discussions are progressing on another contract being extended with a blue chip major mining house ,with the high probability of adding an

additional mine to the existing contract.

• A tender documents has been submitted for a coal mine project in NSW requiring two drill rigs with commencement in July/August 2014 for two years.

For

per

sona

l use

onl

y

Page 5: For personal use only May 2014 - ASX · Information is not a prospectus and should ... The Information is presented by Hughes Drilling for use only by the company ... • 2H14 has

5

Review of Operations – East Coast Contract Drilling (Hughes Drilling)

Client Mine Region Core/Coal Type Number of Rigs Contract Expiry Contract Tenure

Anglo American Metallurgical Coal Foxleigh Bowen Basin, Qld PCI, thermal 2 Jan-16 3 years

TBA TBA Bowen Basin, QLD PCI, thermal 4 TBA TBA

Anglo Coal (Callide Management) Callide Bowen Basin, Qld PCI, thermal 2 Dec-14 2 years

BHP Billiton Mitsubishi Alliance Poitrel Bowen Basin, Qld HCC / SHCC 2 Nov-15 2 years

Downer EDI Boggabri Gunnedah Basin, NSW Export thermal 6 Nov-16 3 years

Downer EDI Millennium Bowen Basin, Qld PCI, coking, thermal 2 Mar-15 2 years

TBA TBA Bowen Basin, Qld Coking 2 June-19 5 years

Jellinbah Mining Jellinbah Bowen Basin, Qld PCI, SSCC 4 Apr-18 5 years

Leighton Sonoma Bowen Basin, Qld HCC, export thermal 5 Oct-15 7 years

MacMahon Group Eaglefield Bowen Basin, Qld HCC, PCI 1 Aug-14 1 year

TBA TBA TBA TBA 3 TBA TBA

TBA TBA TBA TBA 2 TBA TBA

Yancoal Yarrabee Bowen Basin, Qld PCI, export thermal 1 Dec-15 2 years

HD1 - Total Operational Production Rigs under Contract 36

Note: Excludes 1 rig being commissioned at Yatala , 2 rigs in for routine maintenance at Yatala , and 2 rigs in for routine maintenance at Mackay = 41

Contract Summary – East Coast Contract Drilling

0

5

10

15

20

25

30

35

40

45

Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14

N

o

o

f

R

i

g

s

East Coast Contract Drilling - Rig Utilisation

Production Rigs at Work Production Rigs on Hand

For

per

sona

l use

onl

y

Page 6: For personal use only May 2014 - ASX · Information is not a prospectus and should ... The Information is presented by Hughes Drilling for use only by the company ... • 2H14 has

6

Review of Operations – West Coast Contract Drilling (JSW Australia)

JSW: The acquisition of JSW was effective from 1 October 2013. The primary strategic objectives for the acquisition of JSW were to own a drilling business that

provided Hughes with access to on-mine blast hole opportunities in Western Australia, that the business be profitable and that it could possibly absorb the

existing delineation operations of Hughes. In respect of each of these objectives;

• JSW is currently in discussion with several parties regarding upcoming blast hole drilling contracts in the iron ore sector.

• JSW is profitable. Its order book immediately prior to settlement of the acquisition comprised largely of recently awarded contracts with deployment of

equipment and staff occurring through the December quarter and early 2014. Consequently, with the majority of all mobilisation activity completed in the

early 2014. JSW is generating growing month-on-month revenue, profitability and cash flow.

– Underlying gross and EBITDA percentage margins of contracts are in line with those considered in the pre-acquisition data on JSW.

– The high level of pre-mobilisation and mobilisation activity and hence cash costs has had a significant impact of the cash flow of Hughes Group in

1H14. This can be seen with debtors for JSW increasing from $3.3m at 30 September 2013 to $6.1m at 31 December 2013. JSW will recover the

cash outflow from clients in 2H14.

– One water services contract for rail works utilising four drills was cancelled shortly after commencement at the principles convenience and this

delayed full utilisation of the drilling equipment during 3Q14, however, those rigs are now fully utilised on new work

• JSW continues to win major long term contracts

• Two on-mine Grade Control drilling contracts for FMG at their Christmas Creek and Solomon operations.

• JSW’s first contract with the Water Corporation of Western Australia, for a reinjection bore at their Beenyup Waste Water Treatment

facilities.

• Water boring services at Sirius Resources Nova/Bollinger

• A new sample drilling contract for FMG at Christmas Creek.

• Another blast hole drilling contract for BHPB.

• JSW has taken over the management of the pre-acquisition Delineation Drilling operations of Hughes. Several tenders have been submitted on soft rock

projects for the delineation drilling equipment, however, market winning prices in this sector has been sub-economic so JSW has earmarked a significant

quantity of Delineation Drilling support equipment and inventory to be used in its Western Australian operations. All delineation equipment is fully owned

by Hughes from June 2014 and has no cash impact on operations.

For

per

sona

l use

onl

y

Page 7: For personal use only May 2014 - ASX · Information is not a prospectus and should ... The Information is presented by Hughes Drilling for use only by the company ... • 2H14 has

7

Review of Operations – West Coast Contract Drilling (JSW Australia)

Client Mine Region Commodity No of Rigs Contract Expiry Contract Tenure

BHP Billiton Boddington South Western Australia Bauxite (Blast Hole Drilling on Mine) 5 Feb-16 3 yrs

BHP Billiton Rocky’s Reward - Leinster Northern Goldfields Nickel (Blast Hole Drilling on Mine) 2 Jun-14 6 mths

BHP Billiton Mt Keith Northern Goldfields Nickel (Blast Hole and GC Drilling on Mine) 3 Feb-16 3 yrs

BHP Billiton Worsley Refinery South Western Australia Bauxite (Blast Hole Drilling) 1 Jun-14 6 mths

Local WA Government Various South Western Australia Water Services 2 Dec-14 1 yr

FMG Solomon Mine - Newman Pilbara Iron Ore (Grade Control on Mine) 5 Jul-16 3 yrs

FMG Christmas Creek - Tom Price Pilbara Iron Ore (Grade Control on Mine) 3 Sep-16 3 yrs

Mt Magnet Gold NL Mt Magnet Midwest Gold (Grade Control on Mine) 1 Aug-16 3 yrs

Sirius Resources Nova / Bollinger Goldfields Nickel (Water Services on Mine) 1 Jun-14 6 mths

Water Corporation Beenyup Perth Metropolitan Water Services 1 Jun-14 6 mths

Total Operational Rigs 24

Note: The above list includes an average of 8 hired / sub contracted rigs and excludes rigs in for routine maintenance plus 2 rigs available for work. Total Fleet up to 30 rigs.

Contract Summary – West Coast Contract Drilling

0

5

10

15

20

25

30

Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14

N

o

o

f

R

i

g

s

West Coast Contract Drilling - Rig Utilisation

Owned Rigs at Work Hired Rigs at Work Owned Rigs on Hand

For

per

sona

l use

onl

y

Page 8: For personal use only May 2014 - ASX · Information is not a prospectus and should ... The Information is presented by Hughes Drilling for use only by the company ... • 2H14 has

8

Review of Operations – REICHdrill Inc

• Since Hughes’ acquisition of REICHdrill in March 2013, Hughes and REICHdrill have been focused on the expansion and re-establishment of REICHdrill’s

global distribution network.

• Recently REICHdrill appointed a number of new distributors in new territories;

– Mincon covering Sub Equatorial Africa

– Wajax Equipment covering all Canadian Provinces

– P.T. Powertrain Solutions covering Indonesia

– Midlantic Machinery covering Central Pennsylvania, Maryland and Northern Virginia

• Mincon has ordered 8 C550 REICHdrill medium diameter production rigs for clients in iron ore and gold. Delivery of these rigs will be April 2014 to June

2014.

• Komatsu Equipment Company (KEC), based in Salt Lake City ,Utah (servicing Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, North

Dakota, Utah and Wyoming) has secured the sale of the C550 Drill rig that was on display at the recent CON-AGG Convention held in Las Vegas in March.

• These new distributors will work closely with REICHdrill and are committed to promoting the REICHdrill rigs in the new territories.

• In addition to these new distributors and new territories, REICHdrill is currently in discussions to expand into Chile, Peru, Columbia and Panama.

For

per

sona

l use

onl

y

Page 9: For personal use only May 2014 - ASX · Information is not a prospectus and should ... The Information is presented by Hughes Drilling for use only by the company ... • 2H14 has

9

Review of Operations – Express Hydraulics

• Express Hydraulics (Aust) continues to expand through a focused business strategy to offer mine owners, not just the option of a contract driller, but

the option to owner-operate REICHdrill rigs with the back-up of Express Hydraulics (Aust)’s full rig service agreement.

• Express Hydraulics (Aust) has won the contract to supply up to 7 C700 REICHdrill large diameter production drill rigs to a major open cut coal mine in

the Hunter Valley NSW. The delivery of the 7 rigs will take place from 2014 to 2017. These REICHdrill rigs will be fully maintained by Express Hydraulics

(Aust).

• Express Hydraulics (Aust) has also expanded its footprint on the eastern seaboard to meet growing customer needs. In addition to its existing

operations;

– Yatala – main inventory store, CNC operations, heavy fit out, hydraulic and overhaul capabilities

– Hunter Valley – NSW operational base which, holds fast moving inventory for Hughes and customer operations

• Express Hydraulics (Aust) has opened a new facility in Mackay. This facility will also hold fast moving inventory for Hughes and customer operations.

The facility offers customers;

– Spare Parts and Consumables

– Rig rebuilding and servicing capabilities

– All mining ancillary equipment rebuilding and servicing capabilities

– All Hydraulic rebuilding and servicing needs

• The establishment of the new Mackay facility further demonstrates Hughes’ and Express Hydraulics (Aust)’s commitment to customers and the local

mining communities.

For

per

sona

l use

onl

y

Page 10: For personal use only May 2014 - ASX · Information is not a prospectus and should ... The Information is presented by Hughes Drilling for use only by the company ... • 2H14 has

10

Diversified Drilling Portfolio

Note – The forecast figures above include 12 months of existing Hughes and REICHdrill business and 9 months of JSW.

Revenue Contribution by Service

Revenue Contribution by Commodity Revenue Contribution by Location

Revenue Contribution by Drilling Sector

55%

16%

16%

13%Production

DrillingOther (Supply

Services)Development

Non Mining

(Water Well)

42%

6%14%

37%QLD

NSW

USA

WA

47%

13%1%

6%

7%

9%

16%1%

Coal

Iron Ore

Gold

Bauxite

Water

Nickel

Supply - rigs & parts

Other

55%

16%

13%

14%1%

Drill & Blast

On Mine Grade

Control

Water Drilling

ReichDrill

Services

Express

Hydraulics

For

per

sona

l use

onl

y

Page 11: For personal use only May 2014 - ASX · Information is not a prospectus and should ... The Information is presented by Hughes Drilling for use only by the company ... • 2H14 has

11

Hughes Group : Increased Scale and Profile

~A$96m - Revenue Business ~ 84 Rigs ~ 434 Skilled Operators

Revenue – FY14 (E) Estimated Total Rigs Estimated Employees/Contractors

383

13

19

11 84

0

10

20

30

40

50

60

70

80

90

FY13

Prod

Rigs

FY14

Prod

Rigs

FY13

Delin

Rigs

JSW

Own

Rigs

JSW

Hire

Rigs

Total

No

of

Rig

s214

50

170 434

0

50

100

150

200

250

300

350

400

450

500

Hughes Reichdrill JSW Total

Em

plo

ye

es

/ C

on

tra

cto

rs

51

15

40106

0

20

40

60

80

100

120

Hughes Reichdrill JSW Total

$ M

illi

on

For

per

sona

l use

onl

y

Page 12: For personal use only May 2014 - ASX · Information is not a prospectus and should ... The Information is presented by Hughes Drilling for use only by the company ... • 2H14 has

Overview of the Hughes Group

12

Blast-Hole Drilling REICHdrill Express Hydraulics Delineation Drilling JSW Australia

Overview Production drilling: Blast hole drilling in-pit for open cut coal

Manufacture, sales and distribution of REICHdrill drilling rigs, drilling

consumables and spares

Sales and distribution of drilling consumables and spares

Production drilling: Drilling for reserve delineation and structural support for

coal

Production related blast hole drilling, grade control, delineation drilling, mine dewatering, paste and U/G

service holes, casing advance drilling, drilling with a Geo-thermal, BOP,

water services.

FY14 Revenue Contribution ~40% ~20% ~2 % ~2 % ~38%

Key Assets(31 December 2013)

41 Rigs:• 18 x REICHdrill C750D• 16 x REICHdrill C700D• 2 x REICHdrill C550DII• 4 x Terex GD5000• 1 x SKS

Global client base:• USA• Canada• Australia• France• North West Africa• Southern Africa• Former Soviet Union• Indonesia• South East Asia

Agencies/Distributor for:• REICHdrill• Torquato• Sullivan Palatek• Thomson International• Halco• Ryco• N&N Drilling

13 Marketable Rigs: ~30 Rigs:• 1 x Strange Drilling SD1000• 1 x Strange Drilling SD200• 1 x Strange Drilling SD400• 1 x Strange Drilling SD800• 1 x Globe Drill SD850• 1 x Miller Mining SD450• 1 x Globe Drill SD350• 2 x Globe Drill KAL500-CP8• 1 x UDR RCD 450• 2 x UDR RCD 250• 3 x Atlas Copco TH60DH• 1 x Atlas Copco RD20• 5 x CAT/Montabert CPA XTEND (3

subcontract) #• 3 x GD5000 (3 on hire) #• 2 x Atlas Copco D65 (2

subcontract) #• 1 x VermeerD100x120Series 2• 1 x Diamond 6” Coring Rig (1 on

hire) #• 1 x Schramm 685 (SBD) (1 on hire

) #• 1 x Mackay Drilling 685 (1 on hire

) #Note: During the period an average of

8 rigs have been subcontracted or on

hire #

Contracts / Customers:• Anglo American • BHP Billiton• BHP Mitsui Coal• Downer EDI Mining• Fortescue Mining Group• Jellinbah Mining• Leighton Contractors• MacMahon Group• Mt Magnet Gold• Peabody Energy• Rio Tinto• Theiss Contractors• Yancoal

• Boggabri• Callide• Eaglefield• Foxleigh• Jellinbah• Millennium• Poitrel• Sonoma• Yarrabee

Global client base:• USA• Canada• Australia• France• North West Africa• Southern Africa• Former Soviet Union• Indonesia• South East Asia

• Other Hughes business units• Peabody• Sandvik

• Peabody • Beenyup Perth Metro• Boddington Mine Site• Christmas Creek Mine Site• Local WA Governments• Mt Keith• Mt Magnet Gold Mine• Rockys Reward Mine Site• Sirius resources• Solomon Mine Site• Worsley Refinery

For

per

sona

l use

onl

y

Page 13: For personal use only May 2014 - ASX · Information is not a prospectus and should ... The Information is presented by Hughes Drilling for use only by the company ... • 2H14 has

JSW LOCATIONS - GOLD

Mt Magnet Gold Mine

JSW LOCATIONS – IRON ORE

Christmas Creek Mine Site – Grade Control

Solomon Mine Site – Grade Control

JSW LOCATIONS – NICKEL

Mt Keith – Blast Hole & De-Watering

Rockys Reward Mine Site – Grade Control

JSW LOCATIONS – WATER

SERVICES

JSW OFFICES + SUPPORT CENTRES &

EXPRESS HYDRAULICS DEPOTS

Bibra Lake – Head Office

Kalgoorlie – Service Centre

Port Hedland – Service Centre

Boddington – Service Centre

Callide QLD

Eaglefield QLD

Foxleigh QLD

Jellinbah QLD

Millennium QLD

Poitrel QLD

Sonoma QLD

Yarrabee QLD

Boggabri NSW

HUGHES LOCATIONS - COAL

HUGHES OFFICES &

EXPRESS HYDRAULICS DEPOTS

Geographic & Commodity Diversification

REICHdrill FACTORY

Head Office - Yatala QLD

Service Centre - Mackay QLD

Service Centre - Singleton NSW

Not to scale

JSW LOCATIONS - BAUXITE

Boddington Mine Site - Blast Hole

Worsley Refinery – Blast Hole

13

Local WA Government– Water Services

Beenyup Perth Metro – Water Services

Sirius Resources – Water Services

For

per

sona

l use

onl

y

Page 14: For personal use only May 2014 - ASX · Information is not a prospectus and should ... The Information is presented by Hughes Drilling for use only by the company ... • 2H14 has

Client Diversification

14

For

per

sona

l use

onl

y

Page 15: For personal use only May 2014 - ASX · Information is not a prospectus and should ... The Information is presented by Hughes Drilling for use only by the company ... • 2H14 has

Global Distributors – REICHdrill Rigs

REICHdrill FACTORY

United States - Phillipsburg PA

CANADA

Wajax Corporation

FORMER SOVIET UNION

INDONESIA &

SOUTH EAST ASIA

AUSTRALIASOUTHERN

AFRICA

NORTH WEST AFRICA

FRANCE

NORTH EAST USAWESTERN USA

NORTH EAST USA

Midlantic Machinery

Northeast Drill Supply

WESTERN USA

Komatsu Equipment Company

AUSTRALIA

Express Hydraulics

FRANCE & NORTH

WEST AFRICA

Eurofor SAS

CANADA

INDONESIA &

SOUTHEAST ASIA

PT. Powertrain Solutions Indonesia

FORMER SOVIET

UNION

Global Technology Group

SOUTH AFRICA

Mincon

15

For

per

sona

l use

onl

y

Page 16: For personal use only May 2014 - ASX · Information is not a prospectus and should ... The Information is presented by Hughes Drilling for use only by the company ... • 2H14 has

Hughes Corporate Structure

16

Share price(1) 23.5cents

Shares on issue(1) 209.0m

Market capitalisation $49.12m

Debt(2) $46.32m

Cash(2) ($2.08)m

Enterprise value $93.35m

Capital Structure Register Composition Post Acquisition

1) Share price as at 14 October 2014. There are 4,415,000 options on issue and no performance

shares outstanding.

2) Debt & cash balance as at 31 March 2014. Cash net of overdraft.

Bob Hughes, 35.4%

Directors,

Management &

Employees

(Current &

Former), 16.6%

Other

Shareholders,

48.0%

Hughes 54

JSW* 30

Combined 84

Drill Rigs

Hughes 214

JSW* 170

REICHdrill 50

Combined 434

Employees

FY13A FY14E

Hughes ~$48m ~$51m

JSW* - ~$40m

REICHdrill** ~$2m ~$15m

Combined ~$50m ~$106m

FY13A & FY14E Revenue

* 19 Owned Rigs and ~8 subcontracted rigs

* Includes ~20 subcontracted employees

* FY14 Only 9 month revenue contribution from JSW

Register Composition

** FY13 Only 3 month revenue contribution from REICHdrill

For

per

sona

l use

onl

y

Page 17: For personal use only May 2014 - ASX · Information is not a prospectus and should ... The Information is presented by Hughes Drilling for use only by the company ... • 2H14 has

17

Highly Experienced Board

BOB HUGHES, Executive Chairman (Executive Director)

Bob is the founder of the Hughes Drilling business and major shareholder of Hughes. Bob started drilling career 37 years ago, providing drilling and blasting services for quarries

and mining operations. Established Hughes Drilling Pty Limited in 1991, initially contracting to Leighton and has been the driving force in the Company’s development.

ANDREW DRAKE, Chief Executive Officer (Executive Director)

Andrew joined Hughes Drilling in 2006 as General Manager and Chief Executive Officer. In the prior 17 years Andrew held managerial and business development roles with Dyno

Nobel, the world’s second largest explosives supplier.

BARRY O’CONNOR, Non-Executive Director

Barry has over 41 years experience in promoting and marketing premium mining, drilling and comparable products. Barry was previously Director and Head of Construction and

Mining at Sullair Pty Ltd, an international manufacturer of industrial compressors, until 2007. Prior to joining Sullair, Barry headed the rotating equipment division of BTR Nylex.

PAUL BRENTON, Chief Financial Officer and Company Secretary

Paul is a CPA with 18 years experience in accounting, corporate finance and commerce. Paul previously held the position of Chief Financial Officer of a large property

development group prior to joining Hughes in 2010. Prior to this Paul started his career with PwC working across a range of business sectors including to clients based in mining,

manufacturing and construction.

JOHN SILVERTHORNE, Non-Executive Director

John was co-founder of NRW Holdings Ltd, a listed public company that had a market capitalisation in excess of $1.0bn. John has 36 years Contract & Civil Mining Management

and Drilling experience.

JEFF BRANSON, Chief Operations Officer - Drilling (Executive Director)

Jeff is a Civil Engineer and co-founder and past Managing Director of Brandrill Limited, now part of Ausdrill, which was a 100 drill rig business with its primary focus being blast

hole and on mine grade control drilling. Jeff has over 33 years Drilling & Contract Management Experience.

For

per

sona

l use

onl

y