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Cathedral Energy Services Income Trust

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Title: Cathedral Energy Services Income Trust


1
Cathedral Energy Services Income Trust
  • As at December 3, 2008
  • TSX CET.UN
  • Market Value 275 million
  • Units Outstanding 32.6 million
  • Current Unit Price 7.25
  • Annual Distribution 0.84

2
Disclaimer
  • Certain statements in this presentation
    including (i) statements that may contain words
    such as anticipate, could, expect, seek,
    may, intend, will, believe, should,
    project, forecast, plan and similar
    expressions, including the negatives thereof,
    (ii) statements that are based on current
    expectations and estimates about the markets in
    which the Trust/Cathedral operations and (iii)
    statements of belief, intentions and expectations
    about developments, results and events that will
    or may occur in the future, constitute
    forward-looking statements and are based on
    certain assumptions and analysis made by the
    Trust/Cathedral. Forward-looking statements in
    this presentation include, but are not limited
    to, statements with respect to future capital
    expenditures, including the amount, nature and
    timing thereof, oil and natural gas prices and
    demand other development trends within the oil
    and natural gas industry business strategy
    expansion and growth of the Trusts/Cathedrals
    business and operations including the
    Trusts/Cathedrals market share and position in
    the oilfield service market and other such
    matters. Such forward-looking statements are
    subject to important risks and uncertainties,
    which are difficult to predict and that may
    affect the Trusts/Cathedrals operations,
    including, but not limited to the impact of
    general economic conditions in Canada and the
    United States industry conditions, including the
    adoption of new environmental, safety and other
    laws and regulations and changes in how they are
    interpreted and enforced volatility of oil and
    natural gas prices oil and natural gas product
    supply and demand risks inherent in the
    Trusts/Cathedrals ability to generate
    sufficient cash flow from operations to meet its
    current and future obligations increased
    competition the lack of availability of
    qualified personnel or labor unrest fluctuation
    in foreign exchange or interest rates stock
    market volatility opportunities available to or
    pursued by the Trust/Cathedral and other factors,
    many of which are beyond the control of the
    Trust/Cathedral. The Trusts/Cathedrals actual
    results, performance or achievements could differ
    materially from those expressed in, or implied
    by, these forward-looking statements and,
    accordingly, no assurance can be given that any
    of the events anticipated by the forward-looking
    statements will transpire or occur, or if any of
    them do transpire or occur, what benefits the
    Trust/Cathedral will derive therefrom. Subject to
    applicable law, the Trust/Cathedral disclaims any
    intention or obligation to update or revise any
    forward-looking statements, whether as a result
    of new information, future events or otherwise.
  • All forward-looking statements contained in this
    document are expressly qualified by this
    cautionary statement. Further information about
    the factors affecting forward-looking statements
    is available in the Trusts/Cathedrals current
    Annual Information Form and Annual Report which
    have been filed with Canadian provincial
    securities commissions and are available on
    www.sedar.com.

3
Cathedrals Services
  • Directional Drilling Service
  • Production Testing Service
  • Wireline Services (Cased Hole)
  • Slick Line Service
  • Electric Line Service

4
Operations
  • Directional Drilling Services
  • Includes horizontal, directional, multi well pad,
    re-entry, underbalanced, SAGD, and coal bed
    methane drilling
  • Percentage of directional and horizontal wells
    increased from 28-30 in Canada to approximately
    40 of all wells drilled. In the U.S. over 50 of
    wells are now drilled horizontally and/or
    directionally
  • Plays like the Bakken and the Montney, as well as
    multi-stage fracturing, will continue to expand
    horizontal drilling

5
Operations
  • Directional Drilling Services (contd)
  • Most U.S. resource plays are primarily using
    horizontal drilling technology
  • At end of 08 Cathedral will have 98 EM MWD
    systems, 37 of which will be in the U.S. This is
    a total increase of 20 over December 07
  • Services provided in Western Canada and Rocky
    Mountain, Williston Basin, Michigan and Texas
    regions of the U.S.

6
Operations
  • Directional Drilling Technology
  • MWD systems provide well bore inclination,
    azimuth, temperature, pressure, gamma ray levels
    and bottom hole assembly orientation
  • Positive Pulse
  • Negative Pulse
  • Electro-Magnetic (EM)
  • G1 (1st generation)
  • G2 (2nd generation) increased power capacity and
    bi-directional communication
  • G3 (3rd generation) enhanced transmission,
    formation impedance matching and auto rotation
    sensors, will have superior depth capability
    battery management greater depth reduced cost
  • Remote Drilling System

7
Operations
Directional Drilling Technology (contd)
  • The Electric Dipole Measurement While Drilling
    tool (EM MWD) is a wireless system which utilizes
    low frequency signals to communicate to the
    surface. As with other systems, simply install
    the tool in the BHA, drive a ground stake near
    the rig, and begin receiving data

8
Operations
  • Directional Drilling Technology Mud Motors
  • High performance motors
  • New technologies
  • Hard rubber stators
  • Even wall power sections
  • Both designed to provide additional horsepower
    and torque capabilities to the drill bit
  • Current fleet size at 430 mud motors

9
Operations
  • Directional Drilling Activity
  • Canada
  • Market share varies between 14-18
  • Active in S.E. Saskatchewan market which is being
    driven by Bakken activity
  • Increased activity in British Columbia resource
    plays
  • Significant activity in under balanced market
  • Most activity is continuous programs
  • Push to move G3 EM MWD technology into new areas
    where it has not been offered previously
  • 20 of activity utilizing our Remote Drilling
    System

10
Operations
  • Directional Drilling Activity (contd)
  • U.S.
  • Market share nominal approximately 3-4
  • Activity primarily in the Rocky Mountain region
    with growing activity in North Dakota, Michigan,
    Oklahoma and Texas
  • 90 of activity is continuous with utilization
    rates that will approximate 80
  • Currently 33 systems 4 more systems to be added
    in balance of 2008
  • Establishment of Remote Drilling System

11
Operations
  • Production Testing
  • Provides personnel and equipment for all types of
    production testing activities including
  • Production flow tests to determine size and
    production of reservoirs
  • Deliverability of gas wells
  • Flowbacks after well stimulation (to flare or
    inline)
  • Vapor recovery during workover and abandonment
    operations
  • Focus on high-end testing market including
    critical sour service work

12
Operations
  • Production Testing (contd)
  • Canada
  • Currently has 20 high pressure production testing
    units
  • 3 additional units to be added in 2008 Q4
  • U.S.
  • Currently has 8 active production testing units
    with 4 additional units on order
  • Three year contracts
  • Additional demand from clients

13
Operations
  • Wireline Services
  • Provide cased hole logging and perforating,
    complete slickline services, casing integrity
    inspection logging and downhole camera services
  • Canada
  • 14 slickline units
  • 9 electric line (eline) units
  • Services provided in Western Canada from field
    locations in Red Deer, Whitecourt, Grande
    Prairie, Grande Cache, Vegreville, Drayton
    Valley, Calgary, Medicine Hat, and Provost
  • U.S.
  • 2 electric line units based in Casper, Wyoming
  • 3 electric line units based in Dickinson, North
    Dakota

14
(No Transcript)
15
Financial
16
Financial
EBITDAS per diluted unit
17
By Division
18

By Country
2007 Fiscal Year (millions)
19
Financial
(millions)
20
Outlook
  • Strong management and operations teams
  • Strong underlying business
  • Strong balance sheet
  • Net debt at end of 2008 Q3 9.9 million
  • State-of-art equipment/technology
  • Advancement in EM MWD capabilities - expand
    markets/increased market share
  • Remote access monitoring including use for
    vertical applications
  • Market Conditions
  • Oil prices current decline in price longer
    term fundamentals are positive
  • Gas prices current decline in price longer
    term fundamentals are positive
  • Storage levels are close to being in balance with
    the 5 year average
  • Reduced Canadian supply and year to date
    reduction in LNG supply

21
Outlook
  • Outlook (contd)
  • Growth
  • Will focus on expanding overall capacity
  • Expand U.S. bases and operations
  • Strategic acquisitions related to current
    business lines
  • International
  • Bidding on South America opportunities
  • Progress being made

22
Please visit us
  • www.cathedralenergyservices.com
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