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Deutsche Bank high yield conference

September 2015

KCA Deutag

Private & Confidential – Not for Onward Distribution

Disclaimer

2

This presentation has been prepared by KCA Deutag Alpha Limited (the “Company”). No reliance may be placed for any purposes whatsoever on the

information contained in this presentation or on its completeness. Although care has been taken to ensure that the facts stated in this presentation are

accurate, and that the opinions expressed are fair and reasonable, the contents of this presentation have not been subject to any independent audit or review

or been verified by the Company or its advisers. Accordingly, neither the Company, nor affiliated partnerships or bodies corporate, nor any of the Company's

advisers, nor the directors, shareholders, managers, partners, employees or agents of any of them, makes any representation or warranty, express or implied,

as to the accuracy, reasonableness or completeness of the information contained herein. All such parties and entities expressly disclaim any and all liability for,

or based on or relating to any such information contained in, or errors in or omissions from, this presentation or based on or relating to the use of the

presentation or otherwise arising in connection with it.

This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire any

securities or an inducement to enter into investment activity. No part of this document, nor the fact of its distribution, should form the basis of, or be relied on in

connection with, any contract or commitment or investment decision whatsoever.

This presentation may include certain forward-looking statements, estimates, predictions, influences and projections with respect to anticipated future

performance and as to the market for products or services which may reflect various assumptions made by the management of the Company. These

assumptions may or may not prove to be correct and no representation is made as to the accuracy of such statements, estimates, predictions, influences and

projections. These statements and forecasts involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the

future. Accordingly, forward-looking statements are not guarantees of future performance and actual results of operations, financial condition and liquidity and

the development of the industry in which it operates which may differ materially from those made in or suggested by the forward-looking statements in this

presentation. Furthermore, the information and opinions contained in this presentation are subject to change without notice and the Company and its adviser

assumes no responsibility or obligation to update this presentation or any of the forward-looking statements contained herein.

The information contained within the accompanying presentation is confidential and must not be disclosed to any third party without the prior written consent of

the Company. The unauthorised disclosure of this presentation or any information contained in or relating to it could damage the interests of the Company

and/or its affiliates and advisers and have serious consequences.

The information contained in this document is provided as at the date of this document and is subject to change without notice.

This presentation contains non-IFRS measures and ratios that are not required by, or presented in accordance with, IFRS. The Company presents non-IFRS

measures because it believes that they and similar measures are widely used by certain investors, analysts and other interested parties as supplemental

measures of performance and liquidity. The non-IFRS measures may not be comparable to other similarly titled measures of other companies and have

limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of the operating result as reported under IFRS. Non-IFRS

measures and ratios are not measurements of the Company's performance or liquidity under IFRS and should not be considered as alternatives to profit for the

year or any other performance measures derived in accordance with IFRS or any other generally accepted accounting principles or as alternatives to cash flow

from operating, investing or financing activities.


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Company Overview 1



Integrated Land Drilling Offshore Drilling Services & Design

US$181m EBITDA (56% of total)¹ US$122m EBITDA (37% of total)¹

Land Drilling Bentec Platform Services Rig Design Services (RDS)

• Leading international

premium drilling rig owner

and operator

• Design and manufacture of

high-end premium land rigs and

components

• Leading global platform drilling

service operator outside North

America

• Rig design engineering from

concept to commission

• Operations: Russia, Africa,

Middle East, Europe and SE

Asia

• Facilities: Germany, Russia,

Oman

• Operations: UK North Sea,

Norway, Azerbaijan, Russia, SE

Asia and Africa

• Offices: Aberdeen, Baku,

Bergen, Houston, London, St.

Johns

Market-leading international drilling & engineering company

4

Design &

Engineering

Design &

Manufacture Own & Operate Manage

• Rigs: High end fleet of

53 drilling rigs, 2

workover rigs

• 96% of new rigs since

2007 have been built by

Bentec

• Facilities: Capacity for

12-16 rigs and 50 top

drives2 p.a.

• Staff: c.3,000 managing

drilling operations on 41

platforms

• Approx. 60% of

platforms designed or

refurbished by RDS

• Staff: c.400 engineers

and support staff

¹ LTM EBITDA, % split of total including MODUs, before corporate costs/ other of $38.4m. Note: MODUs LTM EBITDA $22.1m represented 6.8% of total EBITDA before corporate costs 2 High-specification mechanical equipment turning the drill string

Houston

Ben Loyal jack-up rig

Baku

London

Stavanger

Bad

Bentheim

Tyumen

Nizwa

Ben Rinnes jack-up rig

St.

Johns

Bergen

Dubai

Land Drilling Platform Services RDS offices MODUs Bentec Regional offices

Operating across a balanced and diverse range of countries

Aberdeen (HQ)

Map excludes work over land rigs, defined as being below 900HP

Years of operation in key markets

North Sea

/Norway

27 Plat.

Europe &

Caspian

7 Rigs

7 Caspian

Plat.

Russia

17 Rigs

Middle

East

14 Rigs

Angola

3 Plat.

Africa

14 Rigs

Russia

Sakhalin

3 Plat.

Brunei

1 Rig

Myanmar

1 Plat.

127

56 51 41

16

0

30

60

90

120

150

Europe NorthAfrica

MiddleEast

North Sea Russia

Ye

ars

5 Private & Confidential – Not for Onward Distribution

LTM Q2 2015 EBITDA split by region

6

¹ c.25% of the revenues are generated from Shell, BP & Statoil

Diversified long-term customer base predominantly with IOCs and NOCs

Key customers by division Customer diversification – LTM Q2 2015


Integrated

Land Drilling

Offshore Drilling

Services &

Design

c.25% of revenue¹

High-quality customer base

Others

IOC

IOC

IOC

NOC

NOC

NOC

NOC

NOC

IOC

NOC

http://www.daewoo.com/english


Operating in markets less impacted by the oil price reduction

7

KCAD relevance Themes

Source: Marginal production costs: Knoema, Rig count: Baker Hughes

Focused on

production

drilling in

resilient markets

• KCAD operates in many drilling

environments with lower lifting

costs

• Oil revenues are often critical to

government budgets in these

markets

• The Platforms business is

working on production platforms

where the majority of the capex

has already been invested (opex

focus)

Supporting data

Strong

international

land drilling

environment

• KCAD has no exposure to the US

market, where rig count levels are

much more volatile and the

market is generally more

commoditised

Private & Confidential – Not for Onward Distribution 8

Historical total recordable incident rate (TRIR)

KCAD HSE statistics vs IADC (Q2 2015)

Source: International Association of Drilling Contractors (IADC) Note: TRIR stands for Total Recordable Incident Rate (per 200,000 man hours); LTIR stands for Lost Time Incident

Rate. 1 Total Recordable Incident Rate is directly comparable with IADC’s Total Recordables (RCRD) statistic

• KCAD has achieved its best ever safety results

over the last 12 months

• The group has consistently performed ahead of

industry peers in the International Association of

Drilling Contractors (IADC)

• Maintaining high safety and operational standards

is a key priority for the business

• Even in today’s market this is still a key

differentiator for customers when selecting a

partner for operations in challenging environments

Strong industry track-record of excellent HSE performance

Company’s backlog1 ($m) including options

9

Comments

1 Backlog is our estimate of potential future revenue under undisputed contracts (including extension options) between the Company and its customers. The backlog amounts in this presentation

are our estimates as of 1-Aug-2015. Our backlog may change over time depending on any early cancellation of contracts, failure to exercise customer extension options, changes to the scope of

work and changes to the applicable day rate

• Current total backlog of $7.6bn1 including options

• Only 4 contracts terminated earlier than expected since H1

2014 across core divisions with the total lost revenue of $24m

(0.3% of total backlog)

Platform Services

• Long term contracts – typically 3-5 years and up to 10 years with

options

• High cost / inconvenience attached to switching operators on

existing platforms

• 3 platforms in the North Sea have been stacked in the last 12

months but we continue work with a reduced crew

Land Drilling

• International markets characterised by longer term contracts,

often 1-3 years and sometimes longer

• As an example the contracts for the Khazzan project in Oman

are 5 years plus options

Bentec

• Bolstered by good order intake in H1 2015

• Challenge remains to fill the pipeline for 2016 with current

tendering activity

High level of forward earnings visibility, with $7.6bn backlog


Land Drilling 211 500 1,167 1,877

Bentec 86 25 0 111

Platform Services 204 481 4,730 5,416

RDS 35 20 0 56

MODUs 26 56 84 166

Total 562 1,082 5,981 7,625

of which options 9 305 4,311 4,625

2015 2016 2017+ Total

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Source: Company information


Robust platform services contract backlog

11

• Significant investment in the land rig fleet over

recent years

• All are high specification rigs built for the premium

land drilling market

• New build rig construction is only initiated based on

signed long term contracts

• Land business utilisation continues to hold up well in

the current environment

• Although it has decreased from a peak in H2 2013,

it has been relatively stable in recent months

• We are seeing good activity levels in Russia, Oman

and Algeria

• Nigeria and Europe are weaker areas where we are

experiencing softer utilisation than elsewhere in our

portfolio


Rejuvenation of the land rig fleet

Well invested land fleet supporting utilisation

12

Current new build program approaching completion

Rig Country Cost ($m)1 Contract length Status

Rig 1 Oman c.31 5yrs + 3x1yr options Operating



Rig 4 Russia c.30 3yrs + 3x1yr options Operating

Rig 5 Brunei c.37 3yrs + 3x1yr options In construction

Rig 6 Russia c.29 3yrs Operating

Rig 7 Oman c.31 5yrs + 3x1yr options In construction

Rig 8 Oman c.31 5yrs + 3x1yr options In construction

New build land rigs schedule

New build land rig contracts

• All ongoing capex projects were initiated in 2014 and are

supported by long term contracts

• Up front contributions of $40m received from clients

• The 2015 growth capex plan is almost complete, with no new

growth capex commitments currently proposed

• Maintenance capex spend for 2015 $80m - $85m

Construction Operational

All new build capital expenditure is targeted at a minimum 18% IRR

• Total 2015 capex spend on ongoing new build construction

projects c.$130m

• Remaining capex spend in H2 2015 c.$54m

• All contracts remain in place without any re-negotiation of

terms

PO

Rig R'cd Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

1 2014

2 2014

3 2014

4 2014

5 2014

6 2014

7 2014

8 2014

20152014

1 Excludes cost of mobilisation given this is reimbursed by client


Significant cost saving initiatives being implemented

13

1. A drive to reduce staff costs and discretionary spending which has

delivered significant savings

a) Salary reduction and salary freezes across the business

b) c.250 redundancies worldwide in overhead positions

c) Significant reduction in discretionary spending

2. Reducing costs in supply chain delivered through a companywide

initiative across all operations and business units

3. Significant senior management focus on working capital and the

full delivery of the various cost reduction initiatives

a) Bi-weekly 13 week cash forecasting process

b) Monthly BU review meetings with KPI & forecasting updates


Private & Confidential – Not for Onward Distribution 14

Senior management Comments

• Current consortium of investors acquired KCA Deutag in March 2011

• Shareholders have demonstrated continued support to our growth and

success, more than $650m total cash investment to date to support the

business and fund growth capex

• Of this, $50m was received in Q1 2015 as part of a $100m commitment.

$50m remains undrawn

• Management have made personal equity investments in the business

¹ Including management

Name, Title Biography

Norrie McKay

CEO

• 34 years in the Oil & Gas industry

• Joined KCAD in 2011 as Chairman, CEO in May 2012

• With Schlumberger / Smith International for 26 years

internationally

Neil Gilchrist

CFO

• 20+ years of international finance experience with

LyondellBasell

• Joined KCAD as CFO in January 2013

• Graduated with degree in Accountancy and Economics

• Qualified as Chartered Accountant with Price

Waterhouse

Name Title Division Experience

Simon Drew President Land Drilling 18 years

Rune Lorentzen President Offshore 36 years

Dirk Schulze CEO Bentec 19 years

Jack Winton SVP Operations 21 years

Shareholder structure

Others1

Experienced management team supported by committed shareholders

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Financials 2


Business Unit Performance

16

• Land

• Strong results from markets focussed on maintaining

market share by maximising production

• Weaker results in others where margins are key

• New build start ups ramping up contribution

• Platforms

• Platform drilling has remained robust

• Worked closely with clients to introduce cost saving

and efficiency initiatives

• Sales and rental activity reduced in Norway

• RDS

• This is the business most significantly impacted due

to reduced capex spend by oil majors

• Significant reductions in headcount implemented to

counteract the reduced revenue levels

• Bentec

• Well ahead of the prior year although this is mainly

due to the timing of EBITDA recognition

• Tendering activity continues to secure 2016 capacity

• MODU’s

• Reduced to 2 Jack-Ups following the sale of the self-

erecting tender barges at the end of last year

• Ben Rinnes continues to operate offshore Angola

• Ben Loyal is currently working under a short-term

contract extension at a reduced day rate offshore

Mexico


Group Results Financial Performance to 30 June 2015

17

Revenue and EBITDA ($m) Q2 2015

YTD

$m

Q2 2014

YTD

$m

Revenue from business units 949.8 1,099.2

Eliminations (75.5) (44.5)

Total revenue 874.3 1,054.7

EBITDA from business units 155.2 182.8

Eliminations (1.3) (1.1)

Corporate costs/other (9.9) (11.8)

Exchange (2.7) (0.1)

Total EBITDA 141.3 169.8


Debt maturity profile ($m)

Capital Structure As at 30 June 2015

18

Net debt / LTM EBITDA Available Liquidity

19

Closing remarks: KCA Deutag summary


Unique provider of end to end expertise across the drilling sector

Focused on production drilling in markets with low lifting costs

Integrated land and offshore drilling operations

All four core business units recognised by the global oil majors as leading providers in their sector

Operating across a diverse range of geographies and markets with a blue chip customer base

Significant cost reductions being quickly implemented

Total EBITDA of $141m for H1 2015 and a strong backlog position of $7.6bn

Results benefiting from completion of the shareholder backed new build programme

1. Market leading international drilling and engineering company

3. Well positioned to respond to the challenging market environment

2. Robust operational and financial performance

Experienced management team supported by committed shareholders

20

Q & A [email protected]


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