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© 2016 Tesco Corporation. All rights reserved.© 2016 Tesco Corporation. All rights reserved.
March 23rd, 2016
The Global AlternativeHoward Weil Energy Conference
© 2016 Tesco Corporation. All rights reserved. 2
Forward Looking Statement
The presentation referred to above contains “forward-looking statements” within the meaning of the USPrivate Securities Litigation Reform Act of 1995. These statements include any statements that are nothistorical facts, such as our financial targets and other forecasts or expectations regarding businessoutlook; growth for Tesco Corporation as a whole and for each of its segments (and for specifiedproducts or geographic areas within each segment); oil and natural gas demand and production growth;oil and natural gas prices; improvements in operating procedures and technology; capital expendituresby Tesco Corporation and the oil and gas industry; the business strategies of Tesco Corporation’scustomers; future global economic conditions; Tesco Corporation’s stock repurchase program; dividendplans; and future results of operations. These statements are subject to risks and uncertainties,including, but not limited to, global economic conditions; changes in exploration and productionspending by Tesco Corporation’s customers and changes in the level of oil and natural gas explorationand development; Tesco Corporation’s future cash flows; general economic, political and businessconditions in key regions of the world, including in Russia; pricing erosion; weather and seasonalfactors; operational delays; production declines; changes in government regulations and regulatoryrequirements, including those related to offshore oil and gas exploration, chemicals, hydraulic fracturingservices and climate-related initiatives; the inability of technology to meet new challenges inexploration; and other risks and uncertainties detailed in our Forms 10-K, 10-Q, and 8-K filed with orfurnished to the Securities and Exchange Commission. If one or more of these or other risks oruncertainties materialize (or the consequences of such a development changes), or should underlyingassumptions prove incorrect, actual outcomes may vary materially from those reflected in our forward-looking statements. The forward-looking statements speak only as of the date of the presentation, andTesco Corporation disclaims any intention or obligation to update publicly or revise such statements,whether as a result of new information, future events or otherwise.
© 2016 Tesco Corporation. All rights reserved. 3
2 Businesses, 4 Offerings, 1 Platform
Tesco at a Glance
REVENUE ($M) TTM Q4 ‘15 by Segment
Total: $280M
Total: $280M
REVENUE ($M) TTM Q4 ‘15 by Geography
NASDAQ: TESO
Headquartered in Houston, Texas
Stock Price: $8.66 (as of 3/16/16)
Market Capitalization: $338 million
Business Segments: Tubular Services & Top Drive
1,300+ employees in 16 countries
Products$43
TD Rentals$64TD AMSS
$39
Tubular Services
$134
US$82
Canada$19Latin
America$85
Asia Pacific
$33
EMAE$48
Russia$13
© 2016 Tesco Corporation. All rights reserved. 4
Market Outlook
Competitor attrition driving
market share gains
Unsustainable pricing in North America / Additional international risk
New business models & technologies required
Q1 revenue expected to decline in line with market
Addressing “Deeper for Longer” Downturn
© 2016 Tesco Corporation. All rights reserved. 5
Addressing the Downturn
Headcount down 40% and payroll costs 60% from peak
$50M annual cost savings from restructuring
Closing entities in small markets while moving to 3rd party sales channels
Capex $3-5M w/ incremental linked to contract wins
$15-20M cash from working capital with opportunities from asset sales
Rationalization to Preserve and Generate Cash
© 2016 Tesco Corporation. All rights reserved. 6
Relative Performance
Managing Decrementals Through a Difficult Market
BAS
CRR
DRQ
FTK
GIFIGLF
HLX
PKD
NR
HP
PES
RES
SLCA
TS
TTI
SLB
HAL
BHI
WFT
NOV
CAM
CLBFI
SPN
OIS
HOS
NBR
PTENFET
KEG
TESO
0%
10%
20%
30%
40%
50%
60%
70%
80%
0% 10% 20% 30% 40% 50% 60% 70%
De
crem
enta
l EB
ITD
A I%
Revenue Decrease Change %
Decremental EBITDA v Revenue Change- Q3 14 vs. Q4 15
© 2016 Tesco Corporation. All rights reserved. 7
New Product Sales
• Manage for short lead-time intra-quarter orders
• Utilize global footprint for assembly
• Inventory drainage through targeted sales
Short Term Tactics
• Higher-torque TD models (EXI 800)
• Gen 2 Catwalks
• New pipe handling technologies (PDS & DSD)
Innovation
Long Term Strategy
• Integrated suite of automated pipe handling equipment
• Integrated rig controls with equipment
• Gain market share from added offerings
New Products
50%+ of ‘15 sales from recently developed
products (NT5)
New Products Target New & Upgrade Rig Markets
© 2016 Tesco Corporation. All rights reserved. 8
Automating Every Rig
Land Rig Automation
© 2016 Tesco Corporation. All rights reserved. 9
After Market Sales & Service
• Streamline global footprint & increase 3rd-party market channels
• Commercialize phase 1 ARC
• Inventory drainage through better supply chain management
Short Term Tactics
• Position ARC as an integrated drilling performance platform
• ARC Phase 2 & rig controls
• Continued EHM integration
Innovation
Long Term Strategy
• Expand 3rd-party to include all rig floor and pipe handling products
• Higher share of 3rd-party TD and other pipe handling products
• Technical/Drilling support
AMSS
ARC works on most TD models & provides
high ROIC
ARC is Our Entry Into Rig Controls
© 2016 Tesco Corporation. All rights reserved. 10
Rentals
• Improve utilization from fleet sales
• Greater use of 3rd-party market channels
• Increased use of EHM for man-less rentals
Short Term Tactics
• Add new pipe handling products to rental fleet
• Increased use of rental units for AMSS swing units
• Achieve overall 50-60% utilization
Long Term Strategy
Fleet Size
RENTALS
Targeted Downsizing of Rental Fleet
80
100
120
140
Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Target
TD Rental Fleet Size (Q2 14 to Target)
Rental TD Target
© 2016 Tesco Corporation. All rights reserved. 11
Tubular Services - Land
• Gain share in critical mass markets
• Increase of use of 3rd party channels in small markets
• Additional customer trials of Evolution Model
Short Term Tactics
• Side Entry Cement Swivel & Multi-Plug Launcher
• Compact CDS (“CCDS”)
• Testtork sub with interlock functionality
Innovation
Long Term Strategy
• Greater integration with/into rig contractor operations
• Higher focus on automated-only offering
• Greater adoption of technology through product sales
TS Land
Converting the Market to Automated Technology
New products complete automated
offering
© 2016 Tesco Corporation. All rights reserved. 12
Land Evolution Model
Tesco’s Current Proposition
© 2016 Tesco Corporation. All rights reserved. 13
Tubular Services - Offshore
• Focus on market share in core markets
• Manage short term costs in strategic start-up markets
• Maximize utilization of current assets
Short Term Tactics
• Fully automated rig floor
• Different pricing strategies (i.e. fixed monthly fees)
• Scoping / bundling equipment & personnel
Innovation
Long Term Strategy
• Achieve critical mass in chosen markets
• Monetize other int. locations through 3rd-party channels
• Rationalize equipment baskets & utilization
TS Offshore
Using Innovation to Differentiate
© 2016 Tesco Corporation. All rights reserved. 14
Offshore Tubular Services Market Share
Targeted Markets: GOM (US &
Mexico), Malaysia and North Sea
Customers want an alternative
Impeccable track record
Customized value proposition
Tesco TS Offshore Revenue VS Rig Count
• Since 4Q14 TS Offshore revenue declining ~34% vs segmented rig count decline of ~43%, which implies market share gains
Gaining Market Share in a Challenging Market
$10.0 $9.8
$8.7
$7.4
$6.6
137
124
99
83
78
70
80
90
100
110
120
130
140
150
$6.0
$6.5
$7.0
$7.5
$8.0
$8.5
$9.0
$9.5
$10.0
$10.5
4Q14 1Q15 2Q15 3Q15 4Q15
BH
I W
orl
d O
ffsh
ore
Rig
Co
un
t
Rev
en
ue (
$ i
n M
)
TS Rev Offshore TESO Key Markets Rig Count
© 2016 Tesco Corporation. All rights reserved. 15
Conservative Balance Sheet
• $51.5M in cash at Year End
• No outstanding debt
• Dividend suspension adds ~$8M in annual cash flow
• Credit facility Under temporary waiver to cover Letters-of-Credit
No current borrowing capacity
Focused on Liquidity
© 2016 Tesco Corporation. All rights reserved. 16
Conclusion
Addressing the downturn
Focused on liquidity
Strategy is happening
Positioning for recovery
Tesco IS the Drilling Innovation Company
© 2016 Tesco Corporation. All rights reserved.© 2016 Tesco Corporation. All rights reserved.
The Global Alternative