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COSL 2002 Results: Strong Growth and Financial Milestones

Discover the financial highlights of China Oilfield Services Limited in 2002, including revenue and net income increases, successful IPO, cost structure analysis, and segment performance.

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COSL 2002 Results: Strong Growth and Financial Milestones

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  1. China OilfieldServices Limited 2 April 2003 2002 Results Announcement

  2. Overview

  3. 2002 - A Landmark Year for COSL • IPO in November 2002 • COSL shares were successfully listed on the Main Board of HKSE, raising net proceeds of US$286 million • Strong growth across all business segments in 2002 • Revenue: ~ 15% increase • Net Income: ~ 30% increase • EBITDA Margin: 39%

  4. Summary Results (RMB mn except per share data)

  5. 2001-2002Growth 2,726 2,366 26% 2,178 1,662 26% 13% 8% Drilling Well Services Marine Support & Transportation Geophysical Growth by Segments Overall Revenue CAGR of 18% Revenue by Segment • Key drivers of 2002 revenue growth • 7 vessels purchased for Marine Support and Transportation • Higher day rates were achieved for both the vessels and jack-up rigs • Strong demand for Well Services • Turn-around of Geophysical Services

  6. Cost Components As % of Total Operating Expenses Depreciation of property, plant and equipment Consumption of supplies, materials, fuel, services and others Employee compensation costs Other SG&A and others (1) Repair and maintenance costs Cost Structure % of Revenue 96% 83% 86% 82% (1) Includes other operating expenses, provision for impairment of long term investments, and provision for impairment of property, plant and equipment

  7. Overall EBITDA CAGR of 28% 2001-2002 Growth 1,072 101% 827 792 57% 513 36% 19% Drilling Well Services Marine Support & Transportation Geophysical EBITDA Performance EBITDA Margin EBITDA YoY Growth 61% 4% 35% • EBITDA margin consistently higher than 30%, 2002 had a record high of 39% • In 2002, Marine Support & Transportation and Well Services are the key growth drivers • Turn-around of Geophysical Services also contributed to the EBITDA margin growth • Continuous improvement of EBITDA profitability due to cost control and margin expansion

  8. Drilling Well Services Marine Support & Transportation Geophysical Operating Profit Performance Operating Profit Margin Operating Profit by Segment Operating Profit YoY Growth 393% 4% 38% • Improved operating profits and margins in 2002 as a result of stronger contribution of Marine Support & Transportation and Geophysical segments

  9. Improving Net Income Overall Net Income CAGR of 59% from 1999 to 2002 YoY growth = 30%

  10. Balance Sheet In RMB Million

  11. Segment Analysis

  12. A. Drilling

  13. Drilling Revenues Drilling Turnover YoY growth = 8% 1,064 985 906 644 Note: 2003 drilling revenue includes all well workover revenues Total drilling revenue increased 8% from 2001

  14. Summary Drilling Activity Summary Drilling Activity Well Workover Trends Number of wells drilled correlates to the development cycle. Well workover volume continues to increase as production activity increases

  15. Utilization Rates COSL Global WTI Jackup Utilization WTI (US$/bbl) Semi Utilization WTI (US$/bbl) SE Asia Utilization and Day Rates Comparative Day Rates (US$/day) COSL GOM West Africa Source: COSL, ODC (utilization based on days available) Source: COSL, ODC (Jackup day rates for 300’ rigs) Strong domestic demand and international deployment continue to drive up our average day rates, utilization continue to surpass international peers

  16. BH IV BH IX Rig Fleet Location BH VIII Beijing Offshore China 0 100 200 300 km Tianjin Korea BH V BH X NH I Qingdao BH XII BH VII China Shanghai Fuzhou • Primary focus in South China Sea and Bohai Bay • International deployment began in 2002 • Offshore Nigeria (Feb 2002) • Offshore Indonesia (Oct 2002) Xiamen Guangzhou NH IV Hong Kong NH VI NH II NH V Philippines As of Dec 31, 2002

  17. B. Well Services

  18. Well Services Revenues Well Services Revenues YoY growth = 13% Total well services revenue expanded 13% in 2002

  19. 13% 14% 21% 13% 4% 11% Well Services Revenue Breakdown 2001 vs. 2002 Well Services Revenue Components YoY Growth Well services experienced robust growth across most of the segments due to increased exploration, development, and production activity

  20. C. Marine Support and Transportation

  21. Marine Support & Transportation Revenues YoY growth = 26% Marine Support & Transportation Revenues • Consistent revenue growth driven by strong demand offshore China • Higher day rates for vessels • Higher working days supported by enlarged fleet capacity

  22. Growth of Our Fleet 22.4% growth since 1997 Our fleet has been growing to meet increased demandin offshore China

  23. Higher and More Stable Utilization Compared to Global Peers Calendar Day Utilization Rate Availability Utilization Rate Note:Trico Marine and Seacor Smit calculate their respective utilization rates based on calendar day utilization methodology; Tidewaterand Gulfmark calculate their respective utilization rates based on availability utilization methodology. Tidewater, Seacor Smit, and Gulfmark 02 utilization rate is the average for the 9 months ended Sep 30, 2002

  24. D. Geophysical

  25. Geophysical Revenues Geophysical Revenues YoY growth = 26% Geophysical revenue increased by 26% in 2002

  26. 2003 Outlook

  27. Characteristics of Development Wells • Subject to development schedules rather than exploration uncertainties • Number of wells required varies by region – greater in Bohai Bay • Development well programs typically lead to more stable and predictable demand for various oilfield services Bohai Bay • BZ 25-1 • CFD 11-1/2 • PL 19-3 • BN fields Eastern South China Sea • PY 4-2/5-1 • HZ 19-3/2 Western South China Sea • WZ 12-1N • DF 1-1 East China Sea • Pinghu • Xihu Exploration Wells Development Wells Substantial Higher Drilling Activities Expected 160+ 161 66 134 117 56 31 57 40 - 50 34 27 26 25 24 1997 1998 1999 2000 2001 2002 2003E Source: Company

  28. Planned Capital Expenditures 2003 Planned Capital Expenditures • Alternatives for drilling capacity expansion: • Seek second-hand rigs in 2003 • Build rigs domestically • Upgrade current fleet • 2003 work plans could be met by: • Improved operating efficiency • Rescheduling work plans with operators to minimize idle days for rigs • Upgrade jack-up rigs to accommodate broader scope of drilling environment (in RMB mm) Drilling and Marine Support & Transportation segments will continueto account for the majority of our future capital expenditures

  29. Winning Strategy Strengths • High growth domestic market • The dominant oilfield service provider for offshore China • Competitive cost structure • Leading technical capabilities Expand operating capacity Selectively pursue international opportunities Realize increasingmargins Strengthen and expand customer relationship Further integrate service lines Increase technical capabilities COSL – Dominant Oilfield Service Provider Offshore China Realize growth opportunities and deliver shareholder value

  30. THANK YOUwww.cosl.com.cn

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