Interim Report Q2 – 2015

Company announcement no.8/2015:In the second quarter of 2015, Welltec’s revenues stabilized at the first quarter level as industry fundamentals continued to be challenging. The stabilization was driven by growth across select geomarkets coupled with penetration of new clients, partly offset by the negative impact from the continued industry downturn.

EBITDA increased sequentially as a result of proactive decisions to adjust the global organization to the prevailing demand levels. Welltec® continuously aligns its spend in order to ensure margins and cash flow resilience ensuring adequate financial flexibility through challenging times.

In the second quarter, the solid operating cash flow was driven by the sequential margin improvement combined with strict working capital management. Furthermore, balanced investment levels coupled with the disbursement of the EIB loan paved the way for a significant increase in cash and cash equivalents.

CONTACT

Michael Krabbe, Chief Financial Officer,
Cell: +45 3034 3000
Simon Stadil, Director, Treasury and Investor Relations
Cell: +45 5213 8944

Outlook

Despite the continued challenging market backdrop and limited visibility, Welltec® expects stabilization towards the latter part of the year with performance in H2 expected to be around the same level as H1 in terms of revenue and EBITDA margin.

Jørgen Hallundbæk, CEO: “As expected, our second quarter reflects the prevailing industry dynamics as operators continue to adjust their activities amid the industry downturn. The prolonged uncertainty coupled with weak supply and demand fundamentals underpins the importance of promoting production optimization in order to improve corporate cash flows and enhance return on investment. Moreover, the industry needs to adapt to the low oil price environment by rethinking their operational setup and implement new game changing technologies.

We continue to develop and deliver our industry leading technology to our clients, allowing them to reduce capex and cost, without jeopardizing safety. This was demonstrated in the second quarter as we saw clients adopting our complementary completion and intervention technology, benefiting from reduced lifting cost, ultimately improving financial performance in this low oil price environment.”

Investor conference call
Welltec® will discuss its results during an investor conference call today at 5 pm CET. An accompanying slide presentation is available on the “Investor” section of Welltec’s website at www.welltec.com under the subheading “Download Center”. The conference call can be accessed by dialing in a few minutes before the 5 pm CET start and informing the operator that you are dialing in for Welltec’s investor conference call, ID 4646971.

Conference Call Access Numbers:
Denmark: +45 3271 1659
United Kingdom: +44 (0)20 3427 1914
USA: +1 646 254 3362

The call will be webcast simultaneously and available online following today’s live transmission.

Company Profile

Welltec® is a leading provider of intervention and completion solutions to the oil and gas industry. Our pioneering technology challenges conventions to increase recovery in a safer and more sustainable way, enabling operators to optimize the management and development of their assets throughout the life cycle.

We address the factors that maximize value creation, disruptively innovating to increase reservoir contact over an extended life cycle, in a fraction of the time, energy and logistical effort of the conventional alternatives. The effect is one of increased net present value through higher returns and reduced risks. Our Flex-Well® approach serves to maximize production and increase total recovery while lowering operational and total development costs. Our game-changing solutions extend the productive life of wells and enable clients to pursue fields that would not otherwise be economically viable.

Our unique approach provides for safer operations, removing considerable infrastructure costs and operational effort. Our lightweight technology lowers the complexity and hazard potential of operations, reducing the risk to personnel and allowing smaller work crews, fewer lifts and lighter loads. We reduce dependency on rigs, significantly reducing the industry’s energy consumption and carbon emissions. The ability to operate in extended reach and horizontal wells allows operators to drill multiple wells from the same topside location, thereby further reducing the environmental footprint.

Our technology created the market for robotic well intervention and continued market leadership is the result of constant innovation, rigorous IP protection and a commitment to completely addressing our clients’ challenges. Our completion concept represents the next paradigm shift for the industry, with a simple yet revolutionary approach that allows operators to tap into the full value of their reservoirs at a much lower level of invested capital and with an unprecedented degree of flexibility. As an example, the simple application of expandable metallic well annual barriers (WAB®) overcomes the traditional shortfalls of cementing to enable a lower completion as minimal or intricate as the reservoir characterization itself. Fields can be developed and maintained from fewer topside locations and brought on line faster, for longer.

In an industry characterized by maturing fields and increasing depletion, the premium attached to technology which aids in reversing these trends will continue to gain momentum. Our technology safeguards people and returns on investment, enabling clients to unlock more value from their assets and to address reservoir complexities and uncertainties with a greater number of options.

Important Notices

Any statement in this announcement that is not a historical fact is a “forward-looking statement”. Such statements may include opinions and expectations regarding Welltec® and its future business, management’s confidence and strategies as well as details of management’s expectations of new and existing programs, technology and market conditions. These forward-looking statements rely on assumptions concerning future events that are subject to a number of risks and uncertainties, many of which are outside Welltec’s control, and which could cause Welltec’s actual results to be materially different from these forward-looking statements. While Welltec® believes that its assumptions concerning future events are reasonable; there are inherent difficulties in predicting certain important factors that could impact the future performance or results of Welltec’s business. Accordingly, such statements should not be regarded as representations as to whether such anticipated events will occur nor that expected objectives will be achieved. Welltec® expressly disclaims any intention or obligation to revise or update any forward-looking statements, whether as a result of new information, future events, or otherwise.


Q2-2015 Report and Investor Conference Call announcement

Company announcement no.7/2015: Welltec® will disclose its interim quarterly financial report for Q2-2015 on Thursday, August 20, 2015 and will discuss the results during an investor conference call at 5pm CET.

CONTACT

Michael Krabbe, Acting CFO,
Cell: +45 3034 3000
Simon Stadil, Director, Treasury and Investor Relations
Cell: +45 5213 8944

An accompanying slide presentation will be available on the “Investor” section of Welltec’s website at www.welltec.com under the subheading “Download Center”.

The conference call can be accessed by dialing in a few minutes before the start and informing the operator that you would like to participate in Welltec’s investor conference call, conference ID 4646971.

The conference call will also be webcast simultaneously on a listen-only basis. Please log in via the “Investor” section of the website in due time to test your browser. A replay of the webcast will then be available following the transmission.

Conference Call Access Numbers:
Denmark: +45 3271 1659
United Kingdom: +44(0)20 3427 1914
USA: +1646 254 3362

Company Profile

Welltec® develops and delivers technology and solutions intended to transform the oil and gas industry. Our game-changing solutions are dedicated to optimizing the management and development of clients’ assets, both in the form of well completion technology and intervention services required to ensure performance and integrity. We operate in all types of onshore and offshore well environments, including the most extreme and hostile, such as deepwater, subsea, extended reach, heavy oil and unconventional gas and oil wells. Our lightweight solutions are based on a vision to improve safety while reducing environmental risks, fuel consumption and carbon footprints.


Welltec Announces Payment of Interest

31 July 2015
Company announcement no. 6/2015

Pursuant to the Rules and Regulations of the Luxembourg Stock Exchange (edition 2012/07), section 903 and section 904(vi) it is noted that Welltec A/S has paid interest on the bonds per 31 July 2015.

CONTACT

Michael Krabbe, Acting CFO
+(45)-3034-3000

About Welltec
Welltec is a leading provider of well intervention services to the oil and gas industry using robotic technology. We are also expanding into well completion products and solutions. Our services and solutions enhance well production performance and increase the amount of recoverable oil and gas reserves in reservoirs. We provide our services and solutions for onshore and offshore oil and gas wells and operate in deepwater, subsea, Arctic, high-yield, heavy oil, geothermal and unconventional environments as well as conventional environments. We operate in all hydrocarbon producing areas and had in 2014 and average of 1,013 dedicated employees across 29 countries. For the twelve months ended December 31, 2014, we had revenues and EBITDA of approximately USD 345 million and USD 155 million, respectively.


Well Cleaner® Maintains High Rate Gas Production Offshore Without a Rig

Offshore UK in the North Sea, a high rate gas producer could not actuate the downhole safety valve (DHSV) due to scale build-up. Welltec carefully planned and mobilized to the platform with the right equipment and procedures to rectify the problem based on prior, practical experience in solving this type of challenge.

CONTACT

VP Marketing
Brian Sidle
bsidle@welltec.com

Without the need for a rig, the e-line was rapidly rigged up on a mast unit and used to deploy the toolstring. On the first run into the well, the Well Miller® ran a special bit which cut through multiple bridges of sodium bromide scale encountered above the DHSV. This was followed by a run with the Well Cleaner® WBH (Wishbone Honer) which cleaned the internal profiles of the upper, sealing portion of the DHSV, removing the residual scale deposits and restoring full functionality.

The DHSV remains in the open position while the well is flowing. If scale deposits form, they frequently can occur across the sealing portion of the DHSV, preventing it from sealing completely when shifted to the closed position.

‘This was a “must do” job for the customer,’ says Nelo Aracena, BDM for Welltec, UK. ‘Value for the client was very high due to the lack of functionality of the safety valve which was not able to be operated.’

Following the successful scale clean-out the client commented ‘Overall the job went very well…, everything was a success.’ ‘In the end, we went out and did what we do for a living; fixing wells,’ summarizes Aracena.

Welltec® is the world’s largest provider of e-line intervention solutions, including the Well Tractor® and a full portfolio of innovative technology for milling, clean-out and mechanical solutions.


Well Design For Today: Welltec® event puts spotlight on innovation in completions market

Advanced wells solutions took centre stage at a successful showcase event hosted by Welltec®, the company challenging the low oil price through innovation.

CONTACT

Area Vice President, UK
Kevin Giles
+44 7837 094788

Senior well operations personnel from a range of offshore operators and contractors took the opportunity to hear more about Welltec’s portfolio of award-winning technologies – and also to discuss wider well design issues in the modern industry.

The Well Design for Today event placed the spotlight on the market specialist’s latest completions solution, Flex-Well®, which cuts construction costs, tackles production issues, increases total recovery and allows for easier plug and abandonment.

It also featured the Welltec® Annular Barrier (WAB®), winner of the 2015 OTC Spotlight on New Technology Award. The WAB® is designed to drive the sector forward in a safer and more sustainable fashion by eliminating cement from well construction.

Kevin Giles, Welltec® Area Vice-President UK, said: “The Well Design For Today event highlighted why our business has an established reputation for introducing innovative solutions. Specifically, it illustrated how we can contribute to client strategies formulated to address the prevailing industry conditions.

“The current focus is on finding ways to work more efficiently, while trying to maintain productivity and sustainable operations. That’s where our solutions come into their own.”

Other technologies featured at the gathering at Aberdeen’s Norwood Hall Hotel included Welltec® Flow Valves (WFV) which, in various configurations, allows for simple manipulation of reservoir injection / production without the need for control lines. Furthermore, the Welltec® Data Monitoring (WDM) technology enhances the ‘smart but simple’ approach to optimising reservoir performance in an efficient, accurate and cost-effective solution.

Established 21 years ago, Welltec® has operations in 59 countries. The company’s solutions are used across all types of onshore and offshore environments including deepwater, subsea and extended reach, high-yield, heavy oil and unconventional gas well programmes.


Interim Report Q1 – 2015

Company announcement no.5/2015: Welltec’s revenues reduced in the first quarter of 2015 as market activity contracted sharply in response to the lower oil price. This overshadowed growth in some geomarkets and the decline in revenue was accentuated by strong currency headwinds. EBITDA reduced accordingly, with margin impacted by lower levels of utilization and increased redeployment of fleet and personnel to match the local demand. Proactive cost management and working capital discipline allowed for improved cash flows in the period.

CONTACT

Michael Krabbe, Acting CFO,
Cell: +45 3034 3000
Simon Stadil, Director, Treasury and Investor Relations
Cell: +45 5213 8944

  • Revenues of USD 68 million were 14% lower compared to the same period last year. On an adjusted currency basis revenues were 7% lower.
    • In Europe, Middle East, Africa and Russia CIS (EMEAR), revenues decreased by 22% to USD 33 million
    • Revenues in the Americas fell 8% to USD 25 million
    • Asia Pacific revenues were level at USD 10 million
  • Welltec® posted a 27% decrease in EBITDA to USD 26 million, representing an EBITDA margin of 38% (44% in Q1 2014)
  • Operating profit (EBIT) before special items decreased to USD 11 million (USD 17 million in Q1 2014)
  • Currency fluctuations impacted revenue negatively by USD 6 million and EBITDA negatively by USD 1 million
  • Due to the current environment and significant uncertainty prevailing in the market, Welltec® remains unable to offer a qualified guidance for the full year 2015.

 

Jørgen Hallundbæk, CEO: “As expected, the first quarter was tough for the oilfield service industry as many operators scaled back activity and delayed investments, creating a vacuum as they decide on how best to sustain production and adjust operations in the low oil price environment. Our complementary completion and intervention technology provides the perfect solution. Clients that have fully embraced our approach are already benefitting, proactively intervening for barrels at a much lower cost and risk to improve their cash flows and return on investments. The prevailing market is difficult, however, and we will continue to push the adoption of new technology to meet the industry challenges.”

Investor conference call
Welltec® will discuss its results during an investor conference call today at 5 pm CET. An accompanying slide presentation will be available on the “Investor” section of Welltec’s website at www.welltec.com under the subheading “Download Center”.

The teleconference can be accessed by dialing in a few minutes before start and informing the operator that you would like to participate in Welltec’s investor conference call, conference code 3263982.

The call will also be webcast simultaneously on a listen-only basis. Please log in via the “Investor” section of the website in due time to test your browser. A replay of the webcast will then be available following the transmission.

Conference Call Access Numbers:
Denmark: +45 3271 1660
United Kingdom: +44 (0)20 3427 1903
USA: +1 646 254 3363

Company Profile

Welltec® develops and delivers technology and solutions intended to transform the oil and gas industry. Our game-changing solutions are dedicated to optimizing the management and development of clients’ assets, both in the form of well completion technology and intervention services required to ensure performance and integrity. We operate in all types of onshore and offshore well environments, including the most extreme and hostile, such as deepwater, subsea, extended reach, heavy oil and unconventional gas and oil wells. Our lightweight solutions are based on a vision to improve safety while reducing environmental risks, fuel consumption and carbon footprints.

Important Notices

Any statement in this announcement that is not a historical fact is a “forward-looking statement”. Such statements may include opinions and expectations regarding Welltec® and its future business, management’s confidence and strategies as well as details of management’s expectations of new and existing programs, technology and market conditions. These forward-looking statements rely on assumptions concerning future events that are subject to a number of risks and uncertainties, many of which are outside Welltec’s control, and which could cause Welltec’s actual results to be materially different from these forward-looking statements. While Welltec® believes that its assumptions concerning future events are reasonable, there are inherent difficulties in predicting certain important factors that could impact the future performance or results of Welltec’s business. Accordingly, such statements should not be regarded as representations as to whether such anticipated events will occur nor that expected objectives will be achieved. Welltec® expressly disclaims any intention or obligation to revise or update any forward-looking statements, whether as a result of new information, future events, or otherwise.


Welltec® Signs Technology Collaboration Framework Agreement With Shell

Welltec A/S has entered into a technology collaboration framework agreement with Shell Global Solutions International B.V., an affiliate of Royal Dutch Shell plc, to improve existing or develop new technologies for global application in the energy industry.

CONTACT

Martin Skovbjerg
+45-88-53-82-35

“Shell has been using our technology since our inception nearly two decades ago,” says Welltec’s founder and CEO Jorgen Hallundbaek.

“We are proud to engage in this collaboration agreement with Shell, a well-known, well-respected developer and early adapter of technology for the oil and gas industry. It aligns and extends our ability to do for Shell what is at Welltec’s core; delivering game-changing technologies that truly impact our industry.”

Welltec is the world’s largest provider of e-line intervention solutions, including the Well Tractor® and a full portfolio of innovative technology for milling, clean-out and mechanical solutions.

In well construction and lower completions, Welltec’s novel, expandable metal products continue to evolve and now provide an alternative to cement as a primary well barrier.


Interim Report Q1 – 2015 and Investor Conference Call

Company announcement no.4/2015: Welltec® will disclose its interim quarterly financial report for Q1-2015 on Thursday, May 21, 2015 and will discuss the results during an investor conference call at 5 pm CET.

CONTACT

Michael Krabbe, Acting CFO,
Cell: +45 3034 3000
Simon Stadil, Director, Treasury and Investor Relations
Cell: +45 5213 8944

The Interim Report and an accompanying slide presentation will be available on the “Investor” section of Welltec’s website at www.welltec.com under the subheading “Download Center”.

The conference call can be accessed by dialing in a few minutes before the start and informing the operator that you would like to participate in Welltec’s investor conference call, ID 3263982.

The conference call will also be webcast simultaneously on a listen-only basis. Please log in via the “Investor” section of the website in due time to test your browser. A replay of the webcast will then be available following the transmission.

Conference Call Access Numbers:
Denmark: +45 3271 1660
United Kingdom: +44 (0)20 3427 1903
USA: +1 646 254 3363

Company Profile

Welltec® develops and delivers technology and solutions intended to transform the oil and gas industry. Our game-changing solutions are dedicated to optimizing the management and development of clients’ assets, both in the form of well completion technology and intervention services required to ensure performance and integrity. We operate in all types of onshore and offshore well environments, including the most extreme and hostile, such as deepwater, subsea, extended reach, heavy oil and unconventional gas and oil wells. Our lightweight solutions are based on a vision to improve safety while reducing environmental risks, fuel consumption and carbon footprints.


Well Stroker XXS – A Strong Finalist for the ICoTA Intervention Technology Award

We are proud to announce that our Well Stroker® XXS is selected a finalist for the ICoTA Intervention Technology Award. This industry award recognizes outstanding technical innovations that demonstrate reduced risk, increased production, improved safety or minimized environmental impact. The e-line Well Stroker XXS changes the game of technology by promoting safety, efficiency and significant cost reductions.

CONTACT

Brian Sidle, VP Marketing
bsidle@welltec.com
+45 48143514

“We are honored to be a finalist for this important industry award”, says Jørgen Hallundbæk. “We believe that the Well Stroker XXS truly has the potential to change how the industry operates by replacing much larger equipment with a nimble e-line tool. In fact, an 18 ft Well Stroker XXS is able to perform the same work as a work-over rig, which has incredible prospects for how we plan and execute operations.”

The Well Stroker XXS offers the first surface controlled, e-line tool with the capability to latch and pull or push objects in the well with up to 60,000 lbs of force. Being e-line deployed, the tool can deliver the force exactly where needed and with surface control. The Well Stroker XXS is able to latch multiple times should it slip free from the object during the operation and it can both pull and push in the same descent multiple times.

This is the fifth time we are selected as a finalist for the ICoTA Intervention Technology Award. We have won it the last two years for our WellLIT and Well Cutter.

Read more about our achievements in the field in these case stories:

 

The award will be formally presented to the winning technology at a Keynote Luncheon, which takes place on Tuesday, 24 March at the Waterway Marriot, The Woodlands, Texas.

If you are planning to attend the ICoTA, please visit us a stand #205 and let us explain how the Well Stroker XXS will change the game for what can be accomplished using e-line tools.


The Welltec Annular Barrier Wins OTC 2015 Spotlight on New Technology Award

Our latest development, the Welltec® Annular Barrier (WAB®), has won the OTC Spotlight on New Technology award as one of the latest, most advanced technologies that are leading the industry into the future.

CONTACT

VP Marketing
Brian Sidle
bsidle@welltec.com

“We pride ourselves on being a transformational company, one that develops technology with real, immediate impact” says CEO Jørgen Hallundbæk. “The WAB is another perfect example of our vision. Its universal application can significantly improve safety and efficiency in our industry, providing a reliable, effective annular barrier while eliminating the need and cost of cement.”

The Welltec Annular Barrier is a unique, metal expandable barrier with a large expansion ratio and high delta P capability. As a qualified, stand-alone barrier element, it precludes the need for cement in the construction phase for many applications. Its novel capabilities allow it to be expanded from surface, with no waiting times and conform to the surrounding open (or cased) hole environment.

Following on successful ISO V0 leak criteria qualifications in Denmark, the 9 5/8” V0 WAB was subsequently approved to meet a client’s Internal Barrier Policy based upon NORSOK D010 Rev 4, enabling them to apply this unique technology without the need for dispensation in the North Sea. The WAB was installed without cement to prevent surface annular pressure (SAP) buildup within the B annulus.

“Being recognized as an OTC Spotlight Technology Award winner is fantastic,” declares Paul Hazel, VP of Well Completions. “It’s the culmination of lots and lots of hard work by a great team at Welltec.”

Recently the capabilities of the WAB have accelerated rapidly, which is reflected in winning this award. The WAB now provides benefits for operators globally for safer wells with lower capex while providing higher productivity.

This is the fourth time we have won this prestigious award. Last time was in 2013 with the Well Cutter; in 2009 the Cleaner PST won whereas the Well Cleaner RCB was announced the winner in 2008. We will be awarded the trophy at a ceremony on May 4 during the Offshore Technology Conference (OTC) at 1530 to 1600 hours in Room 208 on level 2 in NRG Center.

For more information about the Welltec Annular Barrier please click here: http://www.welltec.com/solutions/completion-solutions