Borets International Limited
Non-deal Roadshow Presentation
January 2017
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Disclaimer
2
Presenting Team
Christopher Mackenzie
Chairman of the Board of
Directors
Previous positions include:
‒ Chairman of Brunswick-UBS
‒ President and CEO of Trizec Properties
‒ President and CEO of GE Capital Europe, GE Officer
Natalia Bryantseva
Head of Investor Relations
Current positions include:
‒ Managing Director of Eastlink Lanker Plc (UK)
‒ Director of Tangent Fund Limited
Holds a law degree from Ural Academy of Government Service,
Chelyabinsk, Russia and a Business Administration degree from
Huron University, London, UK
Daniil Shapirovsky
Chief Financial Officer
Previous positions include:
‒ Head of Financial Reporting Projects at Korus Consulting
‒ Head of Corporate Reporting at Borets
Graduated from Moscow State University
3
PresentersJoined Borets
Experience
2005
2005
2006
Table of Contents
I. Key Credit Highlights 5
II. Company Overview 7
III. Market Overview and Borets’ Leadership Position 12
IV. Financial Overview 24
Appendices
4
I. Key Credit Highlights
Key Credit Highlights
Source: Company Information
Notes:
1. ESPs: Electrical Submersible Pumps
2. After Baker Hughes and Schlumberger
3. PMM: Permanent Magnetic Motor
Dominant global market share in ESPs1 - #1 manufacturer by volume; #1 service
company by installed base; #3 global market share by revenues21
Pioneer in ESP technology since 1952. More recently, Borets has introduced
PMM3, Wear Resistant Stages and Linear Motor technologies2
Global presence - well placed to grow as activity picks up3
Plays in the operating cost segment (not capital expenditure) of the oil
production lifecycle – hence, low oil price correlation5
Vertical integration across manufacturing, rental and service (including
3rd party pumps)4
Strong operational excellence with an unparalleled safety track record7
6
A pioneer in
the sector
Robust financial performance due to cost controls, deleveraging business
profile and strong pipeline visibility; record EBITDA margin in 20166
II. Company Overview
Key Facts
8
# 1 ESP manufacturer worldwide
12,000+ ESP units manufactured annually
# 1 Russian / # 3 global ESP sales position
# 1 ESP service company worldwide
c.46,000 ESPs installed base
22,000+ serviced wells
500+ clients worldwide
Established track record – dates back to 1897
Key Clients by Revenue
Established in 1897, headquartered in Dubai
Leading vertically-integrated global manufacturing company providing:
– Artificial lift systems, specialising in ESPs (mainly onshore wells)
– Related aftermarket services
#500+ clients served globally
Operates 11 manufacturing facilities in 5 countries, 25 service centers in
10 countries and 2 R&D centers
9,000 employees with 3,500 dedicated field personnel
LTM Sep-16 Revenue / EBITDA: USD469m / USD134m (29%)
ESP Market Share by Revenue, 2016E (USD)
Ownership Structure
Borets – Global Leader in Growing Artificial Lift
Market
Company Overview
Russian Clients Length International Clients Length
19 years 12 years
19 years 10 years
15 years 9 years
14 years 5 years
14 years 3 years
12 years 2 years
Source: Company Information
Note:
1. Two beneficiaries of Tangent Fund: Gregory Schtulberg and Mark Shabad
9
Tangent Fund92%
European Bank for Reconstruction and Development ("EBRD")
5%
International Finance Corporation ("IFC")
3%
1
Baker Hughes
26%
Schlumberger22%
Borets11%
GE 8%
Novomet4%
Alkhoraef5%
Other 24%
10
Borets: 100+ Years of History
1897 1952 1995 2002 2006 2012 201420082007
• Acquired Lemaz
manufacturing
facility of stages for
pumps
• Acquired 100% of
Weatherford’s ESP
Business unit
2015
• Weatherford
acquired 33% of
company’s shares
• Acquired Lysva motor
manufacturing facility
• Construction of the
Kurgan cable facility
• Construction of the
Stary Oskol
manufacturing facility
of stages for pumps
• Founded as a
compressor factory
• Developed
metal injection
moulding (MIM)
• Introduced PMM-
PCP1 technology to
North America
• Began service
operations in
Indonesia, Congo
and Colombia
• First in Russia to start
volume manufacturing
of Submersible
Centrifugal Pumps
2005 2011
• Began service
operations in Serbia
• Group’s manufacturing
facility in Moscow
acquired by shareholders
2016
• Introduced WR22
ESP system for
‘harsh’ well
conditions targeted
at the US
• Serial production of
submersible motors
using “permanent
magnet” principle
Technological
Advancement
Geographical
Expansion
Industrial
Expansion
• Production of
standard and high
temperature resistant
cables
• Began service
operations in Oman
• Borets bought back 38.5%
of equity from Weatherford
• EBRD and IFC become
shareholders of Borets
• Began service operations in
USA, Canada, Venezuela,
Brazil, Egypt, Shanghai
and Slovakia
2013
Shareholder
Changes
Note:
1. PMM-PCP: Permanent Magnetic Motor - Progressing Cavity Pumps
2. WR2: Wear Resistant Wide Range
Facilities / Service Locations Globally
11
A Vertically Integrated Global Platform
14
1012
13
7
5 6
4
20
19
1817
16 30
29
31
33 34
35 36
26
2
15 28
2223
2132
37
38
1
25 Service Centres11 Manufacturing Facilities:
− Stages
− Cable
− Assembly
− Motor
N. America
1. Tulsa (USA, OK)
2. Midland (USA, TX)
3. Tulsa (USA, OK)
4. Nisku (Canada)
5. Redcliff Canada
6. Estevan (USA, SK)
7. Tulsa USA (USA, OK)
8. Midland USA (USA, TX)
9. Breckenridge (USA, TX)8
S. America
10. Maracaibo (Venezuela)
11. Maracaibo (Venezuela)
12. Cundinamarca (Colombia)
13. Villavicencio (Colombia)
14. Aracaju (Brazil)
Europe
15. ZTS-Kabel (Slovakia)
16. Zrenjanin (Serbia)
Africa
20. Pointe-Noire (Congo)
MENA
17. Alexandria (Egypt)
18. Al-Kuwait (Kuwait)
19. Suhar (Oman)
Russia
21. Borets-NEO
22. Spetsialnye Tekhnologii
23. Lemaz
24. Oktyabersky
25. Buzuluk
26. Ulfa
27. Moscow
28. Oskol
29. Krasnodar
30. Neftekumsk
31. Usinsk
32. Lysva
33. Nefteyugansk
34. Muravlenko
35. Pyt-Yah
36. Nizhnevartovsk
37. Kurgan
24
Asia
38. Shanghai (PRC)
25
2 R&D Centres
3
27
11
9
III. Market Overview and
Borets’ Leadership Position
Borets29%
Others71%
Borets45%
Others55%
Market Overview - Summary
13
95% of global oil wells rely on Artificial Lift Technology to increase pressure within
reservoirs and achieve higher production
While ESP constitutes 16% of Artificial Lift units in operation, it is the most valuable type
of technology accounting for c.38% of revenues
Russia is the largest market for ESPs with >60% share globally
Borets produces 45% and 29% of Russian and global ESP units respectively
ESP units in operation have continued to grow despite the current industry downturn
and are expected to expand further at 5% CAGR between 2015-2020 according to
Douglas Westwood
ESP Unit Share
Global
Russia
Borets’
Strategy
1. Maintain market share in Russia
2. Grow market share in existing international markets
3. Selectively enter new markets
4. Maintain global technological leadership
Source: Company Information, Douglas Westwood
95% of Wells Globally Rely on Artificial Lift
Technology
Distribution of Artificial Lift Market by Revenues, 2016
Distribution of Artificial Lift Market by Units, 2016Main Types of Artificial Lift
PCP 9%
Other 9%
SRP 44%
ESP 38%
Sucker Rod Pump
(SRP)
Electric Submersible
Pump (ESP)
Progressing Cavity
Pump (PCP)
Source: Company Information, Douglas Westwood
Borets is the largest pure-play provider in global
Artificial Lift
SRP
• Consists of a pumping unit on the surface, a downhole pump and rods connecting two
pumping units
• Used predominantly onshore, on low volume (typically <200b/d) marginal wells
• Old technology, vulnerable to Borets’ new linear model
ESP
• Comprising of an electric motor, gas separator, multi-stage pump near the bottom of a
well bore, power cable, motor controller transformers and power source at the surface
• High volume and depth capabilities
• Power and capital intensive, but expense is offset by superior drawdown
PCP
• Utilise a rotating helix method to allow ‘heavy’ oil in at the base and be pushed upwards
• Used in medium to shallow well depths
• Low maintenance costs, and are particularly suited to use in heavy oil applications
14
PCP 7%
Other 11%
SRP 67%
ESP 16%
Borets is the Largest Player in Russia with Growing
Presence Globally
15
Distribution of Revenue by Major ESP Suppliers and Geography (2016)
Source: Company Information
0%
20%
40%
60%
80%
100%
20% 40% 60% 80% 100%0% 10% 30% 50% 70% 90%
ES
P M
arke
t S
har
e b
y C
om
pan
y (U
SD
)
ESP Unit Share by Geography (%)
OthersOthers
Others
Borets is the:
‒ #1 player in Russia with 29% market share
‒ #3 player globally with 11% market share, behind Baker Hughes and Schlumberger
OthersOthers
Market
27% 24% 15% 23% 11%
Russia
& CIS
N. America
& Europe
MENAS. & C.
America
Other
ESP market share by revenue >
Borets global share:
By revenue: 11%; By volume: 29%
Segmenting the Market Served by Borets
16
Global Wells(>1m wells)
Source: Company Information
Global Onshore Market Global Offshore market
Global Artificial Lift Market
ESP(c.161k units)
PCP(c.73k units)
SRP(c.693k units)
Other(109k units)
95% of all global
wells relies on
Artificial Lift
% of Artificial Lift Market:
By volume: 16%; By revenue: 38%
95%
Majority of ESP consumers are Borets’ clients:
0
200
400
600 Spend on ESP Equipment and Services, 2015
Represent existing Borets’ clients
USDm
Borets Plays in the Opex Part of the Oil Production
Lifecycle
Exploration Well
Construction
Completions Production Abandonment
17
Operating
ExpenditureCapital Expenditure
Source: Company Information, Broker Research
E&P operating expenditure has remained resilient relative to capex in the current oil price environment
Globally, unit operating costs on average are generally low (<USD30/bbl), which ensures most producing fields remain
economic even in a low oil price environment
Borets Offers Integrated Products and Services
Borets is the world’s only vertically integrated ESP provider, supplying complete ESP systems
ESP System Design and ConfigurationKey Products
18
Services
Application engineering
Commissioning, start-up and monitoring
Consignment warehouse
Field service and technical support
Leasing
Performance / failure / mean time between failure (MTBF) analysis
Remote well monitoring and data acquisition
Repair and testing of ESP downhole and surface equipment
Sales, service and support for ESP, Hydraulic pumping systems (HPS) and Variable
frequency drives (VFD)
Spare parts ordering and supply services
Submersible / surface equipment and cables servicing, repair and testing
Products
1. Stages
2. Gas handling units
3. Submersible motors
4. Motor seals and intakes
5. Filters
6. Surface equipment
7. Sensors and gauges
8. Cable
Borets’ Growing ESP Installed Base
19
Borets have increased their Installed Base at 3% CAGR between 2007-16, with 12,000+ ESP units manufactured annually
Service Agreements have grown at 6% CAGR over the same period
ESPs have an average run life between 2-5 years
1214 15
17 18 18 18 1920 21
3537 38
40 41 42 43 43 43
46
0
10
20
30
40
50
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Under Service Agreements with Borets Borets Worldwide Installed Base
CAGR: 3%
# of ESP (‘000s)
Source: Company Information
CAGR: 6%
Sector Outlook: Well Count Expected to Grow in-line
With Oil Price in the Future
20
Source: Douglas-Westwood, HSBC
1. Russian oil & gas industry is less sensitive to oil prices increase beyond USD29/bbl given the fiscal regime
Market focus on global oil demand / supply balances and compliance to recent supply cutback announcements
E&P capex spending expected to pick-up in 2017 post-significant cutbacks over last 2 years, both independents and
integrated players
Well count has increased with resurging oil prices in 2016 and is expected to grow further in line with oil price in the
future1
40
45
50
55
60
65
70
0
20
40
60
80
100
120
140
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20
Tho
usan
ds
Historical Brent Forward Brent HSBC Brokers Average
USD/bbl
Brent Oil Price vs. New onshore wells drilled globally
Oil Wells Drilled (‘000)
New Oil Wells Drilled
Borets’ Strategy (1)
21
Borets’ business strategy is to:
Maintain market leadership in Russia by keeping close to our customers and increasing our presence in
Eastern Siberia
Continue to leverage new technology to expand sales with US majors
Build on our existing successful international platforms, e.g. Oman, Kuwait, Egypt and Colombia
Selectively enter new markets in which Borets is trialling equipment, e.g. Saudi Arabia, Iraq and Mexico
Capitalise on the inevitable fallout from the GE-BH merger and the acquisition of Novomet, especially in
the US
Strengthen the Borets Board of Directors with industry leaders to leverage their skills, experience and
contacts, e.g Pete Miller and Peter Goode
Borets’ Strategy (2): International Expansion
Opportunity
22
TOTAL ESP WELLS RENTAL ESP WELLS
Total
(‘000s) (‘000s)%
Total
(‘000s) (‘000s)%
Russia 97.0 44.0 45% 21.0 6.1 29%
Rest of the
World64.0 2.7 4% 19.0 0.6 3%
TOTAL 161.0 46.7 29% 40.0 6.7 17%
Borets powers 29% of the world’s ESP wells’ production. There is significant opportunity to grow internationally
Source: Company Information
Borets’ Strategy (3): Technological Leadership
23
PMM enhances electrical efficiency, with approximately 15-19% power saving according to trials by
Apache in Texas, GazProm Neft and TNK-BP
Borets has installed > 3,000 PMM driven ESPs worldwide, 5 times more than the only competitor
Borets is trialling Linear Motors with selected customers with a view to displacing SRPs with more flexible
down hole pumps, which replicate the rod pump action at greater depth and without requiring vertical wells
Borets has developed a unique metal injection molding production process for pump stages which
increases hardness (to extend pump life) and design definition (to accelerate flow)
Borets is the only manufacturer using this process and already over 100 WR2 pumps have been
delivered to customers
Permanent Magnet Motor (PMM)
Wear Resistant Wide Range (WR2)
Linear Motor
Borets’ ESP R&D have produced 3 uniquely successful product
developments, far exceeding competitors’ achievements
IV. Financial Overview
Key Financial Highlights
25
Real revenues increased by 6% CAGR between 2011-LTM Sep-16 supported by higher unit sales and driven
by contracted sales (>40%)
‒ Nominal revenues (LTM Sep-16: USD469m) have declined as compared to 2015 given Rouble depreciation
Services grew to 45% of revenues in LTM Sep-16 (vs. 38% in 2015), mitigating the impact of the oil price fall
EBITDA (LTM Sep-16: USD135m) has remained stable over the last 3 years despite the fall in nominal revenues
High EBITDA margin given the integrated business model which has further strengthened to 29% in LTM
Sep-16 driven by i) cost reduction initiatives and ii) growth in services and innovative products
Strong / resilient FCF profile; has seen limited drop vs. reduction in revenues given:
‒ Increasing margins maintaining EBITDA
‒ Ability to adjust capital expenditure to cash flows
Current trading has been strong with EBITDA margin increasing from 26% to 31%
Revenues
USA 29%
Colombia 18%Egypt 16%
Serbia 9%
Canada 8%
Venezuela 7%
Kuwait 5%
Oman 2%Brazil 2% Other 3%
Growing “Real” Revenues Growing Service Share of Revenue
LTM Sep-16 International Revenue Split1Total Revenues (USDm)
67% 69% 68% 66% 62% 55%
33% 31% 32% 34% 38% 45%
0%
20%
40%
60%
80%
100%
2011 2012 2013 2014 2015 LTM Sep-16
Product Sales Services (including rental)
Source: Company Information
Note:
1. Before intersegment eliminations and logistics & overheads
26
583 566 579 510367 353
124 177 188210
154 116
707 743 767720
522469
$0
$200
$400
$600
$800
$1,000
2011 2012 2013 2014 2015 LTM Sep-16
Russia International
707 743 767720
522469
707778 817 872 910 914
$0
$200
$400
$600
$800
$1,000
2011 2012 2013 2014 2015 LTM Sep-2016
Based on actual rate Using rate of 29.3 RUB/USD (2011 average rate)
Russian Rouble Outlook
27
USD vs Rouble
0
10
20
30
40
50
60
70
80
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
USD/RUB yearly average Forecast (Brokers Median)
Source: Bloomberg
Brokers expect Rouble to trade in a 50-70 per USD range over the medium-term
Brokers commentary
“Russia’s external position is likely to remain relatively stable over
the next year. While the current account surplus will probably
narrow to below 3% of GDP, external debt should decline below
40% of GDP and external financing requirements are among the
lowest in CEEMEA”
Nov-16
“Rouble supported by oil price increase following OPEC (and non-
OPEC) production cut decision, but additional short-term
appreciation potential below USD/RUB 60 limited in our view”
Jan-17
“Russia’s recession appears to be coming to an end. We expect
gradual improvement in growth indicators in 2017. However,
should expectations of sanctions’ easing materialize, Russia’s
growth may increase by as much as 1pp, making it an outlier
among commodity exporters”
Nov-16
Broker views
Growing EBITDA Margin Underpinned by Cost
Control
EBITDA (USDm)Driving the EBITDA Margin
108
148131
144131 135
15%
20%17%
20%
25%
29%
0%
5%
10%
15%
20%
25%
30%
35%
$0
$40
$80
$120
$160
2011 2012 2013 2014 2015 LTM Sep-16
EBITDA EBITDA margin (%)
7 6 8 8 54
103 102111 111
95 85
16 11
25 16
12
0
126119
144135
111
89
($40)
$0
$40
$80
$120
$160
2011 2012 2013 2014 2015 LTM Sep-16
Sales & Marketing G & A Other
Falling Material and Labour Costs (USDm) Falling Operating Expenses (USDm)
308 302339 327
214 198145 152 155 148
102 95
$0
$100
$200
$300
$400
2011 2012 2013 2014 2015 LTM Sep-16
Materials LabourSource: Company Information
EBITDA grew despite the Rouble depreciation with margins
increasing to 29% in LTM Sep-16 due to:
– Tight cost control and improved supplier terms
– Rouble depreciation impact on international operations
– Growth in the service business and innovative products
Cost control demonstrated by:
– Material and Labour Costs fell by 37% and 34% over
2013-15
– Operating Expense fell by 38% over the same period
28
Stable Cash Flows
Capital Expenditure and Rental Investment (USDm) Free Cash Flow2 (USDm)
29
Operating Cash Flow1 (USDm)
Source: Company Information
Notes:
1. EBITDA – Non-cash Adjustments – Management Fees – Interest – Taxes – Change in NWC
2. Operating Cash Flow – Capex – R&D – Other
3. Rental business is high margin and spending is discretionary
Stable Cash Flow Generation
Stable cash flow generation, remaining steady through 2013-
15 despite a 68% fall in Nominal Revenues:
On an LTM Sep-16 basis, OCF and FCF cash conversion
increased to 63% and 12% respectively
– Tight cost control increasing margins, helping to preserve
EBITDA despite fall in top-line growth
– Strong track record of adjusting capex to manage cash
flows given strong pipeline visibility, shown through a 66%
reduction between 2013-LTM Sep-16
36
56
3220 2 16
34%37%
24%
14%
1%
12%
0%
20%
40%
$0
$40
$80
2011 2012 2013 2014 2015 LTM Sep-16
Free Cash Flow FCF Cash Conversion (%)
83106 103 95
6286
77% 71%78%
66%
47%
63%
0%
20%
40%
60%
80%
100%
$0
$40
$80
$120
2011 2012 2013 2014 2015 LTM Sep-16
Operating Cash Flow OCF Cash Conversion (%)
18 2131
2314 1120 18 24
4932
68
$0
$20
$40
$60
$80
2011 2012 2013 2014 2015 LTM Sep-16
Capex Rental Investment3
116.2 84.8 32.8
339.2 341.5 385.6 367.8
0
100
200
300
400
2010 2011 2012 2013 2014 2015 2016E
According to the conditions of the Notes the Consolidated Net Leverage Ratio should not exceed 3 to 1 on an incurrence basis
As per guidance provided during the H116 conference call, leverage is expected to continue declining - 2.5-2.6x expected for 2016
Net debt / EBITDANet debt
1.10.8
0.2
2.6 2.42.9
Capital Structure as of Sep-16
Source: Company Information
Note:
1. March 2016
30
Capital Structure and Leverage Position
USDm Sep-16LTM Sep-16
EBITDAxCurrency Maturity
Issue
Rating
Cash and Cash Equivalents (34)
Revolving Credit Facility (drawn) 6 RUB 2018
Capex Facility 20 RUB 2017
Senior Unsecured Notes 401 USD 2018 B1 / B+
Net financial debt 391 2.9x
LTM Sep-16 EBITDA 135
Net Debt (USDm) and Net Debt / EBITDA Multiple
Trading Update
31
Real Revenue increased by 1% between 9M15-16 however,
fell by 13% on a nominal basis because of Rouble
depreciation
Continued cost tightening led to 4% EBITDA growth over the
same period with margins increasing from 26% to 31%:
– Cost of Sales fell by 12% due to reduced Raw Material
and Wage related costs
– Operating Expenses decreased by 28%, also down to
Wage related costs and a USD6m reversal of accrued
and unpaid bonuses
Strong OCF generation despite increase in Rental
Investment paid due to:
– Positive EBITDA growth, despite fall in Revenue
– Improved Working Capital position and Capex falling
vs 9M15
Net debt at USD391m (2.9x) as of Sept-16
Year end results expected to be more positive
Current Trading – 9M16 P&L (USDm) 9M15 9M16 Variance
Revenue 395 343 (13%)
Real Revenue 791 795 1%
COGS (280) (247) (12%)
Gross Profit 36 38 7%
Operating Expenses (80) (57) (28%)
EBIT 36 38 7%
EBITDA 101 105 4%
% margin 26% 31%
Source: Company Information
Note:
1. Rental business is high margin and spending is discretionary
CFS (USDm) 9M15 9M16 Variance
Capex (11) (7) (35%)
Rental Investment1 (25) (60) 135%
OCF 16 49 204%
Cash Conversion 16% 47%
Key Credit Highlights
Source: Company Information
Notes:
1. ESPs: Electrical Submersible Pumps
2. After Baker Hughes and Schlumberger
3. PMM: Permanent Magnetic Motor
Dominant global market share in ESPs1 - #1 manufacturer by volume; #1 service
company by installed base; #3 global market share by revenues21
Pioneer in ESP technology since 1952. More recently, Borets has introduced
PMM3, Wear Resistant Stages and Linear Motor technologies2
Global presence - well placed to grow as activity picks up3
Plays in the operating cost segment (not capital expenditure) of the oil
production lifecycle – hence, low oil price correlation5
Vertical integration across manufacturing, rental and service (including
3rd party pumps)4
Strong operational excellence with an unparalleled safety track record7
32
A pioneer in
the sector
Robust financial performance due to cost controls, deleveraging business
profile and strong pipeline visibility; record EBITDA margin in 20166
Appendix
Board of Directors and Key Management
Lev Stulberg
Chief Executive Officer
Daniil Shapirovsky
Chief Financial
Officer
Irina Boeva
Chief Operating
Officer
Vladislav
Kondratiev
Chief Technology
Officer
Irina Kalinina
Chief Audit
Executive
Vladimir Sidash
Geranial Director PK
Borets
Management Team
Board of Directors
Christopher Mackenzie
Chairman, Non-Executive
Director
Lev Stulberg
Chief Executive Officer,
Executive Director
Natalia Bryantseva
Non-Executive Director
Varel Freeman
EBRD-appointed Non-
Executive Director
Merrill Miller
Independent Non-
Executive Director
Gregory Schtulberg
Non-Executive Director
34
Peter Goode
Independent Non-
Executive Director
Current Shareholders
35
Tangent Fund (92%)
EBRD (5%)
IFC (3%)
International financial institution founded in 1991 for development of Central
and Eastern Europe
Owned by Sovereign entities and rated AAA
Purchased 5% equity stake in November 2013 for USD30m
TANGENT FUND Two beneficiaries of the fund: Gregory Schtulberg and Mark Shabad
A member of the World Bank Group focused on the private sector in developing
countries
Acquired a 3% equity stake in 2013 for USD18m
Russia is the Largest Market for ESPs
36
> 60% of the ESP wells are located in Russia and CIS
North America is the largest market for rod pumps, PCPs and gas lift and the second biggest market for ESPs
Middle East and North Africa are the main regions with natural flow wells
Approximate Distribution of Oil Producing Wells by Regions (2016E)
56%
4%18%
35%
9%19%
9%
3%
7%
18%
7%
20%
13%
6%
38%
78%
58%
13%
59%77%
4%11% 7%
46%
12%
68%
8%
176,505 604,826 65,620 31,227 15,126 3,746 139,452
0%
20%
40%
60%
80%
100%
Russia& CIS
North America South& Central America
Middle East& North Africa
Europe West Africa Asia Pacific
ESP PCP SRP Other
# No. of wells >
Source: Company Information
Russia – A Key Oil & Gas Market
37Source: Company Information
12%
88%
2020 Russia % Global
# of Wells in Russia Expected to Rise from 2018
0
100
200
300
400
Iran Venezuela SaudiArabia
Russia Canada
1P Reserves (oil & gas) - bnboe
0
5
10
15
20
25
30
US Russia SaudiArabia
Iran Canada
Production (mboepd)
% Oil Wells
2014
Oil Gas
2020
10%
90%
2014 Russia % Global
0
2
4
6
8
10
0
1
2
3
4
5
6
7
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Oil Wells Drilled (000s) Oil Production (mboepd)
Oil Wells Production
Russia as % of Oil Wells Globally
Total wells: 51,338 Total wells: 40,083
Russia
Others
Russia
Others
Russia - One of the Largest O&G Market Globally
Bond Details
Bond Terms
Issuer Borets Finance DAC
Rating B1 (Moody’s) / BB (S&P)
Debt instrument type Guaranteed Notes
Currency/size USD 420m
Tenor 5 years
Issue format Reg S / 144 A
Coupon 7.625%
Maturity date 26.09.2018
Governing law English Law
Listing Global Exchange Market of Irish Stock Exchange
38
End of Presentation
39