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1
2002 Results Announcement2002 Results Announcement
2 April 20032 April 2003
China Oilfield Services LimitedChina Oilfield Services Limited
3
2002 - A Landmark Year for COSL2002 - 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%
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 ResultsSummary Results(RMB mn except per share data)(RMB mn except per share data)
2001 2002 % Change
Revenue 2,366 2,726 15%
Operating Expenses 2,037 2,247 10%
EBITDA 792 1,072 35%
EBITDA Margin 33.5% 39.3%
EBIT 350 483 38%
EBIT Margin 14.8% 17.7%
Net Income 273 354 30%
Net Margin 11.5% 13.0%
EPS (RMB cents) 10.50 12.84 22%
DPS (RMB cents) NA 1.31
5
Growth by SegmentsGrowth by Segments
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
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
Revenue by SegmentRevenue by Segment
38.8% 41.6% 41.7% 39.1%
24.8%27.9% 25.1% 24.6%
21.5%19.6% 20.2% 22.1%
14.9% 13.0% 14.2%10.9%
0%
20%
40%
60%
80%
100%
1999 2000 2001 2002
(%)
Overall Revenue CAGR of 18%Overall Revenue CAGR of 18%2001-2002
Growth
26%
26%
13%
8%644
906 985
413
607 595672
358
428 477603
387
1,064
247
237 308
0
500
1,000
1,500
2,000
2,500
3,000
1999 2000 2001 2002
(RM
B m
m)
2,178
1,662
2,366
2,726
Drilling Marine Support & TransportationWell Services Geophysical
6
Cost StructureCost Structure
(1) Includes other operating expenses, provision for impairment of long term investments, and provision for impairment of property, plant and equipment
(1) Includes other operating expenses, provision for impairment of long term investments, and provision for impairment of property, plant and equipment
Consumption of supplies, materials, fuel, services and others
Repair and maintenance costs
Depreciation of property, plant and equipmentEmployee compensation costs Other SG&A and others (1)
24% 25%
15% 17% 22%20%
13% 14% 12% 7%
38% 40% 39% 37%
11%
21% 19%
8%10% 8%
0%
20%
40%
60%
80%
100%
1999 2000 2001 2002
(%)
388 378 383553
238 310455
462207246
153
720793
836
243
235611
170
163
145
0
500
1,000
1,500
2,000
2,500
1999 2000 2001 2002
(RM
B m
n)
1,590
1,817
2,037
2,247
% of Revenue 96% 83% 86% 82%
Cost ComponentsCost Components As % of Total Operating ExpensesAs % of Total Operating Expenses
7
EBITDA PerformanceEBITDA Performance
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
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
EBITDA MarginEBITDA Margin
513
827 792
1,072
31%
38%33%
39%
0
200
400
600
800
1,000
1,200
1999 2000 2001 2002
0%
10%
20%
30%
40%
50%
(RM
B m
m)
EB
ITD
A M
argin
(%)
EBITDA YoY Growth 35%61%
4%
Overall EBITDA CAGR of 28%Overall EBITDA CAGR of 28%
DrillingWell Services
Marine Support & TransportationGeophysical
156310
397 471144
266178
241
133
168 174
272
88
81
83 44
0
300
600
900
1,200
1999 2000 2001 2002
(RM
B m
m)
827
513
792
1,0722001-2002
Growth
101%
57%
36%
19%
8
Operating Profit PerformanceOperating Profit Performance
Improved operating profits and margins in 2002 as a result of stronger contribution of Marine Support & Transportation and Geophysical segments
Improved operating profits and margins in 2002 as a result of stronger contribution of Marine Support & Transportation and Geophysical segments
Operating Profit MarginOperating Profit Margin
74
365 350
483
5%
17% 15%
18%
0
100
200
300
400
500
1999 2000 2001 2002
0%
10%
20%
30%
Operating Profit Operating Margin
(RM
B m
m)
Op
erating
Pro
fit Marg
in
Operating Profit YoY
Growth38%393%
4%
Operating Profit by SegmentOperating Profit by Segment
37.3%69.8% 55.3%
53.4%
41.6% 26.7%19.1%60.3%
25.2%
5.5%
15.9% 23.1%
2.5%
-19.2%
5.2%
-21.7%-20%
0%
20%
40%
60%
80%
100%
1999 2000 2001 2002
(%)
DrillingWell Services
Marine Support & TransportationGeophysical
9
Improving Net IncomeImproving Net Income
Overall Net Income CAGR of 59% from 1999 to 2002Overall Net Income CAGR of 59% from 1999 to 2002
354
273287
88
5%
13%12%
13%
0
50
100
150
200
250
300
350
1999 2000 2001 2002
(RM
B m
m)
0%
5%
10%
15%
20%
Ma
rgin
(%)
Net Income Net Margin
YoY growth =
30%
10
Balance SheetBalance Sheet
In RMB MillionIn RMB Million
2001 % 2002 %
Cash and Cash Equivalents 871 17% 2,632 33%Accounts Receivable 351 7% 525 7%Other Current Assets 565 11% 343 4%PP&E 3,049 61% 4,317 54%JV’s & Others 194 4% 141 2%Total Assets 5,030 100% 7,958 100%
Short-term Loan 165 3% 0 0%Trade Payables and Other Payables 369 7% 275 3%Other Current Liabilities 1,187 24% 335 4%
Long-term Loan 30 1% 0 0%Deferred Tax Liability 344 7% 567 7%Long-term Payable to CNOOC 0 0% 600 8%Total Liabilities 2,095 42% 1,777 22%
Shareholders' Equity 2,935 58% 6,181 78%Total Liabilities and Shareholders' Equity 5,030 100% 7,958 100%
As at December 31,
13
Drilling Revenues Drilling Revenues
Total drilling revenue increased 8% from 2001 Total drilling revenue increased 8% from 2001
Drilling TurnoverDrilling Turnover
526629
773
49
188
174 57
69
89
39 167
840
0
100
200
300
400
500
600
700
800
900
1,000
1999 2000 2001 2002
(RM
B m
n)
Day Rate Contract Turnkey Others
YoY growth = 8%
Note: 2003 drilling revenue includes all well workover revenues
644
906
985 1,064
14
Well Workover Trends
Summary Drilling Activity Summary Drilling Activity
Number of wells drilled correlates to the development cycle. Well Number of wells drilled correlates to the development cycle. Well workover volume continues to increase as production activity increasesworkover volume continues to increase as production activity increases
34 25 27
31
161
117 134 66
57
240
20
40
60
80
100
120
140
160
180
200
1998 1999 2000 2001 2002
Wel
ls D
rille
d
Exploration wells Development wells
Summary Drilling ActivitySummary Drilling Activity
105147 134
192
319
815
0
100
200
300
400
500
600
700
800
900
1997 1998 1999 2000 2001 20020
100
200
300
400
500
600
700
800
Well workovers Production wells
Well Workovers
Total Production
Wells
15
Utilization and Day RatesUtilization and Day Rates
Strong domestic demand and international deployment continue to drive up Strong domestic demand and international deployment continue to drive up our average day rates, utilization continue to surpass international peersour average day rates, utilization continue to surpass international peers
Source: COSL, ODC (utilization based on days available)
60%
70%
80%
90%
100%
1999 2000 2001 2002
15
20
25
30
35
Ja
ck
up
WT
I (US
$/bb
l)Uti
lizat
ion
60%
70%
80%
90%
100%
1999 2000 2001 2002
15
20
25
30
35
Se
mi
WT
I (US
$/bb
l)Uti
lizat
ion
COSL Global WTI
Utilization RatesUtilization Rates
Source: COSL, ODC (Jackup day rates for 300’ rigs)
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
1999 2000 2001 2002
Jack
up
0
20,000
40,000
60,000
80,000
100,000
120,000
1999 2000 2001 2002
Sem
i
(US$/day)
Comparative Day RatesComparative Day Rates
GOMCOSL West Africa SE Asia
16
Rig Fleet LocationRig Fleet Location
China
TianjinKorea
Qingdao
Fuzhou
Xiamen
Guangzhou
Hong Kong
Philippines
BeijingOffshore China0 100 200 300 km
Shanghai
BH VIII
BH XBH V
NH I
BH XII BH VII
NH VINH IV
NH V NH II
BH IX BH IV
As of Dec 31, 2002
Primary focus in South China Sea and Bohai Bay
International deployment began in 2002
Offshore Nigeria (Feb 2002)
Offshore Indonesia (Oct 2002)
Primary focus in South China Sea and Bohai Bay
International deployment began in 2002
Offshore Nigeria (Feb 2002)
Offshore Indonesia (Oct 2002)
18
Well Services Revenues Well Services Revenues
Total well services revenue expanded 13% in 2002Total well services revenue expanded 13% in 2002
413
607 595
672
0
100
200
300
400
500
600
700
800
1999 2000 2001 2002
(RM
B m
n)
Well Services RevenuesWell Services Revenues
YoY growth =
13%
19
Well Services Revenue BreakdownWell Services Revenue Breakdown
2001 vs. 2002 Well Services Revenue Components2001 vs. 2002 Well Services Revenue Components
Well services experienced robust growth across most of the segments Well services experienced robust growth across most of the segments due to increased exploration, development, and production activitydue to increased exploration, development, and production activity
13%
14%
21%
11%
4%
13%
595
210148
11875
44
672
239179
13372 49
0
100
200
300
400
500
600
700
800
Total Logging Fluid Cementing DirectionalDrilling
Others
(RM
B m
n)
2001 2002
YoY Growth
21
Marine Support & Transportation RevenuesMarine 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
Consistent revenue growth driven by strong demand offshore China
Higher day rates for vessels
Higher working days supported by enlarged fleet capacity
Marine Support & Transportation RevenuesMarine Support & Transportation Revenues
603
477428
358
0
100
200
300
400
500
600
1999 2000 2001 2002
(RM
B m
m)
YoY growth =
26%
22
Growth of Our FleetGrowth of Our Fleet
15 15 15 16 16 16
23 23 23 2325 26
32 3 3 7 7
3 6 6 66 5
66 6 6
6 6
0
10
20
30
40
50
60
70
1997 1998 1999 2000 2001 2002
AHTS Vessels PSV Vessels Standby Vessels
Utility Vessels Oil Tankers
53 5460 60
5349
22.4% growth since 1997
Our fleet has been growing to meet increased demandOur fleet has been growing to meet increased demandin offshore Chinain offshore China
23
Higher and More Stable Utilization Compared to Global PeersHigher and More Stable Utilization Compared to Global Peers
Note: Trico Marine and Seacor Smit calculate their respective utilization rates based on calendar day utilization methodology; Tidewater and 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
COSL Operating Days 1999 2000 2001 2002Standby vessels 7,675 7,661 7,469 8,717AHTS vessels 4,961 4,897 5,358 5,251PSVs 1,041 899 1,397 2,358Utility vessels 1,787 1,999 1,894 1,791
Total Operating Days 15,464 15,456 16,118 18,117
Calendar Day Utilization RateCalendar Day Utilization Rate
60%
70%
80%
90%
100%
97 98 99 00 01 02
Trico Marine Seacor Smit COSL
Availability Utilization RateAvailability Utilization Rate
60%
70%
80%
90%
100%
97 98 99 00 01 02
Tidewater Gulfmark COSL
25
Geophysical Revenues Geophysical Revenues
Geophysical revenue increased by 26% in 2002Geophysical revenue increased by 26% in 2002
247 237
308
387
0
50
100
150
200
250
300
350
400
450
1999 2000 2001 2002
(RM
B m
n)
Geophysical RevenuesGeophysical Revenues
YoY growth =
26%
27
Substantial Higher Drilling Activities ExpectedSubstantial Higher Drilling Activities Expected
Source: Company
Eastern South China Sea PY 4-2/5-1 HZ 19-3/2
Bohai Bay BZ 25-1 CFD 11-1/2 PL 19-3 BN fields
East China Sea Pinghu Xihu
Western South China Sea WZ 12-1N DF 1-1
26 34 25 27 24
56 31
161
117 134
1997 1998 1999 2000 2001 2002 2003E
Exploration Wells Development Wells
66
57
160+
40 - 50
Characteristics of Development WellsCharacteristics 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
28
Planned Capital ExpendituresPlanned 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
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
Drilling and Marine Support & Transportation segments will continueDrilling and Marine Support & Transportation segments will continueto account for the majority of our future capital expendituresto account for the majority of our future capital expenditures
2003 Planned Capital Expenditures2003 Planned Capital Expenditures(in RMB mm)
Geophysical 94
Drilling 506
Well services288
Marine Support &
Transportation 745
29
COSL – Dominant Oilfield Service Provider Offshore ChinaCOSL – Dominant Oilfield Service Provider Offshore China
Realize growth opportunities and
deliver shareholder value
StrengthsStrengths
High growth domestic market
The dominant oilfield service provider for offshore China
Competitive cost structure
Leading technical capabilities
Winning StrategyWinning Strategy
Selectively Selectively pursue pursue
international international opportunitiesopportunities
Realize Realize increasingincreasing
marginsmargins
Strengthen Strengthen and expand and expand customer customer
relationshiprelationship
Further Further integrate integrate
service linesservice lines
Expand Expand operating operating capacitycapacity
Increase Increase technical technical
capabilitiescapabilities