May 2013

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Corporate Overview

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集团简介

2.5 25 91 134 355 395 539 502

2,336

3,164

4738

1962 1878

3485

5068

0

1000

2000

3000

4000

5000

6000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Revenue（MM RMB）

subsidiary in USA

2008 the sole enterprise of CNPC listed on through reorganization

Company history

Science and technology is the First productive force

Development is inarguable truth

1998 Developed the First 7000m mechanical rig of China

2005 The First enterprise in China to successfully sell self-produced drilling rigs and commenced the large scale of international progress

2012 Successfully designed the First floating drilling rig package in China.

2006 The First low-temperature tolerant digitally-controlled rig exported to Russia

2011 First Direct-drive top drive with electromechanical integration technology

2000 Developed and sold the First DBS drilling rigs in China

50%

Cover an area of about 2,666,000 m2 and has 7,500 employees

100% 100% 50%

100%

85% 70% 100% 80%

Honghua Group Limited （HK0196）

Egyptian Honghua Honghua Russia

Production base of land rigs and components & parts

Honghua International （Chengdu ）

Hongtian （Chengdu ）

Hong teng （Gansu）

sales and procurement

Production base of electronic system

Fracturing and oil production equipment

Hong Hua-Ukraine

100%

Honghua(China) Investment Co.,Ltd.

Honghua Golden Coast (Dubai)

Honghua Oil & gas services

Honghua holdings

100%

85%

Honghua America

Honghua Offshore

Offshore equipment production base

Over seas

Sichuan Honghua (Guang han )

100%

100%

Honghua Oil & gas services（Chegndu）

Oilfield Engineering Services

Bazhou Honghua Petroleum Applied Chemistry

structure

Long-term Growth Strategies

Equipment Manufacture

Oilfield Engineering

Services

Unconventional Oil and Gas Resources

Leverage on technical advantages to provide comprehensive solutions

Synergies from business development

Onshore

Offshore

World’s largest land rig manufacturer with an annual production capacity of 150 sets

Creative “onshore manufacturing of offshore platform” with an annual production capacity of 10 sets upon completion

Provide drilling and turnkey wells services for onshore oil and gas resources

Enter unconventional oil and gas upstream field, powered by equipment sales and services

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Creative Manufac

turing

Global Presence

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Headquarter

Representative Office / JV Company

Uzbekistan

Indonesia

Pakistan

UAE Egypt China

Azerbaijan Kazakhstan

Venezuela

India

Brazil

USA

Russia

Onshore factory Chengdu, China

Honghua Offshore in Jiangsu, China

Production Base and Assembly Factory

Honghua America

Honghua Golden Coast (Dubai)

Established in 2005, covers an area of 80,000 square meters, and manages to assemble 6 drilling rigs simultaneously

Established in 2006, covers an area of 18,000 square meters, and manages to assemble 2 drilling rigs simultaneously

Covers an area of 666,000 square meters with 80,000 square meters of assembly & test field, and manages to assemble 16 drilling rigs simultaneously

Honghua Russia Construction of the JV factory established with OJSC VTB Leasing and Scientific and

Production Corporation Uralvagonzavod, is expected to be completed in 1H2014

Honghua Venezuela Fully covering drilling rigs/parts and components market and expanding to oil and gas engineering services from oil and gas equipment sector

Covers an area of 1,400,000 square meters, manages to assemble 10 platforms at the simultaneously

Onshore equipment production base-World’s largest land rig manufacturer base - Guanghan

Special electrical machine base New base on instruction -Guanghan

Fracturing and oil production equipment base Honghua Golden Coast -Dubai Egyptian Honghua

Enterprises pictures

Honghua America

Offshore equipment production base-Qidong Jiangsu Province , Operation on October 2012

Enterprises pictures

集团概况

earthquake relief work

Financialed nearly amount of 9 million RMB for education

Public benefit activities

Donated more than 20 million RMB for the education of Guanghan

Builded and funded continuously the Honghua foreign language school

Business Overview

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shallow—drilling depth1,000m（500hp） 9,000m(4,000hp)—deep

Mud pump

hook winch swivel Top drive

Full rang Rig Products line

Various depth

Important Parts and

Components motor

Land Drilling Equipment AC variable frequency drive rig

arctic rig Fast move desert rig

helicopter lifted drilling rig cluster well rig

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Land Drilling Rigs

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AC/VFD Drilling Rigs

Super Single Drilling Rigs Arctic Rigs Fast Move Desert

Rigs Helicopter-Lifted

Rigs

• Digital control • Low energy

consumption • Provide automated

and intelligent drilling platform for integrated automatic operation

• Applicable in anti-explosion area

• Hydraulic single pipe rigs targeting at unconventional oil and gas, repairing, inclined shaft and straight-hole drilling, slimhole drilling, etc.

• Small footprint , low transport costs and high degree of automation

• Equip with suitable structural materials and a full range of insulation systems for Alpine environment

• Applicable in Siberia and the Alpine region near the Arctic and other harsh environments

• Shorten moving time between drilling and reduce installation work

• Fully consider the requirements under high-temperature environment at dessert and Gobi desert during the process of design and provide supporting facilities

• Effectively reduce the infrastructure cost of drilling contractors and protect the environment

• Break through the limits of conventional hang rigs

• Applicable in drilling operations in tropical rain forests, swamps, Gobi desert and other harsh environment

Diversified Products and Comprehensive Drilling Equipment Solutions

Sales Volume Breakdown of Drilling Rigs Sold in 1H2013 (28 sets total , by Region)

Europe & Middle AsiaMiddle EastSouth Asia and Southeast AsiaAmericaChina

46.4% China: 13 Units

25% Europe & Middle Asia: 7 Units

21.4% America:13 Units

3.6% Middle-east: 1 Unit

3.6% South Asia and

Southeast Asia: 1 Unit

(By Depth)

68% > 5,000 meters

32% ≤ 5,000 meters

Depth Unit

In 1H2013, share of digital-controlled drilling rigs sales reached 100%.

Major Part & Component Business

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• Simple structure , low failure rate and maintenance intensity

• Reduce the transmission energy loss

• Strong cooling effect

New Efficient Land Drilling Part & Component Series

Drawworks Top Drive Fracturing Pump

• Long service life

• Drilling pump performance to adapt to high pump pressure , large displacement of the drilling process requirements

• Reduce the number of fracturing pump

• Applicable in harsh environment with long operating time

• Long operating time in harsh environment

• Compatible with series of Honghua, interchangeable with domestic and foreign products

• Loading capacity up to 90 tons -900 tons

• Adopt band brake or hydraulic disc brake as a main brake ; use electromagnetic turbine brake as auxiliary brake

• Discharge capacity up to 33% as compared with the traditional five-cylinder pump; Maximum working pressure up to 51.7MPa

• Reduce pump weight by 50%

Mud Pump Quintuple Pump Motor

Independent Sales Volume of Mud Pump Sales Volume of Top Drive

(Unit) (Unit) 12

10

2

4

0

2

4

6

8

10

12

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2012 1H 2013 1HSupporting Sales Individual Sales

26

40

05

1015202530354045

2012 1H 2013 1H

Up 53.8% YoY

In 1H2013, total sales of mud pumps amounted to 40 units, up 14 units YoY.

Stable sales

In 2013 1H, sales of self-produced direct top drives remained stable, recording supporting sales of 10 sets and individual sales of 4 sets.

Miscellaneous Products

15 • Drill collar

• Drill pipe

• Casing

• Tubing • Down hole motor

Tubular

• Drill pipe

• BOP Control unit

• Annular BOP • RAM BOP

• Diverter

BOP & Control Unit

• Chock Manifold

• Kill Manifold

Manifold

• Well head equipment • Down hole tools

• Fishing tools

• Rig floor tool

• Camp

Handling tools

• Roller • PDC

Drill bit

• Fracturing unit • Road Tractor

• Sand blender • LNG vehicle

Vehicles

• LNG factory

• LNG tank

• LNG project

LNG

New Products

Top drive series Hydraulic super single pipe rigs

Hongteng 3000HP

fracturing pump trucks

Coiled tubing smart drilling

rigs

Rack and pinion drilling rigs

New energy saving five

cylinder pump

R&D of New Products

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Qidong Jiangsu 1.5hour drive

from Shanghai

Location

Honghua Offshore

Base

Surrounding area

Seashore length

1,770m

2,080 mu (343 acres)

Area

Product

Jack-ups Semisubmersibles Fixed platform

Equipment manufacturers and

contractors

Offshore Equipment Manufacturing Business (1)

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Based on 400 feet jack-ups: Production cost: lower

by ~20% compared with current costs in the market;

Delivery time: can shorten it to 15-18 months.

• Developed the 1st self-developed jack-up platform jacking system and fixation system in China.

Most competitive offshore equipment manufacturer

Key parts: lifting system and fixation system

Various types of drilling packages:

Jack-up, semisubmersible and drilling ships

Electric system equipment

Innovative construction model

“onshore manufacturing of offshore platform” has greatly shortened the construction cycle and decreased the costs

Self-design “Honghua I” jack-up platform and “Honghua I” semi-submersible platform

With EPC capacity

• Designed “Honghua 1” jack-up platform.

Offshore Equipment Manufacturing Business (2)

• From 2005-2007，constructed and sold more than 10 drilling packages to clients（i.e. Conoco and CNOOC);

• Developed the 1st deep-sea drilling package for Tiger series drilling vessel in China.

R&D and design capacity

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Self Elevating Marine Surveillance Platform（1）

Hull Length: 150.0m Operating Depth: 30.0m Hull Width: 60.0m The Num. of Legs: 8 Hull Depth: 8.4m Air gaps: 3.0m Leg Length: 50.0m

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Self Elevating Marine Surveillance Platform（2）

Two 5000 tons Marine Surveillance ships Berthing at same time;

2 helicopter landing platform and 4 helicopter storage space;

Accommodation with air condition for 300 persons;

Fresh water processing capacity：200t/day; Generating capacity：6600kW; Self supportability：120 days

Oil and Gas Engineering Services（1）— Service Contents

Drilling Serivces

Cementing/Completion/Work

over…

Service company specially focus on providing

professional services like drilling, drilling fluid,

completion, cementing, production stimulation

and production technology Downhole

Services

Supplementary Services

• Fishing

• Testing

• Logging

• Coring

• Shallow Well and Deep

Well(6000m+)

• Air and Foam Drilling

• Under-balanced Drilling

(UBD)

• HPHT/High H2S Wells

• Horizontal and Directional

Well

• Cementing

• Casing

• Oil/Gas Surface Testing

• Completion Services

• Workover

• Drilling Camp Construction and

Operation

• Rig Moving and Assembly

Services

• Component Logistics Services

• Drilling Fluid Engineering

Services

• Drilling Equipment/Tool Repair

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Oil & Gas Engineering Services

1,300

Number of Employees as at Oct 2013

Approx. 22 teams

Current Drilling Service Team

Approx. 30 teams

No. of Drilling Fluids Service Team

Approx. 10 teams

No. of Directional Well’s Team

Xinjiang, China

Drilled well number

11

Iraq Drilled well

number

3

Inner Mongolia,

China

Drilled well number

4

As of the end of October 2013

Northeast China

Drilled well number

1

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Oil & Gas Engineering Services（3）— Business Development Plan & Progress

Based on innovative equipment

Powered by drilling services

Drilling equipment

Fracturing equipment

18 years of experience

Gansu Hongteng acquired early 2012

Provision 2013 Progress

Drilling Service

Drilling Fluid Service

Fracturing Service

Directional/Horizontal

Drilling Service

Expecting number of teams to exceed 25

Acquired Bazhou Company, one of the best water-based drilling fluid service company in China, now with over 30 teams with over 10 years of experience Boosting proportion of directional and horizontal wells drilled

Targeting to launch service in 4th quarter

CONVENTIONAL

UNCONVENTIONAL

Through cooperation with international oil and gas service

companies

Provide complete solution strategy in preparation for unconventional field block

exploration

Provide turnkey well service

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2. Exploit gas by using gas, use gas fired power-gen and power grid, pursue flow process operations and realize large-scale industrial production

1. Establish substation and electricity transmission network ahead

Water, electricity, gas, information and transportation

3. High HP fracturing pumps and flexible water tanks to enhance efficiency, and reduce costs and space occupation

4. Promote Distributed Energy Stations

Unconventional Oil and Gas Exploration Solutions

Lower fixed asset investment by 10%;

Improve land-use efficiency by 50-65%;

Cut down staff headcount by 50-60%;

Reduce fuel cost by 40-80%;

Lower total development cost by 10%.

5. Significantly Reduce Development Costs

Realize joint supply of gas, electricity, heat, coldness and storage, improve utilization efficiency of prime energy and functional stability Achieve close utilization of shale gas Resolve the problem of pipeline network

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Unconventional Oil & Gas Business

Featured Equipment

Fully grasp the opportunity of

unconventional oil and gas

development

Oil and Gas Service Resource Development

180m3 flexible water tank • Complete

optimization design;

• Expect to achieve sales.

To explore unconventional oil and gas blocks by means of contractor/subcontractor or joint bidding with Baker Hughes starting from project-based cooperation.

Provide integrated services from drilling to fracturing.

Sales and R&D of featured equipment

Seek minority equity investment opportunity in the exploration of high-quality shale gas blocks and enter into the upstream area.

Planned cooperation with Baker Hughes:

Provide operation solutions to unconventional oil and gas projects;

Establish an R&D center for unconventional resource engineering in 2nd quarter 2013;

Develop unconventional oil and gas equipment.

6000HP fracturing pump • Complete well site

trials in domestic and North America in 2013;

• Cultivate potential clients and keep on striving for the sales breakthrough.

Strategic Cooperation Framework Agreement with Shenhua Signed January 2013; To carry out long-term

cooperation initiatives in unconventional natural gas development, research, consultation and equipment.

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Seismic services

Thank you!

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