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A p r i l 2 0 1 2
T S X : T I DB VC : T I D C
w w w. t u s c a nyd r i l l i n g . c o m
All Values in US$ unless otherwise stated
Disclaimer
Certain statements included or incorporated by reference in this presentation constitute forward-looking statements or forward-looking information under applicable securities legislation. Such forward–looking statements or information are provided for thepurpose of providing information about management's current expectations and plans relating to the future. Readers arecautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions.Forward-looking statements or information typically contain statements with words such as "anticipate", "believe", "expect“, "plan","intend", "estimate", "propose", "project“, “seek”, “continue”, “forecast”, “may”, “will”, “potential”, “could”, “should” or similar wordssuggesting future outcomes or statements regarding an outlook or statements relating to matters that are not historic facts.Forward-looking statements or information in this presentation include, but are not limited to, statements or information withrespect to: business strategy and objectives; acquisition plans and the timing thereof; capital expenditures; net revenue; operatingand other costs; and taxes.
Forward-looking statements or information are based on a number of factors and assumptions that have been used to develop suchstatements and information but which may prove to be incorrect. Although the Company believes that the expectations reflected insuch forward-looking statements or information are reasonable, undue reliance should not be placed on forward-lookingstatements because the Company can give no assurance that such expectations will prove to be correct. In addition to other factorsand assumptions which may be identified in this presentation, assumptions have been made regarding, among other things: theimpact of increasing competition; the general stability of the economic and political environment in which the Company operatesor plans to operate; the timely receipt of any required regulatory approvals; and the ability of the Company to obtain qualified staff,and equipment in a timely and cost-efficient manner.
Forward-looking statements or information are based on current expectations, estimates and projections that involve a number ofrisks and uncertainties which could cause actual results to differ materially from those anticipated by the Company and describedin the forward-looking statements or information.
The forward-looking statements or information contained in this presentation are made as of the date hereof and the Companyundertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of newinformation, future events or otherwise unless required by applicable securities laws. The forward-looking statements orinformation contained in this presentation are expressly qualified by this cautionary statement.
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Overview
Tuscany is a provider of contract drilling, work-over services and equipment rentals to the oil and gas industry in South America and Central Africa
Fleet
o Total fleet of 41 rigs plus one operated work-over rig available for service in2012
o Currently 36 rigs in Tuscany’s active fleet
• One rig in Brazil undergoing repairs and maintenance. Scheduled to return to service in the first quarter 2012
• Three rigs undergoing major refurbishment and anticipated to return to service in second half 2012
• One rig in Colombia currently undergoing upgrade to enable rig to function as a fully operational drilling rig
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Overview
Approximately 50% of rigs less than 5 years old
Tuscany began trading on the Colombian Stock Exchange “Bolsa de Valores de Colombia – BVC” under the symbol TIDC on December 1, 2011
Estimated revenue run rate of approximately $350 million with 85% utilization assuming no organic growth
Average operating margins of 34%
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Rig 120
Corporate Strategy
Leader in South America and Africa land drilling business with workover and rental capabilities
o Focus on latest technology new equipment
o Experienced management team
o Strong market presence
o Operational excellence
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Focus on Latest Technology New Equipment
Focus remains on new equipment and latest technology built in North America using internally generated cash flow
o New equipment “tailor made” for operating in emerging markets
• Mobile rigs designed for narrow roads and bridges
• Heli-portable rigs design to break down into small loads complete with cranes for remote operation
• Large rigs with fast moving capability
• Recent Brazilian acquisition and Caroil transaction add critical mass and infrastructure platform for operations and future growth
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Corporate Strategy
Leader in South America and emerging market land drilling business with workover and rental capabilities
o Focus on latest technology new equipment
o Experienced management team
o Strong market presence
o Operational excellence
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Experienced Management Team
Solid, experienced, vested Management team and Board of Directors
o Management and Directors have over 10% ownership
o Maurel & Prom holds 29% ownership
Committed, vested and experienced “in country” field staff and managers
o Strong local contacts lead to proprietary deal flow
o Local staffing of rigs in each jurisdiction
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Proven Management Team
Walter Dawson, Executive Chairman - Calgary
Over forty years experience building oilfield service companies and delivering superior shareholder returns
Founder, Chairman: Tuscany International Drilling
Founder, Chairman: Saxon Energy Services (sold for $700 million); Enserco Energy Services (sold for $450 million); and Computalog Gearhart (sold for $500 million)
Reg Greenslade, President & CEO - Calgary
Over twenty years experience in the oil and gas industry
Founder, Chairman, President and CEO: Enterra Energy Trust , Enterra Energy Corp., Big Horn Resources Ltd. (market capitalization increased from $1.4 million to over $1 billion); JED Oil Inc. (market capitalization increased from $50 million to over $170 million) during tenure as President and CEO
Matt Moorman, Chief Financial Officer - Calgary
Over Twenty-five years of experience in finance; most recently VP Finance & Treasurer, Provident Energy Ltd.
Previous experience with TransAlta Corporation
Bruce Moyes, VP Finance and Reporting - Calgary
Over Twenty-five years of experience in finance; most recently VP Finance & Treasurer, Ensign Energy Services Inc.
Previous experience with Canadian Pacific Limited and PricewaterhouseCoopers LLP
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Strong Operations Team
Kiel Clark, President South America
Over 30 years drilling experience in USA, South America and The Middle East, both on land and heli-portable drilling rigs, from start up to growing the business unit
Previously employed with Standard Drilling, Nabors and Helmerich & Payne
Patrick Gares, President Africa
Over 30 years of management experience in drilling and oil and gas
Previously employed with Maurel and Prom (Caroil)
Andres Lozano, VP Business Development
Over 15 years of management experience in the drilling and geophysical industries
Previously employed with PGS EM, EMGS and Nabors
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Board of Directors
Walter Dawson (Calgary, Alberta) - Chairman
Reginald Greenslade (Calgary, Alberta)
Donald Wright (Toronto, Ontario) - Lead Director *
o Chairman, The Winnington Capital Group, Former Director, Saxon Energy, Ex-Chairman & CEO, TD Securities + Deputy Chairman, TD Bank Financial Group
Jeffrey Scott (Calgary, Alberta) *
o Chairman, Gran Tierra Energy Inc., President, Postell Energy Co. Ltd, Former Director, Saxon Energy Services
Herb Snowdon (Calgary, Alberta) *
o Former Partner KPMG
William Dorson (New York, New York) *
o Former CEO and Head of Investment Banking, Standard Bank Americas, New York
Michel Perret *
o Chief Exploration Officer, Maurel and Prom
Paul-Andre Canel *
o Country Manager, Maurel and Prom, Colombia
* Independent Directors 12
Corporate Strategy
Leader in South America and emerging market land drilling business with workover and rental capabilities
o Focus on latest technology new equipment
o Experienced management team
o Strong market presence
o Operational excellence
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Market Presence
Head Office – Calgary
o Houston
o Paris
Current operating centers
o Bogota, Colombia
o Quito, Ecuador
o Manaus and Rio de Janeiro, Brazil
o Congo, Gabon and Tanzania
o Trinidad
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Target Markets – South America/Africa
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New tenders have led to a dramatic increase in exploration and resultant development drilling on “spend or lose concessions”
Large portions of these countries have remote access and lack the infrastructure necessary for the efficient transportation of drilling rigs
o Increasing customer demand for new cost-efficient rigs and technology
o Increasing demand for Tuscany’s fleet of heli-portable rigs
o New exploration drilling programs require small footprint rig equipment
Colombia
15 rigs deployed in Colombia
o Represents over 21% of drilling market in Colombia (Source –Baker Hughes Rig Count for Sept 2011 of 70 land rigs)
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Increasing customer demand for new cost-efficient rigs and technology
New exploration drilling programs require small footprint rig equipment
Source – Baker Hughes Rig Count - June 2010
As of June 2010, 338 rigs operating in Latin America vs. 1,760 operating in Canada and the U.S.
Brazil
10 rigs in Brazil
o Represents over 30% of drilling market in Brazil
o Two rigs under 4-year long term contracts with HRT
o Eight rigs acquired with Brazilian acquisition, two of which are under long term contract with Petrobras
o Over the next two years Brazilian rig counts could double (Source – Baker Hughes Rig Count Sept 2011 of 35 land rigs)
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Campos
Santos
EspiritoSanto
Amazonas
Sergipe-Alagoas
SolimoesParanaiba
San Francisco
Parecis
Frontier onshore
Off-shore
371494
683 662147
149
143 192
2006 2007 2008 20090%
20%
40%
60%
80%
Onshore wells Offshore wellsOnshore success rate Offshore success rate
Source: Agencia Nacional do Petroleo (ANP), 2010 andWood Mackenzie.
Ecuador
6 rigs in Ecuador (3 workover, 2 drilling, and 1 heavy work-over)
o Represents approximately 40% of drillingmarket in Ecuador
(Source - M-I Swaco International Rig Count Sept 2011 of 15 land rigs)
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Rig 105
Africa
8 rigs + 1 work-over rig operated under management contract
o 2 rigs plus 1 work-over in Congo
o 4 rigs in Gabon
o 2 rigs in Tanzania
o Clients include top tier E&P
companies (Energulf, ENI,
M&P, Tullow, etc.)
* Source – Baker Hughes Sept 2011 Rig Count
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Corporate Strategy
Leader in South America and emerging market land drilling business with workover and rental capabilities
o Focus on latest technology new equipment
o Experienced management team
o Strong market presence
o Operational excellence
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Operational Excellence
Focus on margin optimization
Lower maintenance costs
o New equipment
o Common parts and components among rigs
Concentrated deployment of rigs in markets to obtain increased efficiencies
Continued focus on organic growth
o Newly built latest technology equipment
o Expansion in existing markets
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Rig 116
Operational Excellence
Growth through Mergers and Acquisitions
o Accelerate cash flow
o Reduce deployment time
o Add critical mass
o Provide infrastructure for new jurisdictions
Long term contracts
No spring breakup
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Rig 114 - 850 HP Double Pad Drilling Rig
Summary
Proven Executive Track Record
o Reputation for building quality public companies
o Superior service to clients
o Robust returns to shareholders
Strong In-Country Management with Key Relationships
o Solid “on-the-ground” relationships developed by experienced country managers over several decades
Proven Operational Model and Crews
o High quality, new technology equipment
o Superior services delivered with experienced employees in growth markets
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Rig 108
Summary
Strong Corporate Governance:
Well-respected Board of Directors responsible forsignificant successes in private and public businesses,focused domestically and internationally
Strong Demand and Acceptance:
Customer acceptance and demand for additional Tuscanynew build technology is overwhelming
Compelling Valuation:
o Significant growth profile
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Rig 108
Capitalization
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Basic Shares Outstanding (1) 376.2
Fully Diluted 408.2
Share Price ($CDN)(2) $0.70
Market Capitalization – Basic ($US) (3) $263.3
Long Term Debt ($US) (4) $215.0
Cash and working capital ($US) (5) ($25.0)
Enterprise Value ($US) $453.3
Gross Cost of CAPX (at September 30, 2011) (6) $520
Gross Cost CAPX/share – Basic ($US) $1.38
1. Assumes conversion of 27.5 million zero cost warrants issued to M&P as part of the consideration for the acquisition of Caroil2. Closing price on the TSX on Apr. 13, 20123. Using a CAD/USD exchange rate of 1.00 4. Includes $20 million in drawn Revolver5. Estimated as at Dec 31 , 2011 6. Amount is calculated as (Gross Cost CAPX as at September 30 , 2011)
(millions)
Rig # Manufacturer Size (HP) Description Vintage
Rig 101 * Loadcraft Industries 1,000 Mobile double drilling 2009
Rig 103 Loadcraft Industries 550 Mobile double workover 2009
Rig 107 Care Industries 550 Small footprint double heli-portable drilling 2010
Rig 109 * Drilling Structures Int’l 1,500 SCR Triple drilling rig 2009
Rig 111 Care Industries 650 Mobile double drilling / heavy duty workover 2010
Rig 112 Care Industries 650 Mobile double drilling / heavy duty workover 2010
Rig 114 * X-Treme Industries 850 Pad double drilling 2010
Rig 118 Loadcraft Industries 1,000 Mobile double drilling rig 2010
Rig 119 * Drilling Structures Int. 1,500 SCR triple drilling Rig 2009
C1* Cooper 2000 Land Drilling 2004
C8* IDECO 1500 Land Drilling 2006
C12* National 110 Dreco 1500 Land Drilling 1982/2007 (1)
C14* National Oilwell 2000 Land Drilling 1978/2007 (1)
C15* DSI 1500 Land Drilling 2007
C16* DSI 1500 Land Drilling 2007
Rig 110 * Oklahoma Rig Fabricators 1,500 SCR Triple drilling rig 2010
Rig 120 Care Industries 850 Pad double drilling 2011
Colombia/Trinidad Operating Fleet
26* (Includes Top Drive) (1) - Refurbished
Rig # Manufacturer Size (HP) Description Vintage
Rig 102 * Loadcraft Industries 1,000 Mobile double drilling 2009
Rig 104 Care Industries 550 Mobile double drilling / heavy duty workover 2009
Rig 105 Care Industries 650 Mobile double drilling / heavy duty workover 2009
Rig 106 Care Industries 650 Mobile double drilling / heavy duty workover 2009
Rig 108 Care Industries 650 Small footprint double heli-portable drilling 2010
Rig 117 * FPI Limited 2,000 Triple heli-portable drilling rig 2008
Ecuador Operating Fleet
27* (Includes Top Drive)
Rig # Manufacturer Size (HP) Description Vintage
Rig 115 * IDE 1,500 Triple heli-portable drilling rig 2010
Rig 116 * IDE 1,500 Triple heli-portable drilling rig 2010
D1 Franks 550 Work-over 1978/Q2 2012
D2 Cooper LTO 550 Mobile double drilling 1982/2006 (1)/Q4 2012 (2)
D3 Wilson Super 150 Work-over (Retired) 1987
D4 Cooper LTO 550 Mobile double drilling 1985/ Q4 2012 (2)
D5 IRI Cabot 1200 Mobile double drilling 1979/2005 (1)/Q1 2012
D6 IRI Cabot 750 Mobile double drilling 1982/Q1 2012
D7 EMSCO 1200 Mobile double drilling 1956/2004 (1)
D8 Loadcraft HRI 1000 Mobile double drilling 2008/2008 (1)
D9 Skytop Brewster 600 Mobile double drilling 1978/2005 (1)/Q4 2012 (2)
Brazilian Operating Fleet
28* (Includes Top Drive) (1) – Refurbished (2) – Planned Refurbishment
Rig # Manufacturer Size (HP) DescriptionCountry
DeployedVintage
2 * OIME 1200 Land Drilling Congo 1981/2007 (1)
3 * OIME 1200 Land Drilling Gabon 1981
4 * IDECO 900 Land Drilling Gabon 1985
5 * CEMSCO 1500 Land Drilling Congo 1979/2011 (1)
6 * OIME 1200 Land Drilling Tanzania 1983
7 * Gardner Denver 1500 Land Drilling Congo 1982
9 Massarenti 250 Workover Gabon 1984
11 * UPET 1000 Land Drilling Gabon 2007
WO Workover Congo
Africa Operating Fleet
29* (Includes Top Drive)(1) – refurbishment complete
Contact Details
Walter Dawson (Executive Chairman): (403)265-8258 or cell (403)861-6708; [email protected]
Reg Greenslade (President & CEO): (403)265-8258 or cell (403)701-2933; [email protected]
Matt Moorman (Chief Financial Officer): (403)265-8258 or cell (403)862-3877; [email protected]
Bruce Moyes (VP Finance and Reporting): (403)265-8258 or cell (403)613-4327; [email protected]
Website: www.tuscanydrilling.com
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