A Capital Opportunity A Global Market for Oil & Gas Companies CAPP ScotiaBank Investment Symposium – April 2014
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Canada and TSX: Strong Fundamentals Economically stable •
• • • • •
Canada is the fifth largest equity market by float capitalization in the MSCI World Index World’s soundest banking system Lowest debt-to-GDP among G7 Strong equity culture ~$2.4 Trillion in market cap $270 billion in equity capital raised in last 5 years
Energy and resource rich • •
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3rd largest oil reserves in the world #1 in resource listings
Canadian Markets‌Global Leaders
1
st
In Listed Oil & Gas Companies
1
st
In Listed Renewable Energy and Clean Technology Companies
2
nd
In Number of Listed Companies
4
1
st
In Listed Energy Services Companies
2
nd
In New Listings
7
th
In Equity Capital Raised
Source: World Federation of Exchanges, 2013, Capital IQ, TSX/TSXV Market Intelligence Group
1
st
In Oil & Gas Analysts
3
rd
In New International Listings
7
th
In Market Capitalization and Value Traded
The World Lists on TSX and TSXV TSX and TSXV International Listings by Country/Region
Total International Listings as at December 31 2013= 314 TSX = 164 Listings | QMV=$151 B TSXV = 150 Listings | QMV= $2.8 B
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The World Trades on TSX and TSXV
~40% of daily trading originates from international brokers
7
th
in the world in value traded
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Service at All Stages of Growth A Unique Market Structure with Strong Feeder System
Serving all Market Caps
% of TSX Issuers % of TSXV Issuers
94%
583
35%
535 Issuers
29% 2,015 Issuers
<$50 Million
442 Issuers
graduates +147 M&A*
36%
5% 114
$50 - $250 Million
555 Issuers
1%
12
>$250 Million From January 1, 2000 â&#x20AC;&#x201C; December 31, 2013
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Market Capitalization, December 31, 2013
Access to Capital Toronto Stock Exchange and TSX Venture Exchange Total Financings (C$ Billions) 1999 â&#x20AC;&#x201C; 2013 Average Financing Size: TSX: $67M TSXV: $2M
64.9 58.8
52.2 46.2 19.2 19.2
1999*
8
25.5 23.1
22.0 20.9
2.4
1.1
2000
2001
27.3 25.8 1.4
2002
31.5
32.5
29.1
28.4
41.8
47.6
54.0 40.8
44.1
35.3
2.4
4.1
6.1
2003
2004
2005
TSX Venture Exchange commenced operations on November 29, 1999
49.7
56.5
60.0
7.9
2006
11.1
2007
9.8
5.5
5.0
2008
2009
2010
51.1
50.6
41.0
10.1
2011
43.6 39.9
6.0
2012
3.8
2013
Oil & Gas by the Numbers
369 Issuers 110 TSX + 259 TSX V
$5.2B Equity Capital Raised $3.9B TSX + $1.3B TSXV
246 Number of Financings 72 TSX + 174 TSXV 9
$375B Market Capitalization $364B TSX + $11B TSX V
15 New Listings 9 TSX + 6 TSXV
Leading Growth Markets for Oil & Gas
1
#
Number of Listed Oil & Gas Issuers 369
in listed oil & gas companies globally
167
147
136 49
32% of the worldâ&#x20AC;&#x2122;s public oil & gas companies
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Source: Capital IQ, as at December 31, 2013
TSX/TSXV
NYSE/ NYSE MKT
ASX
LSE/AIM NASDAQ
17
14
HKEx
Oslo Bors
Leader in Energy Services
1
#
Number of Listed Energy Services Issuers 80
in listed energy services companies globally
59 46 21
21% of the worldâ&#x20AC;&#x2122;s public energy services companies
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Source: Capital IQ, as at December 31, 2013
TSX/TSXV
19
NYSE/ Oslo Bors LSE/AIM NASDAQ NYSE MKT
13
HKEx
6 ASX
Access to Capital
$
5.2B
Raised by oil and gas companies in 2013
Oil & Gas Equity Capital Raised on Toronto Stock Exchange and TSX Venture Exchange (C$ Billions) Secondary Offerings
Private Placements
$11.7B $10.4B
IPOs
$11.3B $10.5B
$10.1B
$9.2B
$9.0B $8.2B
246
$5.2B $4.1B
Financings in 2013 2004
12
2005
2006
2007
2008
2009
2010
2011
2012
2013
Service at All Stages of Growth
200
+
Oil & Gas Equity Analysts Cover the Sector
Companies of all sizes receive analyst coverage
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Source: Capital IQ
Oil and Gas Analyst Coverage
Who is Attracting Capital?
They have a good story
Strong balance sheet
Room for growth
Strong management team Are they known in the energy community? Are they known in the investment community: bankers, analysts, investors? Have they done it before? What is their track record?
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Where Is the Capital Going?
Canada: $2.7B
UK/Europe, Middle East and Russia: $595M
USA: $980M Latin America: $75M
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Equity capital raised on TSX and TSXV for oil & gas companies by location of project Source: TSX/TSXV Market Intelligence Group, 2014
Africa: $789M
Clean Tech Sector Growth and Performance Growth of Sector:
Performance:
Year-End Market Capitalization (C$B)
S&P/TSX Renewable Energy and Clean Technology Index
$18.0
$16.8
$18.1
2010
2011
2012
$12.9
2009
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$21.8
2013
2013 Oil & Gas Junior Market Overview
Depressed Capital Market Activity
Increased Private Equity financing
Junior companies traded up approximately 17% in the last half of 2013
A lot of consolidation, only 50% of juniors remain from 2007
Equity financings were down 30% from 2012
5 companies raised 60% of equity capital raised
75% of junior proceeds were raised in the second half of the year
More IPO’s in the second half of the year
Companies are recapitalizing
Decreased M&A activity (67%) and higher cost of capital
25% decrease in flowing oil metrics
A lot of assets on the market
Source: Paradigm Capital
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General Trends
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Increased interest in yield/dividends
Private Equity filled the gap that the sluggish capital markets created
Thirst for international projects
Increased activity and capital raising for African based projects
Capital raising and M&A activity has increased dramatically in 2014
Funds are flowing back into the Oil & Gas sector
Preference for oil-weighted E&P issuers
More room for midstream and oilfield services
Private placements and bought deals
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