PV Drilling: Ready for Integration into the Flow and Catch Up New Opportunities

During the first nine months of 2013 (9M2013) together with the growth of Asian economies, PV Drilling has achieved good results such as net revenue and profit after tax of the Corporation accumulating to VND10,417 billion and VND1,396 billion, surging by 25 percent and 27 percent respectively compared to the same period last year.

 

The drilling market during 9M2013 has been improving thanks to more E&P activities which led to stronger demand of drilling rigs and higher day rate. As a result, in Vietnam, the drilling market has been heating up with average day rate reaching USD 150,000/day, increasing by 15 percent-20 percent versus the same period last year. Subsequently, contracts of all our owned jack-up rigs have been revised upward with an average increase of 12 percent in 9M2013 vs. 9M2012. PV Drilling has been operating all our owned rigs safely and efficiently with 98-99 percent of efficiency ratio, attributing significantly to high and stable revenue and profit.

 

During 9M2013, besides 4 offshore owned rigs operating in Vietnam, PV Drilling has successfully increased total number of hired rigs operating in 9M2013 to 6 vs. only 3 hired rigs in 9M2012. These hired-rigs add-ons not only contribute to revenue but also improve PV Drilling’s drilling market share to 55 percent. Thus, revenue from drilling service in 9M2013 has grown by 48 percent vs. 9M2012 and contributes 64 percent of total revenue in this period. Besides, drilling-related service has grown by more than 20 percent in terms of revenue in Q32013.

 

In the investment side, to capture the upward trend of exploration and production activities domestically and regionally; and to serve for the Strategy - “Cross the sea, Steady to the future”, PV Drilling has established a joint venture in Singapore, namely PVD Overseas (in which PV Drilling holds 55 percent) to invest in a newly-built premium jack up rig, expected to put into operation in Q12015. This rig serves the first step of PV Drilling to provide the drilling services overseas with the potential markets like Malaysia, Brunei, Myanmar, etc.

 

Beside some advantages of the drilling market, PV Drilling faces some difficulties in term of limited number of owned rigs to capture more market share, dependence on the drilling campaign of oil and gas companies so some drilling-related business lacking behind the target when some E&P activities are delayed or postponed, bad weather conditions as well as storm in the East Sea, etc. Despite of such obstacles, PV Drilling is and will be taking all opportunities to get breakthrough steps in 2013 and achieve sustainable development in the following years.

 

Since our inception in early 2001, PV Drilling has a great vision to become an internationally reliable and reputable drilling contractor.

 

To realize the vision, the management of PV Drilling has been concentrating on developing the following fundamental elements to make up the firm foundation for PV Drilling’s development, which consists of infrastructure and technology, human resource, and the management system.

 

Along with the investment of advanced rig fleet including three premium, high-spec jack-up rigs, one land rig and one state-of-the-art TAD, PV Drilling has spent great effort to integrate a synchronized management system that was built upon the foundation of latest information technology. Some of the major modules are the inventory management system Maximo, the Reliability Centered Maintenance (RCM) Model, the application of ERP Oracle into activities including finance-accounting, human resource management, contracting and sale, planning and risk management.

 

And the most significant factor that plays the vital role in the success and sustainable development of the Corporation is human resource. Throughout the past years, all of our staffs have been meticulously recruited and received necessary trainings to perform their required tasks in a proper way. Currently, our total headcount has increased up to over 2,000 employees, out of which there are about 1,000 technicians and engineers. Along with excellent skills and in-depth knowledge, our staff always demonstrates a great working spirit and strong determination to conquer challenges and reach for success.

 

Focus on professional quality of human resources, investment in state-of-the-art drilling rigs and international qualification of service standards are main attributors to successful brand name – PV Drilling. As a result, during 2012 and 2013, PV Drilling has been consecutively awarded by World Finance Magazine (UK) as The Best Drilling Contractor in Asia. PV Drilling also achieves the ASEAN Business Award for Large Enterprises in the Growth Category. Among the investors’ community, PV Drilling is evaluated as the transparent and sustainable company with top 3 in the Annual Report Award and Top 5 for Sustainable Report in 2012. With great credit in both drilling and financial market, PV Drilling commits to retain the best brand name in long run.

 

One important milestone embracing strong growth of our Corporation is February 22^nd, 2005, when PV Drilling officially signed contract to build a new multifunctional jack-up rig, which is the first ever 120m jack-up rig 100 percent owned by Vietnamese.

 

Since 1999, oil and gas has risen up with increasing demand for exploration and production activities. At that time, besides the JV Vietsovpetro owned and self-operated 90m jack-up rigs, there was no domestic oilfield service company investing and operating its owned rigs due to technological barrier and large investment capital. Hence, drilling market all belonged to foreign drilling contractors.

 

Although PV Drilling was only a small workshop providing oilfield technical service at our inception in 2001, we had great ambition to become a pioneer in owning and operating high-technology drilling rig. Finally in 2007, the first 120m jack-up rig – PV DRILLING I officially arrived in Vietnam in proud of all engineers in this project and in great appraisement of all companies in this sector. Based on this success, the second and third jack-up rigs (PV DRILLING II and PV DRILLING III) were built up and delivered to Vietnam in 2009. All investment projects had been in line with planned schedules and rigs were delivered on time. PV Drilling has a strong project management team to track and conduct inspection to ensure all rigs complied with international quality. Reaching further development, PV Drilling moved to deepwater block in 2009 through investing in a newly-built tender assist semi-submersible drilling rig (TAD), which was finished at the end of 2011. On 14th February, 2012, the TAD completed its first drilling at Moc Tinh Field for Bien Đong POC, marking great breakthrough in advanced drilling technology. The TAD (PV DRILLING V) is great proud of PV Drilling’s engineers and operational team as PV Drilling has thought of the solution of using the TAD for projects at Hai Thach – Moc Tinh field which is more efficient and less costly as compared to a semi-submersible rig. The TAD is the 9^th, most modern TAD in the world and one of the two large projects was granted the Certification of High-technology application from Ministry of Science and Technology in 2012. These successes have pushed PV Drilling’s brand to new height when PV Drilling is able to operate the most modern TAD ever.

 

Up to now, all our owned drilling rigs are operating at high efficiency ratio, above 98 percent for jack-up rigs and above 95 percent for the TAD. These successes were owed to great effort, persistence of all our staff, proved brand and reputation of PV Drilling, pioneer of drillers in both Vietnam and regional markets.

 

PV Drilling has acknowledged importance of transparency in sustainable development, as the result, management of the Corporation has been focusing on building up transparency both internal and external. The internal environment and management system based on ERP Oracle system has been finished Phase I and II into Accounting, Finance and HR units. Internal management system like this has enhanced transparency to facilitate collaboration, ensure operational capacity and increase management effectiveness. In 2013, PV Drilling continues to implement Phase III of ERP Oracle system into Business Intelligence and Budget Planning.

 

For external environment, since being listed on Ho Chi Minh Stock Exchange in 2006, the Corporation’s leaders have built up Investor Relations (IR) team as part of Finance Department, which has been acting as information linkage between PV Drilling and shareholders, potential investors, authorities and other related parties.

During the past years, IR activities at PV Drilling have been intensified in building widespread information communication channels with investment community. In 2012-2013, PV Drilling welcomed more than 40 domestic and foreign funds/securities companies annually to visit the company to be introduced about development stages of PV Drilling, updated about business performance, financial performance as well as discuss about future direction and business strategy of PV Drilling. Investor Relations Team also develops communication channels through PV Drilling’s official website and reputable newspapers.

 

PV Drilling has actively participated in conferences about business, finance, investment like East Asia’s Financial Stability Conference, “Vietnam Access” Conference, “Vietnam Access Day” Conference, “CLSA Investment Conference”, etc. Through these communication channels, PV Drilling has effectively, immediately updated material information, events to investors; simultaneously, recognized and avoided rumor to ensure rights and benefits of investors, enhance confidence of investors into PVD stock. Through these communication channels, PV Drilling has received supportive feedbacks from investors to adjust business strategy matching the market and improve management activities gearing towards sustainable development.

 

IR team is also responsible for interim and infrequent information disclosure, for explanation to authorities like State Securities Commission of Vietnam (SSC), Ho Chi Minh Stock Exchange about changes in business performance… Annually, PV Drilling discloses information through releasing Annual reports as required by law and PV Drilling has achieved important awards consecutively like Best Annual Reports in 2011, Top 3 Best Annual Reports 2012 and Top 3 Sustainable Report 2012. In 2012, PV Drilling was honourably awarded by SSC for attempts in information disclosure among listed companies.

 

Furthermore, in order to ensure consistency in information disclosure between PV Drilling and the external, leaders of PV Drilling have implemented information disclosure procedure to manage information flow more effectively.

 

Along with the growing tendency of the exploration and production activities in recent years, PV Drilling has made itself prepared and ready to integrate into the flow and catch up new opportunities. PV Drilling’s strategy is to build up a diversified rig fleet that could operate in both shallow and deep water regions, HPHT areas, and for the time being, 1 jack-up construction project has been on progress. Taking this chance, PV Drilling would like to convey a cooperation message to all investors and partners in building new modern rigs. As the demand for rigs is climbing up while a large number of old vessels are gradually eliminated from the market, this is the very advantageous time to make investment to acquire new rigs and stay ahead in the run of catching the market trend in the upcoming period.

 

With a track-proven capability and excellent operational record of its whole rig fleet throughout the past years, together with the abundant source of infrastructure and manpower, PV Drilling believes to create more value added and considerably contributes to the success and development, not only of its clients, but of the ASEAN’s drilling industry as well.