Hello, everyone, and thank you for joining us during the Lytham Partners Fall 2025 Investor Conference. My name is Joe Diaz. I'm a Managing Partner at Lytham Partners. Today, Blake Gendron, VP of Investor Relations of National Energy Services Reunited , will be taking us through the company's slide presentation. National Energy Services Reunited trades on the NASDAQ under the ticker symbol NESR. Let's get started. Blake, welcome. I will turn the floor over to you for your presentation.
Yeah, thanks, Joe, and thanks to the Lytham Partners team for having us. This is NESR. My name is Blake. I handle Investor Relations and Business Development for the company. You'll notice it's been an interesting time for the stock. We've had a good run here over the past, I would say, month and a half. The purpose of my presentation is to just give you an overview of the company, you know, where we play in the energy services space, what we do, and then also talk about some specific stock catalysts. I do think this is a very timely and topical time to be with the Lytham Conference.
Obviously, I'll meet some of you one-on-one, but anybody who's watching this presentation, feel free to reach out to me directly to talk about any of the material that's in this presentation or any questions that you may have about the company. Just before I get started here, some safe harbor and disclosures. I may be making some forward-looking statements. Obviously, those are our projections as of now and should not be relied upon. Any information that you need financial-wise or otherwise can be found on our website or in all of our SEC filings. Let me just start here, Joe, today with a company snapshot and just explain a little bit about the history of the company, you know, where we play and, I would say, the unique position that we're in as a company.
NESR is the first and only pure play Middle East in the energy services space. For those that follow the energy services space, it's typically the energy specialists that follow companies like ours. Generalists are slowly trickling back into the space, especially with some of the geopolitical considerations around oil and the region. Energy services are basically the picks and shovels of the energy industry. Think of us as the services that go around the drilling rig, drilling and evaluation, production services. We make our revenue from the CapEx budgets primarily of our customers, and our customers are themselves the oil and gas producers, in this case, the national oil companies. We are currently the only company listed on NASDAQ that gives the pure play Middle East exposure to countries like Saudi Arabia, U.A.E., Oman, Kuwait. The GCC is about 75% of our revenue.
Those top four countries, and then we have an exposure in North Africa as well. The company was formed as a Special Acquisition Purpose Company back in 2017. Sherif Foda, who's the CEO and founder of the company, longtime Schlumberger, basically 25 years in the industry. What he recognized was that the Middle East, through the oil and gas cycles, was the only region globally that had positive margins and relative cash flow stability. One of the key elements of our story is that we're the only pure play exposure to the best upstream oil and gas region for activity. You can see here it's 16 countries, again, primarily focused in the GCC, over 6,500 employees, 30+ customers, which happen to be the largest oil and gas producers, the national oil companies. Saudi Aramco, for instance, is over half of our business.
We are fully diversified in the services that we provide, 20+ product and service lines. Think of us as a smaller version of, say, a Schlumberger or a Halliburton. The tickers of our peers are SLB, HAL, Weatherford, WFRD, Baker Hughes, BKR, and our ticker is NESR. In terms of what we do, like I said, we're fully diversified in the energy services space. We basically do everything that our large peers do, and it covers the full lifecycle of well construction and well completion. Production services are the bread and butter of the company. Roughly 70% of our revenue are production services. Things like cementing, coiled tubing, stimulation, hydraulic fracturing, these are the biggest segments in the company. These are across all of our 15+ countries. 30% of our portfolio is the drilling and evaluation services. This is services like Directional Drilling, Pressure Control, through Tubing, Slickline, Wireline Logging.
The way the company was formed as a SPAC was back in 2017, Sherif identified two of the major regional private oilfield services companies and brought them together. One was a company called Gulf Energy, which was primarily Oman and primarily drilling and evaluation. The other was NPS- National Petroleum Services, primarily production services and also a bit more diversified in Saudi Arabia and the rest of the GCC and a little bit of North Africa. Very complementary from a geographic perspective and very complementary from a portfolio perspective. That's basically how the reporting structure is today. We have a production services segment. We have a drilling and evaluation segment. We basically do everything that oilfield services has to offer. Now, in my opinion, what makes the NESR story most compelling is simply how much we've grown since the founding of the company. It speaks to two things.
Number one, the vision of creating a company that's, you know, truly a national champion in a very competitive oilfield services environment where the national oil companies want to cultivate local capabilities and local companies that can compete with the big guys, essentially giving more of the share to very capable regional services providers. That's dynamic number one. Dynamic number two is what I alluded to earlier. The Middle East just happens to be the best region for oil and gas activity. I'll talk a little bit more about this when I get into the investment thesis for the company a little bit later on in the presentation. Since the SPAC, and the D-SPAC was in 2018, the SPAC was initiated in 2017, we brought together two companies with a pro forma revenue of about $450 million.
The company has grown 20% every year up to about $1.3 billion in revenue today. We actually have line of sight based on recent contract awards into a run rate of $2 billion in revenue within the next 18 months. I'll get into some of the company-specific catalysts later on in the presentation. We've grown the company substantially. Of course, the region has grown at a 5% CAGR, but I would say that our growth outperformance is really unique in an oilfield services sector that's really devoid of any sort of growth stories that are out there. This is another slide that shows our portfolio and our portfolio positioning. When we call ourselves the national champion, what we're really trying to get at is we are the most local, we have the most local content, most manufacturing and investment. We have partnerships with Academia. We do the most local hiring.
When we hire in our company in Saudi, we're completely Saudi. In Oman, we're completely Omani. Kuwait, we're completely Kuwaiti. This reflects in our market share of our key service segments. We aim to be the top three in every service we provide. We're well on that path. I would say for the top 10 or so segments, we will be top three within the next three years, and that is the ambition. You can see from the SPAC again in 2018 and then, our most recent year, 2024, we've really established ourselves particularly on the production services, the core segments like cementing, coiled tubing, hydraulic fracturing. We're the largest in the region in those segments. In the next set of segments, we are quickly becoming a top one or two provider.
One of the other important aspects of the story is that we take a little bit of a different position as it relates to technology versus the rest of the sector. Oilfield services is a very complex operation, but I would say one of the detriments of the sector is that over the past 30 or 40 years, you've had an erosion in the technological differentiation. Think of a company like our largest peer, for instance, which used to have massive technological differentiation in some of the high-end services. Over time, that technology margin was eroded. That is reflected not only in the returns of the energy services space over time, but also in the R&D spend. Now those companies are large, globally diversified peers that I talked about before. They still spend very heavily on R&D.
We take a little bit of a different tact, and we think that it's better tailor-made for the national oil companies that we work with. We call this strategy the open technology platform. We inaugurated our research facility, NORI, in Saudi Arabia. It's right next to the Aramco campus in Saudi Sahra Techno Valley. It's right next to KFUPM and some of the leading academic work in the kingdom. We have what's known as an open technology platform. What that means is that we do have our own organic R&D budget, but it pales in comparison to our large peers. What we like to do is leverage the footprint that we have, leverage the contracts that we have, identify unique technologies both in the oilfield services space and outside the oilfield services space, and then work with those companies, partner with those companies, and bring those technologies into the region.
It does two things for us. Number one, it gives us technology content without years and years and many, many millions of dollars in organic development. That's kind of the tact that our peers take with respect to R&D. Number two, it helps us streamline really unique technologies very quickly. It actually helps us give access to the national oil companies that otherwise would have to rely on those large peers of ours, which are the gatekeepers of technology in our industry. If there's a technology, for instance, that Saudi Aramco really likes out of the U.S., it's very easy for us to partner with that small company. They themselves wouldn't be able to come to Saudi Arabia by themselves and establish an operation, but they rely on our already established manufacturing supply chain and operational footprint, and we can very quickly get those technologies into the region.
We're doing that with many partners in the U.S. We're doing that with many partners in Europe and around the world. It gives us a lot of flexibility. It also means that we can go out and find the best technology. We're not beholden to any one, say, homegrown technology that we develop ourselves. This is a brief timeline of the company and some of the partnerships that I just alluded to on the previous slide, and also in the bottom of the slide, some of the key contract awards. One of the reasons why we like the Middle East, North Africa region is not only is it a very stable region activity-wise relative to, say, the U.S., which is a hypercyclical sector for oilfield services. In the Middle East, we have multi-year visibility into our contracts.
When a contract is awarded, it's awarded for three years, five years, sometimes up to nine years in the case of our operation in Oman. You can see over the company's history that we've won some really large, what I call anchor contracts in some of the anchor countries. What this means is that once we establish a contract or an operation in that country, we can build around it. We can pull through some of the other segments that we're really strong in, say, in other countries, into some of the frontier areas that we're growing into. Eventually, we can fill out and flesh out a complete operation in a country where all 15 or 16 of our countries are strong across every single one of our 20+ product and service lines.
You'll see at the very bottom right of the slide that there are a large number of tenders to be awarded. I'm going to get into the catalysts with respect to our company here in the next section of the presentation. There are some very large contract awards yet to be decided. This is a massive opportunity for the company and part of the reason why it's worth a look, worth a look today. That was the overview of the company. Again, we're the largest diversified services provider in the Middle East. The pure play Middle East is the selling point. There's no other way to get pure play exposure in the public capital markets. Schlumberger, Halliburton, those were the only companies previously that had any sort of exposure to the Middle East. Obviously, they're global, number one.
Number two, the Middle East region is treated often like a black box. We're the most local company in all the countries that we're in, and we're growing very substantially, even relative to the market. Now, let me get into the investment thesis because some of this draws upon the overview of the company itself. Other elements of this are very timely in nature. I'll go through each one of those elements. There are three pillars of the investment thesis as I think about it today. The first, and I've already talked about it before, is that the Middle East is the healthiest Oilfield Services market. That's both today and also through the cycle. When you think of energy, when you think of Oilfield Services, the reason why the stocks trade at such low valuations is because of the cyclicality.
EBITDA margins and cash flow can go from peaks when oil is really high to basically zero or negative when oil is really low. This is particularly evident in the U.S. Shale industry where the public companies, mainly drillers and service companies, see massive fluctuations in earnings, in earnings power. In the Middle East, it's not like that. Not only are these multi-year contracts where we have visibility into our activity for years to come, but you're talking about a region that's the lowest break even for oil. Out of all the regions globally, the most economic rent to be generated from developing a barrel of oil is onshore Middle East. This is good for the oilfield services companies because it's essentially a split in that economic rent between the national oil company, which is our customer, and then the service companies that they hire within their CapEx budget.
You can see that our major countries, Saudi Arabia, U.A.E., Oman, which is PDO, Kuwait, KOC, these four countries comprise 75%- 80% of our total revenue. They are remarkably stable, if not, you know, secular growth stories. It's because the break-even price of oil is so low. You can see in the chart to the bottom right that, over the past several years, it's been a very healthy growth dynamic for the region. If you compare that to, say, the U.S. or other regions, there's much more volatility. Investment thesis number one is we were the only pure play for the Middle East, and the Middle East is the most healthy market. This is a slide that just goes into the country-specific drivers.
The only thing I'll mention here is, we talk a lot about oil and oil prices, and obviously our stock will be tethered ultimately to commodity prices and oil specifically. There's another element to the Middle East that people maybe underappreciate. That element is the development of natural gas. Natural gas is becoming important for the Middle East, not because the Middle East aims to be an imminent exporter of gas, although at some point, I would say the region probably will be. Qatar is already, you know, a foremost exporter of LNG, as we know. The importance of natural gas for the GCC countries and Saudi Arabia specifically is for domestic consumption. Saudi Arabia already has its Vision 2030.
The Vision 2030 is to increase domestic gas production by, say, mid-teens, you know, from mid-teens Bcf per day to 25 Bcf- 30 Bcf by 2030 and beyond, a massive increase in the domestic gas reserves. One of the key projects within Saudi Arabia to achieve this is in Jafurah. Jafurah is what we call an unconventional natural gas reservoir, which means you need to frack the reservoir. It's a very service-intensive project. We are one of the key companies that have unlocked the potential of Jafurah. Jafurah is one of the large tender awards that's yet to be awarded officially, and something that I've alluded to as far as NESR-specific catalysts. The key takeaway from this slide is oil obviously is the bread and butter of the region. Oil is here to stay as far as the region is concerned.
Natural gas is another, I would say, secular growth story. Again, not for internal consumption. What that means is, irrespective of what global gas benchmarks are, these countries will continue to invest in the domestic gas capacity, which is good news for the service companies and good news for NESR. Thesis number two is our financial performance, both historically and as we look out over the near to medium term horizon. I already mentioned before, being a relatively small company and being a national company, we're given, I would say, preferential share from our national oil company customers. We've shown this in terms of the growth outperformance since the founding of the company. On a trailing 12-month basis, we've grown 7% versus a Middle East market that's grown around 3%. You can see some of the core comp groups that we have.
The international peer group would include the large global diversified, Schlumberger, Halliburton, Baker Hughes, Weatherford. The international regroup would be companies like Adenau Drilling, Addis ADC. I would include Nabors and their international practice there as well. The U.S. comp group would be the drillers and the pumpers and the service companies specific to U.S. shale. The reason why the U.S. comp group is so important is because our stock is trading at a valuation much like the U.S. companies, but our fundamentals are so much better. The region is so much healthier. I have a slide toward the end of the presentation that kind of elucidates this. Growth outperformance is something that we've done recently. It's also something we've done pretty remarkably since the founding of the company. You can see the 15% CAGR over the last five years vs the peer groups. Growth is number one.
Number two are the margins and returns. I talked before about how the break-even price of oil in the Middle East is the lowest out of all the regions globally. What that supports is healthier through cycle margins and cash flow generation for the service companies. On a trailing 12-month ROCE, we are the leader amongst the peer groups. In terms of margins, free cash conversion, and free cash margin from revenue, even with the growth that we've achieved and the reinvestment of growth CapEx in the business, we're still able to generate a leading free cash margin of around 10%. This is only going to grow over time. When you look at the free cash flow yield, which we define as the trailing 12-month free cash flow, the consensus NTM cash flow over enterprise value, we're already at double digits.
That's with a cash flow that is compounding with our growth. Finally, the balance sheet, we've done a remarkable job over the past two- three years in deleveraging the balance sheet. The first three, four years of the company was really an organic growth story, and there were some acquisitions. We kind of rolled up a few regional service providers even after the initial SPAC. The last few years have been a cash harvest and deleveraging story. Now we're in a position where we still have massive growth ambitions. Even with those growth ambitions factored into our CapEx budget, we still should be able to generate very, very healthy cash flow moving forward. The third pillar of the thesis is related to the frontier technology opportunities.
I talked before about how NESR is an open technology platform, and we can find the best technologies from around the world and bring them in. That's the case in our core business, and it's also the case in what we call the NEDA decarbonization business. I handle investor relations. I also handle business development. I'm in charge specifically for the decarbonization business, the NEDA business. This is a business where we have technology partnerships and investments in areas like water, emissions detection, so methane detection, heat capture on geothermal, and then CCOS and new energies. The total addressable market that we see by 2030, it's a completely new market. It's one that we're creating in real time. We see a $5 billion plus total addressable market by 2030. This is completely incremental to the $20 billion or so total addressable market of the core business. That's for NEDA.
The ROYA is something that's more peripheral to our core business. We are fully diversified. We do basically everything in production services and drilling and evaluation. The one place where we don't currently compete, we're starting to get bigger, but we're just at the outset of this journey, is in the tier one directional drilling. For those that follow the energy services space closely, this would include services like rotary steerables, logging while drilling, LWD, and measurement while drilling, MWD. This is a $2.5 billion TAM out of a $20 billion oilfield services TAM in the Middle East, North Africa region. It's a significant part of our core business, even though we don't currently play in this tier one directional drilling niche. For those that are generalists, the way I would think about this is there's really only one hole in the portfolio, in our oilfield services portfolio.
It's in tier one directional drilling. It just happens to be a highly technically sophisticated niche, which means that it's a very high margin and return part of the market that we don't currently play in. As we grow into this market, not only is it going to add to our overall growth outperformance, it's also going to add high-quality revenue dollars and very accretive growth for us. I think this is the second to last slide. I just want to touch really briefly on the stock itself, and why it's very topical for people to maybe tune into our story now. I talked before about how we're outperforming in terms of growth. I talked before how we're outperforming in terms of margins and returns and free cash conversion. The stock does not reflect that.
On the last slide, I'll touch on one element of the story that I think factors into this discussion. Essentially, the NESR stock trades at a valuation that's akin to the small cap or smid cap, mainly U.S.-centric oilfield services companies. The reason why the U.S. O ilfield Services companies trade at such a low multiple is because of the hypercyclicality of the U.S. market that I talked about before. Their contracts can be month to month. They can even be well to well in some cases. Whereas for NESR, we have the multi-year visibility. We have key relationships with the national oil companies, and the national oil companies want to see us succeed as the national champion. That's just one reason why we should not trade at a U.S.-land oilfield services multiple.
If you look at the more comparable peer groups, the capital equipment providers, especially the international diversified providers, the offshore and subsidy is maybe not comparable just because they play in a completely different part of the market. Especially the international diversifieds, I mean, that's more of a multiple that we aspire to and we think that our business model and our market positioning and specifically our Middle East exposure, warrant. The key takeaway from this slide is we are outperforming in terms of growth, but we're not given any sort of credit for it. I think part of the reason is because we're small. Part of the reason is because, you know, there may be some perceived geopolitical risk, although we think the Middle East exposure rebounds to our benefit, fundamentally speaking. We have a very, very stable practice.
Like I said, our top four countries, Saudi Arabia, U.A.E., Oman, Kuwait, they're 75%- 80% of our business. Oil and gas is everything to those countries. You're not going to see a huge amount of variability even when oil prices retreat. In fact, the oil budgets are going to be fairly stable and growing. Then you have the natural gas, you know, secular growth investment that I talked about earlier. Just to wrap up here, I just want to go through some of the recent milestones for the company and also touch on one last topic that I didn't mention before. Of course, the stock chart of late has been very positive for us. I think we're getting a lot of special situations interest just given the valuation disconnect.
We're getting a lot of generalist interest just because they want, you know, pure play energy exposure, and there's really no other way to do that, even in some of the other energy subsectors. I think part of the reason why we traded at a discount as well is because we did go through a financial restatement. Essentially in early 2022, we discovered the need to restate the years 2018, 2019, 2020. This was due to an under accrual of costs. We basically had an overestimation of our margins over those three years. We got right to work in 2022. It took an extremely long time and quite a lot of investment. I would say tens of millions in investment to fully remediate not only the restatement but also the material weaknesses that came out as a result.
All of that to be said, we were delisted in early 2023 from NASDAQ and recently relisted back in October of 2024. It's been less than a year at the time of recording that we've been relisted on NASDAQ. That's the other reason why I think our stock trades where it does and why some of the special situations investors are or have taken a look at the company. On the flip side, all of the investment and all of the work that we've done to restate and remediate the company's financial controls should be a strength of the company moving forward.
There is no company in the sector today that has invested more and done more to improve its back office, you know, hire the right people, hire third-party oversight, obviously conduct a thorough investigation of all of the processes and controls that we had at the time of the restatement. There's no company that I think is as well equipped as we are to handle the growth aspirations that we have moving forward. Part of the reason for the restatement, in my opinion, is because we grew so substantially. When you take two private oilfield services companies and put them together and then grow at a 20% CAGR over five years, it's very difficult for the back office to keep up. Let me just go through some of the recent developments that I think are positive catalysts. Number one, we completed the restatement in December 2023.
We filed our 20-F in April of 2024. We successfully completed an SEC inquiry and relisted on NASDAQ in October of last year. Just this past August, we remediated all four of our material weaknesses, and that helped us satisfy the SEC inquiry. I think part of the reason why our stock has gotten some momentum of late is because we've fully remediated. This issue is fully behind us. We still trade at a significant discount, so there is still plenty of opportunity for investors that take the time to look. Looking ahead, it's everything that I covered in the presentation. The Middle East is extremely stable. Our growth outlook is extremely good. We have line of sight visibility into $2 billion in annualized revenue over the next 18 months.
Our balance sheet is in fantastic shape already, and our cash flow is already healthy to the point where, you know, we could very well balance growth and returns moving forward. That's a short overview of NESR and our story and some of the catalysts. Joe, thanks for the opportunity, and I'll turn it back over to you.
Blake, thanks for that presentation. A lot of great things ahead here for the company, and sounds like you have a great team that can actually execute on all this. That's incredibly positive. If you have anybody out there in the audience, if you have any questions or you would like to schedule a meeting with Blake, send an email to us at 1x1@lythampartners.com. That's 1x1@lythampartners.com. If you would like to learn more about Lytham Partners, you can visit our website at lythampartners.com or follow us on LinkedIn to stay connected about future events. We hope you all enjoy the rest of the conference and have a great day. Blake, thank you again for your time. Appreciate it.
Thank you.