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Leveraged Finance Conference – Ocean Rig UDW Inc.

Ocean Rig UDW Inc. · Oct 10, 2012 · 30 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 1
    Deutsche Bank Leveraged Finance Conference October 10th 2012 OCEAN RIG UDW INC.
  2. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 2
    Company Overview UDW Drilling Market Financial Review Summary Considerations 2
  3. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 3
    Who is Ocean Rig UDW Inc. Pure-play ultra- deepwater driller with premium assets Experience Fully funded fleet & operating UDW high EBITDA growth assets since 2001 Favourable market Large backlog = fundamentals…
  4. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 4
    Fleet growth & capital invested OCR Mylos 670 mil. 8.8 billion invested since 2008 Newbuild Drillship 2 (appx 4.0 billion in equity), to 669 mil. deliver results in 2013 and beyond Newbuild Drillship 3 800 mil. Senior 679 mil.…
  5. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 5
    Worldwide drilling experience Operating in UDW since 2001 having drilled 135 wells for 25 clients Drilled in harsh environments and in nearly every deepwater area of the world Extensive experience working in multiple jurisdictions and…
  6. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 6
    Pure-play ultra-deepwater driller with premium assets Harsh environment UDW semis Sister drillships provide benefits from standardization 5th generation semisubmersibles Four 6th generation drillships Three 7th generation NB…
  7. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 7
    Pure-play ultra-deepwater driller with premium assets Owned & operated ultra-deepwater(1) fleet Owned & operated drillships 35 25 30 20 25 6th largest fleet 5th largest of vessels of vessels 20 15 15 10 10 5 5 0 0…
  8. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 8
    Strong contract backlog provides cash flow visibility Unit Year built Redelivery Operating area Backlog (m) Leiv Eiriksson 2001 Q4 12 Falklands 78 Leiv Eiriksson 2001 Q1 16 North Sea 653 Eirik Raude 2002 Q3 12 Equatorial Guinea…
  9. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 9
    Near term contracting opportunities Taking advantage of tight market to secure lucrative contracts, 2 units still available in 2013 Contract signed with Repsol Sinopec Brazil for OCR Mylos (delivery July, 2013) Up to 6 month LOI* for…
  10. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 10
    Company Overview UDW Drilling Market Financial Review Summary Considerations OCEAN RIG UDW INC.
  11. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 11
    Exploration success fuels deepwater E&P spending E&P capex for UDW expected to accelerate Proven UDW reserves require substantial UDW drilling fleet US Bn 100 90 80 70 36.1 28.9 60 28.0 22.7 50 12.9 8.2 40 8.6 7.5 7.0…
  12. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 12
    Deep / Ultra deepwater a proven growth market Deepwater production has doubled in last 5 years Deep water activity is spreading worldwide Global deepwater production ('000b/d) 8,000 7,000 6,000 5,000 4,000 3,000 2,000…
  13. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 13
    Supply constraints Age Profile of DW and UDW fleet Beginning of Year UDW Deliveries & Availability 29 30 24 33.2% 25 23 Number of UDW units 20 19 48.5% 20 18 15 13 15 11 10 5 3 14.8% 3.6% 0 Over 20 years 10-20…
  14. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 14
    Favorable industry dynamics Day Rates - 3 month rolling average Newbuilding Prices NB Price to Revenue1 Multiple NB price/revenue 5.0x 4.5x High day rates & low newbuilding 4.0x prices = Attractive returns 3.5x 3.0x…
  15. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 15
    Attractive rig economics Indicative Drillship Economics Market Rate 625,000 Net Market Rate3 606,250 Daily OPEX, G&A, Maintenance 235,000 Daily EBITDA 371,250 Delivered Cost (mln) 675 Annual EBITDA2 (mln) 129 Payback…
  16. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 16
    Company Overview UDW Drilling Market Financial Review Summary Considerations 16
  17. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 17
    Corporate structure Listed on NASDAQ Global Select Market since October 6, 2011 (ORIG) Market cap. (10/05/12): 2.1bn 500m 9.5% Senior . Unsecured Notes 800m 6.5% Senior Secured Notes1 Drill Rigs Drillships Drillships…
  18. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 18
    Healthy liquidity & capital structure Pro forma for Senior Secured Notes June 30, Ownership on June 30th, 2012 (in million) 2012 Shares Outstanding 131.7 million Cash 514 Free float shares 45.9 million Restricted cash 143 % of free…
  19. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 19
    Manageable capital expenditures No material construction costs expected until H2 2013 upon delivery of each new build All the equity - over 727m - for newbuilds already invested, remaining capex funded with bank debt Newbuild…
  20. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 20
    Indicative daily breakeven analysis Indicative drillship daily breakeven (000s) Strong cash flow generation available for deleveraging 625 266,000/day 575 88 74 25 397 309 210 235 Opex 1) G&A EBITDA Interest…
  21. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 21
    Credit statistics Potential development The table below facilitates the calculation of Ocean Rig UDW key credit statistics by inputing EBITDA projections. ( million) 2012 2013 2014 YE Debt 2,907 4,071 3,771 Actual YE Debt,…
  22. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 22
    Credit statistics Potential development 2013 2014 2015 2016 2017 ( million) YB Bank Debt 1,608 2,771 2,471 2,171 1,871 Bank Debt Amortization 187 300 300 300 300 Newbuild Drillships Debt 2 1,350 YE Bank Debt 2,771 2,471 2,171…
  23. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 23
    Significant asset coverage (mm) High Quality UDW Asset Rig Transactions 1,000 900 A Petrorig high quality 7,500 ft semi- 800 Average Rig Value submersible, was 700 sold in a firesale to 600 Diamond via Jurong shipyard for 460m…
  24. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 24
    Rating agency considerations 1.6 billion year end 2011 Increased Contract Backlog 4.9 billion current pro-forma LOIs Advanced contract discussions on remaining 2 units Cross Default Clauses Removed all such clauses related to…
  25. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 25
    Company Overview UDW Drilling Market Financial Review Summary Considerations 25
  26. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 26
    Company highlights Pure-play ultra-deepwater Fleet composed of 100% UDW assets driller with premium Sixth largest UDW company globally with a fleet of 9 drillships/rigs assets Latest generation assets with an average age of 2.8 years…
  27. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 27
    Appendix OCEAN RIG UDW INC.
  28. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 28
    Summary of high yield notes terms Issue Senior Secured Notes Senior Unsecured Notes Issuer Drill Rigs Holdings Inc. Ocean Rig UDW Inc. (NASDAQ: ORIG) Guarantors Ocean Rig UDW Inc. (NASDAQ: ORIG) Amount 800 million 500 million…
  29. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 29
    Income Statement (Expressed in Thousands of U.S. Dollars Year ended Six Months Ended except for share and per share data) December 31, June 30, 2010 2011 2011 2012 REVENUES: Revenues from drilling contracts 405,712 699,649 235,955…
  30. Leveraged Finance Conference – Ocean Rig UDW Inc. – slide 30
    Balance Sheet (Expressed in Thousands of U.S. Dollars) December 31, 2010 December 31, 2011 June 30, 2012 ASSETS CURRENT ASSETS: Cash and cash equivalents 95,707 250,878 191,158 Restricted cash 512,793 57,060 59,374 Other current…

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