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DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc.

Hercules Offshore, Inc. · Oct 11, 2011 · 34 slides

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  1. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 1
    World Class Deutsche Bank Nineteenth Annual Leveraged Finance Conference October 11-13, 2011
  2. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 2
    World Class Overview
  3. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 3
    A Global Leader in Shallow Water Services Jackups Liftboats 49 Jackups 65 Liftboats Largest jackup provider in the U.S. Gulf of Mexico; 4th largest Largest liftboat provider provider worldwide (1) worldwide Operations on…
  4. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 4
    Global Footprint Global Summary Liftboats 65 Jackup Rigs 49 Inland Barges 17 Platform Rigs 1 U.S. Gulf of Mexico U.S. Gulf Coast Jackup Rigs 41 Liftboats 41 Inland Barges 17 (1) Vietnam Mexico Jackup Rig 1 Platform…
  5. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 5
    Hercules Strategy Remains Consistent Maintain Leading Position Diversify Geographically in Core Businesses Opportunistic Growth Focus on And Fleet Optimization Shallow Water Assets Maintain Status as an Efficient, Low-Cost…
  6. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 6
    World Class Business Outlook
  7. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 7
    Domestic Offshore Tightening industry supply/demand (1) GOM Jackup Backlog and Dayrates for U.S. GOM jackups 8.0 150 Permit issuance remains slow, but 135 7.0 backlog of pending permits growing GOM Backlog per Marketed Rig…
  8. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 8
    GOM Supply vs. Demand U.S. GOM Jackup Supply and Demand as of September 29, 2011 90 78 Number of Rigs 80% Industry Utilization of Marketed Rigs 60 42 40 32 (36) 30 (2) 0 Current Less: Cold Marketed Planned Jackup…
  9. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 9
    Shallow Water Permitting Activity U.S. GOM Shallow Water Total Permits Approval History (1) 40 38 36 36 35 32 28 29 30 27 27 26 26 26 25 24 22 22 21 21 19 20 17 16 18 15 15 14 15 17 12 12 15 11 12 10 8 12 5 2…
  10. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 10
    Shallow Water Permitting Activity Backlog of U.S. GOM Shallow Water Permits (1) 50 40 of permits pending and returned 30 20 10 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1…
  11. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 11
    GOM Shelf Transaction History Rebound in GOM Shelf M&A suggests GOM Shelf E&P Transaction Values (1) a pick up in activity levels in billions 6.0 Energy XXIs 1+billion purchase of GOM Shelf assets from XOM (Nov. 2010) 5.3 EPLs…
  12. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 12
    Commodity Price and GOM Dayrate Trend Oil & Gas Price vs. GOM Dayrates (1) 120,000 15.00 100,000 12.00 Oil & Gas Prices (/mcfe) GOM 200' MC Dayrate 80,000 9.00 60,000 6.00 40,000 3.00 20,000 - - 07 07…
  13. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 13
    Domestic Offshore Potential Earnings Upside (1) Incremental EBITDA Analysis ( in millions, except dayrate) Increase in Average Dayrate 5,000 10,000 15,000 20,000 25,000 18 28 56 84 112 140 Number of Rigs Working 19 32 62…
  14. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 14
    What a Difference a Year Makes in the U.S. GOM September 2010 (1) September 2011 (2) Contract Status 8 of 11 rigs contracted 18 of 18 rigs contracted Backlog 41 days 86 days 39,000 50,000 Dayrate (Fleet) Flat outlook…
  15. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 15
    International Offshore Current oil prices remain supportive International Jackup Backlog and Dayrates (1) of growth in international capital spending 16.0 200 National Oil Companies have been 14.0 175 Middle East 300'IC…
  16. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 16
    International Drilling Outlook FY 2011 FY 2012 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Hercules 185 W. Africa 59-61k 59-61k Platform 3 Mexico 54-56k 53-55k 49-51k 49-51k Middle Hercules 261 137-139k 83-85k 83-85k East Middle Hercules 262…
  17. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 17
    Domestic Liftboats Liftboat operations tied to more stable production and maintenance activity Growing contribution from plugging and abandonment activity, accounting for 22% of first half 2011 revenue, up from 7% during first half…
  18. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 18
    International Liftboats Largest liftboat provider in West Africa and established presence in Middle East Increased drydocking schedule expected to impact 2nd half utilization for West Africa, offset by expected utilization…
  19. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 19
    World Class Strategic Positioning
  20. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 20
    Proactive Steps Taken to Confront Market Challenges Significant operational and financial challenges since late 2008 Global economic and financial market meltdown Crude oil and natural gas price collapse Global drilling activity…
  21. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 21
    Reduce Costs and Promote Industry Cause Reduced Cost Structure Leadership in Shallow Water Coalition Proactively reduced cost structure through Hercules led effort to organize the Shallow downturn by prudently stacking idle assets…
  22. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 22
    Strengthen Balance Sheet and Divest Non-Core Assets Total Debt Paydown Non-Core Asset Sales Since 2Q08, total debt has been reduced by Generated approximately 110 million from approximately 314 million sales of non-core assets since…
  23. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 23
    Investment for Future Growth: Discovery Offshore Overview Structure Discovery Offshore is a newly established Luxembourgbased company Investors Hercules Offshore Constructing two ultra highspecification Keppel FELS Super A jackup…
  24. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 24
    Capitalize on Market Opportunity: Seahawk Acquisition Attractive valuation with significant hard asset values Acquired 20 jackup rigs, related equipment and receivables from Seahawk, and assumed liabilities limited to payables Total…
  25. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 25
    Increase Financial Flexibility and Maintain Liquidity: Amendment to Credit Agreement Amendment to Credit Agreement allows for greater financial flexibility More accommodative Total Leverage Ratio thresholds Increase investment…
  26. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 26
    Closing Thoughts Drilling Operations Improving demand and pricing momentum for domestic jackups Significant synergies realized from Seahawk transaction Active international tender activity and strong oil prices resulting in…
  27. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 27
    APPENDIX 27 World Class
  28. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 28
    Domestic Offshore Marketed Rig Data Domestic Offshore Fleet Status as of 09/28/2011 Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Hercules 120 120' - MC, TD GOM Chevron 35-37 94…
  29. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 29
    Domestic Offshore Marketed Rig Data (continued) Domestic Offshore Fleet Status as of 09/28/2011 (continued) Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Ready Stacked 10/31/11…
  30. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 30
    International Offshore Marketed Rig Data International Offshore Fleet Status as of 9/28/2011 Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Hercules 170 170' - ILC, TD Bahrain Warm…
  31. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 31
    Maximum Total Leverage Ratio Table Period Total Leverage Ratio April 1, 2011 June 30, 2011 6.75 to 1.00 July 1, 2011 September 30, 2011 7.50 to 1.00 October 1, 2011 December 31, 2011 7.75 to 1.00 January 1, 2012 March 31, 2012…
  32. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 32
    Minimum Fixed Charge Coverage Ratio Table Consolidated Fixed Charge Period Coverage Ratio July 1, 2009 December 31, 2011 1.00 to 1.00 January 1, 2012 March 31, 2012 1.05 to 1.00 April 1, 2012 June 30, 2012 1.10 to 1.00…
  33. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 33
    GOM Shallow Water Operator Data Top 20 Shallow Water (0-350ft) GOM Lease Holders Working % of Total Apache Corp Operator Jackup Contracted Chevron Count Rig Count Stone Energy Apache Corp 7 20% McMoran O&G Chevron 7 20% W&T…
  34. DEUTSCHE BANKS 19TH ANNUAL LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 34
    World Class

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