Overview of Paragon Offshore Business Overview Worldwide Offshore Presence North Sea Offshore contract drilling services provider Semis: 1 Jackups: 7 operating standard specification rigs Canada Hibernia Platform Operations…
Paragons Strategy Confidential Deliver reliable, safe, cost-efficient operations Match our assets to customers in fit- for-purpose applications while maintaining industry-leading utilization Manage our costs to preserve…
Significant Contract Backlog with Global Customers in millions Backlog by Customer 750 2.3 Bn of Backlog as of 6/30/2014 As of 6/30/2014 Other 28% Petrobras 42% Nexen 561 4% 508 ADMA- 500 OPCO 5% Total Pemex 443 14% 7%…
Strong History of Utilization Speaks to Quality of Operations & Assets Marketed fleet utilization for non-US rigs 15 years old and older since January 1, 2011 Jackup Utilization Floater Utilization Percentage 100 Percentage 100…
Industry-Leading Safety and Quality Performance Commitment to Safety and Quality Strong Safety Record Customers recognize our commitment to safety and performance 1.00 50% lower TRIR1 than International 0.81 Association of Drilling…
Key Challenges Jackup market capacity additions and potential impact on the market Some customers focusing on more challenging wells (e.g., wells requiring higher specification rigs) Petrobras rollover of current floater…
Newbuild Jackup Orders According to IHS 22 August 2014 138 Anticipated Jackup Deliveries 160 138 16 27 120 95 54 80 29 40 12 0 Total Newbuilds Contracted Rigs Rigs on Order- Rigs Under China Singapore Other (USA, No…
Considerations for the Jackup Markets Large jackup orderbook may be cause for concern, but more nuanced analysis of the market is required. Consider: Newbuilds Customer Behavior Will all newbuilds actually be Do all customers need…
Paragons Contract Coverage 4 August 2014 Fleet Status Jackup Floater 2014 2015 2016 2017 Rig Name Region J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D DPDS3 (NRE) Brazil DPDS2 (NLS) Brazil…
Mexico Reform Likely to Continue to Provide Opportunities Mexican Energy Reform Underway Round 0: Pemex received 100% PEMEX to retain: 15% (8.9 bn boe) of 2P and 67% of Prospective PEMEX to retain: Reserve requests including 29%…
Paragons Position in Brazil Four of Paragons floaters operate in the post- salt Campos Basin where decline rates are estimated to exceed 10% per year Capex budget for Petrobras has increased by 4.6% Rigs under construction in Brazil…
Capital Structure Overview In Millions 73 30 June 2014 Pro-forma Cash Balance Revolving Credit Facility, Matures 2019 800 Undrawn LIBOR + 2.00% Secured Term Loan, Matures 2021 LIBOR + 2.75%, 1% Floor 650 1% annual…
Disciplined Capital Allocation The Focus for Paragon Offshore Free Cash Flow Fleet Debt Return to Fleet Growth Maintenance Retirement Shareholders Disciplined maintenance Significant number of 1.73 Bn in debt Both dividends and…
Acquisitions: A Balancing Act Given our fleet age profile of 35 years (19 rebuilt), our acquisition strategy must consider both near and longer term horizons Near Term Longer Term Many potential acquisition targets available Must…
2014 Guidance www.paragonoffshore.com 18
Near Term (3Q) Financial Challenges Post- Spin 3Q financial report will not be representative: Includes the July financial results as a part of Noble (Predecessor financials) August and September financial results will be completely…
The Paragon ETR will be 40% Post-Spin in 2014 The increased effective tax rate (ETR) is a function of several factors: A recent UK tax law (adopted in July but retroactive to 1 April 2014) affects all of the offshore drillers and will…
Moderate Leverage and Strong Liquidity Provides Financial Stability and Flexibility Net Debt/EBITDA ratio of approximately 1.9x and a Debt/Capitalization of approximately of 57% based on 1st Half 2014 pro-forma results Large backlog…
Conclusion www.paragonoffshore.com 23
Why Paragon Offshore Significant Scale, Size and Expertise Low-cost Driller with Proven Record of Excellence Strong Backlog and Established Diverse Customer Base Well-Maintained Workhorse Fleet of Rigs Natural…
NYSE Listed: PGN 3151 Briarpark Drive Houston, TX 77042 832.783.4000 For additional information, contact: Lee M. Ahlstrom SVP-Investor Relations, Strategy & Planning lahlstromparagonoffshore.com www.paragonoffshore.com
Appendix www.paragonoffshore.com 26
Management Team with More Than 180 Years of Experience in the Industry Randy Stilley Charlie Yester President and CEO Senior VP - Operations 38 years experience 40 years experience Steve Manz Todd Strickler Vice President and…
Reconciliation to EBITDA Predecessor Historical Paragon Offshore Pro Forma Year Ended Year Ended December 31, December 31, Six Months 2011 2012 2013 2013 6/30/2014 Net Income 104,823 126,237 360,305 172,387 135,172 Add:…
30 June 2014 Pro-forma Summary Balance Sheet Assets Cash 72,688 Total Current Assets 505,488 PPE, Net 2,883,729 Total Assets 3,484,679 Liabilities and Equity Total Current Liabilities 281,350 Long-term Debt 1,726,750…
Jackup Overview: Rigs 15 Years and Older Number of Units Key Owners of Standard ILC Jackups 350 323 66 Number of ILC 300 Jackups 15 Years 257 8 Company and Older 249 250 Shelf Drilling 37 200 Paragon Offshore 34 150 Ensco 30 100…
Jackup Overview: Newer Standard Rigs Less Than 15 Years Old Breakdown by Design: 123 Total Key Owners of Newer Standard Jackups Mod V A, 2 Other, 8 Number of ILC JU-2000, 2 KFELS B Jackups 14 Years Class, 31 CJ-50, 4 Company and…
Floater Overview Drillships and Semisubmersibles 15 Years and Older Number of Units 15 Years or Older Key Owners of Standard Floaters 180 171 Total 160 23 148 Drillships Semisubs Floaters 15 27 15 Years 15 Years Years and 140 26…
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