World Class Raymond James 2012 Boston Spring Conference June 5, 2012
World Class Overview
A Global Leader in Shallow Water Services Jackups Liftboats 43 Jackups 63 Liftboats Largest jackup provider in the U.S. Gulf of Mexico; 4th largest Largest liftboat provider provider worldwide worldwide Operations on three…
Global Footprint Global Summary Liftboats 63 Jackup Rigs 43 Inland Barges 17 Platform Rig 1 U.S. Gulf of Mexico U.S. Gulf Coast Jackup Rigs 34 Liftboats 39 Inland Barges 17 (1) Far East Mexico Jackup Rig 2 Platform…
World Class Business Outlook
Domestic Offshore Overview Tight industry supply/demand for Jackup Industry Backlog and Dayrates GOM (1) U.S. GOM jackups 8.0 150 Leading edge dayrates on the rise 7.0 135 GOM Backlog per Marketed Rig (Months) 120 GOM…
Leading Edge Dayrates Hercules Offshore Leading Edge Dayrates U.S. GOM 90 110 80 100 70 Dayrate (000 per day) Dayrate (000 per day) 90 60 80 50 70 40 30 60 20 50 200MC 250MS 250MC* 300MC* 350ILC…
Domestic Offshore Backlog Hercules Offshore Average Backlog per Marketed Rig U.S.(1)GOM 180 150 120 90 60 30 0 Company backlog per rig at historical high Healthy levels of backlog provides marketing…
U.S. GOM Supply vs. Demand U.S. GOM Jackup Supply and Demand as of May 29, 2012 90 70 95% Industry Utilization Number of Rigs of Marketed Rigs 60 43 39 37 30 (27) (4) 0 Current Less: Cold Marketed Planned Jackup…
Domestic Customer Base Exposure to Crude Oil Domestic customers have Customers U.S. GOM Liquids Mix significant exposure to crude oil, specifically Louisiana Light Sweet Apache 38% (LLS), which trades at a premium to WTI Chevron…
Large and Diverse Domestic Customer Base Diverse group of operators in the U.S. U.S. GOM Industry Customers Mix (1) GOM, ranging in size from mega-cap to private E&P CVX 15% APA Top three operators account for 18% approximately…
Reactivation Matrix (1) Capital Payback Analysis (m onths to payback) Dayrate Assumption 60,000 65,000 70,000 75,000 80,000 Reactivation Capital Cost 8 9.9 8.4 7.3 6.4 5.8 9 11.1 9.4 8.2 7.2 6.5 ( in millions) 10…
Domestic Offshore Potential Earnings Upside (1) Incremental EBITDA Analysis ( in m illions, 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 42 71…
International Offshore Overview Resilient oil prices are supportive of International Jackup Backlog and Dayrates (1) strong growth in international capital 18.0 200 spending 16.0 175 Middle East 300'IC Dayrate (thousands)…
Accretive Rig Acquisition and Blue Chip Contract Key asset details Projected Return on Capital Employed Acquisition of the Ocean Columbia (renamed ( in millions) Hercules 266) Rig purchase price 40.0 Upgrade costs 35.0 Contract…
International Drilling Outlook FY 2012E FY 2013E Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Hercules 185 W. Africa (TBD) 59-61k 59-61k Platform 3 Mexico 49-51k 49-51k Middle Hercules 261 83-85k 83-85k East Middle Hercules 262 79-81k 79-81k East…
Discovery Offshore Fleet renewal and exposure to premium jackup market through 28% ownership of and management agreements with Discovery Offshore Discovery jackup rig specifications to rank in the top 8% of global marketed rig fleet…
International Liftboats Largest liftboat provider in West Africa and growing presence in Middle East Well-established liftboat market and long term demand growth drivers in West Africa, tempered by competition creep Robust Middle…
Domestic Liftboats Seasonally-driven market demand, with activity levels expected to improve in the second and third quarter Select industry capacity movement out of the Gulf of Mexico, including Companys Kingfish vessel to the…
World Class Conclusion
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…
History of Growth August October January June August September November February 2004 2004 2005 2005 2005 2005 2005 2006 Acquired five Acquired 22 Acquired Rig 25 Acquired Rig Acquired Acquired Acquired Acquired jack up rigs…
Refinancing Summary Recent execution of comprehensive refinancing to facilitate rig acquisition, increase operational flexibility and extend maturity profile Refinancing consist of the following: 20 million new shares of equity…
Investment Highlights Positive industry trends in the U.S. GOM led by tight jackup rig supply and oil / liquids-rich activity demand driver Strengthening international jackup market, exemplified by Companys recent Aramco…
APPENDIX 25 World Class
Domestic Offshore Marketed Rig Data Domestic Offshore Fleet Status as of 05/17/2012 Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Hercules 120 120' - MC, TD GOM Chevron 37-39 228…
Domestic Offshore Marketed Rig Data (continued) Domestic Offshore Fleet Status as of 05/17/2012 (continued) 54-56 70 07/26/12 Hercules 213 200' - MC, TD GOM EPL 71-73 64 09/28/12 51-53 3 05/20/12 Hercules 214 200' - MC, TD GOM…
International Offshore Marketed Rig Data International Offshore Fleet Status as of 05/17/2012 Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Hercules 170 170' - ILC, TD Bahrain…
GOM Shallow Water Operator Data Top 20 Shallow Water (0-350ft) GOM Lease Holders Apache Corp Current % of Total Operator Chevron Jackup Current Stone Energy Apache Corp 6 16% McMoran O&G Chevron 5 14% W&T Offshore Stone Energy…
Strong Health, Safety and Environmental Record Total Recordable Incident Rate (TRIR)(1) Lost Time Incident Rate (1) (LTIR) (2) 2.50 0.60 0.55 2.17 0.53 2.06 0.50 0.49 2.00 0.46 0.45 1.77 1.82 1.48 0.40 0.36 0.39 1.50 0.35…
Summary of Discovery Offshore Structure Overview Structure Discovery Offshore is a newly established Luxembourgbased company Investors Hercules Offshore Constructing two ultra highspecification Keppel FELS Super A jackup rigs…
Adjusted EBITDA reconciliation The following table reconciles our Losses from Continuing Operations, the most directly comparable GAAP financial measure, to EBITDA and Adjusted EBITDA in thousands As of 12/31/2011 Loss from…
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