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UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc.

Hercules Offshore, Inc. · May 18, 2011 · 35 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. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 1
    World Class UBS Leveraged Finance Conference May 18 - 19, 2011
  2. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 2
    World Class Overview
  3. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 3
    A Global Leader in Shallow Water Services Jackups Liftboats 50 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. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 4
    Global Footprint Global Summary Liftboats 65 Jackup Rigs 50 Inland Barges 17 Submersibles 3 Platform Rigs 1 U.S. Gulf of Mexico Jackup Rigs 42 U.S. Gulf Coast Submersibles 3 Inland Barges 17 Liftboats 41 (1) Malaysia…
  5. UBS 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. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 6
    Health, Safety and Environmental Record Total Recordable Incident Rate (TRIR)(1) Lost Time Incident Rate (1) (LTIR) (2) 2.5 0.60 0.55 2.17 0.53 2.06 0.50 2 0.46 0.49 0.45 1.77 1.84 0.38 1.48 0.40 0.38 1.5 0.35 1.44…
  7. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 7
    World Class Business Outlook
  8. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 8
    Domestic Offshore Permit activity post Macondo remains GOM Jackup Backlog and Dayrates (1) slow, but pace improving Healthy demand for jackups 8.0 150 exhibited by GOM customers 7.0 135 GOM Backlog per Marketed Rig…
  9. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 9
    GOM Supply vs. Demand U.S. GOM Jackup Supply and Demand as of May 6, 2011 90 84 Number of Rigs 60 48 44 36 36 4 30 0 Current Less: Cold Marketed Planned Jackup Visible GOM Jackup Stacked/ Supply (1) Mobilizations to…
  10. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 10
    Shallow Water Permitting Activity U.S. GOM Shallow Water Total Permits Approval History (1) 40 35 30 28 of Approved Permits 25 22 22 21 21 20 17 15 15 16 14 15 12 12 11 10 8 5 2 0 Jan Feb Mar Apr May Jun Jul…
  11. UBS 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 5.3 ExxonMobil GOM Shelf assets (Nov. 2010) EPLs…
  12. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 12
    International Offshore Robust International E&P capital (1) spending growth forecasted in 2011, International Jackup Backlog and Dayrates supported by strength in oil prices 16.0 200 Tender activity and customer…
  13. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 13
    International Drilling Outlook FY 2011 Q1 Q2 Q3 Q4 Hercules 185 W. Africa 59-61k Middle Hercules 261 137-139k East Middle Hercules 262 127-129k East Hercules 208 Malaysia 109-111k Platform 3 Mexico 54-56k 53-55k…
  14. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 14
    Jackup Newbuild Activity Newbuild Jackup Delivery Schedule Summary Shipyard Location Build Country of Rigs % of Total 30 Brazil 2 3% 25 China 12 18% Number of Rigs India 5 8% 20 Mexico 1 2% 15 9 23 Netherlands 1 2% 16…
  15. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 15
    Domestic Liftboats First quarter 2011 utilization impacted by seasonality Activity levels have improved in the second quarter of 2011 Term contracts recently signed for seven vessels extending through the end of September 2011…
  16. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 16
    P&A and Decommissioning Market Opportunity U.S. GOM Platform Removal U.S. GOM Well Abandonment 1,600 200 1,400 1,200 150 1,000 800 100 600 50 400 200 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010…
  17. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 17
    International Liftboats Largest liftboat provider in West Africa and established presence in Middle East Utilization has improved since late 2010, reflecting higher international activity Long-term contracts on 8 vessels in West…
  18. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 18
    World Class Strategic Positioning
  19. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 19
    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…
  20. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 20
    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…
  21. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 21
    Strengthen Balance Sheet and Divest Non-Core Assets Term Loan Paydown Non-Core Asset Sales Reduced Term Loan balance by approximately Over 50 million in proceeds from non-core 409 million since 2Q09 asset sales since 2008 Term Loan…
  22. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 22
    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 132…
  23. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 23
    Capitalize on Market Opportunity: Seahawk Acquisition Attractive valuation with significant hard asset values Acquire 20 jackup rigs, related equipment and receivables from Seahawk, and assumed liabilities limited to payables…
  24. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 24
    Increase Financial Flexibility: Amendment to Credit Agreement Amendment to Credit Agreement allows for greater financial flexibility More accommodative Total Leverage Ratio thresholds Increase investment basket to 50 million from 25…
  25. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 25
    Closing Thoughts Cautiously optimistic on U.S. GOM jackup demand Permitting, backlog and pricing trends improving Seahawk transaction provides significant synergies Strong oil prices supportive of international drilling activity…
  26. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 26
    APPENDIX 26 World Class
  27. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 27
    Domestic Offshore Marketed Rig Data Domestic Offshore Fleet Status as of 04/27/2011 Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Shipyard 05/22/11 Hercules 120 120' - MC, TD GOM…
  28. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 28
    International Offshore Marketed Rig Data International Offshore Fleet Status as of 4/27/2011 Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Hercules 170 170' - ILC, TD Bahrain Warm…
  29. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 29
    Timeline of Events April 20: Tragedy June 8: NTL-05 issued by the BOEM outlining May 26: SWESC met with at Macondo Well the first round of new safety regulations DOI Secretary Salazar including CEO certification of equipment and 3rd…
  30. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 30
    Summary of Regulatory Changes Notice to Lessees (NTL) No. 2010 - 05 Notice to Lessees (NTL) No.2010 - 06 Issued on June 8, 2010 Issued on June 18, 2010 Independent third-party verification of Plans require additional information on…
  31. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 31
    Summary of Regulatory Changes (continued) Notice to Lessees (NTL) No. 2010 G05: Idle Iron NTL Establishes well abandonment/structure removal requirements that are no longer tied to the one-year anniversary of lease expiration…
  32. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 32
    Maximum Total Leverage Ratio Table (1) Total Leverage Ratio Period (with Seahawk Acquisition) 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…
  33. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 33
    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…
  34. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 34
    GOM Shallow Water Operator Data Top 20 Shallow Water (0-350ft) GOM Lease Holders Current % of Total Current Apache Corp Operator Jackup Contracted Rig Chevron Stone Energy Apache Corp 4 11% McMoran O&G Chevron 7 19% W&T…
  35. UBS LEVERAGED FINANCE CONFERENCE – Hercules Offshore, Inc. – slide 35
    World Class

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