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COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc.

Hercules Offshore, Inc. · Dec 3, 2013 · 35 slides

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Slides

  1. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 1
    World Class Cowen 3rd Annual Ultimate Energy Conference December 3-4, 2013
  2. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 2
    World Class Overview
  3. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 3
    A Global Leader in Shallow Water Services Overview Worldwide Operations Global leader in jackup drilling and liftboat services 40 jackup rigs - third largest worldwide fleet 24 liftboats - largest international fleet Operations…
  4. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 4
    Transforming the Company for the Next Chapter Positioning the Company for future growth: 1. High-grade asset base Acquisition of Discovery Offshore Sale of Domestic Liftboats and Inland Barges 2. Increase earnings visibility Revenue…
  5. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 5
    Hercules Triumph Inaugural Contract Initial contract secured with Cairn India Limited Total contract value is approximately 36.6 million Base dayrate in the 214k - 216k range Approximately 13 million in mobilization fees…
  6. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 6
    Blockbuster Middle East Contract Extensions Five-year contract extensions on the Hercules 261 and Hercules 262 Total revenue backlog of approximately 465 million Extensions are priced at over 50% higher than current dayrates…
  7. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 7
    World Class Business Outlook
  8. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 8
    Domestic Offshore Segment Overview Global recession and Macondo U.S. GOM Supply/Demand of Marketed Jackups created extreme conditions in 2009 and 2010 120 100 Near the trough (April 2011), Hercules acquired main competitor,…
  9. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 9
    U.S. GOM Supply vs. Demand U.S. GOM Jackup Supply and Demand as of November 25, 2013 80 92% Industry Utilization Number of Rigs 58 60 of Marketed Rigs 38 38 40 35 (20) 0 20 0 Current Less: Cold Marketed Planned…
  10. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 10
    Domestic Offshore Backlog Company Average Days Backlog per Marketed Rig U.S. GOM (1) 250 225 200 175 Average of Days 150 125 100 75 50 25 0 Company backlog per rig expected to improve by year end 2013…
  11. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 11
    Leading Edge Dayrates Hercules Offshore Leading Edge Dayrates U.S. GOM 125 140 115 130 105 120 Dayrate (000 per day) Dayrate (000 per day) 95 110 85 100 75 90 65 80 55 45 70 35 60 25 50 Nov11 Nov12…
  12. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 12
    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 EXXI 11% 8% Top three operators typically account…
  13. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 13
    U.S. GOM Shelf M&A Activity (1) GOM Shelf E&P Transaction Values Closing Date Buyer Seller Deal Value (mm) % Oil Dec-10 Energy XXI ExxonMobil 1,012 55% Feb-11 EPL Oil & Gas Anglo-Suisse 201 92% May-11 Tana Exploration Maritech…
  14. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 14
    Reactivation Matrix (1) Capital Payback Analysis (m onths to payback) Dayrate Assumption 80,000 90,000 100,000 110,000 120,000 Hercules 209 Reactivation Capital Cost 14 11.4 9.3 7.9 6.8 6.0 reactivation cost 16 13.0 10.6…
  15. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 15
    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 30 59 89 118 148 Number of Rigs Working 19 47 78…
  16. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 16
    Recent Fixtures in U.S. GOM vs. International Markets U.S. GOM Mexico West Africa Middle East SE Asia Ensco 99 GSP Fortuna Noble Ed Hercules 261 Key Gibraltar Fixtures (250 IC) (300 IC) (250 IC) (250 IC) (300 IC) Dayrate 125,000…
  17. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 17
    International Jackup Market Snapshot Current international jackup rig International Jackup Supply/Demand demand above prior peak in 2008 Worldwide ex. US GOM Jackup Supply / Demand 460 Demand in most major international 440 Total…
  18. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 18
    Ultra High-Spec Rigs Command Premium Pricing Ultra high-specification jackup segment(1) Jackup fixtures by class since 2010(2) 635 600 70 300,000 550 507 Average 500 27 250,000 dayrate 450 235 222,960 Global jackup rig…
  19. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 19
    International Offshore Drilling Outlook FY 2013E FY 2014E Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Hercules Triumph SE Asia 214- 216k (1) Hercules Resilience SE Asia 108- Hercules 267 W. Africa 108-110k 110k Middle (2) (2) Hercules 266…
  20. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 20
    International Liftboats Largest liftboat provider in West Africa Long term demand growth, tempered by competition creep Acquisition of Bull Ray expands high end market opportunities Established presence in Middle East Robust…
  21. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 21
    World Class Corporate Initiatives
  22. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 22
    Focusing on Attractive Asset Segments Revenue Mix by Segment (1) Figures based on LTM revenue ending March 31, 2013. (2) International Offshore segment includes pro forma estimate of Discovery (mean of Wall Street consensus…
  23. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 23
    Significant Expansion of Revenue Backlog Total Revenue Backlog (1) 1,200 1,000 Current Revenue Backlog = 1.1 Billlion Contracted Backlog ( millions) 800 600 400 200 0 3Q09 4Q09 1Q10 2Q10 3Q10…
  24. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 24
    World Class Conclusion
  25. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 25
    Investment Highlights Discovery Offshore acquisition is a significant step toward fleet renewal and high-grading of assets Positive industry trends continue in the U.S. GOM Strength of International jackup market demonstrated by…
  26. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 26
    APPENDIX 26 World Class
  27. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 27
    Domestic Offshore Marketed Rig Data Domestic Offshore Fleet Status as of 11/21/13 Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Hercules 120 120' - MC, TD GOM Chevron 68-70 40…
  28. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 28
    Domestic Offshore Marketed Rig Data (continued) Domestic Offshore Fleet Status as of 11/21/2013 (continued) Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Arena 102-104 102…
  29. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 29
    International Offshore Marketed Rig Data International Offshore Fleet Status as of 11/21/2013 Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Hercules Resilience 400' - ILC, TD…
  30. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 30
    International Liftboats Fleet Status October 2013 International Liftboat Fleet Status Leg Length/ Actively Revenue Per Liftboat Class Total Number Marketed Day Per Operating (1) (2) (3) (Feet) of Liftboats Liftboats Liftboat Days…
  31. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 31
    Total Debt Summary Description Amount Coupon Maturity First Call Date (millions) Rate Senior Secured Notes 300 7 1/8% Apr2017 Apr2014 105% Senior Unsecured Notes 200 10 1/4% Apr2019 Apr2015 108% Senior Unsecured Notes 300 7 1/2%…
  32. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 32
    Crude Oil Driven Market in U.S. GOM Shelf Oil and condensates account for a Relationship between Oil/Gas Price to Production Mix growing percentage of US GOM Shelf production 7.5 40% 7.0 6.5 % Liquids Production in US GOM Shelf…
  33. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 33
    Discovery Offshore Transaction Overview History of Discovery Offshore S.A. Discovery Offshore S.A., a Luxembourg-based public limited liability company, was formed in early 2011 by Hercules Offshore Discovery ordered two newbuild…
  34. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 34
    Triumph and Resilience Ultra High-Spec Jackups KFELS Super A Class is a high-specification design by Keppel FELS for harsh environment Designed for operations in the southern North Sea Able to operate in water depths up to 400 ft.…
  35. COWEN 3RD ANNUAL ULTIMATE ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 35
    World Class

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