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TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc.

Hercules Offshore, Inc. · Aug 10, 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. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 1
    World Class Tudor, Pickering, Holt & Co. Conference August 10-11, 2011
  2. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 2
    World Class Overview
  3. TUDOR PICKERING HOLT & CO 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. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 4
    Global Footprint Global Summary Liftboats 65 Jackup Rigs 49 Inland Barges 17 Submersibles 2 Platform Rigs 1 U.S. Gulf of Mexico Jackup Rigs 41 U.S. Gulf Coast Submersibles 2 Inland Barges 17 Liftboats 41 (1) Malaysia…
  5. TUDOR PICKERING HOLT & CO 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. TUDOR PICKERING HOLT & CO 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. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 7
    World Class Business Outlook
  8. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 8
    Domestic Offshore Permit activity post Macondo GOM Jackup Backlog and Dayrates (1) remains slow, but pace has improved 8.0 150 135 Approximately half of Companys 7.0 GOM Backlog per Marketed Rig (Months) 120 rig fleet…
  9. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 9
    GOM Supply vs. Demand U.S. GOM Jackup Supply and Demand as of August 8, 2011 90 81 Number of Rigs 74% Industry Utilization 60 of Marketed Rigs 45 39 (36) 29 30 (6) 0 Current Less: Cold Marketed Planned Jackup Visible…
  10. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 10
    Shallow Water Permitting Activity U.S. GOM Shallow Water Total Permits Approval History (1) 40 38 36 36 35 32 29 30 28 27 27 26 26 26 25 24 22 22 21 21 19 20 16 17 15 15 14 15 17 12 12 15 11 10 8 12 5 2 0 Jan…
  11. TUDOR PICKERING HOLT & CO 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 ExxonMobil GOM Shelf assets (Nov. 2010) 5.3 EPLs…
  12. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 12
    International Offshore International E&P capital spending International Jackup Backlog and Dayrates (1) growth forecasted in 2011, supported by high oil prices 16.0 200 14.0 175 National Oil Companies have been Middle East…
  13. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 13
    International Drilling Outlook FY 2011 Q1 Q2 Q3 Q4 Hercules 185 W. Africa 59-61k Contract Hercules 260 W. Africa 142-144k preparation 69-71k Hercules 258 India 109-111k TBD Middle Hercules 261 137-139k East Middle…
  14. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 14
    Jackup Newbuild Activity Newbuild Jackup Delivery Schedule Summary Shipyard Location 35 Build Country of Rigs % of Total 30 Brazil 2 3% China 15 20% Number of Rigs 25 India 5 7% 20 Mexico 1 1% 29 15 16 Russia 1 1% 10 7…
  15. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 15
    Domestic Liftboats Strong rebound in utilization during second quarter of 2011 after first quarter seasonal low Term contracts for seven vessels extending through the end of September 2011 June 2011 Domestic Liftboat Fleet…
  16. TUDOR PICKERING HOLT & CO 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. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 17
    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 demand from Middle…
  18. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 18
    World Class Strategic Positioning
  19. TUDOR PICKERING HOLT & CO 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. TUDOR PICKERING HOLT & CO 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. TUDOR PICKERING HOLT & CO 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 Generated approximately 110 million from 409 million since 2Q09 sales of non-core assets since…
  22. TUDOR PICKERING HOLT & CO 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 119…
  23. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 23
    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…
  24. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 24
    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…
  25. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 25
    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…
  26. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 26
    APPENDIX 26 World Class
  27. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 27
    Domestic Offshore Marketed Rig Data Domestic Offshore Fleet Status as of 07/27/2011 Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Hercules 120 120' - MC, TD GOM Chevron 35-37 157…
  28. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 28
    International Offshore Marketed Rig Data International Offshore Fleet Status as of 7/27/2011 Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Hercules 170 170' - ILC, TD Bahrain Warm…
  29. TUDOR PICKERING HOLT & CO 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. TUDOR PICKERING HOLT & CO 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. TUDOR PICKERING HOLT & CO 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. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 32
    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…
  33. TUDOR PICKERING HOLT & CO 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. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 34
    GOM Shallow Water Operator Data Top 20 Shallow Water (0-350ft) GOM Lease Holders Apache Corp Current Current Operator Jackup Liftboat Chevron Stone Energy Apache Corp 5 3 McMoran O&G Chevron 7 19 W&T Offshore Stone Energy 0…
  35. TUDOR PICKERING HOLT & CO CONFERENCE – Hercules Offshore, Inc. – slide 35
    World Class

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