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HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc.

Hercules Offshore, Inc. · Mar 27, 2011 · 37 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. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 1
    World Class Howard Weil Energy Conference March 27-31, 2011
  2. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 2
    World Class Overview
  3. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 3
    A Global Leader in Shallow Water Services Jackups Liftboats 30 Jackups 65 Liftboats Largest jackup provider in the U.S. Gulf of Mexico; 4th largest Largest liftboat provider provider worldwide worldwide Operations on three…
  4. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 4
    Global Footprint Global Summary Liftboats 65 Jackup Rigs 30 Inland Barges 17 Submersibles 3 Platform Rigs 1 U.S. Gulf of Mexico Jackup Rigs 22 U.S. Gulf Coast Submersibles 3 Inland Barges 17 Liftboats 41 (1) Malaysia…
  5. HOWARD WEIL 39TH ANNUAL ENERGY 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. HOWARD WEIL 39TH ANNUAL ENERGY 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. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 7
    World Class Business Outlook
  8. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 8
    Domestic Offshore New regulations since Macondo GOM Jackup Backlog and Dayrates (1) have resulted in a slowdown in the drilling permit approval process Healthy demand for jackups 1,100 150 exhibited by GOM customers 1,000…
  9. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 9
    GOM Supply vs. Demand U.S. GOM Jackup Supply and Demand as of March 17, 2011 90 79 Number of Rigs 60 43 43 36 36 30 0 79 (36) 43 43 36 84% Marketed Utilization Current Less: Cold Marketed Future Jackup Visible GOM…
  10. HOWARD WEIL 39TH ANNUAL ENERGY 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 20 17 15 15 14 15 12 12 13 11 10 8 5 2 0 Jan Feb Mar Apr May Jun Jul…
  11. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 11
    Backlog of Shallow Water Permits Pending Shallow Water Permits (1) 30 25 20 of pending permits 15 10 5 0 11 11 10 10 10 10 0 0 1 1 1 1 1 1 1 01…
  12. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 12
    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 8.1 Energy XXIs 1+billion purchase of ExxonMobil GOM Shelf assets (Nov. 2010) EPLs 202…
  13. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 13
    International Offshore Robust International E&P capital (1) spending growth forecasted in 2011, International Jackup Backlog and Dayrates supported by strength in oil prices 5,500 200 Tender activity and customer 5,000…
  14. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 14
    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 Hercules 258 India 109-111k Platform 3…
  15. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 15
    Jackup Newbuild Activity Newbuild Jackup Delivery Schedule Summary Shipyard Location 25 Build Country of Rigs % of Total Brazil 2 3% 20 China 11 19% Number of Rigs 15 India 5 8% 8 17 Mexico 1 2% 10 17 Netherlands 1 2%…
  16. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 16
    Domestic Liftboats Liftboat demand experiencing normal seasonality during current winter months Activity levels expected to pick up in second quarter of 2011 February 2011 Domestic Liftboat Fleet Status Leg Length/ Actively…
  17. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 17
    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…
  18. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 18
    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…
  19. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 19
    World Class Strategic Positioning
  20. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 20
    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…
  21. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 21
    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…
  22. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 22
    Strengthen Balance Sheet and Divest Non-Core Assets Term Loan Paydown Non-Core Asset Sales Reduce Term Loan balance by approximately Over 50 million in proceeds from non-core 409 million since 2Q09 asset sales since 2008 Term Loan…
  23. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 23
    Investment for Future Growth: Discovery Offshore Overview Overview Structure Discovery Offshore is a newly established Luxembourgbased company Investors Hercules Offshore 120 million 11 million(1) Constructing two ultra…
  24. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 24
    Capitalize on Market Opportunity: Seahawk Acquisition Overview Acquire essentially all of Seahawks drilling assets Initial consideration based on 25 million in cash and 22.3 million shares of Hercules Cash component is intended to…
  25. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 25
    Capitalize on Market Opportunity: Seahawk Acquisition Rationale Attractive valuation with significant hard asset values Average purchase price of 5 million per rig or 14 million per marketed rig (1) All 7 marketed rigs are currently…
  26. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 26
    Increase Financial Flexibility: Amendment to Credit Agreement Lender approval for Seahawk transaction Allow for the use of cash to purchase assets from Seahawk; Exempt pro forma treatment of historical results from Seahawk assets…
  27. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 27
    Closing Thoughts Cautiously optimistic on permitting trends and customer demand for GOM jackups Seahawk transaction provides significant synergies Discovery Offshore provides long term, strategic exposure to high-end jackup…
  28. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 28
    APPENDIX 28 World Class
  29. HOWARD WEIL 39TH ANNUAL ENERGY 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. HOWARD WEIL 39TH ANNUAL ENERGY 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. HOWARD WEIL 39TH ANNUAL ENERGY 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. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 32
    Maximum Total Leverage Ratio Table (1) Total Leverage Ratio Total Leverage Ratio Period (without Seahawk (with Seahawk Acquisition) Acquisition) October 1, 2010 December 31, 2010 No Change No Change January 1, 2011 March 31,…
  33. HOWARD WEIL 39TH ANNUAL ENERGY 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. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 34
    Domestic Offshore Marketed Rig Data Domestic Offshore Fleet Status as of 03/22/2011 Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Shipyard 05/20/11 Hercules 120 120' - MC, TD GOM…
  35. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 35
    International Offshore Marketed Rig Data International Offshore Fleet Status as of 3/22/2011 Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Hercules 170 170' - ILC, TD Bahrain Warm…
  36. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 36
    GOM Shallow Water Operator Data Top 20 Shallow Water (0-350ft) GOM Lease Holders Apache Corp Current % of Total Current Operator Chevron Jackup Contracted Rig Stone Energy McMoran O&G Apache Corp 6 19% W&T Offshore Chevron 6…
  37. HOWARD WEIL 39TH ANNUAL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 37
    World Class

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