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CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc.

Hercules Offshore, Inc. · Dec 6, 2011 · 34 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. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 1
    World Class Capital One 2011 Energy Conference December 6 8, 2011
  2. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 2
    World Class Overview
  3. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 3
    A Global Leader in Shallow Water Services Jackups Liftboats 48 Jackups 65 Liftboats Largest jackup provider in the U.S. Gulf of Mexico; 5th largest Largest liftboat provider provider worldwide (1) worldwide Operations on…
  4. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 4
    Global Footprint Global Summary Liftboats 65 Jackup Rigs 48 Inland Barges 17 Platform Rigs 1 U.S. Gulf of Mexico U.S. Gulf Coast Jackup Rigs 40 Liftboats 41 Inland Barges 17 (1) Vietnam Mexico Jackup Rig 1 Platform…
  5. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 5
    World Class Business Outlook
  6. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 6
    Domestic Offshore Tightening industry supply/demand GOM Jackup Backlog and Dayrates (1) for U.S. GOM jackups 8.0 150 Drilling permit issuance trends 7.0 135 GOM Backlog per Marketed Rig (Months) remain positive, albeit…
  7. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 7
    GOM Supply vs. Demand U.S. GOM Jackup Supply and Demand as of November 23, 2011 90 77 93% Industry Utilization Number of Rigs of Marketed Rigs 60 43 41 38 (34) (2) 30 0 Current Less: Cold Marketed Planned Jackup…
  8. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 8
    Shallow Water Permitting Activity U.S. GOM Shallow Water Total Permits Approval History (1) 40 35 30 26 25 21 20 16 18 15 15 17 14 15 12 10 8 12 5 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 3-Year Avg…
  9. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 9
    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 GOM 5.3 Shelf assets from XOM (Nov. 2010) EPLs…
  10. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 10
    Commodity Price and GOM Dayrate Trend Oil & Gas Price vs. GOM Dayrates (1) 120,000 15.00 Oil & Gas Equivalent Prices (/mcfe) 100,000 12.00 GOM 200' MC Dayrate 80,000 9.00 60,000 6.00 40,000 3.00 20,000 - -…
  11. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 11
    Domestic Offshore Potential Earnings Upside (1) Incremental EBITDA Analysis ( in millions, 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 32 62…
  12. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 12
    What a Difference a Year Makes in the U.S. GOM November 2010 (1) November 2011 (2) Contract Status 11 of 11 rigs contracted 18 of 18 rigs contracted Backlog 27 days 76 days 39,000 50,000 Dayrate (Fleet) Flat outlook Rising…
  13. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 13
    International Offshore Current oil prices remain supportive International Jackup Backlog and Dayrates (1) of growth in international capital spending 16.0 200 14.0 175 National Oil Companies have been Middle East 300'IC…
  14. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 14
    International Drilling Outlook FY 2011 FY 2012 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Hercules 185 W. Africa 59-61k 59-61k Platform 3 Mexico 54-56k 53-55k 49-51k 49-51k Middle Hercules 261 137-139k 83-85k 83-85k East Middle Hercules 262…
  15. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 15
    Domestic Liftboats Liftboat operations tied to more stable production and maintenance activity Seasonally-driven business, with peak activity typically in summer months Growing contribution from plugging and abandonment activity,…
  16. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 16
    International Liftboats Largest liftboat provider in West Africa and established presence in Middle East Well-established liftboat market and long term demand growth drivers in West Africa, tempered by competition creep Extended…
  17. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 17
    World Class Strategic Positioning
  18. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 18
    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…
  19. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 19
    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…
  20. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 20
    Strengthen Balance Sheet and Divest Non-Core Assets Total Debt Paydown Non-Core Asset Sales Since 2Q08, total debt has been reduced by Generated approximately 125 million from approximately 315 million sales of non-core assets since…
  21. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 21
    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 jackup…
  22. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 22
    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…
  23. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 23
    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…
  24. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 24
    World Class Conclusion
  25. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 25
    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…
  26. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 26
    Closing Thoughts Drilling Operations Improving demand and pricing momentum for domestic jackups Significant synergies realized from Seahawk transaction Active international tender activity resulting in tightening of global jackup…
  27. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 27
    APPENDIX 27 World Class
  28. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 28
    Domestic Offshore Marketed Rig Data Domestic Offshore Fleet Status as of 11/17/2011 Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Hercules 120 120' - MC, TD GOM Chevron 37-39 44…
  29. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 29
    Domestic Offshore Marketed Rig Data (continued) Domestic Offshore Fleet Status as of 11/17/2011 (continued) Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Apache 42-44 31 12/18/11…
  30. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 30
    International Offshore Marketed Rig Data International Offshore Fleet Status as of 11/17/2011 Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Hercules 170 170' - ILC, TD Bahrain Warm…
  31. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 31
    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…
  32. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 32
    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…
  33. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 33
    GOM Shallow Water Operator Data Top 20 Shallow Water (0-350ft) GOM Lease Holders Working % of Total Apache Corp Operator Jackup Contracted Chevron Count Rig Count Stone Energy Apache Corp 7 18% McMoran O&G Chevron 6 16% W&T…
  34. CAPITAL ONE 2011 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 34
    World Class

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