Presenters Ian Strachan Introduction Chairman Steven Newman Strategic Overview President and CEO Markets and Outlook Terry Bonno Senior Vice President, Marketing Performance John Stobart Initiatives Executive Vice…
Presenters Ian Strachan Introduction Chairman Steven Newman Strategic Overview President and CEO Markets and Outlook Terry Bonno Senior Vice President, Marketing Performance John Stobart Initiatives Executive Vice…
Presenters Ian Strachan Introduction Chairman Steven Newman Strategic Overview President and CEO Markets and Outlook Terry Bonno Senior Vice President, Marketing Performance John Stobart Initiatives Executive Vice…
November 21, 2013 www.deepwater.com
Company Overview Value Creation Financial Flexibility Capital Investment Dividends Litigation Update Summary 88
Company Overview Industry Leader Premier position in ultradeepwater market segment Largest fleet of high spec and midwater floaters Operates in most major markets worldwide Significant relationships across the customer…
Company Overview Customer Technical Our People Global Reach Relationships Expertise Transocean Transocean 14
Value Creation 800 million margin expansion Financial Pursue MLP Divest non-core assets Flexibility Debt reduction Shareholder Value Dividends: 2.24/sh in 13 Return of Capital Building 12 high- spec rigs, seven 3.00/sh in…
Committed to improving and maintaining financial flexibility Manage financial exposure Sustain investment grade rating while renewing and growing the fleet MLPlike yield vehicle (MLP) Progress towards gross debt targets Divest…
New Field Resources Discovered in 2012 (by Water Depth) Global hydrocarbon demand Volume Discovered (billion boe) 18 of Discoveries requires additional high 16 180 14 specification offshore drilling 12 160 140 equipment 10…
Continuously renew the fleet and grow our leadership position in highspec assets Completed delivery of 10 ultradeepwater floaters in 2011 Delivered four highspec jackups since 2012 Industry Drillships Build Profile 20072013…
Current Fleet Future Fleet Existing Under Total construction Ultra-deepwater 27 +7 34 Ultra-deepwater 50% Floaters Deepwater 12 12 Deepwater Midwater 22 22 Midwater Harsh Environment 7 7 Harsh Environment 10% Jackups…
We continue to execute our asset strategy Seven contracted ultradeepwater newbuilds under construction; expected contract commencement 1Q14 2Q17 Five highspecification jackups under construction to be delivered 1Q16 3Q17 Options…
Philosophy Preference to not add uncommitted incremental capacity to the market Buy: Acquire existing assets that meet investment criteria Build: Preference for highreturn, contractbacked fleet expansion opportunities Historic…
Transocean is a technical leader and innovator, and has achieved many industry firsts Partnering with Shell to develop a new Blow Out Preventer (BOP) control system Designed to be fault resistant and tolerant Designed to retrofit…
Current and proposed dividend yields are very competitive Indicated Dividend Yield (Average of Peer Groups) (11) (%) 6.0 5.4 5.0 4.1 4.0 3.2 3.0 2.7 2.5 2.0 1.8 0.9 1.0 0.4 - Proposed Current Floating Offshore Offshore…
Brazil Frade Settlement of two civil cases against Transocean announced on 9/17/13 Transocean has no financial obligations under the settlement agreement Norway Tax Case Norwegian court overturned Arcade civil tax assessment; state…
We are delivering on our commitment to create value for all our stakeholders Improving financial flexibility to capitalize on highreturn opportunities and increase competitiveness Margin improvement MLP Executing a clear plan to…
Presenters Ian Strachan Introduction Chairman Steven Newman Strategic Overview President and CEO Markets and Outlook Terry Bonno Senior Vice President, Marketing Performance John Stobart Initiatives Executive Vice…
November 21, 2013 www.deepwater.com
Market Overview NearTerm Outlook Challenges Opportunities Market Outlook LongerTerm Outlook Discoveries Play Openers Production and Well Forecast Exploration and Development Forecast Fleet Composition Summary 29
Market Overview Market Leader Premier position in ultradeepwater market Largest floater fleet with well positioned global footprint Leading position in most major markets worldwide Strong customer relationships Success in…
EUROPE AMERICAS 6 11 1 4 1 1 1 1 1 Under Construction 13 1 7 3 5 1 3 * 4 2 Ultra-deepwater 34 1 3 4 Deepwater 12 3 1 2 2 1 3 Harsh Environment Floater 7 4 1 1 Midwater 22 ASIA & AFRICA High-Specification…
Market Overview Backlog Analysis By Asset Class By Customer 5% 13% 29% 30% 8% 4% 4% 70% 4% 4% 18% 5% 6% UltraDeepwater Deepwater Floaters Shell Chevron Petrobras Harsh Environmnet Midwater Floater BP Statoil Total…
Market Overview Floaters - Market Share by Water Depth 7,500 ft. + 4,500 ft. 7,499 ft. < 4,500 ft. Transocean Competitors Source: IHSPetrodata. Competitive rigs include actively marketed rigs, including stacked rigs.…
Near-Term Outlook Challenges Program delays Block 32 Angola one year late West Africa pentup demand 10 15 rigs Delays in government approvals and sanctions Bifurcation of rates filling gaps Farmouts increasing even in North Sea…
Near-Term Outlook Opportunities West Africa Total Nigeria Egina 1 X 5 years Nigeria Egina 1 X 3 years Angola Block 32 1 X 5 years Shell Nigeria Bonga 2 X 5 years Nigeria Bonga 1 X 3 years ExxonMobil Nigeria Erha 1 X 2 years…
Near-Term Outlook Opportunities Brazil Libra Discovery Estimate 8 12 billion barrels Petrobras, Shell, Total, CNOOC and CNPC 200 to 300 development wells estimated First presalt licensing round Petrobras selling 15% equity in…
Near-Term Outlook Ultra-deepwater Market Our customers believe in the longterm growth potential of deepwater Some longterm opportunities for existing fleet with current open demand Currently, high utilization Expect near term…
Near-Term Outlook Jackup and Floater Market HighSpec Jackups Midwater Deepwater Transocean Honor GSF Rig 140 Discoverer Seven Seas High utilization and Strong presence in the UK Nearterm increase in rig improving dayrates in…
Deepwater Discoveries 1 Steady pipeline of discoveries 6 Largest offshore growth market 34 Reserve replacement and 41 production growth driving 42 27 demand water depths 4,500 feet Deepwater Discoveries by Year Deepwater…
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Offshore production growth driven by deepwater and ultra deepwater Steady production for shallowwater fields Source: McKinsey Energy Insights, Rystad 42
Demand Well demand forecasted to grow from 500 in 2013 to 1,250 by 2025 Shallow water remains steady with growth in deepwater and midwater Expect well intervention and workover to increase Exploration drilling translates…
Exploration and Development Forecast Exploration success leading to development growth Development drilling grows to 70% of total drilling demand 44
High-Grading of Fleet Offshore Rigs Floaters Floater fleet Rigs at risk of Potential newbuilds displacement Longterm growth in deepwater 215 500 Lower spec floaters at risk 110 120 298 160 floaters are 30+ years old…
Nearterm softness in demand for ultradeepwater rigs is adversely impacting lower capability floaters; we expect excess capacity to be absorbed and maintain a favorable longterm view Ultradeepwater Longterm outlook remains robust;…
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Presenters Ian Strachan Introduction Chairman Steven Newman Strategic Overview President and CEO Markets and Outlook Terry Bonno Senior Vice President, Marketing Performance John Stobart Initiatives Executive Vice…
www.deepwater.com
Vision Fleet Operational Improvement Ops Integrity Process Revenue Costs Project Execution Future State Summary 50
0 -5000 -10000 -15000 Well Depth (Feet) -20000 -25000 -30000 Transocean Rigs -35000 NonTransocean Rigs -40000 Note: The above graph shows deepest well in record year 53
EUROPE AMERICAS Stavanger Aberdeen St. Johns Geneva Houston Dubai Mumbai Bangkok Lagos Luanda Jakarta Macae Headquarters Rio de Janeiro Unit Office Perth Operating Hub Office ASIA & AFRICA Country…
EUROPE AMERICAS 6 11 1 4 1 1 1 1 1 Under Construction 13 1 7 3 5 1 3 4 2 Ultra-deepwater 34 * 1 3 4 Deepwater 12 3 1 2 2 1 3 Harsh Environment Floater 7 4 1 1 Midwater 22 ASIA & AFRICA High Specification…
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Ultradeepwater drillship Max water depth 12,000 ft Max drilling depth 40,000 ft 2.5MM pound load path Dual activity derrick Dual BOP Three mud systems 110,000 short tons operating displacement 57
Ultradeepwater 6th generation, Aker H6e design Max drilling depth 33,000 ft Max water depth 10,000 ft Moored and dynamically positioned Fully winterized for Arctic conditions Full dual activity with Double Ram Rig Transocean…
Keppel FELS Super B Bigfoot Class Max drilling depth 35,000 ft Fast preload capability Ability to jack up with full preload Three different mud systems Offline pumping and cementing operations Offline stand building platform…
Ultradeepwater drillship Max water depth 10,000 ft Max drilling depth 35,000 ft Offline stand building for drillpipe and casing Vertical and horizontal pipe racking for redundancy Workhorse efficiency 60
Completed Program: 16 HighSpec Rigs 2009 20102012 2013 Americas Inspiration Andaman Clear Leader KG2 Siam Driller KG1 India Ao Thai Petrobras 10000 Luanda DD III Champion Barents Honor Spitsbergen Current Program: Seven…
All active rigs are scheduled to have safety case completed by the end of 1Q14 Risk assess major hazards, establish barriers, test effectiveness Fewer fires, floods, well control and stationkeeping events 63
Systematic elimination of unreliable components and systems using continuous improvement process Designed to bring downtime down in a very methodical and purposeful way 64
Revenue efficiency improvements will drive margin expansion Technical improvement Operations Performance Improvement Plan Improved reliability/less downtime Intense focus on well control equipment Contract enhancements Strive for…
Half of all downtime is due to well Downtime Breakdown control equipment (2013 YTD) Control valve leaks Annular elements and seals Diverter flow line seals Choke and kill line stabs Design and manufacturing defects Subsea…
Cost reduction Personnel Shorebase efficiency initiative Benchmarking of offshore crews Reduction of labor pools Maintenance costs Justintime vs. justincase Training Careful rationalization of training spend Shipyard/Project…
Fiveyear Special Periodic Survey much can be done in service BOP and drilling equipment recertification component swap Two to three year planning and execution cycle Streamlines planning time and minimizes upfront equipment cost…
Most improvement initiatives introduced current focus on implementation Industrybest safety performance Stronger barriers to major accidents Continue to improve the performance of well control and drilling systems Leaner,…
We operate some of the best, most capable and efficient drilling equipment in the industry We are intently focused on the continuous improvement of our offshore operation through Unrelenting attention to safety and integrity of…
Presenters Ian Strachan Introduction Chairman Steven Newman Strategic Overview President and CEO Markets and Outlook Terry Bonno Senior Vice President, Marketing Performance John Stobart Initiatives Executive Vice…
Maintain 3.54.5 billion total liquidity, including 1.53 Liquidity billion cash, respectful of remaining uncertainties; 1.5 billion Management cash required under normal circumstances Pursue balanced and disciplined approach to…
Value Creation 800 million margin expansion Financial Pursue MLP Divest non-core assets Flexibility Debt reduction Shareholder Value Dividends: Building 12 high- 2.24/sh in 13 Return of Capital spec rigs, seven 3.00/sh in…
Targeted total of 800 million in margin improvement, all else equal 300 million in shorebase cost savings 2012 baseline pre Shelf Drilling Transaction Onshore reorganization, headcount reduction, facility consolidation 200 million…
500 million targeted in additional Item Relative Opportunity margin improvement by yearend 2015 Revenue Efficiency 55% Revenue Shipyard/Project Operations, projects Execution 45% Costs InService Maintenance Optimization Perform…
Completed thorough evaluation of the MLPtype yield vehicle Benefits outweigh risks for Transocean MLP structure permits acceleration of strategic initiatives Improves financial flexibility Supports balance sheet objectives…
Investor demand for MLP products continues to grow Increasingly viewed as a durable asset class Vehicle can provide access to equity markets, even under stress MLP Equity Financings By Type of Issuance Launch anticipated mid2014…
Value Valued on a total return basis versus principally on earnings, cash flow Investors seek stable and predictable distribution growth Distribution growth management Optimize debt/equity balance Coverage ratio Reserve…
Generic structuring considerations Balance cash needs and MLP size and structure Size, quality of assets and contracts, and growth drives demand and pricing Prior/proposed transactions are initially three four rigs Notionally, one…
Strategic imperative to highgrade the fleet through consistent investment in highspecification floaters and jackups Fund fleet renewal while maintaining a strong, flexible balance sheet Fleet renewal options include Highreturn,…
Current Fleet Future Fleet Existing Under Total construction Ultra-deepwater 27 +7 34 Ultra-deepwater 50% Floaters Deepwater 12 12 Deepwater Midwater 22 22 Midwater Harsh Environment 7 7 Harsh Environment 10% Jackups…
Execution Divest noncore assets by 2018 Need to add oneplus floater(s) and multiple highspec jackups per year to maintain satisfactory pace of renewal Average annual capital investment for fleet renewal 1.52.0 billion Will be…
Accelerated execution of asset strategy/fleet renewal underway 1.2 billion commitment for a package of five highspecification jackups for delivery 1Q16 3Q17 Firm shipyard orders…
Current and proposed dividend yields are competitive and sustainable Potential for growth Dividend is a key, valueenhancing element of balanced capital allocation strategy (%) Indicated Dividend Yield 10.0 8.1 8.0 6.0 5.4…
In the context of a balanced capital allocation strategy, we have a clear plan and timeline for creating value Continuous improvement in operating performance and efficiencies Margin expansion Increase financial flexibility with…
Presenters Ian Strachan Introduction Chairman Steven Newman Concluding Remarks President and CEO Markets and Outlook Terry Bonno Senior Vice President, Marketing Performance John Stobart Initiatives Executive Vice…
We are delivering on our commitment to continue to create value for Transocean stakeholders Pursuing revenue and cost initiatives to expand margins Executing on our strategy to highgrade the fleet Improving financial flexibility…
Q&A Ian Strachan Chairman Steven Newman President and CEO Terry Bonno Senior Vice President, Marketing John Stobart Executive Vice President, COO Esa Ikaheimonen Executive Vice President, CFO 90
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