World Class Barclays CEO Energy Power Conference September 11 - 13, 2013
World Class Overview
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…
Transforming the Company for the Next Chapter Recent Strategic Events: 1. Acquisition of Discovery Offshore represents significant step toward rig fleet renewal and high-grading of rig fleet 2. Sale of Domestic Liftboats driven by…
Discovery Acquisition Rationale Fleet Renewal for Hercules Offshore Ultra high-specification rigs historically command higher dayrates over industry cycle Discovery rigs expected to provide 30+ years of earnings capacity Newer…
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…
World Class Business Outlook
Domestic Offshore Segment Overview Global recession and Macondo U.S. GOM Supply/Demand of Marketed Jackups created extreme conditions in 2009 and 2010 120 Near the trough (April 2011), 100 Hercules acquired main competitor,…
U.S. GOM Supply vs. Demand U.S. GOM Jackup Supply and Demand as of September 3, 2013 80 89% Industry Utilization Number of Rigs 59 60 of Marketed Rigs 39 38 40 34 (20) (1) 20 0 Current Less: Cold Marketed Planned…
Domestic Offshore Backlog Company Average Days Backlog per Marketed Rig U.S. GOM (1) Strong company backlog per rig near historical high Average term of recent contracts is between 6 months to over a year, compared to 3 months…
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 Oct11 Oct12…
Domestic Customer Base Exposure to Crude Oil Company specific U.S. Gulf of Mexico Customers U.S. GOM Liquids Mix Shelf production shows significant liquids mix Chevron 39% Crude oil from U.S. Gulf of Mexico typically priced at…
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 Top two operators account for 15% EXXI 6% approximately 32%…
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…
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…
Recent Fixtures in U.S. GOM vs. International Markets U.S. GOM West Africa Middle East SE Asia Ensco 99 Tommy Craighead Jimmy Puckett Key Gibraltar Fixtures (250 IC) (300 IC) (300 IC) (300 IC) Dayrate 125,000 145,000 140,000…
International Offshore Resilient oil prices are supportive of International Jackup Backlog and Dayrates strong growth in capital spending 18 200 National Oil Companies have been 16 175 Backlog per International Marketed Rig…
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 Demand in most major international 460 markets…
Ultra High-Spec Rigs Command Premium Pricing Ultra high-specification jackup segment(1) Jackup fixtures by class since 2010(2) 614 600 300,000 58 550 497 Average 500 250,000 dayrate 19 450 225 218,574 Global jackup rig…
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 Hercules 267 W. Africa 108-110k 108-110k Middle (2) (2) Hercules 266 116-118k…
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…
World Class Corporate Initiatives
History of Growth August October January June August September October November February June 2004 2004 2005 2005 2005 2005 2005 2005 2006 2006 Acquired five Acquired 22 Acquired Rig 25 Acquired Rig Acquired the Acquired Initial…
Track Record of High Return Acquisitions Asset acquisitions since 2012 ( in millions) Hercules 266 Hercules 267 Bull Ray (formerly Ocean (formerly Ben Avon) (formerly Titan 2) Columbia) Date Acquired March 2012 February 2013…
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…
World Class Conclusion
Investment Highlights Discovery Offshore acquisition is a significant step toward fleet renewal and high-grading of assets Sale of domestic liftboats and inland barges eliminates low performing assets Positive industry trends…
Domestic Offshore Marketed Rig Data Domestic Offshore Fleet Status as of 08/21/13 Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Hercules 120 120' - MC, TD GOM Chevron 64-66 132…
Domestic Offshore Marketed Rig Data (continued) Domestic Offshore Fleet Status as of 08/21/2013 (continued) Hercules 251 250' - MS, TD GOM Shipyard 10/27/13 74-76 20 09/10/13 Hercules 253 250' - MS, TD GOM Tana 96-98 65 11/14/13…
International Offshore Marketed Rig Data International Offshore Fleet Status as of 08/21/2013 Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Discovery Resilience 400' - ILC, TD…
International Liftboats Fleet Status July 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…
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 % Liquids Production in US GOM Shelf 6.5…
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…
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.…
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