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PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc.

Hercules Offshore, Inc. · Sep 4, 2013 · 36 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. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 1
    World Class Pareto Securities 20th Annual Oil & Offshore Conference September 4 - 5, 2013
  2. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 2
    World Class Overview
  3. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 3
    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…
  4. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 4
    Transforming the Company for the Next Chapter Recent Strategic Moves: 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…
  5. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 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…
  6. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 6
    Discovery Acquisition Rationale Fleet Renewal for Hercules Offshore Higher specification rigs with higher day rates and earning power Discovery rigs are expected to provide 30+ years of earnings capacity Newer assets are expected…
  7. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 7
    Hercules Triumph Inaugural Contract Initial contract secured with Cairn India Limited Total contract value is approximately 36.6 million Dayrate in the 214k - 216k range Approximately 13 million in mobilization fees Contract…
  8. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 8
    World Class Business Outlook
  9. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 9
    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,…
  10. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 10
    U.S. GOM Supply vs. Demand U.S. GOM Jackup Supply and Demand as of August 22, 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 Jackup…
  11. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 11
    Domestic Offshore Backlog Hercules Offshore Average 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…
  12. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 12
    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…
  13. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 13
    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…
  14. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 14
    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%…
  15. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 15
    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…
  16. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 16
    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…
  17. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 17
    Reactivation Matrix (1) Capital Payback Analysis (m onths to payback) Dayrate Assumption 80,000 90,000 100,000 110,000 120,000 Hercules 209 Reactivation Capital Cost 14 11.4 9.3 7.9 6.8 6.0 reactivation estimate 16 13.0…
  18. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 18
    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…
  19. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 19
    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…
  20. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 20
    International Jackup Markets 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…
  21. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 21
    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.…
  22. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 22
    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 19 450 225 214,806 Global jackup rig…
  23. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 23
    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…
  24. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 24
    International Liftboats Largest liftboat provider in West Africa Long term demand growth, tempered by competition creep Recent acquisition of Bull Ray expands high end market opportunities Established presence in Middle East…
  25. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 25
    World Class Corporate Initiatives
  26. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 26
    Track Record of High Return Acquisitions Asset acquisitions since 2012 ( in millions) Ocean Columbia Ben Avon Titan 2 Date Acquired March 2012 February 2013 February 2013 Seller Diamond Offshore KCA Deutag KS Energy Gross…
  27. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 27
    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…
  28. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 28
    World Class Conclusion
  29. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 29
    Investment Highlights Discovery Offshore acquisition represents significant step toward fleet renewal and high-grading of assets Sale of domestic liftboats and inland barges streamlines company operations and eliminates low…
  30. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 30
    APPENDIX 30 World Class
  31. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 31
    Total Debt Summary Description Amount Coupon Maturity First Call Date (millions) Rate Senior Secured Notes 300 7 1/8% Apr2017 Apr2014 105% Senior Unsecured Notes 300 10 1/2% Oct2017 Oct2013 105% Senior Unsecured Notes 200 10 1/4%…
  32. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 32
    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…
  33. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 33
    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…
  34. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 34
    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…
  35. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 35
    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…
  36. PARETO SECURITIES 20TH ANNUAL OIL AND OFFSHORE CONFERENCE – Hercules Offshore, Inc. – slide 36
    World Class

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