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HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc.

Hercules Offshore, Inc. · Mar 17, 2013 · 39 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 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 1
    World Class Howard Weil Energy Conference March 17 21, 2013
  2. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 2
    World Class Overview
  3. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 3
    A Global Leader in Shallow Water Services Overview Worldwide Operations Global leader in jackup drilling and liftboat services 38 jackup rigs* - third largest worldwide fleet 64 liftboats - largest worldwide fleet Operations in…
  4. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 4
    Strategic Objectives Report Card 2012 Strengthen Core Drilling Operations Leading edge dayrates in U.S. GOM up 60% year-over year (y-o-y) for 200 mat-cantilever rig Average Domestic Offshore days backlog nearly doubles y-o-y Domestic…
  5. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 5
    Strategic Objectives 2013 External Fleet Growth at a Reasonable Price Focus on shallow water assets (jackups or liftboats) Stringent return focus Internal Fleet Optimization Reactivation of stacked capacity at attractive…
  6. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 6
    Ben Avon Rig Acquisition and Contract Key asset details Projected Return on Capital Employed Acquisition of Hercules 267 (formerly Ben ( in millions) Avon) Rig purchase price 55.0 Upgrade costs 1.0 Total investment approximately…
  7. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 7
    Expanding Our International Liftboat Fleet Key asset details Acquisition of the White Shark (formerly Titan 2) Purchase price of 42 million Liftboat currently in West Africa Additional investment (5 million) required for certain…
  8. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 8
    World Class Business Outlook
  9. HOWARD WEIL ENERGY 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. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 10
    Domestic Offshore Backlog Hercules Offshore Average Backlog per Marketed Rig U.S. GOM (1) 250 225 200 175 150 125 100 75 50 25 0 Strong company backlog per rig near historical high Average term of recent…
  11. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 11
    Leading Edge Dayrates Hercules Offshore Leading Edge Dayrates U.S. GOM 110 140 100 130 90 120 Dayrate (000 per day) Dayrate (000 per day) 80 110 70 100 60 90 50 80 40 70 30 60 20 50 Oct11 Oct12 Apr11…
  12. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 12
    U.S. GOM Supply vs. Demand U.S. GOM Jackup Supply and Demand as of March 11, 2013 80 90% Industry Utilization Number of Rigs 62 60 of Marketed Rigs 42 40 40 36 (20) (2) 20 0 Current Less: Cold Marketed Planned Jackup…
  13. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 13
    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 5.0 40% % Liquids Production in US GOM Shelf 4.5 2005…
  14. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 14
    Domestic Customer Base Exposure to Crude Oil Company specific U.S. Gulf of Customers U.S. GOM Liquids Mix Mexico Shelf production shows significant liquids mix Apache 38% Crude oil from U.S. Gulf of Mexico typically priced at…
  15. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 15
    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 11% EXXI Top three operators account for 11%…
  16. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 16
    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…
  17. HOWARD WEIL ENERGY 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 Reactivation Capital Cost 14 11.4 9.3 7.9 6.8 6.0 15 12.2 10.0 8.4 7.3 6.4 ( in millions)…
  18. HOWARD WEIL ENERGY 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 19 48 79 110 142 173 Number of Rigs Working 20 66…
  19. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 19
    International Offshore Resilient oil prices are supportive of International Jackup Backlog and Dayrates strong growth in international capital 18.0 200 spending 16.0 175 Backlog per International Marketed Rig (Months)…
  20. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 20
    International Jackup Markets Snapshot Worldwide ex. US GOM Jackup Supply / Demand 440 420 Total Supply 400 Marketed Supply 380 Total Contracted 360 340 Rig Count 320 300 280 Current Demand: 375 260 Prior Peak…
  21. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 21
    International Offshore Drilling Outlook FY 2013E FY 2014E Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Hercules 267 W. Africa 108-110K 108-110K Middle Hercules 266 116-118k* 116-118k* East Middle Hercules 262 79-81k 79-81k East Middle Hercules…
  22. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 22
    Discovery Offshore Investment Creative and opportunistic means to establish ownership in two newbuild top-tier rigs Rig capabilities within top 8% of global fleet Rig class commands highest dayrates among all designs, except Norway…
  23. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 23
    High Specification Rig Demand in the North Sea North Sea (ex. Norway) is a primary target High Spec Jackups in the North Sea market for Discovery rigs Year in Dayrate 2013 2014 Rig Name Location Service Available USD'/day Q1 Q2 Q3…
  24. HOWARD WEIL ENERGY 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 White Shark expands high end market opportunities Established presence in Middle East…
  25. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 25
    Domestic Liftboats Seasonally-driven demand, with activity levels higher during the summer/fall period and lower during winter period Select industry capacity movement out of the Gulf of Mexico, including Companys Kingfish vessel to…
  26. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 26
    World Class Corporate Initiatives
  27. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 27
    History of Growth August October January June August September October November February 2004 2004 2005 2005 2005 2005 2005 2005 2006 Acquired five Acquired 22 Acquired Rig 25 Acquired Rig Acquired Acquired Initial Acquired…
  28. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 28
    Successful Debt Reduction and Asset Sales Efforts Net Debt (1) Proceeds from Asset Sales 1,100 100.0 1,000 80.4 80.0 72.9 900 ( in millions) 60.0 ( in millions) 800 40.0 700 25.8 23.2 600 20.0 17.0 500…
  29. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 29
    Total Debt Summary Description Amount Coupon Maturity First Call Date (millions) Rate Convertible Senior Notes 66 3 3/8% Jun2013(1) -- Senior Secured Notes 300 7 1/8% Apr2017 Apr2014 105% Senior Unsecured Notes 300 10 1/2% Oct2017…
  30. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 30
    World Class Conclusion
  31. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 31
    Investment Highlights Positive industry trends continue in the U.S. GOM led by tight jackup rig supply and oil/liquids-rich activity demand driver International jackup fundamentals supported by expected growth in capital spending…
  32. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 32
    APPENDIX 32 World Class
  33. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 33
    Domestic Offshore Marketed Rig Data Domestic Offshore Fleet Status as of 02/21/13 Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Hercules 120 120' - MC, TD GOM Chevron 64-66 313…
  34. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 34
    Domestic Offshore Marketed Rig Data (continued) Domestic Offshore Fleet Status as of 02/21/2013 (continued) Walter Oil & Gas 60-62 17 03/10/13 Hall-Houston 79-81 40 04/19/13 Hercules 251 250' - MS, TD GOM Hall-Houston 74-76 64…
  35. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 35
    International Offshore Marketed Rig Data International Offshore Fleet Status as of 02/21/2013 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 ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 36
    GOM Shallow Water Operator Data Top 20 Shallow Water (0-350ft) GOM Lease Holders Current % of Total Apache Corp Operator Jackup Current Chevron Stone Energy Apache Corp 7 19% Chevron 4 11% McMoran O&G Stone Energy 0 0% W&T…
  37. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 37
    Summary of Discovery Offshore Structure Overview Structure Discovery Offshore is a newly established Luxembourgbased company Investors Hercules Offshore Constructing two ultra highspecification Keppel FELS Super A jackup rigs…
  38. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 38
    Domestic and International Liftboats Fleet Status January 2013 Domestic Liftboat Fleet Status Leg Length/ Actively Revenue Per Liftboat Class Total Number Marketed Day Per Operating (1) (2) (3) (Feet) of Liftboats Liftboats…
  39. HOWARD WEIL ENERGY CONFERENCE – Hercules Offshore, Inc. – slide 39
    World Class

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