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August 2015 Investor Presentation – Hornbeck Offshore

Hornbeck Offshore · Aug 21, 2015 · 49 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. August 2015 Investor Presentation – Hornbeck Offshore – slide 1
    Todd M. Hornbeck Chairman, President & CEO Investor Presentation James O. Harp, Jr. August 2015 Executive VP & CFO
  2. August 2015 Investor Presentation – Hornbeck Offshore – slide 2
    Company Profile Financial Highlights Relative Stock Price Performance (IPO to 11-Aug-2015) 3 Daily Trading Volume (000s) Year Founded Jun 1997 400% 6,000 Year of IPO Mar 2004 350% HOS 5,000 300% Market Cap Inception 1m Russell…
  3. August 2015 Investor Presentation – Hornbeck Offshore – slide 3
    Investment Considerations Young One of the youngest fleets in the industry with an average age of seven years Technologically Multi-class Upstream fleet capable of servicing our customers needs from cradle-to-grave Advanced Fleet New…
  4. August 2015 Investor Presentation – Hornbeck Offshore – slide 4
    Financial Highlights
  5. August 2015 Investor Presentation – Hornbeck Offshore – slide 5
    Strong Track Record of Growth 700 400 Revenue EBITDA1 600 350 500 300 250 400 200 300 150 200 100 100 50 0 0 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 OSV Barge…
  6. August 2015 Investor Presentation – Hornbeck Offshore – slide 6
    Industry Leading OSV Margins Gross Margin 15-year Average 85.0% 75.0% HOS OSVs = 62% 65.0% Hornbeck OSVs OSV Peers = 42% 55.0% 45.0% 1H 2015 35.0% HOS OSVs = 56% 25.0% OSV Peers = 32% OSV Peer Group HOS Operating Margin…
  7. August 2015 Investor Presentation – Hornbeck Offshore – slide 7
    Recent Trends in Relative Operating Margins Q1 2015 Operating Margin Q2 2015 Operating Margin 30.0% 29% 30.0% 25% 25.0% 25.0% 20.0% 20.0% 15.0% 15.0% 28% 24% 10.0% 10.0% 8% 7% 5.0% 5.0% 1% 0.0% 0.0% Peer Avg -1% -5.0% -5.0%…
  8. August 2015 Investor Presentation – Hornbeck Offshore – slide 8
    HOS vs. Public Domestic OSV Peers Dayrates Utilization 30,000 100% Pre-Macondo Avg Average Dayrate 92% 26,000 90% Effective Dayrate 16-yr Average 22,000 80% Hornbeck 18,000 16-yr Effective 70% Hornbeck 14,000 60% 16-yr Average…
  9. August 2015 Investor Presentation – Hornbeck Offshore – slide 9
    Compounded Reinvestment of Free Cash Flow 700.0m 1.2 billion in 1.3 billion in growth growth capex and other capex to be 600.0m invested from invested from 2011 to 490 2007 to 2010 2016 1 460 500.0m 423 316 400.0m 234 340…
  10. August 2015 Investor Presentation – Hornbeck Offshore – slide 10
    Historical Average Dayrate per Deadweight Ton (DWT) Low-Spec Vessel Avg Dayrate per DWT High-Spec Vessel Avg Dayrate per DWT 12.00 12.00 High = 11.34 11.00 11.00 High = 10.22 10.00 10.00 Avg = 9.16 9.00 9.00 Avg = 8.43 8.00…
  11. August 2015 Investor Presentation – Hornbeck Offshore – slide 11
    Pro Forma Run-Rate EBITDA Illustration Implied 800 Cash EPS: Implied 15.76 700 Cash EPS: 685 10.24 600 Implied Cash EPS: 485 500 365 5.13 400 556 300 270 300 356 200 185 171 320 100 215 115 - Low Case Mid Case High…
  12. August 2015 Investor Presentation – Hornbeck Offshore – slide 12
    Highly Attractive Multiples of Cash EPS with Upside 18 Significant Macondo Implied Upside to Multiple of Cash 15.76 16 incident and Multiple of resulting Cash EPS of EPS…
  13. August 2015 Investor Presentation – Hornbeck Offshore – slide 13
    Long-Term Balance Sheet and Ample Liquidity Recent HOS Financings: 3,000 A = Follow-on Equity Offering in Nov-2011 B = Refinancing of 6.125% Senior Notes due 2014 with 5.875% Senior Notes due 2020 in Mar-2012 C = Refinancing of…
  14. August 2015 Investor Presentation – Hornbeck Offshore – slide 14
    No Maturities of Any Debt until 2019, 2020 and 2021 6.125% Notes were refinanced with 5.875% 6.125% Senior Notes in Mar-2012 Notes due 2014 5.875% Senior Notes due 2020 1.625% Notes were retired in Nov-2013 with 1.625%…
  15. August 2015 Investor Presentation – Hornbeck Offshore – slide 15
    Strong Asset Coverage to Net Debt 4,000 3,500 4.2x 3,405 3,000 3.5x 2,841 3.1x 2,500 2,498 2,000 1,500 1,000 815 Net Debt 4 500 0 Replacement Cost 1 Fair Market Value 2 Net Book Value 3 1 Represents current internal…
  16. August 2015 Investor Presentation – Hornbeck Offshore – slide 16
    Current TEV Substantially Below Intrinsic Vessel Values Average Values per Vessel 170.0m 160.0m 150.0m 140.0m 130.0m 120.0m 110.0m 100.0m 90.0m 80.0m 70.0m 60.0m 50.0m 40.0m 30.0m 20.0m 10.0m 0.0m 5 5 Low Spec High…
  17. August 2015 Investor Presentation – Hornbeck Offshore – slide 17
    HOS Price-Book Ratio Well Below NBV per Share Net Debt Market Cap Price to-Book Ratio Since 2004, the HOS price-to-book ratio has traded in broad range of 40% to 400% of NBV Since its IPO in Mar 2004, HOS has traded at an average…
  18. August 2015 Investor Presentation – Hornbeck Offshore – slide 18
    Relative Trading Volume L3M Trading Volume (shares) to Floating Market Cap Ratio 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% TDW CKH GLF HOS HOS = 4.4% OSV Peer Mean = 2.1% TDW CKH GLF HOS L3M Share Volume 1,247,030 164,063 532,059…
  19. August 2015 Investor Presentation – Hornbeck Offshore – slide 19
    Company Overview 20
  20. August 2015 Investor Presentation – Hornbeck Offshore – slide 20
    Diversified Oilfield Marine Service Provider Offshore Supply Vessels Multi-Purpose Support Vessels HOS Cornerstone approaching the drillship GSF CR Luigs. HOS Iron Horse performing subsea support services. 59 Existing New Gen…
  21. August 2015 Investor Presentation – Hornbeck Offshore – slide 21
    Recent Sale of Military Vessels Recently agreed to sell four 250EDF class OSVs that were chartered to the U.S. Navy for 152m (38m each) These vessels have supported the U.S. submarine fleet on the east and west coast of the U.S.…
  22. August 2015 Investor Presentation – Hornbeck Offshore – slide 22
    Aggressive New Gen OSV Stacking Strategy HOS currently has 18 new generation OSVs stacked (seven 200 class and eleven 240 class OSVs) 23
  23. August 2015 Investor Presentation – Hornbeck Offshore – slide 23
    Market Diversification Strategy1 By Geographic Area By Service-Offering Military Service Port Services Other Intl Contract East Coast West Coast Latin America Oilfield Oilfield GoM Specialty Supply 5 Geographic Markets 4…
  24. August 2015 Investor Presentation – Hornbeck Offshore – slide 24
    Our Core Markets: GoM, Mexico and Brazil Non-Oilfield service West Coast Oilfield service 1 OSV Company locations Gulf of Mexico Europe/ 23 OSVs Middle East 5 MPSVs 1 OSV 1 MPSV Mexico 12 OSVs Represents active vessel…
  25. August 2015 Investor Presentation – Hornbeck Offshore – slide 25
    Top 3 Operator of New Gen OSVs Worldwide By Location By Competitor (by DWT) (by DWT) HOS Core HOS is 3 Med 3% Markets = 40% out of 204 ANZ 2% Indian Ocean Other 2% of WW Supply companies 3% Middle East 2% South America 17%…
  26. August 2015 Investor Presentation – Hornbeck Offshore – slide 26
    Top 3 Operator of Hi-Spec OSVs Worldwide and in the GoM 3 Operator Worldwide 2 Operator in the GoM (Jones Act) (Pro Forma Hi-Spec Fleet1 by DWT) (Pro Forma Hi-Spec Fleet1 by DWT) Siem Jackson Aries Marine Offshore OdysseaLaborde…
  27. August 2015 Investor Presentation – Hornbeck Offshore – slide 27
    Top 2 Operator of Ultra Hi-Spec OSVs WW and in the GoM 2 Operator Worldwide 1 Operator in the GoM (Jones Act) (Pro Forma 300 Class Fleet1 by DWT) (Pro Forma 300 Class Fleet1 by DWT) GulfMark Other 3% 3% Otto Candies 9% Harvey Gulf…
  28. August 2015 Investor Presentation – Hornbeck Offshore – slide 28
    Top Operator of MPSVs Serving the Jones Act GoM Foreign-Flagged MPSVs U.S. Flagged MPSVs All MPSVs (Pro Forma1 by Vessel Count) (Pro Forma1 by Vessel Count) (Pro Forma1 by Vessel Count) Siem Solstad Boa Offshore Edda REM Offshore…
  29. August 2015 Investor Presentation – Hornbeck Offshore – slide 29
    Well-Balanced Blue Chip Customer Base 2015E Upstream Revenue 2015E Upstream Revenue By Customer Type By Customer Credit Rating Integrated Oil A Companies AA 21% 52% 23% BBB 12% National Oil AAA Companies Oilfield 12%…
  30. August 2015 Investor Presentation – Hornbeck Offshore – slide 30
    Safety Record Outperforms Industry Benchmarks Recordable Incident Rates (RIR) 3 12,000,000 2.5 10,000,000 2 8,000,000 1.5 6,000,000 1 4,000,000 0.5 2,000,000 0 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010…
  31. August 2015 Investor Presentation – Hornbeck Offshore – slide 31
    Upstream Macro Overview
  32. August 2015 Investor Presentation – Hornbeck Offshore – slide 32
    Depletion Curve to Drive the Drill Bit 140,000 120,000 100,000 Replacement Need Mbbl per day 80,000 60,000 40,000 20,000 Existing Supply 0 2013 2016 2019 2022 2025 2028 2031 2034 2037 2040 Source: IEO 2014,…
  33. August 2015 Investor Presentation – Hornbeck Offshore – slide 33
    Deepwater Trend Driving Upstream Segment Deepwater GoM Production % of Total U.S. Offshore Production from Deepwater 90.0 Oil Prod 80.0 Gas Prod 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 1985 1987 1989 1991 1993 1995 1997…
  34. August 2015 Investor Presentation – Hornbeck Offshore – slide 34
    Deepwater Wells are Being Drilled to Greater Depths Gulf of Mexico Well Depths Source: BSEE. Well Depth defined as True Vertical Depth Average deepwater well depths in the GoM have increased from 10k feet in 1993 to nearly 20k…
  35. August 2015 Investor Presentation – Hornbeck Offshore – slide 35
    Deepwater Wells are Greater Distances From Shore Brazil Espirito Santo Basin New Orleans Corpus Christi Albacora Leste Discovery 75 miles/6 hours Macae Marlim Leste Discovery 70 miles/6 hours Gunnison Big Foot Rio de Janeiro…
  36. August 2015 Investor Presentation – Hornbeck Offshore – slide 36
    Deepwater E&P Demand Drivers Deepwater and ultra-deepwater exploration and production infrastructure Courtesy of: Clarkson Research Services Limited UK (www.crsl.com). 37
  37. August 2015 Investor Presentation – Hornbeck Offshore – slide 37
    Newbuild Floaters Built for Ultra-Deepwater Drilling Newbuild Floaters By Delivery Date Floating Rig Fleet by Rated Water Depth 80 70 8 8 60 50 17 40 75 30 27 20 10 15 0 2015E 2016E 2017E 2018E After Total 2018E Source:…
  38. August 2015 Investor Presentation – Hornbeck Offshore – slide 38
    Hi-Spec Floating Rigs are Predominant in Our Core Markets Pro Forma Hi-Spec Fleet Hi-Spec Fleet Growth (with or without dual BOP) (by BOP Status) SE Asia S America 4% Uncontracted 51% of pro forma hi-spec 8% 26% 80 floating rig…
  39. August 2015 Investor Presentation – Hornbeck Offshore – slide 39
    Project Spartan OSV Newbuild Program 5
  40. August 2015 Investor Presentation – Hornbeck Offshore – slide 40
    Here We Grow Again Pro Forma 2016 Fleet1 2010 Fleet 39% 5% 2005 Fleet 39% 2000 Fleet 7% 23% 21% 37% 30% 11% 50% 3% 20% 100%…
  41. August 2015 Investor Presentation – Hornbeck Offshore – slide 41
    Multi-Class Upstream Fleet Profile Newbuilds Note: Legend OSV Class DWT Acquisitions Conventional Under 1,500 Current Newbuilds 200 (Low-Spec) 1,500 2,500 Upstream Fleet 240/280 (High-Spec) 2,500 5,000 65 Existing 300 (Ultra…
  42. August 2015 Investor Presentation – Hornbeck Offshore – slide 42
    Strategic Newbuild Program: 300 Class OSVs HOS 200 Class OSV HOS constructing 18 Jones Act-qualified 300 class DP-2 high-spec OSVs These vessels will have an average of 6,000 DWT and 20,000 barrels of liquid mud carrying…
  43. August 2015 Investor Presentation – Hornbeck Offshore – slide 43
    Strategic Newbuild Program: 300 Class MPSVs HOS 200 Class OSV HOS constructing six Jones Act-qualified HOSMAX 310 Class DP-2 MPSVs Five HOSMAX MPSVs will have a 150T-250T AHC KB crane, helideck, and two ROV docking stations…
  44. August 2015 Investor Presentation – Hornbeck Offshore – slide 44
    HOSMAX 310 Class MPSV 45
  45. August 2015 Investor Presentation – Hornbeck Offshore – slide 45
    Our Ultra Hi-Spec Fleet Will Drive Earnings Power 46
  46. August 2015 Investor Presentation – Hornbeck Offshore – slide 46
    Investment Considerations Young One of the youngest fleets in the industry with an average age of seven years Technologically Multi-class Upstream fleet capable of servicing our customers needs from cradle-to-grave Advanced Fleet New…
  47. August 2015 Investor Presentation – Hornbeck Offshore – slide 47
    Todd M. Hornbeck Chairman, President & CEO Investor Presentation James O. Harp, Jr. August 2015 Executive VP & CFO
  48. August 2015 Investor Presentation – Hornbeck Offshore – slide 48
    Appendix
  49. August 2015 Investor Presentation – Hornbeck Offshore – slide 49
    Regulation G Cash Earnings Reconciliation This presentation contains references to the non-GAAP financial measure of Cash Earnings per Share. The Company views Cash Earnings per Share as a meaningful profitability metric and as an…

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