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Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc.

Diamond Offshore Drilling, Inc. · Mar 19, 2013 · 36 slides

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Slides

  1. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 1
    Howard Weil 41st Annual Energy Conference New Orleans, March 19, 2013 Larry Dickerson President and Chief Executive Officer Michael Acuff Senior Vice President, Contracts and Marketing
  2. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 2
    Agenda Shareholder Focus Fleet Renewal Operational Excellence Market Outlook Financial Strength Diamond Offshore Drilling, Inc. 2
  3. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 3
    Shareholder Focus Diamond Offshore Drilling, Inc. 3
  4. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 4
    Dividends Making Headlines Transocean plans to restart dividend after Icahn's push - March 4 (Reuters) Noble board recommends increasing dividend - February 4 (Company press release) Ensco increases dividend 33% -…
  5. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 5
    Dividends Nothing New at Diamond Offshore Since 2006, over 4.8 billion of dividends have been paid, while we remain conservatively leveraged. Diamond Offshore Drilling, Inc. 5
  6. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 6
    Cumulative Dividends Since 2006 Total Regular and Special Dividends per Share 40 35 35 30 25 20 15 10 5 0 2006 2007 2008 2009 2010 2011 2012 Diamond Offshore Drilling, Inc. 6
  7. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 7
    Total Return Performance Average Annual Total Return 1/1/2005 12/31/2012 14% 12.7% 12% 10% 9% 8% 6% 5% 4% 3% 2% 1% 0% DO ESV NE RDC RIG Source: Bloomberg Diamond Offshore Drilling, Inc. 7
  8. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 8
    Fleet Renewal Diamond Offshore Drilling, Inc. 8
  9. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 9
    Ocean Patriot North Sea Enhancement New Seatrax 8032 Crane Project Summary Enhanced to work in the UK New Stability Columns Awarded 3-year term in UK, 400.5K/Day (440MM of backlog) Total cost: 120MM New Accommodation…
  10. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 10
    Ocean BlackHawk Diamond Offshore Drilling, Inc. 10
  11. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 11
    Newbuild Drillship Status BlackHawk BlackHornet BlackRhino BlackLion Cost (Millions) 635 635 645 655 Shipyard Delivery Q2 2013 Q4 2013 Q2 2014 Q4 2014 Contract Status Anadarko (GoM) Anadarko (GoM) Available Available 5 Years 5…
  12. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 12
    Ocean Onyx Specs Water Depth: 6,000 ft. Deck Load: 5,000 tons Status Total Cost: 300MM Scheduled Delivery: Q3 2013 Awarded 1-year Term in US GOM, 490K/Day Diamond Offshore Drilling, Inc. 12
  13. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 13
    Ocean Apex Specs Water Depth: 6,000 ft. Deck Load: 7,000 tons Status Total Cost: 370MM Scheduled Delivery: Q2 2014 Market Opportunities: Worldwide Diamond Offshore Drilling, Inc. 13
  14. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 14
    Investing in the Fleet Year Cost Rig Name Description Ordered / Purchased (Millions) Patriot 2013 3,000' Semi 120 Apex 2012 6,000' Semi 370 BlackLion 2012 UDW Drillship 655 Onyx 2012 6,000' Semi 300 BlackRhino 2011 UDW…
  15. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 15
    Potential Earnings Power Added Potential Assumed Assumed Annual EBITDA* Dayrate Opex (Millions) BlackLion 575,000 200,000 126 BlackRhino 575,000 200,000 126 BlackHornet 495,000 175,000 108 BlackHawk 495,000 175,000 108…
  16. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 16
    Floater Fleet Transformation 2009 2009 Today Today UDW - 6 MW - 15 UDW - 12 MW - 20 DW - 5 DW - 7 UDW + DW = 11 UDW + DW = 19 Note: Today excludes units Held for Sale Diamond Offshore Drilling, Inc. 16
  17. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 17
    Fleet Profile Ultra-Deepwater Units (7,500) Confidence Baroness Rover Endeavor Monarch Courage Valor 12 Clipper BlackHawk BlackHornet BlackRhino BlackLion Deepwater Units (5,000 to 7,499) 7 America Alliance Valiant…
  18. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 18
    Jack-up Fleet Status 6 Marketed Jack-up Units 4 Mexico Term Market Scepter (Aug 13), Titan (Jan 14), Summit (May 15) and Nugget (Jul 16) 1 Long-Term Bareboat Charter Spur (Aug 14) 1 Opportunities in Stable Markets King…
  19. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 19
    Operational Excellence Diamond Offshore Drilling, Inc. 19
  20. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 20
    Sell Side Perspectives Howard Weil Feb 5, 2013 Earnings above expectations, and a third straight quarter with drilling cost well below guidance Wells Fargo Feb 6, 2013 Diamonds operations again surpassed expectations and guidance…
  21. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 21
    Diamond Offshore Drilling, Inc. 21
  22. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 22
    New Capacity = Employment Opportunities Diamond Offshore Drilling, Inc. 22
  23. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 23
    Diamond Offshore Safety Performance Annual Total Recordable Incident Rate (TRIR) 1.50 0.00 2009 2010 2011 2012 Note: Diamond Offshores TRIR should not be assumed to be comparable to peer company data. Diamond Offshore…
  24. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 24
    Market Outlook Diamond Offshore Drilling, Inc. 24
  25. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 25
    2013 Notable Contracts Rig Name Region Term Rate per Day Patriot UK North Sea 3 years 400,500 Nugget Mexico 3 years 97,000 General Vietnam 2 wells 255,000 Nomad Latvia 1 well 410,000 594 Million in Additional Revenue…
  26. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 26
    Contract Status & Backlog Ultra-Deepwater Rover Revenue Backlog BlackRhino Re-pricing BlackLion Opportunity 4.4 Billion Courage 30.1 Rig Years Endeavor Confidence Baroness Valor Clipper Monarch BlackHawk BlackHornet…
  27. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 27
    Contract Status & Backlog Deepwater Victory Revenue Backlog Re-pricing 1.1 Billion Valiant Opportunity 8.6 Rig Years Star Onyx America Alliance Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Contract status and revenue…
  28. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 28
    Midwater Fleet Status 15 Marketed Midwater Units 5 North Sea Very Strong Market Princess (Nov 13), Vanguard (Mar 15), Nomad (Aug 15), Guardian (Jul 15), and Patriot (Apr 17) 5 Long-Term Contracts with NOCs Yorktown (Jul 14),…
  29. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 29
    Return to the Gulf US Gulf of Mexico Rig Count 20 20 15 Number of rigs 10 7 8 5 4 0 2005 Pre-Macondo Today 2014 Note: 2014 assumes current fleet remains in US GOM and includes addition of Ocean Onyx, Ocean BlackHawk…
  30. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 30
    Financial Strength Diamond Offshore Drilling, Inc. 30
  31. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 31
    Conservatively Positioned Net Debt to Market Cap 70% 61% 60% 50% 46% 42% 40% 28% 30% 30% 25% 20% 10% 0.1% 0% DO RDC ATW ESV RIG NE SDRL Debt and net debt as of 31-Dec-2012 SEC filings; market cap as of 1-Mar-2013.…
  32. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 32
    Industry Leading Credit Ratings (in Millions) DO NE ESV RIG RDC ATW SDRL Moodys Rating A3 Baa2 Baa1 Baa3 Baa3 Ba2 n/a S&P Rating A- BBB+ BBB+ BBB- BBB- BB n/a Diamond Offshore Drilling, Inc. 32
  33. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 33
    Return on Capital Employed (ROCE) 2012 15% 11.6% 10% 5% 0% -5% DO ATW ESV SDRL NE RIG RDC Source: Jefferies Diamond Offshore Drilling, Inc. 33
  34. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 34
    Return on Capital Employed (ROCE) 5-Yr Average (20082012) 30% 27.3% 25% 20% 15% 10% 5% 0% DO ATW ESV NE RDC RIG SDRL Source: Jefferies Diamond Offshore Drilling, Inc. 34
  35. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 35
    Summary 1 Focused on Shareholder Value 2 Fleet Renewal at Attractive Prices 3 Strong Market Outlook Diamond Offshore Drilling, Inc. 35
  36. Howard Weil 41st Annual Energy Conference – Diamond Offshore Drilling, Inc. – slide 36
    Disclaimer: Regulation G This presentation may include certain non-GAAP financial Reconciliation to GAAP measures. For these purposes, the SEC defines a non-GAAP financial measure as a numerical measure of historical or future…

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