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Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc.

Hercules Offshore, Inc. · Mar 27, 2014 · 29 slides

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Slides

  1. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 1
    World Class Howard Weil 42nd Annual Energy Conference March 23 27 , 2014
  2. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 2
    World Class Overview
  3. Howell Weil 42nd Annual 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 24 liftboats - largest international fleet Operations…
  4. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 4
    Focus on Risk Management FCPA investigation No near term and concluded with no laddered maturities penalties or findings All unsecured debt of wrongdoing Strong liquidity Safety performance better than industry 600 million…
  5. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 5
    Safety Record Performance Total Recordable Incident Rate Lost Time Incident Rate 0.50 2.00 0.40 1.50 0.30 1.00 0.20 0.50 0.10 0.00 0.00 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013 HERO…
  6. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 6
    Significant Expansion of Revenue Backlog Total Revenue Backlog 1,200 Current Revenue Backlog = 1.05 Billlion 1,000 Contracted Backlog ( millions) 800 600 400 200 0 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10…
  7. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 7
    Transforming the Company for the Next Chapter Positioning the Company for future growth: 1. High-grade asset base Acquisition of Discovery Offshore Acquisition of Bull Ray Sale of Domestic Liftboats and Inland Barges 2. Increase…
  8. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 8
    World Class Business Outlook
  9. Howell Weil 42nd Annual 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 120 100 Near the trough (April 2011), Hercules acquired main competitor,…
  10. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 10
    Current U.S. GOM Jackup Supply vs. Demand U.S. GOM Jackup Supply and Demand as of March 18, 2014 80 87% Industry Utilization Number of Rigs 58 60 of Marketed Rigs 37 37 40 32 (21) 20 0 0 Current Less: Cold Marketed…
  11. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 11
    Domestic Offshore Backlog Company Average Days Backlog per Marketed Rig U.S. GOM 250 225 200 175 Average of Days 150 125 100 75 50 25 0 Source: Company Fleet Status Report 11 World Class
  12. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 12
    Domestic Offshore Average Dayrate Quarterly Average Revenue per Day Domestic Offshore 120,000 100,000 80,000 60,000 40,000 20,000 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14E* * 1Q14 estimate is based on…
  13. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 13
    Central GOM Lease Sale 231 Central GOM Lease Sales 231 - High Bidders Central GOM Lease Sale Comparison Amount 1 McMoran 8,850,000 Lease Sale 227 231 2 EPL 8,155,200 March 2013 March 2014 3 Castex 7,878,964 4 GulfSlope Energy…
  14. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 14
    Recent Fixtures in U.S. GOM vs. International Markets U.S. GOM Mexico West Africa Middle East SE Asia Ensco 86 GSP Fortuna Noble Ed Al-Wajba Trident 16 Fixtures (250 IC) (300 IC) (250 IC) (270 IC) (300 IC) Dayrate 125,000 109,000…
  15. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 15
    International Jackup Market Snapshot International jackup rig demand International Jackup Supply/Demand growth of 10% (CAGR) over past Worldwide ex. US GOM Jackup Supply / Demand three years 500 Total Supply Demand in most major…
  16. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 16
    Inaugural Contract on Hercules Triumph and Resilience Hercules Triumph: Initial contract with India base dayrate in the 214k - 216k range, plus 13 million in mobilization fees Contract term of approximately 5 months Hercules…
  17. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 17
    Long Term Middle East Contract Extensions Five-year contract extensions on the Hercules 261 and Hercules 262 Total revenue backlog of approximately 465 million Extensions are priced at over 50% higher than current dayrates New…
  18. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 18
    International Offshore Drilling Outlook FY 2014E FY 2015E Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Hercules Triumph SE Asia 214-216k (1) Hercules Resilience SE Asia 161-163k 187-189k Hercules 267 W. Africa 108-110k 108-110k Middle 117-…
  19. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 19
    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…
  20. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 20
    World Class Conclusion
  21. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 21
    Investment Highlights U.S. GOM jackup rig market remains solid with firm pricing expectation Confidence in long term market outlook for Hercules Triumph and Hercules Resilience Solid contract coverage for standard international…
  22. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 22
    APPENDIX 22 World Class
  23. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 23
    Total Debt Summary Description Amount Coupon Maturity First Call Date (millions) Rate Senior Unsecured Notes 200 10 1/4% Apr2019 Apr2015 107 11/16% Senior Unsecured Notes 400 8 3/4% Jul2021 Jul2017 104 3/8% Senior Unsecured Notes 300…
  24. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 24
    Domestic Offshore Marketed Rig Data Domestic Offshore Fleet Status as of 03/24/14 Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Hercules 120 120' - MC, TD GOM Chevron 81-83 282…
  25. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 25
    Domestic Offshore Marketed Rig Data (continued) (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Walter Oil & Gas 101-103 8 04/01/14 Hercules 263 250' - MC, TD GOM Shipyard 04/15/14 Tana 101-103 40…
  26. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 26
    International Offshore Marketed Rig Data International Offshore Fleet Status as of 03/24/14 Contract Est. Duration (1) Rig Name Rig Type Location Customer / Status Dayrate (000s) Days Date Vietnam HLHV 161-163 22 04/15/14 Hercules…
  27. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 27
    International Liftboats Fleet Status February 2014 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…
  28. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 28
    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 6.5 % Liquids Production in US GOM Shelf…
  29. Howell Weil 42nd Annual Energy Conference – Hercules Offshore, Inc. – slide 29
    World Class

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