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Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc.

Ocean Rig UDW Inc. · Mar 5, 2014 · 32 slides

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Slides

  1. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 1
    Raymond James 35th Annual Institutional Investors Conference Orlando, Florida OCEAN RIG UDW INC. March 5, 2014
  2. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 2
    Company Overview Financial Review Summary Considerations UDW Drilling Market 2
  3. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 3
    Who is Ocean Rig UDW Inc. Pure-play ultra- deepwater driller with premium assets Experience Large backlog & operating UDW high EBITDA growth assets since 2001 Shareholder value Healthy debt profile creation initiatives…
  4. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 4
    Fleet growth & capital invested multibillion investment since 2008 OCR Santorini 600 mil. OCR Apollo 683 mil. OCR Mykonos 784 mil OCR Athena 679 mil. OCR Poseidon OCR Mylos 792 mil 670 mil. OCR Olympia OCR Skyros 757 mil…
  5. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 5
    Pure-play ultra-deepwater driller with premium assets Harsh environment UDW semis Sister drillships provide benefits from standardization 5th generation semisubmersibles Four 6th generation drillships Five 7th generation NB…
  6. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 6
    Pure-play ultra-deepwater driller with premium assets Owned & operated ultra-deepwater fleet(1) Owned & operated drillships 40 35 35 30 30 6th largest fleet 6th largest 25 of vessels of vessels 25 20 20 15 15 10 10 5…
  7. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 7
    Significant experience operating UDW assets Operating in UDW since 2001 having drilled 174 wells for 31 clients over the last 10+ years Drilled in harsh environments and in nearly every deepwater area of the world Extensive experience…
  8. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 8
    2012 vs. 2013 operational performance Ocean Rig Available Drilling Days Utilization 100.0% 96.2% 98.1% 97.0% 100.0% 96.9% 93.7% 94.1% 93.9% 94.8% 94.3% 94.7% 91.4% 92.0% 88.5% 88.9% 90.0% 84.2% 83.4% 83.8% 78.3% 80.0% 70.0%…
  9. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 9
    Company Overview Financial Review UDW Drilling Market Summary Considerations 9
  10. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 10
    Solid multi-year fleet employment profile Average contract1 remaining fixed period of 2.6 years, 4.1 years with options 99%, 72% and even 38% contract coverage for 2014, 2015 and 2016 respectively 5.4 billion backlog2 up from 1.6…
  11. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 11
    Peer-leading contract coverage Net Revenue Contracted Revenue Backlog 1,500 % denotes fleet operational utilization 2,000 % denotes fleet calendar days under contract 1,883 1,300 1,750 1,180 1,547 1,100 1,500 942 ( in…
  12. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 12
    Healthy liquidity & capital structure December 31, Ownership on December 31st, 2013 (in million) 2013 Shares Outstanding 131.9 million Total cash 659.0 Bank / ECA Facility(1) 875.7 Free float shares 53.4 million B-1 / B-2 Term…
  13. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 13
    Improved debt maturity profile Weighted average maturity of 5.0 years Improved Ocean Rig liquidity through more sensible debt amortization 9.5% Unsecured 6.5% Secured Bank / ECA Term Loan B-1 Notes Notes Facility Amount (1) 1,895…
  14. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 14
    Measured growth OCR Skyros delivered on December 20th 2013 311 million equity invested for 2015 newbuildings Only 52 million to be funded from equity in 2014 Total Delivered Funded From Remaining Cost (1) Delivery ( million) Cost…
  15. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 15
    Strong contract profile provides significant cash flow Approximately 93 million EBITDA and 52 million free cash flow per year per drillship at 92.5% utilization Indicative Daily Breakeven Analysis ( in 000s) 153,000 / day…
  16. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 16
    Company Overview Financial Review UDW Drilling Market Summary Considerations OCEAN RIG UDW INC.
  17. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 17
    Offshore drilling and production assets utilized in E&P activities Exploration Development Production Decommissioning Period: 1-3 years 2-4 years 5-50+ years After 50+ years Inverse relationship Sensitivity to oil price: High…
  18. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 18
    Offshore drilling fundamentals remain exceptionally strong Market weakness historically with short duration Midwater to UDW Market Cycles Historically offshore drilling downturns last between 12-24 months followed by 3-5 year…
  19. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 19
    Market pause not downturn Core economics during offshore drilling downturns Average annual Brent spot crude oil price per barrel 5% 145 60% 4% 125 3% Capex growth & Y/Y % change in Brent 40% OECD GDP Growth 2% Macondo…
  20. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 20
    Development of offshore reserves Development of offshore1 reserves discovered since 2010 Incremental demand from 2010-2013 exploratory drilling campaign MMBoe Subsea wells (equivalent) 439 2,310 800 993 700 Probable 8,219…
  21. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 21
    UDW oil breakeven keeps falling Breakeven Brent oil prices for new developments 2011 Fiscal Balance Break-even Price (OPEC Producers) 120 Country (/bbl) 100 Iraq 102 Bahrain 100 US/bbl (Brent) 80 Algeria 95 60 Iran 87 40…
  22. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 22
    Offshore drilling demand Drilling units 100 93 90 13 80 30 24 UDW Deepwater Midwater 70 20 25 23 60 3 20 20 18 50 4 5 15 3 40 15 3 12 5 10 10 30 60 10 3 8 8 20 16 1 1 6 4 7 5 12 2 2 10 9 10 2 10 5 1 5 5 4 0 2 0…
  23. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 23
    Bifurcation and Cascading effect Vast majority of midwater and deepwater floaters are over 20 years old and becoming obsolete More than 50% of mid and deep water fleet in excess of 30 years and expected to be stacked or scrapped…
  24. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 24
    High-spec UDW market day rates remain firm Ultra Deepwater Day Rates (USD 000s) UDW market utilization at 100% since 2005 600 612 581 569 582 565 546 UDW day rates remain firm for high-spec units 500 450 450 468 490 487 464…
  25. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 25
    Supply & demand improving in 2015 Supply & Demand Summary 60 50 40 14-22 Incremental Demand 30 Uncontracted Newbuilds 20 11-15 37-51 Rigs released from current campaigns 29 24-37 10 7-10 16 7-12 5 0 Demand Supply…
  26. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 26
    Company Overview Financial Review UDW Drilling Market Summary Considerations 26
  27. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 27
    Closing remarks Attractive portfolio of modern drilling units Fleet of 9 modern (6th and 7th generation) UDW drillships and 2 UDW harsh environment semi-submersible rigs Premium high specification standardized assets Value…
  28. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 28
    Appendix OCEAN RIG UDW INC.
  29. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 29
    Strong contract backlog provides cash flow visibility Counterpartys Unit Year built Redelivery Counterparties Operating area Backlog(2) parent credit rating (mm) Leiv Eiriksson 2001 Q2 16 Rig Management Norway (1) Norway 431…
  30. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 30
    2014 Net drilling revenue indicative calculator To calculate FY2014 Revenues from drilling contracts add to the net drilling revenue calculated below: approximately 158.5 million in projected amortization of deferred revenues…
  31. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 31
    Fleet status report Date: 15-Feb-14 Scheduled Off-Hire Estimated Mobilization Days Estimated Available Drilling Days Year Built / Estimated Estimated Days Expected Commencement Completion 2013 2014 2013 2014 Footnote 2013 2014 UDW…
  32. Raymond James 35th Annual Institutional Investors Conference – Ocean Rig UDW Inc. – slide 32
    Projected deferred revenue & expense amortization As of February 15, 2014 (USD million) Q1A 2013 Q2A 2013 Q3A 2013 Q4A 2013 FY 2013 Q1E 2014 Q2E 2014 Q3E 2014 Q4E 2014 FY 2014 Amortization of deferred revenues 34.5 35.1 32.2 25.7…

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