Goldman Sachs Global Energy Conference January 2015 1
Current Market Floaters Jackups Contracted 245 340 Uncontracted 33 52 Active Stacked 12 11 Fleet Total 290 403 % Contracted 84% 84% Under Construction 51 104 On Order / Planned 36 22 Newbuilds Total 87 126 Contracted 57%…
Current Jackup Market Demand from diverse customer base across multiple regions Some customers reevaluating certain programs in light of the decline in commodity prices New five-year lows for oil and increased commodity price…
Newbuild Jackup Order Book 10% 126 Total 12 Contracted, Established Drillers 46 68 Uncontracted, Uncontracted, 36% Established 54% Non-Established Drillers Drillers Source: IHS-ODS Petrodata as of December 2014;…
Jackup Supply 41% CAGR 115 164 77 58 2% CAGR 383 399 365 345 Dec. 2014 Dec. 2015 Dec. 2016 Dec. 2017 < 35 years old = 35 years old Source: IHS-ODS Petrodata as of December 2014; marketed competitive independent leg…
Current Floater Market Pressure on customers to tighten capex spending as returns on capital and commodity prices have declined Less visibility as some customers postpone 2015 budgeting decisions Production levels of Majors as a…
Current Floater Market Rest of World pull back in contracting, especially IOCs positive mid- to long-term growth outlook based on expectation of growing energy demand expanding / emerging markets o West Africa, East Africa and…
Newbuild Floater Order Book 87 Total 50 37 57% 43% Contracted Uncontracted Source: IHS-ODS Petrodata as of December 2014; marketed competitive floaters 9
Floater Supply 66 56 52 52 8% CAGR 287 297 271 238 Dec. 2014 Dec. 2015 Dec. 2016 Dec. 2017 < 35 years old = 35 years old Source: IHS-ODS Petrodata as of December 2014; marketed competitive floaters 10
Enscos Proactive Fleet Management 2Q14 Moved five floaters to held for sale to proactively reduce expenses 1.5 billion impairment charge Streamlined discretionary capex in light of market conditions Some of our competitors have rigs…
2H14 Competitor Actions Transocean 2.6 billion in goodwill & asset impairment charges (3Q14) We intend to scrap certain cold stacked rigs, recognizing their limited potential to re-enter the market. The Company will continue to…
2H14 Competitor Actions Diamond Scrapping six floaters 100 million impairment (3Q14) As we progress through 2015, we expect to see more low-end mid-water units retired across our industry. (3Q14) Paragon 900 million impairment…
Ensco is Well Positioned Fleet highgrading 7 newbuild rigs under construction with differentiated designs major upgrade investments last three years will benefit 2015 and beyond mooring capability to be added to ENSCO 8500 Series…
Ensco is Well Positioned Capex discipline total capex peaks in 2015 driven by newbuilds; drops by more than half in 2016 upgrade capex to decline sharply in 2015 drillship option not exercised Global presence / diverse customer…
Highgrading Actions Fleetwide review in light of challenging floater market conditions Five floaters reclassified as held-for-sale / cold stacked proactively reduce expenses and redeploy capital mostly older, midwater floaters…
High Quality Fleet 66 Rig Fleet 10 11 3 42 ULTRA & DEEP DYNAMICALLY POSITIONED MOORED PREMIUM WATER DRILLSHIPS SEMISUBMERSIBLES SEMISUBMERSIBLES JACKUPS Note: Includes rigs under construction or on order and excludes rigs…
Global Platform Europe & Mediterranean Ships 1 U.S. Gulf of Mexico Semi 1 Ships 3 Jackups 11 Semis 6 Jackups 8 Middle East Jackups 10 Africa Ships 3 Jackups 1 Brazil Asia Pacific Semis 4 Semi 3 Under Construction…
Backlog Diversification 31% 31% 28% 29% Premium National Semis Jackups Independents Oil Companies Drillships 12% Majors 43% 38% Asia Pacific North & South 24% 15% Europe & America Med Brazil Africa 14% 25% Middle East…
Uptime = Customer Satisfaction = Net Inc. Margin Net Income Margin 29% 22% 20% 18% 18% 14% ESV SDRL DO NE RIG RDC Source: Thomson One; sum of trailing eight quarters of net income divided by sum of trailing eight…
Safety, Health & Environment Total Recordable Leading-edge safety Incident Rate management systems 1.2 Major competitive 1.0 advantage; especially versus non-established 0.8 drillers 0.6 0.4 0.2 0.0 2008 2009 2010 2011 2012 2013…
Strong Financial Position 11 billion of contracted revenue backlog Baa1/BBB+ ratings from Moodys/S&P Leverage Ratios 56% 41% 37% 35% 33% 33% SDRL RIG NE RDC DO ESV Source: Bloomberg; total debt-to-total capital ratios as…
Payout Ratios 116% 111% 70% 58% 11% RIG DO NE ESV RDC Source: Thomson Reuters; most recent declared quarterly dividend annualized divided by 2015 earnings per share mean estimate for dividend- paying offshore drillers…
Contracted Revenue Backlog billions 3.9 2.9 1.6 1.2 1.3 4Q14 2015 2016 2017 2018+ Note: Backlog as of 30 September 2014 26
Capital Expenditures billions 2.0B Note: Final rig enhancement and sustaining project capital expenditure budgets for 2015 2017 TBD once budgets are completed 1.60 0.4B 0.085 0.140 0.40 0.175 4Q14 2015 2016 2017…
Capital Management Recap Proactive highgrading continues investments in newbuilds/upgrades support future cash flows o capex peaks in 2015; then drops off sharply proceeds from rig sales re-invested in new assets Attractive…
Enscos Strengths Leader in customer satisfaction four consecutive years High quality fleet of floaters and jackups Technology advantages, e.g. ENSCO 120 Series jackups and Samsung GF 12,000 drillships Highest net income margins…
Summary Current market conditions more challenging as commodity prices have declined customer activity higher for jackups less visibility as customers postpone 2015 budgeting decisions Mid- to long-term outlook remains positive…
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