Barclays CEO Energy-Power Conference Tom Burke President & CEO September 3, 2014
Company Overview & Investment Highlights Market Dynamics Delivering Shareholder Value Conclusion 3
Company Overview & Investment Highlights Market Dynamics Delivering Shareholder Value Conclusion 4
Rowan Overview & Investment Highlights As a result of our strategic initiatives and investments over the past few years, Rowan is now well-positioned to reap significant benefits in the coming years Investment Highlights Company…
1 Rowan is Focused on Demanding Drilling Services Our mission is to be recognized by our customers as the most efficient and capable provider of demanding contract drilling services Rig: Bob Palmer Rig: Scooter Yeargain Customer:…
2 Rowan has a Leading Position in High-Spec Jack-ups Number of High Specification Jack-Ups 20 19 Customers Demand 18 By YE2017 Current Higher-Specification Rigs 16 14 Drilling challenging Rowan High-Spec wellbore designs…
2 Rowan Ultra-Deepwater Drillships are Best in Class Drillships with two BOP stacks and 1250 ton hook load path 4 7 Best In Class Features Include 6 5 Rowan High-Spec Two seven-ram BOPs Drillships Equipped with 12,000 4 ft…
3 Rowans Diverse Global Footprint Spans Seven Markets North Sea 6 JU Harsh environment HP/HT market Super Gorilla / N-Class well suited US Gulf of Mexico 7 JU(1) & 3 UDW(2) HP/HT Deep Gas Key location for demanding UDW Med 1…
4 Rowan UDW Rigs on Schedule & Budget, First Rig on Rate 1 2 3 4 Rowan Renaissance Rowan Resolute Rowan Reliance Rowan Relentless Delivered Jan 2014 Delivered Apr 2014 Delivery Oct 2014 Delivery Mar 2015 3-Year Contract 3-Year…
5 Rowan has a Strong Backlog and Diverse Customer Base Contract backlog has quadrupled in four years Contract backlog extends into 2018 USD Billions USD Billions 5.0 2.2 1.5 1.7 1.2 1.4 0.7 0.8 0.5 2010 2011 2012 Current…
5 Strong Balance Sheet = Capital Allocation Options Investment grade credit rating Provides access to capital in strong and weak markets Provides stability and ability to seize opportunities in down markets Undrawn 1 billion…
6 Strong Culture with Experienced and Loyal Workforce 91-Year history of operating excellence Culture of continuous improvement Experienced and loyal employees with proven industry leadership Goal of highest customer satisfaction…
Company Overview & Investment Highlights Market Dynamics Delivering Shareholder Value Conclusion 14
1980s Era Jack-ups Approaching 40 Years of Age Attrition Could Accelerate Design life of 1980s era jack-ups was approximately 30 years Today, 26 jack-ups are 40 years of age or older, 292 jack-ups will reach 40 years of age by 2024…
1980s Era Jack-ups Approaching 40 Years of Age Attrition Could Accelerate Design life of 1980s era jack-ups was approximately 30 years Today, 26 jack-ups are 40 years of age or older, 292 jack-ups will reach 40 years of age by 2024…
Rowans Older Jack-ups are Capable and Marketable Rowan 1970-1988 Jack-up Capability Ranking (1) (2) (3) Jack-up 650 Capability Score 600 0 to 1095 Wells today demand 550 technical capabilities 500 that older generation rigs 450 with…
Rowan is Currently Competing with Only 23 Newbuild JU Under current ownership, only 23 newbuild jack-ups are clearly competitive with Rowan on near- term opportunities 73 speculator rigs may be cancelled, moved to non-competitive…
Rowan is Well Positioned in the Bifurcating Floater Market Floater market undergoing fleet renewal - 225 newbuild floaters delivered since 2005, 70 more expected by 2017 Long term deepwater supply / demand balance seems favorable,…
Company Overview & Investment Highlights Market Dynamics Delivering Shareholder Value Conclusion 20
Rowan has Established Three Priorities to Increase Value Highest Customers want Safe and reliable operations Customer Operational risk and procedural discipline Satisfaction Low flat spot time Strong Rowan will improve our…
Rowans is Focused on Strong Financial Returns Execution Strong Financial Cost Control Returns Optimal Capital Allocation 22
Execution: Reduce OOS Time, Maintain Low Downtime Rowan is focused on maintaining low levels of operational downtime and reducing out-of-service time (except for repositioning and reaction to market conditions) to drive higher earnings…
Cost Control: Rowan is Focused on Cost Efficiency After Rowans Rapid Expansion into UDW, Norway, and SE Asia, Costs are Moderating Review all back office and support processes for Cost efficiency and focus on control of off-rig costs…
Capital Allocation: Options to Maximize Shareholder Value As Rowan begins to generate free cash flow in 2015, we will consider all capital allocation options while maintaining an investment grade credit rating Dividends Plan to grow…
Company Overview & Investment Highlights Market dynamics (especially jack-up market) Delivering shareholder value (especially through allocation of capital) Conclusion 26
Rowan is Positioned to Benefit from its Strategic Actions 1 Competitive differentiation in drilling demanding wells Young high-specification fleet well positioned in key 2 industry segments 3 Geographic diversity with assets…
Thank you 28
Appendix 29
Global Jack-up Fleet Utilization is 86%, Marketed 92% Worldwide jack-up utilization by region Fleet total: 532 rigs North Sea 98% 50 Rigs Mediterranean 94% Middle East US GOM 16 Rigs 87% 50% 149 Rigs 58 Rigs Southeast Asia…
Jack-up Market Bifurcation Continues Worldwide jack-up utilization by rig class Percent (includes 65 high- 100 % 201 units spec 125 units units) 140 units 80 60 66 units 40 20 IS, MS,…
High-Spec, Quality Jack-ups Still Command Premium Rates Earned day rates worldwide by rig class USD 250,000 200,000 201K 170K 150,000 114K 100,000 100K 96K 50,000 0 IS, MS,…
Rowan Expects 2014 Jack-up Fleet Rollovers As of 08/25/2014 Fleet Status Report Louisiana C. Provine USGOM 7 rig Gorilla IV extensions EXL III completed YTD Rowan expects MED R. Coffman to rollover jack-ups in the Middle…
Global Drillship Fleet Utilization is 94%, Marketed 94% Worldwide drillship utilization by region Fleet total: 108 rigs Percent North Sea 100% 1 Rig Middle East Far East Mediterranean 100% 50% USA 100% 1 Rig 2 Rigs 93% 2 Rig 30…
Floater Market* is also Rapidly Bifurcating Worldwide floater utilization by water depth 100 % 104 units 45 units 90 51 units 80 125 units 70 60…
Later Generation Floaters Attain Higher Rates Earned day rates worldwide by water depth 600,000 521K 500,000 451K 400,000 369K 300,000 334K 200,000 100,000…
Rowans Newbuild Drillship Program is Fully Financed Rowan Remaining Newbuild Capex With Three Drillships as of 06/30/2014 (1) 973 MM 478 MM 2014 2015 Investment Grade Balance Sheet (Baa3/BBB-) Actual Projected (in USD…
Current Rowan Avg. Regional Offshore Rig Operating Costs Region Jack-ups (K/day) Gulf of Mexico Low Mid 50s Middle East Mid 50s Mid 70s U.K. North Sea Mid High 80s Norway North Sea Low - Mid 160s Southeast Asia Mid High 50s…
2014 Operating Cost Components Percentage of total operating costs 9% 3% 1% 3% Labor & Fringes Employee-related * 17% 53% R&M Insurance Rig moves Rebillables 12% All other ** * Employee-related costs include training,…
Rowan Guidance as of August 6, 2014 2Q 2014 3Q 2014 FY 2014 Key metrics: Actual Projected Projected Jack-up Out of Service Time 13% 8% 9-10% Jack-up Operational Downtime (unbillable) 1.8% 2.5% 2.5% Slightly higher Drillship Operational…
Outstanding Debt is 2.8 Billion as of June 30, 2014 Outstanding debt notes and June 30, 2014 maturity date Carrying Value 5% Senior Notes, due 2017 399,102 7.875% Senior Notes, due 2019 498,335 4.875% Senior Notes, due 2022…
Glossary of Terms and Acronyms Blowout Preventer (BOP): An emergency shut-off device comprised of a series, or stack, of valves that shut the wellbore in the event that hydrocarbons enter the wellbore and pressure containment is…
Rowan Companies 2800 Post Oak Blvd. Suite 5450 Houston, TX 77056 713.621.7800 www.rowancompanies.com Investor Contact: Suzanne M. Spera Director, Investor Relations ssperarowancompanies.com 713.960.7517
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