SEB Enskilda Nordic Seminar CFO Esa Ikäheimonen. Copenhagen, January 11, 2012

Transcription

1 SEB Enskilda Nordic Seminar CFO Esa Ikäheimonen Copenhagen, January 11, 2012

2 Forward-looking statements The statements described in this presentation that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of Forwardlooking statements which could be made include, but are not limited to, statements involving prospects for the Company, expected revenues, capital expenditures, costs and results of operations and contingencies and other factors discussed in the Company's most recent annual report on the Form 20-F for the year ended December 31, 2010 and in the Company's other filings with the SEC, which are available free of charge on the SEC's website at Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated. All subsequent written and oral forward-looking statements attributable to the Company or to persons acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Each forwardlooking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward-looking statements. All non-gaap financial measure reconciliations to the most comparative GAAP measure are displayed in quantitative schedules on the company s web site at 2

3 Contents Company profile Market outlook Rig fleet Financial gearing Value creation Summary 6 th gen. semi-submersible rig West Pegasus 6 th gen. semi-submersible rig West Capricorn 3

4 Company profile World s largest offshore driller ~ US$16.1 bn market cap. Diverse fleet of quality rigs 2 nd largest fleet of ultra-deepwater rigs Largest and most modern fleet of jack-up and tender rigs EBITDA annualized ~ US$2.4 billion * Premium wide customer base Contract backlog ~ US$12.6 billion ** Cash dividend annualized ~ US$1.4 billion * Strong shareholder involvement Industry leader with presence in all key markets 4 * Based on 3Q2011 ** As of December 31, 2011

5 Seadrill growth story $113 bbl $40 bbl Growth Performance Scale benefits 5

6 Newbuild Orders & Acquisitions Ultra-deepwater (5 rigs, $3bn worth of investment) 3 ultra-deepwater drillships at US$600m per unit ordered 2 Seadragon ultra-deepwater US$600m per unit acquired Acquired 28.5 percent ownership in Sevan Drilling ASA Shallow water (added 9+3 rigs, sold 3, $1.9 bn worth of investment) 1 x CJ70 HE jack-up rig US$530 m against 5-year contract 4 benign environment jack-up US$200 m 3 tender US$120m 1 US$200m 33.75% shareholding acquired in the 3 jack-up rig company Asia Offshore Drilling Divested 2 older jack-ups, retired 1 old tender barge and sold 1 new jack-up rig Growth in modern assets cash dividend 6

7 Rig investment economics UDW floaters Jack-ups Tender rigs Dayrate US$500,000 US$145,000 US$170,000 Opex incl. G&A US$170,000 US$60,000 US$60,000 Tax (of revenues) 3.5% 3.5% 3.5% 5Y cash-flow US$526 million US$133 million US$175 million Investment US$600 million US$200 million US$200 million Repaid in 5.7Y 7.5Y 5.7Y Right purchase price and timing superior return 7

8 Leading player in our markets Largest modern fleet in our industry 8

9 Jan-10 Jan-11 Jan-12 Sep-10 Jan-11 May-11 Sep-11 Jan-12 Market fundamentals Oil prices remain at historically high levels Higher growth in E&P spending Brent Spot Price Industry focused on new equipment continues in all markets segments Utilization is increasing for all asset classes Significant increase in tenders and requests from customers Market poised to see higher daily rates for ultra-deepwater units Strong demand for quality equipment 9 US$ per barrel Jan-04 May-04 Sep-04 Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May Low/High range Average Historical dayrates for Ultra-deepwater rigs USDk/day Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Low/High range Average

10 Recent drilling contracts Unit Dayrate Term Area Ultra-deepwater floaters West Leo US$ , yr Ghana West Aquarius US$535, yr Canada West Hercules US$500, yr Norway West Capricorn US$477, yr US GoM Jack-ups West Triton US$145, yr Arabian Gulf Offshore Resolute US$140, yr Arabian Gulf West Ariel US$129, yr Southeast Asia West Prospero US$129, yr Southeast Asia West Callisto US$135, yr Southeast Asia Tender rigs West Berani US$170, yr Indonesia West Esperanza US$235, yr Equatorial Guinea Quality equipment command premium daily rates 10

11 Major deepwater regions Deepwater Discoveries Discovered reserves in 2010, by water depth Strong combination of exploration success and new areas 11 Source: DnB NOR Markets, PCF Energy, Pareto, Woodmac, OGX

12 Ultra-deepwater market development UDW FLEET WILL GROW TO 165 UNITS BY 2014 UDW FIXTURES US GoM INCREASINGLY ABSORBING THE PREMIUM ASSETS UDW CONTRACT COVERAGE AND RIG AVAILABILITY 160 Contract Status & Expected Demand : Ultra Deepwater Drilling Units (>7,500feet) -Worldwide Existing contracts Options Requirements Possibles Supply Development Development forecast Source: SEB Enskilda, Fearnley Offshore

13 Only 12% of UDW rigs drill wells in ultradeep waters UDW newbuilds are replacing older rigs 13 Source: Pareto

14 Global floater fleet including newbuilds Uncontracted floaters 11% of the total fleet which has an average age of 25 years 14 Source: Pareto

15 Ultra-deepwater daily rates development UDW dayrates reflect tighter market 15 Source: Morgan Stanley

16 US$8.6 billion contract backlog Floaters * Staggered contract portfolio offers flexibility 16 * As of year-end 2011

17 Jack-up market development JACK-UP FLEET EXPANSION DEVELOPMENT IN # of JACK-UPs AVERAGE DAILY RATES JACK-UPS AVERAGE UTILIZATION RATES JACK-UPS 300, , , , ,000 50,000 % utilization Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan >350ft Source: SEB Enskilda, Pareto, ODS Petrodata <350ft WDR > 350ft WDR < 350ft

18 US$2.4 billion contract backlog - Jack-ups * A strong mix of short and long-term contracts 18 * As of year-end 2011

19 Tender rig market outlook Drilling concept focused on production drilling only Main operational areas are shallow water Southeast Asia and West Africa Market expanding to Central and South America Concept also being applied in deepwater in combination with mini TLPs and Spars Cost-effective and versatile concept Niche market with Seadrill as the only major driller participating Limited availability of quality units pushes daily rates higher 19

20 US$1.6 billion contract backlog Tender rigs * Unit Customer Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Q 2Q 3Q 4Q Tender barges T7 Chevron US$64,000 US$88,000 T17 - Newbuild T11 Chevron US$132,500 T4 Chevron US$106,000 T12 Chevron US$85' US$120,000 US$120, T15 Chevron Newbuild US$115, T16 Chevron Newbuild US$115, Semi-tenders West Setia 1 Chevron US$167,000 West Berani ConocoPhillips/Chevron US$164,000 US$170,000 West Menang Murphy US$160,000 West Jaya BP Transit US$165,000 US$173,000 US$178,000 West Esperanza - Newbuild Transit US$235,000 West Alliance Shell US$171,000 West Pelaut Shell US$138,500 US$120,000 West Vencedor 1 Chevron US$210,000 Contract Option Yard plus transit period 1 Dayrate is partly in Euros (EUR/USD 1.40) Long-term visibility improved margins 20 * As of year-end 2011

21 Broad customer base ~ US$12.6 bn contract backlog Quality customers. superb visibility 21 * As of year-end 2011

22 US$12.6 bn revenue backlog #units Average Average Current term dayrate market rate Floaters Y US$527,000 US$500,000+ HE Jack-up rigs 3 4.4Y US$340,000 US$360,000 Jack-up rigs Y US$147,000 US$135,000 Semi-tenders 8 1.8Y US$167,000 US$200,000+ Tender barges 7 2.3Y US$116,000 US$115,000 Strong visibility locked in at favorable rates market for open position strengthening 22

23 Newbuild delivery schedule Name Rig type 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Contract status West Capricorn Semi-submersible Contracted until 2Q/2017 West Leo Semi-submersible Contracted until 2Q/2013 West Tucana High spec jack-up Uncontracted West Telesto High spec jack-up Uncontracted West Castor High spec jack-up Uncontracted West Oberon High spec jack-up Uncontracted T15 Tender barge Contracted until 1Q/2018 West Auriga Drillship Uncontracted T17 Tender barge Uncontracted West Esperanza Semi-tender Contracted until 4Q/2014 West Vela Drillship Uncontracted T16 Tender barge Contracted until 2Q/2018 West Tellus Drillship Uncontracted West Linus HE Jack-up Contracted until 4Q/2018 Newbuild portfolio provides growth and market exposure 23

24 EBITDA* development 10% CAGR 52% 24 * EBITDA earnings before interest, tax, depreciation and amortization

25 Net interest bearing debt and dividend Daily rates assumed: UDW floaters $500 BE Jack-ups $135 Semi-tenders $170 Tender barges $115 Debt refinanced at similar terms No conversion has been assumed for the US$650m convertible bonds Dividend level is sustainable 25

26 Net interest bearing debt in deepwater unit equivalents Relative gearing significantly reduced per unit Assumptions: 76 cent quarterly dividend, UDW dayrates US$500, jack-up dayrates US$135 and tender rig dayrates US$

27 US$950 million senior secured bank facilities New West Capricorn facility New Jack-up facility Loan amount: US$550 mill. Tenor: 5 years Profile: 10 years Security: UDW rig West Capricorn Margin: In line with previous credit facilities Covenants: In line with previous credit facilities Loan amount: US$400 mill. Tenor: 5 years Profile: 10 years Security: 4 jack-ups Margin: In line with previous credit facilities Covenants: In line with previous credit facilities Attractive long-term financing in place 27

28 Leverage peer group NR 59% Baa3/BBB 39% Baa3/BBB- 34% Baa1/BBB+ 32% Baa1/A- 26% SDRL RIG NE ESV DO Debt cost < < 4.5% 6.3% 4.7% 5.7% 5.5% Secured leverage caters for cheap financing 28 Source: Bloomberg, DnBNOR Markets, Moody s and Standard & Poor ratings

29 Dividend policy Dividend resolved at US$0.76 per share Reflects improved earnings visibility and functional debt markets related to the financing of our operations Future dividends depend on: Debt leverage Contract coverage Capital expenditures Business outlook Cash dividend an important objective 29

30 Value creation and dividends Share price Share price Jan-11 Jan-12 Seadrill Ensco Rowan Diamond Noble Transocean Total dividend Share price Dividend paid (US$ mill) increase* Yield 1,437 11% 8.9% 231-3% 2.9% - -6% % 6.2% % 2.2% % 8.1% Consistently outperforming peers top dividend yield globally 30

31 Seadrill is uniquely positioned Industry leader with diverse versatile fleet of brand new rigs Strong operational performance and rig utilization Increased geographical footprint Superb market conditions for ultra-deepwater rigs and semi-tenders Record high order backlog and earnings visibility Access to debt financing for premium assets funds growth Favorable prospects support cash dividends 31

32 Asset portfolio Core fleet 50 units built after Y built before Y Ultra-Deepwater Units + 1 Mid-water semi 1 Mid-water Semi 20 High Specification Jack-ups 2 Jack-ups 13 Tender Rigs 7 Tender Rigs Shareholdings 3.5% of Ensco (MV - US$391m) 39.9% of Archer (MV - US$355m) 23.6% of Sapura Crest (MV - US$438m) 33.75% of AOD (MV - US$50m) 28.5% of Sevan Drilling (MV US$85m) 32