Seadrill Partners LLC. Graham Robjohns, CEO Wells Fargo MLP Conference New York, December 2013

Transcription

1 Seadrill Partners LLC Graham Robjohns, CEO Wells Fargo MLP Conference New York, December 2013

2 Forward Looking Statements This presentation includes forward looking statements by Seadrill Partners LLC (the Company ). Such statements are generally not historical in nature, and specifically include statements about the Company s plans, strategies, business prospects, changes and trends in its business and the markets in which it operates. In particular, statements regarding the Company s ability to make cash distributions, the expected performance of the drilling rigs in the operating companies (collectively referred to as the OPCO ) fleet, estimated duration of customer contracts, contract dayrate amounts and the Company s ability to purchase drilling rigs from Seadrill Limited in the future are considered forward-looking statements. These statements are made based upon management s current plans, expectations, assumptions and beliefs concerning future events impacting the Company and therefore involve a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, which speak only as of the date of this news release. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to the performance of the drilling rigs in the Company s fleet, delay in payment or disputes with customers, fluctuations in the international price of oil, changes in governmental regulations that affect the Company or the operations of the Company s fleet, increased competition in the offshore drilling industry, and general economic, political and business conditions globally. Consequently, no forward-looking statement can be guaranteed. When considering these forward-looking statements, you should keep in mind the risks described from time to time in the Company s filings with the SEC. The Company undertakes no obligation to update any forward looking statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, the Company cannot assess the impact of each such factor on its business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward looking statement.

3 Seadrill Partners Overview

4 Company Snapshot Number of rigs Average Contract Duration Pre- Transaction (1) 6 3 ultra deep water ( UDW ) floaters 3 tender rigs Post- Transaction 8 5 UDW floaters 3 tender rigs 3.5 years 3.9 years Hemen Holding (Fredriksen Group) 24.6% Seadrill Limited (NYSE: SDRL) 21.5 MM Common Units 16.5 MM Subordinated Units 62.4% 37.6% Public Unit Holders 22.9 MM Common Units post transaction Contract Order Backlog Annualized Distribution Per Unit $2.7bn $1.78 Attractive 1099 structure $4.8bn $ $ % - 15% Seadrill Partners Operating LLC T-15 T-16 Seadrill Partners LLC (NYSE: SDLP) 100% 30.0% 51.0% Seadrill Operating LP West Aquarius West Capella (56%) OPCO (2) Seadrill Capricorn Holdings LLC West Capricorn West Vencedor West Leo West Sirius (1) As of November 29, Distribution per unit represents management s recommended increase for Q (2) Remaining ownership interests in each of OPCO subsidiaries held by Seadrill Limited. 4

5 Seadrill Partners Key Investment Highlights Increased production growth coming from Ultra-Deepwater prospects Strong Industry Dynamics Expectation for Increase in development drilling leading to longer contract duration in the medium and long term Strong demand for high-specification rigs leading to bifuracation between premium modern rigs and older commoditized units Attractive Assets & Visible Growth Profile Attractive long-term contracts with global oil majors Average remaining contract term of 3.9 years Modern, technologically-advanced fleet run by an experienced operator Significant built-in growth opportunities Strong relationship with Seadrill Limited and the Fredriksen Group 5

6 Our Progress Since IPO $ % 12-15% increase increase recommended for since IPO (1) Sirius / Leo $2.05 Major Events to Date Tender rig T-15 acquired for US$210 million, resulting distribution increase of ~8% Tender rig T-16 acquired for US$200 million; distribution increase of ~7% has been recommended Filed US$800 million mixed shelf registration statement Annualized Distribution per Unit ($) $1.78 $2.00 West Capella extension term reduced from 5 years to 3 years - Dayrate increase from US$580,000 to US$627,500 West Aquarius 18 month extension at US$75,000 increased dayrate in total adding US$337 million to backlog Average economic utilization of 95% since IPO Completed 5 year classing on several units in less time and cost than originally budgeted $1.67 Seadrill Ltd. has increased its ownership in SDLP from 75% to 78% since IPO by subscribing to 3.3mm units at $32.29 / unit $1.55 Ultra-deepwater semi-submersibles the West Leo and West Sirius acquired for a total purchse price of US$2.285 billion 1.50 IPO T-15 T-16 Management Recommended Pro Forma Leo/Sirius Completed US$460mm equity offering to finance West Leo and West Sirius acquisitions (1) Including management s recommendation to the board to increase to $ per unit for Q ($1.78 annualized). 6

7 Seadrill Partners Long-Term Contract Coverage Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q West Vencedor US$213,931 West Aquarius US$540,000 US$615,000 (2) West Capella US$562,120 US$627,500 (1) West Capricorn US$495,650 US$487,000 T-15 US$122,723 T-16 US$115,500 West Leo US$605,000 West Sirius US$490,173 US$535,000 Contracted Option Period Average remaining contract term: 3.9 years Order backlog: $4.8bn (1) Customer exercised the right to shorten the term of the contract to three years from five years in exchange for an increased dayrate of US$627,500, from US$580,000. (2) Since the West Aquarius arrived in Canada (December 2012), it has been operating under a sub-contract to Statoil ASA. 7

8 Recent Acquisitions: Two Accretive Dropdowns West Leo To be acquired by SeadrillOperating LP (30% owned by SDLP) West Sirius To be acquired by Seadrill Capricorn Holdings LLC (51% owned by SDLP) Contract details: Dayrate: $605,000 Contract End Date: June 2018; 4.6 years Order Backlog: $1.0bn Principal Features: Maximum water depth: 10,000 feet Built: 2012 Builder: Jurong Shipyard Customer: Tullow Oil Contract details: Dayrate: $535,000 Contract End Date: July 2019 (1) ;5.8 years Order Backlog: $1.1bn Principal Features: Maximum water depth: 10,000 feet Built: 2008; 5 year SPS completed in July 2013 Builder: Jurong Shipyard Customer: BP (1) Current rate of $479,000 /day until June

9 West Leo & West Sirius Transaction Overview Use of Proceeds ($mm) Rigs to be Acquired West Leo West Sirius Total Implied Purchase Price $1,250 $1,035 $2,285 Bank Debt (486) (220) (706) Interco Loan to OPCO (230) (230) Equity Portion $765 $585 $1350 SDLP Ownership % 30% 51% SDLP Equity Share $229 $298 $528 Seller s Loan to SDLP (70) (70) SDLP Requirement $229 $228 $458 9

10 Our Structure Facilitates Continued Growth Assets Larger, diversified pool of jackup and deepwater rigs Term contracts with day rate exposure Long-term contracted deepwater drilling assets Potentially long-term contracted, modern high-specification jack-up units Growth Strategy Exposure to speculative newbuild projects and opportunistic M&A Most proceeds from drop downs to be reinvested to grow the asset base Future SDLP offering participation Managed growth via drop-downs and third-party acquisitions No newbuild construction and startup risk 10

11 Robust Industry Fundamentals Driving Offshore Drilling

12 Increased Service Intensity: More rigs working, but declining oil production Million Barrels per Day Number of Rigs Contracted Total Offshore Production Total Offshore Rigs Source: IEA, IHS, Wood Mackenzie, EIA, ODS Petrodata. 12

13 Ultra-Deepwater Production Growth Accelerating Global liquids production, by land and water depth Global offshore production by water depth Million bbl/d CAGR = 1.3% CAGR 19% 2% Replacement Ratio Thousand boe/d Offshore ultra deep 0% mbbl/d mbbl/d 1% Onshore 30 mbbl/d Shelf (to 400 ft) Deep water ( ft) Ultra deepwater (5000+ ft) 13 Source: Rystad Energy. 13

14 Global Rig Supply & Demand Imbalance Favors Contractors Significant Newbuilds Required to Bridge Expected Demand Gap Supply Demand (50) Current Fleet Newbuilds Potential Supply Possible Retirements Additional Rig Requirements Demand Ultra-Deep Water Deliveries Includes Brazil rigs Source: Rystad Energy, DNB 14

15 Conclusion

16 Significant Potential Growth Going Forward 1 Additional New Assets from Seadrill Drillships West Saturn - Newbuild West Jupiter - Newbuild West Carina - Newbuild West Aquila - Newbuild West Libra - Newbuild West Draco - Newbuild West Dorado - Newbuild West Tellus Chevron Transit 610' US$635' US$ 565,000 West Navigator Shell / Centrica Energi NUF US$603,000 US$621' West Capella Total US$562,120 US$627,500 West Gemini Total US$447' US$640,000 West Neptune LLOG Newbuild Transit US$570,000 West Polaris ExxonMobil US$653, US$ 565,000 West Auriga BP NB US$565, West Vela BP Transit US$565, Semi-submersibles Sevan Rig 4 - Newbuild West Rigel - Newbuild West Taurus Petrobras US$656,662 West Phoenix Total US$454,000 West Eminence Petrobras US$624,460 West Venture Statoil US$442,000 Sevan Driller Petrobas US$419,817 West Orion Petrobras US$624,460 West Pegasus PEMEX US$555,000 Market rate West Eclipse Total US$435,000 US$450,000 US$455,000 Sevan Louisiana LLOG US$505,000 West Aquarius ExxonMobil US$540,000 US$615,000 West Alpha ExxonMobil US$479,000 US$532,000 US$547,000 West Hercules Statoil US$497,000 US$497,000 West Capricorn BP US$495,650 US$487' West Leo Tullow Oil US$605, Sevan Brasil Petrobas US$398, West Sirius BP US$490,173 US$535, West Mira Husky Newbuild Transit US$590, Option Yard plus transit period OPCO Rigs Recently acquired rigs 16

17 Growth Opportunities 2 Acquisition of Additional OPCO Ownership Interests from Seadrill Ltd. - 70% of three UDW and one tender rig - 49% of two UDW rigs 3 Long-Term Contracted Jack-ups US$ 565,000 - Heads of Agreement signed with PEMEX - 30 rig years, $1.8bn backlog 4 Distribution Upside Potential in Existing Fleet - Recent dayrate increases - More efficient use of replacement capex reserves supported by improved financing structure 17

18 Conclusion Strong Market Fundamentals Global offshore production by water depth Shelf (to 400 ft) Deep water ( ft) Ultra deepwater (5000+ ft) Multiple Growth Opportunities Additional Assets from Seadrill Ltd. Long-Term Contracted Jack-up Rigs 1 3 OPCO Interest Acquisitions 29% Pro Forma Distribution Growth (1) 2 4 Embedded Growth in Existing Asset Base Two Accretive Acquisitions West Leo West Sirius $2.05 $1.67 $1.78 $2.00 $ % Accretive IPO T-15 T-16 Management Recommended Pro Forma Leo/Sirius Illustrative Acquisition Opportunities (1) Calculating from IPO 18