Seadrill Limited · NYSE:SDRL
Seadrill — Q3 2008 Earnings Presentation
39 slides from Seadrill's earnings presentation, Nov 24, 2008
Slide 1: 3Q results 2008 conference call
3Q results 2008 conference call November 24, 2008
Slide 2: Disclaimer
Confidential 2 Disclaimer THIS PRESENTATION AND ITS ENCLOSURES AND APPENDICES (HEREINAFTER JOINTLY REFERRED TO AS THE “PRESENTATION” HAS BEEN PREPARED BY SEADRILL LIMITED. (”SDRL” , “SEADRILL or THE ”COMPANY”) EXCLUSIVELY FOR INFORMATION PURPOSES. THIS PRESENTATION HAS NOT BEEN REVIEWED OR REGISTERE
Slide 3: Contents
3 Contents Highlights Third Quarter 3Q results 2008 Current operations Newbuilding program Human resources Contract status Market outlook Summary
Slide 4: Highlights 3Q2008
4 Highlights 3Q2008 Third quarter EBITBA of US$234 million based on sound operational performance Third quarter net income of US$69 million and EPS of US$0.18 Seadrill takes delivery of three newbuilds (one drillship and two semi-submersible units) and has then taken delivery of five of eight
Slide 5: Highlights 3Q2008 – cont’d
5 Highlights 3Q2008 – cont’d Seadrill received US$2.3 billion as part of the deepwater unit sale and leaseback arrangements with Ship Finance International Seadrill receives the consideration US$195 million for the sale of the shares in PT Apexindo Seadrill signed five-year contract for semi-t
Slide 6: Highlights 3Q2008 – cont’d
6 Highlights 3Q2008 – cont’d Seadrill incurred unrealized losses on forward and TRS agreements totaling US$588 million as of November 21 Seadrill paid US$0.30 per share in dividends in September Distribution of further cash dividends has been temporarily postponed
Slide 7: Condensed income statement
7 Condensed income statement Unaudited accounts in USD millions 2Q08 3Q08 9M08 9M07 Revenues Operating revenues 452,1 517,2 1350,1 937,5 Reimbursables 52,5 30,2 114,4 103,4 Other revenues 98,3 18,8 142,9 189,4 Total revenues 602,9 566,2 1607,4 1 230,3 Operating expenses Vessel and rig operating expe
Slide 8: Mobile units
8 Mobile units Mobile Units Division Unaudited accounts in USD millions 2Q08 3Q08 9M08 9M07 Operating revenues 242,9 289,8 748,7 516,3 Reimbursables 13,2 3,0 25,2 24,0 Other revenues 97,1 17,7 138,7 180,2 Total revenues 353,2 310,5 912,6 720,5 Vessel and rig operating expenses 113,6 116,9 336,0 266,
Slide 9: Tender rigs
9 Tender rigs Tender Rigs Division Unaudited accounts in USD millions 2Q08 3Q08 9M08 9M07 Operating revenues 69,1 82,9 217,5 169,4 Reimbursables 7,4 7,3 18,9 13,8 Other revenues 1,2 1,1 4,2 9,1 Total revenues 77,7 91,3 240,6 192,3 Vessel and rig operating expenses 31,1 34,4 93,3 68,9 Reimbursable ex
Slide 10: Well Services (Seawell Limited)
10 Well Services (Seawell Limited) * Well Services Division Unaudited accounts in USD millions 2Q08 3Q08 9M08 9M07 Operating revenues 140,1 144,5 383,9 251,7 Reimbursables 31,9 19,9 70,3 65,8 Total revenues 172,0 164,4 454,2 317,5 Operating expenses 116,8 119,4 319,0 202,6 Reimbursable expenses 30,7
Slide 11: Balance Sheet
11 Balance Sheet Total assets Unaudited accounts in USD millions 30.09.08 30.06.08 31.12.07 Current assets Cash and cash equivalents 776,4 425,4 1 012,9 Marketable securities 249,6 496,3 240,4 Accounts receivables, net 340,9 311,6 220,5 Other current assets 247,9 253,7 223,1 Total current assets 1 6
Slide 12: Balance Sheet
12 Balance Sheet Liability and equity Unaudited accounts in USD millions 30.09.08 30.06.08 31.12.07 Current liabilities Short-term interest bearing debt 631,7 550,2 484,1 Other current liabilities 1 216,0 1 088,7 670,6 Total current liabilities 1 847,7 1 638,9 1 154,7 Non-current liabilities Long-te
Slide 13: TRS & forward contracts - valuation and accounting treatment
13 TRS & forward contracts - valuation and accounting treatment Investment/ # milion of commitment 21 Loss as of Loss as of US$ mill. shares November September 30 November 21 Accounting treatment 4.87% Shares: Marketable securities / Loss against Equity Pride 16,5 569 -80 -349 4,66% Forwards:Off bal
Slide 14: Committed newbuild installments
14 Committed newbuild installments US$ million Commited newbuild installments Paid to date 3 000 2 500 2 000 1 500 2107 670 1 000 500 750 600 380 300 314 200 100 150 100 0 0 Paid 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 2011 Unpaid committed newbuild installment schedule amounts to approximate
Slide 15: Newbuild installments vs. contracted revenues
15 Newbuild installments vs. contracted revenues US$ million Actual revenues Commited newbuild installments Contracted revenues 4 000 3 500 3 000 2 500 2 000 1 500 1 000 500 0 2007 2008 2009 2010 2011 2012 Investment program tailing off … cash flow building up
Slide 16: Operations and newbuild projects
16 Operations and newbuild projects 2 drillships at Samsung Norway - 5 units Korea 3 Semis 1 Jack-up 1 Drillship 1 semi at Samsung Korea 1 semi GOM - 1 Semi at Brazil - 1 Ship & 1 Semi Daewoo Korea 2 semis Southeast Asia - 19 units at Africa - 3 units 1 Semi Jurong 1 Semi-tender 1 Tender rig 4 Semi-
Slide 17: West Sirius
17 West Sirius Update Arrived the Gulf Of Mexico July 1 Commenced drilling operations July 24 Farmed out to APT from July to October Are currently working for Devon Utilization in line with expectations Six year contract at dayrate US$475,000
Slide 18: West Taurus
18 West Taurus Update Delivered on November 7 ahead of schedule En route to Brazil Start-up of operations for Petrobras expected in February next year Six year contract at dayrate US$640,000
Slide 19: West Phoenix
19 West Phoenix Update The unit is in Norway doing the final integration testing Commencement of operations is expected next week The rig has a three year contract with Total at dayrate US$493,000
Slide 20: West Eminence
20 West Eminence Progress 99% complete Delivery scheduled year-end 2008 Challenges Commissioning Cost - On budget
Slide 21: West Polaris
21 West Polaris Update Delivered on July 10 On time and budget Started operations in Brazil for Exxon early October The unit has four years of contract at dayrate US$556,000 to US$615,000
Slide 22: West Capella
22 West Capella Progress 99% complete Delivery planned in December 2008 Commencement of operations in Nigeria for Total expected in March 2009 Challenges Final commissioning Cost - On budget
Slide 23: West Hercules
23 West Hercules Progress Delivered on October 10 Commenced operations in China for Husky on November 3 The unit has three year contract at dayrate US$537,000
Slide 24: West Aquarius
24 West Aquarius Progress 99% complete Delivery planned late December this year Commencement of operations in Indonesia late January Challenges Final commissioning Cost - On budget
Slide 25: Ultra-deepwater projects 2010-11
25 Ultra-deepwater projects 2010-11 Three more deepwater units on order 1 drillship 2 semis All three are copies of existing units To be built at the Samsung and Jurong yards Sister vessels have been delivered on time and cost Low construction risk …. high contract probability
Slide 26: Status shallow water newbuild projects
26 Status shallow water newbuild projects Deliveries on time and budget
Slide 27: Human resources recruitment
27 Human resources recruitment Units Core crew recruitment % complete West Phoenix 100% Core crews West Sirius 100% Internal and international West Hercules 100% recruiting West Polaris 100% West Aquarius 100% Other crew West Capella 98% West Eminence 97% In the country we operate West Tauru
Slide 28: Market outlook
28 Market outlook Global financial turmoil, falling oil prices and recessions impacting oil and oil services The crisis is more widespread than the financial crisis that hit the oil price in 1998 Uncertainty is causing a wait and see attitude amongst oil companies Near term jack-up market is
Slide 29: Market status floaters
29 Market status floaters Brazil with the sub-salt discoveries is still a game changer National Oil Companies have strategic interest that differs from listed companies Super majors and majors are still active in securing deepwater capacity Availability combined with operation track record i
Slide 30: Ultra-deepwater projects 2010
30 Ultra-deepwater projects 2010 Limited availability …. strong visibility Source: Pareto
Slide 31: Contract status floaters
31 Contract status floaters 2008 2009 2010 2011 2012 2013 2014 Customer 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Semi-submersibles 1 2 West Alpha StatoilHydro US$258,000 US$457,000 West Venture 1 StatoilHydro US$248,000 US$248,000 1 West Phoenix Total Newbu
Slide 32: Contract status tender rigs
32 Contract status tender rigs 2008 2009 2010 2011 2012 2013 2014 Customer 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Tender barges T3 1 PTT US$58,000 US$83,000 T4 Chevron US$49' US$88,000 1 T6 Carigali/CTOC US$101,000 T7 Chevron US$58,000 T8 Total US$90' US$
Slide 33: Market status Jack-ups
33 Market status Jack-ups Falling oil prices and the Newbuild jack-ups credit crunch are impacting the demand side 40 Contracted Available Quality and fleet ageing 30 issues overshadowed by 30 short-term uncertainty 20 7 Longer-term demand will 20 10 be focused on rigs with 11 10 higher techni
Slide 34: Contract status jack-ups
34 Contract status jack-ups 2008 2009 2010 2011 Customer 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Jack-ups West Epsilon StatoilHydro US$306,000 West Janus PCPPOC US$185,000 US$150,000 West Atlas Coogee US$257,500 US$255,000 West Triton ADA US$276,000 West Ceres Total/Tullow US$183'/US$221' We
Slide 35: US$12.5 billion order backlog
35 US$12.5 billion order backlog Exxon Shell 13 % 10 % Devon Total 8% 14 % Chevron 5% Statoil 3% Other Petrobras 15 % 32 % Focused on the best credits in the industry
Slide 36: EBITDA expectations
36 EBITDA expectations US$ million 3 000 2 500 2 000 1 500 1 000 500 0 2008 2009 2010 2011 2012 Floaters Tender rigs (100% owned) Jack-ups Main exposure is deepwater market Source: DnBNor
Slide 37: Shareholdings
37 Shareholdings Seadrill has a ownership in jack-up company Scorpion Offshore Ltd to 39.7%. Seadrill has a ownership in Malaysian oil service company SapuraCrest Bhd of 24.6% Seadrill has an ownership in US listed offshore contractor Pride International Inc. of 9.5 percent Current effect is m
Slide 38: Summary
38 Summary Three deepwater newbuild has commenced operations Remaining newbuilding projects are progressing as planned with delivery within January next year Market outlook remains favorable for our ultra- deepwater floaters and tender rigs Order backlog of some US$12.5 billion is built on s
Slide 39: 39
39