Seadrill Limited · NYSE:SDRL

Seadrill — Q2 2006 Earnings Presentation

32 slides from Seadrill's earnings presentation, Sep 1, 2006

  1. Slide 1: The World's Fastest Growing Drilling Contractor - 2Q 2006 Results

    The World’s Fastest Growing Drilling Contractor 2Q 2006 Results Oslo, 1 September2006

  2. Slide 2: Disclaimer

    Confidential 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 REGISTERED

  3. Slide 3: Contents

    3 Contents ƒ Mission statement ƒ 2Q 2006 results ƒ Newbuilding program ƒ Contract status ƒ Market development and outlook ƒ Human resources ƒ Summary

  4. Slide 4: Mission statement

    4 Mission statement Create a world leading drilling contractor within 5 years

  5. Slide 5: Highlights 2Q 2006

    5 Highlights 2Q 2006 ƒ All drilling units on dayrate ƒ Net income of US$ 33.3 million and EPS of US$ 0.07 ƒ US$ 210 million sale and leaseback completed for newbuilt jack-up Seadrill 3 ƒ Ownership position in Eastern Drilling ASA maintained by participating in private placement ƒ New barge tender fr

  6. Slide 6: Current operations

    6 Current operations Norway - 4 units 2 Semis 1 Jack-up 1 Drillship Well Services 39.4% interest in Eastern activities Sakhalin 1 Jack-up Current operations Southeast Asia-10 units Previous operations 3 Semi-tenders West Africa - 4 units 6 Tender rigs 1 Semi-tender 1 Jack-up 1 Tender rig 33% interes

  7. Slide 7: Condensed Income Statement

    7 Condensed Income Statement Actual Pro forma Unaudited accounts in USD millions 2Q06 1Q06 Operating Revenues Operating revenues 224.3 187.1 Reimbursables 22.9 18.4 Other revenues 28.4 28.4 Total revenues 275.6 233.8 Operating expenses Vessel and rig operating expenses 133.3 125.6 Reimbursable expen

  8. Slide 8: Condensed Consolidated Segment Information - Mobile Units

    8 Condensed Consolidated Segment Information Mobile Units Actual Pro Forma Unaudited accounts in USD millions 2Q06 1Q06 Operating revenues 112.9 84.0 Reimbursables 15.2 6.5 Other revenues 24.3 24.3 Total revenues 152.4 114.8 Vessel and rig operating expenses 59.5 53.1 Reimbursable expenses 14.3 5.9

  9. Slide 9: Condensed Consolidated Segment Information - Tender Rigs

    9 Condensed Consolidated Segment Information Tender Rigs Actual Pro Forma Unaudited accounts in USD millions 2Q06 1Q06 Operating revenues 41.5 37.6 Reimbursables 2.3 1.5 Other revenues 4.1 4.1 Total revenues 47.9 43.2 Vessel and rig operating expenses 18.6 17.8 Reimbursable expenses 2.2 1.4 Deprecia

  10. Slide 10: Condensed Consolidated Segment Information - Well Services

    10 Condensed Consolidated Segment Information Well Services Actual Pro Forma Unaudited accounts in USD millions 2Q06 1Q06 Operating revenues 69.9 65.4 Reimbursables 5.3 10.3 Total revenues 75.2 75.7 Vessel and rig operating expenses 55.2 54.8 Reimbursable expenses 5.1 10.0 Depreciation and amortisat

  11. Slide 11: Condensed Consolidated Balance Sheets

    11 Condensed Consolidated Balance Sheets Unaudited accounts in USD millions Actual Pro Forma 30.06.06 31.12.05 Current assets Cash and cash equivalents 433.8 417.5 Receivables 243.4 153.8 Other investments - 302.2 Total current assets 677.2 873.5 Non-current assets Investment in associated companies

  12. Slide 12: Newbuild projects

    12 Newbuild projects 2 drillships at Samsung, Korea 2 semis at Samsung, Korea (Eastern Drilling ASA) 2 semis at Daewoo, Korea 2 semis at Jurong, Singapore 1 semi-tender and 4 jack-ups 2 tender barges in Singapore in Singapore and KFELS and PPL Malaysia, respectively Building the most modern fleet at

  13. Slide 13: Seadrill newbuild characteristics

    13 Seadrill newbuild characteristics ƒ Copies of existing units ƒ Proven technology ƒ Quality yards ƒ Delivery time reflects previous experience ƒ First units to be ordered ƒ Main yard installments to be paid at delivery ƒ Fixed price turnkey contracts Risk contained for on-schedule delivery

  14. Slide 14: Newbuild deepwater program

    14 Newbuild deepwater program Project phases Engineering Construction Commissioning West E-drill West E-drill II Jurong I Jurong II Daewoo I Daewoo II Mosvold I Mosvold II Projects are progressing according to plan

  15. Slide 15: Mosvold drillships

    15 Mosvold drillships ƒ Two deepwater drillships ƒ Builder: Samsung ƒ Delivery: Q2/4Q 2008 ƒ Design: Samsung 10,000 ƒ Rated water depth: 10,000 ft ƒ Rated drilling depth: 35,000 ft ƒ Riser: 7,000 ft ƒ Top Drive: 2 HPS 1,000 short tons (dual motor AC) ƒ Contract price: US$ 470 million * * Excluding s

  16. Slide 16: Jurong semis

    16 Jurong semis ƒ Two semi-submersible rigs ƒ Builder: Jurong ƒ Delivery: Q1/4Q 2008 ƒ Design: Friede Goldman ExD ƒ Rated water depth: 10,000 ft ƒ Rated drilling dept: 35,000 ft ƒ Risers: 7,500 ft ƒ Top Drive: MH DDM 750/1,000 AC ƒ Contract price: US$ 395/407 million * * Excluding spares, constructi

  17. Slide 17: Daewoo semis

    17 Daewoo semis ƒ Two semi-submersible rigs ƒ Builder: Daewoo ƒ Delivery: Q1/3Q 2008 ƒ Design: GVA 7500 ƒ Rated water depth: 10,000 ft ƒ Rated drilling depth: 35,000 ft ƒ Risers: 7,500 ft ƒ Top Drive: MH DDM 750/1,000 AC ƒ Contract price: US$ 506/496 million * * Excluding spares, construction superv

  18. Slide 18: West E-drill I and II

    18 West E-drill I and II ƒ Two semi-submersible rigs ƒ Builder: Samsung ƒ Delivery: 4Q 2007/3Q 2008 ƒ Design: DP Drilling Vessel ƒ Rated water depth: 10,000 ft ƒ Rated drilling dept: 30,000 ft ƒ Dual Derrick ƒ Risers: 4,100 ft ƒ Contract price: US$ 580/578 million * * Including spares, construction

  19. Slide 19: Investments in Capital Spares and Risers

    19 Investments in Capital Spares and Risers ƒ The market for spare equipment is tight with increasing prices and long lead time ƒ Capital spares includes risers, top-drives, thrusters, mud pumps, drill pipe, BOP related equipment etc ƒ Increase flexibility and reduce down time risk Additional invest

  20. Slide 20: Four jack-up newbuilds

    20 Four jack-up newbuilds ƒ Three jack-ups at KFELS ƒ Two units to be delivered in 3Q07 ƒ One unit to be delivered in 2Q08 ƒ One jack-up at PPL ƒ Delivery scheduled for 4Q07 Progress according to plan and budget

  21. Slide 21: Three tender rig newbuilds

    21 Three tender rig newbuilds ƒ One semi-tender at KFELS ƒ Delivery scheduled for 4Q06 ƒ Two tender barges at Malaysia Marine & Heavy Engineering ƒ Delivery scheduled for 2Q07 and 2Q08 ƒ Option to build another tender barge at Malaysian MHE Progress according to plan and budget

  22. Slide 22: Committed newbuild installments

    22 Committed newbuild installments 800 700 654 577 600 US$ million 482 500 400 362 267 300 249 197 204 168 200 147 104 100 51 0 Paid 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Commited newbuild installments ƒ Committed newbuild installment schedule amounts to approximately US$ 3.5 billio

  23. Slide 23: Contract status

    23 Contract status 2006 2007 2008 2009 2010 Customer 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Semi-submersibles West Alpha Statoil US$ 249,000 West Venture Norsk Hydro US$ 220,000 US$ 220,000 06.2011 West E-drill 1 Under construction Samsung - US$ 580M West E-drill II 1 Under cons

  24. Slide 24: Contract status

    24 Contract status 2006 2007 2008 2009 2010 Customer 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Tender rigs T3 1 PTT US$ 40,000 US$ 42,000 US$ 51,000 US$ 58,000 US$ 70,000 06.2012 T4 Chevron US$ 40,000 T6 1 Carigali/CTOC US$ 60,000 US$ 86,000 12.2010 T7 Chevron US$ 40,000 US$ 51,000

  25. Slide 25: Market characteristics

    25 Market characteristics ƒ Increasing number of enquiries for newbuilds (both shallow and deep waters) ƒ Particular increase in interest for ultra deepwater units (3,000 meters) ƒ Term contracts from 3 years and upwards ƒ Deferral of drilling programs ƒ Mainly newbuilds available from 2008 ƒ Demand

  26. Slide 26: Deepwater newbuilds

    26 Deepwater newbuilds ƒ 33 deepwater newbuilds and conversions ongoing ƒ 12 units are signed on contract ƒ 21 units are without contract of which Seadrill controls 8 ƒ Current number of deepwater enquiries are close to 30 Demand supply situation as sound as ever

  27. Slide 27: Ultra deepwater market

    27 Ultra deepwater market Source: ODS Petrodata, Companies, Pareto Securities research

  28. Slide 28: Deepwater market

    28 Deepwater market Source: Fearnley Offshore

  29. Slide 29: Jack-up Market

    29 Jack-up Market Source: Fearnley Offshore

  30. Slide 30: Human resources

    30 Human resources ƒ Currently a pool of 4,300 employees as a basis ƒ More than 25 different nationalities ƒ Significant organic growth capacity ƒ 2,000 people to be hired to operated newbuilds ƒ State of the art rig fleet An attractive employer long term

  31. Slide 31: Summary

    31 Summary ƒ Newbuilding projects organized, resourced and well under way ƒ Strong market outlook in all segments ƒ Operations integrated and running according to plan Creating a world leading drilling contractor

  32. Slide 32: Seadrill

    32 Seadrill

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