Seadrill Limited · NYSE:SDRL
Seadrill — Q2 2008 Earnings Presentation
38 slides from Seadrill's earnings presentation, Aug 28, 2008
Slide 1: 2Q results 2008 conference call
2Q results 2008 conference call August 28, 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 Second Quarter 2Q results 2008 Current operations Newbuilding program Human resources Contract status Market outlook Summary
Slide 4: Highlights 2Q2008
4 Highlights 2Q2008 Second quarter net income of US$210 million and EPS of US$0.53 Second quarter included gain of US$80 million from sale of the 1981-built jack-up West Titania Cash dividend per share of US$0.60 Three newbuild deliveries Tender rig T11 delivered in April, jack-up West Ari
Slide 5: Highlights 2Q2008 – cont’d
5 Highlights 2Q2008 – cont’d US$1.7 billion in newbuild orders One deepwater semi at Jurong Shipyard with delivery in 4Q2011 One self-erecting tender rig at KFELS with delivery 1Q 2011 Four jack-ups with total construction price of US$850 million ordered in June with delivery in 2010 - Two 4
Slide 6: Highlights 2Q2008 – cont’d
6 Highlights 2Q2008 – cont’d New deepwater contracts worth US$4.8 billion Petrobras – Brazil development drilling Deepwater semi West Eminence – 6Y at US$600,000 Deepwater semi West Taurus – 6Y at US$630,000 Deepwater semi West Orion– 6Y at US$600,000 Exxon – Worldwide exploration drilling
Slide 7: Highlights 2Q2008 – cont’d
7 Highlights 2Q2008 – cont’d Financing First sale and leaseback for deepwater unit with Ship Finance Finalized a two-year US$1 billion bridge loan facility In the process of securing additional financing for two more deepwater units Other investments in rig companies 9.5% shareholding ma
Slide 8: Condensed income statement
8 Condensed income statement Unaudited accounts in USD millions 1Q08 2Q08 6M08 6M07 Revenues Operating revenues 380,8 452,1 832,9 613,8 Reimbursables 31,7 52,5 84,2 72,6 Other revenues 25,8 98,3 124,1 166,8 Total revenues 438,3 602,9 1 041,2 853,2 Operating expenses Vessel and rig operating expenses
Slide 9: Mobile units
9 Mobile units Mobile Units Division Unaudited accounts in USD millions 1Q08 2Q08 6M08 6M07 Operating revenues 216,0 242,9 458,9 340,8 Reimbursables 9,0 13,2 22,2 17,1 Other revenues 23,9 97,1 121,0 160,7 Total revenues 248,9 353,2 602,1 518,6 Vessel and rig operating expenses 105,5 113,6 219,1 181,
Slide 10: Tender rigs
10 Tender rigs Tender Rigs Division Unaudited accounts in USD millions 1Q08 2Q08 6M08 6M07 Operating revenues 65,5 69,1 134,6 108,8 Reimbursables 4,2 7,4 11,6 8,4 Other revenues 1,9 1,2 3,1 6,1 Total revenues 71,6 77,7 149,3 123,3 Vessel and rig operating expenses 27,8 31,1 58,9 44,1 Reimbursable ex
Slide 11: Well Services (Seawell Limited)
11 Well Services (Seawell Limited) * Well Services Division Unaudited accounts in USD millions 1Q08 2Q08 6M08 6M07 Operating revenues 99,3 140,1 239,4 164,2 Reimbursables 18,5 31,9 50,4 47,1 Total revenues 117,8 172,0 289,8 211,3 Operating expenses 82,8 116,8 199,6 134,0 Reimbursable expenses 17,8 3
Slide 12: Balance Sheet
12 Balance Sheet Total assets Unaudited accounts in USD millions 30.06.08 31.03.08 31.12.07 Current assets Cash and cash equivalents 425,4 317,2 1 012,9 Marketable securities 496,3 242,6 240,4 Accounts receivables, net 311,6 240,6 220,5 Other current assets 253,7 350,4 223,1 Total current assets 1 4
Slide 13: Balance Sheet
13 Balance Sheet Liability and equity Unaudited accounts in USD millions 30.06.08 31.03.08 31.12.07 Current liabilities Short-term interest bearing debt 550,2 584,1 484,1 Other current liabilities 1 088,7 825,8 670,6 Total current liabilities 1 638,9 1 409,9 1 154,7 Non-current liabilities Long-term
Slide 14: Committed newbuild installments
14 Committed newbuild installments US$ million Commited newbuild installments 3 000 2 500 2246 2 000 1 500 1091 1 000 768 619 500 321 307 300 197 159 73 74 0 0 Paid 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 2011 Unpaid committed newbuild installment schedule amounts to approximately US$3.9
Slide 15: Second cash dividend distribution
15 Second cash dividend distribution Board resolves dividend of some US$240 million Dividend of US$0.60 per share Ex. dividend date is September 4, 2008 Record date is September 9, 2008 Payable date on or about September 16, 2008 Cash dividend based on strong earnings visibility
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 2 semis GOM - 1 semi Brazil - 1 ship at Daewoo Korea 3 semis at Africa - 3 units Southeast Asia - 18 units Jurong 1 Semi-tender 4 Semi-tenders 1 Tender rig 8 Tende
Slide 17: Four premium jack-ups ordered
17 Four premium jack-ups ordered PPL Pacific Class KFELS Mod VB Class 375 West Callisto delivery 2Q2010 West Juno delivery 4Q2010 Yard contract price per rig is US$210 million PPL Baker 375 Pacific Class KFELS Mod VB West Leda delivery 1Q2010 West Elara delivery 4Q2010 Yard contract
Slide 18: Status shallow water newbuild projects
18 Status shallow water newbuild projects Deliveries on time and budget
Slide 19: West Sirius
19 West Sirius Update Arrived the Gulf Of Mexico July 1 Commenced drilling operations July 24 Farmed out to APT Drilled three top holes Utilization in line with expectations Contract extended from four to six years
Slide 20: West Taurus
20 West Taurus Progress 95% complete Delivery scheduled in December this year Start-up of operations for Petrobras expected in February next year Challenges Final commissioning Cost - On budget
Slide 21: West Phoenix
21 West Phoenix Update Delivery taken end March 2008 Unit has arrived Norway Commencement of operations in Norway is delayed to November 2008 Activities outstanding are final commissioning and testing of drilling equipment
Slide 22: West Eminence
22 West Eminence Progress 99% complete Delivery scheduled year-end 2008 Challenges Commissioning Cost - On budget
Slide 23: West Polaris
23 West Polaris Update Delivered on July 10 On time and budget En route to Brazil Commencement of operations in Brazil for Exxon anticipated in October 2008
Slide 24: West Capella
24 West Capella Progress 95% complete Delivery planned in December 2008 Commencement of operations in Nigeria for Total expected in February/March 2009 Challenges Final commissioning Cost - On budget
Slide 25: West Hercules
25 West Hercules Progress 100% complete Delivery scheduled mid September 2008 Commencement of operations in China for Husky in October 2008 Challenges Final commissioning Cost - On budget
Slide 26: West Aquarius
26 West Aquarius Progress 96% complete Delivery planned in the November this year Commencement of operations in Indonesia December Challenges Yard capacity Commissioning risk Cost - On budget
Slide 27: Human resources recruitment status
27 Human resources recruitment status 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 95% West Eminence 95% In the country we operate Wes
Slide 28: Contract status floaters
28 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 West Alpha StatoilHydro US$274,000 US$488,000 2 West Venture StatoilHydro US$269,000 US$269,000 West Phoenix 1 Total Newbuild
Slide 29: Contract status jack-ups
29 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$326,000 West Janus PCPPOC US$185,000 US$150,000 West Atlas Coogee US$257,500 US$252,000 West Triton ADA US$275,000 West Ceres Total US$183'/US$221' West Pros
Slide 30: Contract status tender rigs
30 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$74,000 T4 Chevron US$49' US$88,000 T6 1 Carigali/CTOC US$93,000 T7 Chevron US$57,000 T8 Total US$90' US$1
Slide 31: Market status floaters
31 Market status floaters Brazil with the sub-salt discoveries is a game changer The National Oil Companies and Independents continue to be in the driving seat Super majors and majors are being more active in securing deepwater capacity Availability combined with operation track record is hi
Slide 32: Ultra-deepwater newbuilds – 2008 and 2009 fully booked
32 Ultra-deepwater newbuilds – 2008 and 2009 fully booked 50 40 Contracted Available 30 20 42 8 16 10 16 4 8 7 0 2008/2009 2010 2011 2012 Market is absorbing the newbuilds Source: Pareto
Slide 33: Ultra deepwater rig availability
33 Ultra deepwater rig availability Source: Dahlman Rose
Slide 34: Ultra-deepwater rates established above US$600’/day
34 Ultra-deepwater rates established above US$600’/day Latest fixtures Date Company Rig Rig type Operator Rate $'/day Old $'/day Duration Start-up Comments 4-Aug RIG Deepwater Expedition 5GDS Petronas 640 375 3Y Aug-10 8-Jul RIG Deepwater Pathfinder 5GDS ENI 652 395 5Y Apr-10 27-Jun Seadrill West Si
Slide 35: Market status Jack-ups
35 Market status Jack-ups Continued historical high Newbuild jack-ups oil prices will result in revival 40 Contracted Available Increased focus on 30 quality and fleet ageing 30 issues 20 7 20 A modern brand new 10 fleet of rigs is a major 11 10 advantage 4 4 0 2008 2009 2010 2011 Market is ab
Slide 36: Further growth opportunities
36 Further growth opportunities Opportunities are: Further newbuilds? Acquisition of assets under construction, or Smaller newcomers? A sizable corporate transaction? Transactions that create shareholder value
Slide 37: Summary
37 Summary First deepwater newbuild has commenced operations in the Gulf of Mexico Remaining newbuilding projects progressing as planned with a few exceptions Strong order backlog exceeding US$12 billion Market outlook remain favorable with increasing dayrates especially for ultra-deepwater
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