Seadrill Limited · NYSE:SDRL
Seadrill — Q3 2010 Earnings Presentation
21 slides from Seadrill's earnings presentation, Nov 30, 2010
Slide 1: Conference call 3Q 2010 results
Conference call 3Q 2010 results November 30, 2010
Slide 2: Contents
Contents Highlights 3Q 2010 3Q 2010 accounts Market view Newbuild orders Fleet contract status Dividend policy Summary 2
Slide 3: Highlights third quarter 2010
Highlights third quarter 2010 Net income of US$358m up from US$329m EBITDA of US$560m compared to US$493m in the preceding quarter Earnings per share up from US$0.77 to US$0.85 Regular cash dividend up from US$0.61 to US$0.65 per share Takeover of Scorpion is completed Deepwater units We
Slide 4: Subsequent events
Subsequent events US$350m 6.5% bond and US$650m 3.375% convertible bond issued in October Orders 2+2 ultra-deepwater drillships at Samsung Orders 4+6 benign environment jack-ups from Jurong and Dalian Completes US$55m disposal of 1984-built jack-up rig West Larissa Seadrill subsidiary Seaw
Slide 5: Financial performance highlights
Financial performance highlights Revenue growth continued, Q3/10 at US$1,075m (US$933m in Q2) EBITDA US$560m (US$493m in Q2) Earnings per share of US$0.85 (US$0.77 in Q2) Net operating profit US$431m (US$383m in Q2) Financial items minus US$33m (US$0 in Q2) Cash flow from operating activ
Slide 6: EBITDA contribution
Seadrill 500 - 400 - 300 - 200 + 100 - Mobile units Well services Tender rigs 2Q10 3Q10 Gain from sale of assets
Slide 7: Total Seadrill
Seadnill Total Seadrill Unaudited accounts in USD millions 3Q10 2Q10 1Q10 Operating revenues 1,011 886 810 Reimbursables 60 39 34 Other revenues 4 8 10 Total operating revenues 1,075 933 853 Vessel and rig operating expenses 414 364 351 Reimbursable expenses 56 37 31 Depreciation and amortisation 12
Slide 8: Total Seadrill
Total Seadrill Unaudited accounts in USD millions 3Q10 2Q10 1Q10 Net operating income 431 384 332 Financial items Interest income 9 9 19 Interest expense -98 -58 -48 Share in results from associated companies 15 5 18 Gain related to acquisition of Scorpion 0 167 0 Other financial items 41 -123 -75 T
Slide 9: Assets
Seadnill Assets Unaudited accounts in USD millions 30.09.10 30.06.10 31.03.10 Current assets Cash (incl restrictive) 724 893 449 Marketable securities 524 408 708 Accounts receivable 574 536 402 Other current assets 766 578 611 Total current assets 2,587 2,415 2,170 Non-current assets Investments in
Slide 10: Liabilities and Shareholders Equity
Liabilities and Shareholders Equity 10
Slide 11: Worldwide operations
Worldwide operations Europe - 5 units Newbuilds - 10 units - 3 Semis - 1 Jack-up - 1 Drillship -1 Semi -2 Drillships GoM - 1 unit - 1 HE jack-up - 1 Semi - 5 BE jack-ups - 1 Semi-tender South America - 7 units - 3 Semis - 1 Drillship - 3 Jack-ups Southeast Asia - 2 units - 2 Semis Africa - 5 units -
Slide 12: Market view
Market view Market prospects suggest stable or 160 WTI Spot Price increasing oil prices 140 120 US$ per barrel Decreasing production triggers more 100 80 drilling in existing reservoirs 60 40 20 Exploration for oil reserves takes place 0 M 00 M 01 M 02 M 03 M 04 M 05 M 06 M 07 M 08 M 09 0 N 01
Slide 13: Seadrill orders six newbuilds in 4Q 2010
Seadrill orders six newbuilds in 4Q 2010 2 ultra-deepwater units Samsung design 12,000ft water depth capacity Total project cost per rig US$600 million Delivery scheduled in 1Q/2013 and 2Q/2013 Options for two additional units 4 benign environment jack-ups Friede & Goldman JU2000E de
Slide 14: New ultra-deepwater drillships with increased capacities
New ultra-deepwater drillships with increased capacities West Gemini New drillships Water depth 10,000ft 12,000ft Riser 7,000ft 10,000ft Top-drive / Hook load 1,000 st 1,250 st Compensator main derrick 500 st 750 st BOP 6 rams 7 rams Accommodation 180 people 200 people Crane capacity - Additional ga
Slide 15: New jack-up rigs with increased operational capacities
New jack-up rigs with increased operational capacities MOD V B JU 2000E Operating area Benign waters (0 deg C) Southern North Sea (-20 deg C) Water depth 400ft 400ft Hook load 750 st 1000 st Cantilever combined loads 1,250 st @ 18 m extension 1,360 st @ 21m extension Variable deck-load 3,750 st 4,15
Slide 16: US$8.5 billion contract backlog - Floaters
US$8.5 billion contract backlog - Floaters Superb earnings visibility 16
Slide 17: US$2 billion contract backlog - Jack-ups
US$2 billion contract backlog - Jack-ups Sound market outlook for premium rigs 17
Slide 18: US$1.5 billion contract backlog - Tender rigs
US$1.5 billion contract backlog - Tender rigs Improved market conditions 18
Slide 19: Dividend distribution and policy
Dividend distribution and policy Dividend resolved at US$0.65 per share Increase reflects strong earnings visibility and increasing free cash flow Future dividend depends on: Debt leverage Contract coverage Capital expenditure programs and other investments Free cash flow Business ou
Slide 20: Seadrill is uniquely positioned
Seadrill is uniquely positioned Brand new fleet of rigs (supplemented by newbuild orders) Sound operations Global presence Strong contract backlog and earnings visibility Unique bank relationships Confidence and trust from the equity markets Track record of accretive investments and M&
Slide 21: Asset portfolio
Asset portfolio Core fleet – 43 units built after 2000 11 built before 2000 14 Ultra-Deepwater Units + 1 Deepwater Unit 1 Mid-water semi 19 High Specification Jack-ups 2 Jack-ups 9 Tender Rigs 8 Tender Rigs Shareholdings Shareholdings 9.4% of Pride (MV - US$518m) 52.3% of Seawell (MV - US$663m) 23.6