Tidewater Inc. · NYSE:TDW
Tidewater — Pareto Oil & Offshore Conference 2019
36 slides from Tidewater's conference presentation, Sep 12, 2019
Slide 1: Company Overview
Company Overview Pareto Oil & Offshore Conference Quintin Kneen President, Chief Executive Officer and Director September 12, 2019
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Tidewater Inc. (the “Company”) notes that certain statements set forth in this Current Report on Form 8-K provide other than historical information and are forward lookin
Slide 3: Tidewater Overview
Tidewater Overview TDW $15.19 Market Cap $632 million Based on 41.6 million shares and $0.001 warrants As of September 5, 2019 market close Founded 1955 Created the industry’s first Offshore Support Vessel Cash & Equiv $383 million Net Debt $52 million Vessel Fleet 223 Distributed across the globe,
Slide 4: Peer Market Cap & Price Comparison
Peer Market Cap & Price Comparison Source: FactSet, NYSE, Oslo Bors and Company filings as of September 5, 2019 Note: Tidewater market cap based on common stock + Jones Act Warrants for total share count of 41.6 million * YTD 2019 as of September 5, 2019 market close Net Capitalization Equity Market
Slide 5: The Largest OSV Owner Globally
Source: IHS Petrodata (Aug 2019), Tidewater, company disclosures Vessel Count (AHTS & PSVs) as of June 30, 2019 All Others (~2,400 total vessels for 500+ owners) 223 Total Fleet Incl. All Vessel Types 198 OSVs The Largest OSV Owner Globally 1,200 Est. global stacked/idle fleet ~67% out of service fo
Slide 6: The Most Geographically-Diverse OSV Operator
Note: Figures represent Tidewater active vessel fleet at June 30, 2019 Headquarters Area Operations Deepwater Towing/Supply Other The Most Geographically-Diverse OSV Operator Avg. Active Fleet Age 9.4 Years Active Fleet 163 Vessels Utilization 82.3% Utilization 76.0% Utilization 74.7% Active Utiliza
Slide 7: Industry Demand Fundamentals Improving
Industry Demand Fundamentals Improving… Incremental drilling activity is the most visible demand driver that requires incremental vessel activity, particularly high specification PSV’s Drilling activity bottomed in 2017 and is anticipated to continue to improve Source: Arctic Securities, Tidewater (
Slide 8: Production Support is an Important, Growing Source of Demand
Production Support is an Important, Growing Source of Demand In general, production support represents 45-55% of the demand for OSV’s OSV intensity for production likely to increase due to complexity of field developments and distance from shore Source: Arctic Securities, Tidewater (August 2019) Par
Slide 9: Industry Supply Dynamics Also Improving
Industry Supply Dynamics Also Improving Pareto Oil & Offshore Conference | Sept 2019 | ©Tidewater Inc Global OSV Fleet Active (2,159) Stacked & Idle (1,222) Newbuilds (194) Continued Supply Attrition Active fleet attrition due to maintenance costs Newbuilds will not all deliver Actual Supply Relevan
Slide 10: Mandatory Maintenance Cycles Become Catalyst to Stack
Mandatory Maintenance Cycles Become Catalyst to Stack Source: IHS Markit, Tidewater (August 2019) 1st Special 2nd Special 3rd Special 4th Special Special Survey due in 2019 Special Survey due in 2020 Special surveys are required every 5 years and often coincide with costly maintenance cycles Costs i
Slide 11: Vessel Demolitions Outpacing Newbuild Deliveries
Vessel Demolitions Outpacing Newbuild Deliveries Source: IHS Markit, Tidewater (August 2019) OSV Demolitions, Conversions & Removals from Service 38 OSVs sold or recycled by Tidewater in 2018 (18 recycled) 35 Tidewater vessels sold (10) or recycled (25) as of June 2019 (out of 40 targeted by year en
Slide 12: More Demolitions Likely; Newbuilds Unlikely to Deliver
More Demolitions Likely; Newbuilds Unlikely to Deliver Source: Arctic Securities, IHS Markit, Tidewater (August 2019) 60% low specification 91% built in China, India or other shipyards 5.6 Average number of years under construction (2-3 years normally) $+ Price expectations for newbuilds assumes nea
Slide 13: High Specification PSVs Leading the Recovery
High Specification PSVs Leading the Recovery Source: Clarksons Research Services Ltd. Pareto Oil & Offshore Conference | Sept 2019 | ©Tidewater Inc
Slide 14: High-Spec OSV Rates are Rising
High-Spec OSV Rates are Rising Source: Clarksons Platou Offshore, Tidewater (August 2019) U.S. Gulf of Mexico: Large PSVs West Africa: Large PSVs North Sea: Large PSVs Middle East: Mid-sized PSVs +49% +127% +44% +68% Pareto Oil & Offshore Conference | Sept 2019 | ©Tidewater Inc
Slide 15: Revenue Backlog and Visibility
Revenue Backlog and Visibility Balancing cash flow visibility with the ability to re-price contracts into an improving market Secured contracts into 2025 for lower specification vessels, despite customer tendency to contract shorter term Significant optionality remains for the highest specification
Slide 16: Disciplined Capital Deployment: 2nd Half 2019 Dockings
Disciplined Capital Deployment: 2nd Half 2019 Dockings Deepwater Towing Supply Count Total Cost Contracted Backlog Average Dry Dock Payback 33 dry docks $35.7m total cost $201m contracted revenue 254 days avg. payback Remaining (second half) 2019 dry docks supported by firm, multi-year contract back
Slide 17: 2019 Vessel Reactivations
2019 Vessel Reactivations Avg. Cost for Reactivation per Vessel $1.8 million Approx. Associated Backlog (excl. options) $147 million Approx. Term (excl. options) 36 vessel years 12 Pareto Oil & Offshore Conference | Sept 2019 | ©Tidewater Inc 2 Vessels scheduled to complete reactivation and begin co
Slide 18: High Grading the Fleet for Best Opportunities
High Grading the Fleet for Best Opportunities Combined Fleet at Merger with GulfMark (273 total vessels/173 active vessels) Current Fleet (June 30, 2019) (223 total vessels/163 active vessels) 12 reactivations (avg DWT 3,100t) 52 disposals (avg DWT <1,800t) 14 new stackings (avg DWT <2,150t) 2 acqui
Slide 19: Improved Identification of Cost Synergies
Improved Identification of Cost Synergies Pro Forma G&A Profile 7 June 2018 Pro Forma G&A Profile Today Integration progressing extremely well with run-rate annual G&A expected to now approximate $87 million by year end 2019 Target run-rate G&A now below Tidewater’s stand alone Q3 2018 run-rate G&A
Slide 20: G&A Cost Trends
G&A Cost Trends Strong focus on becoming the most cost efficient OSV operator Reducing G&A spend without compromising our core values of safety, compliance and service is differentiating Developing a truly scalable platform Substantial majority of incremental activity and increases in day rate fall
Slide 21: Strategic Priorities
Strategic Priorities Leadership in safety, compliance and operational excellence Protect and preserve strong liquidity position Efficient and complete realization of merger-related synergies and continued process improvement to expand margins Rationalization of fleet and cost structure to provide sc
Slide 22: Why you should own Tidewater
Why you should own Tidewater A truly investable name in the offshore sector Operational Excellence Leading OSV Fleet Financial Strength An industry leader in safe operations The broadest operating footprint; leveraged to existing and developing markets Strong relationships with IOCs, NOCs and indepe
Slide 23: Tidewater Inc.
TIDEWATER INC. Worldwide Headquarters 6002 Rogerdale Road Suite 600 Houston, Texas 77072 USA P: +1 713 470 5300 ‘wwwetdw.com
Slide 24: Appendix I – Reference
Appendix I – Reference
Slide 25: Safety Leadership Remains a First Priority
0.14 10 year average Safety Leadership Remains a First Priority Total Recordable Incident Rates 2007-2018 (per 200,000 Man Hours) TRIR = Sum of LTAs and Recordables x 200,000 divided by Man Hours Worked 0.0 1.0 0.5 0.0 1.0 0.5 0.12 2018 Pareto Oil & Offshore Conference | Sept 2019 | ©Tidewater Inc
Slide 26: Board of Directors
Board of Directors Alan Carr CEO, Drivetrain Dick Fagerstal Chairman & CEO Global Marine Holdings Quintin V. Kneen President & CEO, Tidewater Inc. Larry T. Rigdon Former Interim President & CEO, Tidewater Inc. Tom R. Bates, Jr. Chairman, Tidewater Inc. Steven L. Newman Former CEO, Transocean Ltd. Ra
Slide 27: Executive Management Team
Executive Management Team For additional information on the company executive management, please visit www.tdw.com/about-tidewater/corporate-officers/ Management incentive plan updates Ensuring that the company’s executive compensation program continues to evolve in alignment with its strategic obje
Slide 28: Vessel Utilization Trends Incrementally Improving
Vessel Utilization Trends Incrementally Improving Tidewater Fleet Utilization 2014 to Q2 2019 79.3% 57.0% Pareto Oil & Offshore Conference | Sept 2019 | ©Tidewater Inc
Slide 29: Vessel Average Day Rates Stable
Vessel Average Day Rates Stable Average Day Rates by Vessel Class 2014 to Q2 2019 Notes: GulfMark fleet included as of Nov 15, 2018 Spike in Q1 2017 average deepwater rates due to lump sum early contract termination payment Pareto Oil & Offshore Conference | Sept 2019 | ©Tidewater Inc
Slide 30: Fleet Valuation
Fleet Valuation Vessel Net Book Value as of June 30, 2019 Vessel Class Vessel Count NBV (in millions) Avg Age (years) Avg NBV/Vessel (in millions) Deepwater Vessels PSV's > 3,800 DWT 57 $ 533.1 7.6 $ 9.4 PSV's < 3,801 DWT 55 $ 245.4 11.1 $ 4.5 Deepwater AHTS's 19 $ 65.3 11.2 $ 3.4 131 $ 843.9 9.5 $
Slide 31: Oil Companies are Generating Record Cash Flow
Oil Companies are Generating Record Cash Flow Top 30 E&P's with offshore output - FCF (pre & post dividends) vs capex* Source: Bloomberg, Clarksons Platou Securities AS *All metrics are trailing 12 months Pareto Oil & Offshore Conference | Sept 2019 | ©Tidewater Inc
Slide 32: Current Oil Prices are (so far) Still Economic for Offshore Projects
Current Oil Prices are (so far) Still Economic for Offshore Projects Breakeven oil prices of discovered but undeveloped offshore resources Perspectives Nearly all offshore oil makes sense near current prices after fall in marginal production costs Here we look at discovered but undeveloped resources
Slide 33: Working Rig Count is Improving
Working Rig Count is Improving Incremental OSV demand and utilization improvements will be partially driven by an increase in the working rig count Jackup utilization continues to gradually improve Floater utilization anticipated to improve through 2019 and into 2020 456 Total working rigs as of Aug
Slide 34: The North Sea – More Activity & Demand Improvements
The North Sea – More Activity & Demand Improvements Source: Clarksons Platou Securities Rigs Utilization North Sea PSV Utilization by Size April 2019 …as long as reactivations are limited this season North Sea Contracted Floating Rigs 2014 to 2019 Pareto Oil & Offshore Conference | Sept 2019 | ©Tide
Slide 35: West African Rig Count Driving OSV Demand
West African Rig Count Driving OSV Demand Rigs Utilization Vessels Source: Clarksons Platou Securities Active PSVs and Total Utilization 2014 to 2019 West Africa Rig Count by Type 2014 to 2019 Pareto Oil & Offshore Conference | Sept 2019 | ©Tidewater Inc
Slide 36: OSV Second Hand Prices Appear to have Bottomed
OSV Second Hand Prices Appear to have Bottomed Source: Clarksons Platou PSV Resale Prices as January 2019 PSV Newbuilding Prices as January 2019 …but transactions have been limited PSV Resale, Large, 1,000 m2 deck PSV Resale, Medium, 700 m2 deck PSV Resale, Medium, 800 m2 deck PSV 3,200 dwt, Europea