Transocean Ltd (switzerland) · NYSE:RIG
Transocean Ltd (switzerland) — Transocean — Merger or Acquisition (September 2018)
25 slides from Transocean Ltd (switzerland)'s merger presentation, Sep 4, 2018
Slide 1: Transocean Announces Acquisition of Ocean Rig
Transocean Announces Acquisition of Ocean Rig September 4, 2018
Slide 2: Legal Disclaimer: Forward-Looking Statements
LEGAL DISCLAIMER Forward-Looking Statements The statements described in this presentation that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Thes
Slide 3: Fleet Transformation: Acquisition Highlights
DIVEST UPGRADE 3 FLEET TRANSFORMATION ACQUIRE ACQUISITION HIGHLIGHTS: Adds High-Quality Rigs at Attractive Value Contributes Backlog and Increases Exposure to Market Recovery Maintains Liquidity and Balance Sheet Integrity
Slide 4: Strategic Rationale: Adds High-Quality Rigs at Attractive Value
4 STRATEGIC RATIONALE Adds High-Quality Rigs at Attractive Value Eleven rigs, including nine high-quality, high-specification ultra-deepwater drillships and two harsh environment semisubmersibles, enhancing Transocean’s fleet Attractive asset-level valuation on existing rigs of ~$278 million per flo
Slide 5: Strategic Rationale: Contributes Backlog and Increases Market Recovery Exposure
5 STRATEGIC RATIONALE Increases Transocean's already industry-leading backlog by ~$740 million* Enhances Transocean’s exposure to, and ability to capitalize on, the recovery of the UDW drilling market 59 rig years to be awarded for 87 programs over the next 18 months* Pro forma fleet will include 17
Slide 6: Strategic Rationale: Maintains Liquidity and Balance Sheet Integrity
6 STRATEGIC RATIONALE * Pro forma as of June 30, 2018 Maintains Liquidity and Balance Sheet Integrity Provides significant cost synergies Estimated at ~$70 million annually Benefits from standardization: common equipment, spare parts, and training Maintains Transocean's strong financial position Oce
Slide 7: Transaction Summary
TRANSACTION SUMMARY 7 Note: Market data based on Transocean share price of $12.11 on August 31, 2018 * Excludes remaining capex for the newbuilds and includes MSA termination charge Transaction Transocean to acquire Ocean Rig in a transaction valued at ~$2.7B*: Consideration of $12.75 in cash and 1.
Slide 8: Sources & Uses
SOURCES & USES* 8 * Numbers shown to nearest $5 million for illustrative purposes; excludes transaction costs ** Ocean Rig cash on the balance sheet is $719M as of June 30, 2018; $670M reflects estimated balance as of December 31, 2018 *** Based on Transocean’s closing price of $12.11 on August 31,
Slide 9: High-Quality Rigs at Attractive Value
HIGH-QUALITY RIGS AT ATTRACTIVE VALUE 9 * Based on Transocean share price of $12.11 on August 31, 2018; Excludes newbuilds; Includes MSA termination charge ** Assumes ~95% revenue efficiency, cost synergies, and 10.0% discount rate; Eirik Raude, Leiv Eiriksson and Paros *** Source: Fearnley Drillers
Slide 10: Compelling Asset Valuation: Ocean Rig Recent Transactions
10 * On May 9, 2018, Northern Drilling acquired the West Aquila and West Libra for $296 million each and has a six-month option to acquire the Cobalt Explorer for $350 million ** Assumes rig is delivered to location for initial contract and accepted HIGH-QUALITY RIGS AT ATTRACTIVE VALUE Compelling A
Slide 11: Continues Fleet Transformation
11 * Reflects the retirement of Transocean’s C.R. Luigs and Songa Delta ** Reflects the retirement of Transocean’s C.R. Luigs and Songa Delta. Includes four rigs under construction (two each, Transocean and Ocean Rig) and the Transocean Norge (33% JV ownership interest) 45% UDW & HE 86% UDW & HE 89%
Slide 12: Further Enhances Transocean's Fleet Versus Competition
12 Further Enhances Transocean’s Fleet Versus Competition Note: Based on public company filings. * Includes the Transocean Norge (33% JV ownership interest) ** Seadrill Group HIGH-QUALITY RIGS AT ATTRACTIVE VALUE PF * * 6 6 3 6 1 1 4 2 1 2 2 32 23 19 19 11 9 11 7 7 1 4 1 1 1 14 12 8 2 5 57 44 28 24
Slide 13: Best-in-Class Technical Specifications
13 # of Floaters Ultra-deepwater Dynamically Positioned Only 35 24 20 20 7 11 11 4 7 1 4 Dynamically Positioned and Moored 3 3 0 7 1 0 0 3 0 0 0 Dual BOPs 14 11 4 6 4 3 0 3 3 1 4 HPHT-Ready (20,000 psi) 7 7 na na na na na na na na na Hoisting: Dual Activity 32 22 10 9 4 10 7 7 5 1 4 Hook load capaci
Slide 14: Highest Concentration of the Best Assets
14 Note: Peers include DO, ESV, NE, RDC, and SDRL * Source: Transocean’s proprietary rig ranking tool ** Assumes that Ocean Rig’s assets are equipped with two BOPs; includes four rigs under construction (two each, Transocean and Ocean Rig) Rigs in Top 100 UDW Rigs in Top 50 UDW Transaction secures 3
Slide 15: High-Specification UDW Additions to Transocean's Fleet
15 High-Specification UDW Additions to Transocean’s Fleet Four Enhanced Samsung 12,000 ft. Drillships Four Enhanced Samsung 10,000 ft. Drillships Rig Name Mylos / Skyros / Athena / Apollo Corcovado / Olympia / Poseidon / Mykonos Rig Type DP Class 3, Enhanced Samsung 10000 DP Class 3, Enhanced Samsun
Slide 16: Newbuilds Increase Exposure to Market Recovery
16 Enhanced Samsung 12,000 ft. Drillship Enhanced Samsung 12,000 ft. Drillship Rig Name Santorini Crete Rig Type DP Class 3 / MODU DP Class 3 / MODU Shipyard Samsung Heavy Industries Samsung Heavy Industries Delivery Date September 2019 September 2020 Water Depth Capacity 12,000 ft. 12,000 ft. Drill
Slide 17: Additive to Already Industry-Leading Backlog
17 Additive to Already Industry-Leading Backlog ~$12.5 Billion Contract Backlog* with Average Dayrate of ~$413k Over 95% with Investment Grade Companies * Backlog as of July 2018. Contracted operating dayrate multiplied by the contract duration for future periods as of latest company filings ** Ultr
Slide 18: Backlog Far Surpasses Peers
18 Far Surpasses Peers * Backlog as of July 2018 Backlog ($B) ~5x greater than closest peer BACKLOG* AND EXPOSURE TO MARKET RECOVERY PF ~ $12.5 $11.7 $2.6 $2.3 $2.2 $0.7 $0.4 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 NE ESV DO ORIG RDC
Slide 19: Floater Market Recovery
Floater Market Recovery 19 Source data © 2018 IHS. All rights reserved. No IHS data/deliverables may be reproduced, reused, or otherwise distributed in any form without IHS’ prior written consent. June 2018 Contracting has increased since 2016 BACKLOG AND EXPOSURE TO MARKET RECOVERY 0 5 10 15 20 25
Slide 20: Numerous Floater Awards on the Horizon
20 Numerous Floater Awards on the Horizon 2 # Number of programs <6 months 6-12 months >3 years 1-3 years 59 rig years to be awarded 87 programs Majors 2 4 1 2 1 1 1 1 3 1 3 4 1 1 1 2 6 3 3 4 8 1 1 5 12 2 1 1 1 8 Source data © 2018 IHS. All rights reserved. No IHS data/deliverables may be reproduced
Slide 21: Continued UDW Dayrate Improvement is Projected
BACKLOG AND EXPOSURE TO MARKET RECOVERY 100% (2 yrs) 94% 92% 81% 68% 65% 65% 70% 83% 84% 85% Utilization Projection Continued UDW Dayrate Improvement is Projected Source: Wood Mackenzie 21 Day rate($000) $600 $500 $400 $300 $200 $100 $0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Slide 22: Cost and Operational Synergies
Cost and Operational Synergies 22 ~$70M of expected annual pre-tax cost synergies SG&A savings OEM maintenance agreements Supply chain / logistics savings Performance efficiencies / technology / real time decision making Insurance premium reductions Leading industry UDW / HE experience and fleet man
Slide 23: Accomplishments and Liquidity Position
23 Acquired Songa Offshore 33.3% JV interest in Transocean Norge Transocean Partners Sold jackup fleet Added ~$320M in cash Removed ~$1B in shipyard obligations Raised ~$5.0B through seven separate debt transactions since July 2016 Opportunistically repurchased ~$3.5B in debt via tender offers and e
Slide 24: Greatest Liquidity Among Peers
24 * Liquidity defined as cash and cash equivalents + short term investments + available revolver. Liquidity excludes restricted cash ** Liquidity shown on a pro forma basis as of 6/30/2018 Greatest Liquidity Among Peers Liquidity* Available Revolver Cash and Cash Equivalents and Short-term Investme
Slide 25: The Right Assets, the Right Value, at the Right Time
25 Contributes Backlog and Increases Exposure to Market Recovery Adds High-Quality Rigs at Attractive Value Maintains Liquidity and Balance Sheet Integrity P P P The Right Assets, the Right Value, at the Right Time Acquisition of Ocean Rig