Odfjell Drilling Ltd. · OSL:ODL
Odfjell Drilling — Pareto Conference September 2024
28 slides from Odfjell Drilling's conference presentation, Sep 9, 2024
Slide 1: Investor Presentation
Investor Presentation September 2024 09.09.2024
Slide 2: Important Information
INTRODUCTION Important Information By reading this company presentation dated September 2024 (the results, financial condition, liquidity position, prospects, growth and “Presentation”), or attending any meeting or presentation held in relation strategies. These statements involve risks and uncertai
Slide 3: Harsh environment market leader, fully sold-out fleet, balanced market, dividends
Harsh environment Fully sold-out fleet Supply and demand well Dividend paying, market leader balanced with intention to increase
Slide 4: Odfjell Drilling at a Glance
OUR COMPANY Odfjell Drilling at a Glance Excellent operational • 51 years of pioneering harsh environment drilling performance and backlog • Fleet of advanced, modern and flexible rigs • Strong secured backlog with solid customers FORWARD BACKLOG • Robust balance sheet and liquidity position USD 2.1
Slide 5: The World's Most Flexible Drilling Units
OUR FLEET The World's Most Flexible Drilling Units Own Fleet External Fleet Deepsea Aberdeen Deepsea Nordkapp Deepsea Bollsta Deepsea Mira Breidablikk Development Alvheim Development SPS / Mobilising Congo Exploration Deepsea Atlantic Fram Field Deepsea Stavanger Hercules Deepsea Yantai Exploration
Slide 6: Fully sold-out fleet
Fully sold-out fleet
Slide 7: Strong Client Relationships and Backlog on Increasing Day rates
OUR FLEET Strong Client Relationships and Backlog on Increasing Day rates Priced Option Unpriced Options Contract ASSET 2023 2024 2025 2026 2027 2028 2029 2030 455k-465k 496k Deepsea Atlantic 400k (6G, UDW, HE) 315k – 335k 505k - 511k 460k Deepsea Aberdeen 447k (6G, UDW, HE) 385k 345k 315k – 335k 43
Slide 8: Growth Secured with Significant Free Cashflow Ahead
OUR FLEET Growth Secured with Significant Free Cashflow Ahead Completed work Firm Priced Options 610 Unpriced Options - 400k 585 450 258 Unpriced Options - 550k Unpriced Options - 600k 243 168 2023 2024 2025 2026 2027 ASSET SPECIFICATIONS 2023 2024 2025 2026 2027 2028 2029 2030 Deepsea Atlantic (6G,
Slide 9: Supply and demand well balanced
Supply and demand well balanced
Slide 10: Harsh Environment Semi Market is Tightening
OUR MARKET Harsh Environment Semi Market is Tightening Demand increasing whilst supply reduced 45 40 35 30 4 4 4 3 25 3 1 3 3 20 1 2 8 6 1 8 4 9 15 4 7 10 16 15 16 13 14 12 12 5 0 2020 2021 2022 2023 2024e 2025e 2026e Norway UK Namibia Other HE Rig Supply Source: Arctic Offshore Rig, S&P Petrodata,
Slide 11: No Newbuilds Expected
OUR MARKET No Newbuilds Expected • A new HE floater could take around four years from project sanction and cost USD 800 – 1000m KEY CONSIDERATIONS + CONFIDENCE - • We estimate upfront payments of around 50% Financing Terms required by yards Yard Terms • Day rate needed to justify a newbuild would ne
Slide 12: Dividend paying, with intention to increase
Dividend paying, with intention to increase
Slide 13: Dividend and Deleveraging
OUR FUTURE Dividend and Deleveraging Dividend History KEY CONSIDERATIONS OUTLOOK 0.06 0.06 0.06 0.06 0.06 Leverage ratio Total cash Cash flow visibility Q2 Q3 Q4 Q1 2024 Q2 Contract backlog Net debt and Leverage Ratio 645 620 Market position 582 575 544 THE OUTLOOK LOOKS BRIGHT… 2.2 2.1 2.0 1.8 1.8
Slide 14: Compelling Upside
OUR FUTURE Compelling Upside Analyst Forecasts CASH FLOW TO EQUITY 40 35 30 25 20 15 10 5 0 ODL Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 2025e 2026e Source: DNB Markets 14
Slide 15: Harsh environment market leader with exceptional track record
Harsh environment Fully sold-out fleet, with Supply and demand well Dividend paying, with market leader with all rigs moving from balanced creating strong intention to increase exceptional track record legacy day rates to much market dynamics, in near future higher value contracts entering a long-te
Slide 16: For further information, please contact
For further information, please contact: James Crothers, Investor Relations Officer jchu@odfjelldrilling.com www.odfjelldrilling.com 16
Slide 17: Appendix
Appendix 09.09.2024
Slide 18: Superior Operations and Uptime
OUR STRATEGY Superior Operations and Uptime Normalised well delivery time (days) Financial Utilisation 2016 - current 100.0% 100% 90.0% 80.0% 70.0% 7-year average Financial Utilisation of 97.5% Peer 1 +32% 60.0% 50.0% 40.0% 30.0% Peer 2 +45% 20.0% 10.0% 0.0% Peer 3 +50% Unique capacity for complex o
Slide 19: Positive Income Growth Through the Year
FINANCIAL REVIEW Positive Income Growth Through the Year Revenue (USDm) EBITDA (USDm) Net Profit (USDm) 85 87 83 85 85 24 184 186 192 194 191 21 5 6 7 6 7 38 39 44 42 45 16 14 11 83 83 79 81 80 145 147 147 151 145 Q2 Q3 Q4 Q1 2024 Q2 Q2 Q3 Q4 Q1 2024 Q2 Q2 Q3* Q4 Q1 2024 Q2 763 340 340 70 75 756 63
Slide 20: Robust Balance Sheet and Strong Liquidity
FINANCIAL REVIEW Robust Balance Sheet and Strong Liquidity Net debt (USDm) and Leverage Ratio Total Assets (USDbn) and Equity Ratio Available Liquidity (USDm) 2.3 2.3 645 620 2.2 2.2 582 226 TOTAL 575 544 2.1 165 63% 153 62% 2.2 132 UNDRAWN 2.1 60% 60% 145 115 RCF 2.0 1.8 1.8 57% 117 121 129 111 CAS
Slide 21: Revenue Generation Significantly Increasing from 2025 Onwards
BACKLOG Revenue Generation Significantly Increasing from 2025 Onwards Increasing Own Fleet Revenue Backlog, Excluding Bonuses and Add-ons (USD m) Priced Option Unpriced Options Contract ASSET LOCATION/OPERATOR 2024 2025 2026 2027 2028 2029 2030 Owned Fleet Deepsea Atlantic Norway (6G, UDW, HE) Equin
Slide 22: Emission reduction focus
SUSTAINABILITY Emission reduction focus Our focus is on enhancing our competitiveness, reputation, and long-term resilience, while also meeting the evolving expectations of stakeholders and regulators ✓ USD 50m invested in carbon-effiency projects across 7.00 14.0 the fleet 6.00 12.0 ✓ Hybrid Batter
Slide 23: No significant debt maturities until 2028
INSTALMENT PROFILE No significant debt maturities until 2028 777 Robust balance sheet with flexibility 722 • No significant debt maturities until 2028 607 • Capital structure allows for significant flexibility to achieve our long-term strategic goals 487 Balance Sheet Strategy 367 • Maintain prudent
Slide 24: Debt Facilities Overview
DEBT FACILITIES Debt Facilities Overview st Instrument USD 390m senior secured 1 lien USD 197m senior secured term loan USD 175m senior secured revolving USD 125m senior secured bond (Aberdeen & Atlantic) facility (Nordkapp) credit facility (Stavanger RCF revolving credit facility (Stavanger tranche
Slide 25: SPS Update
OPERATIONAL REVIEW SPS Update Two down, two to go • Deepsea Nordkapp and Deepsea Atlantic both now successfully completed Special Periodic Surveys • Deepsea Nordkapp completed without idle time • Deepsea Atlantic on budgeted time, with costs expected to be in line with expectations • Average capex a
Slide 26: Tier 1 HE Semi Availability
SEMI AVAILABILITY Tier 1 HE Semi Availability Rig Free Q4/2 Q4/ Tier 1: HE Semi Manager Year WD (ft) Region Operator Tier Q1/24 Q2/24 Q3/24 Q1/25 Q2/25 Q3 Q4 Q1/26 Q2/26 Q3/26 Status date 4 26 West Phoenix Seadrill 2008 10,000 NW Europe n.a. Yard Tier 1 Aug-24 2 2 2 2 2 2 2 2 0 0 00 0 0 0 0 0 0 0 0
Slide 27: Capital allocation strategy – summary
SUMMARY Capital allocation strategy – summary Financial Existing fleet Dividends Growth Robust balance sheet Leading harsh- Increasing quarterly Evaluate accretive with prudent leverage environment contractor distributions fleet expansion • Prudent debt level, with net • Disciplined investment in •
Slide 28: For further information, please contact
For further information, please contact: James Crothers, Investor Relations Officer jchu@odfjelldrilling.com www.odfjelldrilling.com 28