Slide 1: Seadrill Limited
Seadrill Limited Per Wullf, Chief Executive Officer
Slide 2: Disclaimer
Disclaimer We have prepared this document solely for informational purposes. You should not definitively rely upon it or use it to form the definitive basis for any decision, contract, commitment or action whatsoever, with respect to any proposed transaction or otherwise. You and your directors, off
Slide 3: Agenda
Agenda Seadrill Overview Oil Market Fundamentals Seadrill Focus Areas 3
Slide 4: Seadrill at a glance
Seadrill at a glance 6,500 employees operating in over 18 countries Seadrill Limited (includes NADL, Sevan and AOD) 38 rigs in operation: 19 floaters and 19 jack-ups (11 idle units) 2015 Revenue: $4.3 billion 2015 EBITDA: $2.4 billion Seadrill Group (Seadrill Limited, SDLP and Seamex) 54 rig
Slide 5: One of the largest Offshore Drillers
One of the largest Offshore Drillers… Floater Units 60 50 Number of Units 40 30 SDLP 20 10 0 Transocean Seadrill Diamond Ensco Noble Ocean Rig COSL Maersk Pacific Atwood Vantage Offshore Drilling Drilling Drilling Jack-up Units 50 40 Number of Units 30 20 SMX 10 0 Ensco COSL Paragon Rowan Seadrill N
Slide 6: …with a Modern Fleet…
…with a Modern Fleet… Average Floater Age Vantage Drilling Pacific Drilling Maersk Drilling Seadrill Partners Ocean Rig Seadrill Atwood Noble Ensco Transocean COSL Diamond Offshore 0 5 10 15 20 25 30 35 40 Average Jack-up Age Atwood Seamex Seadrill Vantage Drilling Maersk Drilling Transocean Noble C
Slide 7: …and Exposure to Premium Segments
…and Exposure to Premium Segments 120% Pacific Ocean Rig Note: Size of bubble % Ultra-Deepwater 100% Vantage indicates number of Noble units 80% Maersk Ensco 60% Atwood Transocean 40% Diamond Offshore 20% COSL 0% 0 5 10 15 20 25 30 35 Average Age of Floaters 120% Vantage Transocean 100% Seamex % > 3
Slide 8: Our Strategy
Our Strategy Operations Pursue best in class, safe and efficient operations Achieve sustainable, competitive cost structure Rigs Maintain a young fleet Composition of fleet to reflect customer demand Customers and organization Identify opportunities for long-term strategic partnerships D
Slide 9: Agenda
Agenda Seadrill Overview Oil Market Fundamentals Seadrill Focus Areas 9
Slide 10: Oil demand growth projection
Oil demand growth projection Base case demand forecast (mbbl/d) +4 83.3 84.2 81.7 82.6 80.2 80.9 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 Source: Morgan Stanley Research Oil demand expected to increase 10
Slide 11: Supply cost curve
Supply cost curve Cost Curve 2020 Production 120 Weighted Average breakeven 100 Oil 80 Ultra Sands Deepwater Deepwater Onshore Onshore Row 60 Offshore Russia 54 Shelf 42 50 42 40 36 36 46 Onshore 32 43 Middle East NAM 20 Shale Extra 13 Arctic Heavy Oil 0 0 10 20 30 40 50 60 70 80 90 100 2020E Liquid
Slide 12: Offshore is a Critical Source of Future Supply
Offshore is a Critical Source of Future Supply Over half of production growth through 2020 expected to come from the offshore segment Global Liquid Production (mbbl/d) 1.8% observed field decline rate New Projects Deepwater (8.9MMbd) Shallow Water Nam Onshore RoW Onshore Deepwater Shallow Water Pr
Slide 13: Agenda
Agenda Seadrill Overview Oil Market Fundamentals Seadrill Focus Areas 13
Slide 14: Last year, we spoke about five focus areas
Last year, we spoke about five focus areas 2 Shipyards 3 Cost competitiveness 1 Safe and efficient operations 4 Commercial 5 Financing 14
Slide 15: Utilization at record highs and improved HSE
Utilization at record highs and improved HSE +8 pts 1 Safe and efficient operations 2014 2015 2016 YTD Economic utilization – 2014, 2015, 2016 YTD Hurt levels in Aug 2014… …much lower today Hurts Trend – 2014, 2015, 2016 YTD 15
Slide 16: Managing deliveries effectively
Managing deliveries effectively 2 Original deliveries deferred to 2017 2 drillships Discussions on further deferrals ongoing (Samsung) 2 drillships Original deliveries deferred to 2018 and 2019 Shipyards (DSME) 8 jack-ups Original deliveries deferred to 2017 and 2018 (Dalian) Discussions o
Slide 17: Improvement in cost basis
Improvement in cost basis 3 OPEX per rig per day including overhead ($’000) -26% Cost ??? Floaters competitiveness 2014 2015 2016 YTD Q2 Long-term -25% Jack-ups ??? 2014 2015 2016 YTD Q2 Long-term 17
Slide 18: What’s the view from where we stand?
What’s the view from where we stand? Key questions for the industry in these tough times 4 What will it take for the rig • Some 120 rigs have been cold stacked market to be back in balance? since the downturn started, but we need more stacking / retirements to balance Commercial Have we hit bott
Slide 19: We have delivered on the first four areas
We have delivered on the first four areas 2 Shipyards 3 Cost competitiveness 1 Safe and efficient operations 4 Customers 5 Financing 19
Slide 20: Financing Plan
Financing Plan 1 Covenant Waiver 5 Refinancing Supported by: 4 − New Build Deferral 2 − Strong Operations Amendment and Engage Bondholders − Rigorous Cost Savings Extension of Bank − Dividend Suspension Facilities − Limit Other Cash Leakage 3 Prospect for New Capital 20
Slide 21: Summary
Summary Strong operations and a young fleet There is a future for offshore drilling High barriers to entry and investment costs for new entrants We have focused on the right things And now we’re focused on the financing plan 21