Seadrill Limited · NYSE:SDRL
Seadrill — Q1 2011 Earnings Presentation
23 slides from Seadrill's earnings presentation, May 27, 2011
Slide 1: Conference call – Q1 2011 results
Conference call – Q1 2011 results May 27, 2011
Slide 2: Contents
Contents Highlights 1Q 2011 1Q 2011 accounts Newbuild orders Market view Fleet status Dividend policy Summary 2
Slide 3: Highlights – First quarter 2011
Highlights – First quarter 2011 EBITDA of US$573m compared to US$592m in the preceding quarter (ex gain on sale) Net income of US$823m, including US$477m in accounting gain on Seawell merger, and earnings per share of US$1.84 Cash dividend of US$0.75 per share Establishes a harsh environment
Slide 4: Subsequent events
Subsequent events Exercises our right to call the remaining US$750 million of the 2012 convertible bond Repurchases 2.5 million of its own common shares Orders a new ultra-deepwater drillship at Samsung for an all-in cost of US$600 million Secures new contracts with an estimated value of US$
Slide 5: Financial performance highlights
Financial performance highlights Changed segment reporting, introduced Jack-up rigs as a separate segment Seawell, now renamed Archer deconsolidated February 23, 2011 EBITDA US$573m (US$592m) Earnings per share US$1.84 per share (US$0.61 per share) Operating profit US$430m (US$453m) Fina
Slide 6: EBITDA contribution
Seadrill EBITDA contribution USD millions 700 —- 618 25 5 28 600 -- a | = 11. «573 — 500 -- 400 300 + 246 234 924 200 + 100 -- 4Q10 [reser Jack-up | Tender| Well | 1Q11 rigs rigs | services Gain from sale of assets
Slide 7: Operating Income
Seadnill Operating Income Total Seadrill Unaudited accounts in USD millions 1011 4Q10 3Q10 2Q10 Operating revenues 1 081 1105 1022 886 Reimbursables 26 60 60 39 Other revenues 3 4 4 8 Total operating revenues 1110 1 169 1 086 933 Gain on sale of assets 0 26 0 0 Vessel and rig operating expenses 460
Slide 8: Net Income
Seadnill Net Income Total Seadrill Unaudited accounts in USD millions 1011 4Q10 3Q10 2Q10 Net operating income 430 479 431 384 Financial items Interest income 6 6 9 9 Interest expense -77 -109 -98 -58 Share in results from associated companies 19 10 15 5 Gain on derivatives 41 77 75 -168 Other finan
Slide 9: Operating Income – Floaters
Operating Income Floaters Unaudited accounts in USD millions 1011 4010 3Q10 2Q10 Operating revenues 624 616 550 504 Reimbursables 17 11 27 11 Other revenues 9 10 10 8 Total operating revenues 650 637 587 523 Gain on sale of assets 0 0 0 0 Vessel and rig operating expenses 205 191 160 149 Reimbursabl
Slide 10: Operating Income – Jack-up rigs
10 Operating Income Jack-up rigs Unaudited accounts in USD millions 1011 4010 3Q10 2Q10 Operating revenues 204 181 192 117 Reimbursables 2 7 10 2 Other revenues -6 -6 -6 -2 Total operating revenues 200 182 196 117 Gain on sale of assets 0 26 0 0 Vessel and rig operating expenses 89 92 88 51 Reimburs
Slide 11: Operating Income – Tender rigs
Seadnill Operating Income Tender rigs Unaudited accounts in USD millions 1011 4010 3Q10 2Q10 Operating revenues 126 136 125 123 Reimbursables 3} 2 3 2 Other revenues 0 0 0 0 Total operating revenues 129 138 128 125 Gain on sale of assets 0 0 0 0 Vessel and rig operating expenses 56 41 48 47 Reimburs
Slide 12: Operating Income – Well Services
12 Operating Income Well Services Unaudited accounts in USD millions 1011 4010 3Q10 2Q10 Operating revenues 127 172 155 142 Reimbursables 4 41 20 24 Other revenues 0 0 0 2 Total operating revenues 131 213 175 168 Gain on sale of assets 0 0 0 0 Vessel and rig operating expenses 110 141 129 117 Reimbu
Slide 13: Seadrill Balance Sheet – Assets
Seadnill Seadrill Balance Sheet Assets Unaudited accounts in USD millions 31.03.11 31.12.10 Current assets Cash (incl restrictive) 971 910 Marketable securities 759 598 Accounts receivable 440 696 Other current assets 595 679 Total current assets 2765 2 883 Non-current assets Investments in associat
Slide 14: Seadrill Balance Sheet – Liabilities and Equity
14 Liabilities and Shareholders Equity Seadrill Balance Sheet Unaudited accounts in USD millions 31.03.11 31.12.10 Current liabilities Current portion of long-term debt 987 981 Other current liabilities 1 326 1 534 Total current assets 2 313 2515 Non-current liabilities Long-term interest bearing de
Slide 15: Worldwide operations
Worldwide operations North Atlantic - 5 units Newbuilds - 14 units - 3 Semis - 1 Jack-up - 2 Semis - 1 Drillship - 3 Drillships - 2 HE jack-ups Americas - 9 units - 4 BE jack-ups Gulf of Mexico - 3 Tender rigs - 2 Semis South America - 3 Semis - 1 Drillship - 3 Jack-ups Asia Pacific - 26 units - 2 S
Slide 16: Newbuild portfolio increased by 5 units
Newbuild portfolio increased by 5 units 1 HEJU ordered from Fleet development Jurong for US$530m against 5 year contract with ConocoPhillips 1 ultra-deepwater drillships ordered on speculation from Samsung for US$600 million 3 tender rigs ordered from COSCO for a price per rig of US$115m of wh
Slide 17: Market development
Market development Favorable oil price environment Brent Spot Price 160 140 Strong growth in E&P spending 120 100 US$ per barrel 80 Trend towards more challenging and 60 complex resources continues 40 20 0 Industry focused on new equipment M 04 M 05 M 06 M 07 M 08 M 09 M 10 M 11 Ja 4 Ja 5 Ja
Slide 18: US$8.4 billion contract backlog - Floaters
US$8.4 billion contract backlog - Floaters Staggered contract portfolio offers flexibility 18
Slide 19: US$2.4 billion contract backlog - Jack-ups
US$2.4 billion contract backlog - Jack-ups Strong interest in premium rigs continues 19
Slide 20: US$1.8 billion contract backlog - Tender rigs
US$1.8 billion contract backlog - Tender rigs Market support strong EBITDA margins 20
Slide 21: Dividend distribution and policy
Dividend distribution and policy Cash dividend resolved at US$0.75 per share Increase reflects improved free cash flow and earnings visibility Future dividend depends on: Contract coverage Capital expenditure programs and other investments Debt leverage Business outlook US$ Regular cas
Slide 22: Seadrill is uniquely positioned
Seadrill is uniquely positioned Diverse versatile fleet of brand new rigs Operations expanded to new geographical regions Strong operational performance Market prospects are improving for all asset classes Flexibility to meet demand growth though newbuild program and newbuild options NAD
Slide 23: Asset portfolio
Asset portfolio Core fleet – 50 units built after Y2000 10 built before Y2000 17 Ultra-Deepwater Units + 1 Mid-water semi 1 Mid-water Semi 20 High Specification Jack-ups 2 Jack-ups 12 Tender Rigs 7 Tender Rigs Shareholdings Shareholdings 9.3% of Pride (MV - US$686m) 36.5% of Archer (MV - US$720m) 23