Slide 1: Conference Call – 3Q 2013 results
Conference Call – 3Q 2013 results November 25, 2013
Slide 2: Forward Looking Statements
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 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements which could be made
Slide 3: Seadrill Third Quarter Call Agenda
Seadrill Third Quarter Call Agenda • Highlights 3Q 2013 • Market outlook • Financial Performance Highlights • North Atlantic Drilling • Summaryg • Appendices: Seadrill Limited and North Atlantic Drilling Financials 3
Slide 4: Financial Performance Highlights
Financial Performance Highlights • Seadrill generates EBITDA of US$663 million Quarterly EBITDA for the third quarter 2013 • Economic utilization for our floaters was 94 percent and 97 percent for jack-ups • Seadrill reports third quarter 2013 net income of US$315 million and earnings per share of U
Slide 5: Highlights
Highlights Third Quarter 2013 •Ordered four ultra-deepwater drillships for a total estimated project price below US$600 million per rig, with deliveries in the second half of 2015 and the first half of 2016 •Ordered two jack-ups for a total estimated project price of US$230 million per rig, with del
Slide 6: Subsequent Events
Subsequent Events Subsequent Events •Announced settlement agreement and 18 month contract extension for the West Aquarius with a total estimated revenue potential of US$337 million •North Atlantic Drilling suspends partnership discussions and files for NYSE IPO •Completed the sale of the tender rig
Slide 7: Dividend Growth Continues to be a Priority…
Dividend Growth Continues to be a Priority… • Key objective to grow quarterly dividends • Quarterly cash dividend raised from 91 cents to 95 cents per share • Increase reflects improved free cash flow and newbuilds commencing operation this year • Future dividends depend on: – Contract coverage – Ca
Slide 8: …while Maintaining Growth Profile
…while Maintaining Growth Profile ~$4.5 Billion in 2016 Annualized EBITDA 8
Slide 9: Maintain an Orderbacklog of around $20bn
Maintain an Orderbacklog of around $20bn Current backlog US$ Millions 5.6 BP 24% A 5.8 4.7 Petrobras 12% BBB 4.1 4.7 4.7 Total 11% AA- 3.2 3.7 2.9 Exxon 10% AAA 2.9 1.4 Statoil 8% AA- 0,6 Others 35% - 9
Slide 10: Floaters – US$16 Billion Contract Backlog
Floaters – US$16 Billion Contract Backlog Contract coverage 6% 34% 53% 2013 2014 2015 2016 Contracted Uncontracted 100% 94% 66% 47% 10
Slide 11: Jack-ups - US$3 Billion Contract Backlog
Jack-ups - US$3 Billion Contract Backlog Contracted Uncontracted 1% 2013 99% 31% 2014 69% 57% 2015 43% 82% 2016 18% Note: Backlog generated by the tender rigs (T15, T16 and West Vencedor) is US$0.5 billion. 11
Slide 12: Culture of Safe & Efficient Operations
Culture of Safe & Efficient Operations • Recognized for providing highest quality operations, in the most challenging sectors of offshore drilling Quality of • Key focus on procedures to control, measure and improve performance and risk management operations • Competence assurance and on-hire testin
Slide 13: Market Outlook
Market Outlook Market Outlook 13
Slide 14: Global Operational Footprint
Global Operational Footprint Americas North Atlantic 13 units North Atlantic 7 units Canada London - 1 Semi - 4 HE Semis - 2 HE Jack-ups Gulf of Mexico - 1 Drillship - 3 Semis - 2 Drillships Gulf of Mexico Middle East - 1 Jack-up Asia Pacific South America - 5 Semis West Africa - 1 Jack-up Africa –
Slide 15: Recent Discoveries to Become Produced Volumes
Recent Discoveries to Become Produced Volumes Discovered resources 1980 to 2013 (Billion boe) 140 120 100 80 60 40 20 - 1980 1985 1990 1995 2000 2005 2013 Shelf Deep Water Ultra deepwater Resources discovered and produced 2000-2012 (Billion boe) 15 Source: Rystad Energy research and analysis; UCube
Slide 16: UDW Replacing Aging Deepwater Fleet
UDW Replacing Aging Deepwater Fleet Total Floater Utilization 100% Seadrill Noble 90% Ensco Diamond 80% Transocean 70% 11/10 02/11 05/11 08/11 11/11 02/12 05/12 08/12 11/12 02/13 05/13 08/13 11/13 Source: ODS Petrodata 16
Slide 17: Robust Jack-up Fundamentals
Robust Jack-up Fundamentals Age Development of Contracted Jack-up Fleet Jack-ups Removed from the Market # of rigs # of rigs 16 250 232 15 215 220 220 208 14 200 12 12 12 11 10 150 10 9 8 8 8 7 100 90 90 6 6 67 6 51 4 4 4 50 4 3 3 26 10 17 2 2 2 2 2 1 1 1 1 1 1 1 1 1 0 2013 2014E 2015E 2020E 0 1980
Slide 18: Financial Performance Highlights
Financial performance highlights Financial Performance Highlights 18
Slide 19: Financial Performance Highlights
Financial Performance Highlights Previous This quarter quarter EBITDA US$663 m US$665 m Earnings per share US$0.61 US$3.68 Operating profit US$471 m US$507 m Financial items and other income US$(96) m US$1,292 m Cash flow from operating activities US$1,204 m US$248 m Dividend declared per share US$0
Slide 20: Balance Sheet Summary
Balance Sheet Summary September June 30, 2013 30, 2013 Total Current Assets 2,562 2,978 Non-current assets Newbuildings 4,900 3,524 Drilling units 14,778 12,891 Other 2,739 2,408 Total non-current assets 22,417 18,823 TOTAL ASSETS 24,979 21,801 Current Liabilities Current portion of long-term debt 2
Slide 21: EBITDA Contribution
EBITDA Contribution Seadiill USS millions 800 4 700 600 500 400 300 200 100 3Q09 4Q09 1Q10 2010 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1013 2Q13 Floaters Jack-up Tender 3Q13 rigs rigs Gain from sale of assets 21
Slide 22: Financial Flexibility
Financial Flexibility Nov-2013 Actual 2015 Illustrative Capex Per Year (US$ billion) Floaters Jack-ups 4 3.5 3 2.5 2 1.5 1 0.5 0 2013 2014 2015 2016 22
Slide 23: In Excess of 15% EBITDA Growth in Q4
In Excess of 15% EBITDA Growth in Q4 23
Slide 24: North Atlantic Drilling Ltd.
North Atlantic Drilling Ltd. Third quarter 2013 results summary and market update
Slide 25: Third Quarter 2013 Highlights
Third Quarter 2013 Highlights • North Atlantic Drilling achieves an average economical utilization of 96 percent and generates US$143.7 million in EBITDA for the third quarter. • North Atlantic Drilling issues NOK 1,500 million, equivalent to US$253 million, in 5 year senior unsecured bonds in the N
Slide 26: Financial reporting highlights
Financial reporting highlights This quarter Previous quarter EBITDA US$144 m US$132 m Earnings per share US$0.303 US$0.281 Operating profit US$93 m US$87 m Financial items US$(22) m US$(15) m Cash flow from operating activities US$81 m US$96 m Dividend declared per share US$0.225 US$0.225 26
Slide 27: Arctic and harsh environments are key areas for future offshore oil and gas developments
Arctic and harsh environments are key areas for future offshore oil and gas developments North Atlantic and Arctic region › North Atlantic represents the most active harsh environment market › ~13% of world’s undiscovered oil and ~30% of undiscovered gas estimated to be in the Arctic region › Expect
Slide 28: Significant growth in investments expected in the arctic and harsh environment market
Significant growth in investments expected in the arctic and harsh environment market Few assets suitable for harsh Arctic – the next exploration frontier environment (bn BOE) # rigs 17% 1,800 23% 250 239 1,500 387 77% 200 1,200 150 900 1,683 97 100 600 1,296 50 41 300 26 0 0 Undiscoverd excl. Arcti
Slide 29: Ageing fleet ready for renewal – 18 years average age
Ageing fleet ready for renewal – 18 years average age Age profile rigs in Norway # rigs Years 9 9 9 38 40 38 8 8 36 34 7 7 32 7 31 30 6 28 6 25 26 5 24 5 22 20 4 18 14 16 14 14 3 12 91 2 10 2 6 8 1 6 1 3 4 2 0 0 2nd generation 3rd generation 4th generation 5th generation 6th generation Drillships Ja
Slide 30: Core Assets Financial Investments
Core Assets • 32 Ultra-deepwater units built after 2000 • 2 Midwater semi-submersible rigs • 29 High-specification jack-up rigs built after 2005 • 3 Harsh environment Jack-ups • 3 Tender Rigs Financial Investments 12% of SapuraKencana – Market Value ~US$960mm 50.11% of Sevan Drilling – Market Value
Slide 31: Appendix I: Seadrill Limited Financials
Financial performance highlights Appendix I: Seadrill Limited Financials 31
Slide 32: Operating Income - Floaters
Operating Income - Floaters Unaudited accounts in USD millions 3Q13 2Q13 1Q13 4Q12 Total operating revenues 939 913 807 764 Gain on sale of assets - - - - Vessel and rig operating expenses 357 301 290 243 Reimbursable expenses 29 88 40 59 Depreciation and amortisation 146 118 117 109 General and adm
Slide 33: Operating Income – Jack-up Rigs
Operating Income – Jack-up Rigs Unaudited accounts in USD millions 3Q13 2Q13 1Q13 4Q12 Total operating revenues 292 274 269 247 Gain on sale of assets - - 61 - Vessel and rig operating expenses 122 111 112 121 Reimbursable expenses 6 9 13 11 Depreciation and amortisation 42 38 37 38 General and admi
Slide 34: Operating Income – Total Seadrill Limited
Operating Income – Total Seadrill Limited Unaudited accounts in USD millions 3Q13 2Q13 1Q13 4Q12 Total operating revenues 1,280 1,268 1,265 1,215 Gain on sale of assets - - 61 - Vessel and rig operating expenses 491 439 482 448 Reimbursable expenses 48 100 59 78 Depreciation and amortisation 192 158
Slide 35: Net Income – Total Seadrill Limited
Net Income – Total Seadrill Limited Unaudited accounts in USD millions 3Q13 2Q13 1Q13 4Q12 Net operating income 471 507 552 441 Financial items and other income Interest income - 6 4 11 Interest expense (107) (96) (108) (91) Share in results from associated companies (10) (26) 2 (214) Gain on re-mea
Slide 36: Balance Sheet - Assets
Balance Sheet - Assets September June March Unaudited accounts in USD millions 30, 2013 30, 2013 31, 2013 Current assets Cash and cash equivalents 551 437 328 Restricted cash 244 224 174 Marketable securities 316 936 314 Accounts receivables, net 1,043 1,015 884 Other current assets 408 366 650 Tota
Slide 37: Balance Sheet – Liabilities & Shareholder’s Equity
Balance Sheet – Liabilities & Shareholder’s Equity September June March 30, 2013 30, 2013 31, 2013 Current liabilities Current portion of long-term debt 2,645 2,873 2,598 Trade accounts payable 131 66 58 Current liabilities associated with assets held for sale - - 155 Other current liabilities 2,863
Slide 38: Appendix II: North Atlantic Drilling Financials
Financial performance highlights Appendix II: North Atlantic Drilling Financials 38
Slide 39: Operating Income - Total
Operating Income - Total Unaudited accounts in USD millions 3Q13 2Q13 1Q13 4Q12 Operating revenues 293 280 272 241 Reimbursables 28 95 46 42 Total operating revenues 321 375 318 283 Vessel and rig operating expenses 134 137 125 89 Reimbursable expenses 26 90 42 38 Depreciation and amortisation 51 45
Slide 40: Net Income - Total
Net Income - Total Unaudited accounts in USD millions 3Q13 2Q13 1Q13 4Q12 Net operating income 93 87 92 98 Financial items Interest expense (21) (21) (19) (22) Gain / (loss) on derivatives (3) 9 (6) 2 Other financial items 2 (3) (5) 1 Total financial items (22) (15) (30) (19) Income before income ta
Slide 41: Balance Sheet - Assets
Balance Sheet - Assets September June March 30, 2013 30, 2013 31, 2013 Current assets Cash and cash equivalents 116 180 120 Restricted cash 19 23 19 Accounts receivables, net 256 255 225 Related party receivables 30 13 142 Deferred tax assets 11 10 10 Other current assets 43 35 28 Total current asse
Slide 42: Balance Sheet – Liabilities and Shareholder’s Equity
Balance Sheet – Liabilities and Shareholder’s Equity September June March 30, 2013 30, 2013 31, 2013 Current liabilities Current portion of long-term debt 167 167 167 Related party liability 7 12 11 Tax payable 9 8 48 Deferred taxes 12 12 12 Other current liabilities 253 243 397 Total current liabil