Seadrill Limited · NYSE:SDRL
Seadrill — Deutsche Bank Leveraged Finance Conference 2014
25 slides from Seadrill's conference presentation, September 2014
Slide 1: Deutsche Bank Leveraged Finance Conference
Deutsch Bank Leveraged Finance Conference John Roche – Corporate Finance & Investor Relations Director September 2014
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: What Makes Seadrill Unique?
What Makes Seadrill Unique? 1 Strategic Focus on Premium Asset Classes 2 Robust Backlog and High Quality Customers 3 Limited Exposure to Current Dayrate Environment 4 High Degree of Equity Funding 5 Balanced Capital Structure 6 Long Term Commitment from John Fredriksen 3
Slide 4: Scale & Strategic Focus on Premium Asset Classes
Scale & Strategic Focus on Premium Asset Classes One of the largest Offshore Drillers… …with a Modern Fleet… …and Exposure to Premium Segments Ultra-Deepwater Units Average UDW Floater Age % Ultra-Deepwater of Total Floaters 40 100% Vantage Drilling 35 90% Pacific Drilling 80% % of Total Floaters 30
Slide 5: Robust Backlog & High Quality Customers
Robust Backlog & High Quality Customers Seadrill Group Current Backlog Seabras Sapura Participacoes US$23.3 billion 7,000 6,000 5.6 4.7 5,000 4.1 US$ Millions 4,000 3.2 2.9 3,000 50% of US$3.8 billion 2,000 1.4 1,000 0 2014 2015 2016 2017 2018 Remaining Remaining 30% of US$8.7 billion 5
Slide 6: Limited Exposure to Current Dayrate Environment
Limited Exposure to Current Dayrate Environment 2014 2015 2016 4% 20% 38% Floater Contract Coverage 62% 96% 80% $156,000 / day Cash Cushion $120 $515 $41 $23 $359 $239 $175 $198 (1) (1) (2) (3) (4) Opex G&A EBITDA Interest Expense Operational Principal Cash Flow Dayrate Breakeven Breakeven Repayment
Slide 7: Consistent Access to Equity Funding
Consistent Access to Equity Funding West Sirius / 11.2 million shares of SDLP raising approximately West Leo Dropdown $330 million in equity proceeds West Auriga 10.4 million shares of SDLP raising approximately Dropdown $318 million in equity proceeds OPCO Unit 6.1 million shares of SDLP raising ap
Slide 8: Balanced Capital Structure with Staggered Debt Maturities
Balanced Capital Structure with Staggered Debt Maturities 2009 Capital Structure Current Capital Structure 5% 16% 17% 18% 60% 84% Secured Unsecured Secured Unsecured TLB MLP Debt Maturity Profile 4,000 3,000 2,000 1,000 0 2014 2015 2016 2017 2018 2019 2020 Jan-14 Aug-14 US$3bn Reduction in Bank & EC
Slide 9: Illustrative Funding Profile
Illustrative Funding Profile Remaining Yard Instalments 2015 Funding Required 2,500 Floaters Jack-ups • West Rigel • West Titan 2,000 • West Mira • West Proteus • West Carina • West Rhea 1,500 • West Tethys 2014 is fully US$ Millions financed 2016 Funding Required 1,000 Floaters Jack-ups • West Drac
Slide 10: The Fredriksen Group
The Fredriksen Group Market Cap: ~$2.9 billion Market Cap: ~$1.6bn Market Cap: Market Cap: ~$0.8bn Market Cap: ~$0.5bn ~$13.4bn Market Cap: ~$0.1bn Market Cap: ~$5.7bn Note: Market Capitalization as of September 26, 2014 10
Slide 11: Seadrill Strategy
Financial performance highlights Seadrill Strategy Appendix: Seadrill Limited Financials 11
Slide 12: Remember What They Said… Where did we go from here?
Remember What They Said…. …Where did we go from here? 12
Slide 13: The World's Leading Drilling Company
The World’s Leading Drilling Company 80 69 70 60 Seadrill Group 50 Number of Rigs 40 30 SDLP NADL Sevan AOD SeaMex 46.6% 70.4% 50.1% 66.2% 50.0% 20 10 5 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 13
Slide 14: Strongest Fleet Profile in the Industry
Strongest Fleet Profile in the Industry % of Fleet Older than 15 Years Free and Clear Floater Availability Until End of 2016 80 70 81% 79% 74% 60 64% 63% 62% 50 63% 40 42 38% 30 28% 20 22 7 20 11 1 10 11 12 3% 6 6 0 Diamond Transocean Noble Ensco Seadrill Transocean Diamond Noble Ensco Seadrill Grou
Slide 15: Upstream & Drilling Market Outlook
Financial performance highlights Upstream & Drilling Market Outlook Appendix: Seadrill Limited Financials 15
Slide 16: Recent Discoveries to Become Produced Volumes
Recent Discoveries to Become Produced Volumes Discovered resources 1980 to 2013 160,000 120,000 (millions boe) 80,000 40,000 - 1980 1985 1990 1995 2000 2005 2013 Shelf Deep/Mid Water Ultra deepwater Resources discovered and produced 2000-2013 Group Waterdepth Produced (bn boe) Discovered (bn boe) Re
Slide 17: Margin Drives Long Term Investments
Margin Drives Long Term Investments 100 Arctic $75 90 NAm Shale Onshore 80 Onshore RoW Deepwater Offshore Russia 70 Shelf 60 $65 50 Onshore $50 $51 $52 40 Middle East $41 30 $27 Oilsands 20 $70 Heavy Oil Ultradeepwater 10 $47 $56 0 0 10 20 30 40 50 60 70 80 90 100 Deep and Ultra-deep Well Positioned
Slide 18: Preferential Demand for Newer Rigs
Preferential Demand for Newer Rigs Contract Backlog UDW & DW Operating Water Depth 14,000 12% 12,000 10,000 Backlog months 41% 8,000 6,000 4,000 47% 2,000 10 Above 7,500 ft 4,500 - 7,499 ft Below 4,500 ft Apr-03 Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 DW UDW Tota
Slide 19: Jack-Up Market Fundamentals
Jack-Up Market Fundamentals Jack-up Fleet Age Jack-up Delivery Schedule 250 70 60 200 50 Number of Rigs 150 40 100 30 20 50 10 0 0 > 30 years 20 and 30 10 and 20 5 and 10 < 5 years 2014 2015 2016 2017 years years years • Current Jack-up market is tight, however… • 139 Jack-ups to be delivered until
Slide 20: Seadrill Partners
Financial performance highlights Seadrill Partners Appendix: Seadrill Limited Financials 20
Slide 21: Long Term Contracts & High Quality Customers
Long Term Contracts & High Quality Customers Key Characteristics • Long-term contracted modern deepwater drilling assets • Managed growth via dropdowns and third-party acquisitions (NYSE: SDLP) (1) Market Cap: ~$2.9 billion • No newbuild construction and startup risk 2014 2015 2016 2017 2018 2019 1Q
Slide 22: Significant Progress Since IPO – More Growth to Come
Significant Progress Since IPO – More Growth to Come Major Events to Date 7% increase for 40% increase West Auriga •Tender rig T-15 acquired for US$210 since IPO aquisition million 2.25 •Tender rig T-16 acquired for US$200 2.17 million •West Sirius and West Leo acquired for a total consideration of
Slide 23: Add-on Term Loan B Refinancing
Add-on Term Loan B Refinancing Seadrill Limited Refinances Existing Debt (NYSE: SDRL) Facilities Public Unit Holders 46.6% 53.4% • Issued $1.1bn add-on to existing $1.8bn Term Loan B facility Seadrill Partners LLC (NYSE: SDLP) • More efficient 1% annual amortization profile 100% 58.0% 51.0% Borrower
Slide 24: Growth - Additional UDW rigs from Seadrill
Growth - Additional UDW rigs from Seadrill 2014 2015 2016 2017 Unit Customer 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q West Alpha ExxonMobil US$537,000 US$552,000 Rosneft West Vela BP US$565,000 11.2020 West Auriga BP US$565,000 10.2020 West Rigel Rosneft Newbuild Rosneft 07.2020 West Mira Husky
Slide 25: Core Assets and Financial Investments
Core Assets • 32 6th generation ultra-deepwater units • 2 Midwater harsh environment semi- submersible rigs • 29 High-specification jack-ups • 3 Harsh environment jack-ups • 3 Tender rigs Financial Investments 8.18% of SapuraKencana – Market Value ~US$630mm 50.11% of Sevan Drilling – Market Value ~U
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