Seadrill Limited · NYSE:SDRL
Seadrill — Q1 2006 Earnings Presentation
44 slides from Seadrill's earnings presentation, Jun 2, 2006
Slide 1: The World's Fastest Growing Drilling Contractor
The World’s Fastest Growing Drilling Contractor Seadrill Limited Oslo 2 June 2006
Slide 2: Disclaimer
Confidential Disclaimer THIS PRESENTATION AND ITS ENCLOSURES AND APPENDICES (HEREINAFTER JOINTLY REFERRED TO AS THE “PRESENTATION” HAS BEEN PREPARED BY SEADRILL LIMITED. (”SDRL” , “SEADRILL or THE ”COMPANY”) EXCLUSIVELY FOR INFORMATION PURPOSES. THIS PRESENTATION HAS NOT BEEN REVIEWED OR REGISTERED
Slide 3: Content presentation
Content presentation • Mission statement • Acquisitions • Company structure • Operations and contract status • Newbuilding program • First quarter accounts 2006 • Market development and outlook • Summary
Slide 4: Mission statement
Mission statement • Create a world leading drilling contractor within 5 years • Focus on Asia/West Africa and world-wide deepwater areas • Seadrill shall be a consolidator in the offshore rig industry
Slide 5: Acquisitions
Acquisitions 3 Jack-ups - Sakhalinskaya 1985 Mosvold Drilling Inc. - Toto 1981 - Ekha 1984 - Ownership 99.77% - Ownership 99.9% - 3 Jack-Up newbuildings - Two 6th generation drill ships at - Jack-Up 1 del. 2 May 06 2 Jack-Up newbuildings Samsung Heavy Industries in Korea - Jack-Up 2 del. 3Q07 - Jack
Slide 6: Company structure
Company structure Seadrill Limited Bermuda Seadrill Mgt. Stavanger CEO Kjell E Jacobsen CFO Alf C Thorkildsen DEEPWATER MOBILE UNITS TENDER RIGS JACK-UPS WELL SERVICES Stavanger Singapore Singapore Stavanger PROJECTS Singapore Sveinung Lofthus Ståle Rød Hans Van Royen Alf Ragnar Løvdal Stein Diesen
Slide 7: Strategy execution
Strategy execution • Acquire rig capacity • Establish an operational organization • Secure long-term contracts • Put in place term financing Creating a world leading drilling contractor
Slide 8: Current Management Priorities
Current Management Priorities • Consolidate and build the organization • Management of the newbuilding program • Contracts for newbuildings
Slide 9: Current operations
Current operations Norway - 4 units 2 Semis 1 Jack-up 1 Drillship Well Services 39.75% interest in Eastern activities Sakhalin 1 Jack-up en route Current operations Southeast Asia-10 units Previous operations 3 Semi-tenders 6 Tender rigs 1 Jack-up West Africa - 4 units 1 Semi-tender 33% interest in
Slide 10: Newbuild projects
Newbuild projects 2 drillship at Samsung, Korea 1+1 semis at Samsung, Korea (Eastern Drilling ASA) 2 semis at Daewoo, Korea 2+1 semis at Jurong, Singapore 1 semi-tender and 4 jack-ups 1 tender barge in Singapore in Singapore and KFELS and PPL Malaysia, respectively
Slide 11: West E-drill
West E-drill • Semi-submersible rig • Builder: Samsung • Delivery: 4Q 2007 • Design: DP Drilling Vessel • Rated water depth: 10,000 ft. • Rated drilling dept: 30,000 ft • Dual Derrick • Contract price: USD 550 million * * Including spares, construction supervision, capitalized interest and operation
Slide 12: Jurong semis
Jurong semis • Two semi-submersible rigs • Builder: Jurong • Delivery: Q1/4Q 2008 • Design: Friede Goldman ExD • Rated water depth: 10,000 ft. • Rated drilling dept: 35,000 ft • Top Drive: MH DDM 750/1,000 AC • Contract price: USD 395/409 million * * Excluding spares, construction supervision, capit
Slide 13: Daewoo semis
Daewoo semis • Two semi-submersible rigs • Builder: Daewoo • Delivery: Q1/3Q08 2008 • Design: GVA 7500 • Rated water depth: 10,000 ft • Rated drilling depth: 35,000 ft • Top Drive: MH DDM 750/1,000 AC • Contract Price: USD 506/496 million * Excluding spares, construction supervision, capitalized int
Slide 14: Mosvold drillships
Mosvold drillships • Two deepwater drillships • Builder: Samsung • Delivery: Q2/4Q 2008 • Design: Samsung 10,000 • Rated water depth: 10,000 ft • Rated drilling depth: 35,000 ft • Top Drive: 2 HPS 1,000 short tons (dual motor AC) • Contract Price: USD 470 million * Excluding spares, construction sup
Slide 15: Quality yards
Quality yards Samung, Daewoo, Jurong, KFELS, Jurong and PPL among the worlds best yards with proven capabilities and relevant experience.
Slide 16: Certainties
Certainties • Samsung – two Mosvold drillships substantially similar to Saipem 10000 • Samsung 1 (or 2) units copied from West Venture • Jurong – two F&G semi-submersibles substantially identical to Development Driller 1&2
Slide 17: Certainties cont'd
Certainties cont’d • Daewoo to deliver two GVA 7500 semi- submersibles supervised from West Venture project team • All yard contracts are EPC Turnkey
Slide 18: Certainties cont'd
Certainties cont’d • The jack-up projects are standard designs • All projects are properly organized with experienced project teams • All projects have dedicated teams for start up of operation based on established and proven procedures
Slide 19: Certainties cont'd
Certainties cont’d • Yards are motivated to mobilise extra resources to get the first projects safely through • The Seadrill projects are standardized with and supported by reliable vendors with proven equipment • Seadrill has early deliveries
Slide 20: Uncertainty
Uncertainty • Delivery of engineering input from subcontractors and equipment • The duration of commissioning is always at risk • Deferred work from earlier project stages causing lower productivity • Problem solving (waiting for specialist, new equipment etc)
Slide 21: Uncertainty cont'd
Uncertainty cont’d • The capacities of key subcontractors are stretched which may not yet be fully acknowledged • Changed workloads due to unforeseen events may cause cascading delays for downstream projects
Slide 22: Committed newbuild installments
Committed newbuild Installments 700 654 577 600 USD million 500 467 400 347 300 267 238 214 163 194 200 109 94 100 45 0 Paid 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 Commited newbuild installments • The installment do not include spares, construction supervision, operation preparation
Slide 23: Contract status
Seadnill Contract status
Slide 24: Contract status
Contract status 2006 2007 2008 2009 2010 Customer 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Semi-submersibles West Alpha Statoil US$ 249,000 West Venture Norsk Hydro US$ 215,000 US$ 215,000 06.2011 West E-drill 1 Under construction Samsung - US$ 550M Daewoo I Under construction Dae
Slide 25: Contract status
Contract status 2006 2007 2008 2009 2010 Customer 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Tender rigs T3 1 PTT US$ 40,000 US$ 42,000 US$ 51,000 US$ 58,000 US$ 70,000 06.2012 T4 Chevron US$ 40,000 T6 1 Carigali/CTOC US$ 60,000 US$ 86,000 12.2010 T7 Chevron US$ 40,000 US$ 51,000 07
Slide 26: Consolidated accounts
Seadnill Consolidated accounts
Slide 27: Basis for the preparation of the account
Basis for the preparation of the account • Seadrill acquired Smedvig 20 January • Mosvold consolidated from 15 February • Value in excess of book value USD million (100 percent): • Associates companies 125 • Drilling units and newbuildings 1,127 • Negative contract value (299) • Deferred taxes (153)
Slide 28: Effect on profit and loss statement in first quarter
Effect on profit and loss statement in first quarter • Associates companies (1) • Depreciation (10) • Amortization of negative contract value 15 • Change in deferred taxes (1)
Slide 29: Condensed Pro forma Consolidated Income Statements
Condensed Pro forma Consolidated Income Statements Pro forma Actual Unaudited accounts in USD millions 4Q05 1Q06 Operating Revenues Operating revenues 165.0 160.8 Reimbursables 13.5 15.7 Other revenues 15.1 15.1 Total revenues 193.6 191.6 Operating expenses Vessel and rig operating expenses 112.9 10
Slide 30: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets Unaudited accounts in USD millions 31.03.06 31.12.05 Current assets Cash and cash equivalents 479.7 49.6 Receivables 198.6 24.0 Other investments - 302.3 Total current assets 678.3 375.9 Non-current assets Investment in associated companies 353.5 152.8 Other non
Slide 31: Condensed Consolidated Segment Information: Mobile Units
Condensed Consolidated Segment Information Mobile Units Pro Forma Actual Unaudited accounts in USD millions 4Q05 1Q06 Operating revenues 76.5 74.7 Reimbursables 5.3 5.8 Other revenues 12.9 12.9 Total revenues 94.7 93.4 Vessel and rig operating expenses 54.1 45.8 Reimbursable expenses 4.8 5.2 General
Slide 32: Condensed Consolidated Segment Information: Tender Rigs
Condensed Consolidated Segment Information Tender Rigs Pro Forma Actual Unaudited accounts in USD millions 4Q05 1Q06 Operating revenues 34.2 31.1 Reimbursables 1.2 1.2 Other revenues 2.2 2.2 Total revenues 37.6 34.5 Vessel and rig operating expenses 16.0 15.6 Reimbursable expenses 1.2 1.2 General an
Slide 33: Condensed Consolidated Segment Information: Well Services
Condensed Consolidated Segment Information Well Services Pro Forma Actual Unaudited accounts in USD millions 4Q05 1Q06 Operating revenues 54.2 55.0 Reimbursables 7.0 8.6 Total revenues 61.2 63.6 Vessel and rig operating expenses 42.7 46.3 Reimbursable expenses 6.8 8.3 General and adminstrative expen
Slide 34: Market Outlook
Seadnill Market Outlook
Slide 35: Worldwide Floater Fleet
Worldwide Floater Fleet: Order book 12% # of units Total fleet 199 units 25 • Average fleet age 20 years • 49 units built since 1990 • 64 units built last 20 years 20 • 23 units under construction 15 10 5 0 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 Source: Pareto
Slide 36: Jack-up Market
Jack-up Market Source: Pareto
Slide 37: Worldwide jack-up fleet
Worldwide jack-up fleet: Orderbook 16% # of units 90 Total jack-up fleet 384 units • Average fleet age 24 years 80 • Only 30 units built since 1993 70 • Only 49 units built last 20 years • 63 units under construction 60 50 40 30 20 10 0 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1997 200
Slide 38: Newbuilding Boom ?
Newbuilding Boom ? World Jack-up fleet 1981 World Jack-up fleet 2005 600 600 500 500 400 400 300 300 200 200 100 100 0 0 Existing fleet Rigs under Existing fleet Rigs under construction construction Source: Pareto
Slide 39: Ultra Deepwater market
Ultra Deepwater market Source: ODS Petrodata, Companies, Pareto Securities research
Slide 40: Floaters Norway
Floaters Norway Source: ODS Petrodata, Companies, Pareto Securities research Source: Pareto
Slide 41: Floaters UK
Floaters UK Source: Pareto 2 remaining cold stacked units: Transocean Explorer and Wildcat Source: ODS Petrodata, Companies, Pareto Securities research
Slide 42: Conclusions
Conclusions • Smedvig to Seadrill – integration well under way • Newbuilding projects organized, resourced and well under way • Operations running well • Strong market – expect new contracts next quarter
Slide 43: Full speed ahead for Seadrill !
Conclusion Full speed ahead for Seadrill !
Slide 44: Diverse drilling fleet
Seadnill Diverse drilling fleet