Oceaneering International, Inc. · NYSE:OII
Oceaneering International — Investor Presentation (November 2016)
30 slides from Oceaneering International's investor presentation, November 2016
Slide 1: Investor Presentation
Investor Presentation November 2016
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements we make in this presentation that express a belief, expectation, or intention are forward looking. Forward-looking statements are generally accompanied by words such as “estimate estimate,” “project project,” “predict predict,” “believe,” “expect,” “anticipate,”
Slide 3: Why Oceaneering?
Why Oceaneering? Global provider of diversified services and products in all phases off the h offshore ff h oilfield ilfi ld life lif cycle l Strong market positions Solid balance sheet and cash flow Return of capital to our shareholders Leveraged to deepwater - longer term, term deepwater
Slide 4: Operating Segments
5 Operating Segments 1. Remotelyy Operated Vehicles ((“ROVs”)) 2. Subsea Products 3. Subsea Projects 4. Asset Integrity 5 Advanced 5. Ad dTTechnologies h l i 4
Slide 5: In All Phases of the Offshore Oilfield Life Cycle
In All Phases of the Offshore Oilfield Life Cycle PHASE EXPLORATION DEVELOPMENT PRODUCTION DECOMMISSIONING % OII Revenue 10% 50% 35% 5% #1 Market # of Operating # of Subsea Tree # of Subsea Trees # of Field Driver e g Drilling Floating g Rigs g Installations In Service Abandonments Business Segment
Slide 6: Largest Exposure is in Field Development
Largest Exposure is in Field Development Oilfi ld R Oilfield Revenue Mi Mix 5% 10% 35% 50% Exploration Development Production Decommissioning Source: OII Estimates: 2015 6
Slide 7: Revenue by Business Segment
Revenue by Business Segment First 9 Months 2014 2015 2016* 7% 10% 13% 14% 27% 23% 29% 12% 12% 16% 20% 21% 31% 34% 31% $3.7 Billion $3.1 Billion $1.8 Billion ROV Subsea Products Subsea Projects Asset Integrity Advanced Technologies * Nine Months Ended September 30, 2016 7
Slide 8: Remotely Operated Vehicles
23% Remotely Operated Vehicles Revenue Contribution First Nine Months, 2016 g p of the Oceaneering Flagship g Franchise 8
Slide 9: Oceaneering ROV Fleet Size
Oceaneering ROV Fleet Size – 279 ROVs as off September S b 30, 30 2016 350 Vehicle Count at Perriod End 300 279 250 200 2008 2009 2010 2011 2012 2013 2014 2015 2016 2016 2016 Q1 Q2 Q3* * Retired 39 ROVs in the third quarter of 2016. 9
Slide 10: Floating Rig Demand History
Floating Rig Demand History O Oceaneering i 56% 6% M Market k ShShare as off September S b 30, 30 2016 Floaters Contracted % with OII ROVs 300 100% Period End 250 75% 200 with OII ROVs s Conttracted Floating Rigs at P 150 50% %w 100 25% 50 0 0% 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016
Slide 11: Oceaneering ROV Utilization Mix
Oceaneering ROV Utilization Mix 100% Average ROV Funcction Utilizattion 75% 50% 25% 0% Drill Support ROV Utilization Vessel Based ROV Utilization * At September 30
Slide 12: Oceaneering ROV Pricing and Fleet Utilization
Oceaneering ROV Pricing and Fleet Utilization 2% Fl 52% Fleet U ili i as off S Utilization b 30 September 30, 2016 Revenue / Day on Hire Fleet Utilization $11,000 100% $ $10,000 90% $9,000 80% $8,000 Hire 70% Fleet Utilization ue / Day on H $7 000 $7,000 60% $6,000 50% $5,000 40% Revenu $4 000 $4,00
Slide 13: Subsea Products
31% Subsea Products Manufactured Products Revenue Contribution First Nine Months, 2016 Production Control Umbilicals Supply electric and hydraulic power to subsea trees and inject chemicals h i l iintot reservoirs i and d wellll streams. t Specialty Subsea Hardware Field development hardware used to
Slide 14: Subsea Hardware Capex Forecast
Subsea Hardware Capex Forecast B kl at S Backlog September b 3030, 2016 2016, iin $ millions illi Subsea Capex, Quest August 2016 SS Products Backlog $1,000 $9,600 $8,000 $800 acklog Capex $6 400 $6,400 OII SS Products Ba a Hardware C $600 $4,800 $400 Subsea $3,200 $200 $1,600 $0 $0 2011 2012 2013 2
Slide 15: Subsea Installations Forecast
Subsea Installations Forecast Tree Installations SSProducts Revenue 500 $1,500 O SSProductts Revenue, in $ Millions 400 $1,200 ns ee Installation 300 $900 200 00 $600 Tre 100 $300 OII 0 $0 2011 2012 2013 2014 2015 2016F 2017F 2018F 2019F 2020F Source: Quest Offshore, August 2016 15
Slide 16: Subsea Projects
21% Subsea Projects Revenue Contribution First Nine Months, 2016 Change out photo and replace with AUV Consist of Project Management, Management Survey Survey, Subsea Installation and IMR Services 16
Slide 17: Subsea Projects Overview
Subsea Projects Overview Assets Available for f this Market Spot or Charter Deepwater Multi-Purpose Supply Vessels Contract Location End 3 Owned Ocean Intervention Spot GOM N/A Ocean Intervention II Spot GOM N/A Ocean Evolution (available late 2Q 2017) N/A N/A 4 Chartered with Term Normand Flower
Slide 18: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity C i lS Capital Sources and d All Allocations i Liquidity (at end of third quarter 2016) o $442 million of cash cash, $300 million in the U U.S. S o $500 million undrawn revolving credit facility, expiring October 2021 o First debt maturities $30 million in Octobe
Slide 19: Leveraged to Deepwater
Leveraged to Deepwater Projects take years to develop Largely oil reservoirs o With high production flow rates Well capitalized customer base o ~50% revenue from E&P majors in prior 3 years Investment based on long-term commodity price expectations 19
Slide 20: Long Term: Offshore is Essential
Long Term: Offshore is Essential D Deepwater R Remains i SiSignificant ifi Incremental Bbls Existing Fields Bbls 90 Source of Additional ~29.3Mm B/D Liquids Production 80 quids MMB/D D 70 29% 60 Total Liq 71% 50 Offshore Onshore 40 Source: Morgan Stanley Research , Wood Mackenzie, Rystad Energy, and
Slide 21: Expect Extended Declines from Producing Fields
Expect Extended Declines from Producing Fields New Production from New Fields Decline from Aging Fields 4.0 3.5 3.0 Day Barrels Per D 2.5 2.0 Million B 15 1.5 1.0 0.5 0.0 2014 2015 2016 2017 2018 Inverting Balance presented by Bloomberg; Source data from Rystad 21
Slide 22: 2016 Fourth Quarter and FY 2017 Outlook
2016 Fourth Quarter and FY 2017 Outlook Challenging market continues Aligning our operations with anticipated level of activity Forecasting 4Q declines from each of our oilfield segments o ROV: fewer working days and lower average revenue per day o Subsea Products: lower throughput and low sin
Slide 23: Conclusion
Conclusion Longer term, deepwater is still critical to reserve replenishment Global provider in all phases of offshore oilfield life cycle, with a deepwater focus Further differentiate with integrated solutions Strong liquidity and cash flow Maintain or grow our market positions Emerge f
Slide 24: Supplemental Information
Slide 25: EBITDA Reconciliation to Net Income
EBITDA Reconciliation to Net Income (USD in i millions) illi ) Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measurement. Oceaneering’s management uses EBITDA because we believe that this measurement is a widely accepted financial indicator used by i
Slide 26: Free Cash Flow (Through the Cycle)
Free Cash Flow (Through the Cycle) (USD in i millions, illi except ffor E Earnings i per Sh Share amounts)) “Free Cash Flow” (FCF) is a non-GAAP financial measurement. FCF represents cash flow provided by operating activities less organic capital expenditures (i.e., purchases of property and equipme
Slide 27: Oceaneering ROV Leading Market Position
Oceaneering ROV Leading Market Position R Remotely l OOperated dVVehicles hi l Ownership Drill Support Market Share 315 31% 91 56% OII Subsea 7 Fugro DOF Subsea C-Innovations Helix Saipem TMT Technip IKM Group Other Worldwide Fleet 162 Floating Rigs Contracted** 1027 Vehicles Vehicles* Source: *OII
Slide 28: Oceaneering ROV Fleet Geographic Profile
Oceaneering ROV Fleet – 279 ROVs G Geographic hi PProfile fil – September S b 3030, 2016 100 97 90 80 70 60 ROVs 50 46 48 40 40 29 30 19 20 10 0 Other includes Canada, Mexico, United Kingdom, and the Middle East. 28
Slide 29: Oceaneering ROVs on Vessels Geographic Profile
Oceaneering ROVs on Vessels – 94 ROVs G Geographic hi Profile P fil – September S b 3030, 2016 35 30 30 25 24 ROVs s 22 20 18 15 10 5 0 GOM Africa Norway Other Approximately 60% of Oceaneering’s vessel-base customers are contractors, and 40% are operators Other includes Canada, Mexico, United Kingdo
Slide 30: Investor Relations Contact
Investor Relations Contact Suzanne Spera Director Investor Relations Director, 713-329-4707 InvestorRelations@Oceaneering.com 30
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