Deep Value Driller As · OSL:DVD
Deep Value Driller As — Investor Presentation (April 2021)
24 slides from Deep Value Driller As's investor presentation, Apr 19, 2021
Slide 1: Deep Value Driller AS Company Presentation
Deep Value Driller AS Company Presentation | NOTC 19 April 2021
Slide 2: Important Information
IMPORTANT INFORMATION This presentation (the "Presentation") has been prepared by Deep Value Driller AS (the “Company”) solely for information purposes. This Presentation does not constitute or form part of, and should not be construed as, any offer, invitation or recommendation to purchase, sell or
Slide 3: Purchasing a high-end drillship at unprecedented ~9% of build cost
Purchasing a high-end drillship at unprecedented ~9% of build cost § Buying 7G drillship at USD 65m vs. all-in construction cost of USD 750m Perfect price & § Post industry-wide reorganization, consolidation and supply-side rationalization is expected timing § Oil prices have rebounded from the low
Slide 4: Presenting Deep Value Driller
Presenting Deep Value Driller Acquisition of the Bolette Dolphin for USD 65m Strategy Design GustoMSC P10,000 Rig water depth (ft) 10,000 Disciplined approach to investments Drilling depth (ft) 40,000 Dual activity Yes Clear monetization strategy Rig status Warm stacked Build cost (USD) 750,000,000
Slide 5: Experienced management and originators with track record of value creation
Experienced management and originators with track record of value creation Management Rig management Svend Anton Maier | CEO § More than 20 years’ experience from international Executive Management positions in Publicly Listed § Will not build an operational drilling organization, but rather use Com
Slide 6: Well maintained and manageable stacking and reactivation costs
Well maintained and manageable stacking and reactivation costs History 2014 2014-2017 2017-2020 2020-2021 Warm stacked at Canary Worked 3 years with Islands at cUSD 70k/day Relocated to Norway mid- Delivered from Hyundai Anadarako in West Africa at 2020 by creditors for more Rig maintained as to be
Slide 7: Why now? - Offshore Drilling industry set to be reshaped
Why now? - Offshore Drilling industry set to be reshaped 2013 - 2020 2020 2020 - 2021 Current Oversupply Covid-19 Chapter 11 Emergence Fleet A balanced • Oversupply and • Pandemic and oil • Industry wide rationalisation & future: limited operator price cash Chapter-11 consolidation • Commercial and
Slide 8: Rig count bottoming
Rig count bottoming Floater rig count Rig count recovery from trough Number of contracted floaters, globally Floater rig count from trough in number of rigs 90 1986/87 1994/96 1999/00 2001/08 2008/11 300 80 70 250 60 200 50 150 40 30 100 Record low rig count 20 50 10 0 0 1985 1986 1987 1988 1990 199
Slide 9: Meanwhile fundamentals are improving
Meanwhile fundamentals are improving Ultra-deepwater day-rates Ultra-deepwater utilization Numbers in USDk/day Utilization in ptc. 700 UDW Semis UDW Drillships 100 600 90 500 UDW market showing 80 early stages of a 400 recovery 70 300 60 200 50 100 0 40 2000 2001 2002 2003 2004 2005 2006 2007 2008 2
Slide 10: Asset values at all-time low vs. historical capital markets valuations
Asset values at all-time low vs. historical capital markets valuations Historical implied values per modern UDW rig Reference values Numbers in USDm Numbers in USDm 900 Historical values Going concern (RIG and DRLCO) 900 800 800 700 700 600 600 +277% +362% +703% 500 500 400 400 300 300 522 200 200 3
Slide 11: The most attractive distressed asset transaction
The most attractive distressed asset transaction Rig purchased at 9% of original construction cost Pct. of est. all-in build cost 80 Borr Drilling Northern Drilling Recent price indications for the Bolette Dolphin 60 Avg. purchase price in pct. of all- in build cost 40 67% 54% 49% 49% 45% 20 28% 9%
Slide 12: Strong cash dividend potential
Strong cash dividend potential DVD will distribute excess free cash flow Illustrative cash flow yield Numbers in pct. Day-rate USDk/d 175 200 225 250 275 300 70 Utilization Pct. 95% 95% 95% 95% 95% 95% Cost USDk/d 140 140 140 140 140 140 60 50 EBITDA USDk/d 26 50 74 98 121 145 40 Fixed bareboat char
Slide 13: Downside protection from meaningful breakup value
Downside protection from meaningful breakup value Breakup value vs. purchase price Numbers in USDm Vessel scrap value 2 BOPs (7 RAM stacks) Risers Other inventory 100 82 80 22 +26% 65 62 -5% 60 -37% 10 19 41 40 20 8 16 65 15 5 20 10 30 20 10 0 Risk Best Average Purchase price Limited risk in breakup
Slide 14: Clear preference for the best drillships
Clear preference for the best drillships Utilisation for 7G versus 6G rigs 7G drillships preferred choice for long-term contracts Total utilization in ptc. Tullow in Ghana Equinor in Brazil Total in Mozambique 7G drillship 6G rigs 100% 7G 7G Covid-19 effect 90% 80% Rig Maersk Venturer Not awarded ye
Slide 15: GustoMSC P10,000 is a Superior design
GustoMSC P10,000 is a Superior design Long-term contracts with key oil companies § Drilling operations integrated in design (most other drillships are Superior base based on tanker vessels) Backlog for GustoMSC P10,000 rigs design § Large deck area and riser storage inside the hull 2021 2022 2023 §
Slide 16: A large part of the fleet is deemed non-competitive
A large part of the fleet is deemed non-competitive Historical number of contracted benign UDW’s Breakdown of the current fleet of benign UDW’s 160 Number of rigs 152 140 18 120 22 10y avg. contracted: 104 100 17 15 80 80 Current contracted: 80 60 40 20 0 Contracted Idle 7G Warm stacked Cold- Orderb
Slide 17: UDW fleet retirement accelerated in 2020
UDW fleet retirement accelerated in 2020 UDW rigs retired Selected scrapped drillships Numbers of UDW rigs Semisubmersibles Drillships Avg. age 40 Valaris DS-6 (2012) 1998 2000 2000 1998 2002 2009 35 30 Valaris DS-5 (2011) 25 20 Titanium 15 Explorer (2012) 10 6 5 Noble Bully II 3 5 4 7 (2011) 3 3 2
Slide 18: Perfect timing enables a truly unique transaction
Perfect timing enables a truly unique transaction 1 Perfect price & timing Buying 7G drillship at USD 65m vs. all-in construction cost of USD 750m 4 2 Unique distressed opportunity Best in-class drillship Gusto MSC 10,000 is a superior design, and Lean low-cost set-up, with no operational sister ves
Slide 19: Appendix
Appendix
Slide 20: Most recent UDW contracts
Most recent UDW contracts Est. rig Rig name WDR (ft) Manager Operator Region Contract start Contract description Dayrate (USD) Fixture date EBITDA margin Maersk Maersk Drilling Tullow Oil W Africa 4/1/2021 4 years 2/4/2021 40% Venturer 12,000 253,000 Platinum Vantage Indian 5 wells + 4 completions i
Slide 21: Floater demand expected to increase
. Rigs 50 0 100 150 200 250 300 350 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Marketed Supply Possible Demand Under Contract adj. Oct-12 Source: IHS (underlying data), Fearnley Securities (further calculations) Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-1
Slide 22: Technical specification slide
Technical specification slide General description BOP & subsea equipment Design 7th Generation GustoMSC P10000 BOP Two GE 18 ¾”, 15,000 psi, 7 ram, dual annular, Super HD-H4, Shipyard Hyndai Heavy Industries (South Korea) H2S service wellhead connector, API S53 compliant Year in-service 2014 Marine
Slide 23: UDW activity by region
UDW activity by region UDW rig count by region1 Med./Black Sea US GoM 6 5 5 4 44 4 50 40 2 30 23 SE Asia 16 - 20 10 End End Today - 2014 2017 End End Today 6 5 2014 2017 4 4 India 2 1 - End End Today Other South America West Africa 2014 2017 6 5 4 4 27 8 6 30 2 1 6 Brazil 20 - 4 11 Australia 10 6 En
Slide 24: Deep Value Driller AS
Deep Value Driller AS
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