Slide 1: Conference Call – 2Q 2013 results
Conference Call – 2Q 2013 results August 28, 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 Second Quarter Call Agenda
Seadrill Second Quarter Call Agenda • Highlights 2Q 2013 • Contract backlog • Market outlook • Dividend policy • Summary • 2Q 2013 financial accounts – Seadrill – North Atlantic Drilling • Q&A 3
Slide 4: Financial Performance Highlights
Financial Performance Highlights • Seadrill generates a record EBITDA of Quarterly EBITDA US$665 million for the second quarter 2013 • Economic utilization for our floaters increased to 94 percent, up from 92 percent in the first quarter 2013 • Seadrill reports second quarter 2013 net income of US$1
Slide 5: Highlights & Subsequent Events
Highlights & Subsequent Events Second Quarter 2013 •Ordered two high specification jack-ups for US$230 million per rig •Secured a three-year contract for the newbuild drillship West Neptune with a total estimated revenue potential of US$662 million •Completed the integration of the tender rig busine
Slide 6: Global Operational Footprint
Global Operational Footprint Americas North Atlantic 7 units North Atlantic 7 units London Canada - 4 HE Semis - 1 Semi - 2 HE Jack-ups - 1 Drillship Gulf of Mexico -3 Semis Gulf of Mexico Middle East South America Asia Pacific - 3 Semis West Africa Africa – Brazil Asia Pacific Middle East 9 units 1
Slide 7: Modern Fleet & High Exposure to Premium Segments
Modern Fleet & High Exposure to Premium Segments One of the largest Offshore Drillers… …with a Modern Fleet… …and Exposure to Premium Segments 1 Ultra-Deepwater Units 2 Average Floater Age 3 % Ultra-Deepwater of Total Floaters % of Total Floaters Number of units 4 Jack-Up Units 5 Average Jack-Up Age
Slide 8: Floaters – US$15.4 Billion Contract Backlog
Floaters – US$15.4 Billion Contract Backlog Contract coverage 4% 38% 58% 2013 2014 2015 2016 Contracted Uncontracted 100% 96% 62% 42% 8
Slide 9: Jack-ups - US$3.1 Billion Contract Backlog
Jack-ups - US$3.1 Billion Contract Backlog Contracted Uncontracted 1% 2013 99% 33% 2014 67% 48% 2015 52% 52% 2016 48% Note: Backlog generated by the tender rigs (T15, T16 and West Vencedor) is US$0.5 billion. 9
Slide 10: Orderbacklog – US$19 bn
Orderbacklog – US$19 bn US$ Millions 5.6 BP 25% A Total 14% AA- 4.7 4.1 Exxon 11% AAA Statoil 9% AA- 3.2 2.9 Petrobras 7% BBB Husky 6% BBB 1.4 Tullow 6% - Others 23% - High Quality Customer Base & Dividend Visibility 10
Slide 11: Market Outlook
Market Outlook Market Outlook 11
Slide 12: Production Growth to Come From Deepwater
Production Growth to Come From Deepwater Source: EIA, ODS Petrodata 12
Slide 13: UDW Replacing Aging Deepwater Fleet
UDW Replacing Aging Deepwater Fleet ~16% of the Ultra-Deepwater Fleet is Operating in Ultra-Deepwater Source: ODS Petrodata 13
Slide 14: New Equipment Commanding Higher Dayrates
New Equipment Commanding Higher Dayrates Ultra-Deepwater Floaters Jack-ups >350’ Water Depth Customers Demand Better Performance and Safety of New Equipment Source: ODS Petrodata 14
Slide 15: Operational Excellence Translates to Pricing Power
Operational Excellence Translates to Pricing Power Total Floater Utilization Deepwater and Ultra-Deepwater Fixtures Seadrill Average Market Average Source: ODS Petrodata 15
Slide 16: Dividend Policy
Dividend Policy • Key objective to distribute quarterly dividends • Quarterly cash dividend resolved at 91 cents per share • Increase reflects improved free cash flow and newbuilds commencing operation this year • Future dividends depend on: – Contract coverage – Capital expenditure – Leverage capac
Slide 17: Summary – Industry Leading Growth
Summary – Industry Leading Growth ~$4.5 Billion in 2016 Annualized EBITDA 17
Slide 18: Financial Performance Highlights
Financial performance highlights Financial Performance Highlights 18
Slide 19: Financial Performance Highlights
Financial Performance Highlights This quarter Previous quarter EBITDA US$665 m US$713 m Earnings per share US$3.68 US$0.87 Operating profit US$507 m US$552 m Financial items and other income US$1,292 m US$(68) m Cash flow from operating activities US$248 m US$423 m Dividend declared per share US$0.9
Slide 20: EBITDA Contribution
EBITDA Contribution Seadnil USS millions 800 7 700 500 300 200 2009 3009 4009 1010 2010 3010 4010 1011 2011 3011 4011 1012 2012 3012 4012 1013 Floaters Jack-up Tender 2013 rigs rigs Gain from sale of assets 20
Slide 21: Operating Income - Floaters
Operating Income - Floaters Unaudited accounts in USD millions 2Q13 1Q13 4Q12 3Q12 Operating revenues 805 757 700 674 Reimbursables 97 43 63 22 Other revenues 8 7 1 3 Total operating revenues 910 807 764 699 Gain on sale of assets - - - - Vessel and rig operating expenses 297 290 243 254 Reimbursabl
Slide 22: Operating Income – Jack-up Rigs
Operating Income – Jack-up Rigs Unaudited accounts in USD millions 2Q13 1Q13 4Q12 3Q12 Operating revenues 262 256 233 203 Reimbursables 10 15 14 5 Other revenues 1 (2) 0 0 Total operating revenues 273 269 247 209 Gain on sale of assets - 61 - - Vessel and rig operating expenses 110 112 121 98 Reimbu
Slide 23: Operating Income – Tender Rigs
Operating Income – Tender Rigs Unaudited accounts in USD millions 2Q13 1Q13 4Q12 3Q12 Operating revenues 78 182 193 178 Reimbursables 3 6 7 6 Other revenues 4 2 2 (1) Total operating revenues 85 190 202 183 Gain on sale of assets - - - - Vessel and rig operating expenses 32 80 85 69 Reimbursable exp
Slide 24: Operating Income – Total Seadrill Limited
Operating Income – Total Seadrill Limited Unaudited accounts in USD millions 2Q13 1Q13 4Q12 3Q12 Operating revenues 1,145 1,195 1,126 1,056 Reimbursables 110 64 85 33 Other revenues 13 6 3 2 Total operating revenues 1,268 1,265 1,215 1,092 Gain on sale of assets - 61 - - Vessel and rig operating exp
Slide 25: Net Income – Total Seadrill Limited
Net Income – Total Seadrill Limited Unaudited accounts in USD millions 2Q13 1Q13 4Q12 3Q12 Net operating income 507 552 441 413 Financial items and other income Interest income 6 4 11 5 Interest expense (96) (108) (91) (102) Share in results from associated companies (26) 2 (214) (38) Gain on re-mea
Slide 26: Balance Sheet - Assets
Balance Sheet - Assets June March December Unaudited accounts in USD millions 30, 2013 31, 2013 31, 2012 Current assets Cash and cash equivalents 437 328 318 Restricted cash 224 174 184 Marketable securities 936 314 333 Accounts receivables, net 1,015 884 917 Amount due from related party 56 264 293
Slide 27: Balance Sheet – Liabilities & Shareholder’s Equity
Balance Sheet – Liabilities & Shareholder’s Equity June March December 30, 2013 31, 2013 31, 2012 Current liabilities Current portion of long-term debt 2,873 2,598 2,066 Trade accounts payable 66 58 72 Current liabilities associated with assets held for sale - 155 - Other current liabilities 1,458 1
Slide 28: Non-financial highlights
Non-financial highlights • New sale and leaseback transactions for West Linus with Ship Finance securing gross proceeds of US$600 million in long-term financing. • Extension of contract and new contract for West Navigator with Shell and Centrica, securing employment until December 2014, with total e
Slide 29: Financial reporting highlights
Financial reporting highlights This quarter Previous quarter EBITDA US$132 m US$135 m Earnings per share US$0.281 US$0.240 Operating profit US$87 m US$92 m Financial items US$(15) m US$(30) m Cash flow from operating activities US$96 m US$133 m Dividend declared per share US$0.225 US$0.225 29
Slide 30: Operating Income - Total
Operating Income - Total Unaudited accounts in USD millions 2Q13 1Q13 4Q12 3Q12 Operating revenues 280 272 241 244 Reimbursables 95 46 42 17 Total operating revenues 375 318 283 261 Vessel and rig operating expenses 137 125 89 86 Reimbursable expenses 90 42 38 16 Depreciation and amortisation 45 44
Slide 31: Net Income - Total
Net Income - Total Unaudited accounts in USD millions 2Q13 1Q13 4Q12 3Q12 Net operating income 87 92 98 106 Financial items Interest expense (21) (19) (22) (19) Gain / (loss) on derivatives 9 (6) 2 (4) Other financial items (3) (5) 1 (9) Total financial items (15) (30) (19) (32) Income before income
Slide 32: Balance Sheet - Assets
Balance Sheet - Assets June March December 30, 2013 31, 2013 31, 2012 Current assets Cash and cash equivalents 180 120 98 Restricted cash 23 19 24 Accounts receivables, net 255 225 212 Related party receivables 13 142 243 Deferred tax assets 10 10 10 Other current assets 35 28 42 Total current asset
Slide 33: Balance Sheet – Liabilities and Shareholder’s Equity
Balance Sheet – Liabilities and Shareholder’s Equity June March December 30, 2013 31, 2013 31, 2012 Current liabilities Current portion of long-term debt 167 167 167 Related party transaction 12 11 47 Tax payable 8 48 71 Deferred taxes 12 12 12 Other current liabilities 243 397 405 Total current lia
Slide 34: Core Assets and Financial Investments
Core Assets • 28 Ultra-deepwater units built after 2000 • 2 Midwater semi-submersible rigs • 28 High-specification jack-up rigs built after 2005 • 3 Harsh environment Jack-ups • 3 Tender Rigs Financial Investments 12% of SapuraKencana – Market Value ~US$700mm 50.11% of Sevan Drilling – Market Value