Oceaneering International, Inc. · NYSE:OII
Oceaneering International — 32nd Annual Howard Weil Energy Conference (March 2004)
39 slides from Oceaneering International's conference presentation, Mar 31, 2004
Slide 1: 32nd Annual Howard Weil Energy Conference
32nd Annual Howard Weil Energy Conference March 31st, 2004 Safe Harbor Statement Statements in this presentation that express a John Huff belief, expectation, or intention, as well as those that are not historical fact, are forward looking. These forward-looking statements are based on our current i
Slide 2: Why Oceaneering?
WHY OCEANEERING? • Cost Reduction Through Technology • Exposure to All Phases of the Energy Cycle • Leveraged to Deepwater and Subsea Completions • Leading Market Positions – ROVs, Umbilicals, and Inspection • Significant Operating Cash Flow • Poised to Benefit from Capital Expansion Initiatives
Slide 3: Oilfield Business Segments Revenue
Oilfield Business Segments Revenue 81% Oilfield Oilfield Non Non Oilfield Oilfield 2003 2003
Slide 4: Deepwater Discoveries
Deepwater Discoveries Over 75% to be Developed 300 300 267 250 250 Fields of Fields 200 200 182 182 150 150 Number of Number 100 100 50 50 81 85 85 81 00 Production Production Eval. Eval. // Dev. Dev. Source: Source: ODS-Petrodata ODS-Petrodata –– March March 2004 2004 Deepwater ≥≥ 2000 Deepwater 20
Slide 5: Subsea Completions - Worldwide
Subsea Completions - Worldwide Expected Expected to to More More Than Than Triple Triple Completed Completed Estimated Estimated Completions Est. Est. Total Total == 3,497 Subsea Completions 3,497 4,000 4,000 3,000 3,000 2368 2368 of Subsea 2,000 2,000 1092 1092 Number of 1,000 1,000 426 426 Number
Slide 6: Revenue by Business Segment: Remotely Operated Vehicles
Revenue by Business Segment 25% 25% Remotely Operated Vehicles 2003 2003
Slide 7: Oilfield Work Class ROV Fleet
Oilfield Work Class ROV Fleet Ownership Profile – 12/31/2003 28% OII OII 125 125 ROVs ROVs 16% 16% OII OII Stolt Stolt Subsea Subsea 77 Sonsub Sonsub Fugro Fugro Others Others Source: Source: OII OII Estimates Estimates –– December December 2003 2003 –– 445 445 Vehicles Vehicles
Slide 8: Floating Rig and OII ROV Demand
Floating Rig and OII ROV Demand 200 200 180 180 180 180 160 160 147 147 ROVs 140 or ROVs 140 125 125 120 120 98 98 Rigs or 100 90 90 100 of Rigs 80 80 ## of 60 60 40 40 20 20 00 0000 0000 0000 0000 0011 0011 0011 0011 0022 0022 0022 0022 0033 0033 0033 0033 11QQ 22QQ 33QQ 44QQ 11QQ 22QQ 33QQ 44QQ 11
Slide 9: Stolt Drill Support ROV Acquisition
Stolt Drill Support ROV Acquisition 34 Work Class ROVs • 10 Observation Class ROVs • $48.4MM Purchase Price
Slide 10: Oilfield Work Class ROV Fleet - With Stolt Acquisition
Oilfield Work Class ROV Fleet Ownership Profile – With Stolt Acquisition 36% OII OII 159 159 ROVs ROVs 8% 8% OII OII Stolt Stolt Subsea Subsea 77 Sonsub Sonsub Fugro Fugro Others Others Source: Source: OII OII Estimates Estimates –– December December 2003 2003 –– 445 445 Vehicles Vehicles
Slide 11: Geographical Fleet Profile
Geographical Fleet Profile International Business Exposure Increased With Stolt Acquisition 33 17 17 33 17 17 North North Am Am 59 59 27 Brazil Brazil 27 15 15 57 N. N. Sea Sea 57 W. W. Africa Africa Asia/Pac Asia/Pac Other Other 26 26 77 39 39 14 14 125 125 Vehicles Vehicles 159 159 Vehicles Vehicl
Slide 12: ROV Financial Results
ROV Financial Results ($ millions) Revenue Revenue Operating Operating Income Income 200 200 50 50 180 180 45 45 160 160 40 40 Income Operating Income 140 140 35 35 Revenue 120 30 Revenue 120 30 100 25 Operating 100 25 80 80 20 20 60 60 15 15 40 40 10 10 20 20 55 00 00 2000 2000 2001 2001 2002 2002
Slide 13: Revenue by Business Segment: Subsea Products
Revenue by Business Segment 17% 17% Subsea Products 2003 2003
Slide 14: Multiflex Umbilicals
Multiflex Umbilicals Steel Steel Tube Tube Umbilicals Umbilicals Thermoplastic Thermoplastic Hose Hose Umbilicals Umbilicals
Slide 15: Umbilical Market Overview
Umbilical Market Overview Annual Demand To Nearly Double Steel Steel Thermoplastic Thermoplastic Tree Tree Orders Orders 2,500 2,500 500 500 KM Orders -- KM Orders Tree Orders 2,000 2,000 400 400 Umbilical Orders 1,500 1,500 300 300 Subsea Tree Umbilical 1,000 1,000 200 200 Subsea 500 500 100 100 00
Slide 16: Global Umbilical Market
Global Umbilical Market Expected Expected to to Grow Grow 45% 45% Kilometers Kilometers Awarded Awarded 6,000 6,000 5,000 5,000 4,000 4,000 Thermoplastic Thermoplastic 3,000 3,000 Steel Steel Tube Tube 2,000 2,000 1,000 1,000 00 2001-2003 2001-2003 2004-2006 2004-2006 E E Source: Source: Quest Quest
Slide 17: Steel Tube Umbilical Market
Steel Tube Umbilical Market Expected Expected to to Grow Grow 75% 75% Kilometers Kilometers 6,000 6,000 5,000 5,000 4,000 4,000 20% Other Other 3,000 3,000 W. W. Africa Africa 40% N. N. America America 2,000 2,000 Awarded Awarded 1,000 1,000 40% 00 2001-2003 2001-2003 2004-2006 2004-2006 E E Source:
Slide 18: ROTATOR Acquisition
ROTATOR Acquisition * • Production Control Module Valves • Subsea Chemical Distribution Valves * • $15 MM Purchase Price ** Patented Patented
Slide 19: REFLANGE Acquisition
REFLANGE Acquisition • ROV Operable Pipeline Connection Systems • $5 MM Purchase Price
Slide 20: Subsea Products Backlog
Subsea Products Backlog At Year-End 90 90 80 80 70 70 60 60 Millions In Millions 50 50 40 40 $$ In 30 30 61 61 50 50 47 47 20 20 10 10 23 23 00 2000 2000 2001 2001 2002 2002 2003 2003
Slide 21: Subsea Products Financial Results
Subsea Products Financial Results ($ millions) Revenue Revenue Operating Operating Income Income 140 140 35 35 120 120 30 30 Income Operating Income 100 100 25 25 Revenue Revenue 80 80 20 20 Operating 60 60 15 15 40 40 10 10 20 20 55 00 00 2000 2000 2001 2001 2002 2002 2003 2003
Slide 22: Revenue by Business Segment: Inspection
Revenue by Business Segment 21% 21% Inspection 2003 2003
Slide 23: OIS Acquisition
OIS Acquisition Global Market Provider • Tripled International Inspection Market Presence • Leading Specialist Provider to the Industry
Slide 24: Inspection Financial Results
Inspection Financial Results ($ millions) Revenue Revenue Operating Operating Income Income 160 160 10 10 140 140 120 120 7.5 7.5 Income Operating Income 100 100 Revenue Revenue 80 55 Operating 80 60 60 40 40 2.5 2.5 20 20 00 00 2000 2000 2001 2001 2002 2002 2003 2003
Slide 25: Revenue by Business Segment: Mobile Offshore Production Systems
7% Revenue by Business Segment 7% Mobile Offshore Production Systems Ocean Ocean Legend Legend Medusa MedusaSpar Spar Ocean OceanProducer Producer 2003 2003
Slide 26: MOPS Contract Summary
MOPS Contract Summary • Ocean Legend - Five-year Contract – Ending May, 2006 • Ocean Producer - Seven-year Contract – Ending October, 2008 • Medusa Spar – Tariff Based – Life of Medusa Field and Surrounding Areas • San Jacinto – Bareboat Charter – On Charter, Potential for 1-2 Year Extension
Slide 27: MOPS Financial Results
MOPS Financial Results ($ millions) Revenue Revenue Operating Operating Income Income 60 60 30 30 50 50 25 25 Income Operating Income 40 40 20 20 Revenue Revenue 30 30 15 15 Operating 20 20 10 10 10 10 55 00 00 2000 2000 2001 2001 2002 2002 2003 2003
Slide 28: Revenue by Business Segment: Subsea Projects
11% 11% Revenue by Business Segment Subsea Projects Installation, Installation, Repair Repair and and Maintenance Maintenance Diving Diving 2003 2003
Slide 29: Subsea Projects Financial Results
Subsea Projects Financial Results ($ millions) Revenue Revenue Operating Operating Income Income 100 100 20 20 80 80 15 15 Income Operating Income Revenue 60 10 Revenue 60 10 Operating 40 40 55 20 20 00 00 -5 -5 2000 2000 2001 2001 2002 2002 2003 2003
Slide 30: Segment Summary
Segment Summary • ROVs - Market Leader • Subsea Products - Significant Growth • Inspection - Considerable Leverage • MOPS - Excellent Contract Coverage • Subsea Projects – Convergent Technologies
Slide 31: OII Balance Sheet
OII Balance Sheet Dec.31, Dec. 31, Pro Forma 2002 2003 with Stolt Equity 314 359 359 Debt 118 122 167 Deb/Cap 27% 25% 32%
Slide 32: Where We Are
Where We Are • Proven Performer • Accretive Acquisitions • Existing Assets Can Earn More • Strong Cash Flow • Significant Debt Capacity
Slide 33: Earnings Outlook 2004 / 2005
Earnings Outlook 2004 / 2005 2.50 2.50 2.00 2.00 in $$ Share in Per Share 1.50 1.50 Earnings Per 1.00 1.00 Earnings 0.50 0.50 0.00 0.00 1998 1998 1999 1999 2000 2000 2001 2001 2002 2002 2003 2003 2004* 2004* 2005* 2005* ** OII OII Guidance Guidance March March 2004 2004
Slide 34: 2004 Estimates
2004 Estimates Depend on… •• Specialty Specialty Subsea Subsea Hardware Hardware Orders Orders •• Subsea Subsea Projects Projects Demand Demand •• Floating Floating Rig Rig Utilization Utilization
Slide 35: OII vs. OSX
OII vs. OSX Net Income Relative to 2001 OII OII OSX OSX 160% 160% 153% 153% 140% 140% 128% 128% 121% 121% 120% 120% 122% 122% 100% 100% 93% 93% 96% 96% 80% 80% 76% 76% 60% 60% 70% 70% 40% 40% 2001 2001 2002 2002 2003 2003 2004 2004 Est Est 2005 2005 Est Est Source: Source: Bloomberg Bloomberg andand
Slide 36: Trading Discounts
Trading Discounts 2004 Multiples* 2005 Multiples* P/E P/E P/CF P/CF EV/EBITDA EV/EBITDA P/E P/E P/CF P/CF EV/EBITDA EV/EBITDA OII 20.1x 8.0x 7.2x 16.9x 7.2x 6.2x OSX** 27.8x 13.3x 12.1x 21.4x 11.3x 10.1x OII Trading -28% -40% -41% -21% -37% -39% Discount *Source: *Source: HW HW based based onon Firs
Slide 37: Disclaimer Note
Disclaimer Note • OII vs. OSX Net Income Relative to 2001 Historical net income per Bloomberg, excludes charges and gains. 2004 and 2005 estimates were calculated by Howard Weil based on First Call EPS estimates and OII disclaims any responsibility for them, including any responsibility to update th
Slide 38: OII Summary
OII Summary • Small-Cap Diversified OFS Company • Technical Niches with Leading Market Positions • Leveraged to Deepwater and Subsea Completions • Significant Operating Cash Flow • Poised to Benefit from Capital Expansion Initiatives • Share Price has Upside Potential
Slide 39: Engineered Products & Services
Engineered Products & Services
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