Transocean CSFB 2006 -...
Transcript of Transocean CSFB 2006 -...
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Forward-Looking Statement
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 include, but are not limited to, statements involving prospects for the Company, expected revenues, costs and results of operations, market outlook, contract backlog, operational performance, rig demand, dayrates, rig reactivations, major rig upgrades, newbuild and acquisition opportunities, uses of excess cash including stock buybacks, debt reduction, fleet marketing efforts, rig mobilizations and planned shipyard programs. Such statements are subject to numerous risks, uncertainties and assumptions, including but not limited to, uncertainties relating to the level of activity in offshore oil and gas exploration and development, exploration success by producers, oil and gas prices, rig demand, drilling industry market conditions, possible delays or cancellation of drilling contracts, work stoppages, operational or other downtime, the Company's ability to enter into and the terms of future contracts, the availability of qualified personnel, labor relations, future financial results, operating hazards, political and other uncertainties inherent in non-U.S. operations (including exchange and currency fluctuations), war, terrorism and cancellation or unavailability of insurance coverage, the impact of governmental laws and regulations, the adequacy of sources of liquidity, the effect of litigation and contingencies and other factors discussed in the Company's most recent Form 10-K for the year ended December 31, 2004 and in the Company's other filings with the SEC, which are available free of charge on the SEC's website at www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward-looking statements. All non-GAAP financial measure reconciliations to the most comparative GAAP measure are displayed in quantitative schedules on the Company’s web site at www.deepwater.com/Non-GAAP.cfm.
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Uniquely positioned in the best business cycle seen in 30 yearsHigh-Specification Floaters Fleet – industry leader
Other Floaters – largest fleet, positioned in key market sectors
Jackups Fleet – focused in Asia and Mideast
Record revenue backlog
Company Overview
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$2.0$2.4 $2.2
$1.3$0.7
$0.1
$0.1
$0.2
$0.4
$0.9$1.2
2006 2007 2008 2009 2010 2011
High-Specification Fleet Other Fleet
Revenue Backlog By Yearat January 31, 2006
Total Revenue Backlog (1): $11.5 Billion
(1) Calculated by multiplying the contracted operating dayrate by the firm contract period from January 31, 2006 forward. Reflects signed contracts only. Revenue backlog excludes revenues from mobilization, demobilization, contract preparation and customer reimbursables. Backlog is indicative of the full contractual dayrate, which could vary due to rig downtime.
(1)
$3.2 $3.3
$2.6
$1.5
$0.8
$0.1
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Uniquely positioned in the best business cycle seen in 30 yearsHigh-Specification Floaters Fleet – industry leader
Other Floaters – largest fleet, positioned in key market sectors
Jackups Fleet – focused in Asia and Mideast
Record revenue backlog Additional contracts pending (LOIs) total approximately 48 rig years and $3.7 billion in revenues
Strong balance sheetSignificant debt reduction over past five years
Excellent cash flow generation through the cycle
Internal growth opportunitiesRig reactivations and upgrades
New rig construction and/or acquisitions
$2 billion stock repurchase authorization
Company Overview
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Deepwater capable rigs remain in tight supply
Further improvement in dayrates expected
Especially “Other Deepwater” units
Customers interested in longer-term contracts
Supports longer-duration cycle
Growing interest in new construction
Majors, Independents and NOCs
Numerous locations
High-Specification Floaters FleetMarket Sector Comments
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Quarterly Dayrate ProgressionNew Contracts Signed 2004 - 2005
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
US$ Avg. Qtrly Dayrate
Fifth-Gen. DW Floaters Other DW Floaters
2004 2005
Deepwater Floaters Fleet
24 mos.Deepwater Nautilus24 mos.Deepwater Millennium
36 mos.Deepwater Millennium60 mos.Deepwater Horizon
36 mos.Discoverer Spirit24 mos.Sedco Energy
24 mos.Deepwater Expedition18 mos.Discoverer Spirit
26 mos.Deepwater Pathfinder12 mos.Deepwater Nautilus
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82%
18%
High-SpecificationFloaters Fleet
(34 Rigs(2))
Percent of FleetUnder Contract Commitments
2006 2007
Committed
Uncommitted
70%
30%
Effective January 31, 2006(1) Excludes letters of intent(2) Includes two Sedco-700 series rig upgrade commitments
(1)
2008
56%
44%
75%75%90%Other High-Spec. (4 Rigs)
50%51%69%Other Deepwater (17 Rigs(2))
59%94%96%Fifth-Generation (13 Rigs)
200820072006
9 2006 2007
Other High-Spec
Other Deepwater
Fifth-Generation
High-Specification FloatersFleet Contract Status
2008
Firm Priced Option
Horizon
Spirit
M illennium
Expedit ion
Naut ilus
Discovery
Pathf inder
Front ier
Sedco Express
Deep Seas
Enterprise
Sedco Energy
Cajun Express
Sedco Upg # 2
Navigator
Sedco 710
Sedco Upg # 1
Seven Seas
Sedco 707
D534
Peregrine I
Leader
Rather
Richardson
Cunningham
M arianas
SovEx
Jack Bates
M .G. Hulme
Sedco 709
Arct ic
Polar Pioneer
P.B Loyd
Goodrich
2009 2010At January 31, 2006
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Strong Geology With Expanding ActivitySupports Deepwater Sustainability
Established
EstablishedGulf of Mexico
Lease expirations driving short-term demand
BrazilExploration successIncreased activity from int’l operators
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Strong Geology With Expanding ActivitySupports Deepwater Sustainability
Established Developing
DevelopingGulf of Mexico
Ultra-deep well bores - 34,000+ feetTaxing capabilities of Fifth-Generation Deepwater fleet
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Strong Geology With Expanding ActivitySupports Deepwater Sustainability
Established Developing Frontier
FrontierMexico
Deepwater reserves - 36 billion bbls +Orphan Basin
Largest undrilled geological structure in the world
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Customer demand remains strong in all regions
Fleet largely committed through 2006
Dayrates continuing to increase
Average contract length one year
Two reactivations underway with attractive contracts
Two additional reactivations possible in 2006
Other Floaters FleetMarket Sector Comments
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Quarterly Dayrate ProgressionNew Contracts Signed 2004 - 2005
Other Floaters Fleet
50,000
100,000
150,000
200,000
250,000
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
US$ Avg. Qtrly Dayrate
Other Floaters Fleet
2004 2005
First Quarter 2006 Contract Signings To DateSedco 711 $283,000J.W. McLean $250,000
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Other FloatersFleet (mid-water)
(21 Rigs(2))
Percent of FleetUnder Contract Commitments
71%
29%36%
64%
82%
18%
High-SpecificationFloaters Fleet
(34 Rigs(2))
2006 2007
Committed
Uncommitted
70%
30%
2008
56%
44%
16%
84%
Effective January 31, 2006(1) Excludes letters of intent(2) Includes two Sedco-700 series rig upgrade commitments
(1)
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Strong customer demand most evident in Asia and the Middle East
Dayrate improvement continuesTrident 20 $130,000 – Previously $90,000
Shelf Explorer $120,000 – Previously $70,000
J.T. Angel $ 97,000 – Previously $60,000
Contract durations lengthening
Transocean has numerous pending contracts (LOIs)25 rig years
Estimated revenue backlog of approximately $1.2 billion
Pursuing fleet upgrade opportunitiesPetroJack ASA agreement
Jackups FleetMarket Sector Comments
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Other FloatersFleet (mid-water)
(21 Rigs(2))
Percent of FleetUnder Contract Commitments
71%
29%36%
64%
82%
18%
High-SpecificationFloaters Fleet
(34 Rigs(2))
2006 2007
Committed
Uncommitted
70%
30%
2008
56%
44%
16%
84%
Jackups Fleet(25 Rigs)
77%
23%
40%
60%
12%
88%
Effective January 31, 2006(1) Excludes letters of intent(2) Includes two Sedco-700 series rig upgrade commitments
(1)
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Secure “forward-start” contracts for High-Specification Floaters fleet
Significant term and premium rates
Capture contracts for High-Specification Floaters construction
Execute efficientlySafety is paramount, minimize downtime and cost inflation
Projects on time and on budget
Attract, train and retain personnel
Near-Term Focus