Offshore drilling update

Transcription

1 Offshore drilling update October 217 Ingolf Gillesdal Director, Market Analysis Rigs

2 Clarksons Platou - The world s leading provider of insight and execution in the industry Broking Financial Support Research Our shipbroking services are unrivalled in terms of the number and caliber of our brokers, our breadth of market coverage, geographical spread and depth of intelligence resources Leading investment bank within the shipping and oil services markets globally, following issuers and investors in all major markets. Derivative products that have been pioneered at Clarksons as well as project finance Our port services team provides the highest levels of support with 24/7 attendance to vessel owners, operators and charterers at a wide range of strategically located ports in the UK and Egypt Our research is respected worldwide as the most authoritative provider of intelligence on global shipping ,448 2 years offices employees countries 2

3 Clarksons Platou s global footprint Aberdeen Accra Athens Brisbane Bristol Cairo Dubai Geneva Genoa Great Yarmouth Hamburg Hong Kong Houston Hull Ipswich Johannesburg Ledbury Liverpool London Melbourne New Delhi New York Oslo Perth Rio de Janeiro Shanghai Singapore Southampton Sydney Tilbury Clarksons Platou A Global Leader 16+ years maritime experience 49 offices worldwide 1,4+ employees speaking 4+ languages Globally coordinated execution of maritime, energy & natural resources services 3

4 Executive summary, offshore drilling fundamentals A stable oil price in the USD 5 6 price range should allow E&Ps to generate required returns from offshore oil production Total demand for jack-up rigs is on the rise, in particular driven by increased demand from South-East Asia, India, and most important a continued strong demand from the Middle East. In Norway and the UK, we count a large increase in semi-submersible rigs contract opportunities, likely bringing the region in to a balance by mid-218 (excluding cold stack rigs). Moreover, UK is the only reporting of increased revenue backlog (YoY growth) International E&Ps expected to be aggressive in Brazilian licensing rounds, lucrative pre-salt acreage. This will lead to contract awards from early 219 Massive rig retirements within the floater segment make a material impact on rig utilization as ~3% of the total rig supply has been retired since 214 Longer term we are more optimistic for a balanced market for floaters versus jack-up rigs Source: IHS Petrodata; Clarksons Platou Offshore 4

5 Summary, supply and demand forecast Total rig demand forecast : Jack-up rigs: contracted demand of 38-4 rigs, up from 315 (Oct 217) 218: rigs 219: rigs 22: 38-4 rigs Floaters: contracted demand of 18-2 rigs, up from 15 (Oct 217) 218: 15 rigs 219: rigs 22: +2 rigs Source: IHS Petrodata; Clarksons Platou Offshore 5

6 Offshore drilling segment contract fixings and contract status 6

7 Rig fixing activity: Improvement in particular from the jack-up segment Jackup fixing activity (26-217e) Floater fixing activity (26-217e) Rig years fixed Rig years fixed e e Note: 217 estimates are annualized based on actual fixing activity as of Q3217 Source: IHS-Petrodata; Clarksons Platou Offshore and Securities 215 & 16 saw net negative demand adj. for cancellations. This is not the case for 217 7

8 Offshore drilling rig status by sub segments Commentary Modern jack-up fleet - 7% contracted Despite growing demand for jack-up rigs the segment carry high risk due to lack of rig retirements Massive retirement of floaters recent three years, representing ~3% of total floater fleet UDW demand likely to remain soft, until 22 - however supply of marketable rigs reduced with non-performing rigs requiring extensive investments prior to returning to service JU >2 JU <2 UDW DW MW Rig status split by segment Contracted Warm stacked Cold stacked Retired Source: IHS-Petrodata; Clarksons Platou Offshore 8

9 Floaters rig retirement analysis Commentary Floater rig retirement Transocean and Diamond have combined retired ~6% of all floaters Expect increased retirement of rigs due to ongoing industry consolidation Small size companies are not retiring its fair share Existing Retired 1 5 Source: IHS-Petrodata; Clarksons Platou Offshore 9

10 Jack-up rig segment 1

11 Jack-up rig segment regional supply and demand analysis 6 North Sea Supply Contracted 25 2 Mediterranean/Black Sea Supply Contracted US Gulf Supply Mexico Supply Contracted Mar-4 Dec-1 Sep-17 Contracted Mar-4 Dec-1 Sep-17 2 Mar-4 Dec-1 Sep West Africa Supply Contracted Mar-4 Dec-1 Sep-17 1 Middle East Supply Contracted Mar-4 Dec-1 Sep-17 5 Mar-4 Dec-1 Sep South East Asia Supply Contracted. Mar-4 Dec-1 Sep-17 Indian Ocean Supply Contracted. Mar-4 Dec-1 Sep-17 Source: Clarksons Platou Offshore 11

12 Floater rig segment 12

13 Floater segment regional supply and demand analysis 6. Canada/North Sea Supply Contracted Mar-4 Dec-1 Sep US Gulf Supply Central America Supply Contracted Contracted Mar-4 Dec-1 Sep West Africa Supply Contracted. Mar-4 Dec-1 Sep Mediterranean/Caspian Supply Contracted Mar-4 Dec-1 Sep South East Asia Supply Contracted. Indian Ocean Mar-4 Dec-1 Sep-17 Supply Contracted Mar-4 Dec-1 Sep Brazil Supply Contracted. Mar-4 Dec-1 Sep Australia/NZ Supply Contracted Mar-4 Dec-1 Sep Source: Clarksons Platou Offshore. Mar-4 Dec-1 Sep-17 13

14 Floater rigs fleet analysis 5 Limited deliveries until market balance improves +8% Likley retirement candidates # Floater rigs Source: Clarksons Platou Offshore 14

15 Brazil region specific themes 15

16 Brazil a challenge but still a long term offshore attractive region Oil production: 3 So far Petrobras has been the dominant operator 25 Etesco Petroserv Petrobras with success in pre-salt, switching to UDW rigs 2 15 Diamond Ensco Ocean Rig Transocean Drilling contractors: Seadrill Larger US drillers being replaced by locals and their standard rigs have been forced to leave the region 1 5 Odebrecht QGOG Brazilian companies dominate

17 Brazil historic dayrates High spec modern rigs Standard rigs 7, 6, 5, 4, 3, 2, 1, Oct 22 Apr 25 Oct 27 Apr 21 Oct 212 Apr 215 Oct 21 S America - Drillship >5 - Average (US$) S America - Semi >5 - Average (US$) 45, 4, 35, 3, 25, 2, 15, 1, 5, Oct 22 Apr 25 Oct 27 Apr 21 Oct 212 Apr 215 Oct 217 S America - Semi Average (US$) S America - Semi <=3 - Average (US$) Source: Clarksons Research 17

18 Offshore drilling segment competitive landscape and themes 18

19 Newbuild floater capex 1997 to , 3 3, 25, Capex in USD mill 2, 15, , 16 5, Newbuild floater capex Contracted floaters Source: Clarksons Research; Clarksons Platou Offshore 19

20 Top 5 drillers leverage, liquidity and backlog Capitalisation (USDbn) NIBD Market value Liquidity (Available USDbn) Liquid assets RCF capacity Solidity (Multiple) NIBD/EBITDA 218E 2.8x 6.3x 8.4x 4.4x 4.9x Contract backlog (Q3-17) Total EBITDA backlog of USD 1.1bn Total EBITDA backlog of USD 1.1bn Total EBITDA backlog of USD 1.3bn Total EBITDA backlog of USD 2.1bn Total EBITDA backlog of USD 6.bn Board and Senior Management James S. Tisch (Chairman, elected in 1995) Marc Edwards (CEO, elected in 214) Paul E. Rowsey (Chairman, elected in 215) Carl Trowell (CEO, elected in 214) David W. Williams (Chairman, elected in 28) David W. Williams (CEO, elected in 28) Graham James Kearne (Chairman, elected in 216) Thomas P. Burke III (CEO, elected in 214) Merrill A. Miller Jr. Pete (Chairman, elected in 215) Jeremy D. Thigpen (CEO, elected in 215) Considerations Strong market position in US GoM Relative strong revenue backlog RCF matures in 22 Strong cash liquidity position Relative low leverage (for now) RCF matures in 222 Strong market position in US GoM Strong revenue backlog RCF matures in 22 Leading jack-up position Strong cash liquidity position RCF matures in 221 Leading deepwater and HE contractor Sector lead revenue backlog RCF matures in 219 Source: Company filings Page 2

21 Offshore drilling rig landscape Different challenges and threats associated with each drilling contractor Ongoing industry consolidation Companies involved /likely with bankruptcys Runway length secured Current theme seem to prioritize sub-segments prioritization vs global full service provider M&A targets / recently restructured Strong segment position / industry leadership (deepwater) Client relationships, how to gain competitive advantage NOC clients getting increased market share Global players with unsecure future (HE jack-ups) Renewed investor interest 2H 217 (Strong liquidity position, mixed fleet and no lead segment position) Source: Clarksons Offshore Platou Page 21

22 Appendix 22

23 Contract overview South America Name Manager Rig Type West Freedom Seadrill Jackup Ecopetrol Colombia PetroSaudi Saturn PetroSaudi Drillship PDVSA Venezuela Stena Carron Stena Drillship ExxonMobil Guyana Dhirubhai Deepwater KG1Transocean Drillship Petrobras Brazil Gold Star QGOG Constellation Semisubmersible Petrobras Brazil Ocean Rig Mykonos Ocean Rig Drillship Petrobras Brazil Lone Star QGOG Constellation Semisubmersible Petrobras Brazil Ocean Rig Corcovado Ocean Rig Drillship Petrobras Brazil West Carina Seadrill Drillship Petrobras Brazil ENSCO 61 Ensco Semisubmersible Petrobras Brazil West Saturn Seadrill Drillship Standby Ca Yard CanarEn rostatoil Brazil Atlantic Star QGOG Constellation Semisubmersible Petrobras Brazil Sevan Brasil Seadrill Semisubmersible Petrobras Brazil Brava Star QGOG Constellation Drillship Petrobras Brazil Amaralina Star QGOG Constellation Drillship Petrobras Brazil Transocean 76 Transocean Semisubmersible Petrobras Brazil Ocean Valor Diamond Offshore Semisubmersible Petrobras Brazil Laguna Star QGOG Constellation Drillship Petrobras Brazil SSV Victoria Petroserv Semisubmersible Petrobras Brazil Norbe VI Odebrecht Semisubmersible Petrobras Brazil ODN Delba III Odebrecht Semisubmersible Petrobras Brazil Petrobras 1 Transocean Drillship Petrobras USA Petrobras Brazil West Tellus Seadrill Drillship Petrobras Brazil ENSCO 62 Ensco Semisubmersible Petrobras Brazil Vitoria 1 Schahin Drillship Petrobras Brazil Ocean Courage Diamond Offshore Semisubmersible Petrobras Brazil GP-2 PDVSA Jackup PDVSA Venezuela GP-19 PDVSA Jackup PDVSA Venezuela Noble Bob Douglas Noble Drillship TullowHot stacked Suriname ExxonMobil Guyana Norbe VIII Odebrecht Drillship Petrobras Brazil Carolina Petroserv Drillship Petrobras Brazil Norbe IX Odebrecht Drillship Petrobras Brazil Noble Bully II Noble Drillship Shell Brazil Etesco Takatsugu J Etesco Drillship Petrobras Brazil ODN II Odebrecht Drillship Petrobras Brazil ODN I Odebrecht Drillship Petrobras Brazil Grumari Petrobras Drillship Under construction Br Acce Petrobras Brazil Ipanema Petrobras Drillship Under construction Brazil Acceptance testing BPetrobras Brazil Ondina Odebrecht Drillship Standby Japan En route Br Under construction AcceptancPetrobras Brazil Urca Queiroz Galvao Semisubmersible Standby Brazil UndeAccepPetrobras Brazil Deepsea Guarapari Odfjell Galvao Drillship Under construction Singapore En rounder conaccep Petrobras Brazil Frade Petroserv Semisubmersible Standby Brazil Under construction BrazilAccep Petrobras Brazil Pituba Odebrecht Drillship Standby Japan En rounder construction Brazil AccepPetrobras Brazil Bracuhy Queiroz Galvao Semisubmersible Standby Br Under construction Brazil Acce Petrobras Brazil Deepsea Itaoca Odfjell Galvao Drillship Under construction Singapore En rounder construction Brazil AccepPetrobras Brazil Camburi Seadrill Drillship Standby Singapore Under construction SingapEn rounder construction Brazil Acceptance tes Petrobras B Portogalo Petroserv Semisubmersible Standby Brazil Under construction Brazil Cassino Etesco / OAS Drillship Standby China En rounder construction Brazil Arpoador Petrobras Drillship Under construct Accep Petrobras Brazil Copacabana Petrobras Drillship Standby Japan En rounder conaccep Petrobras Brazil Petrobras XXIII Petrobras Semisubmersible Warm stacked Brazil Petrobras XVII Petrobras Semisubmersible Warm stacked Brazil Petrobras XVI Petrobras Semisubmersible Warm stacked Brazil P-6 Petrobras Jackup Warm stacked Brazil P-59 Petrobras Jackup Warm stacked Brazil Alpha Star QGOG Constellation Semisubmersible Warm stacked Brazil Source: Clarksons Research 23