Benjamin Swomley September 5, 2011 Global Oil Services ... · Trading and Valuation Summary:...

September 5, 2011

Global Oil Services, Drilling & Equipment Houston Trip Takeaways: Better Subsea & Int’l Service Pricing, GoM Permits Pick Up

We spent several days in Houston meeting service companies and E&Ps, and have emerged with positive takeaways on (i) subsea equipment orders, (ii) GoM permitting, and (iii) int’l service margins, which may surprise to the upside in 2012. See summary on Page 3. The outlook from a ‘bottom up’ perspective looks positive. Unfortunately, top down macro sentiment swings will continue to dominate share price movements and in that respect the parallels between now and September 2008 are starting to become troubling to say the least.

Based on operator requirements, subsea equipment orders are set for two years of meaningful growth. We counted almost 500 and 600 subsea trees expected to be installed in 2013 and 2014, respectively. This represents growth rates of 26% in 2013 and 22% in 2014, translating into a pickup in orders in early 2012. Both CAM and FTI have stated that they are turning away work with unfavorable pricing, suggesting that margins will soon begin to improve.

GoM permitting on the rise. Permits were issued for eight wells in August, the highest pace we have seen post-Macondo. Operators that we met in Houston appeared more comfortable with the permitting process, which was also reflected in the contracting activity we witnessed last month. There were three new GoM floater contracts signed in August with 710 days of backlog, compared to just four contracts in the first 7-months of the year with backlog of 530 days.

Int’l service pricing is on the rise with margins looking to surprise to the upside. HAL and BHI both commented that certain product lines are sold out. Int’l margins are likely to reach 20% by 2012, ahead of our estimates.

Table of Contents Investment Perspective Page 2 Contract Drilling Markets Page 5 Offshore Drilling Dayrates: Historical and Forecast Page 8 Morgan Stanley Offshore Drilling Dayrates by Company 0 Expected Deliveries: Jackups and Floaters Page 11 US and International Rig Counts Page 12 Trading and Valuation Summary: Contract Drillers Page 13 Trading and Valuation Summary: Oil Services and Drillers Page 14 Global Valuation and Ratings Summary Page 15 Consensus Earnings Revisions and Short Interest Ratios Page 16 Morgan Stanley EPS Estimates vs. Consensus Page 17 Morgan Stanley Revenue Growth Projections by Area Page 19 Morgan Stanley EBIT Margins Projections by Area Page 20 Morgan Stanley Revenue & EBIT Estimates vs. Consensus Page 21 Consensus Outlook Page 25 Commodity Data and Global Economic Forecast Page 26 Newbuild Orderbook: Jackups and Floaters Page 27 Stocks Performance Review Page 30 Valuation Methodologies and Investment Risks Page 31 :

Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Research. Investors should consider Morgan Stanley Research as only a single factor in making their investment decision. For analyst certification and other important disclosures, refer to the Disclosure Section, located at the end of this report. += Analysts employed by non-U.S. affiliates are not registered with FINRA, may not be associated persons of the member and may not be subject to NASD/NYSE restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Morgan Stanley & Co. LLC Ole Slorer

[email protected] +1 (1)212 761 6198

Igor Levi [email protected] +1 (1)212 761 3232

Benjamin Swomley [email protected] +1 (1)212 761 4248

Morgan Stanley & Co. International plc+

Robert Pulleyn [email protected] +44 (0)20 7425 4388

M O R G A N S T A N L E Y R E S E A R C H N O R T H A M E R I C A

Industry View Attractive

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M O R G A N S T A N L E Y R E S E A R C H

September 5, 2011 Global Oil Services, Drilling & Equipment

Investment Perspective Exhibit 1

Weekly Stock Performance

GBB-PARHLXPTEN

CRRNBR

TSS&P 500

SLBTCW-TSE

NOVDOTGS-OSLHALOSXRIGHPFTICAMESVSUBC-OSLOIIPGS-OSLNASDAQNEGA-PARTEC-PARBHISDRLMDRATWSPM-MIL

DRQRDCWFTGTLSKENZ-LON

CFW-TSESBMO-AMSCOSLWG-LONPFC-LONRES

TRE-ESDRC

Aban

VK-PARHERO

TMKS-LON

-5% 0% 5% 10% 15% 20% 25%

Source: FactSet; Morgan Stanley Research. Note: Graph is for total return for period.

TMK outperformed as it reported 1H11 revenues of $3.55bn vs. MS estimate of $3.40bn and EBITDA of $625m vs. MS estimate of $570m. The 38% y/y growth in revenues was attributed to an improvement in pricing and product mix.

ATW signed two long-term floater contracts in Australia at attractive rates, fulfilling an important catalyst we laid out for the company. See Page 5

CAM acquired LeTourneau Drilling Technologies from Joy Global for $375m. We believe that the acquisition complements CAM’s existing BOP offering and will allow it to compete with NOV on complete drilling packages. See separate report

Bourbon underperformed as it continues fleet expansion in a difficult market marked by overcapacity; we reiterate our Underweight. See separate report

Sinopec’s chairman highlighted the firm’s intention in collaborating with foreign players to develop China’s substantial shale gas reserves. This follows on the heels of Shell’s recent deal with Henan CBM.

XOM and Rosneft signed a strategic partnership that includes plans to spend ~$3.2bn in the exploration and development of Arctic and Black Sea resources. Positive for SLB, TS, RIG and SDRL.

Recent sales of old and new jackups above our second-hand value estimates imply upside to our NAV projections. See Page 5 for details

SLB: The HiWAY 6-months later During SLB’s investor conference in February this year, SLB introduced its new fracturing technology that former CEO Gould claimed would be a game-changer to combat gas stimulation practices consisting of “brute force and ignorance”. This technology was expected to reduce the amount of water and proppant consumed per stage, while reducing the number of frac stages per well (although requiring the same amount of horsepower per stage). When we met with SLB in Houston last week, the company dubbed the venture a “tremendous success” in the Eagle Ford and other US oil plays. The company admitted that the technology did not function well in the Haynesville because of high temperature and pressure, but still worked in all other basins. The company has signed up 20 new clients for HiWAY in North America with total customer

savings of 25% from the creation of flow channels that do not require proppant. Cheaper proppant could also be used as HiWAY is less dependent on permeability and requires fewer but more efficient frac stages. At a presentation last week, SLB stated that it had thus far pumped around 2,000 stages of proppant, which we estimate to translate to ~120-140 wells out of a total ~13,000 unconventional wells drilled in the US this year, implying a 1% share. SLB will not use HiWAY for market share purposes, but will instead focus on maximizing the value opportunity, in our view. While certain E&P operators give a skeptical review of the technology in public, we do not see this as unusual given their displeasure about being restricted to a single company technology or product line. So far, the data appear very conclusive, although this is mostly academic while the entire pumping complex remains sold out.

https://secure.ms.com/eqr/rlink/webapp/Research?action=streamFile&docId=372312&docFileType=1&linksrc=rl-res-site&lastParam=/CAM083111.pdf

https://secure.ms.com/eqr/rlink/webapp/Research?action=streamFile&docId=372312&docFileType=1&linksrc=rl-res-site&lastParam=/CAM083111.pdf

https://secure.ms.com/eqr/rlink/webapp/Research?action=streamFile&docId=372354&docFileType=1&linksrc=rl-res-site&lastParam=/PULLEYN_GPBN_310811.pdf

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Houston Energy Field Trip Takeaways Positive takeaways for subsea orders, GoM permitting activity and int’l service pricing.

We met with three major oil service companies, two subsea equipment names and a handful of other companies including E&Ps. Our meetings reflected strong support for multi-year growth in service spending, a view shared by SLB’s CEO at a conference early last week. We highlight three key takeaways:

(i) Subsea equipment activity is expected to be very robust over the next two years with record tree orders, while manufacturers are passing up work with unfavorable pricing.

(ii) Improvement in permitting activity, with operators increasingly optimistic about their ability to secure permits.

(iii) Pickup in international service pricing, with shortages in equipment; int’l margins may surprise to the upside.

(i) Record subsea activity and improved pricing Major pickup in orders to drive pricing higher Both CAM and FTI expressed positive views on the subsea market going into 2012. CAM projects a sharp ramp in activity followed by pricing improvement, and expects the next 2-years to be robust. CAM is particularly enthusiastic about PBR’s demand in 2012, which it believes could double over several years. FTI has seen prices stabilize and expects awards for ~250 trees in 2012. FTI said it is backing away from large contracts with weak pricing and that we should see a pickup in pricing when its competitors do the same. Interestingly enough, CAM also claimed that it is passing up large projects with weak pricing, suggesting that we have likely reached a pricing inflection and should see margins improve in 2012. We looked at tree installation data from ODS, which suggests that 2013 will experience a 26% y/y increase in installation activity, and 2014 will experience an additional 22% increase. We expect this to translate into higher 2012 awards, with the majority of 2013 trees yet to be awarded. The subsea market is far less standardized than the rig equipment or service equipment markets. This is a result of high engineering complexity, with trees built specific to each field. There is additional dislocation due to local content requirements. As a result, this allows for a rise in pricing power,

despite total manufacturing capacity of 700-800 trees per year (according to CAM). Exhibit 2 We see a pickup in subsea tree installations in 2013/14, implying a pickup in awards in 2012 Subsea tress installed per year

94 93 106 73 84 66 101 109 136

88 67 6164 67 87

77141

13847 45 4440 52 79 72

99 83

0

100

200

300

400

500

600

06 07 08 09 10 11e 12e 13e 14e

Other

GoM

SouthAmerica

NorthSea

WestAfrica

most likely to be awarded in 2012

Source: ODS-Petrodata, Morgan Stanley Research

FTI/CAM commentary on their other segments FTI also sees growth opportunity in riserless solutions, which it says cuts costs by 50% vs. traditional rig-based methods. The company is currently working to develop a riserless solution for coiled tubing. CAM highlighted a significant opportunity in US land. The company currently has 10% of the frac infrastructure market in US land vs. 35% in other markets. However, CAM has increased focus on this segment of the market 2-years ago. Prior to this, the US had been a low-pressure market with revenue opportunity of $25-35k per well to provide a wellhead. Today, CAM is able to sell other equipment, including wellhead systems, fluid management, compression and frac equipment, translating into $150k per well. The company suggested that it could double this business from $400mm today over the course of several years. (ii) Pickup in GoM permitting to benefit offshore drillers and service names Pace of permitting increases The initial pickup in permitting in March was followed by a slowdown into the summer. This resulted in additional rigs leaving the GoM and significant pushback from industry participants, who called for a pickup in pace of permit approvals. In response, BOEMRE rolled out numerous aids to facilitate the

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permitting process, including electronic permit tracking. The pace of permitting has since picked up and we count eight new deepwater wells approved in August alone, the highest we have seen post-Macondo (Exhibit 3). We expect this to benefit offshore drillers with GoM exposure such as RIG, ESV, and NE, with positive implications for deepwater rates globally and higher service utilization. We sense increased optimism around permitting among operators in Houston last week. Marathon commented that the Key Largo GoM permit is moving faster, and that they expected a 90-day turnaround. Cobalt also seemed comfortable with the permitting situation, saying that two drilling permits from the BOEMRE are in hand, and that they are only waiting on a certificate of compliance from the coast guard to start drilling. We have also witnessed increased floater contracting activity in the GoM. Three floater contracts with total backlog of ~710 days were signed in August, compared to just four contracts in the first 7 months of the year with total backlog of ~530 days. Exhibit 3 Record deepwater permits approved in August GoM Permits Approved Since Macondo

1

6

4

3

2

4

8

Feb Mar Apr May Jun Jul Aug

Source: BOEMRE, Platts, Morgan Stanley Research

Environmental lawsuits are now less likely to pose a threat We highlighted environmental lawsuits as one of the key threats to a recovery in GoM activity. Two lawsuits were filed by environmental groups in June, which threatened to halt GoM activity (if injunctions were issued). However, Shell recently commenced drilling on the Appomattox prospect (the prospect challenged by the lawsuits) using RIG’s Deepwater Nautilus, which will make it challenging for environmental groups to obtain restraining orders henceforth. (iii) Pickup in int’l service pricing, margins likely continue expanding beyond 2012

Meetings with service majors in Houston confirmed our view that international pricing continues to rise with equipment shortages. BHI has stated that they have sold out on a number of rotary steerable tools and are struggling to keep up with orders. HAL is also seeing pockets of shortages, and expects steady margin improvement over the next few quarters. BHI expects to see 20% int’l margins in 2012 (ahead of our estimate that we would reach those levels in 2013). HAL expressed its view that margins would trend higher beyond 2012. Increased bidding activity coupled with equipment shortages has instilled greater discipline among the service majors. Internationally, areas of strength include the Middle East and the N. Sea. This was corroborated by NBR, which expects to have 30 land rigs in Saudi by YE2011 vs. 21 rigs today; NBR also has eight rigs contracted to work in Iraq, with just two currently working. BHI was very optimistic on Iraq and referred to it as the “new Brazil”. The company sees “tremendous” spending for services, without the complexity and local content distractions of Brazil (should initial security issues be resolved). Exhibit 4 BHI sees int’l margins reaching 20% by the end of 2012, ahead of our expectations

Int'l EBIT margins

0%

5%

10%

15%

20%

25%

30%

35%

2005 2006 2007 2008 2009 2010 2011E 2012E 2013E

BHI SLB HAL WFT

20% margins line

Source: Company data, Morgan Stanley Research

WFT’s production division – a hidden gem WFT is the most complete artificial lift company within our coverage universe, a segment of the market that is below the radar for most investors. Yet, at 25% of NAm revenues it is an important driver for WFT. Recent price increases have brought pricing within 10% of the 2008 pea, but we expect another price increase shortly and margins to accelerate sharply from 3Q11 onwards to a new high by the middle of 2012. While demand for artificial lift so far has been driven by heavy oil and shale oil in NAm, maturing oilfields globally should underpin a favorable long term growth backdrop.

5



Contract Drilling Markets Summary Asset values register an uptick as: (i) RIG sold a 28-year old 300 IC for $69m, above our expected $50m. (ii) An undisclosed buyer paid an estimated ~$225m for a Standard Drilling 400 IC newbuild that was ordered at $185m 11-months ago. (iii) NE exercised an option for an UDW drillship at $630m, $25m more than the order price for a sister vessel 8-months earlier. We believe continued growth in asset values will drive higher NAVs and lead to more compelling valuations for the offshore drillers. Key Data Points and Fixtures Floaters

Ocean Rig’s Eirik Raude (10,000 ft. 5G semi) is close to securing a contract to drill additional wells off West Africa. It was revealed that a contracted dayrate would likely exceed $500kpd. The rig has been contracted to Tullow Oil in Ghana at $665kpd since Oct-2008. The company is still seeking an opportunity to contract the semi in Norway following its work off West Africa.

NE exercised an option for a fourth UDW drillship at HHI. The 12,000 ft. unit will be constructed at a cost of $630m and be delivered in 2H14. This was NE’s final drillship option; the company has remaining options for four jackups that will expire by year-end.

Jackups

RIG secured a new 3-year contract for its third newbuild jackup at $145kpd, versus our expected $139kpd. The rig will be employed upon delivery in 3Q13. All three of its Keppel newbuilds are now on long-term contracts with Chevron in the Gulf of Thailand.

RIG also confirmed the sale of GSF Adriatic XI (300 IC) for $69m, which has been cold-stacked since Sept-2009. This came in well above our expected ~$50m second-hand value for a 1980s built 300 IC jackup (Exhibit 31). The unit will be heading to Alaska to work with Buccaneer Energy in 2H12, following winterization and upgrades in Singapore.

Standard Drilling sold a 400 IC unit under construction for an estimated~$225m to an undisclosed UK buyer. The rig will be delivered in Jul-2012 and was originally ordered at a cost of $185m in Nov-2010.

CIMC Raffles intends to build another two speculative jackups. The shipyard also confirmed the successful sale of all three of its 300 IC newbuilds that were previously built on spec.

Perforadora Central was the sole bidder on a mat jackup tender in Mexico and offered Grijalva (200 MC) at $50kpd for a ~4-month contract. The bid exceeded the dayrate cap of $38kpd.

Two separate tenders for eight jackups have been issued in Mexico. Contracts will run for ~3-years and dayrate caps on the three 350 IC (post-2000), four 350 IC and one 300 IC stand at $127kpd, $100-104kpd, and $81kpd respectively.

Tender Rigs

SDRL announced plans to retire two of its oldest tender rigs. The 1981-built T4 and 1983-built T7 tender barges have been identified as possible candidates for sale/scrapping. Management is seeking to lower the company’s average tender rig fleet age, which currently stands at ~10-years versus ~2-years for floaters and jackups. The company will also take delivery of four new tender rigs in 2013.

Fleet Reports and Earnings Comments ATW increased its floater backlog as it signed two long-term contracts with Apache in Australia at attractive rates, fulfilling an important catalyst that we laid out for the company. Another upcoming catalyst would be the fixing of an attractive contract for Atwood Condor (10,000 ft. 6G semi), which is scheduled for delivery in Jul-2012.

Atwood Eagle (5,000 ft. 4G semi) secured an 18-month contract with Apache in Australia at ~$385kpd, above our expected $370kpd. The contract will commence after a $370kpd Chevron commitment in Jul-2012.

Atwood Falcon (5,000 ft. 4G semi) also signed a new contract with Apache in Australia at ~$385kpd, well above our expected $290-320kpd range. The contract will commence in May-2012 and last for 30-months.

Atwood Beacon (400 IC) will finish its contract in Apr-2012 instead of Mar-2012. The rig will continue to earn $115kpd versus our expected $160kpd.

6



Exhibit 5 Floater Contract Status: Less than 2,000 ft.

0 180 360 540 720 900 1,080

Sedco 714

Essar Wildcat

Ocean NomadOcean Guardian

Noble Ton van LangeveldScarabeo 3

Istiglal

WilPhoenixOcean Patriot

Sedneth 701WilHunter

GSF Arctic III

ENSCO 5003Nanhai VI

Nanhai V

Kan Tan IIINanhai II

Ocean GeneralOcean Whittington

Sedco 704

Borgsten DolphinSonga Mercur

ActiniaSedco 711

Transocean John Shaw

Energy DrillerStena Clyde

Zagreb 1Petrolia

Stena Spey

Dada Gorgud

Days from Today

Newbuild/Upgrade Contract Term Option

Exhibit 6 Floater Contract Status: 4,001–7,500 ft.

0 180 360 540 720 900 1,080

Atw ood Eagle

Henry Goodrich

GSF Development Driller II

Atw ood Hunter

ENSCO 6002

ENSCO DS-2

ENSCO 6001

Blackford Dolphin

Transocean Marianas

GSF Development Driller I

Ocean America

Noble Paul Romano

M.G. Hulme, Jr.

Transocean Rather

Leiv Eiriksson

Noble Homer Ferrington

ENSCO 5006

Sedco Express

Jasper Explorer

Jack Bates

Ocean Valiant

Stena DrillMAX ICE

Sedco 702

Discoverer Seven Seas

Noble Max Smith

Stena DrillMAX

West Capricorn

Ocean Victory

Noble Muravlenko

Deep Venture

Days from Today


Exhibit 7 Floater Contract Status: 2,000–4,000 ft.

0 180 360 540 720 900 1,080

Amir KabirOlinda Star

Maersk ExplorerTransocean Driller

Petrobras XVIISagar Vijay

Noble Therald MartinOcean Concord

Ocean WinnerOcean Worker

Scarabeo 6Ocean Yatzy

Ocean Yorktow nOcean Lexington

Ocean QuestPetroSaudi Saturn

Paul B. Loyd, Jr.ENSCO 5000

Falcon 100

Aban IceIsland Innovator

GSF Arctic ITransocean Amirante

ENSCO 6000GSF Rig 135GSF Rig 140

Sovereign Explorer

Ocean SaratogaTransocean Legend

Kan Tan IVEnergy Searcher

Days from Today


Exhibit 8 Floater Contract Status: 7,501+ ft.

0 180 360 540 720 900 1,080

West AquariusWest Vela

West HerculesDeepw ater Millennium

Ocean ConfidenceOcean Rig Poseidon

Pacif ic KhamsinBelford Dolphin

West AurigaDiscoverer Deep Seas

ChikyuWest Navigator

Maersk DiscovererDalian Developer

GSF ExplorerWest Polaris

Noble Amos RunnerENSCO 8506

Petroserv Semi Tbn1Deepw ater Nautilus

Atw ood CondorENSCO 8504

Ocean MonarchNoble Clyde Boudreaux

Ocean EndeavorENSCO 8505

Noble Jim DayENSCO DS-6

West LeoEirik Raude

La Muralla IV

Days from Today


Source: ODS-Petrodata, Company data, Morgan Stanley Research

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Exhibit 9 Worldwide Offshore Drilling Snapshot

Previous Change over Current DayrateSupply Demand Util (%) Week Last Week Range ($kpd)

JackupsU.S. Gulf of Mexico

450'+ IC 1 1 100% 100% -- $85.0 -- $85.0328' - 400' IC 10 9 90% 90% -- $70.0 -- $105.0350' - 380' IS 3 1 33% 33% -- $55.0 -- $55.0300' IC 7 4 57% 71% ▼ $70.0 -- $78.0250' IC 4 2 50% 50% -- $60.0 -- $62.5250' MS 13 2 15% 8% ▲ $42.0 -- $48.0To 225' IC 2 1 50% 100% ▼ $44.0 -- $55.0To 200' MC 28 10 36% 32% ▲ $36.0 -- $46.0Other 5 4 80% 43% ▲

Total U.S. Gulf of Mexico 73 34 47% 43% ▲ $49.7 -- $63.8

InternationalFar East 34 30 88% 85% ▲ na -- naSoutheast Asia 62 45 73% 73% ▼ $75.0 -- $135.0Indian Ocean 34 27 79% 82% ▼ $62.5 -- $134.0Middle East 118 82 69% 69% -- $55.0 -- $100.0Mediterranean 22 14 64% 68% ▼ $95.0 -- $120.0Mexico 31 23 74% 77% ▼ $58.0 -- $122.5North Sea 42 35 83% 83% -- $290.0 -- $347.0Latin America 17 12 71% 71% -- na -- naWest Africa 33 19 58% 61% ▼ $67.0 -- $134.0Other International 10 5 50% 50% --

Total International 403 292 72% 73% ▼Worldwide Jackups Total 476 326 68% 68% ▲

FloatersUS GoM 33 27 82% 82% -- $205.9 -- $234.1Far East 12 7 58% 58% -- na -- naSoutheast Asia 29 8 28% 28% -- $180.0 -- $285.0Indian Ocean 13 11 85% 77% ▲ na -- naMediterranean 11 7 64% 64% -- $247.0 -- $247.0Mexico 4 4 100% 100% -- na -- naNorth Sea 43 33 77% 81% ▼ $365.0 -- $475.0Latin America 77 65 84% 82% ▲ $270.0 -- $463.0West Africa 36 22 61% 61% -- $185.0 -- $470.0Other International 18 16 89% 89% --

Total International 243 173 71% 71% ▲Worldwide Floaters Total 276 200 71% 71% ▼

Source: ODS-Petrodata, Morgan Stanley Research

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Exhibit 10 Average Dayrates for GoM Commodity Jackups ($kpd)

$0

$20

$40

$60

$80

$100

$120

$140

98 99 00 01 02 03 04 05 06 07 08 09 10 11

250 IC200 MC250 MS

Exhibit 11 Average Dayrates for GoM High Spec Jackups ($kpd)

$0

$40

$80

$120

$160

$200

98 99 00 01 02 03 04 05 06 07 08 09 10 11

300+ IC300 ICMex 300 IC

Exhibit 12 Average Dayrates for International Jackups ($kpd)

$0

$50

$100

$150

$200

$250

98 99 00 01 02 03 04 05 06 07 08 09 10 11

SE AsiaW. AfricaME

Exhibit 13 Average Dayrates for North Sea Jackups ($kpd)

$0

$75

$150

$225

$300

$375

98 99 00 01 02 03 04 05 06 07 08 09 10 11

HarshStandard

Exhibit 14 Morgan Stanley: Key Jackup Rollover Assumptions ($kpd)

GoM Jackups 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13

250 MS 39 41 44 47 49 51 53 55 57 59

200 MC 41 43 47 50 52 54 56 58 60 62

250 IC 56 58 62 65 67 69 71 73 75 77

300 IC 66 68 72 75 77 79 81 83 85 87

350 IC 76 78 82 85 87 89 91 93 95 97

International 300 IC 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13

1980s built jackups

Mexico 79 78 82 85 87 89 91 93 95 97

N. Sea (standard) 95 95 98 101 104 107 110 113 116 119

N. Sea (harsh) 115 115 118 121 124 127 130 133 136 139

Middle East 80 80 80 80 80 80 82 84 86 88

Southeast Asia 90 90 90 90 90 90 92 94 96 98

Post-2000 built jackups

Standard 131 134 137 140 143 146 149 152 155 158

Harsh 165 170 175 180 185 190 195 200 205 210 Source: ODS-Petrodata, Morgan Stanley Research estimates

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Exhibit 15 Average Dayrates for Floaters in the GoM ($kpd)

$0

$100

$200

$300

$400

$500

$600

98 99 00 01 02 03 04 05 06 07 08 09 10 11

DeepwaterMid-water

Exhibit 16 Average Dayrates for Floaters in Brazil ($kpd)

$0

$100

$200

$300

$400

$500

$600

98 99 00 01 02 03 04 05 06 07 08 09 10 11

DeepwaterMid-water

Exhibit 17 Average Dayrates for Floaters in West Africa ($kpd)

$0

$100

$200

$300

$400

$500

$600

98 99 00 01 02 03 04 05 06 07 08 09 10 11

DeepwaterMid-water

Exhibit 18 Average Dayrates for Floaters in the North Sea ($kpd)

$0

$100

$200

$300

$400

$500

$600

98 99 00 01 02 03 04 05 06 07 08 09 10 11

HarshStandard

Exhibit 19 Morgan Stanley: Key Floater Rollover Assumptions ($kpd)

Floaters 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13

<2,000 ft 203 203 203 203 213 223 233 243 253 263

2,000-4,000 250 250 250 250 260 270 280 290 300 310

4,001-7,500 299 299 299 299 314 329 344 359 374 389

7,500+ 453 453 458 463 468 473 478 483 493 503

10,000+ 480 485 490 495 500 510 520 530 540 550

North Sea Floaters 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13

Standard 260 270 280 290 300 310 320 330 340 350

Harsh 365 370 380 390 400 410 420 430 440 450 Source: ODS-Petrodata, Morgan Stanley Research estimates

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Exhibit 20 Morgan Stanley Estimates of Average Achieved Dayrates by Asset Class and Contractor

AVERAGE RATES BY ASSET CLASS ($kpd)RIG Quant. '05 '06 '07 '08 '09 '10 '11e '12e '13e ESV Quant. '05 '06 '07 '08 '09 '10 '11e '12e '13eJackups Jackups250 IC 12 41 84 126 139 136 109 85 71 75 250 IC 19 64 96 105 111 119 85 80 76 79300 IC 30 63 96 168 165 160 120 101 85 88 300 IC 11 60 81 123 146 133 105 74 84 89350 IC 14 69 103 153 175 170 136 110 108 114 350 IC 5 80 125 110 159 129 103 109 115 121400 IC 8 86 114 170 189 185 115 118 131 144 400 IC 13 85 129 190 205 205 139 130 144 161Floaters Floaters2G 5 84 139 241 326 359 318 248 265 299 2G 4 68 83 165 223 254 243 226 223 2433G/4G 41 109 171 266 315 339 344 346 329 344 3G/4G 8 121 154 205 274 304 290 301 296 3135G/6G 31 164 179 198 296 399 405 499 508 506 5G/6G 15 188 225 288 400 461 464 398 459 461

DO Quant. '05 '06 '07 '08 '09 '10 '11e '12e '13e ATW Quant. '05 '06 '07 '08 '09 '10 '11e '12e '13eJackups Jackups200 MC 2 46 99 84 64 75 NA NA NA NA 300 IC 1 65 88 140 155 125 90 90 93 93250 MS 1 43 88 68 61 70 NA NA NA NA 350 IC 1 NA NA NA NA 135 135 133 131 156250 IC 1 48 103 115 125 120 48 55 65 74 400 IC 4 68 75 135 135 130 120 125 150 169300 IC 7 60 116 118 123 111 93 74 75 80 Floaters350 IC 2 60 85 86 123 113 81 110 128 130 2G 1 46 88 179 320 NA 155 NA NA NAFloaters 3G/4G 3 85 139 193 269 394 458 441 413 3752G 12 73 138 194 284 296 266 256 240 251 5G/6G 3 NA NA NA NA NA NA 490 490 5013G/4G 13 103 158 248 330 334 348 329 298 3105G/6G 11 146 211 281 306 375 370 346 354 364 RDC Quant. '05 '06 '07 '08 '09 '10 '11e '12e '13e

JackupsNE Quant. '05 '06 '07 '08 '09 '10 '11e '12e '13e 300 IC 7 70 136 144 145 144 149 124 113 118Jackups 350 IC 11 79 128 135 134 119 106 103 110 116<200 ft 3 49 63 110 129 99 89 74 55 56 400 IC 13 106 170 219 221 214 190 188 203 203250 IC 11 54 85 143 166 160 89 76 80 83 Floaters300 IC 20 53 70 100 133 133 84 74 75 80 5G/6G 2 NA NA NA NA NA NA NA NA NA350 IC 2 63 89 129 159 156 89 93 93 104400 IC 13 65 89 124 156 156 145 99 105 130 HERO Quant. '05 '06 '07 '08 '09 '10 '11e '12e '13eFloaters Jackups2G 2 NA NA NA NA NA 230 155 190 220 <200 ft 10 50 69 68 80 62 61 33 39 473G/4G 14 118 180 226 299 361 350 340 335 355 200 MC 19 40 78 86 80 65 43 45 53 605G/6G 12 NA NA 215 225 379 329 318 416 423 250 MS 15 NA 89 88 80 78 58 55 53 61

250 IC 3 NA NA NA 190 150 150 118 65 70SDRL Quant. '05 '06 '07 '08 '09 '10 '11e '12e '13e 300 IC 1 54 60 79 136 112 55 63 70 79Jackups 350 IC 1 NA NA NA 134 119 106 75 85 94350 IC 7 105 108 185 181 178 150 150 155 163400 IC 13 131 185 288 253 235 186 169 191 201Floaters3G/4G 1 119 229 250 250 406 486 505 486 4705G/6G 18 218 225 234 313 525 534 538 521 521

DAYS CONTRACTEDJackups Floaters

Total Days (000s) Contracted Days (000s) Percent Covered Total Days (000s) Contracted Days (000s) Percent CoveredContractor Quant. 2011* 2012 2013 2011* 2012 2013 2011* 2012 2013 Contractor Quant. 2011* 2012 2013 2011* 2012 2013 2011* 2012 2013RIG 64 7.6 22.7 23.4 3.4 7.0 3.6 45% 31% 15% RIG 77 9.0 27.5 27.4 6.7 17.5 12.0 75% 64% 44%DO 13 1.6 4.8 4.7 0.6 0.7 0.4 41% 15% 8% DO 36 4.0 12.1 12.3 3.2 6.6 5.2 80% 55% 43%NE 49 5.3 16.1 16.7 4.2 7.0 3.4 79% 44% 20% NE 28 2.5 8.1 8.5 2.1 4.7 4.6 86% 59% 54%SDRL 20 1.8 5.6 6.6 1.7 2.7 2.2 93% 49% 33% SDRL 19 1.7 5.9 6.5 1.7 4.9 3.2 97% 84% 50%ESV 48 5.5 16.8 17.1 4.2 6.3 2.8 76% 37% 16% ESV 27 2.8 9.3 9.7 2.5 6.3 4.5 91% 68% 47%ATW 6 0.4 1.2 2.0 0.4 0.6 0.0 100% 48% 0% ATW 7 0.7 2.7 2.9 0.6 1.7 1.4 83% 63% 47%RDC 31 3.6 11.3 11.3 2.9 6.8 3.4 81% 60% 30% RDC 2 0.0 0.0 0.2 0.0 0.0 0.0 NA NA 0%HERO 49 5.9 17.9 17.9 1.0 0.4 0.4 18% 2% 2% HERO 0 0.0 0.0 0.0 0.0 0.0 0.0 NA NA NA

Source: Company data, Morgan Stanley Research. Note: “Average Rates” section includes contracted and estimated dayrates, and includes cold-stacked rigs in the “quantity”; “Days Contracted” section includes cold-stacked rigs and rigs under construction, 2011* numbers are for remaining length of current year.

11



Exhibit 21 Jackup Expected Deliveries (Full Delivery Table by Rig and Yard on Page 27)

0

2

4

6

8

10

12

1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14

Delivered Contracted Uncontracted

Exhibit 22 Floater Expected Deliveries (Full Delivery Table by Rig and Yard on Page 28)

0

2

4

6

8

10

12

14

1Q08 3Q08 1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14

Delivered Contracted Uncontracted

Exhibit 23 Floater Supply

204 204 204 204 217 239 259 280 294

1322

2021

1427

168 170 164 171 179 172194

220

259

2005 2006 2007 2008 2009 2010 2011e 2012e 2013e

Newbuilds

ExistingFleet

RigsWorking

Exhibit 24 Jackup Supply

387 387 396 414 439 459 489 502 524

18 2520

3013 22

30

9

341 344 347 356303 299

325364

416

2005 2006 2007 2008 2009 2010 2011e 2012e 2013e

Newbuilds

ExistingFleet

RigsWorking

Source: ODS-Petrodata, Morgan Stanley Research estimates

12



U.S. and International Rig Counts Exhibit 25 US Land Rig Count vs. Oil / Gas Strip

600

8001,000

1,2001,400

1,600

1,8002,000

2,200

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011051015202530354045

US Land Rigs (left) Oil / Gas Strip (right)

Exhibit 26 North American Weekly Rig Count

This Last Last Peak09/02/11 Week Week Change Year Since '00

US Land 1,937 1,943 (6) 1,633 1,938Gulf of Mexico 31 32 (1) 20 176

US Total 1,968 1,975 (7) 1,653 2,031Canada 517 508 9 388 727

North America 2,485 2,483 2 2,041 2,485US Gas 895 898 (3) 977 1,606US Oil 1,064 1,069 (5) 665 1,069US Horz./Directional 1,374 1,368 6 1,125 1,556US Vertical 594 607 (13) 528 1,064

Exhibit 27 International Rig Count (Updated Aug 5, 2011)

500

600

700

800

900

1000

1100

1200

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11

Note: Adjusted to exclude Iran and Sudan

Exhibit 28 International Monthly Rig Count (Updated Aug 5, 2011)

Last RecentLand 07/11 06/11 Change Year PeakEurope 73 70 3 48 73 Middle East 247 249 (2) 236 257 Africa 37 47 (10) 56 66 Latin America 344 351 (7) 309 351 Asia / Pacif ic 142 143 (1) 149 159

Int'l Land 843 860 (17) 798 880 OffshoreEurope 47 43 4 50 71 Middle East 40 41 (1) 37 43 Africa 24 26 (2) 23 35 Latin America 94 87 7 78 94 Asia / Pacif ic 102 101 1 123 132

Int'l Offshore 307 298 9 311 321 Note: Updated first week of every month. Data from Iran and Sudan discontinued on Jan 1, 2006.

Exhibit 29 Morgan Stanley US and International Rig Count Forecast

3Q10A 4Q10A 1Q11A 2Q11A 3Q11E 4Q11E 1Q12E 2Q12E 2007A 2008A 2009A 2010A 2011E 2012E 2013EUS Land 1,604 1,666 1,691 1,799 1,840 1,901 1,951 2,007 1,696 1,814 1,043 1,509 1,807 2,042 2,262

Change % YoY 67% 53% 28% 21% 15% 15% 16% 12% 7% 6% -42% 42% 19% 13% 11%Gulf of Mexico 18 22 26 31 32 33 38 43 71 63 42 31 30 43 52

US Total 1,622 1,688 1,716 1,829 1,872 1,933 1,989 2,050 1,767 1,877 1,085 1,539 1,838 2,085 2,314US Gas 976 952 900 880 836 836 828 819 1,465 1,489 799 941 863 815 823US Oil 635 726 808 941 1,026 1,087 1,153 1,222 297 379 275 587 966 1,261 1,479US Horz./Directional 1,107 1,156 1,203 1,268 NA NA NA NA 768 925 654 1,039 NA NA NAUS Vertical 513 532 513 561 NA NA NA NA 999 954 433 500 NA NA NACanada 359 412 587 188 409 470 619 197 344 379 223 348 413 435 458

North America 1,981 2,100 2,303 2,017 2,281 2,403 2,608 2,247 2,110 2,257 1,309 1,887 2,251 2,520 2,772Change % YoY 71% 51% 28% 20% 15% 14% 13% 11% 0% 7% -42% 44% 19% 12% 10%

Europe 92 100 118 112 122 127 132 136 78 98 84 94 120 139 159Middle East 273 270 283 291 292 299 310 320 265 280 252 265 291 326 367Africa 84 83 82 76 80 83 86 91 66 65 62 83 80 94 111Latin America 385 385 410 417 428 454 469 484 355 384 356 383 427 494 551Asia/Pacific 276 277 273 251 283 296 307 317 241 252 243 269 276 323 367Int'l Land 799 806 862 847 883 920 952 988 720 784 722 789 878 1,007 1,122Int'l Offshore 312 309 304 299 321 339 351 360 286 295 275 305 316 368 433

Total Int'l 1,110 1,116 1,166 1,146 1,204 1,259 1,304 1,348 1,005 1,079 997 1,094 1,194 1,376 1,555Change % YoY 15% 10% 10% 5% 8% 13% 12% 18% 9% 7% -8% 10% 9% 15% 13%

Source: Baker Hughes, Morgan Stanley Research estimates

13



Trading and Valuation Summary: Contract Drillers Exhibit 30 Offshore Drillers: Summary of Valuation based on EPS and NAV Projections JACKUPS Avg. Asset Va. ($mm)Water Depth Type Repl. Mkt.

Built post-2000400' N. Sea/HE IC 240 225400' IC 210 205350' N. Sea/HE IC 220 210350' IC 190 190300' N. Sea/HE IC 200 195300' IC 170 175

Built in the 1980s350' N. Sea/HE IC 220 105350' IC 190 70350' IS 190 50328' IC 180 60300' N. Sea/HE IC 200 80300' IC 170 50250' N. Sea/HE IC 150 70250' IC 120 40250' MC 120 20250' MS 120 13250' IS 120 19200' IC 115 25200' MC 115 17200' MS 115 11150' IC 100 12

Avg. Asset Va. ($mm)Type Repl. Mkt.

Semis2G Semi 300 1703G Semi 350 2104G Semi 450 3005G (8,000-ft) 550 5306G (10,000-ft) DP 600 560

DrillshipsDrillship (mid-1970s) 450 110Drillship (4,000-ft+) DP 500 205Drillship (8,000 ft.+) DP 550 540Drillship (10,000-ft) DP 600 570

North Sea Certification: $10-20 MM

Last NAV/ Price/Price Share NAV

2011e on ODS estimatesSDRL 32 12 256%NE 33 27 122%ATW 41 35 117%ESV 47 42 113%HERO 4 3 113%RDC 34 37 94%RIG 54 63 85%DO 62 73 84%

2012e on MS estimatesSDRL 32 16 201%HERO 4 3 116%NE 33 32 101%ATW 41 43 96%ESV 47 50 95%RDC 34 42 81%DO 62 76 81%RIG 54 72 75%

Exhibit 31 Second-Hand Market Values for Offshore Rigs ($mm) 2004 2005 2006 2007 2008 2009 2010 2011 2012e

May May May May May May May May DecJackups built after 1980150 feet ind cantilever 15 22 35 40 40 18 13 12 12200 feet mat cantilever 22 30 50 55 55 26 21 17 17250 feet mat slot 18 25 40 45 45 22 17 13 13250 feet ind cantilever 40 52 85 100 100 60 45 40 40300 feet ind cant international 60 70 100 130 150 95 60 50 50300 feet ind cant N Sea 60 70 110 150 160 115 95 80 90New 350 feet IC 125 135 200 210 210 160 165 190 210

SemisubmersiblesAker H-3 North Sea 20 50 120 225 240 225 200 170 1703rd gen North Sea 55 90 175 250 275 275 250 210 2104th generation 125 200 280 300 350 345 320 300 3055th gen 8,000 ft + 250 350 440 450 600 600 530 530 550New 6th gen 10,000 ft + NA NA 600 625 675 650 550 560 630

DrillshipsConventional mid 1970s 17 35 90 170 230 150 120 110 110DP 4000 feet+ (not newbuild) 40 100 165 285 300 250 215 205 2105th gen 8,000 ft + 230 350 440 450 600 605 540 540 560New 6th gen 10,000 ft+ NA NA 600 625 750 660 560 580 640

Exhibit 32 Price/NAV Range (Since 2001)

RDCESVNESDRL ATW RIGDO0%

100%

200%

300%

400%

500%

600%P/NAV Range and Price Target (line) Current P/NAV (2012e)

Exhibit 33 P/NAV Trading Range average for RIG/DO

50%

80%

110%

140%

170%

200%

230%

260%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Standard Deviation Range Average RIG/DO P/NAV

Exhibit 34 P/NAV Trading Range average for NE/ESV/RDC

40%

70%

100%

130%

160%

190%

220%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Standard Deviation Range Average Offshore Drillers P/NAV

Source: FactSet, ODS-Petrodata, Morgan Stanley Research

14



Price Target and Valuation Summary: Oil Services & Drillers Exhibit 35 Service/Equipment: Price Target Summary

MS Last 2013 TargetSymbol Rating Price EPS P/E P/E Price UpsideWFT O $16.34 $3.00 5.4x 15.0x $45 175%MDR O $13.58 $2.00 6.8x 18.0x $36 165%TS O $31.47 $5.20 6.0x 15.2x $79 155%BHI O $58.27 $8.26 7.1x 16.9x $140 142%HAL O $41.54 $5.80 7.2x 16.0x $93 125%SLB O $74.42 $8.30 9.0x 19.3x $160 117%DRC O $40.57 $4.30 9.4x 18.6x $80 97%CAM O $49.63 $4.90 10.1x 18.3x $90 81%GTLS E-W $45.43 $4.45 10.2x 16.8x $75 65%NOV E-W $63.64 $6.80 9.4x 14.7x $100 58%CRR U $146.66 $11.90 12.3x 18.5x $220 51%HLX E-W $15.62 $1.25 12.5x 17.7x $22 41%DRQ E-W $61.87 $4.40 14.0x 19.3x $85 37%FTI E-W $42.36 $2.90 14.6x 19.8x $58 36%TCW-TSE U $21.47 $2.65 8.1x 10.2x $27 26%OII U $40.99 $2.80 14.6x 17.9x $50 22%CFW-TSE U $33.88 $4.00 8.5x 10.0x $40 19%RES U $24.59 $2.70 9.1x 9.6x $26 8%

Note: Upside percentage includes next six quarters of expected dividends. See page 32 for valuation methodology and risks

Exhibit 36 Contract Drillers: Price Target Summary

MS Last 2013 TargetSymbol Rating Price EPS P/E P/E Price UpsideNBR O $17.58 $3.00 5.9x 13.6x $41 133%RIG O $53.73 $6.60 8.1x 16.4x $108 108%ESV O $47.14 $6.76 7.0x 11.8x $80 74%ATW O $40.70 $5.00 8.1x 14.0x $70 72%SDRL O $31.90 $3.00 10.6x 16.7x $50 71%NE E-W $32.66 $4.20 7.8x 13.1x $55 71%PTEN U $23.36 $3.30 7.1x 11.5x $38 64%RDC E-W $34.43 $3.65 9.4x 15.1x $55 60%HP U $54.71 $5.90 9.3x 13.6x $80 47%DO U $61.57 $5.35 11.5x 14.0x $75 30%

Note: Upside percentage includes next six quarters of expected dividends. See page 32 for valuation methodology and risks

Exhibit 37 Land Drillers: EV/Rig (Current) ($m/rig, monthly)

20.1

13.4

11.3

10.0

HP

PDC

PTEN

NBR

Exhibit 38 PTEN: Historic EV/Rig ($m/rig, monthly)

$0m$2m$4m

$6m$8m

$10m$12m

$14m$16m$18m

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Standard Deviation Range Average PTEN EV/Rig

Exhibit 39 Large Cap Services and Equipment: Price/Book

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Standard Deviation Range Average P/B

Note: Only includes large cap services and large cap equipment companies (market cap >$5bn).

Exhibit 40 Large Cap Services and Equipment: Price/Sales

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

4.0x

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Standard Deviation Range Average P/S

Note: Only includes large cap services and large cap equipment companies (market cap >$5bn). Source: FactSet, Company data, Morgan Stanley Research

15



Exhibit 41

Global Valuation Summary MS Recent Price Mkt Cap P/E EV/EBITDA 2011FY Net Debt / Ent. Value

Company Rating Price Target ($MM) 11E 12E 13E 11E 12E 13E ROE 2010 2011e 2012e

Oil Services:Schlumberger O $74.42 $160 $103,227 19.7 12.4 9.0 10.8 7.5 5.7 15.4% 3.3% 6.0% 5.4%Halliburton O $41.54 $93 $39,563 12.4 8.5 7.2 7.0 4.9 4.0 19.0% 4.5% 7.3% 5.4%Baker Hughes O $58.27 $140 $26,098 13.7 9.2 7.1 6.6 4.7 3.6 13.2% 9.6% 10.7% 9.9%Weatherford O $16.34 $45 $12,719 18.9 8.2 5.4 7.7 5.1 4.0 5.9% 26.8% 36.3% 36.4%RPC Inc. U $24.59 $26 $3,710 11.6 9.4 9.1 5.6 4.4 3.9 58.2% 4.6% 4.4% 0.7%Carbo Ceramics U $146.66 $220 $3,531 26.5 19.4 12.3 15.1 11.3 7.3 24.5% (2.0%) (1.7%) (1.1%)Trican Well Services U C$21.47 C$27 $3,287 10.2 8.4 8.1 6.2 4.6 4.1 30.5% 0.8% 9.6% 4.2%Calfrac Well Services U C$33.88 C$40 $1,559 10.9 8.7 8.5 5.9 4.4 3.9 26.0% 13.4% 22.3% 16.4%Average 15.5 10.5 8.3 8.1 5.9 4.6 24.1% 7.6% 11.9% 9.7%

Offshore Drillers:Transocean O $53.73 $108 $17,849 16.6 9.0 8.1 8.0 5.7 5.2 4.8% 26.1% 34.9% 31.4%Seadrill Limited O $31.90 $50 $14,312 11.6 10.6 10.6 10.2 9.5 9.6 24.9% 30.7% 35.0% 35.3%ENSCO International O $47.14 $80 $11,216 12.6 7.9 7.0 11.1 6.2 5.4 12.2% (11.6%) 28.5% 25.5%Noble Corporation E-W $32.66 $55 $8,838 19.0 9.1 7.8 10.5 6.9 6.4 6.0% 20.9% 30.6% 31.2%Diamond Offshore U $61.57 $75 $8,803 10.1 13.5 11.5 5.9 6.9 6.6 22.0% 4.3% 4.4% 4.4%Row an Companies E-W $34.43 $55 $4,596 19.5 9.6 9.4 10.6 5.5 6.1 6.0% 15.4% 3.2% (12.2%)Atw ood Oceanics O $40.70 HK$70 $2,714 10.1 9.7 8.1 8.3 7.9 6.4 19.2% 2.4% 9.3% 13.7%China Oilf ield Services Ltd. E-W HK$11.54 HK$15 $2,342 10.0 8.9 7.6 6.9 6.0 5.0 16.6% 26.6% 33.0% 30.0%Hercules Offshore NA $3.94 NA $569 NA NA NA 9.6 13.6 9.4 (9.2%) 65.7% 58.2% 59.9%Aban Offshore Ltd. O Rs381 Rs975 $356 2.8 2.7 2.5 7.0 6.2 5.7 32.3% 75.7% 84.8% 90.6%Average 12.5 9.0 8.1 8.8 7.4 6.6 13.5% 25.6% 32.2% 31.0%

Land Drillers:Helmerich & Payne U $54.71 $80 $6,152 14.0 11.7 9.3 5.9 5.0 4.0 15.1% (0.4%) (4.9%) (3.6%)Nabors Industries O $17.58 $41 $5,287 12.3 7.5 5.9 5.3 4.2 3.6 7.7% 34.8% 43.8% 45.8%Patterson-UTI U $23.36 $38 $3,759 10.2 7.8 7.1 4.3 3.5 3.1 10.2% 10.0% 12.1% 13.9%Average 12.2 9.0 7.4 5.2 4.2 3.5 11.0% 14.8% 17.0% 18.7%

Equipment:National Oilw ell Varco E-W $63.64 $100 $27,615 13.8 11.8 9.4 7.2 5.8 4.4 11.9% (9.4%) (10.4%) (16.6%)Tenaris S.A. O $31.47 $79 $19,196 13.6 8.6 6.0 7.6 5.0 3.5 13.8% (1.0%) (0.7%) (3.1%)Cameron International O $49.63 $90 $12,643 18.5 13.1 10.1 11.3 7.9 6.0 14.5% (4.5%) (0.8%) (4.9%)Vallourec E-W € 60.36 € 70 $10,679 17.6 11.4 8.7 8.6 6.0 4.4 9.0% 4.6% 11.4% 4.0%FMC Technologies E-W $42.36 $58 $10,474 25.0 18.4 14.6 15.2 11.1 8.6 31.4% 2.1% 2.0% (0.1%)Oceaneering International U $40.99 $50 $4,537 20.5 17.0 14.6 9.5 8.0 6.8 15.8% (1.1%) (0.9%) (4.8%)Dresser-Rand O $40.57 $80 $3,283 22.0 12.3 9.4 11.4 7.2 5.5 13.5% 1.6% 20.9% 18.1%TMK E-W $13.05 $14 $3,047 7.5 5.0 6.0 5.3 4.0 4.1 26.8% 44.7% 52.9% 46.7%Dril Quip E-W $61.87 $85 $2,585 26.5 18.8 14.0 15.7 11.7 8.7 11.4% (8.5%) (11.0%) (10.3%)Chart Industries E-W $45.43 $75 $1,358 22.1 14.0 10.2 11.9 7.9 5.6 12.3% 5.1% 3.5% (0.9%)Average 18.7 13.0 10.3 10.4 7.5 5.8 16.1% 3.4% 6.7% 2.8%

Engineering & Construction:Saipem O € 29.94 € 42 $19,708 14.4 11.6 9.5 8.1 6.3 5.2 19.9% 18.8% 20.4% 14.4%Technip E-W € 65.60 € 72 $10,674 16.1 13.1 11.9 8.3 6.0 5.0 13.1% (14.9%) (8.7%) (21.0%)Subsea 7 U NKr 118 NKr 135 $8,071 20.9 16.0 11.1 8.1 6.6 4.6 33.1% (0.4%) (1.2%) (6.1%)Petrofac O £13.09 £19 $7,550 13.8 11.0 9.1 9.4 7.2 5.5 68.0% (9.4%) (1.1%) (0.4%)SBM Offshore O € 14.20 € 23 $3,607 8.3 6.9 6.3 7.1 5.6 4.4 20.1% 27.4% 43.3% 40.8%Wood Group E-W £5.79 £7 $3,593 16.0 12.2 10.2 8.0 7.3 6.2 15.3% 1.6% 2.3% (2.2%)McDermott O $13.58 $36 $3,345 11.4 8.2 6.8 5.9 4.1 3.1 19.5% (18.4%) (25.9%) (35.1%)Bourbon U £21.61 £26 $2,164 NA 12.2 8.4 11.6 9.5 8.4 0.3% 48.1% 60.0% 63.5%Tecnicas Reunidas E-W € 26.08 € 31 $2,121 11.0 9.6 9.5 6.9 6.0 5.4 38.3% (12.5%) (32.2%) (41.8%)Helix Energy Solutions E-W $15.62 $22 $1,762 9.3 8.2 12.5 3.9 2.4 4.5 14.1% 42.5% 29.7% (15.0%)Kentz E-W £4.35 £5 $818 14.2 13.3 11.2 7.5 6.6 5.1 32.3% (49.2%) (42.6%) (49.5%)Average 13.5 11.1 9.7 7.7 6.1 5.2 24.9% 3.1% 4.0% (4.8%)

Reservoir Information / Seismic:CGG Veritas O € 16.25 € 30 $3,699 NA 8.3 5.9 5.6 3.2 2.4 (0.1%) 24.4% 27.9% 20.8%Petroleum Geo-Services O NKr 64 NKr 100 $2,676 26.4 8.4 6.9 5.6 3.2 2.6 5.7% 9.8% 14.8% 6.4%TGS-NOPEC O NKr 125 NKr 170 $2,532 12.2 9.5 8.6 2.6 1.9 1.6 21.6% (15.1%) (12.7%) (22.7%)Average 19.3 8.7 7.1 4.6 2.8 2.2 9.1% 6.4% 10.0% 1.5%

Source: FactSet, Company data, Morgan Stanley Research; e = Morgan Stanley Research estimates; ++ Rating and price target for this company have been removed from consideration in this report because, under applicable law and/or Morgan Stanley policy, Morgan Stanley may be precluded from issuing such information with respect to this company at this time. For valuation methodology and risks associated with any price targets above, please email [email protected] with a request for valuation methodology and risks on a particular stock.

16



Consensus Earnings Revisions and Short Interest Ratios

Exhibit 42 2011 Consensus EPS Revisions (Past 4-Weeks)

RIGDRQ

MDRTS

ESVRDC

DONE

NBRRESSLBCAMFTIOIIHPHALNOVBHIGTLSPTENCRRATWSDRLWFT

TCW-TSECFW-TSE

DRC

-20% -10% 0% 10% 20% 30%

Exhibit 43 Short Interest Ratio

TSSDRL

MDRSLBBHI

RIGESVNOVNBRWFTOIIDRCCAMHALNE

HPCRR

PTENRDC

RESDRQ

FTIGTLS

DOATW

HERO

0% 2% 4% 6% 8% 10% 12%

Exhibit 44 2011 Consensus EPS Revisions (Past 3-Months)

RIGRDC

NEDRQNBRDRC

MDRTS

ESVDO

HPATWFTISLBCAMGTLSWFTOIISDRL

BHICRRNOVRESPTEN

HALTCW-TSE

CFW-TSE

-40% -20% 0% 20% 40%

Exhibit 45 2012 Consensus EPS Revisions (Past 3-Months)

DRQTS

DOMDR

RIGDRC

RDCSDRL

NBRNE

ATWESV

OIIGTLS

FTISLBHP

CAMNOV

CRRBHI

WFTRES

HALTCW-TSEPTEN

CFW-TSE

-20% -10% 0% 10% 20% 30% 40%

Source: FactSet; Morgan Stanley Research

17



Exhibit 46 Morgan Stanley EPS Estimates versus FactSet Consensus ReutersSymbol Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 2009A 2010A 2011E 2012E 2013E 10 vs 09 11 vs 10 12 vs 11 13 vs 12

SLB.N 0.62 0.68 0.70 0.85 0.71 0.87 1.04 1.16 2.78 2.85 3.77 6.00 8.30 2% 32% 59% 38%Consensus 0.62 0.68 0.70 0.85 0.71 0.87 1.05 1.22 2.78 2.85 3.82 5.47 6.86 2% 34% 43% 25%

HAL.N 0.28 0.53 0.58 0.68 0.61 0.81 0.91 1.02 1.34 2.07 3.35 4.90 5.80 54% 62% 46% 18%Consensus 0.28 0.53 0.58 0.68 0.61 0.81 0.91 1.02 1.34 2.07 3.33 4.48 5.20 54% 60% 35% 16%

BHI.N 0.45 0.36 0.59 0.84 0.87 0.93 1.15 1.32 1.92 2.29 4.26 6.32 8.26 19% 86% 48% 31%Consensus 0.45 0.41 0.59 0.84 0.87 0.93 1.20 1.38 1.92 2.29 4.34 5.91 7.12 19% 90% 36% 20%

WFT.N 0.00 0.06 0.12 0.25 0.10 0.17 0.26 0.34 0.37 0.43 0.87 2.00 3.00 15% 102% 131% 50%Consensus 0.00 0.06 0.12 0.25 0.10 0.17 0.25 0.34 0.37 0.43 0.89 1.75 2.24 15% 107% 97% 28%

RES.N 0.09 0.22 0.32 0.38 0.45 0.50 0.56 0.60 -0.16 1.00 2.11 2.60 2.70 NA 111% 23% 4%Consensus 0.09 0.22 0.32 0.38 0.45 0.50 0.58 0.63 -0.16 1.00 2.14 2.64 2.49 NA 114% 23% -6%

CFW.TO C0.31 -C0.24 C0.70 C0.69 C0.99 C0.23 C1.03 C1.08 -C0.15 C1.42 C3.10 C3.90 C4.00 NA 118% 26% 2%Consensus C0.31 -C0.24 C0.70 C0.69 C0.99 C0.23 C0.99 C1.13 -C0.15 C1.42 C3.48 C4.33 C4.28 NA 145% 25% -1%

TCW.TO C0.26 C0.06 C0.37 C0.39 C0.56 C0.20 C0.63 C0.69 -C0.08 C1.10 C2.10 C2.55 C2.65 NA 91% 21% 4%Consensus C0.26 C0.06 C0.37 C0.39 C0.56 C0.20 C0.58 C0.65 -C0.08 C1.10 C2.02 C2.46 C2.65 NA 85% 22% 8%

CRR.N 0.82 0.81 0.87 0.94 1.35 1.29 1.40 1.50 2.27 3.44 5.54 7.57 11.90 51% 61% 37% 57%Consensus 0.82 0.81 0.87 0.94 1.35 1.29 1.39 1.48 2.27 3.44 5.51 7.43 10.29 51% 60% 35% 39%

TS.N 0.37 0.48 0.52 0.47 0.54 0.49 0.60 0.69 2.00 1.84 2.31 3.65 5.20 -8% 26% 58% 43%Consensus 0.37 0.48 0.52 0.47 0.54 0.49 0.61 0.73 2.00 1.84 2.41 3.20 3.74 -8% 31% 33% 17%

NOV.N 1.10 0.97 0.97 1.05 1.00 1.14 1.22 1.25 3.94 4.08 4.60 5.40 6.80 4% 13% 17% 26%Consensus 1.10 0.97 0.97 1.05 1.00 1.14 1.16 1.20 3.94 4.08 4.48 5.68 6.54 4% 10% 27% 15%

CAM.N 0.51 0.58 0.64 0.69 0.46 0.66 0.75 0.82 2.31 2.42 2.68 3.80 4.90 5% 11% 42% 29%Consensus 0.51 0.58 0.64 0.69 0.46 0.66 0.74 0.81 2.31 2.42 2.68 3.74 4.42 5% 11% 40% 18%

FTI.N 0.40 0.39 0.33 0.35 0.32 0.39 0.44 0.55 1.47 1.47 1.70 2.30 2.90 0% 15% 36% 26%Consensus 0.40 0.39 0.33 0.35 0.32 0.39 0.46 0.54 1.47 1.47 1.71 2.26 2.74 0% 16% 32% 21%

OII.N 0.39 0.95 0.53 0.43 0.38 0.52 0.58 0.53 1.70 1.83 2.00 2.40 2.80 8% 10% 20% 16%Consensus 0.39 0.95 0.53 0.43 0.38 0.52 0.57 0.52 1.70 1.83 1.99 2.49 2.97 8% 9% 25% 19%

DRC.N 0.44 0.43 0.46 0.64 0.13 0.21 0.41 1.09 2.69 1.97 1.85 3.30 4.30 -27% -6% 79% 30%Consensus 0.44 0.43 0.46 0.64 0.13 0.21 0.45 1.14 2.69 1.97 1.96 3.21 4.06 -27% 0% 64% 26%

Source: FactSet, Company data, Morgan Stanley Research

18



Exhibit 47 Morgan Stanley EPS Estimates versus FactSet Consensus (continued) ReutersSymbol Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 2009A 2010A 2011E 2012E 2013E 10 vs 09 11 vs 10 12 vs 11 13 vs 12

DRQ.N 0.74 0.70 0.69 0.67 0.58 0.55 0.58 0.62 2.75 2.80 2.34 3.30 4.40 2% -17% 41% 34%Consensus 0.74 0.70 0.69 0.67 0.58 0.55 0.59 0.67 2.75 2.80 2.39 3.54 4.58 2% -15% 48% 29%

GTLS.O 0.08 0.15 0.27 0.32 0.41 0.41 0.63 0.71 2.04 0.83 2.05 3.25 4.45 -59% 147% 58% 37%Consensus 0.08 0.15 0.27 0.32 0.41 0.41 0.58 0.72 2.04 0.83 2.00 3.23 4.35 -59% 141% 61% 35%

RIG.N 2.22 1.66 1.28 0.88 0.59 0.65 0.63 1.37 11.38 6.05 3.24 5.95 6.60 -47% -46% 84% 11%Consensus 2.22 1.66 1.28 0.88 0.59 0.65 0.84 1.38 11.38 6.05 3.47 5.90 6.40 -47% -43% 70% 9%

NE.N 1.43 0.87 0.39 0.39 0.15 0.17 0.59 0.81 6.44 3.09 1.72 3.60 4.20 -52% -44% 109% 17%Consensus 1.43 0.87 0.39 0.39 0.15 0.17 0.60 0.78 6.44 3.09 1.72 3.85 4.24 -52% -44% 124% 10%

DO.N 2.08 1.63 1.26 1.72 1.75 1.91 1.41 1.02 9.82 6.69 6.08 4.55 5.35 -32% -9% -25% 18%Consensus 2.08 1.63 1.26 1.72 1.75 1.91 1.47 1.14 9.82 6.69 6.27 5.07 5.29 -32% -6% -19% 4%

ESV.N 1.11 0.82 0.92 0.90 0.45 0.71 0.93 1.41 5.43 3.75 3.75 5.99 6.76 -31% 0% 60% 13%Consensus 1.11 0.82 0.92 0.90 0.45 0.71 0.91 1.35 5.43 3.75 3.55 5.92 6.36 -31% -5% 67% 7%

SDRL.N 0.62 0.63 0.71 0.67 0.65 0.65 0.71 0.74 2.60 2.64 2.75 3.00 3.00 1% 4% 9% 0%Consensus 0.62 0.63 0.71 0.67 0.65 0.65 0.72 0.77 2.60 2.64 2.80 3.26 3.34 1% 6% 16% 3%

HERO.O -0.19 -0.19 -0.13 -0.03 -0.12 -0.11 -0.16 -0.21 -0.68 -0.46 -0.60 -0.77 -0.56 NA NA NA NAConsensus -0.19 -0.19 -0.13 -0.03 -0.12 -0.11 -0.13 -0.18 -0.68 -0.46 -0.55 -0.41 -0.38 NA NA NA NA

RDC.N 0.81 0.79 0.57 0.45 0.24 0.38 0.41 0.73 2.98 2.61 1.77 3.60 3.65 -13% -32% 104% 1%Consensus 0.81 0.79 0.57 0.45 0.24 0.38 0.44 0.70 2.98 2.61 1.80 3.76 3.84 -13% -31% 109% 2%

ATW.N 1.03 1.10 0.99 0.81 1.08 1.15 0.99 1.04 3.89 4.14 4.03 4.20 5.00 7% -3% 4% 19%Consensus 1.03 1.10 0.99 0.81 1.08 1.15 1.00 1.08 3.89 4.14 4.01 4.18 4.65 7% -3% 4% 11%

NBR.N 0.14 0.19 0.29 0.44 0.29 0.23 0.40 0.50 1.33 1.06 1.43 2.35 3.00 -20% 35% 65% 28%Consensus 0.14 0.19 0.29 0.44 0.29 0.23 0.41 0.55 1.33 1.06 1.48 2.49 3.01 -20% 40% 68% 21%

PTEN.O 0.03 0.11 0.21 0.37 0.46 0.54 0.63 0.69 0.18 0.71 2.30 3.00 3.30 NA 222% 31% 10%Consensus 0.03 0.11 0.21 0.37 0.46 0.54 0.63 0.70 -0.18 0.71 2.32 3.13 3.35 NA 225% 35% 7%

HP.N 0.61 0.60 0.77 0.95 0.93 1.00 1.02 1.10 3.28 2.55 3.90 4.70 5.90 -22% 53% 20% 26%Consensus 0.61 0.60 0.77 0.95 0.93 1.00 1.04 1.12 3.28 2.55 3.93 4.84 5.60 -22% 54% 23% 16%

MDR.N 0.35 0.35 0.44 0.19 0.29 0.27 0.30 0.33 1.03 1.19 1.19 1.65 2.00 16% -1% 39% 21%Consensus 0.35 0.35 0.44 0.19 0.29 0.27 0.30 0.32 1.03 1.19 1.19 1.55 1.87 16% 0% 31% 20%

HLX.N 0.00 0.18 0.25 0.07 0.25 0.53 0.47 0.43 0.48 0.50 1.68 1.90 1.25 5% 236% 13% -34%Consensus 0.00 0.18 0.25 0.07 0.25 0.53 0.42 0.35 0.48 0.50 1.31 1.60 NA 5% 161% 23% NA

Source: FactSet, Company data, Morgan Stanley Research

19



Exhibit 48 Morgan Stanley Revenue Growth Projections by Area for Top Four Service Names

2011E 2003 2004 2005 2006 2007 2008 2009 2010 2011E 2012E 2013E SLBNorth Am. 11,884 15.2% 20.8% 21.0% 40.2% 1.4% 10.6% (37.3%) 129.7% 39.6% 27.9% 21.7%Latin Am. 6,413 8.9% 23.1% 26.5% 16.0% 28.5% 28.4% (0.1%) 34.5% 12.8% 27.3% 21.8%Eur/CIS/Afr. 9,748 4.4% 11.9% 26.7% 43.0% 30.4% 24.1% (12.6%) 33.7% 2.0% 26.7% 23.8%Mid East/Asia 8,529 9.3% 20.6% 22.4% 22.8% 31.1% 17.3% (8.5%) 42.4% 14.4% 32.2% 27.1%

OFS 36,967 9.2% 19.1% 23.5% 32.5% 21.1% 19.6% (15.5%) 52.1% 18.5% 28.1% 23.4%Total 39,524 5.6% (15.1%) 20.5% 34.4% 21.0% 16.6% (16.4%) 47.4% 18.1% 27.2% 22.8%Consensus 39,525 5.6% (15.1%) 20.5% 34.4% 21.0% 16.6% (16.4%) 47.4% 18.1% 18.9% 15.6%

HALNorth Am. 14,091 1.8% 17.0% 33.5% 34.0% 10.5% 16.9% (32.1%) 55.9% 59.6% 26.0% 18.8%Latin Am. 2,771 7.2% 19.3% 24.2% 12.6% 18.8% 34.9% (10.1%) 2.2% 24.3% 21.1% 17.8%Eur/CIS/Afr. 4,035 7.0% 14.0% 18.2% 25.8% 29.4% 17.5% (9.2%) (0.9%) 3.1% 21.7% 17.8%Mid East/Asia 3,465 (4.8%) 5.2% 20.2% 27.7% 24.0% 20.3% (9.0%) 4.1% 15.4% 22.0% 17.8%

Total 24,362 2.3% 14.3% 26.3% 28.3% 17.8% 19.8% (19.7%) 22.5% 35.5% 24.2% 18.4%Consensus 24,216 2.3% 14.3% 26.3% 28.3% 17.8% 19.8% (19.7%) 22.5% 34.7% 18.1% 12.7%

BHINorth Am. 10,086 14.1% 14.4% 23.7% 29.8% 8.9% 5.6% (32.5%) 139.7% 33.0% 23.6% 23.7%Latin Am. 2,199 1.4% 20.1% 2.5% 17.7% 20.3% 20.6% 0.5% 58.7% 26.6% 18.5% 21.0%Eur/CIS/Afr. 3,337 0.9% 14.7% 13.7% 24.1% 23.6% 4.3% (13.6%) 12.9% 6.5% 16.1% 18.6%Mid East/Asia 2,891 11.1% 20.4% 19.3% 22.3% 17.4% 4.1% (7.3%) 23.7% 20.6% 16.6% 18.6%Ind. & Other 1,301 NA NA NA NA NA NA (11.6%) 51.9% 23.5% 19.7% 18.6%

Total 19,814 8.1% 16.1% 17.8% 25.7% 15.5% 13.8% (18.5%) 64.6% 24.6% 20.5% 21.5%Consensus 19,729 8.1% 16.1% 17.8% 25.7% 15.5% 13.8% (18.5%) 64.6% 24.1% 16.0% 11.8%

WFTNorth Am. 5,849 NA 4.1% 27.2% 53.0% 7.2% 13.3% (38.0%) 50.5% 40.5% 24.1% 22.9%Latin Am. 1,979 NA 118.5% 49.7% 71.3% 21.5% 37.1% 71.7% (22.1%) 22.4% 25.5% 21.6%Eur/CIS/Afr. 2,378 NA 5.2% 51.0% 34.0% 43.7% 29.5% 5.0% 22.5% 20.1% 24.3% 21.6%Mid East/Asia 2,560 NA 118.5% 57.3% 51.8% 34.8% 31.1% (1.0%) 3.5% 4.5% 31.2% 31.1%

Total 12,766 11.3% 21.4% 37.7% 51.8% 19.0% 22.6% (8.1%) 15.7% 25.0% 25.7% 24.2%Consensus 12,688 11.3% 21.4% 37.7% 51.8% 19.0% 22.6% (8.1%) 15.7% 24.3% 19.2% 11.8%

TOP FOURNorth Am. 41,910 9.6% (4.5%) 26.6% 66.2% 7.1% 12.2% (34.6%) 90.1% 44.1% 25.7% 21.4%Latin Am. 13,361 7.1% 16.0% 21.5% 32.5% 23.8% 30.2% 7.0% 17.6% 18.6% 24.3% 20.8%Eur/CIS/Afr. 19,498 4.6% 6.1% 20.6% 43.7% 29.6% 18.7% (10.3%) 20.0% 4.9% 23.6% 21.5%Mid East/Asia 17,445 5.3% 9.4% 21.1% 46.2% 27.3% 17.9% (7.1%) 23.2% 14.0% 27.4% 24.6%

Total 96,466 5.7% 1.0% 23.4% 33.0% 18.9% 17.8% (16.5%) 38.8% 24.4% 24.9% 21.6%Consensus 96,158 5.7% 1.0% 23.4% 33.0% 18.9% 17.8% (16.5%) 38.8% 24.0% 18.1% 13.6%

Top 4 Int'l 50,304 5.4% 9.3% 21.0% 42.0% 27.6% 20.8% (5.3%) 20.4% 11.4% 25.1% 22.4%SLB 24,689 7.1% 17.6% 25.2% 29.2% 30.2% 22.8% (8.4%) 36.6% 8.8% 28.8% 24.5%HAL 10,271 2.8% 12.3% 20.3% 23.0% 25.2% 22.2% (9.3%) 1.5% 12.3% 21.6% 17.8%BHI 8,426 4.1% 17.4% 13.6% 22.5% 20.9% 6.7% (9.1%) 25.1% 16.0% 16.9% 19.2%WFT 6,917 11.3% 61.9% 53.6% 50.4% 34.0% 32.0% 17.9% (0.2%) 14.4% 27.2% 25.2%

Top 4 NAm 41,910 9.6% (4.5%) 26.6% 66.2% 7.1% 12.2% (34.6%) 90.1% 44.1% 25.7% 21.4%SLB 11,884 15.2% 20.8% 21.0% 40.2% 1.4% 10.6% (37.3%) 129.7% 39.6% 27.9% 21.7%HAL 14,091 1.8% 17.0% 33.5% 34.0% 10.5% 16.9% (32.1%) 55.9% 59.6% 26.0% 18.8%BHI 10,086 14.1% 14.4% 23.7% 29.8% 8.9% 5.6% (32.5%) 139.7% 33.0% 23.6% 23.7%WFT 5,849 11.3% 4.1% 27.2% 53.0% 7.2% 13.3% (38.0%) 50.5% 40.5% 24.1% 22.9%

Source: FactSet, Morgan Stanley Research; Note: e = Morgan Stanley Research estimates. Note: BHI growth pro forma for BJS and SLB growth pro forma for Smith beginning in 2010

20



Exhibit 49 Morgan Stanley EBIT Margins Projections by Area for Top Four Service Names

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E 2012E 2013E SLBNorth Am. 24.1% 12.5% 14.1% 16.7% 24.8% 30.4% 28.7% 23.2% 5.8% 15.7% 24.7% 27.6% 27.2%Latin Am. 13.9% 13.1% 15.6% 12.7% 14.9% 19.3% 22.9% 20.3% 17.8% 15.0% 18.5% 21.0% 22.0%Eur/CIS/Afr. 16.4% 15.7% 17.9% 16.0% 19.9% 25.5% 28.5% 27.4% 23.9% 17.0% 14.5% 19.1% 22.5%Mid East/Asia 21.9% 24.2% 24.8% 26.2% 28.7% 32.1% 35.1% 35.0% 32.4% 25.0% 25.7% 29.8% 33.7%

OFS 19.0% 16.0% 17.6% 17.6% 22.2% 27.7% 29.3% 26.8% 21.1% 18.2% 20.4% 24.1% 26.1%Total 10.9% 9.4% 10.6% 14.7% 20.2% 26.6% 28.8% 26.1% 19.0% 16.8% 17.7% 21.4% 23.4%Consensus 10.9% 9.4% 10.6% 14.7% 20.2% 26.6% 28.8% 26.1% 19.0% 16.8% 18.1% 21.2% 22.4%

HALNorth Am. 19.8% 14.1% 11.2% 19.0% 26.8% 32.1% 27.8% 24.5% 8.5% 21.4% 28.0% 28.7% 26.6%Latin Am. 16.7% 13.1% 18.2% 11.4% 15.0% 19.8% 19.4% 21.5% 17.7% 13.0% 12.7% 16.9% 19.3%Eur/CIS/Afr. (1.1%) 4.9% 8.5% 10.8% 17.8% 18.8% 20.1% 19.7% 17.9% 14.9% 8.9% 17.0% 19.4%Mid East/Asia 9.5% 11.3% 15.4% 14.2% 20.2% 24.0% 25.4% 25.7% 24.4% 18.1% 12.5% 17.2% 19.4%

Total 8.3% 6.3% 4.6% 6.0% 12.1% 15.4% 23.0% 21.8% 14.2% 17.1% 19.7% 22.8% 22.7%Consensus 8.3% 6.3% 4.6% 6.0% 12.1% 15.4% 23.0% 21.8% 14.2% 17.1% 19.9% 22.7% 22.8%

BHINorth Am. NA NA NA NA 21.6% 26.7% 26.5% 26.6% 8.8% 16.0% 20.3% 23.4% 23.3%Latin Am. NA NA NA NA 21.0% 20.3% 19.4% 18.0% 13.1% 3.8% 14.3% 16.8% 19.0%Eur/CIS/Afr. NA NA NA NA 17.6% 21.3% 22.3% 19.6% 18.2% 8.3% 14.8% 18.9% 20.6%Mid East/Asia NA NA NA NA 18.2% 23.0% 23.4% 19.8% 13.7% 7.9% 14.3% 19.8% 22.7%Ind. & Other NA NA NA NA NA NA NA 24.5% 10.1% 9.7% 9.1% 10.0% 11.4%

Total NA 12.0% 11.5% 14.0% 18.6% 22.4% 21.7% 20.6% 10.2% 10.1% 15.7% 19.0% 20.2%Consensus NA 12.0% 11.5% 14.0% 18.6% 22.4% 21.7% 20.6% 10.2% 10.1% 16.0% 18.5% 19.6%

WFTNorth Am. NA NA NA NA NA 28.0% 25.7% 25.2% 7.1% 17.2% 20.5% 23.1% 22.8%Latin Am. NA NA NA NA NA 18.3% 23.0% 22.9% 13.6% 10.2% 10.7% 17.5% 20.0%Eur/CIS/Afr. NA NA NA NA NA 20.6% 24.2% 24.9% 15.6% 11.6% 14.7% 18.7% 20.7%Mid East/Asia NA NA NA NA NA 20.2% 22.8% 23.5% 18.7% 12.1% 6.4% 15.2% 21.5%

Total 16.7% 11.7% 10.6% 12.5% 15.4% 20.7% 21.0% 21.0% 9.1% 10.0% 11.4% 16.6% 18.5%Consensus 16.7% 11.7% 10.6% 12.5% 15.4% 20.7% 21.0% 21.0% 9.1% 10.0% 11.7% 15.3% 16.8%

TOP FOURNorth Am. 22.0% 13.3% 12.7% 17.8% 24.4% 29.3% 27.2% 24.9% 7.6% 17.6% 23.4% 25.7% 25.0%Latin Am. 15.3% 13.1% 16.9% 12.0% 17.0% 19.4% 21.2% 20.7% 15.6% 10.5% 14.1% 18.1% 20.1%Eur/CIS/Afr. 7.7% 10.3% 13.2% 13.4% 18.4% 21.6% 23.8% 22.9% 18.9% 13.0% 13.2% 18.4% 20.8%Mid East/Asia 15.7% 17.7% 20.1% 20.2% 22.4% 24.8% 26.7% 26.0% 22.3% 15.8% 14.7% 20.5% 24.3%

Total 12.0% 9.8% 9.3% 11.8% 16.6% 21.2% 23.6% 22.4% 13.1% 13.5% 16.1% 19.9% 21.2%Consensus 12.0% 9.8% 9.3% 11.8% 16.6% 21.2% 23.6% 22.4% 13.1% 13.5% 16.4% 19.4% 20.4%

Top 4 Int'l 12.9% 13.7% 16.7% 15.2% 19.3% 21.9% 23.9% 23.2% 18.9% 13.1% 14.0% 19.0% 21.7%SLB 17.4% 17.6% 19.4% 18.3% 21.2% 25.7% 28.8% 27.6% 24.7% 19.0% 19.6% 23.3% 26.1%HAL 8.3% 9.8% 14.1% 12.1% 17.6% 20.9% 21.6% 22.3% 20.0% 15.4% 11.4% 17.0% 19.4%BHI NA NA NA NA 18.9% 21.5% 21.7% 19.1% 15.0% 6.7% 14.5% 18.5% 20.8%WFT NA NA NA NA n/a 19.7% 23.3% 23.7% 15.9% 11.3% 10.6% 17.1% 20.7%

Top 4 NAm 22.0% 13.3% 12.7% 17.8% 24.4% 29.3% 27.2% 24.9% 7.6% 17.6% 23.4% 25.7% 25.0%SLB 24.1% 12.5% 14.1% 16.7% 24.8% 30.4% 28.7% 23.2% 5.8% 15.7% 24.7% 27.6% 27.2%HAL 19.8% 14.1% 11.2% 19.0% 26.8% 32.1% 27.8% 24.5% 8.5% 21.4% 28.0% 28.7% 26.6%BHI NA NA NA NA 21.6% 26.7% 26.5% 26.6% 8.8% 16.0% 20.3% 23.4% 23.3%WFT NA NA NA NA NA 28.0% 25.7% 25.2% 7.1% 17.2% 20.5% 23.1% 22.8%

Source: FactSet, Morgan Stanley Research estimates. Note: BHI margins pro forma for BJS and SLB margins pro forma for Smith beginning in 2010

21



Exhibit 50 Oil Services Large-Cap: Revenue Growth Assumptions

Top Line ($mm) Top Line Growth2008 2009 2010 2011E 2012E 2013E 2006 2007 2008 2009 2010 2011E 2012E 2013E

SLB MS 27,145 22,702 33,468 39,524 50,278 61,725 34.4% 21.0% 16.6% (16.4%) 47.4% 18.1% 27.2% 22.8%Consensus 27,145 22,702 33,468 39,525 46,985 54,294 34.4% 21.0% 16.6% (16.4%) 47.4% 18.1% 18.9% 15.6%

HAL MS 18,279 14,675 17,973 24,362 30,246 35,807 28.3% 17.8% 19.8% (19.7%) 22.5% 35.5% 24.2% 18.4%Consensus 18,279 14,675 17,973 24,216 28,610 32,231 28.3% 17.8% 19.8% (19.7%) 22.5% 34.7% 18.1% 12.7%

BHI MS 11,864 9,664 15,903 19,814 23,869 29,009 25.6% 15.5% 13.8% (18.5%) 64.6% 24.6% 20.5% 21.5%Consensus 11,864 9,664 15,903 19,729 22,890 25,601 25.6% 15.5% 13.8% (18.5%) 64.6% 24.1% 16.0% 11.8%

WFT MS 9,601 8,827 10,211 12,766 16,053 19,931 51.8% 19.0% 22.6% (8.1%) 15.7% 25.0% 25.7% 24.2%Consensus 9,601 8,827 10,211 12,688 15,120 16,900 51.8% 19.0% 22.6% (8.1%) 15.7% 24.3% 19.2% 11.8%

Avg. MS 16,722 13,967 19,389 24,117 30,112 36,618 35.0% 18.4% 18.2% (15.7%) 37.5% 25.8% 24.4% 21.7%Consensus 16,722 13,967 19,389 24,040 28,401 32,257 35.0% 18.4% 18.2% (15.7%) 37.5% 25.3% 18.1% 13.0%

Note: SLB pro forma for SII and BHI pro forma for BJS beginning in 2010

Exhibit 51 Oil Services Large-Cap: Revenue Growth

2012e Consensus

18.1%

2012e MS24.4%

-30%

-20%

-10%

0%

10%

20%

30%

40%

2006 2007 2008 2009 2010 2011E 2012E 2013E -30%

-20%

-10%

0%

10%

20%

30%

40%

Consensus MS

Note: Includes historical figures and MS vs. consensus projection of top line growth for the average of SLB, HAL, WFT and BHI

Exhibit 52 Oil Services Large-Cap: EBIT Margins

2012e Consensus

19.4%

2012e MS19.9%

0%

5%

10%

15%

20%

25%

2006 2007 2008 2009 2010 2011E 2012E 2013E 0%

5%

10%

15%

20%

25%

Consensus MS

Note: Includes historical figures and MS vs. consensus projection of EBIT margins for the average of SLB, HAL, WFT and BHI

Exhibit 53 Oil Services Large-Cap: EBIT Margins Assumptions

EBIT Margins Incremental EBIT Margins (bps)2006 2007 2008 2009 2010 2011E 2012E 2013E 2008 2009 2010 2011E 2012E 2013E

SLB MS 26.6% 28.8% 26.1% 19.0% 16.8% 17.7% 21.4% 23.4% (277) (709) (218) 94 367 202Consensus 26.6% 28.8% 26.1% 19.0% 16.8% 18.1% 21.2% 22.4% (277) (709) (218) 131 311 120

HAL MS 15.4% 23.0% 21.8% 14.2% 17.1% 19.7% 22.8% 22.7% (119) (762) 294 257 314 (14)Consensus 15.4% 23.0% 21.8% 14.2% 17.1% 19.9% 22.7% 22.8% (119) (762) 294 280 280 9

BHI MS 22.4% 21.7% 20.6% 10.2% 10.1% 15.7% 19.0% 20.2% (113) (1,037) (11) 565 325 117Consensus 22.4% 21.7% 20.6% 10.2% 10.1% 16.0% 18.5% 19.6% (113) (1,037) (11) 590 252 107

WFT MS 20.7% 21.0% 21.0% 9.1% 10.0% 11.4% 16.6% 18.5% 5 (1,191) 86 146 513 196Consensus 20.7% 21.0% 21.0% 9.1% 10.0% 11.7% 15.3% 16.8% 5 (1,191) 86 172 365 143

Avg. MS 21.2% 23.6% 22.4% 13.1% 13.5% 16.1% 19.9% 21.2% (126) (925) 38 265 380 125Consensus 21.2% 23.6% 22.4% 13.1% 13.5% 16.4% 19.4% 20.4% (126) (925) 38 293 302 95

Note: SLB pro forma for SII and BHI pro forma for BJS beginning in 2010 Source: FactSet, Company data, Morgan Stanley Research

22



Exhibit 54 Oil Services Small-Cap: Revenue Growth Assumptions


RES MS 877 588 1,096 1,773 2,419 2,843 39.5% 15.7% 27.1% -33.0% 86.5% 61.7% 36.4% 17.5%Consensus 877 588 1,096 1,840 2,307 2,555 39.5% 15.7% 27.1% -33.0% 86.5% 67.8% 25.4% 10.8%

TCW MS C1,016 C811 C1,478 C2,110 C2,793 C3,177 32.2% -1.3% 21.5% -20.1% 82.2% 42.8% 32.3% 13.8%TCW-T Consensus C1,016 C811 C1,478 C2,196 C2,748 C2,882 32.2% -1.3% 21.5% -20.1% 82.2% 48.6% 25.1% 4.9%CFW MS C557 C592 C936 C1,317 C1,776 C2,022 35.7% 7.8% 21.3% 6.2% 58.2% 40.7% 34.9% 13.8%CFW-T Consensus C557 C592 C936 C1,399 C1,713 C1,954 35.7% 7.8% 21.3% 6.2% 58.2% 49.5% 22.5% 14.0%CRR MS 388 342 473 622 819 1,223 22.9% 5.7% 29.3% -11.8% 38.4% 31.4% 31.6% 49.4%

Consensus 388 342 473 624 804 1,043 22.9% 5.7% 29.3% -11.8% 38.4% 31.8% 28.9% 29.8%

Avg. MS 710 583 996 1,456 1,952 2,316 32.6% 7.0% 24.8% -14.7% 66.3% 44.2% 33.8% 23.6%Consensus 710 583 996 1,515 1,893 2,108 32.6% 7.0% 24.8% -14.7% 66.3% 49.4% 25.5% 14.9%

Note: some consensus numbers might lack relevance due to the low number of estimates; the top line average does not take into account currencies (USD vs. CAD), and is rather a rough indicator of how much we differ from consensus on total top line growth for this segment of the industry.

Exhibit 55 Oil Services Small-Cap: Revenue Growth

2012e Consensus

25.5%

2012e MS33.8%

-30%

-10%

10%

30%

50%

70%

2006 2007 2008 2009 2010 2011E 2012E 2013E-30%

-10%

10%

30%

50%

70%

Consensus MS

Note: Includes historical figures and MS vs. consensus projection of top line growth for the average of RES, TCW, CFW, and CRR

Exhibit 56 Oil Services Small-Cap: EBIT Margins

2012e Consensus

24.5%

2012e MS22.8%

0%

5%

10%

15%

20%

25%

30%

2006 2007 2008 2009 2010 2011E 2012E 2013E0%

5%

10%

15%

20%

25%

30%

Consensus MS

Note: Includes historical figures and MS vs. consensus projection of EBIT margins for the average of RES, TCW, CFW, and CRR

Exhibit 57 Oil Services Small-Cap: EBIT Margins Assumptions


RES MS 29.8% 20.6% 16.4% -5.6% 21.8% 28.1% 25.2% 21.9% -414 -2206 2741 629 -287 -327Consensus 29.8% 20.6% 16.4% -5.6% 21.8% 27.8% 27.6% 23.4% -414 -2206 2741 599 -14 -423

TCW MS 29.4% 15.8% 9.0% -2.7% 14.9% 20.4% 19.0% 17.2% -678 -1174 1755 556 -145 -180TCW-T Consensus 29.4% 15.8% 9.0% -2.7% 14.9% 19.8% 19.5% 18.3% -678 -1174 1755 499 -36 -113CFW MS 19.1% 13.7% 5.5% 1.5% 11.3% 16.9% 15.4% 13.5% -818 -407 983 556 -149 -182CFW-T Consensus 19.1% 13.7% 5.5% 1.5% 11.3% 18.3% 18.3% 15.6% -818 -407 983 702 -3 -265CRR MS 27.4% 23.9% 22.9% 23.3% 25.5% 31.3% 31.8% 33.6% -104 42 226 580 41 187

Consensus 27.4% 23.9% 22.9% 23.3% 25.5% 31.3% 32.7% 35.1% -104 42 226 574 139 245

Avg. MS 26.4% 18.5% 13.5% 4.1% 18.4% 24.2% 22.8% 21.6% -504 -936 1426 580 -135 -126Consensus 26.4% 18.5% 13.5% 4.1% 18.4% 24.3% 24.5% 23.1% -504 -936 1426 593 22 -139

Note: some consensus numbers might lack relevance due to the low number of estimates

Source: FactSet, Company data, Morgan Stanley Research.

23



Exhibit 58 Equipment: Revenue Growth Assumptions


NOV MS 13,424 12,712 12,165 14,298 16,924 19,390 51.3% 39.3% 37.1% (5.3%) (4.3%) 17.5% 18.4% 14.6%Consensus 13,424 12,712 12,165 14,151 16,830 18,488 51.3% 39.3% 37.1% (5.3%) (4.3%) 16.3% 18.9% 9.9%

CAM MS 5,849 5,223 6,135 6,817 8,238 9,934 48.7% 24.7% 25.3% (10.7%) 17.5% 11.1% 20.8% 20.6%Consensus 5,849 5,223 6,135 6,899 7,976 8,672 48.7% 24.7% 25.3% (10.7%) 17.5% 12.5% 15.6% 8.7%

FTI MS 5,081 4,405 4,126 5,052 5,986 7,342 21.0% 18.6% 9.7% (13.3%) (6.4%) 22.5% 18.5% 22.7%Consensus 5,081 4,405 4,126 5,033 5,900 6,768 21.0% 18.6% 9.7% (13.3%) (6.4%) 22.0% 17.2% 14.7%

DRC MS 2,195 2,290 1,954 2,412 3,099 3,488 24.3% 10.9% 31.8% 4.3% (14.7%) 23.5% 28.5% 12.6%Consensus 2,195 2,290 1,954 2,444 3,005 3,428 24.3% 10.9% 31.8% 4.3% (14.7%) 25.1% 23.0% 14.1%

OII MS 1,977 1,822 1,917 2,137 2,402 2,658 28.2% 36.2% 13.4% (7.9%) 5.2% 11.5% 12.4% 10.7%Consensus 1,977 1,822 1,917 2,137 2,413 2,679 28.2% 36.2% 13.4% (7.9%) 5.2% 11.5% 12.9% 11.0%

DRQ MS 519 540 566 568 717 874 11.9% 9.5% (4.4%) 4.2% 4.8% 0.3% 26.2% 21.9%Consensus 519 540 566 568 721 848 11.9% 9.5% (4.4%) 4.2% 4.8% 0.3% 26.9% 17.6%

GTLS MS 744 592 554 822 1,006 1,193 33.3% 24.0% 11.7% (20.5%) (6.4%) 48.4% 22.4% 18.5%Consensus 744 592 554 811 992 1,137 33.3% 24.0% 11.7% (20.5%) (6.4%) 46.3% 22.4% 14.6%

Avg. MS 4,256 3,941 3,917 4,587 5,482 6,411 31.2% 23.3% 17.8% (7.0%) (0.6%) 19.3% 21.0% 17.3%Consensus 4,256 3,941 3,917 4,578 5,405 6,003 31.2% 23.3% 17.8% (7.0%) (0.6%) 19.1% 19.6% 12.9%

Note: top line for NOV includes GRP for all periods, while FTI excludes foodtech & airport; some consensus numbers might lack relevance due to the low number of estimates

Exhibit 59 Equipment: Revenue Growth

2012e Consensus

19.6%

2012e MS21.0%

-20%

-5%

10%

25%

40%

2006 2007 2008 2009 2010 2011E 2012E 2013E -20%

-5%

10%

25%

40%

Consensus MS

Note: Includes historical figures and MS vs. consensus projection of top line growth for the average of NOV, CAM, FTI, OII, DRC, DRQ and GTLS

Exhibit 60 Equipment: EBIT Margins

2012e Consensus

18.0%

2012e MS17.5%

0%

5%

10%

15%

20%

25%

2006 2007 2008 2009 2010 2011E 2012E 2013E 0%

5%

10%

15%

20%

25%

Consensus MS

Note: Includes historical figures and MS vs. consensus projection of top line growth for the average of NOV, CAM, FTI, OII, DRC, DRQ and GTLS

Exhibit 61 Equipment: EBIT Margins Assumptions


NOV MS 15.9% 20.9% 22.4% 20.1% 20.3% 20.2% 20.0% 21.9% 154 (237) 21 (7) (19) 191Consensus 15.9% 20.9% 22.4% 20.1% 20.3% 19.8% 21.0% 22.0% 154 (237) 21 (50) 123 102

CAM MS 13.9% 15.8% 15.7% 15.5% 14.0% 13.9% 15.8% 16.7% (5) (21) (153) (10) 195 86Consensus 13.9% 15.8% 15.7% 15.5% 14.0% 13.7% 16.2% 17.3% (5) (21) (153) (30) 247 110

FTI MS 8.9% 10.4% 11.7% 13.2% 14.4% 12.3% 14.3% 14.7% 131 152 114 (209) 196 49Consensus 8.9% 10.4% 11.7% 13.2% 14.4% 12.0% 13.6% 14.0% 131 152 114 (234) 155 38

DRC MS 12.5% 14.5% 15.0% 15.5% 13.4% 11.8% 15.0% 16.3% 56 45 (206) (160) 318 130Consensus 12.5% 14.5% 15.0% 15.5% 13.4% 11.5% 14.7% 15.7% 56 45 (206) (192) 320 95

OII 15.2% 16.6% 16.2% 16.0% 16.2% 14.9% 15.7% 16.5% (37) (21) 20 (137) 83 78Consensus 15.2% 16.6% 16.2% 16.0% 16.2% 14.8% 16.6% 17.8% (37) (21) 20 (145) 179 127

DRQ MS 27.6% 27.9% 26.8% 27.3% 27.1% 22.7% 25.4% 28.0% (115) 49 (18) (436) 265 261Consensus 27.6% 27.9% 26.8% 27.3% 27.1% 22.8% 27.7% 29.7% (115) 49 (18) (427) 489 198

GTLS MS 12.4% 13.9% 17.7% 17.2% 9.9% 13.3% 16.2% 18.3% 378 (46) (731) 333 291 216Consensus 12.4% 13.9% 17.7% 17.2% 9.9% 13.0% 16.4% 18.5% 378 (46) (731) 306 341 215

Avg. MS 15.2% 17.1% 18.0% 17.8% 16.5% 15.6% 17.5% 18.9% 80 (11) (136) (90) 190 144Consensus 15.2% 17.1% 18.0% 17.8% 16.5% 15.4% 18.0% 19.3% 80 (11) (136) (111) 265 127

Note: Figures for NOV include GRP for all periods, while FTI excludes foodtech & airport; some consensus numbers might lack relevance due to the low number of estimates Source: FactSet, Company data, Morgan Stanley Research.

24



Exhibit 62 Offshore Construction, Tubulars, Seismic: Revenue Growth Assumptions


Offshore ConstructionMDR.N MS 3,181 3,338 2,422 3,574 4,054 4,519 30.0% 51.9% 30.1% 4.9% (27.5%) 47.6% 13.4% 11.5%MDR Consensus 3,181 3,338 2,422 3,564 4,014 4,729 30.0% 51.9% 30.1% 4.9% (27.5%) 47.2% 12.6% 17.8%WG.L MS 5,243 4,927 5,063 5,891 6,323 6,601 25.6% 27.8% 18.3% (6.0%) 2.8% 16.3% 7.3% 4.4%WG-LON Consensus 5,243 4,927 5,063 5,712 6,359 6,969 25.6% 27.8% 18.3% (6.0%) 2.8% 12.8% 11.3% 9.6%SBMO.AS MS 3,060 2,957 3,056 3,143 3,755 4,188 31.0% 44.3% 6.6% (3.4%) 3.4% 2.9% 19.5% 11.5%SBMO-AMSConsensus 3,060 2,957 3,056 3,183 3,438 3,703 31.0% 44.3% 6.6% (3.4%) 3.4% 4.2% 8.0% 7.7%SUBC.OL MS 2,489 2,209 2,369 5,344 6,104 7,105 29.8% 59.5% (6.5%) (11.3%) 7.3% 125.6% 14.2% 16.4%SUB-OSL Consensus 2,489 2,209 2,369 5,200 5,323 NA 29.8% 59.5% (6.5%) (11.3%) 7.3% 119.5% 2.4% NA TECF.PA MS 10,420 9,593 8,136 9,437 11,530 12,107 43.3% 26.0% (9.1%) (7.9%) (15.2%) 16.0% 22.2% 5.0%TEC-PAR Consensus 10,420 9,593 8,136 9,497 10,996 12,106 43.3% 26.0% (9.1%) (7.9%) (15.2%) 16.7% 15.8% 10.1%SPMI.MI MS 14,109 14,734 14,929 17,178 19,174 20,884 85.2% 40.2% 1.5% 4.4% 1.3% 15.1% 11.6% 8.9%SPM-MIL Consensus 14,109 14,734 14,929 17,408 19,050 20,633 85.2% 40.2% 1.5% 4.4% 1.3% 16.6% 9.4% 8.3%Avg. MS 7,064 6,884 6,710 8,199 9,377 10,177 43.0% 39.5% 2.1% (4.8%) (0.1%) 35.2% 15.0% 9.2%

Consensus 7,064 6,884 6,710 8,200 9,033 10,853 43.0% 39.5% 2.1% (4.8%) (0.1%) 34.0% 9.4% 8.9%TubularsTS MS 12,132 8,485 7,712 10,014 12,090 15,115 24.4% 31.7% 19.2% (30.1%) (9.1%) 29.9% 20.7% 25.0%

Consensus 12,132 8,485 7,712 9,944 11,640 13,150 24.4% 31.7% 19.2% (30.1%) (9.1%) 29.0% 17.1% 13.0%VLLP.PA MS 9,052 6,444 6,008 7,387 9,207 10,546 43.5% 22.6% 0.5% (28.8%) (6.8%) 22.9% 24.7% 14.5%VK-PAR Consensus 9,052 6,444 6,008 7,406 8,649 9,815 43.5% 22.6% 0.5% (28.8%) (6.8%) 23.3% 16.8% 13.5%TRMKq.L MS 5,690 3,461 5,579 6,876 7,220 6,941 NA NA 36.2% (39.2%) 61.2% 23.3% 5.0% (3.9%)TMKS-LONConsensus 5,690 3,461 5,579 6,982 7,472 7,715 NA NA 36.2% (39.2%) 61.2% 25.2% 7.0% 3.3%

Avg. MS 8,958 6,130 6,433 8,092 9,506 10,867 33.9% 27.2% 18.6% (32.7%) 15.1% 25.4% 16.8% 11.9%Consensus 8,958 6,130 6,433 8,110 9,254 10,227 33.9% 27.2% 18.6% (32.7%) 15.1% 25.8% 13.6% 9.9%

SeismicGEPH.PA MS 3,852 3,120 2,909 3,220 3,776 4,091 54.4% 94.5% 18.4% (19.0%) (6.8%) 10.7% 17.3% 8.4%GA-PAR Consensus 3,852 3,120 2,909 2,295 2,572 2,831 54.4% 94.5% 18.4% (19.0%) (6.8%) (21.1%) 12.1% 10.1%PGS.OL MS 1,918 1,485 1,135 1,188 1,544 1,721 9.4% 16.2% 26.2% (22.5%) (23.6%) 4.7% 29.9% 11.4%PGS-OSL Consensus 1,918 1,485 1,135 1,238 1,458 1,706 9.4% 16.2% 26.2% (22.5%) (23.6%) 9.1% 17.8% 17.0%TGS.OL MS 582 478 568 666 832 891 64.7% 14.4% 28.6% (18.0%) 19.0% 17.1% 25.0% 7.1%TGS-OSL Consensus 582 478 568 653 739 811 64.7% 14.4% 28.6% (18.0%) 19.0% 14.9% 13.2% 9.8%

Avg. MS 2,117 1,694 1,537 1,691 2,051 2,234 42.8% 41.7% 24.4% (19.8%) (3.8%) 10.8% 24.1% 9.0%Consensus 2,117 1,694 1,537 1,395 1,590 1,783 42.8% 41.7% 24.4% (19.8%) (3.8%) 0.9% 14.3% 12.3%

Exhibit 63 Offshore Construction, Tubulars, Seismic: EBIT Margins and EPS Assumptions

EBIT Margins EPS2006 2007 2008 2009 2010 2011E 2012E 2013E 2008 2009 2010 2011E 2012E 2013E

Offshore ConstructionMDR.N MS (0.2%) (0.2%) (0.1%) (0.1%) 14.9% 10.7% 13.1% 14.0% $226.92 $229.47 $1.19 $1.19 $1.65 $2.00MDR Consensus (0.2%) (0.2%) (0.1%) (0.1%) 14.9% 10.6% 11.8% 12.2% $226.92 $229.47 $1.19 $1.19 $1.55 $1.87WG.L MS 6.2% 7.2% 8.4% 7.3% 6.8% 6.9% 7.1% 7.4% $0.73 $0.59 $0.55 $0.59 $0.77 $0.92WG-LON Consensus 6.2% 7.2% 8.4% 7.3% 6.8% 5.7% 6.6% 7.3% $0.73 $0.59 $0.55 $0.61 $0.86 $1.06SBMO.AS MS 12.8% 10.6% 8.3% 9.9% 11.9% 16.7% 18.1% 18.2% $1.39 $1.46 $1.53 $2.44 $2.92 $3.22SBMO-AMSConsensus 12.8% 10.6% 8.3% 9.9% 11.9% 8.8% 15.6% 16.0% $1.39 $1.46 $1.53 $2.19 $2.41 $2.73SUBC.OL MS 10.4% 13.0% 17.2% 15.5% 18.4% 12.5% 13.6% 16.4% $1.66 $1.42 $1.31 $1.05 $1.37 $1.97SUB-OSL Consensus 10.4% 13.0% 17.2% 15.5% 18.4% 11.3% 15.4% NA $1.66 $1.42 $1.31 $1.02 $1.60TECF.PA MS 4.8% 3.1% 8.5% 10.2% 10.1% 10.1% 10.5% 11.0% € 4.00 € 3.90 € 3.79 € 4.07 € 5.02 € 5.51TEC-PAR Consensus 4.8% 3.1% 8.5% 10.2% 10.1% 10.1% 10.6% 11.1% € 4.00 € 3.90 € 3.79 € 4.16 € 4.94 € 5.79SPMI.MI MS 8.0% 9.1% 10.7% 11.2% 11.8% 12.2% 12.9% 14.0% € 1.64 € 1.66 € 1.88 € 2.08 € 2.59 € 3.16SPM-MIL Consensus 8.0% 9.1% 10.7% 11.2% 11.8% 12.0% 12.5% 12.9% € 1.64 € 1.66 € 1.88 € 2.08 € 2.46 € 2.80Avg. MS 8.4% 8.6% 10.6% 10.8% 11.8% 11.7% 12.4% 13.4% 98% (6%) 0% 13% 26% 21%

Consensus 8.4% 8.6% 10.6% 10.8% 11.8% 9.6% 12.1% 11.8% 98% (6%) 0% 10% 29% 17%TubularsTS MS 36.1% 29.3% 29.1% 25.8% 19.5% 19.5% 26.0% 29.8% $3.60 $1.97 $1.91 $2.31 $3.65 $5.20TS Consensus 36.1% 29.3% 29.1% 25.8% 19.5% 20.0% 23.1% 24.6% $3.60 $1.97 $1.91 $2.41 $3.20 $3.74VLLP.PA MS 27.8% 26.4% 23.6% 17.6% 15.2% 13.5% 16.7% 19.0% € 9.11 € 4.88 € 3.50 € 3.43 € 5.30 € 6.95VK-PAR Consensus 27.8% 26.4% 23.6% 17.6% 15.2% 14.0% 16.9% 20.0% € 9.11 € 4.88 € 3.50 € 3.68 € 5.42 € 7.33TRMKq.L MS NA 18.4% 13.3% 0.3% 10.8% 12.9% 15.2% 13.0% $1.21 -$1.28 $0.50 $1.75 $2.63 $2.19TMKS-LONConsensus NA 18.4% 13.3% 0.3% 10.8% 12.9% 14.2% 14.4% $1.21 -$1.28 $0.50 $1.78 $2.51 $2.90Avg. MS 32.0% 24.7% 22.0% 14.6% 15.2% 15.3% 19.3% 20.6% (13%) (99%) (58%) 90% 54% 19%

Consensus 32.0% 24.7% 22.0% 14.6% 15.2% 15.6% 18.1% 19.7% (13%) (99%) (58%) 96% 40% 23%SeismicGEPH.PA MS 20.7% 20.8% 20.9% (6.8%) 3.0% 7.4% 19.6% 23.3% $3.51 -$2.43 -$0.48 -$0.02 $2.79 $3.94GA-PAR Consensus 20.7% 20.8% 20.9% (6.8%) 3.0% 10.7% 21.1% 26.7% $3.51 -$2.43 -$0.48 $0.31 $1.93 $2.95PGS.OL MS 31.3% 32.6% 33.0% 25.7% 12.0% 15.0% 28.5% 30.5% $2.71 $1.51 $0.30 $0.45 $1.42 $1.73PGS-OSL Consensus 31.3% 32.6% 33.0% 25.7% 12.0% 13.2% 23.7% 30.4% $2.71 $1.51 $0.30 $0.44 $1.10 $1.71TGS.OL MS 56.3% 44.4% 46.2% 44.0% 40.0% 41.9% 43.1% 44.1% $1.09 $1.57 $1.49 $1.90 $2.43 $2.70TGS-OSL Consensus 56.3% 44.4% 46.2% 44.0% 40.0% 41.8% 44.1% 51.4% $1.09 $1.57 $1.49 $1.92 $2.23 $2.54Avg. MS 36.1% 32.6% 33.3% 21.0% 18.3% 21.5% 30.4% 32.6% 26% (56%) (55%) (7%) 122% 25%

Consensus 36.1% 32.6% 33.3% 21.0% 18.3% 21.9% 29.6% 36.1% 17% (56%) (55%) (31%) 228% 40% Source: FactSet, Company data, Morgan Stanley Research

25



Exhibit 64 12-Month Forward Rolling Consensus EPS

ConsensusRecent 12-Month Rolling Price-to-12-Month Rolling EPS Price-to-12-Month Rolling CEPS

Company Price EPS CEPS High Low Avg Std Dev Current High Low Avg Std Dev Current

Oil Services:Schlumberger 74.42 4.93 5.57 51.9 10.0 25.9 9.2 15.1 22.3 6.9 13.8 3.1 13.4Halliburton 41.54 4.10 4.22 41.5 6.2 19.1 7.4 10.1 21.0 4.8 11.8 3.4 9.8Baker Hughes 58.27 5.40 6.15 55.7 6.6 22.7 10.1 10.8 17.3 4.7 11.7 2.6 9.5Weatherford 16.34 1.47 2.17 45.2 5.3 19.3 6.5 11.2 15.7 3.5 8.5 2.1 7.5Calfrac Well Services 34.49 4.05 5.53 48.4 7.5 16.7 9.5 8.5 49.3 3.5 15.8 14.4 6.2Trican Well Services 21.83 2.32 3.09 53.7 6.8 16.2 8.5 9.4 15.9 2.6 6.7 3.2 7.1RPC, Inc. 24.59 2.47 2.98 52.1 8.2 16.3 7.1 9.9 15.8 4.2 7.7 2.0 8.3Carbo Ceramics 146.66 6.80 6.11 30.5 11.6 21.4 4.3 21.6 24.2 8.1 16.4 3.8 24.0Average (Big 4 Only) 48.6 7.0 21.7 8.3 11.8 19.1 5.0 11.4 2.8 10.1

Drillers:Atw ood Oceanics 40.70 4.17 4.72 44.2 3.3 14.6 8.9 9.8 49.8 3.0 11.0 6.2 8.6Diamond Offshore 61.57 5.47 9.41 45.9 5.1 17.5 9.8 11.3 19.6 4.4 10.8 3.4 6.5ENSCO International 47.14 5.14 5.41 43.1 3.4 15.6 9.0 9.2 30.0 2.9 11.2 5.7 8.7Noble Corporation 32.66 3.16 4.72 49.0 3.1 22.9 13.9 10.3 31.6 2.6 14.7 7.3 6.9Row an Companies 34.43 3.12 3.64 50.0 3.3 17.6 12.2 11.1 27.7 2.5 11.2 5.4 9.4Transocean 53.73 5.11 9.20 32.5 3.1 13.7 6.1 10.5 22.4 2.4 8.7 3.3 5.8Hercules Offshore 3.94 (0.46) 0.81 15.4 3.6 8.8 3.0 NA 12.6 1.6 5.5 2.5 4.9Nabors Industries 17.58 2.16 4.45 47.0 4.7 18.1 9.5 8.2 23.0 2.5 10.0 5.1 4.0Helmerich & Payne 54.71 4.77 6.29 40.1 5.5 17.6 9.1 11.5 10.9 3.6 7.7 1.6 8.7Patterson-UTI 23.36 2.86 4.51 51.7 5.3 18.9 11.6 8.2 18.2 3.7 8.9 3.5 5.2Seadrill 31.90 3.25 4.07 43.6 2.9 13.6 8.0 9.8 40.3 2.4 11.6 7.4 7.8Average 42.0 3.9 16.3 9.2 10.0 26.0 2.9 10.1 4.7 7.0

Equipment:Tenaris 31.47 2.94 3.07 23.1 4.5 12.9 3.4 10.7 15.2 3.8 9.6 2.5 10.3National Oilw ell Varco 63.64 5.29 5.32 42.4 4.0 17.9 7.2 12.0 21.4 3.2 11.9 3.6 12.0Cameron International 49.63 3.39 3.33 45.0 7.0 20.3 6.6 14.6 17.2 4.0 11.2 2.8 14.9FMC Technologies 42.36 2.08 1.89 27.0 8.4 20.0 3.5 20.4 22.6 7.3 14.6 3.5 22.4Oceaneering International 40.99 2.33 3.32 42.5 6.5 26.1 9.1 17.6 17.7 4.3 10.0 2.2 12.3Dril-Quip 61.87 3.16 3.06 45.9 6.5 22.6 7.4 19.6 37.4 5.7 16.5 5.0 20.2Dresser-Rand 40.57 2.80 3.75 24.5 6.8 16.2 3.9 14.5 17.8 5.4 12.1 2.6 10.8Chart Industries 45.43 2.83 1.96 25.3 4.1 14.5 5.0 16.1 23.2 2.9 10.1 3.9 23.2Average 34.4 6.0 18.8 5.8 15.7 21.6 4.6 12.0 3.3 15.8

Engineering & Construction:McDermott International 13.58 1.44 1.55 43.3 3.9 15.1 6.2 9.5 17.9 1.9 8.9 4.1 8.8Helix Energy Solutions 15.62 1.50 3.96 34.9 2.2 15.4 6.8 10.4 18.4 1.1 7.7 3.8 3.9Average 40.4 3.4 16.3 7.5 10.1 23.2 1.8 8.4 4.0 13.7

CEPS = cash EPS is equal to net income + depreciation and amortization + convertible interest (where applicable)

Exhibit 65 OSX versus Weighted 12-Month Forward Rolling Consensus EPS of OSX Constituents

0.00

2.00

4.00

6.00

8.00

Jul-97 Jul-99 Jul-01 Jul-03 Jul-05 Jul-07 Jul-09 Jul-11

$ / share

050100150200250300350400

12-Month Forward Rolling EPS OSX

Source: FactSet, Morgan Stanley Research

26



Commodity Data Exhibit 66 US Natural Gas Storage

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

Trill

ions

of C

ubic

Fee

t

5-Yr. Range 2011 2010 2009 2008 2007

Exhibit 67 US LNG Monthly Imports (Bcf/d)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecB

cf/d

2011 2010 20092008 2007 Avg 05-09

Exhibit 68 Natural Gas Injection Rate

(300)

(250)

(200)

(150)

(100)

(50)

0

50

100

150

Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov5 Year Range 2011 2010 2009 2008 2007

Exhibit 69 US Total Oil Inventories

580

600

620

640

660

680

700

720

740

760

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

mbbls

2011 2010 2009 20082007 2006 Avg 06-10

Exhibit 70 Weekly US Natural Gas Storage (Injection/(Withdrawal))

71.0

36.0

90.0

65.0

54.063.2

55.0

Inje

ctio

n (W

ithdr

awal

)(B

cf)

Weekly Change 71.0 36.0 90.0 65.0 54.0 55.0 63.2

2006 2007 2008 2009 2010 2011 '06-'10 Avg.

Exhibit 71 US Oil Inventory Data

Prior Weekly Previous 5-Yr.

08/26/11 Week Change Year Avg.

APICrude Oil 352.2 347.0 5.1 361.5 326.5

Motor Gasoline 210.8 213.9 (3.1) 225.6 208.7

Middle Distillates 197.8 196.7 1.1 213.2 192.1

Distillates 153.1 152.8 0.3 167.7 149.7

Kerosene 44.7 43.9 0.8 45.4 42.5

Naphtha - - - - -

Residual 37.0 37.9 (0.9) 38.6 37.0

Unfinished 83.9 85.7 (1.8) 75.5 86.4

Total Oil 881.7 881.3 0.4 914.4 850.7 DOE

Crude Oil 357.1 351.8 5.3 361.7 329.1

Motor Gasoline 208.6 211.4 (2.8) 225.4 203.5

Distillates 156.1 155.7 0.4 175.2 149.9

Total Oil 721.8 718.9 2.8 762.3 682.6 Source: Energy Information Administration (EIA), Department of Energy (DOE), Waterborne, American Petroleum Institute (API), Morgan Stanley Research

27



Exhibit 72 Future Deliveries of Newbuild Jackups

Ow ner Manager Rig Name DesignWater

Depth (ft) Est. CostExpected Delivery Shipyard Region

Date of Delivery Term Contract

1 Asia Offshore Drilling Seadrill AOR1 KFELS B Class 350 $201 4Q12 Keppel FELS Sing. 20122 Asia Offshore Drilling Seadrill AOR2 KFELS B Class 350 $201 1Q13 Keppel FELS Sing. 20133 Asia Offshore Drilling Seadrill AOR3 KFELS B Class 350 $184 3Q13 Keppel FELS Sing. 20134 Atw ood Oceanics Atw ood Oceanics Atw ood Orca PPL Shipyard Pacif ic Class 400 400 $190 2Q13 PPL Sing. 20135 Atw ood Oceanics Atw ood Oceanics Atw ood Mako PPL Shipyard Pacif ic Class 400 400 $190 3Q12 PPL Sing. 20126 Atw ood Oceanics Atw ood Oceanics Atw ood Manta PPL Shipyard Pacif ic Class 400 400 $190 4Q12 PPL Sing. 20127 Central Panuco Perforadora Central Papaloapan LeTourneau Super 116E Class 375 $195 1Q13 AMFELS USA 20138 CPTDC CPTDC Unnamed CPLEC CP 300 200 3Q11 CPLEC China 2011 CNPC9 Discovery Offshore Hercules Offshore Discovery Offshore JU Tbn1 KFELS Super A Class 400 $231 2Q13 Keppel FELS Sing. 201310 Discovery Offshore Hercules Offshore Discovery Offshore JU Tbn2 KFELS Super A Class 400 $231 4Q13 Keppel FELS Sing. 201311 Drilling & Offshore Drilling & Offshore Drilling & Offshore JU Tbn1 Friede & Goldman JU-2000A 350 $220 4Q12 Bharati India 201212 Drilling & Offshore Drilling & Offshore Drilling & Offshore JU Tbn2 Friede & Goldman JU-2000A 350 $220 4Q12 ABG Shipyard India 201213 Dynamic Offshore Drilling Deepw ater Drilling Dynamic Drilling JU Tbn1 KFELS B Class 350 $180 1Q13 Keppel FELS Sing. 201314 ENSCO ENSCO ENSCO JU Tbn1 KFELS Super A Class 400 $230 2Q13 Keppel FELS Sing. 201315 ENSCO ENSCO ENSCO JU Tbn2 KFELS Super A Class 400 $230 4Q13 Keppel FELS Sing. 201316 Essar Oilf ields Services Essar Oilf ields Services Essar JU Tbn1 Friede & Goldman JU-2000A 350 $229 1Q12 ABG Shipyard India 201217 Essar Oilf ields Services Essar Oilf ields Services Essar JU Tbn2 Friede & Goldman JU-2000A 350 $229 3Q12 ABG Shipyard India 201218 Eurasia Drilling Eurasia Drilling Eurasia Drilling JU Tbn1 LeTourneau Super 116E Class 250 $210 2Q13 Lamprell M.E. 201319 Gazprom Gazflot Arkticheskaya Corall SPBU 6500/10-100 328 $100 3Q11 Zvezdochka Russia 2011 Gazflot20 Great Offshore Great Offshore Great Offshore JU V351 LeTourneau Super 116E 350 $165 4Q11 Bharati Shipyard India 2011 PEMEX21 Greatship Greatship Greatdrill Chaaya LeTourneau Super 116E 350 $160 4Q12 Lamprell M.E. 201222 Gulf Drilling International Gulf Drilling International GDI JU Tbn1 KFELS B Class Bigfoot 350 $197 3Q13 Keppel FELS Sing. 201323 Gulf Drilling International Gulf Drilling International GDI JU Tbn2 KFELS B Class Bigfoot 350 $197 3Q14 Keppel FELS Sing. 201424 Japan Drilling Japan Drilling Hakuryu-11 KFELS Super B Class 425 $210 1Q13 Keppel FELS Sing. 201325 Jasper Investments Ltd Jasper Offshore Jasper JU Tbn1 KFELS B Class 400 $180 4Q12 Keppel FELS Sing. 201226 Jasper Investments Ltd Jasper Offshore Jasper JU Tbn2 KFELS B Class 400 $180 2Q13 Keppel FELS Sing. 201327 KS Energy KS Energy KS JU Tbn1 LeTourneau 240-C 400 $194 3Q13 COSCO Nantong China 201328 KS Energy KS Energy KS JU Tbn2 LeTourneau 240-C 400 $194 1Q14 COSCO Nantong China 201429 Maersk Maersk Maersk JU Tbn1 GustoMSC CJ70-X150A 492 $500 4Q13 Keppel FELS Sing. 201330 Maersk Maersk Maersk JU Tbn2 GustoMSC CJ70-X150A 492 $500 2Q14 Keppel FELS Sing. 201431 Maritime Industrial Services Maritime Industrial Services MIS JU Hull 108 Friede & Goldman Super M2 300 $184 4Q11 MIS Shipyard M.E. 201132 Mosvold M.E. Jackup Mosvold M.E. Jackup Haffar I Friede & Goldman Super M2 300 $184 3Q11 MIS Shipyard M.E. 2011 PEMEX33 National Drilling National Drilling Makhasib LeTourneau Super 116E Class 200 $159 2Q12 Lamprell M.E. 201234 National Drilling National Drilling Muhaiyimat LeTourneau Super 116E Class 200 $159 3Q12 Lamprell M.E. 201235 Noble Corp. Noble Corp. Noble JU Tbn1 Friede & Goldman JU-3000N 400 $220 4Q12 Jurong Sing. 201236 Noble Corp. Noble Corp. Noble JU Tbn2 Friede & Goldman JU-3000N 400 $220 2Q13 Jurong Sing. 201337 Noble Corp. Noble Corp. Noble JU Tbn3 Friede & Goldman JU-3000N 400 $235 3Q13 Jurong Sing. 201338 Noble Corp. Noble Corp. Noble JU Tbn4 Friede & Goldman JU-3000N 400 $235 1Q14 Jurong Sing. 201439 Noble Corp. Noble Corp. Noble JU Tbn5 Friede & Goldman JU-3000N 400 $245 4Q14 Jurong Sing. 201440 Noble Corp. Noble Corp. Noble JU Tbn6 Friede & Goldman JU-3000N 400 $245 1Q15 Jurong Sing. 201541 North Atlantic Drilling North Atlantic Drilling West Linus GustoMSC CJ70-X150A 492 $530 3Q13 Jurong Sing. 2013 ConocoPhillips42 Operadora Cisca Operadora Cisca Independencia 1 Friede & Goldman JU-2000E 400 $195 3Q11 Operadora Cicsa Mexico 201143 Petrobras Odebrecht P-59 LeTourneau Super 116E Class 350 1Q12 Bahia Brazil 2012 Petrobras44 Petrobras Odebrecht P-60 LeTourneau Super 116E Class 350 2Q12 Bahia Brazil 2012 Petrobras45 PetroVietnam PetroVietnam Tam Dao 03 LeTourneau Super 116E 200 $180 1Q12 PV Shipyard Vietnam 2012 PetroVietnam46 Prospector Offshore Drilling Prospector Offshore Drilling Prospector JU Tbn1 Friede & Goldman JU-2000E 400 $170 4Q12 Dalian China 201247 Prospector Offshore Drilling Prospector Offshore Drilling Prospector JU Tbn2 Friede & Goldman JU-2000E 400 $170 1Q13 Dalian China 201348 Prospector Offshore Drilling Prospector Offshore Drilling Prospector JU Tbn3 Friede & Goldman JU-2000E 400 $209 3Q13 Dalian China 201349 Prospector Offshore Drilling Prospector Offshore Drilling Prospector JU Tbn4 Friede & Goldman JU-2000E 400 $209 3Q13 SWS China 201350 Prospector Offshore Drilling Prospector Offshore Drilling Prospector JU Tbn5 Friede & Goldman JU-2000E 400 $209 1Q14 SWS China 201451 Prospector Offshore Drilling Prospector Offshore Drilling Prospector JU Tbn6 Friede & Goldman JU-2000E 400 $209 2Q14 Dalian China 201452 Row an Row an Row an EXL IV LeTourneau Super 116E 350 $197 4Q11 AMFELS USA 201153 Row an Row an Joe Douglas LeTourneau 240-C 400 $257 4Q11 LeTourneau USA 2011 McMoRan54 Saudi Aramco Saudi Aramco Saudi Aramco JU Tbn1 Keppel FELS KFELS Super B Class 300 3Q12 Keppel FELS Sing. 2012 Saudi Aramco55 Seadrill Seadrill West Castor Friede & Goldman JU-2000E 400 $200 4Q12 Jurong Sing. 201256 Seadrill Seadrill West Oberon Friede & Goldman JU-2000E 400 $190 1Q13 Dalian China 201357 Seadrill Seadrill West Telesto Friede & Goldman JU-2000E 400 $190 4Q12 Dalian China 201258 Seadrill Seadrill West Tucana Friede & Goldman JU-2000E 400 $200 1Q13 Jurong Sing. 201359 Standard Drilling Standard Drilling Offshore Driller B319 Keppel FELS KFELS B Class 400 $185 3Q12 Keppel FELS Sing. 201260 Standard Drilling Standard Drilling Offshore Driller B324 Keppel FELS KFELS B Class 400 $184 1Q13 Keppel FELS Sing. 201361 Standard Drilling Standard Drilling Offshore Driller B325 Keppel FELS KFELS B Class 400 $184 2Q13 Keppel FELS Sing. 201362 Standard Drilling Standard Drilling Offshore Driller 1 Keppel FELS KFELS B Class 400 $196 3Q13 Keppel FELS Sing. 201363 Standard Drilling Standard Drilling Offshore Driller 2 Keppel FELS KFELS B Class 400 $196 4Q13 Keppel FELS Sing. 201364 Standard Drilling Standard Drilling Offshore Driller 3 Keppel FELS KFELS B Class 400 $196 4Q13 Keppel FELS Sing. 201365 Standard Drilling Standard Drilling Offshore Driller 4 Keppel FELS KFELS B Class 400 $196 2Q14 Keppel FELS Sing. 201466 Transocean Transocean Transocean Honor PPL Shipyard Pacif ic Class 400 400 $195 4Q11 PPL Sing. 201167 Transocean Transocean Transocean JU Tbn1 KFELS Super B Class Bigfoot 350 $190 4Q12 Keppel FELS Sing. 2012 Chevron68 Transocean Transocean Transocean JU Tbn2 KFELS Super B Class Bigfoot 350 $190 2Q13 Keppel FELS Sing. 2013 Chevron69 Transocean Transocean Transocean JU Tbn3 KFELS Super B Class Bigfoot 400 $195 3Q13 Keppel FELS Sing. 2013 Chevron70 Yantai Raff les Momentum Engineering Caspian Driller Friede & Goldman Super M2 300 1Q12 Krasnyye B Turkmenistan 2012 Dragon Oil71 Yantai Raff les Yantai Raffles Yantai Raff les JU Tbn2 Friede & Goldman Super M2 300 3Q11 Yantai Raffles China 201172 Yantai Raff les Yantai Raffles Yantai Raff les JU Tbn3 Friede & Goldman Super M2 300 4Q11 Yantai Raffles China 201173 ZPMC ZPMC Zhenhai 1 Friede & Goldman Super M2 400 2Q13 ZPMC China 2013

Source: Company data, ODS-Petrodata, Morgan Stanley Research

28



Exhibit 73 Future Deliveries of Newbuild Floaters

Ow ner Manager Rig Name DesignWater

Depth (ft) Est. CostExpected Delivery Shipyard Region

Date of Delivery Term Contract

1 Aker Drilling Vantage Drilling Aker Drsh Tbn1 12,000 $600 4Q13 Daew oo Korea 20132 Aker Drilling Vantage Drilling Aker Drsh Tbn2 12,000 $600 4Q13 Daew oo Korea 20133 Atw ood Oceanics Atw ood Oceanics Atw ood Condor Friede & Goldman Ex-D 10,000 $750 2Q12 Jurong Sing. 20124 Atw ood Oceanics Atw ood Oceanics Atw ood Advantage 10,000 $600 3Q13 Daew oo Korea 20135 CNOOC COSL Hai Yang Shi You 981 Friede & Goldman ExD 7,500 $599 3Q11 Shanghai Waigaoqiao China 2011 CNOOC6 COSL COSL COSL Innovator Global Maritime GM-4000 1,640 $460 3Q11 Yantai Raffles China 2011 Statoil7 COSL COSL COSL Promoter Global Maritime GM-4000 1,640 $460 2Q12 Yantai Raffles China 2012 Statoil8 Delba Delba Delba III GustoMSC TDS 2500 7,874 $611 3Q11 Gulf Piping Company M.E. 2011 Petrobras9 Diamond Offshore Diamond Offshore Ocean BlackHaw k GustoMSC P10000 12,000 $590 2Q13 Hyundai Heavy Korea 2013 Anadarko10 Diamond Offshore Diamond Offshore Ocean BlackHornet GustoMSC P10000 12,000 $590 4Q13 Hyundai Heavy Korea 2013 Anadarko11 Diamond Offshore Diamond Offshore Diamond Drsh Tbn3 GustoMSC P10000 12,000 $610 2Q14 Hyundai Heavy Korea 201412 ENSCO ENSCO ENSCO 8505 ENSCO 8500 8,500 $537 1Q12 Keppel FELS Sing. 201213 ENSCO ENSCO ENSCO 8506 ENSCO 8500 8,500 $560 3Q12 Keppel FELS Sing. 201214 ENSCO ENSCO ENSCO DS-6 Samsung 12000 10,000 $790 4Q11 Samsung Heavy Korea 201115 ENSCO ENSCO ENSCO DS-7 Samsung 12000 10,000 $600 3Q13 Samsung Heavy Korea 201316 Etesco Etesco Etesco Takatsugu J 10,000 $820 1Q12 Samsung Heavy Korea 2012 Petrobras17 Fred Olsen Dolphin Fred Olsen Drsh Tbn1 GustoMSC P10000 12,000 $615 3Q13 Hyundai Heavy Korea 201318 IPC IPC La Muralla IV GVA 7500-N 10,000 $709 3Q11 Daew oo Korea 201119 Island Offshore Island Offshore Island Innovator Global Maritime GM-4000 2,460 $560 1Q12 COSCO Nantong China 201220 Maersk Drilling Maersk Drilling Maersk Drsh Tbn1 Samsung 12000 12,000 $650 3Q13 Samsung Heavy Korea 201321 Maersk Drilling Maersk Drilling Maersk Drsh Tbn2 Samsung 12000 12,000 $650 4Q13 Samsung Heavy Korea 201322 Maersk Drilling Maersk Drilling Maersk Drsh Tbn3 Samsung 12000 12,000 $650 2Q14 Samsung Heavy Korea 201423 Maersk Drilling Maersk Drilling Maersk Drsh Tbn4 Samsung 12000 12,000 $650 3Q14 Samsung Heavy Korea 201424 Metrostar Odfjell Drilling Deepsea Metro II GustoMSC P10000 10,000 $668 4Q11 Hyundai Heavy Korea 2011 Petrobras25 Noble Corp. Frontier Drilling Noble Bully I GustoMSC PRD12,000 12,000 $610 3Q11 Keppel FELS Sing. 2011 Shell26 Noble Corp. Frontier Drilling Noble Bully II GustoMSC PRD12,000 12,000 $632 3Q11 Keppel FELS Sing. 2011 Shell27 Noble Corp. Noble Corp. Noble Globetrotter I Huisman Globetrotter 10,000 $585 3Q11 Dalian China 2011 Shell28 Noble Corp. Noble Corp. Noble Globetrotter II Huisman Globetrotter 10,000 $550 2Q13 Dalian China 2013 Shell29 Noble Corp. Noble Corp. Noble Drsh Tbn5 GustoMSC P10000 10,000 $605 2Q13 Hyundai Heavy Korea 201330 Noble Corp. Noble Corp. Noble Drsh Tbn6 GustoMSC P10000 12,000 $605 4Q13 Hyundai Heavy Korea 201331 Noble Corp. Noble Corp. Noble Drsh Tbn7 GustoMSC P10000 12,000 $615 2Q14 Hyundai Heavy Korea 201432 Noble Corp. Noble Corp. Noble Drsh Tbn8 GustoMSC P10000 12,000 $630 4Q14 Hyundai Heavy Korea 201433 Ocean Rig Ocean Rig Ocean Rig Mykonos Samsung/Saipem 10000 10,000 $792 4Q11 Samsung Heavy Korea 2011 Petrobras34 Ocean Rig Ocean Rig Dryships Drsh Tbn5 Samsung 12000 12,000 $608 3Q13 Samsung Heavy Korea 201335 Ocean Rig Ocean Rig Dryships Drsh Tbn6 Samsung 12000 12,000 $617 4Q13 Samsung Heavy Korea 201336 Ocean Rig Ocean Rig Dryships Drsh Tbn7 Samsung 12000 12,000 $608 4Q13 Samsung Heavy Korea 201337 Odebrecht Odebrecht ODN-1 10,000 $579 1Q12 Daew oo Korea 2012 Petrobras38 Odebrecht Odebrecht ODN-2 10,000 $579 2Q12 Daew oo Korea 2012 Petrobras39 Odebrecht Odebrecht Odebrecht Semi Tbn1 10,000 3Q13 Daew oo Korea 201340 Odebrecht Odebrecht Odebrecht Drsh Tbn5 10,000 2Q13 Daew oo Korea 201341 Pacific Drilling Pacific Drilling Pacific Santa Ana Samsung 10000 10,000 650 3Q11 Samsung Heavy Korea 2011 Chevron42 Pacific Drilling Pacific Drilling Pacific Khamsin Samsung 10000 10,000 550 2Q13 Samsung Heavy Korea 201343 Pacific Drilling Pacific Drilling Pacific Sharav Samsung 10000 10,000 550 3Q13 Samsung Heavy Korea 201344 Petroserv Petroserv Carolina 10,000 $953 1Q12 Daew oo Korea 2012 Petrobras45 Petroserv Petroserv Petroserv Semi Tbn1 GVA 7500-N 10,000 $526 2Q13 Daew oo Korea 201246 Queiroz Galvao Queiroz Galvao Amaralina Star Samsung 10000 10,000 3Q12 Samsung Heavy Sing. 2012 Petrobras47 Queiroz Galvao Queiroz Galvao Laguna Star Samsung 10000 10,000 3Q12 Samsung Heavy Sing. 2012 Petrobras48 Row an Row an Unnamed GustoMSC P10000 12,000 551 3Q13 Hyundai Heavy Korea 201349 Row an Row an Unnamed GustoMSC P10000 12,000 551 4Q13 Hyundai Heavy Korea 201350 Rozneft Rozneft Bolshaya Medveditsa 6,562 $700 3Q14 Zvezda Russia 2014 Rozneft51 Saipem Saipem Scarabeo 8 Moss Maritime CS-50 MkII (N) 9,843 $615 4Q11 Fincantieri Italy 2011 Eni52 Schahin Schahin Cerrado Samsung 10000 10,000 $682 3Q11 Samsung Heavy Korea 2011 Petrobras53 Schahin Schahin Sertao Samsung 10000 10,000 $709 4Q11 Samsung Heavy Korea 2011 Petrobras54 Seadrill Seadrill West Leo Moss CS50 6G 10,000 $510 4Q11 Jurong Sing. 201155 Seadrill SeaDrill West Capricorn Friede & Goldman ExD 7,500 $771 4Q11 Jurong Sing 201156 Seadrill Seadrill West Auriga Samsung 12000 12,000 $595 1Q13 Samsung Heavy Korea 201357 Seadrill Seadrill West Vela Samsung 12000 12,000 $595 2Q13 Samsung Heavy Korea 201358 Seadrill Seadrill West Tellus Samsung 12000 12,000 $600 3Q13 Samsung Heavy Korea 201359 Sevan Sevan Sevan Brasil Sevan Drilling Sevan 650 7,874 $685 1Q12 COSCO Nantong China 2012 Petrobras60 Sevan Sevan Unnamed Sevan Drilling Sevan 650 10,000 $526 4Q13 COSCO Nantong China 201361 Sevan Sevan Unnamed Sevan Drilling Sevan 650 10,000 $526 2Q14 COSCO Nantong China 201462 Sete Brasil Sete Brasil Unnamed Samsung 10000 10,000 $662 1Q15 Estaleiro Atlantico Sul Brazil 2015 Petrobras63 Sete Brasil Sete Brasil Unnamed Samsung 10000 10,000 $662 3Q15 Estaleiro Atlantico Sul Brazil 2015 Petrobras64 Sete Brasil Sete Brasil Unnamed Samsung 10000 10,000 $662 1Q16 Estaleiro Atlantico Sul Brazil 2016 Petrobras65 Sete Brasil Sete Brasil Unnamed Samsung 10000 10,000 $662 3Q16 Estaleiro Atlantico Sul Brazil 2016 Petrobras66 Sete Brasil Sete Brasil Unnamed Samsung 10000 10,000 $662 1Q17 Estaleiro Atlantico Sul Brazil 2017 Petrobras67 Sete Brasil Sete Brasil Unnamed Samsung 10000 10,000 $662 3Q17 Estaleiro Atlantico Sul Brazil 2017 Petrobras68 Sete Brasil Sete Brasil Unnamed Samsung 10000 10,000 $662 1Q18 Estaleiro Atlantico Sul Brazil 2018 Petrobras69 Songa Songa Songa Eclipse F&G Ex-D 10,000 $640 3Q11 Jurong Sing. 2011 Total70 Songa Songa Songa Semi Tbn3 1,640 $565 3Q14 Daew oo Korea 2014 Statoil71 Songa Songa Songa Semi Tbn2 1,640 $565 2Q14 Daew oo Korea 2014 Statoil72 Stena Stena Stena DrillMAX ICE Stena/Samsung (Harsh) 7,500 $1,150 1Q12 Samsung Heavy Korea 201273 Vantage Drilling Vantage Drilling Dalian Developer MPF 1000 10,000 4Q12 COSCO Dalian China 201274 Vantage Drilling Vantage Drilling DragonQuest 10,000 $782 3Q11 Daew oo Korea 2011 Petrobras75 Vantage Drilling Vantage Drilling Tungsten Explorer 12,000 $590 2Q13 Daew oo Korea 2013

Source: Company data, ODS-Petrodata, Morgan Stanley Research

29



Performance Review Exhibit 74 Segment and Index Performance

Last LastWeek Month 2011 2010 2009 2008 2007

Land Drillers 1.4% -22.6% 13.0% 22.9% 45.0% -47.7% -4.4%

Services 1.6% -13.5% 1.6% 33.1% 48.2% -59.8% 35.5%

Logistics 1.3% -12.6% -8.9% 16.2% 37.1% -46.6% 23.6%

Equipment 4.6% -13.3% -10.1% 39.9% 125.2% -61.0% 52.0%

Offshore Drillers 3.7% -9.2% -10.9% 8.0% 84.4% -65.8% 78.4%

Offshore Construction 3.3% -11.2% -11.3% 28.3% 110.2% -71.4% 53.8%

Seismic 1.9% -16.0% -15.7% 37.9% 118.1% -73.4% 33.4%

XNG 1.5% -8.7% 2.7% 12.2% 43.7% -34.5% 29.6%

WTI (Oil) 4.2% -3.3% -2.7% 15.1% 77.9% -53.5% 57.2%

S&P 500 -0.2% -6.9% -6.7% 12.8% 23.5% -38.5% 3.5%

XOI 0.8% -9.1% -7.4% 13.6% 9.0% -37.2% 31.3%

OSX 0.8% -13.5% -7.6% 25.8% 60.6% -59.8% 50.9%

Henry Hub (Gas) 3.5% -1.0% -8.4% -20.1% -2.2% -24.4% 18.8% Exhibit 75 Relative Performance of the OSX to S&P 500 (52-wk)

80

90

100

110

120

130

140

Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

(%)

Exhibit 76 Stock Performance in 2011 (YTD)

AbanTRE-ES

TMKS-LONTS

MDRCOSL

WFTGBB-PAR

NBRGA-PAR

PGS-OSLRIG

DRQVK-PARPFC-LON

SPM-MILSUBC-OSL

ESVSLB

SBMO-AMSOSX

NES&P 500

NOVDRC

FTIDO

NASDAQCAM

SDRLRDC

CFW-TSEHALBHITEC-PAR

TGS-OSLWG-LONTCW-TSEPTENATW

OIIHPHERO

HLXGTLS

RESKENZ-LONCRR

-60% -40% -20% 0% 20% 40% 60%

Note: Graph is for total return for period

Exhibit 77 Component Contribution to Overall Performance of the OSX Last Week

NOV0.0%

DO0.0%

HAL0.0%

RIG0.1%

WFT0.1%

GLBL0.1%

CAM0.1%

NE0.1%

OII0.2%

TDW0.2%

RDC0.2%

BHI0.3%

NBR0.0%

SLB0.0%

LUFK-0.4%

Source: FactSet; Company data, Morgan Stanley Research

30



Exhibit 78 Global Coverage Universe (US$) Performance Review

Price All-time 52-w k 52-w k % Below % Below % Above Last Last LastCompany USD High High Low All-time HI 52W-HI 52W-LO Week 4-Wks 3-Mos 2009 2010 2011Oil Services:

Carbo Ceramics 146.66 180.25 183.34 76.12 -18.6% -20.0% 92.7% -0.8% 0.4% -1.4% 91.9% 51.9% 42.3%RPC Inc. 24.59 27.05 29.05 11.13 -9.1% -15.4% 121.0% 6.6% 9.4% -2.0% 6.6% 161.3% 37.2%Trican Well Services 21.47 28.22 28.33 13.51 -23.9% -24.2% 58.9% -0.2% -14.6% -5.2% 108.0% 51.1% 8.3%Baker Hughes 58.27 98.67 81.00 38.12 -40.9% -28.1% 52.9% 3.0% -18.9% -21.7% 26.2% 41.2% 2.6%Halliburton 41.54 57.27 57.77 28.69 -27.5% -28.1% 44.8% 0.4% -21.5% -17.2% 65.5% 35.7% 2.3%Calfrac Well Services 33.88 45.21 40.86 21.15 -25.1% -17.1% 60.2% 5.4% -7.9% 0.3% 182.2% 73.3% 0.6%Schlumberger 74.42 112.09 95.64 53.90 -33.6% -22.2% 38.1% -0.2% -14.4% -12.2% 53.8% 28.3% -10.1%Weatherford 16.34 49.59 28.11 14.64 -67.0% -41.9% 11.6% 3.8% -21.3% -15.3% 65.5% 27.3% -28.3%

Offshore Drillers:Hercules Offshore 3.94 42.30 6.99 2.05 -90.7% -43.6% 92.2% 5.1% -7.7% -34.0% 0.6% -27.2% 13.2%Atw ood Oceanics 40.70 62.17 48.84 25.55 -34.5% -16.7% 59.3% 3.0% -8.4% -4.6% 134.6% 4.2% 8.9%Row an Companies 34.43 47.95 44.83 26.85 -28.2% -23.2% 28.2% 3.7% -10.5% -10.4% 42.4% 54.2% -1.4%Seadrill Limited 31.90 38.24 38.49 24.48 -16.6% -17.1% 30.3% 3.0% -4.8% -9.5% 235.7% 33.0% -1.7%Diamond Offshore 61.57 148.51 81.19 56.40 -58.5% -24.2% 9.2% 0.1% -6.2% -12.9% 67.0% -32.1% -4.5%Noble Corporation 32.66 67.98 46.72 27.68 -52.0% -30.1% 18.0% 2.8% -6.5% -19.5% 84.2% -12.1% -7.5%ENSCO International 47.14 82.22 60.31 39.51 -42.7% -21.8% 19.3% 2.0% -7.5% -15.7% 40.7% 33.7% -10.6%Transocean 53.73 161.40 85.98 49.05 -66.7% -37.5% 9.5% 1.1% -7.6% -18.3% 75.2% -16.1% -20.6%China Oilf ield Services Ltd. 1.48 2.70 2.35 1.27 -45.2% -37.0% 17.1% 6.0% -10.7% -21.8% 48.7% 80.6% -30.6%Aban Offshore Ltd. 8.32 136.76 20.56 7.28 -93.9% -59.6% 14.2% 10.1% -22.1% -34.9% 99.9% -33.8% -54.4%

Land Drillers:Helmerich & Payne 54.71 76.99 73.40 37.59 -28.9% -25.5% 45.5% 1.7% -14.4% -13.5% 75.3% 21.6% 13.2%Patterson-UTI 23.36 38.33 34.09 14.99 -39.1% -31.5% 55.8% -1.1% -22.7% -24.3% 33.4% 40.4% 8.8%Nabors Industries 17.58 49.77 32.47 15.95 -64.7% -45.9% 10.2% -0.7% -29.4% -36.0% 82.9% 7.2% -25.1%

Equipment:Chart Industries 45.43 61.33 62.15 15.90 -25.9% -26.9% 185.7% 4.2% -13.7% -4.6% 55.4% 104.5% 34.5%Helix Energy Solutions 15.62 46.84 21.65 9.31 -66.7% -27.9% 67.8% -1.8% -16.4% -4.7% 62.3% 3.3% 28.7%Oceaneering International 40.99 45.76 46.19 25.32 -10.4% -11.3% 61.9% 2.6% 1.2% 6.4% 100.8% 25.8% 12.2%Cameron International 49.63 62.07 63.16 37.08 -20.0% -21.4% 33.8% 1.8% -6.1% 7.3% 103.9% 21.4% -2.2%FMC Technologies 42.36 49.61 50.33 31.51 -14.6% -15.8% 34.5% 1.7% -3.3% -2.7% 142.7% 53.7% -4.7%Dresser-Rand 40.57 55.85 56.53 30.59 -27.4% -28.2% 32.6% 8.2% -19.6% -21.1% 83.2% 34.7% -4.7%National Oilw ell Varco 63.64 91.55 86.71 38.14 -30.5% -26.6% 66.9% -0.1% -18.0% -13.1% 80.4% 52.5% -5.1%Vallourec 85.76 175.60 127.33 78.36 -51.2% -32.6% 9.4% 4.4% -12.0% -29.5% 61.9% 15.7% -17.4%Dril Quip 61.87 82.28 83.80 47.40 -24.8% -26.2% 30.5% 3.7% -9.4% -10.1% 175.4% 37.6% -20.4%Tenaris S.A. 31.47 74.50 51.07 30.34 -57.8% -38.4% 3.7% -0.6% -25.5% -34.3% 103.3% 14.8% -35.1%

Engineering & Construction:Kentz 7.05 7.97 8.01 3.69 -11.6% -12.0% 91.1% 4.2% -3.0% 6.6% 120.2% 56.9% 41.1%Wood Group 9.38 11.86 11.99 5.66 -20.9% -21.8% 65.8% 6.5% -8.1% -9.4% 84.2% 75.5% 6.9%Technip 93.21 112.99 114.62 65.75 -17.5% -18.7% 41.8% 3.0% -7.4% -11.8% 133.8% 30.8% 2.6%SBM Offshore 20.18 40.20 29.90 15.31 -49.8% -32.5% 31.8% 6.0% -3.7% -21.7% 56.5% 17.8% -7.9%Subsea 7 21.93 30.85 27.62 15.58 -28.9% -20.6% 40.8% 2.3% -11.3% -15.2% 184.8% 55.1% -10.8%Saipem 42.54 57.27 57.73 34.70 -25.7% -26.3% 22.6% 3.1% -12.3% -18.9% 110.4% 42.9% -12.4%Petrofac 21.21 26.94 27.08 16.95 -21.3% -21.7% 25.2% 6.5% -3.0% -15.8% 238.6% 47.5% -13.6%Bourbon 30.71 60.49 45.46 26.59 -49.2% -32.4% 15.5% -2.8% -21.1% -27.4% 65.8% 23.2% -25.4%McDermott 13.58 34.23 26.14 11.52 -60.3% -48.0% 17.9% 3.0% -28.8% -33.2% 143.0% -13.8% -34.4%Tecnicas Reunidas 37.06 90.52 64.72 32.63 -59.1% -42.7% 13.6% 7.5% -4.3% -31.3% 125.0% 10.9% -40.2%Sevan Marine 0.07 16.99 1.37 0.06 -99.6% -94.6% 24.0% -8.7% -11.4% -34.3% 66.4% -36.4% -93.4%

Reservoir Information / Seismic:TGS-NOPEC 23.17 30.31 31.12 13.53 -23.5% -25.5% 71.3% 0.2% -16.3% -14.6% 266.6% 24.7% 6.0%Petroleum Geo-Services 11.88 100.07 17.25 9.09 -88.1% -31.1% 30.7% 2.6% -18.6% -24.5% 191.5% 35.8% -24.0%CGG Veritas 23.08 68.63 38.42 16.77 -66.4% -39.9% 37.6% 2.8% -19.0% -37.5% 45.4% 42.6% -24.5%

Indices:XNG 621.5 761.11 715.3 489.4 -18.3% -13.1% 27.0% 1.5% -8.7% -8.2% 43.7% 12.2% 2.7%NASDAQ 2,480.3 5,048.62 2,887.8 2,142.0 -50.9% -14.1% 15.8% 2.7% -5.5% -6.8% 43.9% 16.9% -4.0%S&P 500 1,174.0 1,565.15 1,370.6 1,049.7 -25.0% -14.3% 11.8% -0.2% -6.9% -9.7% 23.5% 12.8% -6.7%XOI 1,123.4 1,630.09 1,409.8 925.9 -31.1% -20.3% 21.3% 0.8% -9.1% -13.2% 9.0% 13.6% -7.4%OSX 226.5 359.61 301.0 171.5 -37.0% -24.7% 32.1% 0.8% -13.5% -15.3% 60.6% 25.8% -7.6%

Source: FactSet; Morgan Stanley Research

31



Valuation Methodologies and Investment RisksThe valuation methodologies we use vary as the earnings cycle develops. At the (perceived) trough, we essentially want to answer the question, “how low could it go?” We favor an investment approach that has a bias towards value at this point, not momentum. We assess where the risk/reward is decidedly more attractive for accumulating longer-term positions using normalized earnings, price-to-book, price-to-sales, and for the offshore drillers, net asset value. We often concentrate more on the offshore drillers at this point of the cycle given the tangible asset valuation that is obtainable versus the uncertainties in earnings. Such a value approach however does carry the risk of being early.

As the earnings cycle begins to turn up, we use a two year forward earnings multiple, as well as a 12-month forward rolling multiple, price-to-book, price-to-sales, and a peak earnings analysis. The peak earnings analysis offers insight into what the stock could be worth once the EPS revision phase of the cycle really kicks in. For the offshore drillers, we continue to use a net asset value assessment, but also use an EV/EBITDA multiple, CEPS (cash EPS is equal to net income + depreciation and amortization + convertible interest (where applicable) and peak earnings.

Our two year forward earnings multiples are based upon prior cycle ranges (see “Trading and Valuation Summary” in this report). The average multiples achieved at the equity peaks of the previous two cycles were 19−23x with a range of 18−33x. The North American natural gas levered stocks typically achieve the higher-end of this range in the early stages of the cycle as the discounting mechanism is rather substantial in these stocks. The later cycle stocks typically include the equipment names, particularly subsea.

As the earnings cycle matures, momentum often overtakes value as the market digests an onslaught of upward earnings revisions. While the net asset value assessment for offshore drillers is still useful, it becomes more of a reality check. At this stage, the two year forward consensus earnings begin to narrow the gap with peak earnings assumptions, and a two-year forward multiple is placed on these “best case” pricing and utilization scenarios for the services and equipment.

Net Asset Value (NAV) is one of the more useful exercises in terms of identifying support levels for the asset intensive offshore drilling stocks. Depending on the mix of assets, a typical price/NAV support level has been 70−100%, while the upside is near two times NAV. The variance in the multiples on

net asset value is largely a function of the fleet composition. Today the horsepower is in the deepwater, whereas in prior years, a bias toward jackups yielded a wider trading range. We calculate a NAV/share by applying a vendor published second-hand market value to each rig within a company’s fleet, then grossing up to a fleet market value plus other assets, then adjusting for debt.

Investment Risks The Oil Services and Equipment industry is one of the most volatile and unpredictable industries in the “old economy.” The main investment risk is the overall health of the global economy, although with particular interim risk exposure to the fiscal and geopolitical uncertainties in areas including, but not limited to the Middle East, Latin America, Russia, Southeast Asia, and West Africa. In North America, E&P spending is highly susceptible to changes in oil and natural gas prices, more so in the short-run than any other region due to the dominance of the spot market and independents.

Main Investment Risks include: The health of the global economy and its impact on the

global demand for oil and natural gas.

Merger and acquisition activity among operators typically has a negative impact on spending budgets.

Capacity expansion in long-lived assets such as marine seismic, pressure pumping equipment, and drilling rigs, particularly speculative newbuilding.

Changes in fiscal terms (taxes) on oil and natural gas production in the major drilling basins including, but not limited to the Gulf of Mexico, Venezuela, Mexico, Brazil, Argentina, North Sea, West Africa, Southeast Asia, Russia, and the Middle East.

Adoption of new technology is often slow in the oilfield. There is meaningful risk to companies whose success is predominantly dependent upon a single new technology and the acceptance of that technology.

32



Exhibit 79 Oil Service: Price Target Methodology and Risks Ticker Price Target MethodologyOil ServiceSLB Based on 23x 2013E EPS, below historical 12-month forw ard average

of 26x. Risks include slow dow n of global economic grow th triggering low er oil prices and broadly reducing global drilling activity.

HAL Based on 18x 2013E EPS, below historical 12-month forw ard average of 19x, due to multiple contraction given high NAm pressure pumping exposure. Risks include slow dow n of global economic grow th triggering low er oil prices and reducing global drilling activity.

BHI We derive our 12-month price target for BHI using a 20x P/E multiple on our 2013E BHI/BJS pro-forma EPS, below BHI’s historical 12-month forw ard average of 23x and consistent w ith stage in cycle. Risks include slow dow n of global economic grow th triggering low er oil prices and broadly reducing global drilling activity.

WFT Based on 18x 2013E EPS, below historical 12-month forw ard average of 19.5x and consistent w ith stage in the cycle. Risks include slow dow n of global economic grow th triggering low er oil prices and broadly reducing global drilling activity.

RES Based on 10x 2013E EPS, consistent w ith stage of the cycle. Risks include NAm rig count rolling over due to w eak gas prices or global economic slow dow n w eakening oil prices, combined w ith substantial new capacity coming online in 2011.

TCW.TO Based on 10x 2013E EPS, consistent w ith stage of the cycle. Risks include NAm rig count rolling over due to w eak gas prices or global economic slow dow n w eakening oil prices, combined w ith substantial new capacity coming online in 2011.

CFW.TO Based on 10x 2013E peak EPS, consistent w ith stage of the cycle. Risks include NAm rig count rolling over due to w eak gas prices or global economic slow dow n w eakening oil prices, combined w ith substantial new capacity coming online in 2011.

CRR Based on 21x 2013E EPS, in line w ith historical 12-month forw ard average of 21x.

MDR Based on 18x 2013E EPS, a modest discount to its European peers, given its more conventinoal f leet and limited deepw ater capability.

HLX Our PT is based on SoTP valuation, w ith the E&P business valued at an IPO discount of $600m, the core contracting business at $1.75bn, production facilities at BV of $187m. Net debt of ~$660m gvies equity value of $20/shr.

Exhibit 80 Oil Service Equipment: Price Target Methodology and Risks Ticker Price Target MethodologyEquipmentTS Based on 15x 2013E EADS. Risks to our target include deepening of

the global recession negatively affecting commodity prices resulting in a further decline in drilling activity. Venezuela and Mexico drilling budgets, w here the company has meaningful footprints, could also add short-term risk.

NOV Based on 17.5x 2013E EPS, slightly below historical 12-month forw ard average of 18x. Multiple compression due to risks of a slow dow n in rig construction as the cycle matures. Risks include global economic slow dow n leading to low er drilling activity.

CAM Based on 19x 2013E EPS, slightly below historical 12-month forw ard average of 20x. Multiple compression due to integration of Dresser Flow Control. Risks include global economic slow dow n leading to low er drilling activity.

FTI Based on 20x 2013E EPS, in line w ith historical 12-month forw ard average of 20x.

DRC Based on 19x 2013E EPS, slightly above historical 12-month forw ard average of 16x given stage of cycle.

DRQ Based on 19x 2013E EPS, below historical 12-month forw ard average of 23x. Multiple compression due to risks associated w ith the introduction of new technologies including liner hangers and fully integrated subsea systems.

OII Based on 18x 2013E EPS, in line w ith historical 12-month forw ard average.

GTLS Based on 17.2x 2013E EPS, slightly below production-oriented equipment peers (CAM and DRQ). Risks include the company’s exposure to the industrial gas market, delays in sanctioning planned large-scale LNG projects and execution risks.

Source: Company data, Morgan Stanley Research

Exhibit 81 Offshore and Land Drillers: Price Target Methodology and Risks Ticker Price Target MethodologyOffshore DrillersRIG Based on ~140% of our 2012 NAV estimate of $77/sh, in line w ith

previous dow nturns and in line w ith peer targets This also implies a target 2013E P/FCF multiple of 11.2x, slightly below peers, given additional earnings risk on revenue eff iciency.

NE Based on ~160% of our 2012 NAV estimate of ~$34/sh, in line w ith previous dow nturns, and above its peers due to higher than average return of 11% on our 2012 rig value estimates and triangulation w ith P/E multiples.

DO Based on a dividend yield of 7% on its ~$5/sh max dividend capacity, in line w ith historical yields.

ESV Based on ~157% of our 2012 NAV estimate of ~$51/sh, in line w ith previous dow nturns, and close to the peer average, w hich assumes a 10% return on our 2012 rig value estimate. This also implies a 2013E P/FCF of 12.0x, slightly below our targets for its peers.

SDRL Based on dividend yield of 7%, low er yield than w here SDRL historically traded due to expanding dividend capacity, grow th in dayrates and strategic acquisitions.

RDC Based on ~125% of our 2012 NAV estimate of $44/sh, below the peer average, given a slow dow n in momentum in jackup rates, w hile high-end jackup values are near peak levels.

ATW Based on ~160% of our 2012 NAV estimate of ~$44/sh, slightly above the peer average during the prior upcycle, given the company’s major f leet upgrade program. This also implies a target 2013E P/FCF(ex new buids) multiple of 12.6x, in line w ith our targets for its peer group.

Land DrillersNBR Based on 13.7x 2013E EPS, consistent w ith stage in cycle. Risks

include global economic slow dow n w eakening oil prices and depressing drilling activity.

PTEN Based on 11.5x 2013E EPS, consistent w ith stage in cycle. Risks include global economic slow dow n w eakening oil prices and depressing drilling activity.

HP Based on 13.6x 2013E EPS, consistent w ith stage in cycle. Risks include global economic slow dow n w eakening oil prices and depressing drilling activity.

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Disclosure Section The information and opinions in Morgan Stanley Research were prepared by Morgan Stanley & Co. LLC, and/or Morgan Stanley C.T.V.M. S.A., and/or Morgan Stanley Mexico, Casa de Bolsa, S.A. de C.V. As used in this disclosure section, "Morgan Stanley" includes Morgan Stanley & Co. LLC, Morgan Stanley C.T.V.M. S.A., Morgan Stanley Mexico, Casa de Bolsa, S.A. de C.V. and their affiliates as necessary. For important disclosures, stock price charts and equity rating histories regarding companies that are the subject of this report, please see the Morgan Stanley Research Disclosure Website at www.morganstanley.com/researchdisclosures, or contact your investment representative or Morgan Stanley Research at 1585 Broadway, (Attention: Research Management), New York, NY, 10036 USA. Analyst Certification The following analysts hereby certify that their views about the companies and their securities discussed in this report are accurately expressed and that they have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report: Ole Slorer. Unless otherwise stated, the individuals listed on the cover page of this report are research analysts. Global Research Conflict Management Policy Morgan Stanley Research has been published in accordance with our conflict management policy, which is available at www.morganstanley.com/institutional/research/conflictpolicies. Important US Regulatory Disclosures on Subject Companies As of July 29, 2011, Morgan Stanley beneficially owned 1% or more of a class of common equity securities of the following companies covered in Morgan Stanley Research: Cameron International, Chart Industries, Hercules Offshore, McDermott International Inc., Seadrill, Weatherford International. Within the last 12 months, Morgan Stanley managed or co-managed a public offering (or 144A offering) of securities of Calfrac Well Services, Cameron International, Chart Industries, Nabors Industries Inc., Schlumberger, Weatherford International. Within the last 12 months, Morgan Stanley has received compensation for investment banking services from Baker Hughes, Calfrac Well Services, Cameron International, Chart Industries, Diamond Offshore, Dresser-Rand, FMC Technologies, Halliburton Co., Nabors Industries Inc., Rowan Companies, Schlumberger, Transocean. In the next 3 months, Morgan Stanley expects to receive or intends to seek compensation for investment banking services from Baker Hughes, Calfrac Well Services, Cameron International, Chart Industries, Diamond Offshore, Dresser-Rand, ENSCO, FMC Technologies, Halliburton Co., Hercules Offshore, McDermott International Inc., Nabors Industries Inc., National Oilwell Varco, Noble Corporation, Rowan Companies, Schlumberger, Seadrill, Tenaris S.A, Transocean, Trican Well Service. Within the last 12 months, Morgan Stanley has received compensation for products and services other than investment banking services from Baker Hughes, Cameron International, Chart Industries, Diamond Offshore, Dresser-Rand, FMC Technologies, Halliburton Co., Helix Energy Solutions, Hercules Offshore, McDermott International Inc., Nabors Industries Inc., Noble Corporation, Rowan Companies, Schlumberger, Transocean, Weatherford International. 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Coverage Universe Investment Banking Clients (IBC)

Stock Rating Category Count % of Total Count

% of Total IBC

% of Rating Category

Overweight/Buy 1120 41% 460 48% 41%Equal-weight/Hold 1151 42% 389 40% 34%Not-Rated/Hold 114 4% 21 2% 18%Underweight/Sell 374 14% 93 10% 25%Total 2,759 963 Data include common stock and ADRs currently assigned ratings. An investor's decision to buy or sell a stock should depend on individual circumstances (such as the investor's existing holdings) and other considerations. Investment Banking Clients are companies from whom Morgan Stanley received investment banking compensation in the last 12 months. Analyst Stock Ratings Overweight (O). The stock's total return is expected to exceed the average total return of the analyst's industry (or industry team's) coverage universe, on a risk-adjusted basis, over the next 12-18 months. Equal-weight (E). The stock's total return is expected to be in line with the average total return of the analyst's industry (or industry team's) coverage universe, on a risk-adjusted basis, over the next 12-18 months. Not-Rated (NR). Currently the analyst does not have adequate conviction about the stock's total return relative to the average total return of the analyst's industry (or industry team's) coverage universe, on a risk-adjusted basis, over the next 12-18 months. Underweight (U). The stock's total return is expected to be below the average total return of the analyst's industry (or industry team's) coverage universe, on a risk-adjusted basis, over the next 12-18 months. Unless otherwise specified, the time frame for price targets included in Morgan Stanley Research is 12 to 18 months. Analyst Industry Views Attractive (A): The analyst expects the performance of his or her industry coverage universe over the next 12-18 months to be attractive vs. the relevant broad market benchmark, as indicated below. In-Line (I): The analyst expects the performance of his or her industry coverage universe over the next 12-18 months to be in line with the relevant broad market benchmark, as indicated below. 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International PLC and its affiliates have a significant financial interest in the debt securities of Baker Hughes, Cameron International, Chart Industries, Diamond Offshore, Dresser-Rand, ENSCO, FMC Technologies, Halliburton Co., National Oilwell Varco, Noble Corporation, Rowan Companies, Schlumberger, Seadrill, Transocean, Weatherford International. Morgan Stanley is not acting as a municipal advisor and the opinions or views contained herein are not intended to be, and do not constitute, advice within the meaning of Section 975 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Morgan Stanley produces an equity research product called a "Tactical Idea." Views contained in a "Tactical Idea" on a particular stock may be contrary to the recommendations or views expressed in research on the same stock. This may be the result of differing time horizons, methodologies, market events, or other factors. 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35



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© 2011 Morgan Stanley


Industry Coverage:Oil Services, Drilling & Equipment

Company (Ticker) Rating (as of)Price* (09/02/2011)

Ole Slorer Atwood Oceanics Inc (ATW.N) O (02/07/2011) $40.7Baker Hughes (BHI.N) O (09/17/2009) $58.27Calfrac Well Services (CFW.TO) U (02/17/2010) C$33.88Cameron International (CAM.N) O (05/08/2009) $49.63Carbo Ceramics (CRR.N) U (09/14/2009) $146.66Chart Industries (GTLS.O) E (05/04/2011) $45.43Diamond Offshore (DO.N) U (03/20/2009) $61.57Dresser-Rand (DRC.N) O (11/17/2010) $40.57Dril Quip Inc. (DRQ.N) E (05/11/2009) $61.87ENSCO (ESV.N) O (07/27/2011) $47.14FMC Technologies (FTI.N) E (02/09/2009) $42.36Halliburton Co. (HAL.N) O (05/25/2011) $41.54Helix Energy Solutions (HLX.N) E (04/27/2011) $15.62Helmerich & Payne Inc (HP.N) U (10/14/2009) $54.71Hercules Offshore (HERO.O) NR (02/19/2010) $3.94McDermott International Inc. (MDR.N)

O (09/16/2010) $13.58

Nabors Industries Inc. (NBR.N) O (09/25/2008) $17.58National Oilwell Varco (NOV.N) E (11/18/2010) $63.64Noble Corporation (NE.N) E (04/11/2011) $32.66Oceaneering International Inc (OII.N)

U (06/01/2010) $40.99

Patterson-UTI Energy (PTEN.O) U (11/17/2010) $23.36RPC (RES.N) U (08/19/2010) $24.59Rowan Companies (RDC.N) E (04/11/2011) $34.43Schlumberger (SLB.N) O (04/21/2008) $74.42Seadrill (SDRL.N) O (04/14/2010) $31.9Tenaris S.A (TS.N) O (11/03/2009) $31.47Transocean (RIG.N) O (04/11/2011) $53.73Trican Well Service (TCW.TO) U (02/17/2010) C$21.47Weatherford International (WFT.N) O (09/22/2003) $16.34

Stock Ratings are subject to change. Please see latest research for each company. * Historical prices are not split adjusted.

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Benjamin Swomley September 5, 2011 Global Oil Services ... · Trading and Valuation Summary:...

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