1

Deepwater Oil & Gas Market Continued Acceleration Led by

Subsea Technology

Paul H. Hillegeist President & COO Quest Offshore Resources, Inc. Paul.Hillegeist@questoffshore.com August 21, 2013

2

Table of contents:

Why Subsea? Market at Pinnacle & Going Higher

Forecast for Higher Offshore Spending

Current Landscape for Subsea Awards Robust Exploration Outlook

Rig Supply Driving Record Drilling Pace Key Regions – Forecast Growth Led by GoM & Africa Frontier Areas Offer Significant Potential

Subsea Award Trends & Forecast Global Supply Chain Potential Pinch Points

Shipyard Fabrication Capacity SURF Marine Construction Supply Engineering Manpower Subsea Systems (Wellheads, Trees & Assoc. Hardware) Tier 2 & 3 OEM Subsea Suppliers

3

0

500

1000

1500

2000

2500

3000

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

1960's 1970's 1980's 1990's 2000's 2010's

Ave

rage

Wat

er

De

pth

(Fe

et)

# S

ub

sea

Tre

es

Startup Decade

Number of New Subsea Trees Average Water Depth (Feet)

Global Subsea Trees by Decade Average Water Depth

Source: Quest Offshore Resources, Inc

Products and market segments

Proxy for deepwater drilling & development activity

Subsea & related hardware components

Production umbilicals

ROV services & MarCon (URF install)

Subsea workover & intervention opportunities

4

World Subsea Production Capex 2013-2018e Forecast $74.5bn

Source: HolyGrail_August 2013.xls

0

100

200

300

400

500

600

700

800

$0

$5,000

$10,000

$15,000

$20,000

$25,000

Nu

mb

er

of

Sub

sea

Tre

e S

tart

up

s

KM

of

SPU

or

$M

M

Startup Year

$MM - subsea production umbilicals installed

$MM - subsea manifolds

$MM - tree control pkg (flying leads, jumper, MCS, HPU, UTA, J-Plate)

$MM - subsea trees & control pod: (chokes, sensor pkg.)

No. subsea trees (well completions) by onstream year

Km - subsea production umbilicals installed

Subsea Systems55%

Subsea Processing

23%

Subsea Whld6%

Subsea Assoc/Hardware

16%

2020 Global Subsea Spend $28.6 Billion

5

Subsea Tree Awards Largest 1H Activity in History

0

100

200

300

400

500

600

Nu

mb

er

of

Sub

sea

Tre

e A

war

ds

Award Year

Q1 Q2 FY Awards

Source: Quest Subsea Database June 2013

2013 FY awards are preliminary forecast @ Aug. 2013

6

Global Subsea Tree Awards Multi-Year Trend Analysis (2000-2015)

Source: Quest Offshore Resources, Inc

554

727

866775 754

9911055

0

200

400

600

800

1000

1200

# S

ub

sea

Tre

e A

war

ds

Award Timing

7

Global Exploration Outlook

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Exploration Targets by Hemisphere 2009-2017 2,523 Undrilled Exploration Targets

No

. Exp

lora

tio

n T

arge

ts

Drilled includes 23 wells spud 1H-2013

Drilled includes 17 wells spud 1H-2013

Drilled includes 19 wells spud 1H-2013

Drilled includes 32 wells spud 1H-2013

Drilled includes 17 wells spud 1H-2013

SOURCE: Quest Global Prospects Quarterly June 2013

265 291

151

349415

576417

469

482

579

0

200

400

600

800

1000

Africa/Med. Asia-Pacific North America North Sea/Arctic South America

Drilled Undrilled

9

Key Regions – Africa (East, West & Med.) Exploration & Appraisal Drilling

0

20

40

60

80

100

120

140

160

2009 2010 2011 2012 2013 2014 2015 2016 2017

E&

A W

ell C

ou

nt

Spud Year

>=7500 FSW

4001-7499 FSW

1501-4000 FSW

0-1500 FSW

SOURCE: QGPQ Exploration Working File June 2013/EXP FRCST 2009to2017

33-55 semis+dS

59-63 semis+dS 67% Growth

297 e&a wells

496 e&a wells

10

Key Regions – Asia Pacific Exploration & Appraisal Drilling

0

10

20

30

40

50

60

70

80

90

100

2009 2010 2011 2012 2013 2014 2015 2016 2017

E&

A W

ell C

ou

nt

Spud Year

>=7500 FSW

4001-7499 FSW

1501-4000 FSW

0-1500 FSW

SOURCE: QGPQ Exploration Working File June 2013/EXP FRCST 2009to2017

278 e&a wells

363 a&a wells

50-53 semi+Ds

46-47 semi+Ds

31% Growth

11

Key Regions – North Sea Exploration & Appraisal Drilling

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013 2014 2015 2016 2017

E&

A W

ell C

ou

nt

Spud Year

>=7500 FSW

4001-7499 FSW

1501-4000 FSW

0-1500 FSW

SOURCE: QGPQ Exploration Working File June 2013/EXP FRCST 2009to2017

35-48 Floating Rigs

50-55 Floating Rigs 309 e&a wells

434 e&a wells 41% Growth

12

Key Regions – GoM in North America Exploration & Appraisal Drilling

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013 2014 2015 2016 2017

E&

A W

ell C

ou

nt

Spud Year

>=7500 FSW

4001-7499 FSW

1501-4000 FSW

0-1500 FSW

Effects of Post Moratorium period in US-GOM

SOURCE: QGPQ Exploration Working File June 2013/EXP FRCST 2009to2017

30-52 semis+Ds

414 e&a wells

160 e&a wells

61-66 semis+Ds 159% Growth

13

Key Regions – Brazil in South America

0

20

40

60

80

100

120

140

160

180

2009 2010 2011 2012 2013 2014 2015 2016 2017

E&

A W

ell C

ou

nt

Spud Year

>=7500 FSW

4001-7499 FSW

1501-4000 FSW

0-1500 FSW

SOURCE: QGPQ Exploration Working File June 2013/EXP FRCST 2009to2017

64-82 semis+Ds 82-94 semis+Ds 418 e&a wells 516 a&a wells

Exploration & Appraisal Drilling

23% Growth

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Emerging Frontier Regions

15

Exploration – Emerging Frontier Areas

18%

28%

12%

12%

3%

18%

9%

East Africa

West Africa

Mediterranean

Arctic

South America

North & Central America

Other

27%

43%

30%Super-Majors

Independents

Nationals

Today Led by 20 Operators w 33 Rigs

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Exploration – Emerging Frontier Areas

East Africa (Mozambique, Tanzania, Kenya, Madagascar)

West Africa (Angola Pre-Salt, Liberia, Sierra Leone, Benin, Namibia,)

Mediterranean (Israel, Cyprus, Libya, Morocco)

Arctic (Greenland, Norwegian Barents, Alaska, Kara Sea, Russian Barents)

South America (Falklands, French Guiana, Guyana, Suriname, Uruguay)

The Americas (Mexico, Bahamas, Nova Scotia, Nicaragua)

Ireland, Canary Is., SW Portugal & deepwater Red Sea. Black Sea, Okhotsk Sea & Myanmar

17

Subsea Award Trends

& Forecast

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Global Subsea Tree Awards Multi-Year Trend Analysis (2001-2015)

Source: Quest Offshore Resources, Inc

0

200

400

600

800

1000

1200

# S

ub

sea

Tre

e A

war

ds

Award Timing

ROW South America

19

North Sea Subsea Tree Awards Multi-Year Trend Analysis (2001-2015)

Source: Quest Offshore Resources, Inc

0

40

80

120

160

200

240

280

# S

ub

sea

Tre

e A

war

ds

Award Timing

Norway UK Other

20

Africa Subsea Tree Awards Multi-Year Trend Analysis (2001-2015)

Source: Quest Offshore Resources, Inc

0

50

100

150

200

250

300

350

# S

ub

sea

Tre

e A

war

ds

Award Timing

Angola East Africa Nigeria North Africa Other Transform Margin

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Asia Subsea Tree Awards Multi-Year Trend Analysis (2001-2015)

Source: Quest Offshore Resources, Inc

0

40

80

120

160

200

# S

ub

sea

Tre

e A

war

ds

Award Timing

Australia China India Other

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Global Supply Chain

Potential Pinch Points

23

Growing Lead-times & Burgeoning Back-logs Global Fabrication Shipyard Backlog

0

172,250

344,500

516,750

689,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Date

To

nn

es

Type

Accommodation

Drill Semi

Drillship

Fixed Platform

FLNG

FPSO

FPU

FSO

FSRU

Jackup

MarCon

Onshore Modules

Semi

Spar

Tender Assist Rig

TLP

Turret

24

Marine Construction Supply / Demand Balance Worldwide by Activity

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Uti

lizat

ion

Pe

rce

nta

ge

Day

s

Installation Year

SS Hardware, FPS & Other Demand 0-14,FLEX,SPU Demand 15-24 Pipeline Demand

25+ Pipeline Demand Net Supply Utilization

25

0

100

200

300

400

0

300

600

900

1200

Flo

atin

g R

ig S

up

ply

Tota

l We

ll D

em

and

Spud Year

Total Well Demand (Expl & Devp) Rigs Contracted Rigs Needed

Subsea Well Demand & Floating Rig Supply Analog for Subsea Wellhead Demand