1
Investor Presentation
October 2014
2
Forward-Looking Statements
Statements made today that are not historical facts are forward-looking statements within the meaningof Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of1934. Forward-looking statements include words or phrases such as “anticipate,” “believe,” “estimate,”“expect,” “intend,” “plan,” “project,” “could,” “may,” “might,” “should,” “will” and similar words andspecifically include statements regarding the timing of delivery, mobilization, contract commencement,relocation or other movement of rigs. Such statements are subject to numerous risks, uncertainties andassumptions that may cause actual results to vary materially from those indicated, includinggovernmental regulatory, legislative and permitting requirements affecting drilling; downtime and otherrisks associated with offshore rig operations, relocations, severe weather or hurricanes; possiblecancellation or suspension of drilling contracts as a result of mechanical difficulties, performance orother reasons; risks inherent to shipyard rig construction, repair, maintenance or enhancement; andactual contract commencement dates. In addition to the numerous factors described above, you shouldalso carefully read and consider “Item 1A. Risk Factors” in Part I and “Item 7. Management’s Discussionand Analysis of Financial Condition and Results of Operations” in Part II of our most recent annualreport on Form 10-K, as updated in our subsequent quarterly reports on Form 10-Q, which are availableon the SEC’s website at www.sec.gov or on the Investor Relations section of our website atwww.enscoplc.com. Each forward-looking statement speaks only as of the date of the particularstatement, and we undertake no obligation to publicly update or revise any forward looking statements,except as required by law.
3
Offshore Drilling Revenues
$20
$0
$80
$60
$40
2003 200920082007 2013200620052004 201220112010
Floaters: RevenuesOverall: Revenues
Jackups: Revenues
Revenue CAGR(’03‐’13)
Overall 19%
Floaters 22%
Jackups 14%
Global Offshore Contract Drilling Market (2003–2013)
Revenu
es (in $ B)
Note: 1 Revenue based on total rig fleet and calculated as # of rigs * average utilization * average day ratesSource: RigPoint
4
$20
US and Jackup focusedPlus presence in adjacent services
Global expansionGlobal offshore drilling
‘87 ‘89 ‘91 ‘99 ‘03 ‘05 ‘07 ‘09 ‘13‘93 ‘95 ‘97 ‘01 ‘11 Today
Ensco’s Evolution
Successful expansion into global deepwater drillingLeader in global offshore
drilling
Ensco’s growth trajectory (1987 – 2014)
$70
$60
$50
$40
$30
$10
$0
5
Current Market
Newbuilds
Floaters JackupsContracted 268 373Uncontracted 19 25Warm Stacked 9 6Cold Stacked 1 0Total 297 404
Marketed Utilization 90% 92%
Under Construction 52 96On Order / Planned 35 32Total 87 128
Contracted 56% 9%
Uncontracted 44% 91%
ActiveFleet
Source: IHS-ODS Petrodata as of 29 October 2014; competitive marketed floaters and jackups; jackups are independent leg cantilever rigs
6
Current Jackup Market
• Day rates have held up well in face of oncoming supply
• Healthy demand from diverse customer base
– North Sea and Middle East markets particularly strong
– NOC growth has stabilized demand
• Shallow water drilling is profitable at current commodity price levels
• New technology facilitates drilling more complex wells economically
• Must be cognizant of new supply
7
Newbuild Jackup Order Book
Source: IHS-ODS Petrodata as of 29 October 2014; marketed competitive jackups
128 Total
71Uncontracted,
Non-EstablishedDrillers
45Uncontracted, Established
Drillers
12Contracted, Established
Drillers
35%
9%
56%
8
Jackup Supply
347 378 403 370
57 74
112 162
Oct. 2014 Oct. 2015 Oct. 2016 Oct. 2017< 35 years old >= 35 years old
2% CAGR
42% CAGR
Source: IHS-ODS Petrodata as of 29 October 2014; marketed competitive independent leg cantilever jackups
9
Current Floater Demand
• Brazil
– market undersupplied in ultra-deepwater / tender activity increasing
– more customers entering market following lease purchases
– midwater demand has declined
– new rig supply from Brazil has repeatedly been delayed
– Petrobras committed to contracting on the international market to address any shortfall
10
Current Floater Demand
• Rest of World
– pull back in contracting, especially IOCs
– pressure on customers to tighten capex spending as returns on capital have declined
– production levels of Majors as a group below 2010 levels
– fundamentals support mid- to long-term growth
• commodity prices, positive GDP forecasts, lease sales, discoveries
– expanding / emerging markets
• West Africa, East Africa and Mexico
11
Newbuild Floater Order Book
Source: IHS-ODS Petrodata as of 29 October 2014; marketed competitive floaters
87 Total
38Uncontracted
49Contracted56% 44%
12
Floater Supply
241 270 287 297
56 56
60 71
Oct. 2014 Oct. 2015 Oct. 2016 Oct. 2017< 35 years old >= 35 years old
7% CAGR
Source: IHS-ODS Petrodata as of 29 October 2014; marketed competitive floaters
19% of current supply is 35+ years old
13
Ensco is Well Positioned
• Fleet highgrading
– 7 newbuild rigs under construction with differentiated designs
– major upgrade investments last three years will benefit 2015 and beyond
– mooring capability to be added to ENSCO 8500 Series® rigs
– 5 floaters held-for-sale in 2Q14; 18 rigs sold since beginning of 2010
• Efficiency / rig uptime improvements
– vendor quality management
– training and education
– 96% operational utilization in 3Q14
• Expense management discipline
– leading net income margins among major competitors
14
Ensco is Well Positioned
• Capex discipline
– total capex peaks in 2015 driven by newbuilds
– upgrade capex to decline sharply next year
– drillship option not exercised
• Global presence / diverse customer base
– operations across six continents
– extensive customer relationships: NOCs, Majors, IOCs
• 2015 results to benefit from newbuilds and upgrades
– full year impact of three ENSCO 120 Series jackups & two upgraded semis
– partial year impact of two new drillships & one upgraded semi
15
Highgrading Actions
• Fleetwide review in light of challenging floater market conditions
• Five floaters reclassified as held-for-sale / cold stacked
– quickly reduce expenses and redeploy capital
– mostly older, midwater floaters
• 9 year average age for go-forward floater fleet
• Seven jackups sold year to date for $70 million gain
16
Newbuild Delivery Schedule
2014.5 2015.5 2016.5
ENSCO DS-8
ENSCO DS-9
ENSCO 110
ENSCO DS-10
ENSCO 123
ENSCO 140
ENSCO 141
Drillships Premium jackups
3Q14 4Q14
Contracted
3Q15 4Q151Q15 2Q15 3Q16 4Q161Q16 2Q16
Contracted
17
10 11
PREMIUMJACKUPS
ULTRA & DEEP WATER DRILLSHIPS
MOOREDSEMISUBMERSIBLES
DYNAMICALLY POSITIONED SEMISUBMERSIBLES
Note: Includes rigs under construction or on order and excludes rigs in discontinued operations (29 October 2014)
High Quality Fleet
66 Rig Fleet
3 42
18
Differentiation
19
Operational Utilization
Note: Operational utilization for rigs in continuing operations. Operational utilization adjusts for uncontracted time and planned out of service time including surveys and upgrades.
2013 YTDSep. 14
98%99%
Jackups
2013 YTDSep. 14
92%94%
Floaters
20
• Leading-edge safety management systems
• Major competitive advantage; especially versus non-established drillers
Safety, Health & Environment
0.0
0.2
0.4
0.6
0.8
1.0
1.2
2008 2009 2010 2011 2012 2013 YTD2014
Ensco Industry
Total RecordableIncident Rate
Note: 2014 TRIR for Industry is as of 2Q14
21
Net Income Margin
Source: Thomson One; sum of trailing eight quarters of net income divided by sum of trailing eight quarters of revenue; DO, NE & ESV updated as of 3Q14 results
ESV SDRL DO RIG NE RDC
30%
22%20% 18% 17%
14%
22
SDRL RIG NE RDC DO ESV
55%
38% 37% 36% 33% 33%
Leverage Ratios
Strong Financial Position
Source: Bloomberg; total debt-to-total capital ratios as of 30 June 2014 financial filings, DO, NE & ESV updated as of 30 September 2014 filings
• $11 billion of contracted revenue backlog
• Baa1/BBB+ ratings from Moody’s/S&P
23
Dividend Growth
Nov. 2009 Apr. 2010 Feb. 2012 Feb. 2013 Nov. 2013
$0.10
$1.40 $1.50
$2.00
$3.00
Note: Dividend announcement date; dividend per share annualized
24
SDRL DO RIG NE ESV RDC
133%
113%
65%51% 51%
19%
Source: Thomson Reuters; most recent declared quarterly dividend annualized divided by 2014 earnings per share mean estimate for dividend-paying offshore drillers
Payout Ratios
25*Note: 4Q14 total capex estimated to be approximately $400 million**Note: Approximately $200 million of 2014 rig enhancement capex to be funded by customers
Capital Expenditures
2014 2015 2016 2017
0.75
1.60
0.40
0.56
0.34
Newbuild construction Rig enhancements Sustaining
$ billions
Sustaining
Enhancements
Newbuild
Note: Final rig enhancement and sustaining project capital expenditure budgets for 2015 –2017 TBD once budgets are completed
**
~$2.0B
$1.65B*
26
• Leader in customer satisfaction – four consecutive years
• High quality fleet
• Technology advantages, e.g. ENSCO 120 Series jackups and Samsung GF 12,000 drillships
• Highest net income margins among major competitors
• Strongest balance sheet in peer group
• $11 billion of contracted revenue backlog; record jackup backlog
• Top 10 dividend yield in S&P 500
Ensco’s Strengths
27
• Current floater market is challenging; supply pressure in jackup market
• Mid- to long-term outlook remains positive
• Ensco is well positioned – use strengths to navigate market conditions
• Pursue opportunities for growth & leverage global footprint
– expand customer base & enter new markets
• Disciplined capital management
Summary
28
Top Related