UBS Global Oil and GasUBS Global Oil and Gas · PDF fileUBS Global Oil and GasUBS Global Oil and Gas Conference May 21, ... technical support ... Market outlook for 2013 remains favorable

UBS Global Oil and GasUBS Global Oil and Gas Conference

May 21, 2013

R b S l i lRob SaltielPresident and CEO

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Forward Looking Statements

Statements contained in this report with respect to the future are forward-lookingstatements. These statements reflect management’s reasonable judgment with respectto future events. Forward-looking statements are subject to numerous risks,uncertainties and assumptions and actual results could differ materially from thoseuncertainties and assumptions and actual results could differ materially from thoseanticipated as a result of various factors including: uncertainties related to the level ofactivity in offshore oil and gas exploration and development; oil and gas prices;competition and market conditions in the contract drilling industry; the risks inherent inthe construction of a rig; delays in the commencement of operations of a rig followingthe construction of a rig; delays in the commencement of operations of a rig followingdelivery; our ability to enter into and the terms of future contracts; possible cancelation orsuspension of drilling contracts; the availability of qualified personnel; labor relations;operating hazards and risks; terrorism and political and other uncertainties inherent inforeign operations (including risks of war civil disturbances seizure or damage toforeign operations (including risks of war, civil disturbances, seizure or damage toequipment, and exchange and currency fluctuations); the impact of governmental andindustry laws and regulations; and environmental matters. These factors and others aredescribed and discussed in our most recently filed annual report on Form 10-K, in ourForms 10-Q for subsequent periods and in our other filings with the Securities andForms 10-Q for subsequent periods and in our other filings with the Securities andExchange Commission which are available on the SEC’s website at www.sec.gov. Eachforward looking statement speaks only as of the date of this presentation and weundertake no duty to update the content of this presentation or any forward-lookingstatement contained herein to conform the statement to actual results or to reflect

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statement contained herein to conform the statement to actual results or to reflectchanges in our expectations.

Overview & Strategy

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Transforming Atwood Oceanics

Multi-year investment in fleet modernization and expansion Delivering 5 UDW floater and 3 jackup newbuilds from 2011 through

20152015 Will own youngest high-spec floater and jack-up fleets in the industry

Industry-leading safety and reliability performance across fleety g y y p

Top-tier revenue efficiency and cost control leads to: Best in class margins Best-in-class margins Superior shareholder returns

Growth is fully funded and sourced predominantly from operating y p y p gcash flow Current contract backlog of $2.4 billion Maintains substantial financial flexibility

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y

Steady Revenue and Earnings Growth2008-Present

R

$787$800

$ Millions

$300

$ Millions

Revenue Net Income

$651

$787

$600

$700

$215

$257$272

$250

$253Q2

$527

$400

$500

$86Q2

$215

$150

$200

$245Q1

$200

$300Q2

$73$50

$100

$0

$100

2008 2010 2012 2013

Q1

$0

$50

2008 2010 2012 2013

5 Note: Revenue and Net Income represented on fiscal year basis.

Industry Leading Margins and Capital Returns for FY 2013

ESVATW

35%

40%

DO

SDRL25%

30%

rgin

s

DO

RDC RIGNE15%

20%

Net

Mar

5%

10%

Note: The Bubble size represents the number of rigs operated by each company

0%0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

Capital Return

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Note: DO = Diamond Offshore, ESV = Ensco, NE = Noble, RDC = Rowan, RIG = Transocean, SDRL = Seadrill

• Capital Return = Net Income / (Debt + Shareholders’ Equity)

Source: Bloomberg, FactSet Dated May 15, 2013

Total Shareholder Return: 1 Year Comparison

Shareholder Return: ATW Vs. Peers*150%

Total Shareholder Return: 3 Year Comparison

31.7%

19.9% 20.5% 20.5%

24.2%

31.5%

20%

25%

30%

35%Total Shareholder Return: 1 Year Comparison

70.8% 66.9%

129.7%

70%

90%

110%

130%

150%p

12.7%

5%

10%

15%

20%

14.4% 21.6%34.6%

-10%

10%

30%

50%

70%

0%ATW RDC DO NE SDRL RIG ESV

-11.8%-30%

ATW RIG DO NE RDC ESV SDRL

800%Total Shareholder Return: 10 Year Comparison Total Shareholder Return: 20 Year Comparison

699.8%

487.2%

400%

500%

600%

700%

800% 3721.8%

2000%

2500%

3000%

3500%

4000%

82.4%161.2% 165.2% 167.5%

0%

100%

200%

300%

400%

1002.5%

258.3%

0%

500%

1000%

1500%

2000%

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*As of May 14, 2013Source: FactSet

ATW RDC ESV NE RIG DO0%

ATW NE RDC

Expanding our High Specification Rig Fleet2011 – 2015 Fleet Additions

5 Ultra-Deepwater Floaters3 High-Spec Jackups

$3 8 Billion InvestmentAtwood Mako

$3.8 Billion Investment

Atwood Manta

Atwood Orca

2011 2012 2013 2014 2015Atwood Osprey Atwood AdvantageAtwood Condor Atwood Achiever Atwood Admiral

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2011 2012 2013 2014 2015CALENDAR YEAR

Improving Revenue Quality – 2011 vs. 2015

FY 2011 Revenue FY 2015 Revenue*

10%10%

27%

20%53%

80%20%

Ultra Deepwater FloatersHigh Spec JackupsOther

Ultra Deepwater FloatersHigh Spec JackupsOther

9*Source: Atwood internal analysis (pro forma estimate for FY 2015)

Fleet Transformation and Growth

Atwood’s fleet has a strong presence in Australia, Southeast Asia and West Africa

Houston, TexasATWOOD ADVANTAGE

ATWOOD ACHIEVER

ATWOOD ADMIRAL

ATWOOD BEACON

ATWOOD FALCON

ATWOOD HUNTER

ATWOOD CONDORATWOOD ADMIRAL

VICKSBURGATWOOD AURORA

ATWOOD MANTA

ATWOOD ORCA

ATWOOD MAKO

Headquarters UDW / DW Semisubmersibles

ATWOOD EAGLE

ATWOOD OSPREY

Newbuild DrillshipsJack ups

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Jack-ups

Execution Performance

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Achieving Top-Tier Execution

Revenue Cost ProjectM tKe Enablers

Value Drivers

Efficiency Control ManagementKey Enablers- Centralized

maintenance and technical support

Best-in-class Operating and Net Margins

2011- Atwood Osprey2012- Atwood Mako

Atwood Condor

technical support- Consistent standards

and trouble-shooting- Common equipment

across rigs and - Atwood Condor2013- Atwood Manta- Atwood Orca2014

supplier consolidation- Organic growth with

proven rig designs and world-class shipyards

Consistent, Superior Shareholder Returns

- Atwood Advantage- Atwood Achiever2015- Atwood Admiral

shipyards- Early capital project

scoping and detailed project planning

- Experienced project

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- Atwood Admiralmanagement teams

Continuous Safety Performance ImprovementFiscal Year 2008-Present

1 05

1.2

Total Recordable Incident Rate

0.35

0.40

Lost Time Incident Rate

1.05

0.800.8

1.0

0.260.25

0.30

0.35

0.68

0 4

0.6

0.180.15

0.20

0.2

0.4

0.060.05

0.10

0.02008 2010 2012

0.002008 2010 2012

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Atwood Oceanics recognized as leading offshore driller for HSE in 2012* *Results from EnergyPoint Research customer satisfaction survey published February 20, 2013

Major Accomplishments – Last Nine MonthsPartial Listing

Delivered Atwood Mako 4 weeks ahead of schedule and started up in the Gulf of Thailand

Delivered Atwood Condor ahead of original schedule and

Sept 2012

Oct 2012Delivered Atwood Condor ahead of original schedule and started up in the Gulf of Mexico

Announced FY2012 record revenue and earnings and best f t i At d’ 44 hi t

Oct 2012

Nov 2012safety year in Atwood’s 44-year history

Delivered Atwood Manta 3 weeks ahead of schedule and started up in the Gulf of Thailand

Dec 2012

Contracted Atwood Orca to initial 2-year contract in Thailand

A d 1Q FY2013 l i h 9 % J 2013

Jan 2013

Announced 1Q FY2013 results with 95% revenue efficiency

Delivered Atwood Orca 10 weeks ahead of schedule

Jan 2013

April 2013

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Announced 2Q FY2013 results with record quarterly revenue

May 2013

Calendar 2013 Priorities and Potential Catalysts

Start-up of the Atwood Orca

Contracting ofAtwood Beacon andContracting of Atwood Beacon and Atwood Hunter (2013 / 2014 availability)

Securing inaugural contract for theSecuring inaugural contract for the Atwood Achiever

Potential exercise of option for 4th “APotential exercise of option for 4th A-Class” drillship

Delivery and start-up of theAtwoodDelivery and start-up of the Atwood Advantage

Extensions/contracting of rigs with

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Extensions/contracting of rigs with 2014+ availability

Market Outlook and Contracts

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64 Recent Discoveries in Floater Water Depths*December 2011 to April 2013

6

4

6

4“G

10

34

117

“GoldenTriangle”

104

87

17 Source: IHS-Petrodata

* Water depths greater than 500 ft.

Steady Floater Utilization – UDW Rigs “Sold Out”

92%94%96%98%100%

250

270

290

310

tiliz

atio

n

ly

Worldwide Floater Supply and Utilization303

80%82%84%86%88%90%92%

150

170

190

210

230

Con

trac

ted

Ut

Tota

l Sup

p 221

UDW Floater Supply and Utilization

80%50

Total Supply Total Contracted Utilization

90%92%94%96%98%100%

80

100

120

140

d U

tiliz

atio

n

Supp

ly

UDW Floater Supply and Utilization128

80%82%84%86%88%90%

0

20

40

60

Con

trac

ted

Tota

l S 51

18

Total Supply Total Contracted Utilization

Source: IHS-PetrodataNote: Contracted Utilization equals Working Rigs / Total Supply

New Build UDW Floater Delivery by Calendar Years

No. of Rigs

130

35

3 18

1

20

25

30

17

8 9

293 18

7

5

10

15

8 9

0

5

2013 2014 2015 2016+Contracted Uncontracted

Total 92Contracted 63

19 Source: IHS Petrodata as of May 1, 2013

Contracted 63

Uncontracted 29

Jackups: Utilization Recovers Even as Supply Grows

100%490494

Worldwide Jackup Supply and Utilization

90%

95%

470

480

80%

85%

450

460

Util

izat

ion

Tota

l Sup

ply

443

65%

70%

75%

420

430

440

65%420

Total Supply Total Contracted Utilization High Spec Contracted Utilization

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Source: IHS-PetrodataNote: Contracted Utilization equals Working Rigs / Total Supply

Accelerating High Spec Jack-Up Dayrate Outlook

J k t d i t l 20% th t 4 thJackup tenders up approximately 20% over the past 4 months

Driven by demand in the North Sea, Middle East, SE Asia and IndiaContract duration and lead times steadily increasingy g

Currently at 390 and 160 days, respectively

Up 100% and 50%, respectively since 2007Market outlook for 2013 remains favorable

Overall contracted utilization rates for high spec rigs exceeds 94%

Dayrates currently in the $160 000 to $190 000 range depending on the Dayrates currently in the $160,000 to $190,000 range, depending on the geographic region and contract term

Many older rigs are not likely to return to market

30 jack-up rigs permanently removed from the fleet since 2011; compared to aggregate of 22 rigs for the previous 15 years ending 2010

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Jack-up demand continues to shift toward newer, high-specification rigs

Source – IHS, ISI Group, Pareto Securities

Atwood Fleet Contract Status (by calendar year)

Ri Cl /Ri C t2013 2014 2015

Rig Class/Rig CustomerQ1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Ultra-Deepwater Drillships

Atwood Advantage Noble Energy $409K $584K

Atwood Achiever Available Delivery mid-2014

Atwood Admiral Available Delivery early 2015

Ultra-Deepwater SemisubsAtwood Osprey Chevron $490K $470K

Atwood Condor Hess / Shell $514K

Deepwater Semisubs

Atwood Eagle Woodside / BHP / Apache $436K / $385K

Atwood Falcon Apache $385K

Atwood Hunter Noble Energy $435Kgy $

Jack-Ups

Atwood Aurora Bowleven / Glencore / Addax $134K $155K $164

Atwood Beacon Shemen Oil $151K

Vicksburg CEC International $105 $115K

Atwood Mako Salamander $145K $155K

Atwood Manta CEC International $145K

Atwood Orca Mubadala Petroleum $160K

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Contracted (current)Contracted (follow on work)ShipyardMobilization (as of 5/14/13)

Firm Rig Years17.6

Firm Revenue $ Billions

2.4

Revenue Backlog Analysis

$1,200 (in Millions)

(FY in $Millions) Total = $2.4 Billion

$965$800

$1,000 $353

$886$965

$600

$886

$411 $461

$531

$200

$400 $1,129

$-2013 2014 2015 2016+

MajorsLarge IndependentsS ll I d d t

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Small Independents

(as of 5/14/13)

Fiscal Year

Financial Considerations

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Future Capital Expenditures Fully Financed

$ 1($ millions)

900

1,000

• $1.5 billion1 in remaining total capital expenditures as of May 1, 2013

• Approximately $0.9 billion in

400

600

700

800Approximately $0.9 billion in contracted after tax cash flow through 2015 is available to fund these expenditures

With th i f th $550920

520

2203

300

400

500• With the exercise of the $550

million Credit Facility accordion, we are fully funded for all construction costs

124

480

124

520

260

0

100

200• Credit metrics peak in mid-2014 with the delivery of the Atwood Achiever

• Debt to cap and debt to 0

CAPEX Contracted CashflowUncontracted Cash Flow Debt

20132 2014 2015• Debt-to-cap and debt to EBITDA ratios are maintained below 40% and 2.7 times, respectively

Fiscal Year

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1. Includes $245 million of maintenance and other CAPEX and capital spares for 2013, 2014 and 20152. CAPEX for 2013 represents projections for remaining 5 months for fiscal 20133. Represents approximately ½ of uncontracted cash flow to meet CAPEX requirements

Uncontracted Cash Flow Debt

P t ti l I t l $6 25 E i P Sh f N b ild Ri D li i *

Earnings Growth Through Newbuild Rig Deliveries

Potential Incremental $6.25 Earnings Per Share from Newbuild Rig Deliveries*

Atwood CondorAtwood MakoAt d M t

Atwood MantaAtwood OrcaAt d Ad t

Atwood AchieverAtwood Admiral

Atwood Admiral

$2.50

Atwood MantaAtwood Orca

Atwood AdvantageAtwood Achiever

$1.00$1.50$2.00

$0.00$0.50

FY 2013 FY 2014 FY 2015 FY 2016

High-Spec Jack Ups Ultra-Deepwater FloatersAssumptions:UDW Floaters – Dayrate of $575,000, operating cost of $190,000 (inflation-adjusted), revenue efficiency of 95% and a tax rate of 13%

26* Comparison versus FY2012 earnings; EPS analysis excludes any increases in Operating or SG&A

costs or interest expense during the 4 year period

High Specifications Jack-ups – Dayrate of $155,000,operating costs of $71,000 (inflation-adjusted), revenue efficiency of 95% and a tax rate of 13%

Summary

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The Atwood Advantage

High-Quality Operating Fleet with Aggressive Growth InitiativeGrowth Initiative

Knowledgeable and Experienced

Management Team

Attractive Geographic

Diversity

Strong Backlog with High Quality

Customers

Significant Liquidity and

Financial Flexibility

History and Reputation of Safe

and Efficient Operations

Industry-Leading Margins and Shareholder

Returns

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OperationsReturns

Thank You

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