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Q2 2013 Financial Results<br />
19 August 2013<br />
Report available at www.maerskdrilling.com
<strong>Maersk</strong> <strong>Drilling</strong> | page 2<br />
Forward-looking Statements<br />
This presentation contains forwardlooking<br />
statements. Such<br />
statements are subject to risks and<br />
uncertainties as various factors,<br />
many of which are beyond A.P. Møller<br />
- Mærsk<br />
actual developments and results to<br />
differ materially from the<br />
expectations contained in the<br />
presentation.
Summary of Q2 2013<br />
<strong>Maersk</strong> <strong>Drilling</strong> | page 3<br />
• Profit was USD 150m<br />
• ROIC was 12.6%<br />
• For 2013 <strong>Maersk</strong> <strong>Drilling</strong> expects a result<br />
significantly above the 2012 results (USD 347<br />
m)<br />
• Forward contract coverage is 100% for 2013,<br />
86% for 2014 and 58% for 2015<br />
• Newbuilding programme progressing as<br />
scheduled with contracts secured for five out<br />
of the seven newbuildings<br />
• Ultra harsh environment newbuild jack-up XLE2<br />
contract extension by two years to five years<br />
• Well on track towards the financial ambition of<br />
delivering a profit of USD 1 billion to the A.P.<br />
Moller <strong>Maersk</strong> Group in 2018
Financials<br />
<strong>Maersk</strong> <strong>Drilling</strong> | page 4<br />
Best financial quarter ever<br />
Financial Highlights (USD million, second quarter)<br />
2013 2012<br />
Revenue 512 410<br />
Profit/loss before depreciation, amortisation and impairment<br />
losses, etc. (EBITDA)<br />
223 148<br />
Depreciation, amortisation and impairment losses 58 26<br />
Share of profit/loss in joint ventures 6 1<br />
Profit/loss before financial items (EBIT) 171 123<br />
Tax 21 25<br />
Net operating profit/loss after tax (NOPAT) 150 98<br />
Cash flow from operating activities 227 220<br />
Cash flow used for capital expenditure -153 -236<br />
<strong>Maersk</strong> <strong>Drilling</strong> result<br />
• Revenue increased to USD 512m in Q2 2013 from USD<br />
410m in Q2 2012<br />
• EBITDA increased to USD 223m in Q2 2013 from USD<br />
148m in Q2 2012<br />
• Profit (NOPAT) increased to USD 150m in Q2 2013 from<br />
USD 98m in Q2 2012<br />
• ROIC was 12.6%, up from 10.2% in Q2 2012<br />
• The increase in profit of USD 52m compared to Q2 2012 is<br />
mainly due to higher operational uptime in Q2 2013<br />
• For 2013 <strong>Maersk</strong> <strong>Drilling</strong> expects a result significantly<br />
above the 2012 result (USD 347 million)<br />
Invested capital 4,778 3,932<br />
ROIC 12.6% 10.2%<br />
Operational uptime 96& 86%
<strong>Maersk</strong> <strong>Drilling</strong> | page 5<br />
Contract backlog<br />
High forward contract coverage<br />
2013 2014 2015<br />
Jack-Ups Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4<br />
2016 2017<br />
Q1 Q2 Q3 Q4 Q1<br />
Q2 Q3 Q4<br />
MÆRSK INNOVATOR<br />
ConocoPhillips, Norway<br />
MÆRSK INSPIRER<br />
Statoil, Norway<br />
MÆRSK GALLANT ConocoPhillips, Norway Statoil, Norway<br />
MÆRSK GIANT Dong, Norway1) 2) 3) Centrica, Norway 4) Undisclosed, Norway<br />
MAERSK GUARDIAN 5) 6) Lundin, Norway<br />
MAERSK REACHER<br />
BP, Norway<br />
MAERSK RESOLUTE<br />
Hess, Denmark<br />
MAERSK RESOLVE 7) EON, UK 8) DONG, Denmark<br />
MAERSK RESILIENT<br />
ConocoPhillips, UK<br />
MAERSK ENDURER<br />
Addax, Cameroon<br />
MAERSK COMPLETER<br />
BSP, Brunei<br />
MAERSK CONVINCER<br />
Petronas, Malaysia<br />
Jack-Ups Under Construction<br />
XL ENHANCED I<br />
Total, Norway<br />
XL ENHANCED II<br />
XL ENHANCED III<br />
Floaters<br />
MÆRSK DEVELOPER<br />
Statoil, US GoM<br />
MÆRSK DELIVERER<br />
Chevron, Angola<br />
MAERSK DISCOVERER<br />
BP, Egypt<br />
HEYDAR ALIYEV<br />
BP, Azerbaijan<br />
Nanhai VI 9) BHP, Australia Santos, Australia<br />
Floaters Under Construction<br />
DEEPWATER ADVANCED I ExxonMobil, US GoM<br />
DEEPWATER ADVANCED II<br />
CoP/Marathon, US GoM<br />
DEEPWATER ADVANCED III<br />
DEEPWATER ADVANCED IIII<br />
Det norske, Norway<br />
Statoil, Norway<br />
Contract: Options: LOI / LOA: Unavailable: Available:<br />
Note: as per August 1st<br />
1) Talisman, Norway 4) Det Norske, Norway 7) ConocoPhillips, UK<br />
2) Det Norske, Norway 5) Lotos, Norway 8) DONG, Denmark<br />
3) Repsol, Norway 6) Lundin, Norway 9) Santos, Australia
Forward contract coverage<br />
<strong>Maersk</strong> <strong>Drilling</strong> | page 6<br />
Capacity sold out for 2013<br />
Contract backlog<br />
100%<br />
100%<br />
80%<br />
86%<br />
60%<br />
58%<br />
40%<br />
20%<br />
0%<br />
2013 2014 2015
Newbuild contract status<br />
<strong>Maersk</strong> <strong>Drilling</strong> | page 7<br />
Contracts secured for five out of seven newbuilds<br />
Ultra harsh jack-ups<br />
XL Enhanced<br />
Ultra deepwater floaters<br />
XL Enhanced 1<br />
• Customer: Total E&P Norge AS<br />
• Country: Norway<br />
• Contract value: USD 550 million<br />
• Duration: 4 years<br />
XL Enhanced 2<br />
• Customer: Det norske Oljeselskab<br />
• Country: Norway<br />
• Contract value: USD 700 million<br />
• Duration: 5 years<br />
Drillship 1<br />
• Customer: ExxonMobil<br />
• Country: US GoM<br />
• Contract value: USD 610 million<br />
• Duration: 3 years<br />
Drillship 2<br />
• Customer: ConocoPhillips/Marathon<br />
Oil Company<br />
• Country: US GoM<br />
• Contract value: USD 694 million<br />
• Duration: 3 years<br />
XL Enhanced 3<br />
• Customer: Statoil<br />
• Country: Norway<br />
• Contract value: USD 620 million<br />
• Duration: 4 years<br />
Drillship 3<br />
• Uncontracted<br />
Drillship 4<br />
• Uncontracted
Newbuild programme<br />
<strong>Maersk</strong> <strong>Drilling</strong> | page 8<br />
Rig construction programme progressing according to schedule<br />
Ultra harsh jack-ups<br />
XL Enhanced<br />
Ultra deepwater drillships<br />
Note: Picture of XLE 1 Note: Picture of Drillship 2<br />
• Three ultra harsh jack-ups (CJ-70s) under construction at<br />
Keppel FELS ship yard in Singapore<br />
• Expected delivery in 2014/2015<br />
• Four ultra deepwater drillships under construction at<br />
Samsung Heavy Industries, South Korea<br />
• Expected delivery in 2013/2014
Operational performance<br />
<strong>Maersk</strong> <strong>Drilling</strong> | page 9<br />
Operational uptime improving<br />
Operational uptime<br />
Safety performance<br />
100%<br />
80%<br />
60%<br />
Uptime<br />
Q2 2013 Q2 2012<br />
96% 94% 97%<br />
86%<br />
75%<br />
90%<br />
2.00<br />
1.60<br />
1.20<br />
LTI frequency<br />
(12 months rolling)<br />
40%<br />
0.80<br />
20%<br />
0.40<br />
0%<br />
<strong>Maersk</strong> <strong>Drilling</strong><br />
Total<br />
Floating rigs<br />
Jack-ups<br />
0.00<br />
2008 2009 2010 2011 2012 2013<br />
• <strong>Maersk</strong> <strong>Drilling</strong> Q2 2013 average uptime 96% (86% in Q2<br />
2012)<br />
• Safety performance with LTIf of 1.42 per million working<br />
hours for Q2 2013 (0.59 per million working hours in Q2<br />
2012)
USD '000<br />
Ultra deepwater floater market<br />
<strong>Maersk</strong> <strong>Drilling</strong> | page 10<br />
The ultra deepwater market remain healthy<br />
• The ultra deepwater market (7500ft+) was<br />
characterised by full utilisation in Q2 2013<br />
• Dayrates in Q2 remained around USD 600,000 with<br />
some variations across regions and countries reflecting<br />
differences in operating cost levels and taxes<br />
700<br />
600<br />
500<br />
7500ft+ Floater Market - Fixtures<br />
(only standard and new mutual contracts)<br />
• With several active tenders and potential requirements<br />
for modern ultra deepwater units, the current<br />
orderbook with one yet uncontracted rig scheduled for<br />
delivery in 2013 and twelve in 2014 is expected to be<br />
absorbed<br />
• Strongest growth in demand comes from West Africa<br />
followed by the US Gulf of Mexico<br />
400<br />
300<br />
200<br />
100<br />
0<br />
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013<br />
Source: IHS-Petrodata, <strong>Maersk</strong> <strong>Drilling</strong>
Ultra harsh jack-up market (Norway)<br />
<strong>Maersk</strong> <strong>Drilling</strong> | page 11<br />
Limited near term supply of jack-up rigs in Norway<br />
• The Norwegian jack-up market remained strong with<br />
full utilisation of capacity in Q2 2013<br />
• Currently, there are nine ultra harsh environment<br />
jack-ups in the Norwegian sector of which many are<br />
tied up in long term contracts reducing the near term<br />
availability of jack-up rigs in the market<br />
• An additional six ultra harsh jack-ups are under<br />
construction, all of which have secured long term<br />
contracts<br />
• In Q2 additional tenders requesting jack-ups for long<br />
duration drilling programmes were issued confirming<br />
the solid demand outlook for the Norwegian sector<br />
• <strong>Maersk</strong> rig capacity in Norway is sold out<br />
until Q3 2014<br />
2013<br />
Q3 Q4<br />
MÆRSK GIANT<br />
Norway<br />
Ultra harsh jack-up availability 2013-2015<br />
Q1<br />
2014 2015<br />
Q2 Q3 Q4 Q1 Q2 Q3<br />
MAERSK GUARDIAN Norway<br />
MÆRSK GALLANT Norway Yard Norway<br />
MAERSK REACHER Norway<br />
MÆRSK INSPIRER Norway<br />
MÆRSK INNOVATOR Norway<br />
MÆRSK XLE1 Under construction Norway<br />
MÆRSK XLE2 Under construction Norway<br />
MÆRSK XLE3 Under construction Norway<br />
Contract: Options: LOI / LOA:<br />
Available:<br />
Unavailable:<br />
Source: <strong>Maersk</strong> <strong>Drilling</strong><br />
Q4
Rig fleet<br />
<strong>Maersk</strong> <strong>Drilling</strong> | page 12<br />
<strong>Maersk</strong> <strong>Drilling</strong> focuses on modern high-end equipment<br />
Jack-Ups Floaters Other<br />
Ultra Harsh<br />
Harsh/Premium<br />
Ultra Deepwater<br />
Mid-Water<br />
Other<br />
5 Units<br />
3 Under Construction<br />
7 Units<br />
3 Units<br />
4 Under Construction<br />
1 Unit<br />
10 Barges (Venezuela)<br />
64 landrigs and 4 jack-ups
<strong>Maersk</strong> <strong>Drilling</strong> | page 13<br />
Geographic positioning<br />
Caspian Sea<br />
1 mid-water semi<br />
NW Europe<br />
5 ultra harsh jack-ups<br />
4 high-end jack-ups<br />
Egypt<br />
1 ultra deepwater semi<br />
US GoM<br />
1 ultra deepwater semi<br />
Egyptian <strong>Drilling</strong><br />
Company<br />
(50/50 JV), 64 land and<br />
workover rigs, 4 jack-ups<br />
Venezuela<br />
10 drilling barges<br />
Asia<br />
2 premium jack-ups<br />
West Africa<br />
1 ultra deepwater semi<br />
1 high-end jack-up<br />
Under construction:<br />
3 ultra harsh jack-ups<br />
4 ultra deepw. drillships<br />
Australia<br />
1 standard semi<br />
(management)
# units<br />
Strategy<br />
<strong>Maersk</strong> <strong>Drilling</strong> | page 14<br />
Well on track towards the 2018 target<br />
• To become a significant and stable contributor to the A.P. Moller -<br />
<strong>Maersk</strong> Group profit<br />
• Financial ambition is to deliver a profit of USD 1 billion to the A.P.<br />
Moller - <strong>Maersk</strong> Group by 2018<br />
• Incident free operation<br />
• Become a sizable player in the market with 30 units<br />
• Growing the business within the ultra deepwater and ultra harsh<br />
environment segments<br />
• The focus areas for growth are Norway, leveraging the market<br />
leading position in the ultra harsh jack-up market, and the deepwater<br />
regions in the US Gulf of Mexico and West Africa where <strong>Maersk</strong><br />
<strong>Drilling</strong> aims to build strong positions<br />
25<br />
20<br />
15<br />
10<br />
5<br />
0<br />
<strong>Maersk</strong> <strong>Drilling</strong> fleet<br />
23<br />
22<br />
17<br />
16 16 16<br />
15<br />
11<br />
10 10<br />
8<br />
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
<strong>Maersk</strong> <strong>Drilling</strong> - Moving boundaries within offshore drilling<br />
<strong>Maersk</strong> <strong>Drilling</strong> | page 15
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