Barclays CEO Energy-Power Conference September 8, 2015 - Jeremy Thigpen President and Chief Executive Officer
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Barclays
CEO Energy-Power Conference
September 8, 2015
Jeremy Thigpen
President and Chief Executive Officer
www.deepwater.com
Legal Disclaimer
The statements described in this presentation that are not historical facts are forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements contain words such as "possible," "intend," "will," "if,"
"expect," or other similar expressions. Forward-looking statements are based on management’s current expectations and assumptions, and are subject
to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results could differ materially from those
indicated in these forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, statements
involving prospects for the company, expected revenues, capital expenditures, costs and results of operations and contingencies and other factors
discussed in the company's most recent Form 10-K for the year ended December 31, 2014 and in the company's other filings with the SEC, which are
available free of charge on the SEC's website at www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those indicated. All subsequent written and oral forward-looking statements
attributable to the company or to persons acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties. You
should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement,
and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that occur, or which we
become aware of, after the date hereof, except as otherwise may be required by law. Adjusted earnings is a non-GAAP financial measure and the
reconciliation to the most comparative GAAP measure is displayed in quantitative schedules on the company’s website at www.deepwater.com.
This presentation is being issued pursuant to and in accordance with Rule 135 under the Securities Act of 1933. Investors must rely on their own
evaluation of Transocean Ltd. and its securities, including the merits and risks involved. Nothing contained herein is, or shall be relied on as, a promise
or representation as to the future performance of Transocean Ltd.
This presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, and it does not constitute an offering prospectus
within the meaning of article 652a or article 1156 of the Swiss Code of Obligations or a listing prospectus within the meaning of the listing rules of the SIX
Swiss Exchange. Investors must rely on their own evaluation of Transocean Ltd. and its securities, including the merits and risks involved. Nothing
contained herein is, or shall be relied on as, a promise or representation as to the future performance of Transocean Ltd.
www.deepwater.com 2
Recent Accomplishments
Continued improvement across key safety metrics
Revenue efficiency at or above 95% for last 5 of 6 quarters
Operational
Sustained improvements in cost structure and margins
Improvement Rationalized headcount and overhead reductions
Focus on out-of-service time and optimized maintenance programs
Cost effective stacking of UDW floaters
$18.6 billion in contract backlog
Financial $5.9 billion total liquidity at July 31, 2015
Retired ~$900 million of debt in July 2015
Flexibility
Deferred delivery of 7 newbuild rigs
BP/PSC Macondo settlement / insurance proceeds
Cancellation of dividend*
Fleet Robust pipeline of value-enhancing high-specification newbuilds
Eliminating exposure to non-core rigs
Renewal Continuing technical leadership
* Pending shareholder approval
www.deepwater.com 3
Sustained Operational Out-Performance
2Q15 adjusted earnings of $1.11/share on revenues of $1.9 billion
Revenue Efficiency Revenue, Adjusted EBITDA & Costs
Average Revenue Efficiency 95.3%
100% 3,000 70%
95% 60%
2,400
90% 50%
(US$ millions)
1,800
85% 40%
1,200
80% 30%
600
75% 20%
70% 0 10%
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15
Revenue Adj Costs* Adj EBITDA** Adj EBITDA Margin***
Continued progress on margin improvement initiatives partially offset deteriorating market conditions
*O&M plus G&A expenses, adjusted for unusual items **Revenue less Adjusted Costs ***Adjusted EBITDA divided by Revenue
www.deepwater.com 4
Industry Leading Execution
Focus on personal and process safety
Reducing non-productive time
Better planning, improved reliability, lower spend
Deliver more wells in record time
www.deepwater.com 5
Industry Leading Contract Backlog
Total backlog - $18.6 billion*
Chart Title
8.0
$6.8
7.0
6.0 Backlog recognized $5.7
through July 31, 2015
5.0
(US$ billions)
4.1
$3.9
4.0
3.0 $2.8
5.7
2.6
$1.9
2.0 1.4 $1.6
2.3
$2.7
0.3 0.5 1.7
1.0
1.5
0.8 0.5
0.3 0.1
0.2 0.3 0.2 0.1 0.1
0.0
2015 2016 2017 2018 2019 2020-27
*Contracted operating dayrate multiplied by the firm contract period for future periods as of the Fleet Status Report issued July 15, 2015
www.deepwater.com 6
Global Market Leader
27
Ultra-Deepwater
7
Harsh Env.
6
Deepwater
13
Midwater
10
Jackup
Transocean fleet composition at August 19, 2015
www.deepwater.com 7
Challenging Market
Oil prices at post-2009 lows and rig market is oversupplied – rig fleet transformation in progress
Ultra-Deepwater Deepwater Midwater High-Spec Jackups
Deepwater Invictus Jack Bates GSF Rig 140 Transocean Honor
Global fleet utilization Global fleet utilization Global fleet utilization Global fleet utilization
86%* 72%* 76%* 84%*
Uncontracted newbuild Weakening activity with Acceleration of rig Dayrates declining as
deliveries delayed or limited prospects retirements oversupply intensifies
cancelled
* Global marketed utilization data from IHS-Petrodata as of August 25, 2015
www.deepwater.com 8
Future Imbalance From Depressed Oil Prices
$50 oil: supply and demand could be in balance in 2015, incremental demand incremental supply @ $70/bbl
but supply destruction in out-years is unsustainable mmb/d incremental supply @ $90/bbl incremental supply @ $50/bbl
2.0
$70 oil: continued reinvestment keeps market from
balancing until 2016-2017, but 2017+ undersupplied 1.0
$90 oil: longer-term price required to balance incremental 0.0
supply/demand
Approximately 30% of the potential 8mmb/d 2018 deficit -1.0
comes from deepwater sources
-2.0
Please note, this is not intended to be a commodity price forecast, merely a sensitivity analysis.
-3.0
Oil supply @ $50/bbl Oil supply @ $70/bbl
13 14 15E 16E 17E 18E
mmb/d Oil supply @ $90/bbl Total oil demand
mmb/d
98
0 -0.5 -0.2 -0.7
-0.7
96 -1.8
-1.5 -1.5
-2
94
-2.6 -2.5
92 -4
Other Onshore
Shelf
90 -6
Deepwater -3.6
88 -8 NAm Shale
86
12 13 14 15E 16E 17E 18E -10
Source: Rystad Energy, EIA, IEA, Morgan Stanley Research estimates
15E 16E 17E 18E
www.deepwater.com 9
Future Demand Requires Offshore Development
~50% of incremental new field production growth
through 2020 is related to non-OPEC offshore
Crude & Condensate Production (mmb/d) development
85
Chart Title
Non-Producing Fields Producing Fields
2.0 RoW Onshore
80
6.0 RoW Offshore
75
2.2 OPEC
1.2 NAm Land
70
Currently-producing NAm
65 unconventional fields need to add
~7mmb/d* in incremental production
to offset base decline and grow
production
60
00 03 06 09 12 15 18
Source: Rystad Energy, Morgan Stanley Research estimates *~7mmb/d = ~3.3mmb/d to offset declines + ~3.5mmb/d in net additions
www.deepwater.com 10Rig Attrition Key to Rebalance the Market
Marketed Utilization (average last 12 months)
Contract Status & Expected Demand 2005-2017 7500’+ 92.6%
All Floaters - Worldwide
4500’-7500’ 85.5%Investing in the Fleet – High Specification Assets
18 Newbuilds Added 2009-2014 12 Newbuilds in Pipeline 2016-2020
11 UDW Drillships 7 UDW Drillships
3 UDW Semisubmersibles 5 HS Jackups
4 HS Jackups
~$12B Investment ~$7B Investment
www.deepwater.com 12Asset Profile
2009 Fleet Current Fleet 2020 Projected Fleet*
% of Fleet % of Fleet % of Fleet
15% 16%
4% 24%
41% 43%
10% 55%
30%
32%
8% 11%
11%
Projected fleet includes:
11 UDW dual BOP rigs
8 UDW moored & DP capable rigs
Ultra-Deepwater Floaters
7 UDW 20k psi capable rigs
Harsh Environment Floaters
Average fleet age:
Deepwater & Midwater Floaters
2020 ~16 years*
High-Specification Jackups
Standard Jackups
2015 ~19 years
2009 ~24 years
* Estimate August 2015
www.deepwater.com 13Strong Financial Position
$18.6 billion backlog provides solid cash-generation foundation
$5.9 billion total liquidity at July 31, 2015
$2.9 billion cash
o Includes July 2015 redemption of 4.95% senior notes
$3.0 billion undrawn revolving credit facility
Re-phasing/reduction of capital spending
Continuous improvement in operating performance and costs
Cost effective stacking
www.deepwater.com 14Substantial Liquidity
12 Projected liquidity at
11 December 31, 2017
$3.7-$4.7B* ~$3.7B*
10
9
8
7
(US$ billions)
$1.9B
$3.0B
6
5 $4.0-$5.0B*
4
$2.9B
3
2
1
0
Cash at 7/31/15 Revolving Credit Operations Cash CapEx through Debt Due through Liquidity
Facility Flow 2017 2017 at 12/31/17
* Estimate
www.deepwater.com 15The Path Forward
Transocean will:
Deliver the safest, most efficient drilling services
Continue to focus on producing strong operating results through:
o Strengthening customer relationships
o Delivering best-in-class uptime and revenue efficiency
o Right-sizing the organization consistent with fleet size
o Streamlining every element of the business
Actively manage capital structure and liquidity
High grade and reposition the worldwide fleet for the industry recovery
Transocean will build upon its position as the industry’s leading offshore driller
www.deepwater.com 16Barclays
CEO Energy-Power Conference
September 8, 2015
Jeremy Thigpen
President and Chief Executive Officer
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