Alan R. Curtis Alan R. Curtis Chi f Fi Chi f Fi Chief Financial - - PowerPoint PPT Presentation

Alan R. Curtis Alan R. Curtis Chi f Fi i l Offi Chi f Fi i l Offi

Johnson Rice Energy Conference Johnson Rice Energy Conference

Chief Financial Officer Chief Financial Officer

gy gy September 22, 2016 September 22, 2016 New Orleans, LA New Orleans, LA

Forward-Looking Statements

Statements we make in this presentation that express a belief, expectation, or intention are forward looking. Forward-looking statements are generally accompanied by words such as “estimate ” “project ” “predict ” by words such as estimate, project, predict, “believe,” “expect,” “anticipate,” “plan,” “forecast,” “budget,” “goal,” or other words that convey the uncertainly of future events or outcomes. These forward-looking statements are based on our current information and expectations that involve a number of information and expectations that involve a number of risks, uncertainties, and assumptions. Among the factors that could cause the actual results to differ materially from those indicated in the forward-looking statements are: industry conditions, prices of crude oil and natural gas, our ability to obtain and the timing of new projects, and changes in competitive factors. Should one or more of these risks or uncertainties materialize, or should the assumptions underlying the forward-looking statements prove incorrect, actual

• utcomes could vary materially from those indicated.

For additional information regarding these and other factors, see our periodic filings with the Securities and Exchange Commission, including our most recent Reports on Forms 10-K and 10-Q.

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Why Oceaneering?

• Global provider of diversified services and products in all phases

f h ff h ilfi ld lif l

• Global provider of diversified services and products in all phases

f h ff h ilfi ld lif l

• f the offshore oilfield life cycle
• Strong market positions
• f the offshore oilfield life cycle
• Strong market positions
• Solid balance sheet and cash flow
• Solid balance sheet and cash flow
• Return of capital to our shareholders
• Leveraged to deepwater

longer term deepwater is still critical to

• Return of capital to our shareholders
• Leveraged to deepwater

longer term deepwater is still critical to

• Leveraged to deepwater - longer term, deepwater is still critical to

reserve replenishment

• Leveraged to deepwater - longer term, deepwater is still critical to

reserve replenishment

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5 Operating Segments

• 1. Remotely Operated Vehicles (“ROVs”)
• 1. Remotely Operated Vehicles (“ROVs”)

y ( )

• 2. Subsea Products

y ( )

• 2. Subsea Products
• 3. Subsea Projects
• 3. Subsea Projects
• 4. Asset Integrity

5 Ad d T h l i

• 4. Asset Integrity

5 Ad d T h l i

• 5. Advanced Technologies
• 5. Advanced Technologies

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EXPLORATION DEVELOPMENT PRODUCTION

DECOMMISSIONING

PHASE

In All Phases of Offshore Oilfield Life Cycle

EXPLORATION

10%

DEVELOPMENT

50%

PRODUCTION

35%

DECOMMISSIONING

5%

# of Operating Floating Drilling Rigs # Subsea Tree Installations # Subsea Trees In Service # of Field Abandonments

PHASE

% OII Revenue

#1 Market Driver

g g g

e Business Segment P d t

• ROV

ROV

• Survey (SP)

Survey (SP)

• Tooling (SSP)

Tooling (SSP)

Product and Service Revenue Streams

• ROV
• Survey (SP)
• Tooling (SSP)

IWOCS I t ll ti &

• ROV
• Tooling (SSP)
• IWOCS (SSP)

S b H d (SSP)

• ROV
• Tooling (SSP)
• IWOCS (SSP)
• IWOCS – Installation &

Workover Control Systems (SSP)

• Subsea Hardware (SSP)
• Umbilicals (SSP)
• Vessel-based Installation

Services (SP) Inspection Ser ices (AI)

• Subsea Hardware (SSP)
• Vessel-based Inspection,

Maintenance & Repair Services (SP)

• Inspection Services (AI)

ROV = Remotely Operated Vehicles SSP = Subsea Products SP = Subsea Projects AI = Asset Integrity

• Inspection Services (AI)

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Largest Exposure is in Field Development

R Mi

10% 5%

Revenue Mix

35% 50% Exploration Development Production Decommissioning Exploration Development Production Decommissioning

Source: OII Estimates: 2015

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Revenue by Business Segment

7% 10%

2014 2015 First Half 2016*

29% 14% 7% 27% 12% 10% 23% 12% 12% 16% 20% 31% 22% 34% 31%

$3.7 Billion $3.1 Billion $1.2 Billion

ROV Subsea Products Subsea Projects Asset Integrity Advanced Technologies

* Six Months Ended June 30, 2016

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Remotely Operated Vehicles

23%

Revenue Contribution First Half 2016

Flagship of the Oceaneering Franchise

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g p g

Oceaneering ROV Fleet Size

318 ROV f J 30 2016

350

318 ROVs as of June 30, 2016

318

300 riod End 300 Count at Per 250 Vehicle 200 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1 2016 Q2

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Floating Rig Demand History

O i 8% M k Sh f J 30 2016

100% 300 Floaters Contracted % with OII ROVs

Oceaneering 58% Market Share as of June 30, 2016

75% 200 250 s Period End 50% 150 200 with OII ROVs ing Rigs at P 25% 50 100 % w tracted Float 0%

2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2016 Q1 2016 Q2

Cont

Source: IHS-Petrodata, June 30, 2016

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Oceaneering ROV Pricing and Fleet Utilization

% Fl U ili i f J 30 2016

100% $ $11,000 Revenue / Day on Hire Fleet Utilization

55% Fleet Utilization as of June 30, 2016

70% 80% 90% $7 000 $8,000 $9,000 $10,000 n Hire 40% 50% 60% $4 000 $5,000 $6,000 $7,000 eet Utilizatio ue / Day on H 10% 20% 30% $1 000 $2,000 $3,000 $4,000 Fl Revenu 0% 10% $0 $1,000 2008 2009 2010 2011 2012 2013 2014 2015 2016*

* YTD June 2016

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Subsea Products

31% Manufactured Products Production Control Umbilicals

Supplies electric and hydraulic power to subsea trees and injects h i l i t i d ll t

Revenue Contribution First Half 2016

Specialty Subsea Hardware

chemicals into reservoirs and well streams. Field development hardware used to connect production trees to

Service and Rentals

Field development hardware used to connect production trees to umbilicals and flow lines. Also includes connectors and valves.

Service and Rentals Tooling & Subsea Work Systems

Support drilling, construction, field maintenance, and plugging and abandonment activities. Support drilling, construction, field maintenance, and plugging and

Installation and Workover Control Systems (IWOCS)

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pp g p gg g abandonment activities.

Subsea Hardware Capex Forecast

B kl J 30 2016

$9,600 $1,000 s Subsea Capex, Quest May 2016 SS Products Backlog

Backlog at June 30, 2016

$6 400 $8,000 $800 SD in Million in Millions $4,800 $6,400 $400 $600 are Capex, US acklog, USD i $1,600 $3,200 $200 $400 bsea Hardwa Products Ba $0 $0 2011 2012 2013 2014 2015 2016* 2017F 2018F 2019F 2020F Sub OII SS

*June 30, 2016

Source: Quest Offshore, May 2016; Capex: hardware costs for subsea trees/control systems, manifolds, and production umbilicals; Includes S. America 13

Subsea Installations Forecast

$1,500 500 Tree Installations SSProducts Revenue $1,200 400 D in Millions ns $600 $900 200 300 Revenue, USD ee Installation $300 $600 100 00 SProducts R Tre $0 2011 2012 2013 2014 2015 2016F 2017F 2018F 2019F 2020F OII S

Source: Quest Offshore, May 2016

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Subsea Projects

22%

Revenue Contribution First Half 2016

Change out photo and replace with AUV Consist of Project Management Survey Subsea

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Consist of Project Management, Survey, Subsea Installation and IMR Services

Subsea Projects Overview

f

• Deepwater Multi-Purpose Supply Vessels

Spot or Contract Location Charter End 2 Owned

Assets Available for this Market

2 Owned Ocean Intervention Ocean Intervention II Ocean Evolution (available 2Q 2017) Spot Spot N/A GOM GOM N/A N/A N/A 4 Chartered with Term 4 Chartered with Term Normand Flower Ocean Alliance Ocean Intervention III Island Pride Spot Contract, Shell Contract, BP Contract GOM GOM

• W. Africa

India Dec ‘16 Mar ‘18 Jan ‘17 Nov ‘17

• Diving Support Vessels
• Survey/AUV Services acquired in 2015
• Survey/AUV Services, acquired in 2015
• Global Data Solutions, including AIRSIS, acquired in 2014

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Strong Balance Sheet and Liquidity

C i l S d All i

• Liquidity (at end of second quarter 2016)

$393 million of cash

Capital Sources and Allocations

• $393 million of cash
• $500 million undrawn revolving credit facility, expiring October 2020
• Only $19 million of debt maturities until October 2018
• Organic capital expenditures
• Expect to range from $100 million to $150 million in 2016
• Acquisitions
• Acquisitions
• Continue to consider investments that augment our service or product
• fferings

Di id d

• Dividends
• Subject to anticipated EPS levels, cash flow, liquidity and Board approval
• Consider share repurchases

p

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Leveraged to Deepwater

• Projects take years to develop
• Projects take years to develop
• Largely oil reservoirs
• With high production flow rates
• Largely oil reservoirs
• With high production flow rates
• With high production flow rates
• Well capitalized customer base

50% revenue from E&P majors in prior 3 years

• With high production flow rates
• Well capitalized customer base

50% revenue from E&P majors in prior 3 years

• ~50% revenue from E&P majors in prior 3 years
• Investment based on long-term commodity
• ~50% revenue from E&P majors in prior 3 years
• Investment based on long-term commodity

price expectations price expectations

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Long Term: Offshore is Essential

D R i Si ifi

Source of

90 Incremental Bbls Existing Fields Bbls

Deepwater Remains Significant

Source of Additional ~26Mm B/D Crude Production

80 e

32% 68%

60 70 d Condensate MB/D

68%

50 60 Crude and M

Offshore Onshore

40

Source: Morgan Stanley Research , Wood Mackenzie, Rystad Energy, and Company Data – March 2016

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Expect Extended Declines from Producing Fields

4.0 New Production from New Fields Decline from Aging Fields 3.0 3.5 Day 1 5 2.0 2.5 Barrels Per D 0.5 1.0 1.5 Million B 0.0 2014 2015 2016 2017 2018

Inverting Balance presented by Bloomberg; Source data from Rystad

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2016 Second Half Outlook

• Challenged market has not changed
• Aligning our operations with current activity
• Forecasting declines in major oilfield segments,

g j g , most notably:

• ROV: less utilization and lower average revenue per day
• Subsea Products: lower throughput and single digit margins
• Subsea Projects: impacted by Angola, although expecting some

seasonal uptick

• 2H16 vs 1H16 operational results lower

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Conclusion

• Longer term, deepwater is still critical to reserve replenishment
• Global provider in all phases of offshore oilfield life cycle, with

a deepwater focus p

• Further differentiate with integrated solutions
• Strong liquidity and cash flow

Maintain or grow our market positions

• Maintain or grow our market positions
• Emerge from the current cycle ready for the upturn

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EBITDA Reconciliation to Net Income

(USD i illi )

Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measurement. Oceaneering’s management uses EBITDA because we believe that this measurement is a widely accepted financial indicator used by investors and analysts to analyze and compare companies on the basis of operating performance, and that this measurement may be used by some investors and others to make informed investment decisions. You should not consider EBITDA in isolation from or as a substitute for net

(USD in millions)

1H 1H

investors and others to make informed investment decisions. You should not consider EBITDA in isolation from or as a substitute for net income or cash flow measures prepared in accordance with generally accepted accounting principles or as a measure of profitability or

• liquidity. EBITDA calculations by one company may not be comparable to EBITDA calculations made by another company. The

following table provides a reconciliation between net income (a GAAP financial measure) and EBITDA (a non-GAAP financial measure) for Oceaneering’s historical and projected results on a consolidated basis for the periods indicated:

Period Ended

2011 2012 2013 2014 2015 1H 2015 1H 2016

Net Income

235 7 289 0 371 5 428 3 231 0 135 0 47 4

Net Income

235.7 289.0 371.5 428.3 231.0 135.0 47.4

Depreciation & Amortization

151.2 176.5 202.2 229.8 241.2 121.5 119.8

Subtotal

386.9 465.5 573.7 658.1 472.2 256.5 167.2

Interest Expense/Income, Net

.2 2.3 1.7 4.4 23.4 11.5 10.3

Income Tax Expense

102.2 132.9 170.8 195.2 105.3 61.5 21.6

EBITDA

489.3 600.7 746.2 857.7 600.9 329.5 199.1

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Oceaneering ROV Leading Market Position

R l O d V hi l

Ownership Drill Support Market Share

Remotely Operated Vehicles

315 31%

OII Subsea 7

101 58%

Fugro DOF Subsea C-Innovations Helix Saipem TMT TMT Technip Harkand IKM Group Other

Worldwide Fleet 1027 Vehicles* 174 Floating Rigs Contracted** 1027 Vehicles

Source: *OII Estimates - December 2015; **IHS Petrodata and OII Estimates – June 30, 2016

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Oceaneering ROV Fleet

G hi P fil J 30 2016

41

Geographic Profile – June 30, 2016

108 31 41 21 53 64

GOM Africa Norway Brazil Asia/Pac Other

318 Vehicles

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Oceaneering ROVs on Vessels

J 30 2016 June 30, 2016

Locations Customers 23 18 46 42 26 21

GOM Africa Norway Other Operators Contractors

88 Vehicles

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Investor Relations Contact Suzanne Spera Director Investor Relations Director, Investor Relations 713-329-4707 InvestorRelations@Oceaneering.com

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