1 Investor Presentation March 2015
Forward-Looking Statements Statements contained 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. Forward-looking statements include words or phrases such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “could,” “may,” “might,” “should,” “will” and similar words and specifically include statements regarding expected financial performance and return of capital, effective tax rate, day rates and backlog; the timing of delivery, mobilization, contract commencement, relocation or other movement of rigs; and general market, business and industry conditions, trends and outlook. Such statements are subject to numerous risks, uncertainties and assumptions that may cause actual results to vary materially from those indicated, including commodity price fluctuations, customer demand, new rig supply, downtime and other risks associated with offshore rig operations, relocations, severe weather or hurricanes; changes in worldwide rig supply and demand, competition and technology; future levels of offshore drilling activity; governmental action, civil unrest and political and economic uncertainties; terrorism, piracy and military action; risks inherent to shipyard rig construction, repair, maintenance or enhancement; possible cancellation or suspension of drilling contracts as a result of mechanical difficulties, performance, customer finances, the decline or the perceived risk of a further decline in oil and/or natural gas prices, or other reasons; the outcome of litigation, legal proceedings, investigations or other claims or contract disputes; governmental regulatory, legislative and permitting requirements affecting drilling operations; our ability to attract and retain skilled personnel on commercially reasonable terms; environmental or other liabilities, risks or losses; debt restrictions that may limit our liquidity and flexibility; our ability to realize the expected benefits from our redomestication and actual contract commencement dates; cybersecurity risks and threats; and the occurrence or threat of epidemic or pandemic diseases or any governmental response to such occurrence or threat. In addition to the numerous factors described above, you should also carefully read and consider “Item 1A. Risk Factors” in Part I and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of our most recent annual report on Form 10-K, which are available on the SEC’s website at www.sec.gov or on the Investor Relations section of our website at www.enscoplc.com. 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, except as required by law. 2
Profile • #1 in customer satisfaction – five consecutive years • Highest net income margins among major competitors • Best ever total recordable incident rate in 2014 • High-quality fleet of floaters and jackups • Broad diversification: customer, geography, rig type • Capital management flexibility – $1.4 billion of cash and short term investments – $2.25 billion revolving credit facility – investment grade credit ratings – $9.7 billion of contracted revenue backlog • 2%+ dividend yield 3
4Q14 Results • $546 million cash flow from operating activities – 98% operational utilization for jackups – 90% operational utilization for floaters • Fleet highgrading continues – classified 4 rigs as discontinued operations – cold stacking 7 held-for-sale rigs to quickly reduce expenses • $3.9 billion total non-cash impairments – $3.0 billion goodwill – $925 million asset • Total debt-to-capital ratio increased to 42% 4
Additional Actions Taken in Response to Market Downturn • Reduced quarterly dividend to $0.15 per share to improve capital management flexibility during downturn • Decrease operating expenses by cold stacking four rigs in continuing operations – three jackups in U.S. Gulf of Mexico and ENSCO 8502 – with limited near-term contracting opportunities • Reducing offshore discretionary compensation and onshore support costs – 9% unit labor cost decrease beginning 2Q15 for offshore compensation – 15% Reduction in Force for onshore personnel including corporate staff o $27 million annualized savings beginning in 2Q14 o $5 million up-front severance costs in 1Q14 to achieve savings • Negotiating with vendors and suppliers to lower costs 5
Market Environment • Sharp drop in commodity prices accelerated beginning late fourth quarter 2014 • New lows/increased volatility for oil prices during customers’ budget season • Capital expenditures will decline in 2015 as customers re-evaluate programs in light of lower commodity prices • Customers shortening contracts where permitted and requesting concessions • Uncontracted newbuilds and customer sublets creating additional supply • Aging of current global fleet should lead to more retirements and stacking, especially as rigs approach 30/35 year surveys • Some newbuilds being cancelled and others being delayed 6
Declining Commodity Prices and Increasing Volatility 20% 10% 0% -10% -20% -30% -40% -50% -60% Brent WTI 7 Source: Thomson One; commodity prices indexed to 31 December 2013 close prices; data through 23 February 2015
Current Market Floaters Jackups Contracted 238 338 Uncontracted 28 33 Active Stacked Marketed Rigs 20 38 Fleet Total 286 409 % Contracted 83% 83% Under Construction 58 101 On Order / Planned 25 17 Newbuilds Total 83 118 Contracted 55% 8% Uncontracted 45% 92% 8 Source: IHS-ODS Petrodata as of February 2015; competitive marketed floaters and jackups; jackups are independent leg cantilever rigs
Newbuild Jackup Order Book 118 Total 8% 9 Contracted, Established Drillers 42 67 Uncontracted, Uncontracted, 35% 57% Established Non-Established Drillers Drillers 9 Source: IHS-ODS Petrodata as of February 2015; marketed competitive jackups
Jackup Supply 45% CAGR 121 172 77 57 399 394 355 352 Feb. 2015 Feb. 2016 Feb. 2017 Feb. 2018 < 35 years old >= 35 years old Source: IHS-ODS Petrodata as of February 2015; marketed competitive independent leg cantilever jackups 10
Newbuild Floater Order Book 83 Total 46 37 45% 55% Contracted Uncontracted Source: IHS-ODS Petrodata as of February 2015; marketed competitive floaters 11
Floater Supply 65 53 50 7% CAGR 48 291 285 266 238 Feb. 2015 Feb. 2016 Feb. 2017 Feb. 2018 < 35 years old >= 35 years old Source: IHS-ODS Petrodata as of February 2015; marketed competitive floaters 12
Newbuild Deferrals and Cancellations Atwood • Delivery dates for 2 drillships with 2015 expected deliveries delayed by six months each Transocean • Delivery dates for 5 jackups with 2016 and 2017 expected deliveries delayed by ten months on average Other • Reports suggest up to 12 floaters under construction for SETE Brasil program may be cancelled • 6 jackups ordered by non-established drillers were cancelled in 2H14 13
Increase in Rig Retirements and Cold Stacking Floaters Jackups 30 12 25 10 10 20 8 15 6 10 4 6 18 7 4 3 1 5 2 2 5 2 1 1 1 1 0 0 1Q14 2Q14 3Q14 4Q14 YTD15 1Q14 2Q14 3Q14 4Q14 YTD15 Retired Cold Stacked Retired Cold Stacked Source: IHS-ODS Petrodata; includes announced retirements 14
Ensco’s Proactive Fleet Management 2Q14 • Moved five floaters to held for sale to proactively reduce expenses; one sold for scrap value 3Q14 • Sold four jackups for more than $200 million 4Q14 • Moved three rigs to held for sale and cold stacking rigs to quickly reduce operating expenses YTD15 • Cold stacking four rigs in continuing operations 15
Well Positioned to Manage Through Downturn • Fleet highgrading – 7 newbuild rigs with differentiated designs under construction – major upgrade investments expected to benefit 2015 – mooring capability to be added to select ENSCO 8500 Series rigs – 7 held-for-sale rigs as of 4Q14; 19 rigs sold since beginning of 2010 – 2015 results to benefit from newbuilds and prior upgrades • Expense management discipline • Leading net income margins among major competitors 16
Well Positioned to Manage Through Downturn • Capital management flexibility • Global presence and diverse customer base – operations across six continents – extensive customer relationships: NOCs, Majors, IOCs 17
Organic Growth: Newbuild Contracts/Deliveries 2012.75 2013.75 2014.75 2015.75 2016.75 2017.75 2018.75 2019.75 2014 2015 2018 2019 2013 2016 2017 2020 ENSCO DS-7 3 yrs with Total 3 yrs with Total ENSCO 120 2+ yrs with Nexen 2+ yrs with Nexen ENSCO 121 2 yrs w/ Wintershall 2 yrs w/ Wintershall Contracted 2 yrs with NAM 2 yrs with NAM ENSCO 122 ENSCO DS-8 5 yrs with Total 5 yrs with Total 3 yrs with ConocoPhillips 3 yrs with ConocoPhillips ENSCO DS-9 ENSCO 110 ENSCO DS-10 ENSCO 123 ENSCO 140 ENSCO 141 Drillships Premium jackups 18
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