[PPT] - Pareto Conference Seadrill Per Wullf , Seadrill Chief Executive PowerPoint Presentation

SLIDE 1

Pareto Conference – Seadrill

Per Wullf, Seadrill Chief Executive Officer

SLIDE 2

Seadrill is ten this year

Listed in Oslo in 2005
Acquired Smedvig in early

2006 - 4 rigs in North Sea; 7 tender rigs in SE Asia

2005 Seadrill Rev: $27mn

(part year)

2

2005 / 2006

Receives US$ 4.1bn

commitment for 3 x 6 years contracts with Petrobras 2008

Seadrill Limited listed on The

New York Stock Exchange 2010

Seadrill

Partners LLC listed on NYSE 2012

Receives US$4 bn

commitment for 19 rig years with BP

69 rigs, over 8,000

employees; recognized industry leader

2014 Seadrill consolidated

(inc. NADL and Sevan) plus Seadrill Partners revenue: $6.3bn Today

Delivery of

UDW drillships – Polaris, Capella

SLIDE 3

We’ve delivered on all five focus areas

3

Shipyards 2 Funding 3 Customers 4 Safe operations 1 Cash savings 5

SLIDE 4

Continued focus on safe, efficient operations

4

Safe operations 1

Utilization across the fleet has been high… …and HSE performance solid

Improved trend in HSE focus areas (YTD Aug versus same period last year)

– Hurts

47%

– Dropped Objects

31%
Continual improvement of the QHSE management system

– Global alignment of HSE Directives – Systematic compliance process (Corporate Audit, Regional and Rig Verification)

Technical utilization high at 95% YTD August (equal to results same period last year)
13 class projects executed YTD all on time and budget
Four drill ships put in service since August 2014 (West Saturn, West Neptune, West

Jupiter and West Carina); all operating with technical utilization above 96%

* Under Water Survey In Lieu of Drydocking

SLIDE 5

Discussions with shipyards are progressing

5

Shipyards 2 Rigs

West Draco
West Dorado
West Titan
West Proteus
West Rhea
West Tethys
West Hyperion
West Umbriel
West Dione
West Mimas
West Aquila
West Libra
West Rigel

Original schedule

Q3 2015
Q4 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q1 2017
Q2 2017
Q4 2015
Q4 2015
Q1 2015

Revised schedule

Q2 2017
Q2 2017
Q1 2016
Q1 2016
Q2 2016
Q3 2016
Q2 2016
Q3 2016
Q1 2017
Q2 2017
Q2 2016
Q2 2016
Q4 2015

Rig delivery timing Rig type

Drillship
Drillship
Jack-up
Jack-up
Jack-up
Jack-up
Jack-up
Jack-up
Jack-up
Jack-up
Drillship
Drillship
Semi-submersible

SLIDE 6

Continuing to deliver on funding requirements

6

Look back since last year

Over the last year…

– Instalments paid on loan facilities – Secured loan facilities refinanced – New debt - newbuilds, jack-up facility, others req. – Added cash to the balance sheet

Agreed to a revised Leverage Ratio with our banking group

Funding 3

Going forward

For the rest of 2015 we have the following funding

requirements – West Mira facility – Bond maturing October, likely repaid with excess cash

For 2016 we have two facilities maturing

– West Eminence facility in June, balloon payment – 4 jack-ups facility maturing October, balloon payment

xx
US$1.1bn
US$1.8bn
US$4.25bn
US$760mn
xx
US$450mn
US$350mn
xx
US$337.5mn
US$200mn

SLIDE 7

Commercial discussions progressing

7

Customer

Pemex
ENI
Total
Customer “A”

Concession

$60mn
$32mn
$16mn
$23mn

Benefits received

2 year extension
18 month extension
6 month extension
3 year extension

Net Backlog Impact + $205mn + $53mn + $46mn + $113mn

Customers 4

SLIDE 8

Approximately $500mn in cash savings

8

Targets identified early
Process in place

Cash savings 5

Performance measured monthly
Tracked at multiple levels
Estimated $500mn cash savings
Savings 2x original target

SLIDE 9

9

Floater cash flow breakeven

6 Months Ago

“Typical Floater”
1 – 2 years
$350,000 - $400,000

Today

“Typical Floater”
6 months – 2 years
$250,000 - $300,000

1 Year Ago

“Typical Floater”
2 – 3 years
$475,000 - $525,000

Instalments based on $450m, 10 year profile Debt interest 3.5% per annum

$45 Interest Expense $232 Operational Breakeven EBITDA Breakeven $187 Cash Savings – OPEX only G&A $25 OPEX $175 Cah Flow Breakeven $352 Principal Repayment $120

$13

I n Thousand $ per day

SLIDE 10

10

Jack-up cash flow breakeven

6 Months Ago

“Typical Jack-up”
6 months - 2 years
$130,000
“Typical Jack-up”
1 well - 2 years
$90,000 - $100,000

1 Year Ago

“Typical Jack-up”
1 - 2 years
$150,000

Today

Instalments based on $100m, 10 year profile Debt interest 3.5% per annum

I n Thousand $ per day

OPEX Principal Repayment Cah Flow Breakeven G&A Cash Savings – OPEX only $60 $10 $65 $15 $80 $107 EBITDA Breakeven Interest Expense

$5

$27 Operational Breakeven

SLIDE 11

Source: IHS. Petrodata as of August 1st, 2015 Seadrill includes SDRL, SDLP, NADL & Sevan. West Sirius is considered utilized as it earns income UDW rigs is specified as rigs over 7,499 ft UDW under construction without contracts are excluded

We’re having very difficult conversations

Floater contract coverage

44% 65% 84%

Seadrill Contract Coverage

Contracted Uncontracted

2015 2016 2017

75% 25% 74% 26% 51% 49%

UDW Utilization – Seadrill vs. Competition

1 1 4 8 2 6 13 10 9 22 23 5 9 100% 91% 90% 85% 74% 71% 60% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 5 10 15 20 25 30 35 Noble Diamond Ocean Rig Seadrill Transocean Pacific Ensco Number of UDW rigs Idle Working Working % of Total

Excluding Newbuilds

11

SLIDE 12

12

Jack-up contract coverage

44% 65% 84%

Seadrill Contract Coverage

Contracted Uncontracted

2015 2016 2017

High Spec JU Utilization – Seadrill vs. Competition

68% 32% 43% 57% 32% 68%

*

1 4 1 2 2 5 6 2 8 20 5 8 8 17 13 3 89% 83% 83% 80% 80% 77% 68% 60% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 5 10 15 20 25 30 Shelf Seadrill Paragon Noble Transocean Rowan Ensco Hercules Idle Working Working % of Total

Source: IHS. Petrodata as of August 1st, 2015 Seadrill includes SDRL, NADL & SeaMex. High Spec Jack-ups are specified as rigs over 350 ft Jack-ups under construction without contracts are excluded

Excluding Newbuilds

SLIDE 13

Projected long-term active fleet of floaters

Source: ODS Petrodata, Morgan Stanley Research

Adjusted long term active floater fleet

283 283 280 26 358 78 78 29

50 100 150 200 250 300 350 400 450

Marketed Fleet Not Marketed Newbuild Sete Newbuilds Supply Potential Scrappings Long Term Supply

How long will it take for the industry to get back into balance?

13

SLIDE 14

Projected long-term active fleet of jack-ups

Source: ODS Petrodata, Morgan Stanley Research

Adjusted long term active jack-up fleet

480 537 467‐612 57 667 55‐200 130

100 200 300 400 500 600 700 800

Marketed Fleet Not Marketed Newbuild Supply Potential Scrappings Long Term Supply

How long will it take for the industry to get back into balance?

14

SLIDE 15

30 year + 28% 26‐30 years 6% 21‐25 years 1% 11‐20 years 11% <=10 years 54%

Average floater age today: 17 years

15

Average floater age today: 17 years

Floater fleet analysis

Source: IHS Petrodata, Fearnley Securities

Fleet Age Floater Scrapping Picking up

5 3 16 9 2 11 7 5 2 1 3 7 4 1 1 2 1 2 15 23

5 10 15 20 25 1985 1990 1995 2000 2005 2010 YTD 2015

SLIDE 16

Average floater age today: 17 years

16

Average floater age today: 17 years

Jack-Up fleet analysis

Source: IHS Petrodata, Fearnley Securities

Fleet Age Jackup Scrapping Picking up

8 4 15

2 4 6 8 10 12 14 16

2013 2014 2015

30 year + 51% 26‐30 years 3% 21‐25 years 2% 11‐20 years 4% <=10 years 40%

SLIDE 17

Delivered on the most important actions this year

Conclusion

17

Strengthened the balance sheet
Reset operating costs and saved cash
Negotiated effectively with customers, shipyards, and banks