Investor Presentation April 208
Forward-Looking Statements Statements contained in this investor presentation that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 933 and Section 2E of the Securities Exchange Act of 934. Forwardlooking 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 involving expected financial performance, effective tax rate, expected expense savings, day rates and backlog, estimated rig availability; rig commitments and contracts; contract duration, status, terms and other contract commitments; estimated capital expenditures; letters of intent or letters of award; scheduled delivery dates for rigs; the timing of delivery, mobilization, contract commencement, relocation or other movement of rigs; our intent to sell or scrap 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, suspension or termination 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, including terminations for convenience (without cause); the cancellation of letters of intent or letters of award or any failure to execute definitive contracts following announcements of letters of intent, letters of award or other expected work commitments; 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; tax matters including our effective tax rate; and cybersecurity risks and threats. In addition to the numerous factors described above, you should also carefully read and consider Item A. 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 0-K, as updated in our subsequent quarterly reports on Form 0-Q, 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
Perspectives on Offshore Drilling Why Invest in Ensco? 3
Offshore Drilling is a Cyclical Industry 00% Global Fleet Utilization Offshore drilling is highly cyclical with six significant upcycles since 985 90% 80% 70% 60% +03 rigs 7 months +70 rigs 34 months +53 rigs 7 months +8 rigs 22 months +82 rigs 28 months +95 rigs 40 months Average length of upcycle: 26 months Average increase in contracted rig count: 24% During the same period there has been six major downcycles Average decrease in contracted rig count: 2% Most recent downcycle was particularly severe, with contracted rig count declining 38% 50% Expect offshore recovery to be protracted and phased Current contracted rig count ~3% higher than Jan. 207 lows Source: IHS Markit RigPoint as of April 208 Significant upcycle defined as a 0%+ increase in the number of contracted rigs 4
Utilization of Offshore Drilling Rigs Driven by Customer Spending 00 Offshore Drilling Rig Utilization & E&P Capex 40 Customers offshore project expenditures significantly impact global rig utilization 90 80 70 30 20 0 Global rig utilization has generally moved in line with the rate of change in customer spending over time 60 0 50 40 30 Global Fleet Utilization (%, left axis) -0-20 -30 Change in E&P Offshore Capex (2Y rolling avg %, right axis) While nominal offshore capital expenditures are expected to bottom in 208, aggregate offshore capital expenditures are forecast to grow at ~0% compound annual rate through 2027 Source: IHS Markit RigPoint, Rystad Energy 5
Offshore Production Critical to Meeting Future Global Energy Demand 36 34 32 30 28 26 24 22 Offshore Oil Production mm bbl/day ~5.5 million bbl/day Source: Rystad Energy, IHS Markit Strategic Horizons Offshore oil production defined as oil, NGL & other liquids production Offshore production represents ~30% of global production Current production levels driven by historical investment with increased spending needed to meet future oil demand and replace production depletion Average annual depletion rates of ~% and ~5% for deep- and shallow-water production, respectively Average time from FID to first production of ~50 months for deepwater projects and ~20 months for shallow-water projects 6
Higher Oil Prices Support Increased Offshore Project Sanctioning 00 80 60 40 20 Offshore Project Approvals & Oil Prices 20 00 80 60 40 20 Brent crude oil prices have recently risen above $70/bbl and have now remained above $60/bbl for six consecutive months 0 - Offshore FIDs (#, left axis) Brent Crude Oil Avg Price ($/bbl, right axis) Average Offshore Breakeven Oil Prices $/bbl $20 - $40 < $40 < $40 < $40 $33 $27 Statoil Respol Chevron Petrobras Shell Maersk During 207, offshore project sanctioning as measured by FID approval more than doubled 206 levels Many offshore projects are economic at breakeven oil prices well below current levels Pre-FID Norwegian Shelf Projects Pre-FID Shallow- Water Projects Brownfield US GOM Deepwater Projects Pre-FID Pre-Salt Projects Pre-FID Deepwater Projects Acquired Maersk portfolio Source: AllianceBernstein, FactSet, Rystad Energy, IHS Strategic Horizons; Statoil 7 February 207 Capital Markets Day; Repsol 23 February 207 earnings conference call; Chevron 29 April 206 earnings conference call; Petrobras CEO Pedro Parente via Bloomberg 0 October 206; Shell 2 February 207 earnings conference call; Maersk 8 February 207 earnings conference call 7
Fixtures and Contracted Rig Years For Floaters and Jackups Have Increased Floaters High Spec Jackups 50 500 50 250 20 400 20 200 90 300 90 50 60 200 60 00 30 00 30 50 0 2007 2008 2009 200 20 202 203 204 205 206 207 0 0 2007 2008 2009 200 20 202 203 204 205 206 207 0 Fixtures (#, left axis) Rig Years (#, right axis) Fixtures (#, left axis) Rig Years (#, right axis) Source: IHS Markit RigPoint High-spec jackup defined as jackups with water depth rating of 350 ft. or greater 8
Jan-4 Apr-4 Jul-4 Oct-4 Jan-5 Apr-5 Jul-5 Oct-5 Jan-6 Apr-6 Jul-6 Oct-6 Jan-7 Apr-7 Jul-7 Oct-7 Jan-8 Apr-8 Increasing Customer Activity has Led to Improved Utilization 00% 90% 80% Global Fleet Utilization Utilization of offshore rigs has stabilized since reaching bottom in late 206 and increased modestly during 207 after nearly three years of declines 70% 60% 50% Recent improvements in both total and marketed utilization are due in part to a higher number of contracted rigs Total Marketed Source: IHS Markit RigPoint as of April 208 9
Substantial Portion of Current Global Supply are Retirement Candidates Delivered Rigs Global Rig Fleet Floaters Jackups Under Contract 23 30 Future Contract 2 25 Idle / Stacked 56 32 Marketed Fleet 200 458 Non-Marketed 58 74 Total Fleet 258 532 Marketed Utilization 72% 7% Total Utilization 56% 6% Newbuild Rigs Uncontracted 28 28 Build in Brazil / China 4 62 Total Newbuilds 42 90 ~60 floaters could be candidates for retirement based on age and contract expirations ~80 jackups 2 could be retired as expiring contracts and survey costs lead to the removal of older rigs from drilling supply Uncontracted newbuilds expected to be delayed further, while several newbuilds in Brazil and China are unlikely to join the global fleet Source: IHS Markit RigPoint as of April 208 Includes floaters >30 years of age that are idle without follow-on work or have contracts expiring before year-end 208 without follow-on work and floaters 5 to 30 years of age that have been idle for more than two years and without follow-on work 2 Includes jackups >30 years of age that are idle without follow-on work or have contracts expiring before year-end 208 without follow-on work and jackups 5 to 30 years of age that have been idle for more than two years and without follow-on work 0
Retirements Expected to Lead to Future Supply Contraction 258 Current Total Supply 4 Uncontracted Build in Brazil Newbuilds Newbuilds Illustrative Floater Supply 28-30 >30yrs idle w/o future contract -7 >30yrs rolling off contract by YE208-2 5-30yrs idle for over 2yrs 23 Illustrative Total Supply 8 Nonmarketed 23 Illustrative Marketed Supply The global floater count could decline by 27 rigs, or ~0%, if adjusted for likely retirements and newbuild deliveries Excluding another 8 floaters that are not currently marketed, illustrative marketed supply of 23 compares to contracted floater count of 44 532 Current Total Supply 40 Chinese Newbuilds 2 Illustrative Jackup Supply 28-8 Uncontracted Newbuilds >30yrs idle w/o future contract -59 >30yrs rolling off contract by YE208-2 42 5-30yrs idle for over 2yrs Illustrative Total Supply 40 Nonmarketed Illustrative Marketed Supply When adjusting for likely retirements and newbuilds the jackup count could decline by rigs, or ~2% Excluding another jackups that are not currently marketed, illustrative marketed supply of 40 compares to contracted jackup count of 326 Source: IHS Markit RigPoint as of April 208, Ensco analysis Build in Brazil newbuilds exclude 0 rigs that are unlikely to be delivered 2 Assumes 65% of Chinese newbuilds enter the global supply
Perspectives on Offshore Drilling Why Invest in Ensco? 2
The Offshore Driller of Choice High-Quality Rig Fleet Safety & Operational Excellence - Largest fleet in the sector - Diversified fleet with exposure to shallow- and deep-water segments - Safety metrics consistently better than industry average¹ - 99% fleet-wide operational utilization in Q 208² Solid Financial Position - $2.9 billion of liquidity - $236 million of debt maturities to 2024 Systems, Processes & Intellectual Property - Significant improvement in subsea equipment related downtime since 205-30 recent patent filings 3 Broad Global Footprint & Customer Base 8 consecutive years rated # in total satisfaction among offshore drillers 4 IADC industry statistics as of 4Q7 2 Operational utilization is adjusted for uncontracted rigs and planned downtime 3 Includes provisional and non-provisional patent filings completed or in progress since Q5 4 Independent industry survey by EnergyPoint Research 3
High-Quality Rig Fleet Diverse Fleet Capable of Meeting a Broad Spectrum of Customers Well Program Requirements Ultra-Deepwater Drillships Versatile Semisubmersibles Premium Jackups Total Rigs: 2 3 36 Includes two drillships and one jackup under construction, excludes managed rigs and non-operating rigs announced for retirement 4
Fleet Renewal Strategy Has Improved Our Ability to Meet Customer Demand 7% 3% 20% 50% 203 Fleet Composition 30% 8 29 6G+ Floaters Post-2002 Jackups Newbuild Deliveries Acquired Assets Divestitures 2G-5G Floaters 34% 3% 7% 28% Current Pre-2002 Jackups 65% Fleet repositioned to focus on newest, most technically-capable assets while maintaining exposure to both shallow- and deepwater markets 40 rigs are either a 6 th generation or greater floater or a modern highspecification jackup, up significantly from just 2 in 203 Rebalanced fleet better enables us to meet customer demand for highest-specification assets Current fleet includes two drillships and one jackup under construction, excludes managed rigs and non-operating rigs announced for retirement 5
Highlights of Select Premium Assets Technical Specifications 2,000 water depth & 40,000 total drilling depth rating Dual 7-Ram BOPs Dual 2.5 million lb. derricks Importance to Customers Water depth rating and total drilling depth enable rig to operate in the most challenging ultra-deepwater environments Second BOP reduces flat time between wells, and 7 th Ram optimizes well control, safety and redundancy as well as saving time during testing Dual derricks allow the rig to conduct simultaneous activities, reducing customers project time and costs, while higher hookload capacity increases a rigs ability to drill/complete deeper, more complex wells Technical Specifications Moored/dynamicallypositioned configuration Proprietary ENSCO 8500 Series design Managed pressure drilling ready Importance to Customers Added flexibility for programs that straddle both shallow- and deep-water Flexible deck space well-suited for plug-and-abandon and intervention work Increased drilling efficiency for complex wells, plus monitoring and response capabilities to mitigate the risk of well-control incidents Total Rigs: Technical Specifications 40,000 total drilling depth & 2.5 million pound quad derrick Patented Canti-Leverage Advantage SM technology Automated drill floor Importance to Customers Top-tier hoisting capacity allows for drilling of long-reach wells Enhanced hoisting capacity at the farthest reaches of the cantilever leads to fewer rig moves Greater automation allows offline activities to be completed while continuing to drill 6
Proprietary Solutions to Industry Challenges Industry Challenges Equipment Maintenance Equipment maintenance can be intrusive and untimely, requiring disassembly and downtime Time-based maintenance can lead to extra costs when parts are replaced before the end of their useful life Reliability-Based Maintenance Proprietary Solutions Ensco is transitioning to a reliability-based maintenance model through in-house development of systems that apply real-time monitoring, machine learning and predictive analysis to drilling equipment The Ensco Predictive Intelligence Center increases operational uptime and decreases lifecycle costs by optimizing asset selection and maintenance activities The Ensco Asset Management System has contributed to a 70% improvement in subsea equipment-related downtime Going on Location Going-on-location conditions have traditionally been determined using estimates of wave movements, which is commonly conservative and can cause unnecessary downtime while waiting-on-weather PinSAFE System Proprietary technology collects and analyzes real-time motions data of a floating jackup to determine if conditions are suitable for lowering legs to seabed Significant cost savings by optimizing jackup moves and reducing downtime spent waiting on weather Improves safety by removing the need for human interpretation, ensuring consistent adherence to accepted level of risk when going-on-location Reduction in subsea equipment-related downtime over total operating hours for floaters during 206 & 207 as compared to 205 7
Safety & Operational Excellence Safety and Operational Performance Provides Competitive Advantage and Benefits Financial Results 0.7 0.6 0.5 0.4 0.3 0.2 0. 0.0 203 204 205 206 207 Q8 95% Total Recordable Incident Rate Industry Ensco Fleet-Wide Operational Utilization 2 95% 96% 99% 99% IADC industry statistics as of 4Q7 2 Operational utilization is adjusted for uncontracted rigs and planned downtime 3 Based on 207 annual revenue 99% 203 204 205 206 207 Q8 Critical to customers, in particular for complex well programs Safety metrics consistently better than industry averages Improved safety and operational results each successive year during industry downturn % improvement in operational utilization increases annual revenue by approximately $20 million 3 8
Solid Financial Position Strong Balance Sheet Provides Financial Flexibility Customers want financially strong counter-parties that are able to: Maintain rigs Provide stable operations Fulfill long-term contracts Flexibility to make selective investments in: Technology & innovation Opportunistic asset enhancements & high-grading Financial Position 3 March 208 $2.9 billion of liquidity $0.9 billion of cash and short-term investments $2.0 billion revolving credit facility $2.7 billion of contracted revenue backlog $4. billion of net debt & 32% net debt-to-capital ratio Source: Company Filings Net debt is a non-gaap financial measure and should be considered as a supplement to, and not as a substitute for, or superior to, financial measures prepared in accordance with GAAP. Net debt-to-capital is calculated as follows: long-term debt of $5.0 billion, less $0.9 billion of cash and short-term investments, divided by the sum of long-term debt of $5.0 billion plus shareholders equity of $8.6 billion, minus $0.9 billion of cash and short-term investments. 9
Manageable Debt Maturities in Light of Strong Balance Sheet & Liquidity $ millions Available Revolver Cash & ST Inv. $2,867 Other Considerations Undrawn revolver extends beyond all nearterm debt maturities No secured debt in capital structure Generated ~$320M of net proceeds from asset sales since year-end 203 ~$265M of newbuild commitments remaining $2,003 ~$236 million of Maturities Before 2024 $,805 $850 $,000 $,00 $864 $23 $4 $955 $669 $50 $300 Liquidity 208 209 2020 202 2022 2023 2024 2025 2026 2027 2040 Cash & Short-Term Investments Revolving Credit Facility Senior Notes Convertible Senior Notes 2044 Source: Company Filings Borrowing capacity under revolving credit facility is $2.0B through September 209, $.3B from October 209 through September 2020 and $.2B from October 2020 through September 2022 20
Global Footprint with Diverse Customer Base Customer Base Spans Majors, National Oil Companies and Independents North Sea Mediterranean Southeast Asia Gulf of Mexico West Africa Middle East Brazil Australia Note: Certain customers may not currently have backlog 2
Higher Levels of Customer Activity Have Led to Increased Contract Awards As Customer Activity Increases, Ensco Has Won More New Contracts Than Any Offshore Driller 7% 7% Percentage of New Contracts Awarded since 207 6% 5% 4% Ensco Company Company 2 Company 3 Company 4 Company 5 Company 6 3% 3% New contracts have added more than 36 rig years 2 to Ensco s backlog Diverse rig fleet and global footprint have led to floater and jackup contracts across several regions Won approximately 8% of all ultra-deepwater contracts in 207 Three multi-year jackup contracts awarded recently Source: IHS Markit RigPoint; Ensco analysis Note: Independent companies with most new contract awards include Aban Offshore, Maersk Drilling, Noble, Paragon Offshore, Shelf Drilling and Transocean Calculated by dividing the number of rig years contracted by Ensco for fixtures classified as New Mutual in IHS Markit RigPoint (approximately 48) by the corresponding industry-wide total (approximately 283) 2 Calculated based on date of contract execution; number of rig years awarded differs from totals in industry databases due to timing delay between date of contract execution and public disclosure of new contracts in certain cases. 22
$25K Jackup Dayrates $00K $75K High-Quality Fleet Provides Meaningful Cash Flow in Market Recovery Scenario Historical Average Day Rates Illustrative Annual EBITDA Contribution from Modern High-Specification Assets ($ millions) 500 $K/day $450K/day Floater Dayrates 400 $250K $350K $450K 300 $250K/day 88,546 2,274 200 00 $25K/day 983,7 2,439 0 $75K/day 2002 2004 2006 2008 200 202 204 206,47,876 2,604 Floaters Jackups Based on historical build costs, an average day rate of $465K for floaters and $50K for jackups would be needed to meet a 5% unlevered internal rate of return 2 Since 2000, the average build costs for floaters was ~$665 million, while jackups averaged ~$200 million Ensco s modern high-specification assets can generate meaningful cash flow for debt service and capital commitments in normalized day rate environment Source: IHS Markit RigPoint Fleet includes 2 6G+ floaters and 9 jackups delivered in 2002 or later. EBITDA calculated using illustrative dayrates and a 95% utilization assumption less average opex of $50K/day for a floater and $50K/day for a jackup over 365 days. 2 Simplified discounted cash-flow analysis assumes 35-year useful life, average opex of $50K/day, $5 million of annual maintenance costs, $0 million of survey costs every five years for floaters; and 30-year useful life, average opex of $50K/day, $2.5 million of annual maintenance costs, $7 million of survey costs every five years for jackups; and 95% operational utilization. Analysis excludes debt service costs, shore-based support costs, taxes, and assumes no residual value at the end of the asset life. 23
Summary Offshore sector has entered a different point in the cycle Brent crude prices have increased significantly from cyclical lows Stabilization in oil prices has led to higher levels of offshore project sanctioning with the expectation that this trend continues Offshore rig utilization to benefit from increasing customer demand and attrition of older, less capable assets from the global fleet Ensco s strengths provide competitive advantage during market recovery High-quality rig fleet and track record of safety and operational performance ahead of industry averages Technology and innovation improve operational results and augment service offering Solid financial position bolstered by one of the strongest liquidity positions in the offshore drilling sector Global footprint and diverse customer base Leader in new contract awards as customer activity has increased Fleet provides meaningful cash generation in market recovery scenario 24
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