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TheStreet Open House

Ensco Management Host 2012 Investor Day (Transcript)

Stocks in this article: ESV

Today, as a result of the successful long-term implementation of our strategy, we have the newest ultra-deepwater fleet in the industry, the largest number of active premium jackups amongst the major offshore drillers and a wide range of capabilities, including ultra-deepwater drillships, semis and high-specification jackups. We have critical mass in all of the strategic growth markets. We have engineering talent that we believe gives us a competitive advantage in addressing our customers' drilling requirements, which you will see in greater detail when John Knowlton and Richard Roper present later this morning. And we serve a diverse client base, including super majors, national oil companies and independents. This client base, once again, voted Ensco #1 in terms of customer satisfaction in the most recent EnergyPoint customer satisfaction survey that was just recently issued.

This slide shows a wide range of advanced drilling technologies that we operate today to provide drilling services to customers in virtually any shallow or deepwater basin around the world. This diverse product offering of high-spec, well-maintained equipment enables our customers to achieve the lowest delivered cost for construction of their wells and generate significant repeat business.

Now let's look at each rig type. We have the newest fleet of ultra-deepwater rigs amongst our peers, capable of drilling in 7,500 feet of water or greater. This will continue to be true for the foreseeable future given our scheduled deliveries of newbuild rigs that I'll discuss in a moment. Some of our competitors have recently noted significant downtime for their deepwater fleets. We believe our downtime will be less than our peers over time given our mature and cost-effective maintenance philosophy and the fact that the average age of our ultra-deepwater fleet is just 2 years, as shown here.

We have 21 deepwater rigs that can drill in 4,500 feet of water or greater. It is the second youngest fleet of its kind, as shown on the left, with an average age of just 7 years, and this is less than half the average age of the next youngest fleet. We also have the largest fleet of active premium jackups with a total of 40 rigs. The numbers shown here are for active rigs, which excludes rigs that are cold stacked or under construction. And today, Ensco only has 6 cold-stacked jackups remaining in our fleet. And I think, as most of you know, we've sold 5 jackups over the last 2 years, so we feel we're well ahead of the curve in this regard.

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