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Investor PresentationSeptember 2016
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Forward-Looking Statements
Statements contained in this press release that are not historical facts are forward-looking statements within the meaningof Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-lookingstatements 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 financialperformance, effective tax rate, day rates and backlog, estimated rig availability; rig commitments and contracts; contractduration, status, terms and other contract commitments; letters of intent or letters of award; scheduled delivery dates forrigs; the timing of delivery, mobilization, contract commencement, relocation or other movement of rigs; our intent to sellor scrap rigs; and general market, business and industry conditions, trends and outlook. Such statements are subject tonumerous 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 withoffshore 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 andeconomic 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 ofmechanical difficulties, performance, customer finances, the decline or the perceived risk of a further decline in oil and/ornatural gas prices, or other reasons, including terminations for convenience (without cause); the cancellation of letters ofintent or letters of award or any failure to execute definitive contracts following announcements of letters of intent orletters of award; 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 andretain skilled personnel on commercially reasonable terms; environmental or other liabilities, risks or losses; debtrestrictions that may limit our liquidity and flexibility; our ability to realize the expected benefits from our redomesticationand actual contract commencement dates; cybersecurity risks and threats; and the occurrence or threat of epidemic orpandemic diseases or any governmental response to such occurrence or threat. In addition to the numerous factorsdescribed 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 recentannual report on Form 10-K, as updated in our subsequent quarterly reports on Form 10-Q, which are available on theSEC’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 publiclyupdate or revise any forward-looking statements, except as required by law.
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• Market Conditions
• Decisive actions to persevere through the downturn– capital & expense management
– fleet restructuring
– investments in engineering and innovation to improve operational &safety performance
• Outlook for offshore drilling– efficiency & cost improvements
– attrition of older rigs & deferral/cancellation of newbuild deliveries
– catalyst markets
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$218$208
$181
$126
$120
$0
$50
$100
$150
$200
$250
$ billions
Major & European IOCs’ UpstreamCapital Spending Outlook
Market Conditions
Source: IHS EnergyNotes: Group of Major & European integrated oil companies includes BP, Chevron, Eni, ExxonMobil, OMV, Repsol, Shell/BG, Statoil and Total;historical years include acquisitions; 2016 and 2017 estimates exclude acquisitions
• Substantial reduction inupstream capex amongMajor & European IOCs’since 2013
− unprecedented decline in exploration spending
• 2016 upstream capex forMajor & European IOCs’expected to decline ~30%year-over-year, butbottoming in 2017
• Significant pullback inspending will affect supplyin the future
- 45%
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• Capital management
• Expense management
• Fleet restructuring
• Investments to improveoperational & safetyperformance– engineering & innovation
– process improvements
DecisiveActions ToPersevere
Through TheDownturn
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• Accessed the debt markets twice to bolster liquidity and refinance near-term debt maturities
• Increased revolver to $2.25 billion and extended to 2019
• Reduced capital expenditures and dividend to preserve cash
• Delayed delivery of newbuilds, postponing ~$500 million of final milestonepayments
• Repurchased debt in 2Q16 at substantial discounts resulting in ~$500million of pre-tax cash savings
• Raised equity to further enhance liquidity position
• Significantly reduced leverage
Proactive Capital Management
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Benefits of RecentCapital Management Actions
Note: Net debt is a non-GAAP financial measure defined as long-term debt less cash and short-term investments. Non-GAAP financial measures shouldbe considered as a supplement to, and not as a substitute for, or superior to, financial measures prepared in accordance with GAAP. 4Q15 net debt-to-capital is calculated as follows: long-term debt of $5.9 billion, less $1.3 billion of cash and short-term investments, divided by the sum of long-term debtof $5.9 billion plus shareholders’ equity of $6.5 billion, minus $1.3 billion of cash and short-term investments. 2Q16 net debt-to-capital is calculated asfollows: long-term debt of $4.9 billion, less $1.8 billion of cash and short-term investments, divided by the sum of long-term debt of $4.9 billion plusshareholders’ equity of $7.9 billion, minus $1.8 billion of cash and short-term investments.
2.25 2.25
1.31.8
4Q15 2Q16
Liquidity
Revolver Cash + Short-term investments
$ billions
4Q15 2Q16
Net Debt-to-Capital Ratio
$3.55
$4.0541%
28%
$1.5 billionreduction in
net debt
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Debt Maturity Schedule
$454
$760 $778
$623$669
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2027 2040
$300
2044
$ millions
$1,025
No debtmaturitiesuntil 2019
$150
$2 billion of debt maturitiesover next eight years
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Capital Expenditure Outlook
$100
$375
$225
2H16E 2017E 2018E 2019E
Newbuild Capital Expenditures
New rig construction
$ millions
$0
Note: Estimates for 2016, 2017, 2018 and 2019; final capex estimates to be determined upon completion of annual budget process and subject tochange based on rig contracting; new rig construction represents contractual commitments plus anticipated capex associated with rig construction;2016 rig enhancements capex is specific to a mooring upgrade for an additional ENSCO 8500 Series rig, while 2017, 2018 and 2019 rigenhancements are estimates and not earmarked for any specific projects at this time; capex for minor upgrades and improvements are based on thecurrently active fleet.
55 50 50
10 25 50
2H16E 2017E 2018E
Other Capital Expenditures
Rig enhancements Minor upgrades & improvements
$ millions
$65 $75$100
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2015 Actions
• 15% reduction in offshore unit labor cost
• $60+ million of annual savings from 27% reduction in onshore supportheadcount
– consolidated business unit reporting structure from five to three
– centralized certain functions
• $100+ million of additional contract drilling and G&A expense savings
– repair and maintenance rate reductions and lower rig insurance premiums
– other savings through negotiated discounts with vendors
Recent Actions
• Recently instituted a lower base salary structure for new hire offshore crews
• Further streamlining organizational structure: shore-based operational support,offshore labor pool and additional corporate staff department centralization
Expense Management Actions
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Fleet Management Strategy
• Leverage record uptime/safety performance to negotiate extensions forcontracted rigs
• Maintain warm stacked rig availability in each region in order to bid intonew opportunities, examples include:– West Africa: ENSCO DS-7
– U.S. Gulf of Mexico: ENSCO 8503 & ENSCO 68
– Asia: ENSCO DS-9, ENSCO 8504* & ENSCO 106
– Middle East: ENSCO 140
– North Sea: ENSCO 120/1*
• Preservation stack excess high-spec rig capacity to prudently reduceexpenses, yet maintain high-spec capacity that may be reactivated within90 – 120 days
• Retire older, less capable rigs as they roll off contract as part of continuoushigh-grading/expense management
*Note: Current contract expires in October 2016.
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Stacking & Reactivation Costs
Rig Type
Upfront Costto
PreservationStack
Average Estimated DailyOperating Expenses Estimated Cost
to ReactivateWarmStack
PreservationStack
Drillship $5 million$40k
per day$15k
per day$25 - $35 million
8500 SeriesSemi
$5 million$32k
per day<$10k
per day$25 - $35 million
High-SpecJackup
$1 million$20k
per day*<$5k
per day$5 million
*Note: ENSCO 140 daily stacking costs covered by shipyard for up to two years.
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(1) Includes ENSCO DS-10 newbuild currently scheduled for delivery in 1Q17(2) Includes ENSCO 7500 that is expected to be retired from Ensco’s go-forward fleetNote: adjusted for 2011 acquisition of Pride International; ultra-deepwater defined as 7500 ft. or greater
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Fleet Restructuring: Floaters
Newbuilds(1)Current
FleetYear-End
2009
Retirements& Sales(2)
+13 -10 20
16.8 years Lower average fleet age
Greater drilling capabilities
9.2 years
4 ultra-deepwatercapable floaters
7 floaters with15k psi BOPs
15 ultra-deepwatercapable floaters
18 floaters with15k psi BOPs
Enhanced well control
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Fleet Restructuring: Jackups
CurrentFleet
Year-End2009
+5 -24 32
ENSCO 141Scheduled Delivery: 3Q16
ENSCO 123Scheduled Delivery: 1Q18
Under Construction
Jackup sales since 2009 havegenerated ~$600 million in proceeds
Newbuilds(1)
Retirements& Sales(2)
(1) Includes ENSCO 140 newbuild that was delivered in August 2016(2) Includes ENSCO 56, ENSCO 81, ENSCO 82, ENSCO 86, ENSCO 90 & ENSCO 99 that are expected to be retired from Ensco’s go-forward fleetNote: adjusted for 2011 acquisition of Pride International
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Investment in Engineering:8500 Series Mooring Upgrade
Source: IHS-ODS Petrodata as of August 2016; Ultra deepwater defined as 7500 ft. or greater
Dynamically Positioned
295
Rig CountGlobal FloaterFleet
Ultra-deepwater capable
15K+ psi & 6+ ram BOP
8 mooringwinches
193
162
127
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• Low-cost mooringupgrade increases theversatility of our 8500Series rigs, placingthem among a selectgroup of floaters withsuperior technologicalcapabilities and theability to operate in adynamicallypositioned and/ormoored capacity
ENSCO 8503
ENSCO 8505
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• We continue to invest inthree core programs:
− improving the drilling process
− asset uptime and efficiency
• Ensco Asset ManagementSystem
− re-engineering the support structure
Investment in Innovation:Operational & Safety Results
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Improved Operational Utilization
98.5%
99.0%99.1%
99.5%
2013 2014 2015 1H16
Jackups
92.0% 92.9%
94.0%
99.1%
2013 2014 2015 1H16
Floaters
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Excellent Safety Performance
Total RecordableIncident Rate
• Record 2015 andYTD16 TRIR
• Leading-edge safetymanagement systems
• Enhancing processsafety to drive furtherimprovements
0.0
0.2
0.4
0.6
0.8
1.0
1.2
2008 2009 2010 2011 2012 2013 2014 2015 YTD2016
Ensco Industry
Note: IADC industry statistics are as of 1Q16.
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Net Income MarginLargest Offshore Drillers
ESV SDRL RDC NE RIG DO
27%
24%
20%17% 16% 16%
Source: FactSet as of August 2016; sum of trailing eight quarters of net income divided by sum of trailing eight quarters of revenue. FactSet's datais based on aggregation of information collected from industry equity research analysts and may not be based on GAAP reported financial data.
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High Levels of Customer Satisfaction
Rated #1• Total Satisfaction
• Safety & Environment
• Performance & Reliability
• Job Quality
• Special Applications
• Ultra-Deepwater Wells
• Deepwater Wells
• Harsh Environment Wells
• Horizontal & Directional Wells
• Shelf Wells
• North Sea
• Middle East
• Asia & Pacific Rim
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Outlook for
Offshore Drilling
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Offshore Exploration & Production
• Offshore production is ~33% of global supply
• Offshore reserves are a critical part of major E&P portfolios andare vital to the economies of several countries
• Excessive costs/inefficiencies crept into sector during the $100+oil environment
• Industry is proactively responding to commodity price pressuresand breakeven commodity prices for offshore programs aredeclining
• Unprecedented decline in E&P spending will lead to supply sidechallenges – the longer the duration of the pullback, the greaterthe chance of significant upward movements in commodity prices
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Catalyst
Markets
Offshore
Rig Supply
Path to Recovery
BreakevenEconomics
Commodity
• Improvement /stabilization in oilprices
• Re-engineering /standardization /innovation
• Cost deflationand efficiencygains
• Brazil opens pre-salt to moreplayers
• Mexico offshorelease sales andentrance ofinternationaloperators
• Retirement ofolder, lesscapable assets
• Deferral andcancellation ofnewbuilddeliveries
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• Cost estimates reduced to less than $9 billion from priorestimate of $20 billion
• Project re-engineering through standardization and scopeoptimization, coupled with industry deflation, resulted insignificantly less capital required to develop approximately90% of resources
Offshore BreakevenEconomics Improving
BPMad DogPhase 2
ShellVito
StatoilJohan
Castberg
• Lowered estimated breakeven cost from >$60/bbl to $45/bblthrough project re-scoping
• Reduced breakeven cost from >$80/bbl to <$45/bbl throughsupply chain savings, optimized project design andstandardized and simplified solutions
Recent Customer Commentary on Deepwater ProjectsOffshore Outlook
• Customers attentionhas turned to projectre-engineering,efficiency gains andbetter expensemanagement
• Cost deflation acrosssupply chain:operators, servicecompanies
• Break-eveneconomics areimprovingsignificantly foroffshore projects
Sources: Statoil 4 February 2016 Capital Markets Day; BP 17 June 2016 Bloomberg interview; Shell Capital Markets Day 7 June 2016
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• Cost reductions have led to an average project breakevenof $40 to $45 per barrel
• Average breakeven prices for future projects onNorwegian continental shelf have been reduced from $70per barrel to approximately $40 per barrel
• Project breakevens for pre-FID deepwater projects havebeen reduced to $45 per barrel on average
− Brazilian pre-salt project breakevens under $40 per barrel on average
Offshore BreakevenEconomics Improving
Sources: Shell Capital Markets Day 7 June 2016; Maersk Earnings Release 12 August 2016; Statoil 29 August 2016 Upstream Interview; Chevron29 April 2016 earnings conference call
• Deepwater single-well breakeven economics between $20per barrel and $40 per barrel for brownfield developmentsin U.S. Gulf of Mexico
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Strategic Combinations & AlliancesAmong Offshore Service Companies
Strategic combinationsand alliances drive greaterefficiencies and lower the
breakeven commodityprices for offshore projects
Innovation, efficienciesand cost reductions in
deepwater projects
Enhance project delivery,improve recovery and
optimize cost/efficiency ofsubsea developments
Overhaul subsea fieldoperations to drive
efficiencies
Integrated FPSO solutionsto reduce costs of offshore
developments
Optimize the cost andefficiency of subsea well
intervention systems
Develop productionsolutions to boost output,increase recovery rates
and reduce costs forsubsea fields
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Attrition of Older Rigs
60 more floaters could be retired by year-end 2017 if attritioncontinues at similar rates observed throughout the downturn
Retired to Date63 floaters retired
since 3Q14
Currently Idle~35 floaters >30 years ofage idle without follow-on work could be retired
Expiring Contracts~25 floaters >30 years of
age have contracts expiringbefore YE17 without follow-
on work could be retired
Source: IHS-ODS Petrodata as of August 2016; competitive jackups are independent leg cantilever rigs, ‘retired’ includes scrapped rigs, announced scrapping and rigs convertedto non-drilling units.Historical attrition ratio of 88% for floaters older than 35 years of age and 67% for floaters between 30 and 35 years of age applied annually to rigs that are currently idle or rollingoff contract for each age category.
Up to 150 additional jackups could be retired as expiring contracts andsurvey costs lead to the removal of older rigs from drilling supply
Retired to Date20 competitivejackups retired
since 3Q14
Currently Idle87 competitive
jackups >30 years ofage idle without follow-on work could be retired
Expiring Contracts63 jackups >30 years of
age have contracts expiringbefore YE17 without follow-
on work could be retired
FL
OA
TE
RS
JA
CK
UP
S
28
Newbuild Floater Order Book
Source: IHS-ODS Petrodata as of August 2016; marketed competitive floaters
2Uncontracted,
On Order
3Contracted
45%
8 – 29SETE Brasil
28Uncontracted,
UnderConstruction
5%
3%
47%
News reports suggestSETE Brasil programcould be reduced to 8
newbuilds in total
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Newbuild Jackup Order Book
Source: IHS-ODS Petrodata as of August 2016; marketed competitive jackups (independent leg cantilever rigs)
? – 61Uncontracted,Speculators
37Uncontracted,
EstablishedDrillers
7Contracted,Established
Drillers
35%
7%
58%
Zero rigs beingbuilt in China byspeculators havebeen contracted
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Jackup Delivery Deferrals
05
1015202530
1Q
14
2Q
14
3Q
14
4Q
14
1Q
15
2Q
15
3Q
15
4Q
15
1Q
16
2Q
16
3Q
16
4Q
16
1Q
17
2Q
17
3Q
17
4Q
17
1Q
18
2Q
18
3Q
18
4Q
18
1Q
19
2Q
19
3Q
19
4Q
19
1Q
20
2Q
20
3Q
20
4Q
20
May 2014 Delivery Schedule
Delivered Under Costruction
05
1015202530
1Q
14
2Q
14
3Q
14
4Q
14
1Q
15
2Q
15
3Q
15
4Q
15
1Q
16
2Q
16
3Q
16
4Q
16
1Q
17
2Q
17
3Q
17
4Q
17
1Q
18
2Q
18
3Q
18
4Q
18
1Q
19
2Q
19
3Q
19
4Q
19
1Q
20
2Q
20
3Q
20
4Q
20
August 2016 Delivery Schedule
Delivered Under Costruction
Source: IHS-ODS Petrodata as of August 2016Note: August 2016 delivery schedule includes 20 new orders and excludes 11 orders cancelled since May 2014.
112 Scheduled Deliveries42 Actual Deliveries
119 Scheduled Deliveries 26 Scheduled Deliveries
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Future Catalyst Markets: Brazil
• In 1Q16, the Brazilian Senate passed abill that would eliminate requirement forPetrobras to manage all pre-saltoperations and hold a minimum 30%stake in pre-salt projects
• More recently, Statoil conditionallyacquired Petrobras’ 66% operatinginterest in BM-S-8 offshore Brazilincluding the Carcará discovery for $2.5billion
• Diversification of customer base offshoreBrazil is ongoing with outstanding tendersfrom Premier, Total and Chevron
“We believe in the strongfundamentals of Brazil
and the fundamentals ofits geology. We will belooking at a substantialpart of our production
from Brazil.”
– Ben van Beurden,Shell CEO
February 2016
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Future Catalyst Markets: Mexico
• During 4Q15, an auction was completedfor shallow-water blocks offshore Mexico,awarding licenses to several explorationand production companies
• Deepwater blocks are scheduled to beauctioned in late 2016 with 26 E&Psregistered for participation includingseveral integrated oil companies
“Regardless of whathappens in the
international context,Mexico will move forward
with the energy reformimplementation.”
– Enrique Peña Nieto,President of Mexico
February 2016
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Recap
• Proactive steps to:
– improve capital structure
– reduce expenses
– restructure fleet
– invest in engineering and innovation that improves operational and safetyperformance
• Positive steps taken by the offshore sector to reduce breakeveneconomics are building the foundation for future market recovery
• Rig attrition improving rig supply dynamics
• Our actions and investments position Ensco to capitalize as wenavigate through the market cycle
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