October 2009
Corporate Presentation
DisclaimerNo representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness ofthe information or opinions contained in this presentation Such information and opinions are in all events not current after the date of this presentation Certainthe information or opinions contained in this presentation. Such information and opinions are in all events not current after the date of this presentation. Certainstatements made in this presentation may not be based on historical information or facts and may be "forward looking statements" based on the currently heldbeliefs and assumptions of the management of Aban Offshore Limited (the “Company”), which are expressed in good faith and in their opinion reasonable,including those relating to the Company’s general business plans and strategy, its future financial condition and growth prospects and future developments in itsindustry and its competitive and regulatory environment.
F d l ki t t t i l k d k i k t i ti d th f t hi h th t l lt fi i l ditiForward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, financial condition,performance or achievements of the Company or industry results to differ materially from the results, financial condition, performance or achievementsexpressed or implied by such forward-looking statements, including future changes or developments in the Company’s business, its competitive environment andpolitical, economic, legal and social conditions. Further, past performance is not necessarily indicative of future results. Given these risks, uncertainties and otherfactors, viewers of this presentation are cautioned not to place undue reliance on these forward-looking statements. The Company disclaims any obligation toupdate these forward-looking statements to reflect future events or developments.
This presentation is for general information purposes only, without regard to any specific objectives, financial situations or informational needs of any particularperson. This presentation does not constitute an offer or invitation to purchase or subscribe for any securities of the Company by any person in any jurisdiction,including India and the United States. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract orcommitment to purchase or subscribe for any securities. The Company may alter, modify or otherwise change in any manner the content of this presentation,without obligation to notify any person of such change or changes. This presentation may not be copied or disseminated in any manner.
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Promoted by Mr M A Abraham in 1986 a first generation entrepreneur and has transformed into the
Aban Offshore Limited – Key Highlights
Among the 10 largest offshore drilling service providers in the world based on number of rigs (1)
Promoted by Mr. M.A.Abraham in 1986, a first generation entrepreneur and has transformed into the largest Indian private offshore drilling company in India
Operating in a recovering industry environment; Improved outlook for oil prices and drilling capex
Young and technically superior fleet from reputed yards; 45% of the fleet is less than 4 years old and most of the other rigs have undergone refurbishment in the last 3‐4 years
Long term contracts at attractive rates; diverse client base comprising domestic and international oil and gas companies
Highly experienced management and operating team
Impressive historical revenue growth with higher EBITDA margin amongst certain operators; Strong order backlog of US$ 2 372 million as on September 30 2009
3
backlog of US$ 2,372 million as on September 30, 2009
(1) Source: ODS‐Petrodata Offshore Rig Monthly August 2009 and Company information.
Creating Value Through Continuous Growth
2005
2009 Took delivery of 4 new vessels (Deep Drill 6,7,82005
2 jack‐up rigs (Aban V and Aban VI) and 1 drill ship (Aban Ice) added to portfolio
Launched Aban Singapore Pte Ltd. (ASPL) as a vehicle for international operations
Took delivery of 4 new vessels (Deep Drill 6,7,8 and Aban VIII) in FY08‐09
Fleet of 19 offshore drilling rigs and 1 FPU placing AOL among the leading offshore drilling asset owners in the world
2009for international operations
Placed order for a new premium jack‐up rig Aban VIII
20071994 Investment in renewable
2006
2007
1992A i d 300 ft j k
2006 Purchased Aban Abraham
Acquired 40% in Norway based Sinvest for US$2
Completed 100% acquisition of Sinvest
Aban Pearl added to portfolio
energy (wind)
Current capacity of 68.5 MW 2005
2001
1986 Aban Offshore Limited (“AOL”) t bli h d
Acquired a 300‐ft. jack‐up rig from Mahindra & Mahindra
$billion
Portfolio of 3 jack‐ups rigs (Deep Drill 1, 2, 3), 5 jack‐up rigs on order and a 50% interest in a drill ship Deep Venture
2001 Acquired Hitech Drilling Services, a Tata Group Company; portfolio of 4 rigs
1992
1994
(“AOL”) established
1987 Launch of contract drilling
Enables AOL to enter the FPSO(1)
business with the FPU ‘Tahara’ owned by Hitech
1986
1987
4
services; contract with ONGC for 2 jack‐up drilling rigs
(1) FPSO – Floating production, storage and offloading.
Estimated Global Offshore Spend (1)
Recovery in Oil Prices Resulting in Higher Capex OutlookOil Prices – Forward Curve (2)
7075808590
Europe / FS U21%
As ia‐Pac ific23%
Europe / FSU18%
Asia‐Pacific22%
US $48
US $53 US $55Estimated Global Offshore Drilling Expenditure (1)
US$266 US$275
6570
Nov-09 Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Dec-17A fric a / Middle Eas t
28%
Americ as28%
Africa / Middle East
31%Americas
29%
US $43
US$239
US$253
S$
bn
US
$ bn
2008E 2009E 2010E 2011E
Worldwide E&P expenditure is expected to continue in the near future to ~US$375 billion in 2011
2008E 2009E 2010E 2011E
US
Impact of Slowdown Outlookfuture to US$375 billion in 2011
– Growth in global offshore spend expected to be in line with E&P expenditure at US$275 billion in 2011
– A significant amount of this spending will be specifically on drilling rigs
Reduction in Rig hire activity
Decline in rig rates
Scrapping of fresh rig
Strong demand for deep water rigs
Strong demand in emerging economies like
5
pp g gbuilding programmes
emerging economies like Mexico, West Africa etc.
(1) Source: ODS‐Petrodata and Industry Research(2) Source: Bloomberg
Improved Outlook for Drilling Services in Past Six monthsHistorical Supply & Demand
Jack ups Semi submersibles Total
Over 50 new offshore drilling assets are
expected to be globally supplied over
the next 15‐18 months, adding ~10% to
the current global fleet Although this
Jack-ups Semi-submersibles TotalAug-09 Jul-09 Aug-08 Aug-09 Jul-09 Aug-08 Aug-09 Jul-09 Aug-08
North America 20 18 61 27 29 30 54 53 101North Sea 31 32 32 36 38 39 69 72 72Africa 15 15 25 20 19 23 45 45 56Latin America 49 51 47 43 42 37 104 105 95SE Asia/Australia 39 38 51 17 20 19 59 61 72 the current global fleet. Although this
additional supply is also expected to
replace part of the old rig fleet
Far East/India 61 62 49 6 7 8 76 77 65Middle East 72 69 82 2 1 1 74 70 83Mediterranean 23 25 28 6 7 5 31 33 34FSU/Eastern Europe 10 10 12 3 3 3 13 13 15Total 320 320 387 160 166 165 525 529 593Rig Supply 450 448 427 183 184 173 685 682 647W ld id Utili ti % 71 71 91 87 90 95 77 78 92
91.7%
95.7%Average Day Rates for International Jackups showing signs of improvement
Source: Industry Research
Worldwide Utilization % 71 71 91 87 90 95 77 78 92
Improving Utilisation Rates in certain regions
66.7% 66.9% 68.4%71.2% 70.4%
86.7%
67.8%
74.1%76.9%
64.2%
68.4%66.7%
64.2%
84.0%
signs of improvement
$100
$150
$200
$250
Af rica Eastern Europe North America Mediterranean Middle East SE Asia North Sea Far East Asia
1 Month Ago Current
$0
$50
$100
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
SE Asia West Af rica ME
6
Source: RigZone.comSource: Industry Research
Aban owns and operates a young fleet with 9 new rigs built in 2006 or later; The fleet comprises 15 Offshore Jack‐up Rigs, an FPSO 3 D ill hi d FPU
AOL’s Fleet Located in Strategic Geographical locations
FPSO, 3 Drill ships and an FPU.
RIG: Aban IILocation: IndiaSpecs: 250’ ISAge: 28 / 2
RIG Ab III
RIG: Aban VILocation: Middle EastSpecs: 250’ ICAge: 34 / 7
RIG Ab VII
RIG: Deep Driller 2Location: Middle EastSpecs: 350’ ICAge: 3 / ‐
RIG: Deep Driller 4Location: Middle EastSpecs: 375’ ICAge: 2 / ‐
RIG: Deep Driller 5Location: Middle EastSpecs: 350’ ICAge: 2 / ‐
RIG: Aban VIIILocation: Middle EastSpecs: 375’ ICAge: 1 / ‐
RIG: Aban IIILocation: IndiaSpecs: 300’ ICAge: 35 / 6
RIG: Aban IVLocation: IndiaSpecs: 300’ ICAge: 26 / 10
RIG: Aban VIILocation: Under MarketingSpecs: 250’ ICAge: 36 / 3
RIG: Deep Driller 1Location: Under MarketingSpecs: 375’ ICAge: 3 / Age: 26 / 10
RIG: Aban VLocation: IndiaSpecs: 300’ ICAge: 27 / 7
Age: 3 / ‐
RIG: Deep Driller 8Location: India
RIG: Deep Driller 6Location: Under MarketingSpecs: 350’ ICAge: 1 / ‐
RIG: Deep Driller 7Location: Mexico
RIG: Aban IceLocation: IndiaSpecs: 1,000’ DSAge: 34 / 0
Specs: 350’ ICAge: 0 / ‐
RIG Ab Ab h
RIG: Aban PearlLocation: VenezuelaSpecs: 1,250’ SSAge: 32 / 0
Specs: 375’ ICAge: 1 / ‐
RIG: Deep Driller 3
OperationalNot OperationalFPSOJackup RigDrill Ship
RIG: Aban AbrahamLocation: West AfricaSpecs: 6,600’ DSAge: 33 / 0
RIG: Deep VentureLocation: West AfricaSpecs: 4,200’ DSAge: 28 / 2
RIG: TaharaLocation: IndiaSpecs: FPUAge: 36 / 12
RIG: Deep Driller 3Location: MalaysiaSpecs: 350’ ICAge: 3 / ‐
7
Source: Company
Age: Number of years from manufacture date / Number of years from last refurbishment date
Age: 28 / 2 g /
Long term contracts resulting in stable cash flow for near future.
Long‐term contracts
2009 2010 2011 2012 2013 2014Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Drillship - Aban Abraham $325
Drillship - Aban Ice $123
$Drillship - Deep Venture $525
FPU - TAHARA $49
Jack-up - Aban II $74
Jack-up - Aban III $157
Jack-up - Aban IV $157p
Jack-up - Aban V $157
Jack-up - Aban VI $83
Jack-up - Aban VII Under Marketing
Jack-up - Aban VIII $170
Under MarketingJack-up - Deep Driller 1 Under Marketing
Jack-up - Deep Driller 2 $177
Jack-up - Deep Driller 3 $165
Jack-up - Deep Driller 4 $177
Jack-up - Deep Driller 5 $177
Jack-up - Deep Driller 6 Under Marketing
Jack-up - Deep Driller 7 $106
Jack-up - Deep Driller 8 $156
Semi-sub Aban Pearl $358
8
Note: The figures at the end of each bar represent the per day US$ ‘000 rate at which these rigs are contracted
Senior Management Designation
Strong Management & Operating TeamKey Operating Personnel
Designation
Mr. V. S. Rao Chairman• Experience: Over 42 years in the industry. A member of the
board since 1991, was designated as Chairman of the Board in 2005
Mr. A. P. S. SandhuChief Operating Officer
• Qualifications: Graduate in Engineering
• Experience: Over 30 years in drilling and oil field services. Prior to Aban he was working with ONGC
Mr. Larry Albert Noel Austin
Operations Manager
• Qualifications: Graduate in Electrical Engineering (Norther Alberta Institute , Canada)
• Experience: Over 30 years in the drilling industry. Prior to Aban he
Mr. P. Murari Vice Chairman• Experience: Senior positions in the Government of India
and Government of the State of Tamil Nadu. He has been a member of the Board since 1996
Managing
• Qualifications: Graduate in Engineering and a post graduate in Management Studies
AustinJackups
p y g yhas worked with Global Santa Fe, Seadrill, Dixilynn, Smedvig, Tera Nova & Texaco Global
Mr.S. SrinivasanVice President Corporate Planning
• Qualifications: Graduate in Chemical Engineering (Indian Institute of Technology Chennai) and a Management graduate (Indian Institute of Management, Calcutta)
• Experience: Over 18 years in corporate finance, project financing and equity markets Prior to Aban he was working with ICICI Bank
Mr. Reji AbrahamManaging Director
• Experience: Over 16 years of experience in the Industry. Joined the Board in 1994 and was appointed as a whole‐time director in 1997 and promoted to Managing Director in 2004
Mr. Satish Chandra Gupta
Director
• Qualifications: Post graduate in Commerce
• Experience: Over 35 years in all the areas of banking. Prior to Aban, he was the head Punjab National Bank
and equity markets. Prior to Aban he was working with ICICI Bank
Mr. V. Ramasubramanian
General manager Business Development
• Qualifications: Graduate in Technology in Mechanical Engineering, post graduate in Diploma Management
• Experience: Over 18 years in business development, marketing and operations in engineering industry. Prior to Aban he was working with ArcelorMittal
• Qualifications: Graduate in Business Administration (Royal j
Mr. K. Bharathan Director
• Qualifications: Chartered Accountant
• Experience: Over 32 years in commercial and development banking and insurance
Mr. K. M. Jaya RaoNominee Director ICICI Bank Ltd
• Qualifications: Graduate in Engineering
• Experience: Over 27 years in banking
Mr. Adrian GreyQC HSE Manager
Military College UK)
• Experience: Over 37 years in the drilling industry in the filed of compliance, quality, health and safety. Prior to Aban, he has worked with companies like IADC, Transocean, Amoco
Mr. Vijay SahetaGeneral Manager Finance
• Qualifications: Chartered Accountant
• Experience: Over 19 years in accounts, taxation, insurance and
Mr. P. Venkateswaran
Deputy Managing Director
• Qualifications: Graduate in Engineering (Indian Institute of Technology, Madras)
• Experience: Over 34 years in operations. He was appointed as Deputy Managing Director in 2007
Mr C PDeputy Managing
• Qualifications: Chartered Accountant and a graduate in Law
Finance finance
Mr. Narayanan Venkatramanan
General Manger Finance
• Qualifications: Chartered Accountant
• Experience: Over 20 years in accounts, taxation and finance
Mr. Alun RobertsOperations Manager Floaters
• Experience: Over 40 years in the drilling industry. Prior to Aban he has worked with companies like Global Santa Fe, Transocean, Robertson Research and IDC
9
Mr. C.P. Gopalkrishnan
Managing Director & Secretary
• Experience: Over 28 years in finance. He was Appointed as Deputy Managing Director in 2007 and is an associate of Company Secretaries of India
AOL – Strategy For Future
Deleverage and strengthen our balance sheet
Focus on cash flow generation by increasing
our balance sheetutilisation levels
Pursue strategic growth opportunities in theF i k t growth opportunities in the
longer termFocusing on new markets
Continue to focus on health, safety and
environment standards
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environment standards
Overview of Financial Performance
FY2009
Sharp decline in oil prices from high of US$147 / barrel to low of US$35 / barrel
Increase in drilling activity
Improvement in contract day rates
FY2010 Outlook
Lack of funds for onward investment in E&P sector
Reduction in rig leasing activity and impact on t
Improvement in contract day rates
Global demand expected to rebound by ~7% in 2010 (largely led by non OPECD countries)
Industry Events
rates
Fleet Status 4 new builds delivered
Aban Abraham upgradation project
Aban Ice refurbishment completed and contracted for 3 years
completed
5 year contract for Aban Pearl
2 new builds placed on long term contracts
Long term contracts for 4 new builds
AOL Progress
contracts
Revenue Growth
49% revenue growth over FY08 6 % growth over Q1 2009
Debt refinancing resulting in debt maturities for
11
g glonger term of upto 10 years
Source: Annual Report
Debt Repayment Schedule Debt Profile (1)
Improved Debt Outlook
US$ mn 2010 2011 2012 2013 2014 2015–2019
Loan / Bond Amortisations
184 215 276 365 326 1,107
p y
Notes and Bond
Total Debt of: INR 166 bn / ~US$3,279 (1) mn
Loan / Bond Bullet Repayments
226 160 374 – – 46
Total Repayments 410 375 650 365 326 1,153
Rupee Loans16.8%
F i
Notes and Bond Loans24.7%
Foreign Currency Term
Loan58.5% Key Highlights
Debt repayment relatively spread out over 10 years with no large
Loan Description US$ mn
Rupee Loans 551
Foreign Currency Term Loan 1,917
Debt repayment relatively spread‐out over 10 years with no large repayments falling due in any year
Bank loans (rupee as well as foreign currency) largely from Indian banks, who have been supportive of the Company’s growth
g y
Notes and Bonds Loans 811
Total 3,279
12
(1) Debt as of March 31, 2009(2) FX Rate INR / US$: 50.73 (March 31, 2009)
EBITDA Margin (2)Fleet size (1) PAT Margin (2)
Benchmarking with Peers
47
57
136
Di d
Noble
Transocean
62.1%
65.1%
Diamond
Ensco
37.0%
47.0%
Diamond
Ensco
31
41
46
47
Hercules
Pride
Ensco
Diamond
56.2%
56.8%
Transocean
Aban
33.2%
37.0%
36.9%
Transocean
Pride
Diamond
20
22
23
31
Aban
Row an
COSL
Hercules
45.5%
48.3%
Pride
Scorpion
15.7%
25.0%
Aban
COSL
16
16
18
Maersk Drilling
Nabors
Seadrill
41.9%
44.1%
Seadrill
COSL10.0%
-7.8% Seadrill
Nabors
10
11
11
ONGC
National Drilling
Saipem
34.9%
35.9%
Nabors
Hercules
-96.3%
-12.9%
Hercules
Scorpion
13
(1) Source: ODS‐Petrodata Offshore Rig Monthly August 2009 and Company information(2) EBITDA and PAT margins for the last financial year ended from company annual reports
EBITDA and EBITDA Margin (1)Revenue (1)
Historical Growth Overview
EBITDA and EBITDA Margin ( )Revenue
17,32752.4%
56.8%15,000
20,000
30,501
30,000
40,000
3,474
10,72548.3%
0
5,000
10,000
7,187
20,470
0
10,000
20,000
Operating Cash Flow (3)Profit After Tax (2)
FY07 FY08 FY09EBITDA (INR in Million) EBITDA Margin (%)
0FY07 FY08 FY09
Revenue (INR in Million)
8,341
21,077
8,000
16,000
24,000
5,407
15.7%
5.8%2 000
3,000
4,000
5,000
6,000
3,190
0
,
FY07 FY08 FY09Operating Cash Flow (INR in Million)
1,230
(140)
(1.7)%
(1,000)
0
1,000
2,000
FY07 FY08 FY09PAT (INR in Million) PAT Margin (%)
14
PAT (INR in Million) PAT Margin (%)
(1) Excludes Other Income of INR 4,043 mm (FY 09), 880 mm (FY 08) and 881 mm (FY 07)(2) Represents profits after tax and minority interest (including other income). PAT margin computed on revenues (including other income)(3) Represents net cash from operating activities (post taxes and working capital changes)
Net Debt to EBITDADebt to Equity (1,2)
Leverage and Returns Profile
Net Debt to EBITDADebt to Equity ( , )
20x
25x
ity 20
25
30
BITD
A
20.4x16.1x
9.5x
0x
5x
10x
15x
Deb
t / Eq
u
27.4
11.6 9.3
0
5
10
15
Net
Deb
t / E
B
0FY07 FY08 FY09 FY07 FY08 FY09
Return on Capital Employed (ROCE) (4,5)Return on Net Worth (RONW) (3,5)
17,440
31.0%
15.1%
6 000
12,000
18,000
t in
INR
Mill
ion
13%
21%
29%
138 553183,795
8.4%
2 7%
6.1%
100,000
150,000
200,000
t in
INR
Mill
ion
4.00%
6.00%
8.00%
10.00%
5,3088,119
-2.6%0
6,000
FY07 FY08 FY09
Am
ount
-3%
5%
Equity RONW
138,553
113,834
2.7%
0
50,000
FY07 FY08 FY09
Am
ount
0.00%
2.00%
Capital Employed ROCE
15
(1) Equity represents Share Capital and Reserve and Surplus(2) Debt Includes Secured and Unsecured Loans(3) Return on Net Worth = PAT / Equity(4) Return on Capital employed = EBIT / (Equity + Loan Funds)(5) All figures are for financial year end
Appendix
Water Depth / Drilling Depth Year Built (Last Refurbished) Location / Geography
Rate ('000 USD) Contract End
Portfolio Overview
Drillship – Aban Abraham 6,600 / 25,000 1976 (2009) West Africa $325 Jun‐10
Drillship – Aban Ice 1,000 / 20,000 1975 (2009) India $123 (1) Sep‐12
Drillship – Deep Venture (2) 4,200 / 20,000 1981 (2007) West Africa $525 Feb‐11
FPU – TAHARA 800 / NA 1973 (1997) India $49 Oct‐10
Jack‐up – Aban II 250 / 20,000 1981(2007) India $74 (1) May‐10
Jack‐up – Aban III 300 / 20,000 1974 (2003) India $157 Apr‐11
Jack‐up – Aban IV 300 / 25,000 1983 (1999) India $157 Jan‐11
Jack‐up – Aban V 300 / 25,000 1982 (2002) India $157 May‐11
Jack‐up – Aban VI 250 / 20,000 1975 (2002) Middle East $83 (3) Jan‐14
Jack‐up – Aban VII 250 / 20,000 1973 (2006) ‐‐ ‐‐ Under Marketing
Jack‐up – Aban VIII 375 / 30,000 2008 Middle East $170 Jun‐12
Jack‐up – Deep Driller 1 375 / 30,000 2006 ‐‐ ‐‐ Under Marketing
Jack‐up – Deep Driller 2 350 / 35,000 2006 Middle East $177 Oct‐12
Jack‐up – Deep Driller 3 350 / 35,000 2006 Malaysia $165 Oct‐12
Jack‐up – Deep Driller 4 375 / 30,000 2007 Middle East $177 Oct‐12
Jack‐up – Deep Driller 5 350 / 35,000 2007 Middle East $177 Sep‐12
Jack‐up – Deep Driller 6 350 / 35,000 2008 ‐‐ ‐‐ Under Marketing
Jack‐up – Deep Driller 7 375 / 30,000 2008 Mexico $106 Nov‐11
Jack‐up – Deep Driller 8 350 / 35,000 2009 India $156 Dec‐09
Semi‐sub Aban Pearl 1,250 / 25,000 1977 (2009) Venezuela $358 Oct‐14
17
(1) Operating day rate in INR converted to US$ at an exchange rate of 50.73 (March 31, 2009)(2) Chartered by Venture Drilling AS(3) Operating day rate in EUR converted to US$ at an exchange rate of 1.325 (March 31, 2009)
Group Structure
Ab Off h Ltd (1) India
SingaporeNorway
Aban Offshore Ltd. (1)Aban II,III,IV,V,VI, Aban Ice , Tahara
Aban Holdings Pte Ltd
100%
Aban Singapore Pte Ltd
Aban International Norway ASAban Abraham Pte Ltd
100%
Aban 7 Pte Ltd
100%
Aban 8 Pte Ltd
100%100%
Aban Pearl Pte Ltd
100%
100%
Sinvest AS
Aban Abraham Pte Ltd. Aban 7 Pte Ltd. Aban 8 Pte Ltd.
60%
100%
40%
50%
Aban Pearl Pte Ltd.
Aban VIII Aban PearlAban VIIAban Abraham
DDI Holding AS
Deep Drilling Invest Pte Ltd
100%
Venture Drilling AS
50%
100%
Deep Drilling 1 Pte Ltd
100%
Deep Drilling2 Pte Ltd
100%
Deep Drilling 3 Pte Ltd
100%
Deep Drilling 4 Pte Ltd
100%
Deep Drilling 5 Pte Ltd
100%
Deep Drilling 6 Pte Ltd
100%
Deep Drilling 7 Pte Ltd
100%
Deep Drilling 8 Pte Ltd
100%
18Note: Text underlined are rig owning companies
Deep Drill 2 Deep Drill 3 Deep Drill 5 Deep Drill 6 Deep Drill 8Deep Drill 1 Deep Drill 4 Deep Drill 7
Thank You