Rod Larson President and CEO Scotia Howard Weil 46 th Annual Energy Conference March 27, 2018 New Orleans, Louisiana Oceaneering.com 1
Forward-Looking Statements Statements we make in this presentation that express a belief, expectation, or intention are forward looking. Forward-looking statements are generally accompanied by words such as “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “plan,” “forecast,” “budget,” “goal,” or other words that convey the uncertainty of future events or outcomes. These forward-looking statements are based on our current information and expectations that involve a number of risks, uncertainties, and assumptions. Among the factors that could cause the actual results to differ materially from those indicated in the forward- looking statements are: industry conditions, prices of crude oil and natural gas, our ability to obtain and the timing of new projects, and changes in competitive factors. Should one or more of these risks or uncertainties materialize, or should the assumptions underlying the forward-looking statements prove incorrect, actual outcomes could vary materially from those indicated. For additional information regarding these and other factors, see our periodic filings with the Securities and Exchange Commission, including our most recent Reports on Forms 10-K and 10-Q. 2
Why Oceaneering? • Provider of integrated technology solutions • Strong portfolio of diversified services and products • Geographically dispersed asset base and revenue streams • Serves blue chip customers • Strong market positions • Solid balance sheet, and the financial flexibility to invest and grow the company 3
In All Phases of the Offshore Oilfield Lifecycle Phase Exploration Development Production Decommissioning Market Driver Subsea Trees In Field Abandonments Operating Floating Subsea Tree Drilling Rigs Installations Service • • Business Segment • ROV Services ROV Services • ROV Services ROV Services Product and Service • • • Survey (SP) • Tooling (SSP) Survey (SP) Tooling (SSP) Revenue Streams • • Tooling (SSP) • Subsea Work • Tooling (SSP) Subsea Work • Systems (SSP) IWOCS – Installation & Systems (SSP) KEY Workover Control • IWOCS – (SSP) • IWOCS – (SSP) Systems (SSP) • Subsea Hardware • ROV = Remotely Subsea Hardware (SSP) (SSP) Operated Vehicles • Umbilicals (SSP) • Vessel-based SSP = Subsea Products • Vessel-based Installation Installation Services Services (SP) SP = Subsea Projects (SP) • Inspection Services (AI) • AI = Asset Integrity Inspection Services • (AI) Seabed Preparation/ Trenching (SP) 4
Five Operating Segments Energy: Remotely Operated Vehicles (ROVs) Subsea Products Subsea Projects Asset Integrity Non-Energy: Advanced Technology 5
Financial Overview Revenue Operating Income $2.3B $1.9B $10.7M $2.3M 100% 8% 14% 20% 20% 5% 12% 22% 75% 10% 12% Adtech 9% 21% 15% Asset Integrity 50% Subsea Projects 49% 41% Subsea Products 30% 33% ROV 25% 23% 20% 20% 16% 0% 0 0 0 0 2016 2017 2016 2017 6
Revenue Overview Geographic Area Services and Products $2.3B $1.9B $2.3B $1.9B 100% 34% 39% 75% 43% 49% 50% 57% 51% 66% 61% 25% 0% 2016 2017 2016 2017 International United States Services Products 7
2018 Outlook Lower 2018 operating income than 2017 on slightly lower revenue • Decreases in three energy segments, partially offset by increases in Asset Integrity and Advanced Technologies • EBITDA guidance is $140 million to $180 million, with positive EBITDA contributions from each operating segment • $12 million to $18 million increase in Unallocated Expenses, and to be in the upper- $20 million range per quarter • Higher net interest expense • Effective tax rate about 5% before discrete items and any potential adjustments to our provisional estimates related to the recently passed U.S. tax reform recorded in 2017 8
Remotely Operated Vehicles 2017 100% We provide ROVs, which are tethered submersible vehicles remotely 75% operated from the surface, to customers in the energy industry for 50% drilling support and vessel-based services, including subsea hardware 25% installation, construction, pipeline 20% 20% 0% inspection, survey and facilities Revenue Operating Income inspection, maintenance and repair. 9
Floating Rig Demand History Oceaneering has 56% drill support market share as of December 31, 2017 Contracted Floaters, Working Contracted Floaters, Not Working % of Contracted Floaters with OII ROVs 300 100% Contracted Floating Rigs at Period End 250 75% 200 % with OII ROVs 150 50% 100 25% 50 0 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 10 Source: Rig data, IHS Petrodata, December 2017
Oceaneering ROV Drill Support/Vessel-Based Fleet Mix Fleet mix was 64% in drill support and 36% in vessel-based activity for 2017 Drill Support Vessel Based ROV Days on Hire 100% 100,000 Drill Support / Vessel Fleet Mix 75% 75,000 ROV Days on Hire 50% 50,000 25% 25,000 0% 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 11 * Based on number of actual working days.
Oceaneering ROV Days on Hire and Fleet Utilization Approximately 80% of our ROVs earned revenue at some point during 2017 Drill Support Days Vessel Based Days ROV Fleet Utilization 100% 100,000 80% 75,000 Fleet Utilization Rate Days on Hire 60% 50,000 40% 25,000 20% 0% 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 12 Source: Rig data, IHS Petrodata, December 31, 2017
Oceaneering ROV Average Revenue per Day on Hire Impacted by geographic mix Revenue / Day on Hire ROV EBITDA Margin $11,000 100% $10,000 Average Revenue per Day on Hire $9,000 75% $8,000 $7,000 $6,000 50% $5,000 $4,000 25% $3,000 $2,000 $1,000 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 13
Communications via ROV Technologies 4G, fiber, and satellite Enabling better control and video imaging, precise tool manipulation, and Mission support centers adherence to industry requirements Stavanger (Norway), Houston (Texas), and Morgan City (Louisiana) Traditional Resident ROV ROV system Freedom ROV Concept E-ROV E-ROV concept winner 2017 World Oil New Horizons Idea Award 14
ROVs – Increase in Activity, Lower Operating Income 2018 outlook versus 2017 Reduced average pricing • Shift in geographic mix • Continued competitive pricing More fleet days on hire • Slight shift in fleet mix more towards drill-support utilization Increase in ROV market share for drill support Fleet utilization in the low 50% range ROV EBITDA margin in the low 30% range 15
Subsea Products 2017 100% While most of our subsea products are sold, we also rent tooling, and 75% provide IWOCS and subsea work systems as a service, including 50% 41% 33% hydrate remediation, riserless light 25% well intervention, well stimulation, dredging, and decommissioning. 0% Revenue Operating Income 16
Subsea Products Manufactured Products 64% Specialty Subsea Hardware Production Control Umbilicals % of Total Subsea Product Field development hardware used to Supply electric and hydraulic power to 2017 Revenue connect production trees to umbilicals and subsea trees and inject chemicals into flow lines. Also includes connectors and reservoirs and well streams. valves - Oceaneering Grayloc, Oceaneering Pipeline Connection & Repair Systems (PCRS) and Oceaneering Rotator. 17
Subsea Products Service and Rental 36% Installation and Workover Control Systems (IWOCS) Tooling and Subsea Work Systems % of Total Subsea Product Provide more than 4,000 ROV tools for rental. A temporary control system designed for both 2017 Revenue Supports well intervention, drilling, rig- and vessel-based operations used for tree construction, field maintenance, and plugging installation, completion, workover, and abandonment activities. intervention and decommission of subsea wells. 18
Subsea Products Financials Backlog $276 million at December 31, 2017 Subsea Products Revenue Subsea Products Backlog $1,500 $1,200 Subsea Products ($ in Millions) $900 $600 $300 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 19
Optimism in More Final Investment Decisions (FIDs) • FIDs recovered strongly in 2017 • Globally, 25 major offshore projects* (>50 mmboe) were sanctioned in 2017, and nearly half were for deepwater • Wood MacKenzie estimates 39 pre-FID offshore projects* (>50 mmboe) in 2018, and about 40% are for deepwater • Based on the above, along with discussions with customers and bid activity, we envision our book-to-bill for 2018 exceeding 1.0 * Offshore Projects = >+400 Meters (1320 feet) 20
Subsea Installations Forecast 500 400 Subsea Trees Onstream 349 319 Trees Onstream 305 295 282 280 Y/Y Growth % 300 267 243 243 2017: -5% 2018F: -13% 2019F: No Change 200 2020F: +10% 2021F: +7% 100 0 2013 2014 2015 2016 2017 2018F 2019F 2020F 2021F 21 Source: Tree data - Infield, A Wood Mackenzie Business, December 2017.
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