Industry Overview - Global oilfield services companies are facing a decline in earnings due to the ongoing Iran war, which disrupts energy infrastructure in the Middle East and causes producers to delay new drilling activities until oil prices stabilize [1][6] - The Brent benchmark crude oil price has surged by 53% since February 27, following U.S. and Israeli strikes against Iran, typically making oil and gas projects more profitable [2] Impact on Operations - Security risks and infrastructure damage from the Iran war have led to a significant drop in activity and reduced demand for oilfield services and equipment in a key energy-producing region [2][3] - The offshore rig count in the Gulf has decreased by approximately 39%, falling to 72 rigs as of March 27, down from 118 rigs before February 28 [4] Challenges Faced - Idled rigs, slower crew mobilizations, and increased logistics and insurance costs are disrupting operations, leading to project delays and reduced utilization [3][5] - A prolonged closure of the Strait of Hormuz could severely hinder crew mobilizations and create logistical challenges for equipment movement, further complicating operations in the region [5] Company Earnings Impact - Major oilfield services firms, including SLB, Halliburton, and Baker Hughes, are experiencing immediate impacts on earnings due to decreased activity in the Middle East, with SLB expecting first-quarter revenue to fall below expectations and a 6-9 cent-per-share earnings hit [6][7] - Smaller rivals that have invested in the region are also feeling the financial squeeze as producers exercise caution in their operations [7]

Financial Data and Key Metrics Changes - In Q4 2025, the company reported an Adjusted EBITDA of $385 million and free cash flow of $321 million, with a year-on-year increase in Adjusted EBITDA of nearly 20% to $1.37 billion and free cash flow rising to $626 million [4][5] - The company retired approximately $1.3 billion in debt during the year, reducing annual interest expense by nearly $90 million and enhancing financial flexibility [5][6] - Total liquidity at the end of Q4 was approximately $1.5 billion, including $620 million in unrestricted cash and cash equivalents [16] Business Line Data and Key Metrics Changes - The company achieved record uptime performance just shy of 98% across its fleet, with zero operational integrity events and zero lost time incidents [6] - The company executed five major planned out-of-service projects on time and on budget, and recycled six rigs in 2025 [6] Market Data and Key Metrics Changes - The outlook for deepwater offshore drilling is strengthening, with expectations for deepwater utilization to exceed 90% through 2027 [10] - In the US Gulf, long-term demand remains robust, driven by new lease awards and improved fiscal terms [10] - The rig count in Africa is expected to increase from roughly 15 to at least 20 over the next couple of years, with significant multi-year program awards anticipated [11] Company Strategy and Development Direction - The company aims to optimize the value of its differentiated assets and generate industry-leading free cash flow, with a backlog of approximately $6 billion [7][8] - The recent acquisition of Valaris is seen as transformational, expected to create cost synergies exceeding $200 million and enhance shareholder returns [8][9] - The company is focused on establishing a stronger capital structure to weather business cycles and improve operational efficiencies [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the upcoming inflection point for offshore drilling, supported by customer conversations and increasing tender activity [33][34] - The company anticipates a pivot back towards traditional hydrocarbon sources among producers, indicating a shift in focus from renewables to offshore drilling [74][75] Other Important Information - The company has identified opportunities for rig movements to capitalize on demand in various regions, including Africa and Asia [42][46] - The guidance for 2026 reflects some idle time on specific rigs, but management expects free cash flow to be in line with or better than 2025 levels [18][67] Q&A Session Summary Question: Impact of Valaris acquisition on chartering strategy - Management indicated that the acquisition allows for cost efficiencies and improved service provision to customers, enhancing project execution reliability [22][24] Question: Confidence in offshore drilling inflection timing - Management cited customer conversations and increasing tender activity as key indicators of confidence in the timing of the market inflection [33][34] Question: Petrobras blend-and-extend negotiations - Management stated that the guidance reflects their best estimates and does not include significant upside from these negotiations [38] Question: Fleet placement and rig movements - Management noted that opportunities are developing in Africa and Asia, and rigs can be moved to meet demand in various regions [42][46] Question: Customer feedback on Valaris acquisition - Management reported overwhelmingly positive feedback from customers regarding the acquisition and its potential benefits [53][55]

Strategic Focus - The company is shifting its strategic focus to fill the 2026 'white space' while positioning its fleet to capture a projected dayrate recovery in 2027 [1] - Management anticipates a clear recovery in dayrates and earnings visibility starting in 2027, following the absorption of available supply by multi-year Middle East tenders [2] Operational Performance - Operational efficiency remained high with a technical utilization rate of 98.8%, although revenue experienced a 6.4% sequential decline due to rigs transitioning to lower-rate contracts [1] - The jackup market is believed to have bottomed out, with a steady global utilization rate of 90% for modern rigs and a significant increase in tender activity [2] Financial Outlook - The company achieved top-end 2025 EBITDA guidance of $470.1 million by leveraging platform scale to offset unforeseen contract suspensions and terminations [2] - Anticipates that 2026 contracting days will modestly exceed 2025 levels, supported by a current fleet coverage of 64% for 2026 (80% for the first half) [2] Market Developments - Performance in Mexico is stabilizing due to improved government financial measures and Pemex's planned 34% increase in upstream capital expenditure [1] - Approximately 120 rig-years of identified tenders are expected to move into the award and preparation phases, which is projected to boost global utilization by mid-2026 [2] Fleet Management - The company acquired five premium rigs from Noble to opportunistically increase scale at an attractive cycle point, with integration currently ahead of schedule [2] - The return of the acquired rig Sif is expected in the coming months, while the rig Freya is anticipated to return to the operating fleet sometime in 2026 or early 2027 as regional demand firms [2] Stock Market Strategy - The company plans a full uplisting to the main list of the Oslo Stock Exchange in 2026 to capitalize on strong European investor interest [2]

Group 1 - Valaris Limited (NYSE:VAL) experienced a significant stock increase of 34.31%, closing at $83.82, following the announcement of its acquisition by Transocean Ltd. for $5.8 billion [1] - The acquisition aims to create an industry leader with a diversified offshore fleet consisting of 73 rigs, including 33 ultra-deepwater drillships, nine semisubmersibles, and 31 modern jackups, to capitalize on growth opportunities globally [2] - Valaris CEO Anton Dibowitz stated that the merger will enhance Transocean's deepwater assets and jackup expertise, enabling the combined company to operate any rig in various offshore environments worldwide [3] Group 2 - Two directors from Valaris Limited will join Transocean's board after the transaction is completed [4]

Core Viewpoint - Transocean Ltd. has agreed to acquire Valaris Ltd. in an all-stock deal valued at $5.8 billion, driven by increasing offshore drilling activity [1] Company Summary - The acquisition will result in the formation of the world's largest offshore rig contractor by market value [1] - The combined fleet will consist of 73 offshore rigs, which includes 33 ultra-deepwater drillships, nine semisubmersibles, and 31 jackup vessels [1]

Core Viewpoint - Transocean Ltd. has agreed to acquire Valaris Limited in an all-stock transaction valued at approximately $5.8 billion, creating a combined entity with a significant presence in the offshore drilling industry [1][2] Group 1: Transaction Details - Valaris shareholders will receive 15.235 shares of Transocean for each Valaris share, resulting in Transocean shareholders owning about 53% of the combined company and Valaris shareholders holding 47% [2] - The merger is expected to close in the second half of 2026, pending regulatory and shareholder approvals [2] Group 2: Fleet and Market Position - The merger will create the world's highest-quality offshore drilling fleet, consisting of 73 rigs across major offshore segments, including 33 ultra-deepwater drillships, nine semisubmersibles, and 31 modern jackups [3] - The combined fleet will enhance customer access in key offshore basins, including the U.S. Gulf of Mexico, Brazil, West Africa, the Middle East, and the North Sea, amid a resurgence in offshore investment [4] Group 3: Financial Impact - The combined backlog is estimated at approximately $10 billion, which will strengthen cash flow visibility as operators focus on long-cycle offshore projects [4] - Transocean anticipates unlocking over $200 million in cost synergies from the merger, in addition to an existing cost-reduction program targeting over $250 million in cumulative savings through 2026 [5] - The deal is expected to increase cash flow, accelerate deleveraging, and enhance financial flexibility, aiming for a leverage ratio of around 1.5x within two years of closing [5] Group 4: Management Structure - The combined company will be led by Transocean President and CEO Keelan Adamson, with current Transocean CEO Jeremy Thigpen serving as Executive Chairman of the Board [7] - The board will consist of nine Transocean directors and two Valaris directors, with Transocean remaining incorporated in Switzerland and its primary administrative office located in Houston [7]

Investor Presentation O c t o b e r 2 0 2 5 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 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include words or phrases such as "anticipate," "believe," "estimate," "expect," "intend," "likely," "outlook," "plan," "project," "could," "may," "might," "s ...