-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CnjJXEFuH1D1AhV2PpOQNA2KKL4M/ozybD/9TaN8EwEKn/2CkUR8UAow6NIty4xk ykWGItXc16pBy7MrM6HyUA== 0000899243-01-500648.txt : 20010627 0000899243-01-500648.hdr.sgml : 20010627 ACCESSION NUMBER: 0000899243-01-500648 CONFORMED SUBMISSION TYPE: DEFA14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20010524 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARINE DRILLING COMPANIES INC CENTRAL INDEX KEY: 0000860521 STANDARD INDUSTRIAL CLASSIFICATION: DRILLING OIL & GAS WELLS [1381] IRS NUMBER: 742558926 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEFA14A SEC ACT: SEC FILE NUMBER: 001-14389 FILM NUMBER: 1647642 BUSINESS ADDRESS: STREET 1: ONE SUGAR CREEK CENTER BLVD STREET 2: SUITE 600 CITY: SUGAR LAND STATE: TX ZIP: 77478-3556 BUSINESS PHONE: 7132433000 FORMER COMPANY: FORMER CONFORMED NAME: MARINE HOLDING CO DATE OF NAME CHANGE: 19910707 DEFA14A 1 ddefa14a.txt ADDITIONAL DEFINITIVE MATERIALS =============================================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant [X] Filed by a Party other than the Registrant [_] Check the appropriate box: [_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14a-6(e)(2)) [_] Definitive Proxy Statement [_] Definitive Additional Materials [X] Soliciting Material Under Rule 14a-12 MARINE DRILLING COMPANIES, INC. - -------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) - -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: ------------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: ------------------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): ------------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------------------- (5) Total fee paid: ------------------------------------------------------------------------- [_] Fee paid previously with preliminary materials. [_] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ------------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: ------------------------------------------------------------------------- (3) Filing Party: ------------------------------------------------------------------------- (4) Date Filed: ------------------------------------------------------------------------- FORWARD LOOKING STATEMENTS AND INVESTOR NOTICE - -------------------------------------------------------------------------------- This presentation includes statements that may be deemed to be "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. All statements, other than statements of historical facts, included in this presentation that address activities or events Pride International, Inc. or Marine Drilling Companies, Inc. believe will or may occur in the future or estimates are forward-looking statements. Such statements include but are not limited to the consummation of the transaction, its effect on future earnings, cash flow or other operating results, the tax-free status of the transaction, expected closing date of the transaction, any other effect or benefit of the transaction, market prospects, levels of future indebtedness and future spending by exploration and production companies. Pride International, Inc. and Marine Drilling Companies, Inc. strongly encourage readers to note that some or all of the assumptions upon which such forward-looking statements are based are beyond their ability to control or estimate precisely, and may in some cases be subject to rapid and material changes. Such assumptions include but are not limited to costs and difficulties related to the integration of acquired businesses; costs, delays and other difficulties related to the merger; closing conditions not being satisfied; general market conditions prevailing in the marine drilling industry (including dayrates and utilization) and various other trends affecting the marine drilling industry; operating hazards and delays; risks associated with international operations; actions by customers and other third parties; the future price of oil and gas; and other factors detailed in Pride International's and Marine Drilling's filings with the Securities and Exchange Commission (SEC), which are available free of charge on the SEC's website at www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated. Additional information regarding the transaction can be found in both companies' Current Reports on Form 8-K to be filed shortly. INVESTORS AND SECURITY HOLDERS ARE URGED TO CAREFULLY READ THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTIONS WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. The joint proxy statement/prospectus will be filed with the SEC by Pride International, Inc. and Marine Drilling Companies, Inc. Investors and security holders may obtain a free copy of the joint proxy statement/prospectus (when it is available) and other documents containing information about Pride International, Inc. and Marine Drilling Companies, Inc., without charge, at the SEC's web site at www.sec.gov. Copies of the joint proxy statement/prospectus and the SEC filings that will be incorporated by reference in the joint proxy statement/prospectus may also be obtained for free by directing a request to either: Investor Relations, Pride International, Inc., 5847 San Felipe, Suite 3300, Houston, Texas 77057, Phone: 713 789-1400, Fax: 713 952-6916; or T. Scott O'Keefe, Senior Vice President and Chief Financial Officer, Marine Drilling Companies, Inc., One Sugar Creek Center Blvd., Suite 600, Sugar Land, Texas 77478, Phone: 281 243-3000, Fax: 281 243-3080. In addition, the identity of the persons who, under SEC rules, may be considered "participants in the solicitation" of Pride International and Marine Drilling shareholders in connection with the proposed transactions, and any description of their direct or indirect interests, by security holdings or otherwise, are available in an SEC filing under Schedule 14A made by each of Pride International and Marine Drilling on May 24, 2001. [PRIDE LOGO] [MARINE DRILLING LOGO] COMBINING STRENGTHS INVESTOR PRESENTATION MAY 24, 2001 [PRIDE LOGO] [MARINE DRILLING LOGO] This presentation contains projections and other forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These projections and statements reflect the Company's current views with respect to future events and financial performance. No assurances can be given, however, that these events will occur or that these projections will be achieved and actual results could differ materially from those projected as a result of certain factors. 2 [PRIDE LOGO] [MARINE DRILLING LOGO] PROPOSED MERGER . TRANSACTION STRUCTURE: Tax free stock-for-stock merger with each Pride and Marine share exchanged for 1 share of Newco . NEW COMPANY NAME: Pride International, Inc. . PRO FORMA OWNERSHIP: Approximately 56% Pride shareholders Approximately 44% Marine shareholders . BOARD: 8 directors: 4 designated by each Pride and Marine Robert Barbanell - Chairman . MANAGEMENT: Paul Bragg - CEO Jim Allen - COO Earl McNiel - CFO Scott O'Keefe - VP . ACCOUNTING TREATMENT: Intended to qualify as pooling-of-interests 3 [PRIDE LOGO] [MARINE DRILLING LOGO] COMBINING STRENGTHS 4 [PRIDE LOGO] [MARINE DRILLING LOGO] COMBINING STRENGTHS . Leading Positions in Attractive Markets - Global Deepwater - Gulf of Mexico and International Jackups - International Land . Operating Leverage - One of industry's largest fleets - New assets coming online in 2001 - Concentrated in attractive drilling markets - Strong and improving industry fundamentals . Positioned for Long-Term Growth and Leadership in Consolidation 5 [PRIDE LOGO] [MARINE DRILLING LOGO] FINANCIAL STRENGTH . Strong Earnings and Cash Flow Momentum . Optimized Capitalization - Ability to Delever Rapidly . Enhanced Financial Market Position 6 [PRIDE LOGO] [MARINE DRILLING LOGO] PREMIER DRILLER Offshore Drilling Sector by Firm Value (Dollars in Billions) $0 $5 $20 Transocean........... ===================================--9.9x Firm Value/ 2002E EBITDA Noble................ ========================--8.5x Pride................ ======================--6.5x Global............... ====================--7.8x Diamond.............. ======================-7.4x ENSCO................ =====================--6.5x Santa Fe............. ===================8.5x Rowan................ ==============--6.7x Smedvig.............. =====--7.6x Fred. Olsen.......... ====--4.5x Atwood............... ====5.8x Chiles............... ====7.3x == Equity Value - -- Net Debt
[Data for graph] Company Equity Value Net Debt Firm Value Transocean $17.7 $4.1 $21.8 Noble 6.3 0.5 6.8 Pride 4.5 1.7 6.2 Global 4.8 0.8 5.6 Diamond 5.5 0.0 5.5 ENSCO 4.9 0.3 5.3 Santa Fe 4.4 0.0 4.0 Rowan 3.0 0.2 3.2 Smedvig 0.8 0.5 1.3 Fred. Olsen 0.5 0.5 0.9 Atwood 0.6 0.0 0.6 Chiles 0.6 0.0 0.6
Source: Prices as of 5/23/01. 2002 EBITDA estimates based on Salomon Smith Barney Equity Research. 7 [PRIDE LOGO] [MARINE DRILLING LOGO] LEADING OFFSHORE FLEET 0 10 20 30 40 50 // 120 Transocean.... ======================================= ----++++ 122 Pride......... ======================-------++ 48 Noble......... ====================-------+++ 46 Diamond....... =========-------------------+ 45 ENSCO......... ========================-- 38 Global........ ===============----+++ 33 Santa Fe...... ==============-- 26 Rowan......... =============-- 23 == Jackups - -- Semisubmersibles ++ Drillship
[Data for graph] Jackups Semisubmersibles Drillships Total Rowan 22 1 0 23 Santa Fe 23 3 0 26 Global 23 6 4 33 ENSCO 37 1 0 38 Diamond 14 30 1 45 Noble 34 9 3 46 Pride 35 11 2 48 Transocean 55 51 16 122
8 [PRIDE LOGO] [MARINE DRILLING LOGO] COMBINED FLEET Tender- Semisubmersible Drillship Land Barge Platform Assisted Jackup (Moored) (DP) (DP) 246 3 21 5 35 8(a) 3(b) 2 OFFSHORE FLEET 77 ONSHORE FLEET 246 DP = Dynamically positioned (a) Includes 2 semis that are managed but not owned. (b) Does not include 2 rigs under construction. 9 [PRIDE LOGO] [MARINE DRILLING LOGO] GLOBAL OPERATIONS GULF OF MEXICO - -------------- 1 Semi 27 Jackups 21 Platforms SOUTH AMERICA - ------------- 4 Semis 2 Jackups 2 Barges 226 Land Rigs NORTH SEA - --------- 2 Semis 1 Jackup AFRICA/MIDDLE EAST - ------------------ 2 Drillships 3 Semis 2 Jackups 3 Tender Rigs 1 Barge Rig 18 Land Rigs ASIA/PACIFIC - ------------ 1 Semi 3 Jackups 2 Tender Rigs 2 Land Drilling Rigs Note: Rig count excludes 2 Semis under construction. 10 [PRIDE LOGO] [MARINE DRILLING LOGO] OPERATING FOCUS 2001E Gross Margin By Asset Class By Geographic Market Jackups & Shallow Water............47% GOM.........................42% Drillships/Semisubmersibles........30% South America...............30% Land Rigs..........................23% Africa/Middle East..........16% Asia Pacific & Other........12% Source: Salomon Smith Barney. 11 [PRIDE LOGO] [MARINE DRILLING LOGO] TECHNOLOGICALLY ADVANCED DEEPWATER FLEET 0 20 40 60 80 Transocean........ ============================------ 67 Diamond........... =================-- 31 Pride............. ======-- 13 Noble............. =====-- 12 Global............ ===-- 10 Santa Fe.......... == 3 ENSCO............. = 1 Rowan............. = 1 == Semisubmersibles - -- Drillships
[Data for graph] Semisubmersibles Drillships Total Rowan 1 0 1 ENSCO 1 0 1 Santa Fe 3 0 3 Global 6 4 10 Noble 9 3 12 Pride 11 2 13 Diamond 30 1 31 Transocean 51 16 67
12 [PRIDE LOGO] [MARINE DRILLING LOGO] A LEADING JACKUP DRILLER Transocean.............................. 55 ENSCO................................... 37 Pride................................... 35 Noble................................... 34 Global.................................. 23 Santa Fe................................ 23 Rowan................................... 22 Diamond................................. 14 13 [PRIDE LOGO] [MARINE DRILLING LOGO] LEADING INTERNATIONAL LAND FRANCHISE Pride................................ 246 Nabors............................... 101 Parker............................... 47 H&P.................................. 40 Grey Wolf............................ 5 Source: Company SEC filings. Includes land rigs outside of North America. 14 [PRIDE LOGO] [MARINE DRILLLING LOGO] PENDING ASSET DEPLOYMENT The deployment of recently constructed, acquired or refurbished assets, along with assets obtained under management agreements will add substantial near term gains.
Annual ............................ Asset Type Revenues Cash Flow - ------------------------------------------------------------------------------------------- Pride Carlos Walter Newbuild DP Semi $52 $36 Pride Brazil Newbuild DP Semi 52 36 Pride North Atlantic 3rd Gen. Semi 26 12 Pride North Sea 2nd Gen. Semi 24 10 Pride Montana Independent Leg Jackup 17 9 Pride Utah Mat Cantilever Jackup 12 6 Marine 306 Accommodation Jackup 10 6 Al Baraka Tender-assisted 11 6 Bintang Kalimantan Barge Rig 12 6 1006E Platform Rig 8 4 3,000 HP Land Rigs (2) Ultra-deep Land Rigs 18 8 Coiled Tubing Drilling Units (2) Land Drilling 11 5 Chad Land Rigs (5) Land Drilling 32 13 Omega Managed Semi 5 5 Viking Managed Semi 5 5 ============================================================================================= TOTAL 21 RIGS $295 $167 15
[PRIDE LOGO] [MARINE DRILLING LOGO] INDUSTRY DRIVERS: COMMODITY PRICES CRUDE OIL PRICES NATURAL GAS PRICES [LINE GRAPH APPEARS HERE] [LINE GRAPH APPEARS HERE]
[Data for graph] Quarterly Data Gas Oil First Quarter 1997 $1.83 $20.65 Second Quarter 1997 2.17 19.61 Third Quarter 1997 2.98 21.28 Fourth Quarter 1997 2.29 17.61 First Quarter 1998 2.34 15.70 Second Quarter 1998 2.38 14.36 Third Quarter 1998 2.22 16.19 Fourth Quarter 1998 1.94 12.06 First Quarter 1999 2.00 16.69 Second Quarter 1999 2.34 19.10 Third Quarter 1999 2.56 24.48 Fourth Quarter 1999 2.30 25.73 First Quarter 2000 2.83 26.83 Second Quarter 2000 4.25 32.41 Third Quarter 2000 5.20 30.84 Fourth Quarter 2000 9.21 26.69 First Quarter 2001 5.32 26.33
16 [PRIDE LOGO] [MARINE DRILLING LOGO] INDUSTRY DRIVERS: E&P SPENDING Dollars in billions [BAR GRAPH APPEARS HERE] [Data for graph--estimated] 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001E 2002E - ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----- ----- $60 70 75 75 75 80 85 100 95 75 85 100(+19%) 115(+14%) Source: Salomon Smith Barney and Morgan Stanley. 17 [PRIDE LOGO] [MARINE DRILLING LOGO] INDUSTRY DRIVERS: BUDGET INCREASES Shell, BP and ExxonMobil: E&P Spending . Big 3 annually account for roughly 25% of total Non-OPEC spending. . 75-80% of Big 3's [BAR GRAPH APPEARS HERE] spending is international. . Recent spending is far below normal: 1998 -- Big 3 spent 87% of available cash flow on E&P. 2000 -- Spent only 37% of available cash flow on E&P activities due to mergers, etc. 2001 -- Moving towards a more normalized level upstream investment. [Data for graph--estimated (in billions)] 1999 2000 2001E ---- ---- ----- $20 $18 $22 (-12% (+27% Yr/Yr) Yr/Yr) Source: Morgan Stanley. 18 [PRICE LOGO] [MARINE DRILLING LOGO] GOM GAS PRODUCTION DECLINE [LINE GRAPH APPEARS HERE]
[Data for graph--percentages represent first full year production] Wells Drilled During Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 83-85 100% 80% 63% 50% 40% 32% 26% 21% 16% 86-88 100% 75% 52% 36% 28% 22% 16% 13% 10% 89-91 100% 68% 48% 33% 24% 17% 12% 8% 6% 92-94 100% 60% 41% 28% 19% 10% 95 100% 56% 28%
19 [PRIDE LOGO] [MARINE DRILLING LOGO] GOM JACKUP DAYRATES [LINE GRAPH APPEARS HERE]
[Data for graph] 1/95 7/95 1/96 7/96 1/97 7/97 1/98 7/98 1/99 7/99 1/00 7/00 1/01 0-200 $14.63 $15 $15 $21.75 $27 $31.63 $36.06 $32.25 $19.95 $15.25 $20.5 $26.5 $37.63 250-299 16.25 16.63 16.63 25 32.5 39.88 40.5 34.5 21.05 15 21.13 34.38 40 300 20 22 22 36.5 44 61.25 64 44.5 23.75 19 38 44 53.75
[Today's replacement dayrates for: 0 to 200 ft ($52.50); 250 to 299 ft ($80); 300 ft ($90)] 20 [PRIDE LOGO] [MARINE DRILLING LOGO] FINANCIAL HIGHLIGHTS 21 [PRIDE LOGO] [MARINE DRILLING LOGO] FINANCIAL HIGHLIGHTS REVENUE (Dollars in Millions) 1998................................. $1,064 1999................................. $ 735 2000................................. $1,173 2001E................................ $1,664 2002E................................ $2,152 Upside............................... $2,801 EBITDA (Dollars in Millions) 1998................................. $ 335 1999................................. $ 88 2000................................. $ 357 2001E................................ $ 651 2002E................................ $ 952 Upside............................... $1,481 Source: Historical - Company SEC filings. Projected and Upside - SSB Equity Research. Note: Pro forma combined as if merger occurred on the first day of period. Projections exclude effects of synergies. 22 [PRIDE LOGO] [MARINE DRILLING LOGO] FINANCIAL OUTLOOK SSB PROJECTED (US Dollars in Milllions) ................................. 2000 2001E 2002E Upside - -----------------------------------------------------------//---------- Revenues $1,173 $1,664 $2,152 $2,801 EBITDA 357 651 952 1,481 Net Income 49 226 429 910 Cash Flow 236 458 671 1,163 EPS $ 0.40 $ 1.59 $ 2.86 $ 5.92 CFPS 1.92 3.15 4.40 7.54 - -----------------------------------------------------------//---------- Source: Company SEC filings and SSB Equity Research. Note: Pro forma results as if merger occurred on the first day of period. Results exclude effects of synergies. 23 [PRIDE LOGO] [MARINE DRILLING LOGO] SOUND CAPITAL STRUCTURE (US Dollars in Millions) - ------------------------------------------------------------------------- 3/31/01 "AS IF PRO FORMA CONVERTED" - ------------------------------------------------------------------------- Cash and Equivalents $ 281 $ 281 Senior Notes and other LT Debt 655 655 Project Debt 583 583 Convertible Debt 599 ------------------------------ TOTAL LONG TERM DEBT 1,838 1,238 SHAREHOLDERS' EQUITY 1,614 2,214 TOTAL CAPITALIZATION 3,507 3,507 - ------------------------------------------------------------------------ Total Debt/Capitalization 52% 35% Net Debt/Capitalization 48% 30% 24 [PRIDE LOGO] [MARINE DRILLING LOGO] COMBINING STRENGTHS . Strong and Improving Industry Fundamentals . Earnings and Cash Flow Momentum . Large Fleet with Tremendous Operating Leverage . Positioned for Continued Growth and Leadership in Consolidation 25 -----END PRIVACY-ENHANCED MESSAGE-----