Pacific Drilling (PACD) CFO William Restrepo Interviews with The Wall Street Transcript

Wall Street Transcript

67 WALL STREET, New York - February 7, 2013 - The Wall Street Transcript has just published its Oil & Gas: Exploration & Production Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company Senior Management and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Capital Expenditures and Consolidation Activity - Refining Crude Price Differentials - Frontier Exploration and Development - Shale Drilling Capital Expenditures - Oil Price Expectations - Oil and Gas Transportation Infrastructure Demand - Shale Drilling Dynamics - Shale, Offshore and Deepwater Drilling

Companies include: Pacific Drilling (PACD) and many more.

In the following excerpt from the Oil & Gas: Exploration & Production Report, a senior executive at Pacific Drilling (PACD) discusses the outlook for his company and the industry.

TWST: Stephens Analyst John Keller said that you have the newest fleet in the industry, which is a benefit for both efficiency and safety reasons. Tell us just briefly about the fleet and what investors should know about dual-gradient drilling.

Mr. Restrepo: We are very proud of our fleet. Our oldest drill ship was delivered in 2010, and four of them are going to be brand-new. Not only that, but they are stacked as higher or higher than anything out there. These are going to be incredible drilling machines, a level higher than what is out there now. Our clients will demand them, not only because they're new, but also because they've a very, very high-spec, and they can maintain the requirements of any of our clients anywhere in the world.

Our larger clients have tougher wells and easier wells, and they want to get drill ships that can meet all their needs. Our drill ships' size and flexibility save our clients money in terms of fixed costs and helicopters and supply ships and so forth. The newer generations of drill ships have better utilization in terms of contract than those that are 15 years old, and those have better utilizations than 25-year-old drill ships.

The drill ships that were built in the last six years or so have been working from day one and have had basically 100% utilization. The drill ships that are 15 years old are more in the 85% to 90% level of utilization, and 20-year-old drills hips are in the 80% range. Newer drills hips, they will continue to generate cash even if cycles hit us in the future. We're not expecting that, but sourcing companies will.

Investors in Pacific Drilling, because of these newer assets, will have more peace of mind. They can expect their cash flows to be protected even if there is a future inflection point in terms of activity. Again, some other companies have good assets as well, but in terms of consistency of modern, new, capable assets, Pacific Drilling is really top-of-the-line.

We have been very open to bringing in new technologies, and we're very proud of dual-gradient drilling, which has been developed and promoted by Chevron. They believe it's one of the top five new technologies...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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