UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: June 18, 2018
Commission File Number 001-35345

PACIFIC DRILLING S.A.

8-10, Avenue de la Gare
L-1610 Luxembourg
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒	    	Form 40-F  ☐	
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes  ☐	    	No  ☒	
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes  ☐	    	No  ☒	
Indicate by check mark whether the registrant by furnishing the information contained in this Form, is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ☐	    	No  ☒	
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

 

 

INFORMATION CONTAINED IN THIS FORM 6-K REPORT
 
Background
 
Under the Bankruptcy Code, Pacific Drilling S.A. (the “Company” and, together with its subsidiaries, the “Companies”, “we” or “our”) had the exclusive right to file a plan of reorganization under Chapter 11 (the “Exclusive Filing Period”) through March 12, 2018.
 
On March 8, 2018, the Bankruptcy Court approved our request to extend the Exclusive Filing Period through and including March 21, 2018 or the date on which the Bankruptcy Court resolved the Company’s request to extend the Exclusive Filing Period.
 
At a hearing on March 22, 2018, the Bankruptcy Court approved our request for an agreed order, which was entered on April 2, 2018, under which we, our secured creditor groups and our majority shareholder agreed to take part in mediation (the “Mediation”) before the Honorable James R. Peck, retired Bankruptcy Court Judge for the Southern District of New York. The scope of the Mediation was to facilitate discussions for the purpose of agreeing to the terms of a binding term sheet or restructuring support agreement describing a Chapter 11 plan of reorganization. In addition, conditioned on our participation in the Mediation, the Bankruptcy Court ordered the extension of the Exclusive Filing Period to May 21, 2018, without prejudice for us to seek further extensions of the Exclusive Filing Period. 
 
On May 16, 2018, the Bankruptcy Court approved our request for an agreed order under which we, our secured creditor groups and our majority shareholder agreed to extend the Mediation and the Exclusive Filing Period to June 4, 2018,  without prejudice to seek further extensions of the Exclusive Filing Period.
 
On May 25, 2018, the Bankruptcy Court approved our request for an agreed order under which we, our secured creditor groups and our majority shareholder agreed to further extend the Mediation and the Exclusive Filing Period to June 15, 2018, without prejudice to seek further extensions of the Exclusive Filing Period.  
 
On June 14, 2018, the Bankruptcy Court approved our request for an agreed order under which we, our secured creditor groups and our majority shareholder agreed to further extend the Mediation and the Exclusive Filing Period to June 22, 2018, without prejudice to seek further extensions of the Exclusive Filing Period.
 
In connection with the Mediation, we executed non-disclosure agreements (“NDAs”) with certain of our secured creditors to facilitate discussions in the Mediation.  Pursuant to the NDAs, the Company agreed to disclose publicly after a specified period, if certain conditions were met, the fact that confidential discussions occurred, and certain information regarding such discussions.    
 
As a condition to their approval of the extension of the Mediation and the Exclusive Filing Period to June 22, 2018, certain of our stakeholders have required us to satisfy the public disclosure obligations under the NDAs.  The information included in this Form 6-K is being furnished, in part, to satisfy the Company’s public disclosure obligations under the NDAs.
 
Included herein as Exhibit 99.1 to this Form 6-K is a presentation of the Company’s Business Plan that was provided to the secured creditor groups and our majority shareholder on April 29, 2018 (the “Business Plan”).  Included herein as Exhibit 99.2 is a presentation (the “QP Group / SSCF Proposal”) containing the proposal that was made by our majority shareholder, Quantum Pacific (Gibraltar) Limited, certain lenders under the Senior Secured Credit Facility and a third party investor  (collectively, the “QP Group / SSCF”), on June 7, 2018 to the independent members of our Board of Directors for a plan of reorganization.  Included

 

herein as Exhibit 99.3 to this Form 6-K is a presentation (the “Ad Hoc Group Proposal”) containing the proposal that was made by an ad hoc group of our secured creditors on June 7, 2018 to the independent members of our Board of Directors for a plan of reorganization.   
 
Neither the QP Group / SSCF Proposal, the Ad Hoc Group Proposal nor any other proposal is legally-binding or indicative of the terms of any Chapter 11 plan of reorganization that may occur. 
 
There is no consensus currently among the Company and its stakeholders as to the terms of any plan of reorganization.  We continue to engage in active discussions in the Mediation among us and our stakeholders for the purpose of agreeing to the terms of a Chapter 11 plan of reorganization. 
 
The information contained in this Form 6-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing. The filing of this Form 6-K shall not be deemed an admission as to the materiality of any information herein.
 
Disclosure Regarding Forward-Looking Statements
 
Certain statements and information contained herein constitute “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and are generally identifiable by the use of words such as   “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “our ability to,” “plan,” “potential,” “projected,” “should,” “will,” “would,” or other similar words, which are generally not historical in nature.  The forward-looking statements speak only as of the date hereof, and we undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
 
Our forward-looking statements express our current expectations or forecasts of possible future results or events, including our future financial and operational performance; revenue efficiency levels; market outlook; forecasts of trends, future client contract opportunities, contract dayrates; our business strategies and plans and objectives of management; estimated duration of client contracts; backlog; expected capital expenditures; projected costs and savings; the potential impact of our Chapter 11 proceedings on our future operations and ability to finance our business; and our ability to emerge from our Chapter 11 proceedings and continue as a going concern.
 
Although we believe that the assumptions and expectations reflected in our forward-looking statements are reasonable and made in good faith, these statements are not guarantees, and actual future results may differ materially due to a variety of factors. These statements are subject to a number of risks and uncertainties, many of which are beyond our control.
 
Important factors that could cause actual results to differ materially from our expectations include: the global oil and gas market and its impact on demand for our services; the offshore drilling market, including reduced capital expenditures by our clients; changes in worldwide oil and gas supply and demand; rig availability and supply and demand for high-specification drillships and other drilling rigs competing with our fleet; costs related to stacking of rigs; our ability to enter into and negotiate favorable terms for new drilling contracts or extensions; our substantial level of indebtedness; possible cancellation, renegotiation, termination or suspension of drilling contracts as a result of mechanical difficulties, performance, market changes or other reasons; our ability to continue as a going concern in the long term, including our ability to confirm a plan of reorganization that restructures our debt obligations to address our liquidity issues and allows emergence

 

from our Chapter 11 proceedings; our ability to obtain Bankruptcy Court approval with respect to motions or other requests made to the Bankruptcy Court in our Chapter 11 proceedings, including maintaining strategic control as debtor-in-possession; our ability to negotiate, develop, confirm and consummate a plan of reorganization; the effects of our Chapter 11 proceedings on our operations and agreements, including our relationships with employees, regulatory authorities, customers, suppliers, banks and other financing sources, insurance companies and other third parties; the effects of our Chapter 11 proceedings on our Company and on the interests of various constituents, including holders of our common shares and debt instruments; Bankruptcy Court rulings in our Chapter 11 proceedings as well as the outcome of all other pending litigation and arbitration matters and the outcome of our Chapter 11 proceedings in general; the length of time that we will operate under Chapter 11 protection and the continued availability of operating capital during the pendency of the proceedings; risks associated with third-party motions in our Chapter 11 proceedings, which may interfere with our ability to confirm and consummate a plan of reorganization and restructuring generally; increased advisory costs to execute a plan of reorganization; our ability to access adequate debtor-in-possession financing or use cash collateral; the potential adverse effects of our Chapter 11 proceedings on our liquidity, results of operations, or business prospects; increased administrative and legal costs related to our Chapter 11 proceedings and other litigation and the inherent risks involved in a bankruptcy process; the cost, availability and access to capital and financial markets, including the ability to secure new financing after emerging from our Chapter 11 proceedings; and the other risk factors described in our 2017 Annual Report on Form 20-F and our Current Reports on Form 6-K. These documents are available through our website at www.pacificdrilling.com or through the SEC’s website at www.sec.gov.  

 

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 	 	 	
 	Pacific Drilling S.A.	
 	(Registrant)	
 	 	
Dated:       June 18, 2018	By	/s/ Lisa Manget Buchanan	
 	 	Lisa Manget Buchanan	
 	 	SVP, General Counsel & Secretary	

 

EXHIBIT INDEX 

    
  Exhibit  	 	 	 	Description	
 	 	 	
99.1	 	 	 	Company Business Plan	
99.2	 	 	 	QP Group / SSCF Proposal	
99.3	 	 	 	Ad Hoc Group Proposal	

Exhibit 99.1

	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change Business Plan Discussion May 1, 2018 1	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change Disclaimer THIS PRESENTATION AND ITS CONTENTS ARE CONFIDENTIAL AND ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION. THIS PRESENTATION MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION WITHIN THE MEANING OF APPLICABLE SECURITIES LAWS. THIS PRESENTATION IS NOT AN OFFER OR INVITATION TO BUY OR SELL SECURITIES IN ANY JURIS DICTION. The Company certifies that slides numbered 17, 18, 19, 20, 22, 23, 24, 25, 26, 27, 38, 39, 40, 41, 42, 48 and 50 within this presentation do not constitute material, non-public information within the meaning of Regulation FD under the Securities Exchange Act of 1934, as amended. Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege For the purposes of this notice, “Presentation” means and includes this document, any oral presentation, any question and answer session and any written or oral material discussed or distributed during the Presentation meeting. This Presentation is being provided to you solely for your information and you may not disclose this Presentation to any third party. It may not be copied, distributed, reproduced, published or passed on, directly or indirectly, in whole or in part, or disclosed by any recipient, to any other person (whether within or outside such person's organization or firm) or published in whole or in part, by any medium or in any form for any purpose or under any circumstances. Forward-looking Statements Certain statements and information contained in this Presentation constitute “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and are generally identifiable by the use of words such as “believe,” “estimate,” “expect,” “forecast,” “our ability to,” “plan,” “potential,” “projected,” “target,” “would,” or other similar words, which are generally not historical in nature. The forward-looking statements speak only as of the date hereof, and we undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise. Our forward-looking statements express our current expectations or forecasts of possible future results or events, including: future financial and operational performance; earnings expectations; revenue efficiency levels; market outlook; forecasts of trends; future client contract opportunities; contract dayrates; our business strategies and plans and objectives of management; estimated duration of client contracts; backlog; expected capital expenditures and projected costs and savings. Although we believe that the assumptions and expectations reflected in our forward-looking statements are reasonable and made in good faith, these statements are not guarantees and actual future results may differ materially due to a variety of factors. These statements are subject to a number of risks and uncertainties, many of which are beyond our control. Important factors that could cause actual results to differ materially from our expectations include: the global oil and gas market and its impact on demand for our services; the offshore drilling market, including reduced capital expenditures by our clients; changes in worldwide oil and gas supply and demand; rig availability and supply and demand for high-specification drillships and other drilling rigs competing with our fleet; costs related to stacking of rigs; our ability to enter into and negotiate favorable terms for new drilling contracts or extensions; our substantial level of indebtedness; possible cancellation, renegotiation, termination or suspension of drilling contracts as a result of mechanical difficulties, performance, market changes or other reasons; our ability to continue as a going concern in the long term, including our ability to confirm a plan of reorganization that restructures our debt obligations to address our liquidity issues and allows emergence from our Chapter 11 proceedings; our ability to obtain Bankruptcy Court approval with respect to motions or other requests made to the Bankruptcy Court in our Chapter 11 proceedings, including maintaining strategic control as debtor-in-possession; our ability to negotiate, develop, confirm and consummate a plan of reorganization; the effects of our Chapter 11 proceedings on our operations and agreements, including our relationships with employees, regulatory authorities, customers, suppliers, banks and other financing sources, insurance companies and other third parties; the effects of our Chapter 11 proceedings on our Company and on the interests of various constituents, including holders of our common shares and debt instruments; Bankruptcy Court rulings in our Chapter 11 proceedings as well as the outcome of all other pending litigation and arbitration matters and the outcome of our Chapter 11 proceedings in general; the length of time that we will operate under Chapter 11 protection and the continued availability of operating capital during the pendency of the proceedings; risks associated with third-party motions in our Chapter 11 proceedings, which may interfere with our ability to confirm and consummate a plan of reorganization and restructuring generally; increased advisory costs to execute a plan of reorganization; our ability to access adequate debtor-in-possession financing or use cash collateral; the potential adverse effects of our Chapter 11 proceedings on our liquidity, results of operations, or business prospects; increased administrative and legal costs related to our Chapter 11 proceedings and other litigation and the inherent risks involved in a bankruptcy process; the cost, availability and access to capital and financial markets, including the ability to secure new financing after emerging from our Chapter 11 proceedings; and the other risk factors described in our 2017 Annual Report on Form 20-F and our Current Reports on Form 6-K. These documents are available through our website at www.pacificdrilling.com or through the SEC’s website at www.sec.gov. 2	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change Table of Contents I. II. III. IV. V. VI. Introduction (Paul Reese – CEO) Company Background and Positioning (Paul Reese – CEO) Commodity Backdrop (Michael Acuff – SVP Commercial) Offshore Drilling Market Outlook (Michael Acuff – SVP Commercial) Business Plan Assumptions and Financial Projections (John Boots – SVP and CFO) Conclusion (Paul Reese – CEO) Appendix a. b. c. d. Commodity Backdrop Offshore Drilling Market Outlook Business Plan Assumptions Projected Financials in the Business Plan 3	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change I. Introduction	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change The Company has carefully prepared a Business Plan (the “Business Plan”) for the period 2018 through 2025  In developing its Business Plan, the Company has considered: – Projected supply, demand and price of oil – The outlook for the offshore UDW drilling market – The Company’s competitive and strategic position in the UDW drilling market  To obtain additional market intelligence and to enhance the credibility of the Business Plan, the Company has engaged three experts (the “Experts”) to support management in developing the Business Plan: – Analysis Group has been engaged to help inform the outlook for oil prices – Rystad Energy has been engaged to help inform the outlook for oil prices and the UDW offshore drilling market – Fearnley Offshore has been engaged to help inform the outlook for oil prices, the UDW offshore drilling market, and drillship values 5	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change The Company has carefully prepared a Business Plan (the “Business Plan”) for the period 2018 through 2025 (cont’d)  The utilization and dayrate projections incorporated by management in the Company’s Business Plan have been informed both by: –Near-term currently visible contracting opportunities, and –Additional contract opportunities estimated by management in view of input from the Experts, most importantly Rystad Energy’s sophisticated, granular, bottom-up demand / supply driven model for the Company’s utilization and dayrates  The cost and capex assumptions in the Business Plan – Have been carefully developed by the relevant corporate departments of the Company and have been reviewed by AlixPartners – Are reflective of (i) current run-rates, (ii) expected cost increases as market activity increases, (iii) required equipment service and maintenance costs over the coming years, and (iv) planned capex to further enhance the competitiveness of the fleet 6	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change Recent Contract Awards  The Company has been successful in multiple competitive tender processes, executing a contract extension and putting rigs to work post-petition, including: – The contract commencement with Petronas for the Pacific Santa Ana, – A contract extension for the Pacific Bora, – A Letter of Intent from ENI for the Pacific Bora, – A Letter of Award for the Pacific Khamsin, and – A Letter of Award for the Pacific Meltem  The Company successfully competed against much larger offshore drilling competitors in multiple cases  The Company believes it was selected over competitors based on its: – Rigs’ technical specifications and quality – Condition and readiness of rigs, attributable to the Company’s “Smart Stacking” system, and – Experience and relationships of the existing management team  As a result of these awards, the Company expects to have at least five of its seven rigs under contract by the end of 2018 or early 2019 7	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change II. Company Background and Positioning	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change Pacific Drilling at a Glance Pacific Drilling S.A. (the “Company” or “Pacific Drilling”) is a competitive global ultra-deepwater (“UDW”) offshore oil and gas drilling company which is well positioned to benefit from the expected increase in UDW drilling demand        The only pure-play “high specification” UDW offshore driller Incorporated in 2008, operational since 2011 7 drillships of the highest specification Proven experience in – – – – – Nigeria (Total, Chevron, FASL, Erin) Ivory Coast (Total), Guinea (Hyperdynamics) Mauritania (Petronas) USGOM (Chevron) Brazil (Petrobras)    Very cost-competitive operator Exceptional service quality and revenue capture with 98.3%1 revenue efficiency2 in 2017 Strong, experienced management team 768 employees3 Historical revenue efficiency >94.5% over the life of the Company Revenue efficiency defined as actual contractual dayrate revenue divided by the maximum amount of contractual dayrate revenue that could have been earned As of December 31, 2017    (1) (2) (3) 9	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change Pacific Drilling is run by an experienced and qualified management team with over 260 years of industry experience The Company’s management team has a combined 82 years of tenure with Pacific Drilling 10 NamePositionCompany Tenure (years)Industry Experience (years)Career Experience (years) Paul ReeseCEO>9>22>24 Cees van DiemenEVP, COO>8>39>39 Michael AcuffSVP, Commercial>3>18>22 Johannes BootsSVP, CFO>8>28>33 Lisa BuchananSVP, GC, Secretary>2>11>32 Amy RoddySVP Corporate Services>6>10>17 Tony SeeligerSVP Operations>5>25>25 Richard TatumSVP, CAO>7>9>15 Michael CurtisVP Strategy and CPO>6>14>19 Paul LinkinVP QHSE>9>26>28 Matthew SchwartzVP Audit & Compliance>7>17>22 Corey ThompsonVP Information Technology<1>9>32 Dick VerhaagenVP Africa>4>30>30 Mike WeinsteinVP Tax>7>15>15	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Pacific Drilling’s fleet is comprised of 7 “high spec” 6th and 7th generation Preliminary Draft—Subject to Review and Change drillships, the most modern generations in the market, and 5 of these drillships are either under existing contract or currently in process of entering into new contracts Pacific Khamsin Received letter of award for two years of work in US Gulf of Mexico from an undisclosed party Pacific Sharav Working for Chevron in US Gulf of Mexico Pacific Meltem Received letter of award for two years of work in US Gulf of Mexico from an undisclosed party Pacific Bora Awarded letter of intent from ENI for work in Nigeria Pacific Scirocco Modified Smart Stacked in Las Palmas Pacific Mistral Modified Smart Stacked in Las Palmas Pacific Santa Ana Working for Petronas in Mauritania 11 6th Generation Drillships 7th Generation Drillships	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change Pacific Drilling’s drillships offer premium technical capabilities relative to the total floater1 market and the 6/7th generation floater market specifically floaters lifted (e.g., casing strings and BOPs) over higher hook load capacity. At 2.5M lbs. the rigs can perform the significantly increases efficiency and allows customers to assets to be bid into tasks at most demand depths. This (e.g., risers). non-productive time. Also, during a failure of the (1) (2) (3) (4) Floater market includes semi-submersibles and drillships Offline standbuilding Maximum water depth could be extended to up to 12,000 feet with drillship modifications BOP = blow out preventer outfitted 12 Source: Rystad Energy research and analyses Feature Share of fleet Comment Total floaters 6/7th generation Main Max Hook Load 2.5M lbs. or more 27% 52% Khamsin Meltem Sharav 43% Deeper wells and deeper water require more steel to be elevations. This is accomplished by having sufficient most demanding tasks out there. Dual Derrick 43% 74% Bora2 Khamsin Meltem Mistral2 Santa Ana Scirocco Sharav 100% Dual derrick setups allow for simultaneous operations, e.g., building of casing strings while drilling. This complete operations faster. Water Depth Rating 10,001 ft or more 31% 67% Bora3 Khamsin Meltem Mistral Santa Ana Scirocco Sharav 86% The higher end water depth rating generally allows the is done by having sufficiently spec’ed equipment stacks Dual BOP4 14% 28% Bora Khamsin Meltem Sharav 57% Refurbishing the BOP between jobs can be on critical path and, by having a second unit, once can eliminate primary BOP, one can eliminate non-productive time by replacing with the secondary.	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change With a fleet composed solely of high-spec rigs, Pacific Drilling is in a strong competitive position to participate in the recovery in demand for UDW drilling services 7 13 Perce60ntage of Rig1 C51omposition by28Rig Capability2a0 nd Type 18 61 The only 100% modern, exclusively UDW fleet Pacific Drilling Ocean Rig Seadrill Transocean Noble Rowan Diamond Offshore Ensco High Spec Standard Spec Low Spec Jackup Rig Specification Index (1) Rig includes jack-ups, semi-submersibles and drillships Note: Graph includes committed newbuilds only 13 100% 8% 43% 4% 50% 80% 6% 59% 33% 44% 8% 85% 20% 5% 5% 14% 28% 47% 43% 8% 7% 12% 29% 22% 20% 21%	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change With a very cost-competitive fleet, the Company is well-positioned to benefit relatively early in the market recovery Cost of Supply for 2023 Dedicated DP Floater Asset Class Marginal Cost of Supply 600 450 Cost of Floater Supply for DP Floaters ($kpd) 300 150 0 Supply Curve of Dedicated DP floaters - 2023 (ranked by cost of competiveness, lowest to highest) Source: Rystad Energy 5 *Assumes attrition of floaters reaching 30 years age with upcoming special survey capital expenditure costs and no contract Note: Cost of Floater Supply includes opex, SPS, inefficiency/spread impact and reactivation costs. Demand calculated base on BP Trust Implied oil price forecast 14 Rystad Base Case Demand: 146 floaters Marginal Cost: $382kpd	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Company’s overall cost effectiveness, and its very competitive and cost effecPtreilvimeinar“y DSramft—Saubrjetct to Review and Change Stacking” strategy, reflect its long-standing and differentiated proactive drillship maintenance programs Smart Stacking Keeps the Rig in an Advanced Warm Status – Ready to Work in 90 days  Uniform, high-specification fleet that has been continuously maintained from delivery allows the Company to put the rigs into Smart Stack mode cost effectively  Locating all Smart Stacked rigs together allows the Company to employ a Modified Smart Stack mode, where one “anchor” Smart Stacked rig supports the other rigs, allowing further cost reduction on the supported rigs – the Modified Smart Stacked rigs are ready to work in 180 days mobilization, country-specific installation crew and includes refresher training continuously monitored to ensure reactivated to operational mode acceptance testing is performed 5 15 [ ] Smart Stacking efficiencies have lowered daily costs from initial forecasted levels of $80-$100kpd to ~$30kpd in Smart Stacking mode and ~$8kpd in Modified Smart Stacking mode Post-Smart Stack (Ramp Up) • 90-day ramp up includes approval/permits and 3rd party • Crew ramp-up assembles full rig and maintenance • Maintenance routines are • Drilling simulation tests and client Smart Stack Period • All equipment is kept in hot condition and periodically functioned • Minimum crew of 15 persons is retained on board to maintain Class compliance and perform maintenance • 90-day Back-to-Work List is Ramp Up will be executed in the time frame • “Marketing crew” maintained for immediate deployment to any contracted rig Pre-Smart Stack (Ramp Down) • Initial stage critical to success of eventual Ramp-Up • Total top down cleaning of rig • Comprehensive equipment health-check is performed • 1-year Preventive Maintenance System (“PMS”) routine performed at minimum for all equipment • 5-yearly PMS routine performed on all drilling equipment • Any PMS routines due in next 2.5 years are performed	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change III. Commodity Backdrop	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change IV. Offshore Drilling Market Outlook	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change In view of the expected recovery in the UDW drilling industry and the Company’s competitive position in the industry, the Company is pursuing the following strategy  Manage the Company’s assets in such a way as to enable it to nimbly and cost-effectively exploit the market recovery Continue to deploy existing drillships under contracts in which cash flow dynamics are positive even in the current low dayrate environment Maintain readiness and cost competitiveness of idle drillships through “Modified Smart Stacking” Retain critical mass of core management and operations personnel, and continue personnel development programs, while managing cash costs Maintain presence in key UDW drilling geographies, including West Africa, US Gulf of Mexico and Brazil        5 28 This strategy is designed to enable the Company to generate significantly increased profitability and cash flow as the market for UDW drilling improves over the medium-term	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change V. Business Plan Assumptions and Financial Projections	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege The utilization and earned dayrates projected in the Business Plan are generParellilmyinary Draft—Subject to Review and Change in line with the projections prepared by Rystad Energy for the Company’s fleet and conservative relative to projections by Fearnley Offshore UDW Utilization (%) – Excluding Revenue Efficiency UDW Dayrate Assumptions ($’000/d) - Worldwide Note: Due to technical spec differences, Bora, Scirocco & Mistral strip is $25k lower than Company mgmt. strip, and Khamsin, Sharav & Meltem strip is $25k higher than Company mgmt. strip; Assumed rates in 2019 are management’s best estimates based on current client discussions and tenders; Rystad Energy’s projections are based on their in-house view of base, low and high oil price projections while Fearnley Offshore’s projections represent s a range of possible outcomes under a single in-house oil price projection (1) Figures are for UDW floaters including 5G, 6G and 7G (2) Business Plan utilization less than “Rystad Energy – Company Fleet” due to assumed 15 days downtime between contracts Source: Rystad Energy report to Company based on Rystad view on oil pricing dated March 21, 2018, Fearnley Offshore report presented to Company March 13, 2018 30 Fearnley Offshore – Floater Fleet1 Rystad Energy – 6th / 7th Generation Floaters 2019202020212022202320242025 $224$300$354$408$425NANA $219$268$303$328$378$450$460 Business Plan $183$266$298$325$375$450$475 Fearnley Offshore – Floater Fleet1 Rystad Energy – DP Floater Fleet Rystad Energy – Company Fleet 2019202020212022202320242025 85%90%NANANANANA 65%74%81%86%99%100%100% 71%100%100%100%100%100%100% Business Plan (ex. rev. eff.)2 77%90%96%96%96%96%95%	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change The Company’s Business Plan projects the beginning of a market recovery in 2019 and significantly increased revenue and Adjusted EBITDA during the period 2021 through 2025 Adjusted EBITDA and Adjusted EBITDA / rig year are projected to remain below their peak levels in 2015 during the forecast period due, in large part, to projecting that dayrates not rise to the peak levels above $500k / day that were experienced in the last industry cycle Revenue ($m) Adjusted EBITDA ($m) 800 1,200 1,000 600 800 400 600 400 200 200 - - (200) Adj. EBITDA Rig years 5.3 5.1 3.8 2.2 2.6 5.4 6.3 6.8 6.7 6.7 6.7 6.7 106 117 108 (5) 4 9 9 28 30 46 7279 / rig year Actuals Forecasts 31 2014 $1,086 2015 $1,085 2016 $770 2017 $320 2018 $317 2019 $451 $519 2020 2021 $699 2022 $756 2023 $871 2024 $1,047 2025 $1,095 2014 $563 2015 $595 2016 $414 2017 ($10) 2018 $9 2019 $50 $56 2020 2021 $186 2022 $201 2023 $311 2024 $482 2025 $528	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change The Company is projected to generate significant unlevered free cash flow beginning in 2021 as the expected market recovery develops momentum Unlevered Free Cash Flow Before Any Restructuring Expenses ($m) 500 400 300 200 $80 100 - ($35) ($22) (100) 32 2018 2019 2020 2021 2022 2023 2024 2025 $465 $399 $242 $164 ($43)	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change A plan of reorganization and the Company’s ability to capitalize on the anticipated market recovery and maximize value will benefit from the investment of new money Assuming consummation of a plan of reorganisation on September 30, 2018, the Company is projected to have approximately $151 million of cash on its balance sheet after deducting the expected cash costs of the restructuring The Company anticipates that additional cash will be required to fund a potential partial cash paydown of bank debt at plan consummation and to fund debt service and potential liquidity requirements during the projection period after plan consummation Illustrative Closing Cash Balance at Exit plus Cumulative Unlevered Free Cash Flow1 ($m) Illustrative Cash Balance September 30, 2018 Amount ($ in millions) 1,500 1,400 1,300 1,200 1,100 1,000 900 800 700 600 500 400 300 200 100 - Category Projected Clos ing Ca s h September 30, 2018 196 Les s : Res tricted Ca s h (9) Les s : Exit Tra ns a ction Cos ts (30) Les s : True-Up of RCF a nd SSCF Interes t & Gua ra ntee Fees (6) (1) Projected cash balances do not include any debt repayments at plan consummation or debt service payments thereafter, or a ny cash requirements with respect to the customs bond needed for the potential ENI contract 33 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 Illustrative Cash Balance at Exit 151 Low-point of $72 million in2Q 2020	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change VI. Conclusion	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change The Company is well positioned to benefit from the expected industry recovery  Oil reserves continue to deplete at a rapid pace, while demand for oil continues to increase  Increased UDW drilling will be required to help fill the inevitable “supply gap” forecasted  The Company is very well positioned to take advantage of this increase in UDW drilling due to: –Its highly efficient and cost competitive fleet of latest generation drillships –Its motivated and experienced management team and operations personnel  In fact, the Company is already demonstrating its market strength by obtaining 3 Letters of Intent/Award from clients, even while in the process of Chapter 11 –By the end of 2018 or early 2019 the Company expects to have at least five of its seven rigs under contract  Accordingly, the Company’s Business Plan forecast illustrates significantly increased revenue and cash flow by 2021 that will drive value for all stakeholders 35	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change Appendix a. b. c. d. Commodity Backdrop Offshore Drilling Market Outlook Assumptions in the Business Plan Projected Financials in the Business Plan 26	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change a. Commodity Backdrop	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change b. Offshore Drilling Market Outlook	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change Recent Dayrates Trending From $120-$150kpd; Low End for Short Term Work and Upper End of Range for Longer Term Work Source: Company Notes: Includes rigs with water depth capability greater than 5,000 ft and contract dayrate revenue from new mutual or mutual renegotiations with available dayrates (IHS-Petrodata) and excludes harsh environment fixtures; Dayrates estimated from analyst reports or market intelligence 44 Operator Rig Name Manager Rig Type Rig Water Depth Country Contract Description Day Rate Fixture Date ExxonMobilMaersk VikingMaersk DrillingDrillship12,000’USA2-month extension$145 2-Jan-18 PetrobrasOcean ValorDiamond OffshoreSemi7,500’Brazil2-yr extension (priced contract)Blend & Extend 4-Jan-18 ExxonMobilStena CarronStenaDrillship7,500’Guyana1-well option$135 5-Jan-18 RelianceDhirubhai Deepwater KG1TransoceanDrillship10,000’India6 wells + 2-7optionsNot Published 8-Jan-18 EniWest GeminiSeadrillDrillship10,000’Angola4 wells + 3-well option$140 11-Jan-18 MurphyDeepwater AsgardTransoceanDrillship10,000’USA1-2 wells$123 16-Jan-18 RepsolENSCO 8504EnscoSemi8,500’Vietnam5 wells + option wellsNot Published 18-Jan-18 CNR InternationalDiscoverer IndiaTransoceanDrillship10,000’Cote d'Ivoire5-wells + 2 x 1-well options$155 7-Feb-18 ExxonMobilOcean MonarchDiamond OffshoreSemi10,000’Australia2 wellsNot Published 12-Feb-18 PTTEPNoble Clyde BoudreauxNobleSemi10,000’Myanmar8 wells + 7 to 9 well optionsNot Published 16-Feb-18 ShellSSV CatarinaPetroservSemi6,562’BrazilTBCNot Published 16-Feb-18 ShellDeepwater NautilusTransoceanSemi8,000’Brunei1 well + 3 option wellsNot Published 19-Feb-18	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change No contract cancellations / terminations since November 2017 12-Month Rolling Floater Contract Terminations Nov-17 Rowan Resolute Rowan Anadarko USGOM Contract end date changed from August 2018 to March 2018 $28m Sep-17 Discoverer Clear Leader Transocean Chevron Termination effective November 2017. Contract originally set to expire October 2018 $148m Jul-17 Bolette Dolphin Fred Olsen Anadarko Cote D'Ivoire Rig was on contract until July 2018, term fee equal to remaining EBITDA $96m Feb-17 Ocean Rig Athena Ocean Rig Conoco Rig has been off contract since June of 2016 - did not disclose details of term payout $64m Feb-17 Stena Forth Stena Hess Hess noted that it terminated a rig, but has not disclosed the rig - Feb-17 Deepwater Asgard Transocean Chevron USGOM Contracted until July 2017 at $615kpd, term fee covered lost EBITDA $79m Jan-17 Pacific Santa Ana Pacific Chevron USGOM Contract amendment with Chevron to change the contract end date to January 31, 2017 $35m Kosmos reversed the extension of the rig, it will revert to original dayrate ($595kpd from blend & extend rate of $495kpd) and end its contract Nov 2017, not Nov 2018 Jan-17 Atwood Achiever Atwood Kosmos NW Africa $75m Source: IHS-Petrodata and market/driller reports Notes: Dayrate was cut without contract extension, **unclear prior contract terms make current transaction unclear (excluded from termination totals) 45 Contract cancellations and suspensions in the deep-water space show that once a rig is operating and it meets the technical specifications of the contract, most contracts with IOC’s protect against early terminations with large payouts for the rig operators Time Rig Contractor Operator Location Comments Payout	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change 2018 early contracting pace ahead of last year UDW Fixture Activity (Rig years) UDW Fixtures by Region (Rig Years) 180 14 169 160 12 140 10 120 8 100 2 80 2 6 60 4 40 4 9 2 20 2 0 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2012 2013 2014 2015 2016 2017 2018 US W Africa Asia S America Other labels labels Notes: Excludes the Petrobras domestic newbuilds; includes rigs with water depths above 7,500 feet; includes rigs with sublet fixture type Source: IHS-Petrodata 46 Rig Years 12 11 11 7 11 8 5 6 5 4 22 2 10 8 3 82 1	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change Supply rationalization has slowed though cold stacked rigs continue to be scrapped Supply Rationalization of Low Spec Rigs (210 low spec 5th gens and below) 200 175 150 125 100 163 157 75 138 107 50 25 0 Contracted Limbo Out Limbo Out 5 Source: IHS-Petrodata, *Cold stacking is assumed after stacked for more than six months or after announced 47 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Rig Manager RCI IHS Status Ensco 8507Ensco 5.1 Warm Stacked* Blackford DolphinDolphin 3.7 Warm Stacked* Rig Manager RCI IHS Status BicentenarioIPC 5.0 Warm Stacked Scarabeo 8Saipem 5.1 Warm Stacked 17 20 26 31 34 37 40 16 49 56 15 53 63 59 63 21 72 18 16 79 87 17 83 95 99 20 108 113 117 122 123 23 21 125 131 24 24 132 140 136 146 146 148 147 146 144 138 28 31 143 143 26 15 13 16 11 177 175 161 159 150 136 130 127 119 116 112 116 114 104 102 89 83 78 78 81 73 63 68 68 60 60 65 58 58 58 60 60 60 62 3 2 4 6 2 9 9 3 2 4 12 14 18 14 9 13 14 12 10 9	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change Large number of newbuild delays and cancellations Recent Delivery News North Atlantic Drilling delays delivery of West Rigel to 2018 DSME delivers Deepwater Pontus to Transocean Daewoo Shipbuilding & Marine Engineering (DSME) has delivered drillship Deepwater Pontus to Transocean. Deepwater Pontus is scheduled to mobilize to the US Gulf of Mexico for a 10-year charter with Shell. DSME said the final drillship it is building for Transocean is set for delivery in October. Deepwater Poseidon is also expected to mobilize to the US Gulf following its delivery. Like Deepwater Pontus, it has a 10-year charter with Shell. Both ultra deepwater units were ordered in 2012. The rigs are of the DSME 12000 design. North Atlantic Drilling has amended the agreement with Jurong Shipyard to extend the delivery deferral period of newbuild semi West Rigel from 6 July 2017 to 6 January 2018. The extension allows the parties to continue to explore commercial opportunities for the unit. As previously agreed, in the event no employment is secured for the semi and no alternative transaction is completed, North Atlantic Drilling and Jurong will form a joint asset holding company for joint ownership of the unit, to be owned 23% by North Atlantic Drilling and 77% by Jurong. Sevan Drilling delays delivery of Sevan Developer to 2020 Sevan Drilling has further deferred the delivery of deepwater semi Sevan Developer from 30 June 2017 to 30 June 2020. The deferral is an amendment to the previous delivery deferral agreement for the Sevan Developer effective upon receipt of USD 25.3 million plus interest from COSCO Qidong Offshore. During the extended delivery deferral period, Sevan may continue marketing the rig for an acceptable drilling contract where financing could be secured to allow delivery. Under the amended agreement, COSCO has the option to terminate the deferral period on 1 July 2018 and again on 1 July 2019, which would require COSCO to refund the remaining USD 1 million investment balance to Sevan. The deferral agreement was first settled in October 2014. The completed rig is on standby at COSCO Qidong in China awaiting delivery. It is being marketed for work. Transocean – Construction Resumed on Jurong Drillships Sembcorp Marine reported that Transocean has requested Jurong to resume work on its two drillships at the yard. The rigs are scheduled to be delivered in 1H’2020. Delayed Jul 2017 West Rigel NADL Semi 10000 Singapore Jurong 15-Nov-2014 6-Jan-2018 Note Above Delayed Jul 2017 Sevan Developer Sevan Semi 10000 China COSCO 30-Jun-2014 30-Jun-2020 Note Above Shipyard failed to meet the originally delivery date, allowing Stena to cancel for convenience. Original construction cost (yard cost) was just Cancelled Jun 2017 Stena MidMax Stena Semi 6562 South Korea SHI 31-Mar-2016 30-Jun-2018 above $700m for this rig and estimated total project cost above $800m Seadrill will receive $170m in cash from the yard and recognize a non-cash impairment of $44m. Rig rumored to be purchased by Mr. Sold Mar 2017 West Mira HHI Semi 10000 South Korea HHI 1-Oct-2014 1-Jul-2018 Fredriksen for ~$360-375m, will likely have SDRL manage. Delayed Jan 2017 Hai Yang Shi You 982 COSL Semi 5000 China Dalian 1-Aug-2016 31-Jan-2018 Delayed for another year 5 49 Source: IHS-Petrodata and market reports The Sete Brasil newbuild program has been reduced from 29 rigs to a proposed ~10. Ongoing corruption investigations and restructuring have the potential to lower this number further. Recent reports suggest a Sete rig program that may be reduced to 3-6 rigs. StatusDateRig NameManagerRig TypeRig Water Depth (ft)CountryBuild Yard Orig Delivery Date Delivery DateComments	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change c. Business Plan Assumptions	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change Projected Utilization and Dayrate per Rig In addition to the rollover dayrate projections prepared by Rystad, the Company’s projections are informed by current and prospective contracts Projected Dayrates ($’000) Plan = Existing contracts / Expected commitments = Idle / Modified Smart Stacked = New contract Note: Assumed rates in 2018 & 2019 are management’s best estimates based on current client discussions and tenders (1) Petronas contract also includes integrated service costs of $120k in the first phase (2018) and $130k in the second phase (2019-2020) (2) Letter of award from unnamed party 52 Business 2018 2019 2020 2021 2022202320242025 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q1Q 2Q 3Q 4Q1Q 2Q 3Q 4Q1Q 2Q 3Q 4Q PBA PSO PML PSA1 PKN PSV PMM 150 - 150 150 150 150 150 150 250 250 250 250 275 275 275 275 300 300 300 300 350 350 350 350 425 425 425 425 450 450 450 450 Erin-- EN-I - - - 190 190 250 250 250 250 275 275 275 275 300 300 300 300 350 350 350 350 425 425 425 425 450 450 450 450 - - - - - - - - - - 250 250 250 250 275 275 300 300 300 300 350 350 350 350 425 425 425 425 450 450 450 450 265 265 150 150 150 280 280 280 280 280 275 275 300 300 300 300 325 325 325 325 375 375 375 375 450 450 450 450 475 475 475 475 Pet-ron as - LO-A2 160 160 160 160 160 160 160 160 270 325 325 325 325 350 350 350 350 400 400 400 400 475 475 475 475 500 500 500 500 550 550 550 550 550 550 425 300 300 300 300 300 325 325 325 325 350 350 350 350 400 400 400 400 475 475 475 475 500 500 500 500 Che-vro n - - LO-A2 160 160 160 160 160 160 160 160 325 325 325 325 350 350 350 350 400 400 400 400 475 475 475 475 500 500 500 500	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change Projected Opex per Day Longer-term, the Company assumes two rigs operating in each of US GoM, Brazil and West Africa; and that the Khamsin will be a “floating” rig Operating costs per day are forecast to increase as market activity returns Assumed Long-Term Rig Location Opex per Day Assumption • Contracted rigs: • Projected opex per day is based on: A base cost per day in each region Cost inflation of the base cost to reach dayrates which reflect historical cost levels in each region at time of high activity 1. 2. • Inflation in the Business Plan beyond 2022 assumed to be covered through contractual escalation provisions Modified Smart Stacked rigs: US GoM PSV PMM • West Africa PBA PSO • Anchor rig: Between $50kpd and $80kpd depending on how many rigs that are modified Smart Stacked; 90 days to ramp up • Costs include Smart Stacking costs for the rig as well as for a marketing crew (personnel retained in anticipation of near-term activity increase) Each additional rig: Between $7kpd and $8kpd depending on how many rigs that are modified Smart Stacked; 180 days to ramp up Brazil PML PSA “Floating” • PKN Projected Opex per Day ($’000) 2019 2020 2021 2022 2023 ≥2024 Plan Cost % Increase West Africa US GoM Brazil Mauritiania Floating - - - - - - - - - - 13% 6% 7% - 10% 13% 6% 7% NA 10% 13% 6% 7% NA 10% - - - NA - - - - NA - DOaypreaxteper Day West Africa US GoM Brazil Mauritiania Floating 120 137 150 110 130 120 137 150 110 130 136 146 161 110 144 154 155 173 NA 158 175 165 185 NA 175 175 165 185 NA 175 175 165 185 NA 175 53 Business Base	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change Projected Daily Opex per Rig The projected opex per day for each rig reflects in which region the rig is assumed to be working Projected Opex per Day ($’000) Plan = Existing contracts / expected commitments = Idle / Modified Smart Stacked = New contract Note: 2018 assumptions are based on the Company’s 2018 forecast (1) Petronas contract also includes integrated service costs of $120k in the first phase (2018) and $130k in the second phase (2019-2020) (these costs are not included in opex per day) (2) Anchor rig in the Company’s modified smart stacking program; costs include Smart Stacking costs for the rig as well as for a marketing crew (personnel retained in anticipation of near-term activity increase) 54 Business 2018 2019 2020 2021 2022202320242025 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q1Q 2Q 3Q 4Q1Q 2Q 3Q 4Q1Q 2Q 3Q 4Q PBA PSO PML PSA1 PKN PSV PMM2 115 95 101 102 105 120 120 120 136 136 136 136 154 154 154 154 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 35 8 8 50 73 97 120 120 136 136 136 136 154 154 154 154 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 16 8 8 8 40 40 40 40 80 121 161 161 173 173 173 173 185 185 185 185 185 185 185 185 185 185 185 185 185 185 185 185 95 95 110 110 110 110 110 110 110 110 161 161 173 173 173 173 185 185 185 185 185 185 185 185 185 185 185 185 185 185 185 185 19 21 71 120 120 120 120 120 130 130 130 130 158 158 158 158 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 175 139 139 134 130 137 137 137 137 146 146 146 146 155 155 155 155 165 165 165 165 165 165 165 165 165 165 165 165 165 165 165 165 80 65 65 93 120 120 120 120 130 130 130 130 155 155 155 155 165 165 165 165 165 165 165 165 165 165 165 165 165 165 165 165	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change Projected Deferred Projects and Capex The Company projects that all of its seven rigs will undergo the 10-year SPS (incl. 20 days of out of service time) during the projected period and that three of the rigs will be equipped with MPD kits • The costs for deferred projects (which include UWILD, SPS, certain equipment inspections and thrusters overhaul required every 2.5, 5 or 10 years) are forecasted to: SPS1 is forecast for PBA in 2020, PSO, PML and PSA in 2021, PKN in 2023, PSV in 2024 and PMM in 2025 for the 10-year thruster overhaul Cash outlays for deferred projects are recorded as assets and then recognized over the period they benefit (generally 5 years; exceptions include UWILD (2.5 years) and thruster overhaul (10 years)) • • • In the Business Plan capex is forecast to: Enhancement capex include three MPD2 kits (which are transportable throughout the fleet) and passive heave system upgrades Cash outlays for capex are recorded as assets and then recognized over the period they benefit (generally 15 years) • • (1) Special periodic survey (2) Managed pressure drilling (technique to manage pressures which arise when drilling more effectively, leading to improved efficiency and enhanced safety) 55 $ in m illions 2018 2019 2020 2021 2022 2023 2023 2025 Total Sustaining capex $14.1 $21.5 $21.5 $21.5 $21.5 $21.5 $21.5 $21.5 Enhancement capex $9.6 $38.7 $25.2 $25.2 - - - - $164.6 $87.9 Total cape x $23.7 $60.2 $46.7 $46.7 $21.5 $21.5 $21.5 $21.5 $263.3 $ in m illions20182019202020212022202320242025 Total Total Deferred Projects$8.5$7.9$35.0$41.6$4.2$21.5$21.4$30.8 $170.8 Deferred Projects Capex CategoryMetric	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change Other Assumptions Other key operating cost and other cash flow drivers include the following • 95% • • Costs in 2018 of $23m Thereafter costs depend on utilization •$13m fixed costs per year plus $500k for each incremental rig (beyond 3) that is working •Costs per office as the schedule below • • At full run-rate, costs amount to $40m per year Inflation of 3% starting in 2022 • • • $42m in 2018 and 2019 Costs increasing to $50m in 2021, primarily the result of a pick-up in drilling activity and tightening markets Inflation of 3% starting in 2022 • • Cash payments for the 2016, 2017 and 2018 LTIP grants of a combined amount of $12m paid in 2018 through 2021 Beyond the 2018 grant, assumption is that LTIP is paid in stock • Receivable days: 60 • Payable days: 60 – 75 • • • • 1.5% for US GOM 6% for Nigeria 1% for Brazil (excl. PIS / Cofins / Service taxes, which are part of opex per day) 3% for other areas • Projections do not include any restructuring fees or any cash impact resulting from the outcome of the Samsung arbitration 56 $ in millions Rigs w orking in Region None 1 2 3 US GoM NA $2.6 $3.5 $4.25 Nigeria / West Af rica $1.0 $5.0 $8.0 NA Brazil $0.9 $7.0 $11.0 NA Satellite NA $2.5 NA NA Revenue Efficiency Shore-Based Costs Corporate Overhead Other G&A Accounts Receivable Accounts Payable / Accrued Expenses Tax Rate as % Contract Drilling Revenue Other CategoryBusiness Plan	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change d. Projected Financials in the Business Plan	

 

 	 	
	Privileged and Confidential Materials Prepared at the Request of U.S. Legal Counsel – NOT FOR FURTHER DISTRIBUTION Business Plan Overview Subject to Common Interest / Provided in Connection with Mediation & Subject to Mediation Privilege Preliminary Draft—Subject to Review and Change Summary Cash Flows M e m o (1) Excludes non-cash amortization of (i) deferred mobilization revenue and (ii) recognized other deferred revenue (2) Excludes non-cash amortization of (i) deferred mobilization / ramp-up costs and (ii) deferred projects costs (SPS, UWILD, etc.) 58 Total Revenues 317 451 519 699 756 871 1,047 1,095 EBITDA 9 50 56 186 201 311 482 528 5,755 1,824 $ in millions 2018 2019 2020 2021 2022 2023 2024 2025 Total Contract Drilling Re ve nue s 295 436 519 699 756 871 1,047 1,095 5,718 Total "Cas h" Re ve nue 1 295 436 519 699 756 871 1,047 1,095 5,718 Drilling Cash Opex & Ramp-Up Costs (186) (272) (346) (410) (447) (447) (448) (447) (3,003) Def erred Projects (SPS, UWILD, etc.) (8) (8) (35) (42) (4) (21) (21) (31) (171) Integrated services (22) (36) (22) - - - - - (79) Shore-Based Support Costs (23) (32) (36) (40) (41) (42) (44) (45) (303) Total "Cas h" Ope x2 (239) (348) (438) (491) (493) (511) (513) (523) (3,556) Corporate Overhead (42) (42) (46) (50) (52) (53) (55) (56) (396) Other G&A - LTIP (cash component) (5) (3) (3) (1) - - - - (12) Other G&A - SHI Fees (7) - - - - - - - (7) "Cas h" EBITDA 1 43 32 157 212 306 479 516 1,747 Taxes (7) (12) (15) (20) (21) (24) (29) (31) (159) Change in Accounts Receivable (12) (18) (24) (22) (14) (20) (30) 1 (138) Change in Accounts Payable 4 10 7 5 3 0 0 0 31 Change in Accrued Expenses (6) 15 11 7 5 1 1 0 34 Capex (24) (60) (47) (47) (22) (22) (22) (22) (263) Unle ve re d Fre e Cas h Flow (43) (22) (35) 80 164 242 399 465 1,252 Cum ulative Unle ve re d Fre e Cas h Flow (43) (64) (99) (19) 145 387 786 1,252 1,252	

Exhibit 99.2
 
	Privileged and Confidential Draft – Prepared at Direction of Counsel; Subject to Common Interest / Provided in Conjunction with Mediation & Subject to Mediation Privilege Presentation to Pacific Drilling Restructuring Committee June 7, 2018	

 

 	 	
	2 Privileged and Confidential Draft – Prepared at Direction of Counsel; Subject to Common Interest / Provided in Conjunction with Mediation & Subject to Mediation Privilege Introduction Quantum Pacific (“QP”), a third party investor (collectively, the “QP Group”) and certain lenders under the SSCF Facility (the “SSCF”) are pleased to present a revised restructuring proposal to Pacific Drilling (“PACD” or the “Company”)  PACD is seeking a restructuring solution that will provide the Company with a sustainable capital structure and sufficient liquidity to withstand the uncertainty in the timing of the industry recovery In order to achieve these objectives, we understand the Company believes any restructuring proposal must provide for a significant deleveraging of the balance sheet, new equity capital to ensure the Company has sufficient pro forma liquidity, and certainty regarding the likelihood of such new equity capital QP Group / SSCF strongly believe that our combined revised proposal with a new capital commitment of $1.2 billion addresses all of the Company’s objectives and provides the best opportunity for the Company to successfully restructure its obligations p/w/p / perilla Weinberg/ partners

 

 

	Privileged and Confidential Draft – Prepared at Direction of Counsel; Subject to Common Interest / Provided in Conjunction with Mediation & Subject to Mediation Privilege SSCF Restructuring Term Sheet Summary QP Group / Fully committed $1.0 billion new equity investment (the “E qu ity Inve stmen t”) , comprised  of: − $450M private placement (the “Private Placement”) commitment by QP Group/SSCF to buy 41.7% of equity(1) − $550M equity rights offering (the “ERO”) open to the 2017 Notes / 2018 TLB / 2020 Notes (the “AHC Group Classes”) to buy 50.9% of equity(1) − The ERO would be fully backstopped by QP Group/SSCF, however, QP Group / SSCF is willing to let the AHC backstop some or all of the ERO − ERO subscription rights to be fully transferrable The Equity Investment commitment / backstop parties will receive a private placement commitment and backstop premium of 8.0% paid in equity − Implies Private Placement investors receiving 3.3% of equity and ERO backstop parties receiving 4.1% of equity Proceeds from the Private Placement and the ERO would be used to: − Provide a $405M cash payment to the AHC Group Classes − Provide a partial paydown of the SSCF debt, and − Fund excess cash to the balance sheet    $700M new first lien facility (the “New 1L Facility”) raised by PACD on terms acceptable to QP Group / SSCF $200M fully committed new second lien facility (the “N ew 2L Fa cility”) provided by Canyon    and King Street(2) $900M of total debt, comprised of $700M of New 1L Facility and $200M of New 2L Facility $427M of net debt at closing    Notes: (1) Implies buy-in price of $204M per rig (2) New Second Lien Debt will have an 8 year tenor, [10-13]% interest rate, and will be secured on a second lien basis by all 7 rigs. QP Group / SSCF expressed a willingness that the New Second Lien Debt could be revised to include a paid in kind (“PIK”) toggle feature with a step up in interest rate of 200bps 3 PF Debt New Debt Commitment New Equity Investment	

 

	Privileged and Confidential Draft – Prepared at Direction of Counsel; Subject to Common Interest / Provided in Conjunction with Mediation & Subject to Mediation Privilege SSCF Restructuring Term Sheet Summary (Cont’d) QP Group / Full recovery in the form of:  – $417M cash paydown(1) – $60M consensually rolled by Canyon into the New 1L Facility Full recovery in the form of:  – $461M cash paydown(1) – $200M consensually rolled by Canyon and King Street into the New 2L Facility Consideration in the form of:  − $405M of cash on account of their secured claims − Rights to invest in the $550M ERO Notes: (1) Payment at closing will also include payment of default interest 4 Treatment of the AHC Group Classes Treatment of SSCF Debt Treatment of RCF Debt	

 

	Privileged and Confidential Draft – Prepared at Direction of Counsel; Subject to Common Interest / Provided in Conjunction with Mediation & Subject to Mediation Privilege Key Highlights of the Revised QP Group / SSCF Proposal  Provides for $1.2 billion of committed capital to adequately capitalize Pacific Drilling in light of uncertainty of the timing of the industry recovery  Fully backstopped $1.0 billion equity investment by long-term sector investors with significant knowledge of the Company’s assets and long-term commitment to the Company  Commitment by Canyon and King Street to roll $200 million of SSCF into New 2L Facility Creates sustainable deleveraged capital structure and positions the Company to most effectively compete for new contracts    Provides an opportunity to re-list the Company, which facilitates access to capital markets that can serve as a source of liquidity as well as for future growth  Provides substantial cash liquidity of $473M at closing to ensure significant runway for the Company to fund its business plan  Provides fair treatment to all the Company’s creditors, including minority holders of the 2017 & 2020 Notes and 2018 TLB    Opportunity for all members of AHC Group Classes to share in ERO and for members of the AHC Group to backstop the ERO Flexibility for all members of AHC Group Classes to elect to cash out or to recycle cash into new equity investment on same terms as QP Group / SSCF Flexibility for all members of AHC Group Classes to sell their ERO subscription rights    QP Group is willing to allow other existing minority equity holders to invest new money by purchasing some of the equity purchased by QP Group in the Private Placement at the same price as paid by QP Group (post closing) 5	

 

	Privileged and Confidential Draft – Prepared at Direction of Counsel; Subject to Common Interest / Provided in Conjunction with Mediation & Subject to Mediation Privilege Fair Treatment of All Stakeholders  Full repayment of the RCF Facility in cash at closing with proceeds from New 1L Facility, with $60 million held by Canyon voluntarily rolling into the $700 million New 1L Facility  Full repayment of the SSCF Facility in cash at closing, with $200 million held by Canyon and King Street voluntarily rolling into the New 2L Facility  Cash payment of $405 million to all of the AHC Group Classes in full satisfaction of their secured claims based on the mid-point of an independent rig market expert valuation analysis by Fearnley’s  Opportunity for all members of the AHC Group Classes to invest $550 million of capital into the Company at the same price as QP Group / SSCF by participating in the ERO or to re-sell their ERO subscription rights  Cash payment to all members of the AHC Group Classes is fairest alternative since it doesn’t prejudice minority holders (the “Minority Holders”) relative to members of the ad hoc group of bondholders that have appeared in the chapter 11 cases (the “AHC Group”)  Other existing equity holders also invest new money on the same terms as the QP Group by purchasing some of the shares to be purchased by QP 6	

 

	Privileged and Confidential Draft – Prepared at Direction of Counsel; Subject to Common Interest / Provided in Conjunction with Mediation & Subject to Mediation Privilege Sustainable Capital Structure with Investable Equity ($ in millions) Pro forma cash balance of $473 million and net debt of $427 million PRO FORMA CAPITAL STRUCTURE Amount Outstanding Transaction Adjustments Pro Forma Amount Pacific Drilling S.A. $500mm 2013 Revolving Credit Facility due 2018 $477 - ($477) (725) (768) $750mm Senior Secured Term Loan B due 2018 $750mm Senior Secured Notes due 2020 725 768 - - Pacific Drilling Sharav & Pacific Drilling VII $1.0Bn Senior Secured Credit Facility $500mm Commercial Tranche $331 - ($331) (165) $250mm EKN Sub-tranche 165 - $250mm Bank Sub-tranche 165 (165) - Pacific Drilling V $500mm Senior Secured Notes due 2017 $454 - ($454) New 1L Facility - $700 $700 200 New 2L Facility - 200 Notes: (1) Net of $30M accrued professional fees, $9M restricted cash, $6M true-up and guarantee fees, $1,000M of new money equity, $640M New 1L Facility, $60M RCF roll into New 1L Facility, $35M New 1L Facility transaction fees, $405M cash payout to AHC Group Classes, and $878M paydown to the RCF and SSCF; prior to payment of default interest to the RCF and SSCF. 7 Total Debt $3,085 ($2,185) $900 Less: Cash & Equivalents(1) (196) (277) (473) Net Debt $2,889 ($2,462) $427 Subtotal $661 ($661) - Subtotal $1,970 ($1,970) -	

 

	Privileged and Confidential Draft – Prepared at Direction of Counsel; Subject to Common Interest / Provided in Conjunction with Mediation & Subject to Mediation Privilege Transaction Valuation and Implied Equity Ownership Splits ($ in millions) PROPOSED VALUATION AND EQUITY SPLITS Assumed Illustrative Enterprise Valuation Less: Pro Forma Illustrative Total Debt(1) Plus: Pro Forma Cash(2) $2,100 (900) 473 New Money Discount 35% Equity Splits: Investment ($) Own (%) Plan Value ($) Private Placement $486 450 36 550 340 210 44 45.0% 41.7% 3.3% 50.9% 31.5% 19.5% 4.1% $753 697 56 852 526 326 68 Of Which: QP Group / SSCF Investment Of Which: Private Placement Commitment Premium ERO Participants (Rights allocated to Noteholders)(3) Of Which: Ad Hoc Group Members Of Which: Minority Bondholders ERO Backstop Premium Notes: (1) Reflects new $700M 1L and $200M consensually rolled 2L (2) Net of $30M accrued professional fees, $9M restricted cash, $6M true-up and guarantee fees, $1,000M of new money equity, $640M New 1L Facility, $60M RCF roll into New 1L Facility, $35M New 1L Facility transaction fees, $405M cash payout to AHC Group Classes, and $878M paydown to the RCF and SSCF; prior to payment of default interest to the RCF and SSCF. (3) Assumes AHC Group Classes exercise 100% of rights in ERO 8 Total $1,080 100.0% $1,673 Implied Illustrative New Money Equity Value $1,080 Implied Illustrative Equity Value $1,673	

 

 	 	
p 	Privileged and Confidential Draft – Prepared at Direction of Counsel; Subject to Common Interest / Provided in Conjunction with Mediation & Subject to Mediation Privilege Substantial Liquidity ($ in millions) Runway to Fund Business Plan PRO FORMA LIQUIDITY(1) $1,200 $1,000 $800 $600 $400 $200 $0 Projected Cash Balance Notes: (1) Based on Business Plan projections 9 4Q 25 3Q 25 2Q 25 1Q 25 4Q 24 3Q 24 2Q 24 1Q 24 4Q 23 3Q 23 2Q 23 1Q 23 4Q 22 3Q 22 2Q 22 1Q 22 4Q 21 3Q 21 2Q 21 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 4Q 19 3Q 19 2Q 19 1Q 19 4Q 18 3Q 18 Minimum Cash of $173M	

 

	Privileged and Confidential Draft – Prepared at Direction of Counsel; Subject to Common Interest / Provided in Conjunction with Mediation & Subject to Mediation Privilege Comparison of Recoveries to Minority Holders(1) ($ in millions) COMPONENTS OF RECOVERY TO MINORITY HOLDERS UNDER QP GROUP / SSCF PROPOSAL & AHC GROUP PROPOSAL QP Group / SSCF Proposal AHC Group Proposal Key Advantages of QP Group / SSCF Proposal recovery can be captured through sale of ERO Rights Notes: (1) “Minority Holders” defined as all holders of 2017 Notes, 2018 TLB, and 2020 Notes not part of the Ad Hoc Group 10 Cash Recovery 17.6% NA Provides ability to receive cash instead of equity in the reorganized company Total Recovery (Assuming Full Participation in ERO) Similar pro forma equity ownership in a less levered capital structure with more cash at closing and no PIK debt or contingent equity investment overhang 39.5% 40.7% ERO Rights will be freely transferable, therefore additional QP Group / SSCF intend to re-list the Company which facilitates access to capital markets and can serve as a source of liquidity for the Company and equity holders	

 

	Privileged and Confidential Draft-Prepared at Direction of Counsel; Subject to Common Interest I Provided in Conjunction with Mediation & Subject to Mediation Privilege Appendix I PERELLA WEINBERG PARTNERS	

 

	Privileged and Confidential Draft – Prepared at Direction of Counsel; Subject to Common Interest / Provided in Conjunction with Mediation & Subject to Mediation Privilege Pro Forma Liquidity ($ in millions) Comparison – Business Plan PRO FORMA LIQUIDITY(1) $1,200 $1,000 $800 $600 $400 $200 Minimum Liquidity of $75M - QP Group / SSCF Plan Ad Hoc Plan Notes: (1) Based on Business Plan projections 12 4Q 25 3Q 25 2Q 25 1Q 25 4Q 24 3Q 24 2Q 24 1Q 24 4Q 23 3Q 23 2Q 23 1Q 23 4Q 22 3Q 22 2Q 22 1Q 22 4Q 21 3Q 21 2Q 21 1Q 21 4Q 20 3Q 20 2Q 20 1Q 20 4Q 19 3Q 19 2Q 19 1Q 19 4Q 18 3Q 18 Minimum Cash of $173M Minimum Cash of $51M	

 

	Privileged and Confidential Draft – Prepared at Direction of Counsel; Subject to Common Interest / Provided in Conjunction with Mediation & Subject to Mediation Privilege Pro Forma Liquidity ($ in millions) Comparison – Sensitivity Case PRO FORMA LIQUIDITY(1) $1,000 $800 $600 $400 $200 - ($200) QP Group / SSCF Plan Ad Hoc Plan Notes: (1) Based on Sensitivity Case (Excluding LOA’s) projections 13 4Q25 3Q25 2Q25 1Q25 4Q24 3Q24 2Q24 1Q24 4Q23 3Q23 2Q23 1Q23 4Q22 3Q22 2Q22 1Q22 4Q21 3Q21 2Q21 1Q21 4Q20 3Q20 2Q20 1Q20 4Q19 3Q19 2Q19 1Q19 4Q18 3Q18 Minimum Cash of ($6)M Minimum Cash of ($110)M	

 

	Privileged and Confidential Draft – Prepared at Direction of Counsel; Subject to Common Interest / Provided in Conjunction with Mediation & Subject to Mediation Privilege Comparison of Proposals ($ in millions) QP GROUP / SSCF PROPOSAL – VALUATION & EQUITY SPLITS AHC GROUP PROPOSAL – VALUATION & EQUITY SPLITS Assumed Illustrative Enterprise Valuation Less: Pro Forma Illustrative Total Debt(4) Plus: Pro Forma Cash $2,100 Assumed Illustrative Enterprise Valuation Less: Pro Forma Illustrative Total Debt(1) Plus: Pro Forma Cash(2) $2,100 (900) 473 (1,024) 285 Equity Splits: Equity Splits: Own (%) Plan Value ($) Own (%) Value ($) Private Placement 40.5% 37.5% 3.0% 55.1% 34.0% 21.1% 4.4% $677 627 50 921 569 352 74 Of Which: QP Group / SSCF Investment Of Which: Private Placement Commitment Premium ERO Participants (Rights allocated to Noteholders)(3) Conversion of Debt to Equity Of Which : Ad Hoc Group Of Which: Minority Holders Equity Rights Offering Investors Of Which : Ad Hoc Group Of Which: Minority Holders Backstop Fee 41.1% 29.2% 11.9% 52.0% 41.5% 10.5% 6.9% $559 398 161 $707 564 143 $94 Of Which: Ad Hoc Group Members Of Which: Minority Bondholders ERO Backstop Premium AHC GROUP PROPOSAL – PRO FORMA CAPITAL STRUCTURE QP GROUP / SSCF PROPOSAL – PRO FORMA CAPITAL STRUCTURE Amount Outstanding Transaction Adjustments Pro Forma Amount Amount Outstanding Transaction Adjustments Pro Forma Amount RCF SSCF Senior Secured Notes due 2017 Senior Secured Term Loan B due 2018 Senior Secured Notes due 2020 New 1L Facility New 2L Facility $477 661 454 725 768 - - ($477) (661) (454) (725) (768) 700 200 - - - - - 700 200 RCF SSCF Secured Notes due 2017 Senior Secured Term Loan B due 2018 Senior Secured Notes due 2020 New 1L Facility New 2L Facility $477 661 454 725 768 - - - - - - - 700 324 ($477) (661) (454) (725) (768) 700 324 Notes: (1) Assumes a $461M cash paydown to SSCF, $200M SSCF roll into the New 2L Facility, $417M cash paydown to RCF, and $60M RCF roll into the New 1L Facility (2) Assumes AHC Group Classes exercise 100% of rights in ERO (3) Net of $30M accrued professional fees, $9M restricted cash, $6M true-up and guarantee fees, $1,000M of new money equity, $640M New 1L Facility, $60M RCF roll into New 1L Facility, $35M New 1L Facility transaction fees, $405M cash payout to AHC classes, and $878M paydown to the RCF and SSCF; prior to payment of default interest to RCF and SSCF (4) Assumes additional $24M of New 2L debt is provided to the AHC as a 8.0% backstop fee 14 Total Debt $3,085 ($2,061) $1,024 Less: Cash & Equivalents (196) (89) (285) Net Debt $2,889 ($2,150) $739 Total Debt $3,085 ($2,185) $900 Less: Cash & Equivalents(3) (196) (277) (473) Net Debt $2,889 ($2,462) $427 Total 100.0% $1,361 New Money Invested by Ad Hoc Group $239 New Money Invested by Minority Bondholders 61 Total New Money Invested $300 Total 100.0% $1,673 New Money Invested in Private Placement by QP Group / SSCF $405 Ad Hoc Group Investment $384 Recycled Cash 300 New Money 85 Minority Holders Investment $211 Recycled Cash 105 New Money 105 Total New Money Invested $1,000 Implied Illustrative Equity Value $1,361 New Money Discount 58% Implied Illustrative New Money Equity Value $577 Implied Illustrative Equity Value $1,673 New Money Discount 35% Implied Illustrative New Money Equity Value $1,080	

 

	Privileged and Confidential Draft – Prepared at Direction of Counsel; Subject to Common Interest / Provided in Conjunction with Mediation & Subject to Mediation Privilege Legal Disclosures This Presentation has been provided to you by Perella Weinberg Partners and its affiliates (collectively “Perella Weinberg Partners” or the “Firm”) and may not be used or relied upon for any purpose without the written consent of Perella Weinberg Partners. The information contained herein (the “Information”) is confidential information. By accepting this Information, you agree that you will, and you will cause your directors, partners, officers, employees, attorney(s), agents and representatives to, use the Information only for your informational purposes and for no other purpose and will not divulge any such Information to any other party. Any reproduction of this Information, in whole or in part, is prohibited. These contents are proprietary information and products of Perella Weinberg Partners. The Information contained herein is not an offer to buy or sell or a solicitation of an offer to buy or sell any corporate advisory services or security or to participate in any corporate advisory services or trading strategy. Any decision regarding corporate advisory services or to invest in the investments described herein should be made after, as applicable, reviewing such definitive offering memorandum, conducting such investigations as you deem necessary and consulting the investor's own investment, legal, accounting and tax advisors in order to make an independent determination of the suitability and consequences of an investment or service. Nothing contained herein should be construed as tax, accounting or legal advice. You (and each of your employees, representatives or other agents) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by these materials and all materials of any kind (including opinions or other tax analyses) that are provided to you relating to such tax treatment and structure. For this purpose, the tax treatment of a transaction is the purported or claimed U.S. federal income tax treatment of the transaction and the tax structure of a transaction is any fact that may be relevant to understanding the purported or claimed U.S. federal income tax treatment of the transaction. Perella Weinberg Partners LP, Tudor, Pickering, Holt & Co. Securities, Inc., and Tudor, Pickering, Holt & Co. Advisors, LLC are each members of FINRA (www.finra.org) and SIPC. 15	

Exhibit 99.3
 
	Exhibit 99.3 Project Williwaw AD HO C G RO UP PRO PO SAL JUNE 201 8 | DRA F T | P RIV IL E G E D& CO NF IDE NT I AL | S UBJE CT T O F RE 408 & E Q UIV A L E N T S | S UBJE CT T O CO M M O N INT E RE S T / P RO V ID E D IN CO NNE CT I O N W IT H M E DI A T I O N & S UBJ E CT T O M E DIA T I O N P RIV IL E G E	

 

 	 	
	Ad Hoc Group Proposal Transaction Summary US$ in mm Sources Uses Equity Rights Offering New First Lien Debt New Second Lien Debt New Contingent Equity Capital 300.0 700.0 300.0 200.0 RCF Repayment SSCF Repayment Est. Cash Financing Fees(1) Cash to the Balance Sheet Day One Cash to the Balance Sheet in Future if Needed 475.0 661.5 28.0 135.5 200.0 Current and Pro Forma Capital Structure (4) (1) (2) (3) (4) Fees are subject to negotiation and change; inclusive of Arrangement Fee, Commitment Fee, and Lender Fees. Assumes 400 bps on $700mm 1L Initial market indications are inside this pricing Face amount of debt claims as of 9/30/17 per Company filings; $151mm cash estimate as of 9/30/18 per Company estimate Includes $24mm of backstop fees paid in kind DRAFT | PRIVILEGED & CONFIDENTIAL | SUBJECT TO FRE 408 & EQUIVALENTS | SUBJECT TO COMMON INTEREST / PROVIDED IN CONNECTION WITH MEDIATION & SUBJECT TO MEDIATION PRIVILEGE 2 +200.0mm if needed Senior Secured Credit Facility Commercial Tranche GIEK Tranche Revolving Credit Facility New First Lien Debt New Second Lien Debt Interest Face Transaction Adjustments Pro Forma Amount Out. Rate Maturity Amount Out.(3) 661.5 L + 3.75% May-19 330.7 L + 1.50% Nov-26 330.7 L + 3.75% Jun-18 475.0 [9.00%] 2023+ - [PIK, 15.00%](2) [2024]+ - (661.5) (330.7) (330.7) (475.0) 700.0 324.0 - - - - 700.0 324.0 Subtotal $1,136.5 7.25% Senior Secured Notes 7.25% Dec-17 439.4 Term Loan B L + 3.50% Jun-18 718.1 5.375% Senior Secured Notes 5.375% Jun-20 750.0 ($112.5) (439.4) (718.1) (750.0) $1,024.0 - - - Total Ad-Hoc Group $1,907.5 ($1,907.5) - Total Debt $3,044.0 ($2,020.0) $1,024.0 Cash 151.0 135.5 286.5 Total Net Debt $2,893.0 ($2,155.5) $737.5 Total Uses$1,500.0 Total Sources$1,500.0 The Ad Hoc Group has support for a plan featuring $1.5 billion of new capital, including (i) $700 million of New First Lien Debt, (ii) $300 million of New Second Lien PIK Debt, (iii) $200 million of New Contingent Equity, and (iv) a $300 million Equity Rights Offering. The Ad Hoc Group has received a draft commitment letter from Credit Suisse for the debt financing components. In addition, the Ad Hoc Group will fully backstop the $800 million of junior capital (up to $500 million in equity and $300 million on New Second Lien PIK Debt, if Credit Suisse cannot place it)	

 

 	 	
	Ad Hoc Group Claim Treatment Proposal Class of Claims Amount Treatment $475.0mm DRAFT | PRIVILEGED & CONFIDENTIAL | SUBJECT TO FRE 408 & EQUIVALENTS | SUBJECT TO COMMON INTEREST / PROVIDED IN CONNECTION WITH MEDIATION & SUBJECT TO MEDIATION PRIVILEGE 3 RCF Claims  Recovery in full, in cash  Unimpaired, not entitled to vote SSCF Claims $661.5mm ($330.7mm Recovery in full, in cash commercial + $330.7mm GIEK) Unimpaired, not entitled to vote Ad Hoc Group Claims (2017s, 2020s, TLB) 2017s: $453.7mm 100% of pre-Rights Offering, pre-MIP New Equity 2020s: $768.1mm Right to invest in the Equity Rights Offering TLB: $724.9mm Current Shareholders N/A Extinguished QP Investment Right  Upon signing of an RSA to fully support the plan of reorganization, QP and / or other existing shareholders shall receive the right at signing, if it so chooses (the “Existing Shareholders Debt Purchase Right”) to purchase $125mm of claims held by AHG members, in a proportion of 2017s, 2020s and TLB based on face amount outstanding, at 60 cents on the dollar. Net proceeds from the Existing Shareholders Debt Purchase Right would be $75mm and would be funded on or around the date of confirmation of the plan of reorganization. N/A Upon exercising of the Existing Shareholders Debt Purchase Right, the associated commitments (including 2nd lien debt commitments, backstop commitments for the equity rights offering, and signing a joinder to the RSA with respect to QP’s and / or other existing shareholders new debt holdings), backstop fees, minimum directed allocation and investment rights from the equity rights offering shall be transferred to QP and / or other existing shareholders, allowing QP and / or other existing shareholders to participate alongside the AHG as a backstop party, exact mechanics TBD	

 

 	 	
	Ad Hoc Group Term Sheets Proposal above), arrangement fee as set forth in the Fee Letter (1) Based on draft commitment letter from CS (2) Initial market indications are inside this pricing DRAFT | PRIVILEGED & CONFIDENTIAL | SUBJECT TO FRE 408 & EQUIVALENTS | SUBJECT TO COMMON INTEREST / PROVIDED IN CONNECTION WITH MEDIATION & SUBJECT TO MEDIATION PRIVILEGE 4 New First Lien Debt(1) Borrower  Pacific Drilling S.A. (“PDSA”) or other borrower with PDSA as Guarantor and other subsidiary guarantors TBD Size  $700 million Collateral  First lien on all seven drillships Maturity  At least 5 years Interest Rate  [9.00%] with flex as set forth in Fee Letter Amortization  None New Second Lien Debt Borrower  Pacific Drilling S.A. (“PDSA”) or other borrower with PDSA as Guarantor and other subsidiary guarantors TBD Size  $300 million Collateral  Second lien on all seven drillships Maturity  At least 6 years Interest Rate  PIK, 15.00%(2) Amortization  None Backstop  Fully backstopped by members of the Ad Hoc Group in the event Credit Suisse does not raise the full amount Backstop Fee  8% to be paid in kind Financing Fees Fees  Fees estimated to be ~[400]bps all-in on 1L  If CS can place the 2L debt (indicating that the rate would be lower than the backstopped rate of 15% as shown Work Fee  None	

 

 	 	
	Ad Hoc Group Proposal Term Sheets (cont.) DRAFT | PRIVILEGED & CONFIDENTIAL | SUBJECT TO FRE 408 & EQUIVALENTS | SUBJECT TO COMMON INTEREST / PROVIDED IN CONNECTION WITH MEDIATION & SUBJECT TO MEDIATION PRIVILEGE 5 Equity Rights Offering Size  $300 million Subscription Price  $170 million per rig; ~44% discount to assumed $2.25 billion plan enterprise value Participation  Available to all holders of TLB, 2017 Notes, and 2020 Notes, net of Directed Allocation Directed Allocation  30% of the Equity Rights Offering to be reserved for members of the Ad Hoc Group Backstop  Fully backstopped by members of the Ad Hoc Group Backstop Fee  8% paid in equity Corporate Governance  Owners of pro-forma equity to nominate board of directors New Contingent Equity Size  $200 million Subscription Price  Equivalent to equity rights offering (based on $170 million per rig) Participation  Fully backstopped by members of the Ad Hoc Group: Avenue Capital Group, Strategic Value Partners, Abrams Capital, Whitebox Advisors, and Fidelity Investments, with approximate split based on pro-rata bond position  Commitments available to be taken up by all holders of TLB, 2017 Notes and 2020 Notes, net of Directed Allocation Directed Allocation  30% of the New Contingent Equity to be reserved for members of the Ad Hoc Group Commitment / Drawdown Period  1 year period post-emergence where PACD may call the funds at its discretion Commitment Fee  8% Commitment Fee paid in equity upon emergence  2% Funding Fee paid in equity upon funding Use of Proceeds  No restrictions or conditions	

 

 	 	
	CORPORATE FINANCE FINANCIAL ADVISORY SERVICES FINANCIAL RESTRUCTURING STRATEGIC CONSULTING HL.com DRAFT | PRIVILEGED & CONFIDENTIAL | SUBJECT TO FRE 408 & EQUIVALENTS | SUBJECT TO COMMON INTEREST / PROVIDED IN CONNECTION WITH MEDIATION & SUBJECT TO MEDIATION PRIVILEGE 6