Ensco PLC
Company Analysis and Sell Report

Nathan Green
December 2, 2010

Finance 573
Dr. John Settle
Rick Watson

Contents Executive Summary 4 Company Overview 5 Sale Thesis 6 Energy Industry Overview (Oil and Gas Focus) 7 The “Upstream” Oil and Gas Sub-Sector Overview (Offshore Focus) 8 Macro-Level Trends in the Oil & Gas Industry 11 Industry Attractiveness Using Porters Five Forces 13 Bargaining Power of Suppliers: Low 13 Bargaining Power of Customers: Medium 13 Threat of New Entrants: Low 13 Threat of Substitute Products: High 14 Government Action: Medium 14 Competitive Rivalry: Medium 14 Five Forces Summary 14 Ensco’s Operations & SWOT Analysis 15 Strengths & Weaknesses 15 Opportunities & Threats 16 Financial Performance 17 Revenue, Cost of Sales, Net Income, & Margins 17 Capital Expenditures 18 Return on Assets 18 Relative Valuations 19 Financial Forecast 21 Discounted Cash Flow Valuation 22 Conclusion and Recommendation 23

Table of Figures Figure 1) World-Wide Energy Consumption Growth since 1965. 7 Figure 2) Example Photograph and Diagram of "Jackup" Oil Rigs 9 Figure 3) Example Photograph and Diagram of "Semisubmersible" Oil Rigs 9 Figure 4) Comparison of the Average Size of 2009 Oil Field Discoveries: Offshore vs. Onshore 10 Figure 5) Historical WTI Oil Prices 11 Figure 6) Historical and Projected Jackup Rig Demand 12 Figure 7) EIA Projected Global Demand for Energy through 2035. 12 Figure 8) Jackup Utilization Comparison & History, 15 Figure 9) Semisubmersible Utilization & History, 16 Figure 10) Comparison: Revenue, Cost of Sales, Income, & Margins – Ensco vs. Noble (millions USD) 17 Figure 11) Comparison: Capital Expenditures – Noble vs. Ensco (millions USD) 18 Figure 12) Comparison: Return on Assets –Ensco vs. Noble (millions