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DryShips Inc.

Analyst Day – June 24, 2011

NASDAQ: “DRYS”

DryShips Inc.

Forward Looking Statements

Matters discussed in this presentation may constitute forward-looking statements. Forward-looking

statements reflect the Company’s current views with respect to future events and financial performance

and may include statements concerning plans, objectives, goals, strategies, future events or

performance, and underlying assumptions and other statements, which are other than statements of

historical facts.

The forward-looking statements in this release are based upon various assumptions, many of which

are based, in turn, upon further assumptions, including without limitation, management's examination

of historical operating trends, data contained in our records and other data available from third parties.

Although DryShips Inc. believes that these assumptions were reasonable when made, because these

assumptions are inherently subject to significant uncertainties and contingencies which are difficult or

impossible to predict and are beyond our control, DryShips Inc. cannot assure you that it will achieve

or accomplish these expectations, beliefs or projections. Important factors that, in the Company’s view,

could cause actual results to differ materially from those discussed in the forward-looking statements

include the strength of world economies and currencies, general market conditions, including changes

in charterhire rates and vessel values, changes in demand that may affect attitudes of time charterers

to scheduled and unscheduled drydocking, changes in DryShips Inc.'s operating expenses, including

bunker prices, dry-docking and insurance costs, or actions taken by regulatory authorities, potential

liability from pending or future litigation, domestic and international political conditions, potential

disruption of shipping routes due to accidents and political events or acts by terrorists.

Risks and uncertainties are further described in reports filed by DryShips Inc. with the US Securities

and Exchange Commission.

DryShips Inc.

Agenda

Company Overview

Industry Overview

Financial Overview & Conclusion

Q&A

DryShips Inc.

DryShips Today

DryShips Inc.

(NASDAQ: DRYS)

Drybulk Offshore

OCR UDW Inc. Tankers

• 8 units

- 2 UDW drilling rigs

- 2 UDW drillships

- 4 UDW drillships under

construction

• Management in-house

• Strong operational track

record

• 39 vessels

- 7 capesize

- 26 panamax

- 2 handymax

- 4 newbuildings

• Average age 8.1 yrs

• Total DWT: 3.7 Mt

• 12 vessels:

- 5 suezmax N/Bs-1 in water

- 4 aframax N/Bs-2 in water

• Deliveries:2 in 2011, 4 in

2012, 3 in 2013

• Employment in the Heidmar

Pools

• Total DWT: 1.6 Mt

100% owned 100% owned 78% owned

DryShips Inc.

DryShips – Selected Financial Data

(in $ million) 2010 2011

Revenue 859.7 1,205.6

Adjusted EBITDA 566.1 720.9

Assets 6,984.5 6,991.4

Cash 1,165.4 639.0

Market Capitalization 2.2 bn 1.5 bn

NOTES:

1) Adjusted EBITDA represents net income before interest, taxes, depreciation and amortization, gains or losses on interest rate swaps and contract termination fees and

forfeiture of vessels deposits

2) FY 2010

3) As per 31/12/2010

4) Analyst consensus for FY 2011 – Cantor Fitzgerald, Dahlman Rose, Goldman Sachs, Lazard Capital Markets, Wells Fargo Securities

5) As per 31/03/2011

6) As per 16/06/2011

(1)

(2)

(3)

(5)

(4)

(6)

(2)

(3)

(3)

(5)

(4)

DryShips is one of the largest shipping groups listed in the US

DryShips Inc.

Drybulk Employment Status

Total revenue from time charters for the next 2.5 years is about $470 million

76%

37%

19%

Remaining 2011 2012 2013

% Charter coverage Annual Dry Bulk fixed revenue ($m) Average fixed rate1 ($k/d)

$332

$209

$111

2011 2012 2013

$43,100$41,250

$34,000

Remaining 2011 2012 2013

1 Represents rates before commission

Spot ship-years

6.1 23.1 30.6

DryShips Inc.

Tankers – High Spec Tankers

Aframax vessels

M/T Saga delivered in January 2011

M/T Daytona delivered in April 2011

M/T Belmar – Q4 2011

M/T Calida – Q4 2011

M/T Alicante – Q2 2012

M/T Mareta – Q3 2012

Suezmax vessels

M/T Vilamoura delivered in March 2011

M/T Lipari – Q2 2012

M/T Petalidi – Q2 2012

M/T Bordeira – Q1 2013

M/T Esperona – Q3 2013

M/T Blanca – Q4 2013

DryShips Inc.

Leading pure-play ultra-deepwater driller

Long-term blue chip customer relationships

Strong cash flow generation from significant contract backlog

Operator with proven capabilities and unblemished safety record; experienced management and operational team

Two of the best and newest harsh environment semisubmersible rigs in the world

Four premium ultra-deepwater drillships by year-end 2011 with two more newbuilding drillships in 2013

Two additional newbuilding options for delivery in 2014 from Samsung

Ultra-deepwater is the key growth market in the offshore drilling industry

Market capacity tightening after lull in 2008-2010

Improving dayrate environment

Pure play

company

Superior asset

base

Strong growth

market

Ocean Rig UDW Inc – Only UDW Pure Play of Size

DryShips Inc.

1996 1997 2001 2007 2008 2009 2002 1998

Ocean Rig ASA established

Ordered four hulls

Listed on Oslo Stock Exchange

Started hull construction

Eirik Raude completed, two baredecks sold

Leiv Eiriksson completed

Cardiff Marine ordered two drillships from SHI

DryShips acquired ~30% stake in Ocean Rig ASA

DryShips ordered two drillships from Samsung Heavy Industries (“SHI”)

DryShips acquired a controlling interest in Ocean Rig ASA and subsequently de-listed the company from Oslo Stock Exchange

All drilling assets combined under Ocean Rig UDW

2010

Secured 4 options for drillships at SHI with delivery in 2013/2014

Ocean Rig UDW took delivery of the 2 first drillships

Issued $500m unsecured bond

2011

Ocean Rig UDW completed a USD 500m private placement

Declared two newbuilding options for delivery in 2013

Established long-term history as an UDW drilling contractor

DryShips Inc.

6th generation sistership drillships built by

Samsung

2 delivered; Corcovado in January 2011, and

Olympia in March 2011

2 under construction: Poseidon to be delivered in

July 2011, and Mykonos in September 2011

Water depth capacity of 10,000 ft and drilling

depth capacity of 40,000 ft

Dual derrick capabilities to ensure optimal

operational efficiency

Saves 15-40% of drilling days

depending on well parameters, providing

significant cash savings to customers

Transit speed 12 knots

Environmentally friendly zero-spill systems with

low emissions

Other specs include: 5 Mud Pumps, 217 P.O.B

capacity, Powerful DP3, High variable deckload;

20,000 mt

$60m worth of upgrades

Delivered:

Leiv Eiriksson in 2001

Eirik Raude in 2002

– Hull: Dalian

– Outfitting/Topside: Friede Goldman & Irving

Shipyard

5th generation semi with dynamic positioning,

Bingo 9000

Water depth capacity:

10,000 ft for the ER

7,500 ft for the LE

Fully winterized for year around operations in

extreme weather climates

Ideal for development drilling due to high

deckload and storage capacity

Two modern harsh environment semis

Eirik Raude Leiv Eiriksson

Four 6th generation drillships Two 7th generation drillships

7th generation sistership drillships built by

Samsung

Under construction, with deliveries in July 2013

and October 2013 respectively

Water depth capacity of 12,000 ft and drilling

depth capacity of 40,000 ft

Upgrades to the four 6th generation drillships

include:

Increased water depth capacity

Seven ram BOP

Dual mud system

Enhanced riser handling and storage

system

Ballast water treatment

High quality assets with superior technology

DryShips Inc.

Construction for drillships proceeding as per schedule

Ocean Rig Poseidon (Hull 1865) , on schedule for delivery in July

Ocean Rig Mykonos (Hull 1866), on schedule for delivery in September

Drillships Construction and Operations Update – On Schedule

DryShips Inc.

Options to build up to two high specification UDW drillships at Samsung for 2014

deliveries

Sisterships to the drillships currently being constructed, secures high degree of

standardization

Favorable payment terms

Construction cost estimated at approximately USD 638 million (excluding financing costs)

– attractive relative to current replacement value

Each of the options can be exercised any time prior to November 2011

Two newbuilding options

Attractive Newbuilding Options

DryShips Inc.

UDW Contract Backlog – Over $2 billion

Notes: Backlog as of 31/03/2011

Vanco/Lukoil backlog do not assume extension of 1-yr

Unit Year Built Redelivery Customer Operating Area Maximum dayrate ($k) Backlog ($m)

Leiv Eiriksson 2001 Apr – 11 Petrobras Black Sea $ 583 $ 5

Leiv Eiriksson 2001 Q4 – 11 Cairn Greenland $ 550 $ 95

Leiv Eiriksson 2001 Q3 – 12 Borders & Southern Falklands $ 530 $ 126

Eirik Raude 2002 Oct – 11 Tullow Off-shore Ghana $ 665 $ 127

OCR Corcovado 2011 Q4 – 11 Cairn Greenland $ 560 $ 107

$ 140

OCR Corcovado 2011 Q4 – 14 Petrobras Brazil $ 460 $ 534

$ 140

OCR Olympia 2011 Q2 – 12 Vanco / Lukoil W. Africa $ 415 $ 160

OCR Poseidon 2011 Q2 – 13 Petrobras Tanzania $ 632 $ 378

OCR Mykonos 2011 Q4 – 14 Petrobras Brazil $ 455 $ 528

Total $ 2,060

Contracts in place

Leiv Eirikson

Eirik Raude

Ocean Rig Corcovado

Ocean Rig Olympia

Ocean Rig Poseidon

Ocean Rig Mykonos

OCR Drillship TBN #1 NB Delivery July 2013

OCR Drillship TBN #2 NB Delivery October 2013

2012

Petrobras Cairn

NB Delivery July 2011

NB Delivery September 2011

Cairn

Petrobras - 20 months

Vanko / Lukoil - 1 yr

B&S

+ 1yr option

2014

Tullow (since 2008)

Petrobras - 3 years

Petrobras - 3 years

20132011

DryShips Inc.

•

Leiv Eiriksson

Eirik Raude

OCR Corcovado

Operating for Tullow

Oil offshore Ghana

Operating for Cairn

offshore Greenland

OCR Poseidon

Operating for Cairn

offshore Greenland

Contracted by

Petrobras offshore

Tanzania

Contracted by Vanco

/ Lukoil offshore

Ghana

OCR Olympia

OCR Mykonos

Contracted by

Petrobras offshore

Brazil

Drilling operations during Q3 2011

DryShips Inc.

Source: Company

Leiv Eirikson Eirik Raude OCR Corcovado OCR Olympia OCR Mykonos

164 employees 147 employees 157 employees 173 employees 51 employees

OCR Poseidon

85 employees

Ocean Rig employs 911 people and has been operating drilling rigs for approximately 10 years with a good safety

record and success rate

The company also has 44 project team employees on site in Korea and 90 shore staff

Highly capable staff

DryShips Inc.

OCR – Selected Financial Data

(in $ million) 2010 2011

Revenue 405.7 669.8

Adjusted EBITDA 266.5 415.3

Assets 4,343.7 4,434.7

Cash 608.5 270.0

Market Capitalization 2.3 bn 2.5 bn

NOTES:

1) Adjusted EBITDA represents net income before interest, taxes, depreciation and amortization, gains or losses on interest rate swaps and contract termination fees and

forfeiture of vessels deposits

2) FY 2010

3) As per 31/12/2010

4) Analyst consensus for FY 2011 – DnB NOR, Fearnley Fonds, Nordea Markets, SEB Enskilda

5) As per 31/03/2011

6) As per 16/06/2011

(1)

(2)

(3)

(5)

(4)

(6)

(2)

(3)

(3)

(5)

(4)

DryShips Inc.

OCR is now fully funded

Units Loan facility

Leiv Eiriksson

Eirik Raude DnB NOR facility - $ 615 m

OCR Corcovado

OCR Olympia Nordea & ABN Amro facility - $ 800 m

OCR Poseidon

OCR Mykonos Deutsche Bank facility $ 1 bn

NB Units CAPEX Paid so far Remaining CAPEX (including OFEs, Supervision costs)

OCR Poseidon $ 449 m $ 339 m

OCR Mykonos $ 439 m $ 347 m

Declared Option #1 $ 242 m $ 396 m (entire amount payable in July 2013)

Declared Option #2 $ 242 m $ 396 m (entire amount payable in Oct 2013)

Available free cash today of about $ 500 m

DryShips Inc.

68

45

3710

82

242

98

340

500

Crew Maintenance Other G&A Interest expense 1) Operational Breakeven

Ammortization 2) Financial Breakeven Market rates

Daily breakeven cashflow per drillship ($ 000’s)

Notes:

1) Assuming a $500 million senior facility @ 6.0% interest per rig

2) Assuming principle amount amortized to 50% over 7 years Source: Pareto Research

Daily breakeven cash flow for drillships

About $60m

of free cash

flow every

year

DryShips Inc.

OCR UDW Update

Operations

First two drillships left the yard immediately upon delivery and

have commenced operations

Wells spudded

People

Staffed up offshore and onshore – almost complete

Listing Process Update

Trading on Nasdaq expected to commence this summer

OCR Bond rating process underway

DryShips Inc.

0

5

10

15

20

25

30

Tran

soce

an

No

ble

Sead

rill

Ensc

o /

Pri

de

Oce

an R

ig

Dia

mo

nd

Pac

ific

Od

eb

rech

t

Mae

rsk

Ake

r

Sch

ahin

Seva

n

Van

tage

Ste

na

Atw

oo

d

Q. G

alva

o

Od

fje

ll

Saip

em

IPC

Do

lph

in

Ete

sco

Pe

tro

serv

NA

Dri

llin

g

De

lba

Son

ga

0

5

10

15

20

25

Tran

soce

an

No

ble

Oce

an R

ig

Ensc

o /

Pri

de

Pac

ific

Sead

rill

Od

eb

rech

t

Van

tage

Ste

na

Ake

r

Sch

ahin

Mae

rsk

Atw

oo

d

Dia

mo

nd

Do

lph

in

Ete

sco

Od

fje

ll

Q. G

alva

o

Saip

em

Pe

tro

serv

NA

Dri

llin

g

(1) Ultra-deepwater defined as 7,500 feet of water depth or greater.

(2) Includes newbuilds (assigned zero fleet age) and jackups. Source: ODS Petrodata, includes 5G/6G unit in operation and under construction

Current options

Fleet composition – Ultra-deepwater(1) as a % of NAV

100% 100%

63% 54% 54%

39% 33%

14%

OCR PD SDRL RIG ESV NE DO ATW

Average fleet age(2)

0.1 2.2 2.3

12.8

20.0

22.8 23.9

29.2

PDSA SDRL OCR ATW ESV NE RIG DO

Pure Play with Size, Experience & Premium Assets

Owned and operated drillships (including options) Owned and operated UDW units (including options)

DryShips Inc.

Medium to long term

Strategic growth levers

Short term

Safe and top quality operations – Zero incident philosophy

Successful start-up of newbuild drillship operations

Continued focus on increasing contract backlog

– Erik Raude in 2011 and LE in 2012

– Marketing NBs

Target of listing on international exchange before end of Q3 2011

Secure contracts and financing for 7th gen NBs and optional drillships

Institute dividend

Grow fleet to ~10-15 units by 2015

– Capitalize on economies of scale from high degree of standardization and ultra-deepwater “pure play”

– Increase capability to serve clients globally

Fleet growth through organic growth or consolidation

Create leading “Pure Play” contractor in the ultra-deepwater and harsh environment markets

Company Strategy

DryShips Inc.

Agenda

Company Overview

Industry Overview


Q&A

Drybulk

DryShips Inc.

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Jan-10 Feb-10 Apr-10 May-10 Jul-10 Sep-10 Oct-10 Dec-10 Feb-11 Mar-11 May-11

Capesize Panamax Supramax

0

50,000

100,000

150,000

200,000

250,000

Jan-05 Sep-05 May-06 Jan-07 Sep-07 Jun-08 Feb-09 Oct-09 Jun-10 Mar-11

Capesize Panamax Supramax

Drybulk Rates – Capesize Rates in the Doldrums

Source: Clarkson

(USD / day)

Drybulk Average T/C Routes – Since 2005

Drybulk Average T/C Routes – Since beginning of 2010

(USD / day)

DryShips Inc.

-20

0

20

40

60

80

100

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD 2011

Deliveries Sold for Scrap Losses Misc. Additions Misc. Removals Net Fleet Change

Drybulk Net Fleet Growth – Achilles Heel

Source: Clarkson

(million DWT)

Yearly Net Fleet Changes

DryShips Inc.

0

20

40

60

80

100

120

140

160

Total Scheduled in the beginning of 2010 Actual Delivered

0

20

40

60

80

100

120

140

160

Total Scheduled in the beginning of 2011

Actual Delivered

Assuming Last Year's Slippage

Assuming Current Trend

Drybulk Deliveries – Slippage at 61% YTD

Source: Clarkson

Actual vs. scheduled deliveries in terms of DWT in 2010 Actual vs. scheduled deliveries in terms of DWT in 2011

Imp

lied

slip

pag

e: 3

7%

A

ctu

al d

eliv

erie

s o

f

79 m

illion

DW

T

141m DWT

(million DWT) (million DWT)

89m DWT

75m DWT

DryShips Inc.

Drybulk Demolition – Accelerating

Source: Clarkson

Note: * 2011 Total number represents vessels sold for scrap YTD

Drybulk demolitions per type of vessel in 2010 and YTD 2011 – in terms of DWT

(million DWT)

0

2

4

6

8

10

12

14

Capesize Panamax Handymax Handysize TOTAL DRYBULK

2010 YTD 2011

*

DryShips Inc.

0

20

40

60

80

100

120

140

160

180

200

2003 2004 2005 2006 2007 2008 2009 2010 2011E

0

20

40

60

80

100

120

140

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

E

0

100

200

300

400

500

600

700

800

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

E400

450

500

550

600

650

700

750

2009 2010 2011E

Drybulk Demand Growth – Solid Fundamentals

Source: SSY, Banchero Costa, Worldsteel

(million tons) (million tons)

China’s Iron Ore Imports China’s Crude Steel Production

China’s Coal (Steam and Coking) Imports India’s Coal (Steam and Coking) Imports


DryShips Inc.

0

200

400

600

800

1,000

1,200

2008 2009 2010 2011E

China Iron Ore Imports Rest of the World Imports

0

200

400

600

800

1,000

1,200

2008 2009 2010 2011E

China Coal Imports Rest of the World

Drybulk Demand Growth – Solid Fundamentals

Source: SSY

(million tons)

0

200

400

600

800

1,000

1,200

1,400

1,600

2008 2009 2010 2011E

Chinese steel production Rest of the World


World Crude Steel Production

Seaborne Coal Trade (Coking + Steam) Seaborne Iron Ore Trade

DryShips Inc.

Urbanization in China and India – Long Terms Story Intact

Source: BHP Billiton, McKinsey 2011, Global Insight

Projected India and China finished steel demand Urbanization of India

0

10,000

20,000

30,000

40,000

50,000

60,000

2000 2009 2025 projection

US - $55,600 in 2025

Urbanization of China China’s GDP per capita 2000 – 2025

0

400

800

1,200

1,600


Urbanized population in China Total Population in China

0

400

800

1,200

1,600


Urbanized population in India Total Population in India

0

200

400

600

800

1,000

1990 1995 2000 2005 2010 2015 2025

China's demand India's demand

CAGR: 3.4%

CAGR: 8.0%

USD / Capita (in million)

(in million) (in mtpa)

DryShips Inc.

0

1

2

3

4

5

6

7

8

China and Hong Kong N. Korea, S. Korea and

Taiwan

Indian sub-continent

and South Asia

Japan

2007 2035

0

5

10

15

20

25

30

35

1995 2000 2005 2010 2015 2020 2025 2030 2035

America Europe Asia Total

China and India – Long Term Story Intact

Source: BHP Billiton, McKinsey 2011, Global Insight, International Energy Outlook 2010, SSY

Projected India and China finished steel demand

Coal imports to Asia by major importing region

China’s GDP per capita to grow substantialy to 2030

0

200

400

600

800

1,000

1990 1995 2000 2005 2010 2015 2025

China's demand India's demand

CAGR: 3.4%

CAGR: 8.0%

(quadrillion Btu)

(in mtpa)

Coal imports by major importing region

(quadrillion Btu)

DryShips Inc.

Agenda

Company Overview

Industry Overview


Q&A

Tankers

DryShips Inc.

0

20,000

40,000

60,000

80,000

100,000

Jan-10 Feb-10 Apr-10 May-10 Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 Feb-11 Mar-11 May-11

VLCC Suezmax Aframax

Tanker Rates – Depressed due to Oversupply

Source: Clarkson

(USD / day)

Tanker Average Earnings (TCE) – Since 2005

Tanker Average Earnings (TCE) – Since beginning of 2010

(USD / day)

0

50,000

100,000

150,000

200,000

250,000

Jan-05 Sep-05 May-06 Jan-07 Sep-07 Jun-08 Feb-09 Oct-09 Jun-10 Mar-11

VLCC Suezmax Aframax

DryShips Inc.

Tankers Deliveries – Slippage at 44% YTD

Source: Clarkson

Actual vs. scheduled deliveries in terms of DWT in 2010

0

10

20

30

40

50

60

70

Janu

ary

Febru

ary

Mar

chApr

ilM

ayJu

ne July

Augus

t

Septe

mbe

r

Oct

ober

Nov

embe

r

Dec

embe

r


Actual Delivered

Actual vs. scheduled deliveries in terms of DWT in 2011

0

10

20

30

40

50

60

70


Actual Delivered

Assuming Last Year's Slippage

Assuming Current Trend

Imp

lied

slip

pag

e: 3

6%

A

ctu

al d

eliv

erie

s o

f

39 m

illion

DW

T

(million DWT) (million DWT)

59m DWT

38m DWT

35m DWT

DryShips Inc.

Tankers Net Fleet Growth – Single Hull Fleet Gone

Source: Clarkson

(million DWT)

Yearly Net Fleet Changes

-30

-20

-10

0

10

20

30

40

50

60

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 YTD 2011

Deliveries Sold for Scrap Losses Misc. Additions Misc. Removals Net Fleet Change

DryShips Inc.

0

2

4

6

8

10

12

14

VLCC Suezmax Aframax Panamax Handy TOTAL TANKERS

2010 YTD 2011

Tankers Demolition

Tankers demolitions per type of vessel in 2010 and YTD 2011 – in terms of DWT

(million DWT)

Source: Clarkson

Note: * 2011 Total number represents vessels sold for scrap YTD

*

DryShips Inc.

-1.0

0.0

1.0

2.0

3.0

4.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E 2012E 2013E 2014E 2015E

0

0.2

0.4

0.6

0.8

1

1.2

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E 2012E 2013E 2014E 2015E

Oil Consumption – Demand Growth Intact

Source: IEA

(million barrels per day)

Year-on-year change in Global Oil Demand

Year-on-year change in Chinese Oil Demand


DryShips Inc.

-0.4

-0.2

0

0.2

0.4

0.6

0.8

1

1.2

09 -10 Change 10 - 1Q11 Change 4Q10 - 1Q11 Change 10 - 11 Expected Change

OPEC Middle East OPEC Other Non-OPEC

0

10

20

30

40

50

60

2009 2010 Q1 2011 2011E

OPEC Middle East OPEC Other Non-OPEC

Oil Production

Source: IEA


World oil production

Change in world oil production


DryShips Inc.

80

82

84

86

88

90

2007 2008 2009 2010

2,400

2,500

2,600

2,700

2,800

Q1-05 Q3-05 Q1-06 Q3-06 Q1-07 Q3-07 Q1-08 Q3-08 Q1-09 Q3-09 Q1-10 Q3-10 Q1-11

45

50

55

60

65

OECD Inventories Days of Forward Demand Curve

-3.00

-2.00

-1.00

0.00

1.00

2.00

2007 2008 2009 2010 2011 2012

OPEC production Non-OPEC production

Oil Supply – Non-OPEC Production Growth Slowing

Source: SSY, Jefferies, Deutsche Bank, OECD, OPEC, EIA, OGJ, IEA

OECD Inventories And Forward Demand Cover

Global Oil Supply OPEC vs. Non-OPEC Production Growth


(million barrels) (days)


0.02

0.03

0.04

0.05

0.14

0.18

0.19

0.22

0.23

0.26

0.33

3.50

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

Ecuador

Algeria

Iran

Iraq

Venezuela

Qatar

Angola

Libya

Kuwait

Nigeria

UAE

Saudi Arabia


OPEC Spare Capacity vs Jan 2011 Supply

DryShips Inc.

Agenda

Company Overview

Industry Overview


Q&A

UDW Drilling

DryShips Inc.

0

20

40

60

80

100

120

140

160

Jan-2005 Sep-2005 May-2006 Jan-2007 Oct-2007 Jun-2008 Feb-2009 Oct-2009 Jun-2010 Mar-2011

High Oil Prices – Fundamentals + Conflicts

Analysts expect high oil prices for the near future, mainly driven by:

Demand growth in emerging markets

Declining production in mature provinces (e.g. North Sea, Mexico)

Slowing non-OPEC production growth

Brent (USD/bbl)

DryShips Inc.

15%15%16%

13%

0%

4%

8%

12%

16%

20%

Super Majors &

Majors

National Oil

Companies

Independents Average

Onshore and shallow water oil reserves are mature; deepwater and ultra-deepwater are the new frontiers

Oil companies have announced plans for increased CAPEX budgets in 2011 vs 2010

Aggregate increase in CAPEX being 15% across the group

Budgets are likely to increase further during 2011, with an increase of around 15-20% for 2011 more likely

Petrobras announced E&P growth of 16.5%

BG, Chevron and ConocoPhillips are all increasing capex by 25% or more

Most UDW projects profitable above $60 per barrel

Technological innovations have improved the economic viability of deepwater developments

E&P spending is accelerating

Source: Pareto, SEB

Oil Demand & Spare Capacity and Global E&P CAPEX Growth in 2011 E&P Spending Budgets

DryShips Inc.

0

1

2

3

4

5

6

7

8

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

US Brazil Angola Nigeria Equatorial Guinea Congo Malaysia Ghana Other

Global deepwater production (mbd)

Source: Pareto Research, HIS CERA, Wood Mackenzie

Strong production growth in deepwater Significant development of deep water wells

Rising oil prices improve economics for UDW operators

Depleting reserves make UDW exploration critical

UDW is still a young segment focused mostly on exploration

Development in infancy and gathering pace

Deepwater production has doubled in last 5 years

Deepwater discoveries accounted for ~50% of world discoveries from 2006-2009

Deepwater discoveries 6x larger in size than new onshore discoveries

Established Developing Frontier

Ultra-deepwater exploration: a proven growth market

DryShips Inc.

Source: Pareto Research

Major planned development in Brazil Large opportunities in harsh environments

Brazilian Tupi development will require ~200 wells

Speed of the most recently drilled UDW well (156 days) indicates one rig can drill ~2.3 wells/ year

There will be learning curve effects, but considering routine downtime (transit, shipyard etc.) we believe an estimate of 2.3 wells/year is reasonable

Assuming 6+ years development, Tupi alone will employ 17 rigs – 13% of the world UDW fleet (#130 YE 2013)

The Tupi field could employ ~13% of the world’s UDW fleet

The Area north of the Arctic Circle has an estimated 90 billion barrels of undiscovered oil

The Arctic region accounts for 13% of undiscovered natural gas and 20% of undiscovered natural gas liquids

UDW and harsh environment development in infancy

DryShips Inc.

UDW Drilling – A Rising Market

UDW day rates Rates bottomed out in Q3 2010 in the low

~$400,000 per day range and now trading up

– Management estimate of current market

rate: $500,000 per day, for short period

Recent Diamond newbuild fixtures of

$495,000 beginning in 2013 / 2014 give

credence to this estimate

Currently more than 15 open enquiries for

projects in Brazil, West Africa, North Sea,

Mediterranean, Malaysia, etc

Brazil expected to play a critical role in

balancing ultra-deepwater demand and

supply

Latent demand from GoM could be game

changer for the UDW market

$0

$100

$200

$300

$400

$500

$600

$700

Ma

r-0

0

Ma

r-0

1

Ma

r-0

2

Ma

r-0

3

Ma

r-0

4

Ma

r-0

5

Ma

r-0

6

Ma

r-0

7

Ma

r-0

8

Ma

r-0

9

Ma

r-1

0

Ma

r-1

1

DryShips Inc.

Ultra-deepwater units – Eirik Raude Only Hot Rig in 2011

Source: Fearnley Offshore

FIRM CONTRACT 1

OPTION

CONSTRUCTION DELIVERY 3NEWBUILDINGS

2011 2012

RIG OPERATOR AREA COUNTRY CONTRACTOR TYPE UDW WD 1 DP / Moored (M)J F M A M J J A S ON D J F M A M J J A S ON D

PACIFIC MISTRAL YARD/AVAILABLE AP S.Korea Pacific Drilling DS Y 10 000 DP

SONGA ECLIPSE YARD/AVAILABLE AP Singapore Songa SS Y 7 500 DP

LA MURALLA IV YARD/AVAILABLE AP S.Korea IPC SS Y 10 000 DP

WEST CAPRICORN YARD/AVAILABLE AP Singapore Seadrill SS Y 10 000 DP

WEST LEO YARD/AVAILABLE AP SEA Seadrill SS Y 10 000 DP

EIRIK RAUDE TULLOW WAFR Ghana OCR SS Y 10 000 DP

DEEP OCEAN MOLOKAI YARD/AVAILABLE AP S.Korea Pride DS Y 10 000 DP

STENA DRILLMAX REPSOL BRA Brazil Stena DS Y 10 000 DP 1 1 1 1 1 1

NOBLE JIM DAY SHELL GOM USA Noble SS Y 12 000 DP

STENA ICEMAX YARD/AVAILABLE AP S.Korea Stena DS Y 7 500 DP

ENSCO 8504 YARD/TOTAL AP Singapore/Brunei Ensco SS Y 8 500 DP

ENSCO 8505 YARD/AVAILABLE AP Singapore Ensco SS Y 8 500 DP

OCEAN MONARCH MARATHON/BP GOM/SEA USA/Vietnam Diamond SS Y 10 000 M

OCEAN ENDEAVOR BURULLUS MED EGYPT Diamond SS Y 8 000 M

NOBLE CLYDE BOUDREAUX SHELL GoM USA Noble SS Y 10 000 M

OCEAN RIG OLYMPIA VANCO WAFR Ghana OCR DS Y 10 000 DP

DEEPSEA METRO I YARD/BG (WOODSIDE) AP S.Korea Odfjell DS Y 10 000 DP 1 1 1 1 1 1 1 1 1 1 1 1

LEIV EIRIKSSON CAIRN/BORDERS & SOUTHERN (FALKLAND O&G)CAN/SOA Greenland/Falklands OCR SS Y 7 500 DP

ATWOOD CONDOR YARD/AVAILABLE AP Singapore Atwood SS Y 7 500 DP

PACIFIC SCIROCCO TOTAL WAFR NIgeria Pacific Drilling DS Y 12 000 DP

DEEPWATER NAUTILUS SHELL GoM USA Transocean SS Y 8 000 M

ENSCO 8506 YARD/AVAILABLE AP Singapore Ensco SS Y 8 500 DP

DISCOVERER ENTERPRISE BP GoM USA Transocean DS Y 10 000 DP

ENSCO 8502 NEXEN GOM USA Ensco SS Y 8 500 DP

CATARINA YARD/AVAILABLE AP S.Korea Petroserv SS Y 10 000 DP

WEST GEMINI TOTAL WAFR Angola Seadrill DS Y 10 000 DP

WEST POLARIS EXXONMOBIL BRA Brazil Seadrill DS Y 10 000 DP 1 1 1 1 1 1 1

SAIPEM 10000 ENI AP Australia/Indonesia/India/MozambiqueSaipem DS Y 10 000 DP

OCEAN CONFIDENCE MURPHY/COBALT/TOTALWAFR/GoM Congo/Angola/USA Diamond SS Y 10 000 DP

GSF DEV. DRILLER 1 BHP GoM USA Transocean SS Y 7 500 DP

DryShips Inc.

Agenda

Company Overview

Industry Overview


Q&A

DryShips Inc.

CAPEX

Yard Commitments – as of today

(USD millions) FY2011 FY2012 FY2013 FY2014 Total

Drillships:

Hull 1865 305.3 - - - 305.3

Hull 1866 305.3 - - - 305.3

NB Drillship TBN #1 365.6 - 365.6

NB Drillship TBN #2 365.6 - 365.6

Total 610.6 - 731.2 - 1,341.8

Drybulk Vessels:

Panamax 1 23.1 - - - 23.1

Panamax 2 6.6 16.5 - - 23.1

Capesize 1 - 40.6 - - 40.6

Capesize 2 - 40.6 - - 40.6

29.7 97.8 - - 127.5

Tanker Vessels:

Belmar 42.8 - - - 42.8

Calida 45.6 - - - 45.6

Lipari 54.4 - - 54.4

Petalidi 6.8 54.4 - - 61.2

Alicante 45.6 - - 45.6

Mareta 5.7 45.6 - - 51.3

Bordeira 6.8 54.4 - - 61.2

Esperona - 6.8 54.4 - 61.2

Blanca - 6.8 6.8 47.6 61.2

107.7 268.0 61.2 47.6 484.5

GRAND TOTAL 748.0 365.8 792.4 47.6 1,953.8

DryShips Inc.

DEBT

Proforma Debt Repayment Schedule – as of today

(USD million)

Drybulk Segment Tanker Segment Drilling Rig Segment Total

Remaining 2011 65 3 112 180

FY 2012 114 7 167 288

FY 2013 110 7 549 666

Long-term Debt

DryShips Inc.

Strong Contracted Cashflow - Upside from Drillships & Spot Drybulk and Tankers

Notes:

− EBITDA has been estimated on the basis of Net Revenues; Drydock expenses are not included in calculation of EBITDA. Cash G&A is taken into account in calculation

of EBITDA

− Assumed utilization rate of 95% for the rigs and drillships

− * Estimates only include fixed contracts

− ** Spot – assumed fixed at market EBITDA: All units as they become available, are assumed fixed upon delivery at $500,000 per day (with 1 month mobilization

period, and assumed OPEX of $150,000 per day)

− Dry Cargo and Tankers – Spot: 2011 and 2012 rates as per FFA forward curve. 2013 rates as per management projections

($ in millions)

$225$153

$79

$140

$492$452

$232

$17 $214$478

$45$15

$749

$863

$930

$0

$200

$400

$600

$800

$1,000

2011 2012 2013

Ultra Deep Water - Spot (assumed fixed at market) **

Ultra Deep Water - Fixed *

Dry Cargo and Tankers - Spot (assumed fixed at market)

Dry Cargo - Fixed contracts

EBITDA Estimates

DryShips Inc.

Drybulk

Tankers

UDW Drilling

DryShips Inc Strategy – Three Standalone Segments

Spin-off / IPO

Dividend play

Stand alone entity

Capitalization

proceeding

Increase backlog

Fleet growth

Increase liquidity

(float)

Opportunistic

Valuation of long-

term charters

Fleet renewal/M&A

Take advantage

when market

improves

DryShips Inc.

OCRG Closing Price = US$19 per share

78% of OCR = US$2.0 billion

DRYS Market Cap = US$1.6 billion

Buy 1 (20% off) and Get 2 free

Buy OCR at a 20% discount and get the drybulk and

tankers for free

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