Siem Offshore Inc. Presentation 3Q 2008 CEO Terje Sørensen

Transcription

1 Siem Offshore Inc. Presentation 3Q 2008 CEO Terje Sørensen

2 Introduction Brief Summary Owner and operator of vessels for the global oil and gas service industry. The total fleet comprises 25 vessels in operation and 18 vessels under construction The Company will become a major owner and operator of high capacity large-size AHTS vessels Owner of companies that develops technology for managed pressure drilling and increased oil recovery Total number of employees: 675 Listed on the Oslo Stock Exchange (Ticker SIOFF) Market capitalisation NOK 2.4 billion (USD 341 billion)

3 Introduction Vision Become a preferred supplier of marine services to the oil & gas industry based on quality and reliability Strategy Grow the company within the offshore support vessels market, in order to achieve economies of scale and stronger presence in the market. Provide cost efficient solutions by close cooperation with customers applying technology and experience Core Values Honesty Predictability Quality Safety Profitability Involve the employees in the development of a Company culture that express the kind of behaviour and conduct required to achieve the vision for the Company and the goals for the individuals.

4 Financials Earnings Highlights Three Months Ended Nine Months Ended 30 September 30 September Figures in USD millions Unaudited Unaudited Unaudited Unaudited Operating Revenue EBITDA[1] Gain/Losses FX forward contracts[2] ( 19.3) 20.4 ( 5.9) 39.9 Net financial items[3] ( 16.4) 2.9 ( 8.1) ( 2.0) Profit before tax ( 17.8) Income Tax Provision ( 0.9) ( 7.2) ( 3.2) ( 7.3) Net Profit ( 18.7) Attributable to minorities 1.2 ( 0.2) 1.5 ( 0.6) Attributable to equity holders ( 19.9) Net Profit ( 18.7) Earnings per share[4] ( 0.08) Average number of shares outstanding[5] 253, , , ,692 [1] Operating revenue less operating expenses [2] Revaluation of off-balance sheet currency exchange contracts entered into in order to hedge future yard installments [3] Revaluation of non-usd currency balance sheet items [4] Net profit / Average number of shares outstanding (diluted) [5] Weighted average number of shares outstanding (diluted) ('000)

5 Financials Earnings Comments The fleet of PSVs and MRSVs performed at an average utilisation rate (basis 365 days) of 99% during 3Q 2008 and at 94% for the nine months ended 30 September The fleet of crew and support vessels in Brazil performed at an average utilsation rate of 99% during 3Q 2008 and at 93% for the nine months ended 30 September 2009 Operating margin for 3Q 2008 was USD 26.3 million (48%) and USD 63.8 million (44%) for the nine months ended 30 September Non-USD currency related balance sheet, and off-balance sheet, items are revaluated each quarter in line with the exchange rate movements. The P&L in 3Q 2008 includes total revaluation charges of USD 33.2 million. An income tax provision of USD 0.9 million representing a potential tax charge on operations. The nine months period ended 30 September 2008 includes a similar provision of USD 2.9 million. The audited annual accounts for 2007 will be revised to include a provision for the years 2006 and The Company are in the process of restructuring and aligning its operations to various European Tonnage Tax regimes.

6 Financials Fleet in Operation Employment Status Vessel Type Ownership Q 1Q Q 3Q 4Q 1Q 2Q 3Q 4Q Q 2Q 3Q 4Q Q 2Q 3Q 4Q Q 2Q 3Q 4Q Siem Sasha PSV 100% Siem Sophie PSV 100% Siem Louisa PSV 100% Siem Danis PSV 100% *) *) Siem Mollie PSV 100% Siem Hanne PSV 100% Siddis Skipper PSV 51% Siem Carrier PSV 100% Ocean Commander PSV 35% Siem Supplier PSV 100% *) *) *) *) Hugin Explorer PSV 100% Siem Sailor PSV 51% Siem Swordfish MRSV 100% Seven Sisters MRSV 100% Big Orange XVIII WSV 41% Joides Resolution SPV 50% Marati OSRV 100% Marabá OSRV 100% Parnaiba FSV 100% Paropriá FSV 100% Paracaru FCV 100% Capela FCV 100% Piracicaba FCV 100% Parati FCV 100% Atalaia FCV 100% 2009: 58% (71% incl options) 2009: 100% (100% incl options) 2009: 81% (92% incl options) Current contract coverage for 2009 =Yard = Contract = Option *) Subject to charter party details The current contract coverage for 2009 for the total fleet in operation is 70% (81% including options) The Company will continue to pursue long-term employment for all vessels Scheduled dry-dockings are not included in the above graph, unless committed with yards

7 Financials Fleet under Construction Delivery and Employment Status Vessel Type Ownership 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Siem 'TBN' PSV 100% Siem 'TBN' PSV 51% Siem 'TBN' MRSV 100% Siem 'TBN' MRSV 100% Siem 'TBN' AHTS 100% Siem 'TBN' AHTS 100% Siem 'TBN' AHTS 100% Siem 'TBN' AHTS 100% Siem 'TBN' AHTS 100% Siem 'TBN' AHTS 100% Siem 'TBN' AHTS 100% Siem 'TBN' AHTS 100% Siem 'TBN' AHTS 100% Siem 'TBN' AHTS 100% Brazil 'TBN' FSV 100% Brazil 'TBN' FSV 100% Brazil 'TBN' FCV 100% Brazil 'TBN' FCV 100% =Yard = Contract = Option See comment below The delivery dates are anticipated delivery dates based on latest discussions with yards The Company has a 100% interest in a mid-size PSV under construction. On 22 October 2008, the Company was informed that the shipyard, Havyard Solstrand, filed for bankruptcy. The Company has refund guarantees for the pre-delivery instalments made under the shipbuilding contract. It is too early to evaluate how this event will impact the interests of the Company. The Company has a 51% interest in a large-size PSV under construction. The hull was completed and was in the process of being towed to the outfitting yard in Norway when it was grounded during heavy weather conditions. The hull is insured and the refloating activities are coordinated by the underwriters. The final delivery date of the vessel is uncertain, but a delivery in second half of 2009 is assumed.

8 Financials Balance Sheet Highlights 30 September 31 December Figures in USD millions Unaudited Unaudited Audited Intangible assets Vessels and other tangible assets CIRR loan deposits Interest in associates and other financial assets Debtors, prepayments and other current assets Cash and cash equivalents Total Assets Total Equity Provisions Borrowings CIRR loan Other non-current liabilities Trade creditors and other current liabilities Total Liabilities Total Equity and Liabilities

9 Financials Balance Sheet Comments Future Yard Instalments Future yard istallments (Millions) Equivalent Year NOK USD , , Total 5,909 1,014 Future yard instalments will be financed by cash reserves, cash-flow from operations and debt instruments

10 Financials Balance Sheet Comments Status Debt Instruments No of Vessel Type Vessels Delivery Ownership Committed Debt Instrument Envisaged Guarantors Siem 'TBN' PSV 1 1Q % USD 30 mill Drawing Facility N/A Siem 'TBN' PSV 1 3Q % Loan from commercial bank 1 N/A Siem 'TBN' MRSV 2 1Q/2Q % Loan from Eksportfinans 2 GIEK 3 and commercial banks Siem 'TBN' AHTS 10 2Q Q % Loan from Eksportfinans GIEK and commercial banks Brazil 'TBN' FSV 2 3Q74Q % Loan from FMM 4 To be agreed Brazil 'TBN' FCV 2 1Q/2Q % Loan from FMM To be agreed 1 A loan agreement is entered into with a commercial bank for the long-term financing 2 Eksportfinans is the Norwegian export credit agency for Export Financing. Eksportfinans has granted funding of up to 80% of the project cost, subject to satisfactory guarantees 3 GIEK is the Norwegian Guarantee Institute for Export Credits. The Company has an ongoing discussion with GIEK in respect of GIEK s capacity to provide guarantees for the export credits made available by Eksportfinans 4 Fundo de Marinha Mercante is the Brazilian Government Fund for Development of Merchant Shipping. FMM has granted financing of up to 90% of the total project cost, subject to satisfactory guarantees "In periods of increased unrest of the markets, private risk capital is in short supply. Our objective is to be a supplement to the banks and to respond in a counter-cyclic way. This is particularly important in today's situation," (

11 Financials Balance Sheet Comments Status Debt Instruments (cont.) Prior to ordering vessels from Norwegian yards, the Company was granted 12-year fixed interest rate options from Eksportfinans related to the longterm financing of such vessels During 2007, the Company sold the right to exercise such options to a first class international bank (the Bank ) in consideration for an up-front payment of USD 23.5 million The funding from Eksportfinans remains with the Company, but shall be pledged as security for any options declared by the Bank based on an inthe-money assessment The Company will regain full access to the funding from Eksportfinans for any options not declared by the Bank, or for any options repurchased by the Company The price for such options is determined in line with other interest swap derivatives

12 Financials Share Information SHAREHOLDER SHARES SIEM INDUSTRIES INC. 85,504, % ACE CROWN INTERNATIONAL LIMITED 39,000, % ROVDEFRAKT AS 11,098, % ROVDE INVEST AS 8,979, % KNARDAL INVEST AS 6,395, % MP PENSJON 6,383, % NORDEA BANK NORGE ASA 5,158, % OJADA AS 4,713, % STAVANGER OFFSHORE AS 3,532, % PUMPØS A/S 2,882, % TOTAL 10 LARGEST 173,647, % OTHERS 80,244, % TOTAL 253,891, % /10/05 21/01/06 21/04/06 21/07/06 NOK / Share 21/10/06 21/01/07 21/04/07 21/07/07 21/10/07 21/01/08 21/04/08 21/07/08 21/10/08 All shares carry equal votes Par value per share: USD 0.01 Book Equity per share: USD 1.84, NOK (basis USDNOK 7.00) Authorised number of shares: 380,000,000 Issued number of shares: 253,891,866 Unissued number of shares: 126,108,134 The unissued number of shares are at the disposal for the Board of Directors

13 Activities - Selected comments The Company will become a major owner and operator of high capacity large-size AHTS vessels Vessel fleet characteristics: New with latest technology and solutions Large and high stability Safe and attractive for offshore personnel Powerful and high capacities Fuel efficient and low emissions Advanced equipment and high safety focus Flexible work roles for future demand Rational operation through economies of scale Work roles: Pre-laying of anchor systems for semis Anchor handling for semis in deep water Towing and mobilisation of semis and FPSOs Chain work and inspection FPSOs Ploughing and trenching Inspection repair and maintenance, Subsea installation General supply service ERRV services, Oil Recovery, FiFi Operations moves into deeper water and more remote areas Modern, larger and safer vessels are in demand in all regions

14 Activities Selected comments Organisation The onshore organisation is being developed in order to prepare for the increased future activities The recruitment plan for offshore personnel to the growing fleet is initiated and the response is encouraging Site management teams for the supervision during outfitting are in the process of being recruited

15 Market Outlook Short-Term GDP Growth Projection - Look beyond 2009 Hight economic growth needed to fund urbanisation and better living standards Source: IMF World Economic Outlook 2008 (October 2008) Global growth is expected to slow substantially in 2008, and modest recovery would only begin later in 2009 IMF World Economic Outlook, Oct 2008

16 Market Outlook Population Growth, Urbanisation Intensity, and Long-Term GDP Growth Projections Population (millions) 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 Urban population in strong growth in less developed regions To support continued economic progress for the world s growing population, more energy will be needed Economic output GDP, 2005 trillion $ More Developed Regions, Rural population More Developed Regions, Urban population Less Developed Regions, Rural population Less Developed Regions, Urban population Total World Population Source: UN: An overview of urbanization, internal migration, population distribution and development in the world (January 2008) Source: ExxonMobil: The Outlook for Energy (November 2007)

17 Market Outlook Long-Term World Energy Demand and Primary Energy Supplies Source: ExxonMobil: The Outlook for Energy (November 2007) Fossil energy will continue to be dominant for the forseeable future Oil dominant as transport fuel, with few substitutes Declining production from current fields significant variations Spare production capacity to remain tight

18 Market Outlook Rigs Drillships and FPSOs On order/ Exisiting Construction Total Jackups Semisubmersible Drillships FPSOs ,004 Source: ODS Petrodata

19 Market Outlook World Fleet of Platform Supply Vessels Operations moves into deeper water and more remote areas No of Vessels Modern and larger vessels are in demand in all regions The world PSV fleet is being modernised with larger and more efficient vessels PSV < 3,000 Dwt PSV 3,000-4,000 Dwt PSV > 4,000 Dwt Source: ODS Petrodata PSVs, age distribution > 20 years years 0-10 years Current fleet On order TOTAL PSVs, % of current fleet > 20 years On order PSV < 3,000 Dwt PSV < 3,000 Dwt 60% 13% PSV 3,000-4,000 Dwt PSV 3,000-4,000 Dwt 5% 33% PSV > 4,000 Dwt PSV > 4,000 Dwt 2% 66% TOTAL ,166 TOTAL 37% 26%

20 Market Outlook No of Vessels World Fleet of AHTS Vessels > 12,000 BHP Operations moves into deeper water and more remote areas Moder and larger vessels are in demand in all regions Increased focus on vessel stability and true bollard pull capacity for deep water operations Source: ODS Petrodata AHTS 12,000-16,000 BHP AHTS 16,000-20,000 BHP AHTS > 20,000 BHP AHTS Vessels, age distribution > 20 years years 0-10 years Current fleet On order TOTAL AHTS, % of current fleet > 20 years On order 12,000-16,000 BHP ,000-16,000 BHP 38% 40% 16,000-20,000 BHP ,000-20,000 BHP 7% 74% > 20,000 BHP > 20,000 BHP 3% 183% TOTAL TOTAL 24% 68%

21 Market Outlook Weekly Average North Sea Spot Fixtures Source: R. S. Platou The activity in the North Sea has been at high levels so far during 2H 2008 Vessel demand in other regions has continued to increase during 2008

22 Market Outlook Weekly Average North Sea Spot Fixtures Source: R. S. Platou Number of reported term fixtures world wide has increased compared to previous year Reported charter rates for term fixtures has increased compared to previous years

23 Market Outlook Summary Market Outlook The current financial crisis is expected to have a significant impact on the world economy. Although there is higher uncertainty related to the oil price, the underlying macro economics for the sector remain strong. The North Sea market for medium and large PSVs has been affected by limited supply of vessels and charter rates have increased for both vessel types compared to the previous quarter. The number of requirements for MRSVs is increasing and particularly driven by planned activities in Brazil, Gulf of Mexico and West Africa. Spot rates for larger AHTS vessels have reached record levels during this quarter. Long term requirements have increased, but primarily for vessels with early availability.

24 Technologies for Increased Oil Recovery Siem WIS AS (60% Owned by Siem Offshore) Siem WIS is developing technology and solutions for managed pressure drilling and increased oil recovery services Siem WIS has obtained patent award for the main products under development, including the first product called the CircSub CircSub is a device to be installed on the drill floor which will enable constant circulation of mud during drill pipe connections Status CircSub development: Successful prototype full-scale test performed 2Q 2008 Test results are now used to improve the commercial version of the CircSub in cooperation with StatoilHydro, including feasibility studies at certain offshore installations to plan for a pilot operation The pilot operation is planned within first half

25 Technologies for Increased Oil Recovery WellCem AS (34% Owned by Siem Offshore) WellCem AS has the patented product ThermaSet, which is a product based on thermo setting resins and weighting materials ThermaSet is a penetrating liquid with low viscosity that stops leaks in oil and gas wells (onshore/offshore) ThermaSet is well documented, field tested and launched in industrial format to the world wide markets Areas of applications: Drilling (As lost circulation material to prevent loss off drill mud and stuck bit) Production (Sealing off water and gas leaks in well and formation (Zonal isolation) Decommissioning (Plug & Abandonment) Further product development High Temp Petrobras/Total

26 Thank you!