Registration Document

Transcription

1 Siem Offshore Inc Prepared according to Commission Regulation (EC) No 809/ Annex IV

2 Important notice The Arranger and/or affiliated companies and/or officers, directors and employees may be a market maker or hold a position in any instrument or related instrument discussed in this, and may perform or seek to perform financial advisory or banking services related to such instruments. The Arrangers corporate finance department may act as manager or co-manager for this Issuer in private and/or public placement and/or resale not publicly available or commonly known. Copies of this are not being mailed or otherwise distributed or sent in or into or made available in the United States other than on the Issuer s web page. Persons receiving this document (including custodians, nominees and trustees) must not distribute or send such documents or any related documents in or into the United States. Other than in compliance with applicable United States securities laws, no solicitations are being made or will be made, directly or indirectly, in the United States. Securities will not be registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The distribution of the may be limited by law also in other jurisdictions, for example in Canada, Japan and in the United Kingdom. The Prospectus has been reviewed and approved by the Norwegian FSA in accordance with sections 7-7 and 7-8, cf. section 7-3 of the Norwegian Securities Trading Act. The Norwegian FSA has not controlled or approved the accuracy or completeness of the information given in this Prospectus. The approval given by the Norwegian FSA only relates to the Issuer's descriptions pursuant to a pre-defined check list of requirements. The Norwegian FSA has not made any form of control or approval relating to corporate matters described in or otherwise covered by this Prospectus. Page 2 of 23

3 Table of Contents: 1. Risk factors Persons responsible Definitions Statutory auditors Selected financial information Information about the issuer Business overview Administrative, management and supervisory bodies Major shareholders Financial information concerning the issuer's assets and liabilities, financial position and profits and losses Documents on display Cross reference list: Page 3 of 23

4 1. Risk factors Interest risk The Company is exposed to changes in interest rates as a portion of the long-term interest-bearing debt was subject to floating interest rates with the remaining amount subject to fixed interest rates. Currency risk The Company is exposed to currency risk as revenue and costs are denominated in various currencies. The Company is also exposed to currency risk due to future yard instalments in relation to shipbuilding contracts and long-term debt in various currencies. Forward exchange contracts are entered into in order to reduce the currency risk related to future cash flows. Credit risk The Company s credit risk is primarily attributable to its trade and other shortterm receivables. The exposure to credit risk is measured on an ongoing basis and credit evaluations are performed for customers identified to be risky. The Company s debtors are mainly major oil companies and offshore service companies, which are considered to be creditworthy third parties. Liquidity risk The Company is financed by debt and equity. If the Company fails to repay or refinance its credit facilities, additional equity financing may be required. There can be no assurance that the Company will be able to repay its debts or extend the debt repayment schedule through re- financing of credit facilities. There is no assurance that the Company will not experience cash flow shortfalls exceeding the Company s available funding sources or to remain in compliance with minimum cash requirements. Further, there is no assurance that the Company will be able to raise new equity or arrange new credit facilities on favourable terms and in amounts necessary to conduct its ongoing and future operations should this be required. Commercial risk The service life of modern OSV vessels is generally considered to exceed thirty years, but may ultimately depend on its efficiency and demand for such equipment. There can be no guarantees that the Siem Group s current and future fleet will have a long service life. The vessels may have particular unforeseen technical problems or deficiencies, new environmental requirements may be enforced, or new technical solutions or vessels may be introduced that are more in demand than the Siem Group s vessels, causing less demand and use of these vessels. It may, however, be possible to upgrade vessels to counteract some of these effects that may occur Yard risk The process for construction of new vessels is associated with numerous risks. Among the most critical risk factors in relations to such construction is the risk of not receiving the vessels on time, at budget and with agreed specifications. In addition, there is the risk of yards experiencing financial or operational difficulties resulting in bankruptcy or otherwise adversely affecting the construction process. The Company has obtained certain guarantees of financial compensation including refund guarantees in case of delays and non-delivery. Further, the Company has the right to cancel contracts if delivery of vessels is significantly delayed. However, no assurance can be given that all risks have been fully covered. Market risk Demand for supply vessel services in connection with exploration, development and production in the offshore oil and gas industry is particularly sensitive to oil and gas price fluctuations, low production levels and disappointing exploration results as well as possible political incidents. Demand for the Company s services and products may also be negatively impacted by increased supply of similar or other complementary vessels into the markets where the Company operates. Political risk Siem Offshore has operations and investments in countries that are unsafe and politically unstable. Activities in these countries will often involve greater risk, including unfavourable changes in tax laws and other laws, partial or full expropriation, currency volatility and restrictions on currency transfer, disruption of operations because of labour disputes or political riots or wars, and some individual countries requirements for some local ownership interests. Page 4 of 23

5 The Company s operations are moreover subject to laws, regulations and supervisory rules in the country where the activity is performed. The operations of the Company may be negatively affected by changes in environmental laws and other regulations that can result in large expenses in, for example, modification of vessels and changes in the operation of vessels. Environmental risk Siem Offshore s operations involve the use and handling of materials that can be environmentally hazardous. Environmental legislation has in general become stricter in the countries in which Siem Offshore operates. These laws and regulations might expose the Company to liability due to events caused by others or by it, even though the actions were consistent with existing laws at the time. In the event of liability arising due to the action of a customer, Siem Offshore would expect to get some contractual compensation from that customer through contractual regulations for events such as pollution and other environmental damage. However, there can be no assurance that the compensation granted in such events, if at all granted, will cover the losses suffered. Page 5 of 23

6 2. Persons responsible Siem Offshore Inc. confirms that, having taken all reasonable care to ensure that such is the case, the information contained in the registration document is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import Siem Offshore Inc. Page 6 of 23

7 3. Definitions AHTS - Anchor Handling Tug Supply Vessel Arranger - Arctic Securities ASA CLV - Cable-Lay Vessel ISV - Installation Support Vessel OSCV - Offshore Subsea Construction Vessel OSRV - Oil Spill Recovery Vessel OSV - Offshore Support Vessel PSV - Platform Supply Vessel - This document dated Secunda - Secunda Canada LP SOC - Siem Offshore Contractors The Parent / Issuer - Siem Offshore Inc. The Group / The Company / Siem Offshore - Siem Offshore Inc.with subsidiaries USA - United States of America USD - United States dollars WIV - Well-Intervention Vessels Page 7 of 23

8 4. Statutory auditors The Company auditor for the period covered by the historical financial information in this has been PricewaterhouseCoopers AS. PricewaterhouseCoopers AS contact information: Dronning Eufemias gate 8, 0191 Oslo, Norway. PricewaterhouseCoopers AS is member of The Norwegian Institute of Public Accountants. Page 8 of 23

9 5. Selected financial information Selected financial information for the Group: (Amounts in USD 1,000) Income Statements Ref Q Q Operating revenue Operating margin (1) Operating margin, % 34 % 30 % 39 % 24 % Operating profit (2) Operating profit margin, % 19 % 15 % 30 % 34 % Net profit/(loss) attributable to shareholders Net profit margin, % 6 % 5 % 16 % 25 % Statements of Financial Position Working capital (3) Total assets Shareholders' equity Non-current liabilities Statements of Cash Flows Q Q Net cash flow from operations (4) Net cash flow (4) Key Figures Weighted average no. of outstanding shares (1,000) Weighted average no. of diluted outstanding shares (1,000) Earnings per share (USD) 0,06 0,04 Diluted earnings per share USD 0,06 0,04 Cash flow per share in USD (5) 0,15 0,18 Share price per year end (USD) 1,59 1,37 Share price per year end (NOK) 9,65 7,60 Price/earnings per share (P/E) (6) 28,05 31,30 Price/cash flow per share (P/CF) (7) 10,42 7,62 Book shareholders' equity per share (USD) (8) 2,00 1,90 Operating margin share (9) 0,32 0,28 Book equity ratio (10) 0,41 0,46 Liquidity ratio (11) 1,12 1,61 Definitions: (1) Earnings before interests, tax, depreciation and amortization (EBITDA) (2) Earnings before interests and taxes (EBIT) (3) Total current assets less total current liabilities (4) See Statements of Cash Flows for details (5) Net cash flow from operation divided on weighted average number of shares outstanding (6) Stock Exchange price on December 31 divided on earnings per share (7) Stock Exchange price on December 31 divided on cash flow per share (8) Shareholders' equity divided on number of outstanding shares (9) Operating margin divided on weighted average number of outstanding shares (10) Book equity divided on total assets (11) Current assets divided on current liabilities Page 9 of 23

10 6. Information about the issuer Siem Offshore Inc. (an exempted company existing under the laws of the Cayman Island) with business registration number MC , having its registered office at PO Box 309, George Town, Grand Cayman KY1-1104, Caymen Island. The address of Siem Offshore Management AS is Sjølystveien 3, 4610 Kristiansand S, Norway. Their postal address is P.O. Box 425, 4664 Kristiansand S, Norway. Phone: , Fax: Website: As a company incorporated in the Cayman Islands, Siem Offshore Inc. is an exempted company duly incorporated under the laws of the Cayman Islands and subject to Cayman Island laws and regulations with respect to corporate governance. Cayman Islands corporate law is to a great extent based on English Law. In addition, due to the Company s listing on the Oslo Stock Exchange, certain aspects of Norwegian Securities law apply to the Company and there is a requirement to adhere to the Norwegian Code of Practice for Corporate Governance. The Company s commercial name is Siem Offshore. Siem Offshore was established as a stand-alone company in July 2005 following a spin-off from the company Subsea 7 Inc. The initial activities of the Company included shipbuilding contracts for vessels under construction, ownership and operation of a fleet of support/crew boats in Brazil and part ownerships in one scientific core drilling vessel and one well stimulation vessel. Siem Offshore owns and operates a fleet of offshore support vessels, equipped to meet the increased requirements from clients and demands from operation in the most harsh environments. The Parent is a holding company with no employees and is therefore depended on service from its subsidiaries. These services consist of administrative and corporate services provided by Siem Offshore Management AS and Siem Offshore AS. The Group has approximately 1100 employees, including approximately 850 offshore and 250 onshore employees. Siem Offshore has today 43 vessels in operation and 13 vessels under construction. Vessels in operation included two anchor handling, tug, supply vessels operated on behalf of a pool partner. By May 2014, the total fleet comprised of 56 owned vessels, including, among others, seventeen Platform Supply Vessels (PSVs), six Offshore Subsea Construction Vessels (OSCVs), eight Anchor Handling, Tug, Supply vessels (AHTS vessels), two Well-Intervention Vessels (WIVs) and six Canadian flagged vessels comprising of both AHTS vessels and PSVs. The fleet provides a broad spectrum of services offered by a highly experienced and competent crew with a strong focus on Health, Safety, Environment and Quality. The Company s vision is to become the leading provider and the most attractive employer offering marine services to the offshore energy service industry. The Company shall deliver quality and reliable contracted services in a timely manner by executing cost-efficient solutions developed in active collaboration and cooperation with the customers. The pursued strategy has been to grow the Company within the offshore support vessels market, in order to achieve economies of scale and stronger presence in the market. The Company s activities has increased significantly in way of ordering and delivery of new vessels, acquisition of modern second-hand vessels and through business combinations. The onshore and offshore organizations are increased and developed accordingly. The Company has an integrated operation with offices in Norway, Germany, Netherlands, Ghana, USA, Poland, India, Brazil, Canada and Australia and provides a wide range of services from its vessels, equipment and experienced onshore and offshore personnel with high focus on Health, Safety, Environment and Quality. Page 10 of 23

11 Simplified legal structure*: * All companies without indicated shareholding in % are owned 100% directly or indirectly by Siem Offshore Inc * Siem Offshore Canada Inc. owns 50% of Secunda (6 Canadian flagged vessels and 1 vessel under construction) Partly owned businesses Ownership in vessel owning companies and technology based companies that provide services on a global basis. Siem Offshore Do Brazil S.A. (trademark: Siem Consub SA ) The Company s subsidiary Siem Consub SA in Brazil is an owner and operator of supply vessels and crew boats in the Brazilian market. Siem Consub s head office is located in Rio de Janeiro in addition to bases located along the Brazilian coast. With more than 26 years of experience in Brazil, Siem Consub is focused on offshore support operations, submarine cable maintenance and installation, engineering and systems integration for the defence market. Siem Consub further undertakes projects that comprise underwater and naval technology, high quality resources and qualified professionals. Unique solutions have been implemented but each new project brings new challenges to overcome. View the company web at Siem WIS AS Siem WIS AS is 60% owned by Siem Offshore, and is a Norwegian Oil Service Company which has developed and commercialized new unique drilling technology for Underbalanced Operations (UBO) and Managed Pressure Drilling (MPD). Subject to a successful development, the products will enable safer and more efficient drilling and well maintenance services, including riser-less subsea intervention services from vessels. Page 11 of 23

12 With the technology, challenging reservoirs such as HPHT (High Pressure High Temperature) and ERD (Extended Reach Drilling) wells, will be drilled with better control of your first barrier. These companies services are increasing due to global challenges with depleted reservoirs, drilling of additional and infield wells, and the demand to achieve a more constant well pressure during drilling and tripping operations. View the company web at Siem Offshore Contractors (SOC) Siem Offshore Contractors (SOC) is an experienced submarine cable and umbilical installation, repair and maintenance contractor serving the worldwide offshore oil and gas as well as renewable energy industries. SOC, a German company with its head office situated in the City of Leer, was formed in SOC has gained great experience in providing its service to the demanding worldwide offshore oil and gas industry, meeting the highest industry standards for quality, health, safety and environmental protection. View the company web at Page 12 of 23

13 7. Business overview The Company s primary activity is to own and operate offshore support vessels ( OSVs ) for the offshore energy service industry. The OSV fleet comprises platform supply vessels ( PSVs ), anchor-handling, tug, supply vessels ( AHTS vessels ), offshore subsea construction vessels ( OSCVs ) and a variety of other service vessels. The Company operates an OSV fleet of 43 vessels, and has 13 vessels under construction. FLEET IN OPERATION 1) Incl. two vessels owned by a partner 2) Incl. three 51% owned 3) 50% owned 4) Delivered from yard 7th of April CONTRACT BACKLOG - VESSELS IN OPERATION The majority of the fleet is on long-term contracts. The contract backlog at 31 March 2014 for the PSV fleet, which is consolidated on a 100% basis, was 84% for 2014, 52% for 2015 and 30% for The contract backlog for the OSCV fleet was 100% for 2014, 68% for 2015 and 50% for The contract backlog for the AHTS vessel fleet was 60% for 2014, 18% for 2015 and 5% for The contract backlog for the fleet of smaller Brazilian-flagged vessels was 87% for 2014, 69% for 2015 and 67% for The total contract backlog of firm contracts for all vessels at 31 March 2014 was USD 1.68 billion, including the one-year option for the JOIDES Resolution, the 41%-ownership in the Big Orange XVIII, the 50% ownership in Secunda Canada LP and vessels under construction. The total contract backlog is allocated with USD 297 million in 2014, USD 262 million in 2015 and USD 1119 million in 2016 and thereafter. The total contract backlog of firm contracts within the submarine power cable segment at 31 March 2014 was USD 184 million. The contract backlog was USD 160 million in 2014 and USD 24 million in Page 13 of 23

14 1) Employment for Siddis Mariner includes firm time charter with options for Siem Offshore Contractors. 2) Employment for Siem Garnet includes firm time charter for Siem Offshore Contractors. 3) The ISV Siem Moxie was delivered 7th of April 2014 and shall primarily be utilized by the subsidiary Siem Offshore Contractors for cable installation projects within the offshore wind-farm segment. VESSELS UNDER CONSTRUCTION The Company has 13 vessels under construction and one vessel under construction in the 50% owned entity Secunda. Three of the 13 vessels are under construction in Norway, five in Poland and two in Germany. These 10 vessels includes two OSCVs for delivery in 2014, five dual-fuel PSVs with one for delivery in 2014, two in 2015 and two 2016, one Cable-Lay Vessel ( CLV ) for delivery in 2015 and two Well-Intervention Vessels ( WIV ) for delivery in The Company had three vessels under construction in Brazil at the end of the first quarter 2014, which includes two oil spill recovery vessels ( OSRVs ) and one PSV. All vessels are scheduled for delivery in The two OSRVs shall commence eight-year firm contracts for Petrobras with options for additional eight-year periods. The Company has secured long-term employment for both of the OSCVs, two of the dual fuelled PSVs and for the two WIVs. The CLV shall be utilised by SOC, Siem Offshore Page 14 of 23

15 Contractors, for project work within the submarine power cable installation, repair and maintenance segment. Total future yard instalments for vessels under construction were equivalent to USD 1.1 billion at the end of the first quarter These instalments fall due with USD 407 million in 2014, USD 261 million in 2015 and USD 427 million in The Company has secured debt financing for 8 of the 13 vessels currently under construction. Siem Offshore will finance the remaining 5 vessels, currently not secured debt financing, by way of mortgage debt financing and cash generated from fleet in operation. CONTRACT BACKLOG - VESSELS UNDER CONSTRUCTION Total firm backlog for vessels under construction at approximately USD 952 million as of end of first quarter The CLV shall primarily be utilized by the subsidiary Siem Offshore Contractors for cable installation projects within the offshore wind-farm segment. Page 15 of 23

16 MARKET AND OUTLOOK The global market for offshore support vessels is characterised by a large number of vessel owners, which in turn result in a competitive market for the supply of offshore support vessels to a vast variety of clients. The market is further divided in low and high-end segments, where the high-end segment is characterised by larger vessels, increased complexity in operations, more demanding clients, stricter quality requirements and thus higher barriers to entry. The Company is positioned in the high-end segment of offshore support vessel providers. During the first quarter 2014, the Company experienced a volatile market for the high-end AHTS vessel in the North Sea. The first couple of months were positively influenced by a high number of rig moves supported by relatively harsh weather conditions resulting in a sold out market. In the latter part of the quarter, there were periods where practically the entire spot fleet remained idle. The market for the rest of the year is expected to continue to be volatile. The outlook for demand of high-end offshore support vessels remains positive. The number of rigs working in the North Sea, Brazil, West Africa and the Gulf of Mexico has increased and further rigs are contracted to commence operations. Activity in harsh and /or remote areas (Barents Sea, Greenland, Canada, US Alaska, Kara Sea, Santos Basin Brazil) is picking up and will create incremental demand for highend PSVs and AHTS vessels going forward.the Company anticipates that oil companies will place more emphasis on reducing their cost, which might have implications for the activity level in general and the OSV market. The Company believes, however, that the activity level will remain high based on stable oil price. They have registered increased demand for OSV in all geographic areas where they today have operations. A majority of the Company s vessels are currently operating in the North Sea, off the Brazilian coast and the coast of West Africa. Page 16 of 23

17 8. Administrative, management and supervisory bodies BOARD OF DIRECTORS SIEM OFFSHORE: Chairman - Eystein Eriksrud (born 1970) Mr. Eriksrud is the Deputy CEO of Siem Industries Inc., the Company s main shareholder. Prior to joining Siem Industries in October 2011, he was partner of the Norwegian law firm Wiersholm Mellbye & Bech since 2005 working as a business lawyer with an internationally oriented practice in mergers and acquisitions, company law and securities law, particularly in the shipping, offshore and oil service sectors. He was Group Company Secretary of the Kvaerner Group from and served as Group General Counsel of the Siem Industries Group from He has served on the boards of Privatbanken ASA and Tinfos AS as well as a number of other boards. Eriksrud is a Norwegian citizen. Board member - Kristian Siem (born 1949) Mr. Siem is chairman of Siem Industries Inc., Subsea 7 Inc. and Siem Industrikapital AB and a director of Star Reefers Inc. and North Atlantic Smaller Companies Investment Trust plc. Mr. Siem is a Norwegian citizen. Board member - Michael Delouche (born 1957) Mr. Delouche is the president and the secretary of Siem Industries Inc. and is in charge of the Company's operations at the head office in George Town, Cayman Islands. He is a director of STAR Reefers Inc. and a former director of Subsea 7 Inc. Mr. Delouche received degrees in civil engineering (structural) and business and was previously an audit manager with KPMG Peat Marwick LLP. Mr. Delouche is a US citizen. Board member - David Mullen (born 1958) Mr. Mullen served as the Chief Executive Officer for Wellstream Holdings PLC until March 2011 following the acquisition of the company by General Electric. Prior Wellstream he was the Chief Executive officer of Ocean Rig ASA and prior to working at Ocean Rig, he was the Senior Vice President of Transocean Inc. where he was responsible for the worldwide marketing, corporate strategy and mergers and acquisitions activities. Between 2001 and 2004, Mr. Mullen was the president of Schlumberger Oilfield Services, North and SouthAmerica. Prior to this, Mr. Mullen served as vice president of Human Resources for Transocean Sedco Forex, Inc. He has also been the director of personnel for Geco-Prakla, managing director of Schlumberger (Nigeria) Ltd., and the district manager for Eastern Venezuela, Wireline & Testing. Mr. Mullen began his carreer with Schlumberger in Mr. Mullen holds a degree in geology from Trinity College, Dublin, and a master degree in geophysics from the University College Galway, Ireland. Mr. Mullen is an Irish citizen. Board member - John C. Wallace (born 1938) John C. Wallace is a Chartered Accountant having qualified with PricewaterhouseCoopers in Canada in 1963, after which he joined Baring Brothers & Co., Limited in London, England. Prior to his retirement in 2010, he served for over twenty-five years as Chairman of Fred. Olsen Ltd., a London-based corporation that he joined in 1968 and which specializes in the business of shipping, renewable energy and property development. He received his B. Comm degree majoring in Accounting and Economics from McGill University in In November 2004, he successfully completed the International Uniform Certified Public Accountant Qualification Examination and has received a CPA Certificate from the State of Illinois. Mr. Wallace also retired from the board of directors of Ganger Rolf ASA and Bonheur ASA, Oslo, both publicly-traded shipping companies with interests in offshore energy services and renewable energy. He is a Director of Callon Petroleum Co, USA where he is Chairman of the Audit Committee. He was inducted as a 2011 Industry Pioneer by the Offshore Energy Centre in Houston. Mr. Wallace is a Canadian citizen. Page 17 of 23

18 SENIOR MANAGEMENT TEAM - SIEM OFFSHORE INC: Chief Executive Officer - Terje Sørensen (born 1964) Mr. Terje Sørensen was appointed CEO of Siem Offshore Inc with effect from 1 July Terje Sørensen was previously CFO of the former Siem Offshore Inc since 2001 and entered the Company from a position as CFO in Mosvold Shipping AS. He has also experience from Norsk Skibs Hypotekbank AS and Norwegian Petroleum Consultants AS. Terje Sørensen is educated business economist from BI Norwegian School of Management. Terje Sørensen is a Norwegian citizen and resident in Kristiansand, Norway. Chief Financial Officer - Dagfinn B. Lie (born 1972) Mr. Dagfinn B. Lie joined Siem Offshore in October 2007 as Controller and was appointed CFO with effect from 1 January Dagfinn B. Lie has a Master in Finance & Accounting and an MBA from the Norwegian School of Economics and Business Administration. Prior to his current employment in Siem Offshore he has gained experience from, among others, the companies Wallenius Wilhelmsen Logistics and ABB Offshore. Dagfinn B. Lie is a Norwegian citizen and resident in Vennesla, Norway. Chief Operating Officer - Svein Erik Mykland (born 1961) Mr. Svein Erik Mykland was appointed COO of Siem Offshore with effect from 1 January Svein Erik Mykland joined the Company 1 August 2008 as AHTS Director. He has a broad experience from the offshore industry (offshore and onshore) for the last 25 years. Came from Acergy (former Stolt Nilsen A/S) as Group Operation Manager. Svein Erik Mykland is a Norwegian citizen and resident in Kristiansand, Norway. Chartering Director - Bernt Omdal (born 1966) Mr.Bernt Omdal was appointed as head of chartering 1st of July Bernt Omdal has been the Chartering Director of the company since November 2008 and has more than 20 years of experience within the maritime industry, including chartering, operations and shipbroking. Bernt Omdal is a Norwegian citizen and resident in Kristiansand, Norway. Organization and HR Director - Tore B Johannessen (born 1955) Mr. Tore B. Johannessen was appointed Global HR Director for the Siem Offshore Group with effect of 15th May He has a long and diverse experience form the oil and gas industry. He came from the position as Senior Vice President HR & Organization in TTS Energy AS. He has also previous experience from position as Regional General Manager in DnB, Norway and Vice President HR & Organization in Hydralift AS. Tore B. Johannessen is a Norwegian citizen and resident in Kristiansand, Norway. AUDIT COMMITTEE SIEM OFFSHORE INC. The Audit Committee consists of two Directors, John C. Wallace and Michael Delouche. The committee s mandate can be summarized as follows: Ascertain that the internal and external accounting reporting process are organized appropriately and carried out efficiently, and are of high professional quality. Monitor and assess the quality of the statutory audit of the Company s financial statements. Ensure the independence of the external auditor, including any additional services provided by the external auditor. All the members of the board, the management and the audit committee can be reached at Sjølystveien 3, 4610 Kristiansand S, Norway. The principles for corporate governance adopted by the Company is based on the Norwegian Recommendation for Corporate Governance issued on the 23rd October 2012, which is a revised version of the recommendation issued on the 4th December 2007, and good common sense. As a company incorporated in the Cayman Islands, Siem Offshore Inc. is subject to Cayman Island Laws and regulations with respect to corporate governance. Cayman Islands corporate law is to a great extent based on English Law. In addition, due to the Company s listing on the Oslo Stock Exchange, certain aspects of Norwegian Securities law apply to the Company and there is a requirement to adhere to the Norwegian Code of Practice for Corporate Governance. The Company endeavours to maintain high standards of corporate governance and is committed to ensure that Page 18 of 23

19 all shareholders of the Company are treated equally and the same information is communicated to all shareholders at the same time. Siem Industries Inc, which owns 34,4% of the Company, is represented by its Chairman, Kristian Siem, Deputy CEO, Eystein Eriksrud and President, Michael Delouche, on the Board of Directors. The Company pays an annual fee to Siem Industries as compensation for directorships, provision of an office and presence in the Cayman Islands, and other services. The fee is adopted by the annual general meeting based on a recommendation from the independent Board Members. Certain key employees own shares and have been granted options in the Company. CEO of the Company Terje Sørensen holds shares and options in the Company. CFO Dagfinn B. Lie holds shares and options in the Company. COO Svein Erik Mykland holds shares and options in the Company. Organization and HR Director Tore B. Johannessen holds options in the Company. Chartering Director Bernt Omdal holds options in the Company. General Manager Siem Consub SA Celso Costa holds shares and options in the Company. General Manager Siem Offshore Contractors Lars Muck holds shares and options in the Company. General Manager Siem Offshore, Region Norway Tor Helge Egeland holds options in the Company. General Manager Siem Offshore, Netherlands Sjoerd Berends holds 100,000 options. General Manager Siem Offshore, Australia Peter Bengtsson holds 100,000 options. Information regarding how the options can be exercised, see the annual report 2013 note 31, and cross reference list in section 12 in this. Other than the above mentioned, there are no conflicts of interests between any duties to the issuing entity of the persons referred to above and their private interests or other duties. Page 19 of 23

20 9. Major shareholders The Company's share capital is USD ,-, divided into shares each with a nominal value of USD 0,01,-. Siem Offshore Inc. has one class of shares, fully paid-up, and they are registered under ISIN KYG and are listed on Oslo Børs with the ticker code SIOFF. The Company is committed to ensuring that all shareholders of the Company are treated equally and all the issued shares in Siem Offshore are freely tradable and carry equal rights with no restrictions on voting.. The 20 largest shareholders in Siem Offshore per : Siem Industries Inc. is the main shareholder of Siem Offshore Inc. and is controlled by a trust whose potential beneficiaries include members of Kristian Siem s immediate family. Kristian Siem, who is Director of the Company, is also the Chairman of Siem Industries Inc.. Page 20 of 23

21 10. Financial information concerning the issuer's assets and liabilities, financial position and profits and losses The financial statements for the Company and the Parent are prepared in accordance with the International Financial Reporting Standards ( IFRS ) as adopted by the European Union. The financial information is incorporated by reference, please see the cross reference list in section 12 in this, to as follow: Financial reports Q Q Siem Offshore Inc. - Parent Income statement Page 26 Page 22 Balance sheet Page Page Cash flow statement Page 27 Page 23 Notes Page Page Accounting principles Page Page Auditors report Page Page Siem Offshore Inc. - Group Income statement Page 26 Page 22 Page 8 Page 7 Balance sheet Page Page Page 9 Page 8 Cash flow statement Page 27 Page 23 Page 10 Page 9 Notes Page Page Page Page Accounting principles Page Page Page 11 Page 10 Auditors report Page Page : nnual+report+2013.pdf 2012: %2fSiem_AR2012_web.pdf Q1 2014: -+First+Quarter+Report+2014.pdf Q1 2013: ations%2fsioff_+first_quarter_report_+2013.pdf The historical financial information for 2013 and 2012 for the Parent and Group has been audited. The historical financial information for the interim reports has not been audited. There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Issuer is aware), during a period covering at least the previous 12 months which may have, or have had in the recent past, significant effects on the Issuer and/or Group's financial position or profitability. There are no significant change in the financial or trading position of the Group which has occurred since the end of the last financial period for which either audited financial information or interim financial information have been published. And there has been no material adverse change in the prospects of the Issuer since the date of its last published audited financial statements. There are no known trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on the Issuer's prospects for at least the current financial year. Page 21 of 23

22 11. Documents on display For the life of the registration document the following documents (or copies thereof), where applicable, may be inspected: (a) the memorandum and articles of association of the issuer; (b) all reports, letters, and other documents, historical financial information, valuations and statements prepared by any expert at the issuer's request any part of which is included or referred to in the registration document; (c) the historical financial information of the issuer or, in the case of a group, the historical financial information of the issuer and its subsidiary undertakings for each of the two financial years preceding the publication of the registration document. The documents may be inspected at or at the Issuer Norwegian office Sjølystveien 3, 4610 Kristiansand S, Norway. Page 22 of 23

23 12. Cross reference list: In section 8 in the information regarding how key employees can exercise its options is incorporated by reference to the annual report 2013 note 31. In section 10 in the the financial information is incorporated by reference to as follow: Financial reports Q Q Siem Offshore Inc. - Parent Income statement Page 26 Page 22 Balance sheet Page Page Cash flow statement Page 27 Page 23 Notes Page Page Accounting principles Page Page Auditors report Page Page Siem Offshore Inc. - Group Income statement Page 26 Page 22 Page 8 Page 7 Balance sheet Page Page Page 9 Page 8 Cash flow statement Page 27 Page 23 Page 10 Page 9 Notes Page Page Page Page Accounting principles Page Page Page 11 Page 10 Auditors report Page Page Information concerning the Company s 2013 figures is incorporated by reference from the Company s Annual Report Information concerning the Company s 2012 figures is incorporated by reference from the Company s Annual Report Information concerning the Company s 2014 Q1 figures is incorporated by reference from the Company s Q report. Information concerning the Company s 2013 Q1 figures is incorporated by reference from the Company s Q report. The Company s financial reports are available at: 2013: nnual+report+2013.pdf 2012: %2fSiem_AR2012_web.pdf Q1 2014: -+First+Quarter+Report+2014.pdf Q1 2013: ations%2fsioff_+first_quarter_report_+2013.pdf Page 23 of 23