Fred. Olsen Energy ASA Presentation ti 4Q results 2011 16 February 2012 1
AGENDA FINANCIAL RESULT 4Q 2011 MARKETS OPERATIONS SUMMARY AND OUTLOOK 2
Income Statement Key Figures Operating revenues 1 630 1 618 Recharged income 52 64 Total revenues 1 682 1 682 Operating costs (743) (659) Recharged expenses (50) (63) Total operating expenses (793) (722) Oper. result before depr. (EBITDA) 889 960 Depreciation (332) (318) Impairment (15) - Operating result (EBIT) 542 642 Net financial i items (26) (13) Result before tax 516 630 Estimated tax 14 (14) Net result 530 616
EBITDA Comparison 4Q 2011 vs. 3Q 2011 1000 980 960 940 20 15 920 9 MNOK 900 21 880 960 21 3 12 860 840 889 820 800 3Q EBITDA Borgsten Bredford Belford Fee-option Provision Other Blackford 4Q EBITDA 4
Financial Items Breakdown (NOK mill) 4Q 2011 3Q 2011 Interest income 3 5 Gains on financial instruments 18 - Financial income 21 5 Interest expenses (33) (32) Losses on financial instruments (16) (35) Other financial expenses (5) (8) Financial expenses (54) (75) Net foreign currency gain/(loss) 7 57 Net financial items (26) (13)
Offshore Drilling Segment (NOK mill) 4Q 2011 3Q 2011 Operating revenues 1 586 1 552 Recharged income 52 64 Total revenues en es 1 638 1 616 Operating costs (701) (599) Recharged expenses (50) (63) Total operating expenses (751) (662) Oper. result before depr. (EBITDA) 887 954 Depreciation (331) (316) Impairment (15) Operating result (EBIT) 541 638
Engineering & Fabrication Segment (NOK mill) 4Q 2011 3Q 2011 Operating revenues 44 66 Operating costs (42) (61) Oper. result before depr. (EBITDA) 2 5 Depreciation (1) (1) Operating result (EBIT) 1 4
Consolidated Balance Sheet (NOK mill) 4Q 2011 3Q 2011 Intangible assets 99 99 Property, plant & equipment 10 449 10 315 Other non-current assets 61 38 Total non-current assets 10 609 10 452 Other current assets 2 071 2 047 Cash and cash equivalents 2 184 1 451 Total current assets 4 255 3 498 Total assets 14 864 13 950 Equity 7 988 7 242 Non-current interest bearing debt 4 430 4 350 Other non-current liabilities 372 373 Total non-current liabilities 4 802 4 723 Current interest bearing debt 1 319 1 285 Current liabilities 755 700 Total current liabilities 2 074 1 985 Total equity and liabilities 14 864 13 950
Consolidated Cash Flow (NOK mill) 4Q 2011 3Q 2011 Profit before income taxes 516 629 Depreciation and impairment 347 318 Interest expense 33 32 Changes in working capital 53 97 Unrealized loss/(gain) financial instruments (18) 20 Cash generated from operations 931 1 096 Interest paid (41) (38) Taxes paid (14) (13) Net cash flow from operating activities 876 1 045 Net investment in fixed assets (117) (66) Cash flow used in investment activities (117) (66) Repayment of loans - (643) Dividend paid - (1 325) Cash flow from financing activities - (1 968) Foreign currency (26) 172 Net change in cash and cash equivalents 759 (989) Cash at beginning of period 1 451 2 268 Cash at end of period 2 184 1 451
Offshore drilling EBITDA and margin NOK m illion 1600,0 1500,0 1400,0 1300,0 1200,0 1100,0 1000,0 900,00 800,0 700,0 600,0 500,0 400,0 300,0 200,0 100,0 00 0,0-100,0-200,0 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % -10 % 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 EBITDA Offshore Drilling EBITDA % Offshore Drilling 10
Fleet status as per 15 February 2012 Rig Type / design W depth ft Location Client Contract status Day rate Next CR survey (in USD) Ultra deepwater and deepwater units Bolette Dolphin - delivery 3Q'13 Drillship 12 000 Mozambique Anadarko 4Q 2013-4Q 2017 488 000 Belford Dolphin Drillship 10 000 Mozambique Anadarko January '12 - December '15 480 000 1Q 2015 Blackford Dolphin SS / Aker H-3 7 000 Brazil Sonangol December '11- March '12 272 000 3Q 2013 Andarko April '12 - August '12 351 000 Karoon August '12 - January '13 355 000 Midwater floaters Norway Bideford Dolphin SS / Aker H-3 1 500 Norway Statoil January '11 - January '14 NOK 850' + USD 243' 2Q 2014 Borgland Dolphin SS / Aker H-3 1 500 Norway Consortium* January '10 - January '14 NOK 883' + USD 376' 4Q 2014 Bredford Dolphin SS / Aker H-3 1 500 Norway Lundin November '11 - June '13 NOK 890' + USD 204' 2Q 2012 Option July '13 - August '13 NOK 890' + USD 204' Midwater floaters UK - Brazil Borgsten Dolphin SS / Aker H-3 1 500 UK Valiant March '12 - July '12 262 500 1Q 2015 Tender support services UK Total November '12 - Februar '16 202 000 Option March '16 - February '17 Borgny Dolphin SS / Aker H-3 2 300 Brazil Petrobras September '08-September '13 241 000 4Q 2014 Byford Dolphin SS / Aker H-3 1 500 UK BP April '10 - April '13 324 000 1Q 2015 Accomodation floater Borgholm Dolphin Acc. / Aker H-3 UK BP December '11-September '12 182 500/204 000 4Q 2012 Option October '12 - January '13 204 000/182 500 Participants in the consortium: * BP, Total, E.ON Ruhrgas, OMV, Rocksource, Wintershall, Statoil 11
Dividend The Board of Directors will propose to the AGM in May 2012 to distribute NOK 10 as ordinary dividend and NOK 10 as extraordinary dividend 30 Dividend payments in Fred. Olsen Energy ASA Ordinary dividend Extraordinary dividend 25 20 N O K 15 10 5 0 2007 2008 2009 2010 2011 2012 Proposed Dividend payments 12
AGENDA FINANCIAL RESULT MARKETS OPERATIONS SUMMARY AND OUTLOOK 13
Positive global market outlook floating units All markets improved during 2011 with high tendering and contracting activity Continued stable activity in the mid-water segment High number of fixtures and contracts with longer term perspective in the deepwater segment 14
Norwegian floater market Continued strong market development The market is tight with only a few units becoming available in 2013 Requests and tendering activities with longer term perspective p Name Bredford Dolphin Stena Don Borgland Dolphin Polar Pioneer Scarabeo 5 Bideford Dolphin West Alpha Ocean Vanguard West Navigator Transocean Winner Transocean Arctic Songa Delta Transocean Searcher Transocean Leader Transocean Barents Deepsea Bergen COSLPioneer West Hercules Deepsea Atlantic West Venture Songa Trym Songa Dee Scarabeo 8 COSLInnovator COSLPromoter Transocean Spitsbergen Songa Semi Tbn2 Songa Semi Tbn3 Q1 2012 2013 2014 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Contract Option Yard/under construction As per February 2012 Source: DNB 15
Average dayrates Norway 16
UK floater market The market has strengthened during the last months with a solid outlook for the summer season Signals beyond 2012 becoming more positive Continued positive outlook in the accommodation segment 2012 2013 2014 Name Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Sedco 712 J.W. McLean Sedco 704 GSF Arctic III Transocean John Shaw WilPhoenix Stena Spey Ocean Nomad Noble Ton van Langeveld WilHunter Sedco 714 Byford Dolphin Sedco 711 Transocean Prospect Paul B. Loyd, Jr. Ocean Princess Ocean Guardian West Phoenix Stena Carron Borgsten Dolphin Odfjell Semi Tbn1 As per February 2012 Source: DNB 17
Average dayrates UK 18
Dayrates deepwater drilling units worldwide 19
Global floater fleet and newbuilds 40 2.gen 3.gen 4.gen 5.gen 6.gen 35 30 Nu umber of units 25 20 15 10 5 0 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009 2013 2017+ Semi/Drillship NB Semi NB Drillship Source: Platou/ DNBNOR/ ODS-Petrodata/FOE 20
AGENDA FINANCIAL RESULT MARKETS OPERATIONS SUMMARY AND OUTLOOK 21
Fred. Olsen Energy operating worldwide Bideford Byford Borgland Borgsten Bredford Borgholm Borgny Blackford Belford 22
Contract schedule as per 15 February 2012 2011 2012 2013 2014 2015 2016 2017 Belford Anadarko Anadarko Blackford Reliance 1) 2) 3) Bideford Borgland Consortium Statoil Bredford 4) Lundin Lundin Borgny Byford Petrobras BP Borgsten TAQA Valiant Total (tender suppert services) Borgholm BP BP Bolette* Anadarko 1) Sonangol Starfish 2) Anadarko 3) Karoon 4) Premier Oil *) UDW drillship from Hyundai Heavy Industries Co., Ltd. Yard/Class renewal survey Option Mobilization Average contract length of 25 months 23
Contract backlog and customer base 1 000 000 Contract backlog Customer base 900 000 USD 1000 800 000 700 000 600 000 500 000 400 000 5 % 6 % 6 % 8 % 11 % 49 % 300 000 14 % 200 000 100 000-15.feb.12 2013 2014 2015 2016 2017 Anadarko Statoil Total BP Lundin Petrobras Others Total backlog approx. USD 2.9 billion 24
Ultra deepwater Africa Bolette Dolphin Drillship from HHI with estimated delivery 3Q 2013 Total project cost is estimated t to USD 650 million including a second BOP In November 2011, a four-year contract with Anadarko was entered into for operations offshore Mozambique. Start of operation after delivery and mobilization Belford Dolphin Commenced a new four-year contract with Anadarko from January 2012 Operating offshore Mozambique Completed five-year class renewal survey in November 2009 Option for a second drillship not declared 25
Midwater - Norway Bideford Dolphin Continued operations under a three-year drilling contract with Statoil estimated to expire end of January 2014 Five-year class renewal survey completed July 2009 Borgland Dolphin Continued operation under a four-year drilling contract with a consortium of originally eight oil companies, managed by RMN (Rig Management Norway), expiring January 2014 Five-year class renewal survey completed in December 2009 26
Midwater - Norway / United Kingdom Bredford Dolphin Completed the one-well contract with Premier Oil Norway AS mid November Commenced a drilling contract with Lundin Norway AS mid November, estimated to eighteen months duration. Option for one additional well exists Next class renewal survey to take place in 2Q 2012 Borgholm Dolphin Accommodation unit with 274 bed capacity Continued operations under the ten-months contract, plus four months of options with BP Exploration. Next class renewal survey to take place end of 2012 27
Midwater - United Kingdom (cont.) Byford Dolphin Currently undergoing preparations for the three- well contract with Valiant Causeway Limited, with start-up mid March 2012 Continued operation under a three-year drilling contract with BP Exploration expiring April 2013 Five-year class renewal survey and upgrade completed in April 2010 Borgsten Dolphin New tender support services contract of 40 months duration with Total E&P UK, plus two six month options. Start up mid November 2012 The unit will undertake an early class renewal survey and upgrades prior to the Total contract 28
Deepwater/ midwater - Brazil Blackford Dolphin Borgny Dolphin Currently operating under a one-well contract with Operating under a five-year drilling contract with Sonangol offshore Brazil Petrobras in Brazil, expiring September 2013 Entered into a one-well contract with Anadarko for operation in Brazil in direct continuation with the current contract and subsequently a three-well contract with Karoon Petroleo & Gas S.A Next five-year class renewal survey in 3Q 2013 Completed five-year class renewal survey and upgrade in April 2010 29
Harland & Wolff Focus on ship repair, ship building, steel fabrication and engineering services Holds a Waste Management License for ship demolition The yard area is serving as a logistics and assembly base for offshore windfarms Continued the construction of two substations for Siemens Awarded a contract for class renewal survey of the SeaRose FPSO, with estimated commencement in 2Q 2012 30
Summary Financial Revenues were 1682 million EBITDA was 889 million Profit before tax was 516 million Contract backlog amounting to approximately USD 2.9 billion The Board of Directors proposes a dividend payment for 2011 of NOK 10 per share as ordinary dividend and NOK 10 per share as extraordinary dividend Operational Bredford Dolphin completed operations under the Premier Oil Norge AS contract in November Borgsten Dolphin completed the contract with TAQA during December Market Bolette Dolphin entered into a 4 year contract with Anadarko Belford Dolphin entered into a 4 year contract with Anadarko with effect from 2012 Borgsten Dolphin entered into a 40 months tender support services contract with Total Lundin exercised the option for 3 wells under the Bredford contract Option for a second drillship at Hyundai Heavy Industries Co., Ltd. was not exercised Average contract duration approximately 25 months 31
Q&A 32