Paratus Energy Services Ltd. · OSL:PLSV

Paratus Energy Services — Investor Presentation (September 2024)

59 slides from Paratus Energy Services's investor presentation, Sep 11, 2024

  1. Slide 1: Paratus Energy Services Company Presentation September 2024

    Paratus Energy Services Company Presentation September 2024

  2. Slide 2: Disclaimer and important information (1/2)

    Disclaimer and important information (1/2) This presentation, together with its enclosures and appendices (collectively, the “Presentation”), has been prepared by Paratus Energy Services Ltd. (the “Company” and together with its subsidiaries and affiliated companies, the "Group") solely to provide i

  3. Slide 3: Disclaimer and important information (2/2)

    Disclaimer and important information (2/2) THIS PRESENTATION HAS NOT BEEN REVIEWED BY OR REGISTERED WITH ANY PUBLIC AUTHORITY, STOCK EXCHANGE OR REGULATED MARKET, IS NOT A KEY INFORMATION DOCUMENT ("KID") UNDER THE REGULATION (EU) 1286/2014 (THE "PRIIPS REGULATION") AND DOES NOT CONSTITUTE A PROSPEC

  4. Slide 4: Company

    1 Company 2 Key investment highlights 3 Supporting materials A Appendix 4

  5. Slide 5: Paratus is the principal holder of a group of leading energy service providers

    1 2 3 A Company Paratus is the principal holder of a group of leading energy service providers  Paratus group consists of the leading energy services companies Seagems and Fontis Energy  Other equity investments Group companies(1) Financials according to management reporting(1),(3) Q2 2024 Q2 2024

  6. Slide 6: Paratus is well positioned for immediate distributions

    1 2 3 A Company Paratus is well positioned for immediate distributions 1 2 3 Exceptional cash flow position today Solid backlog and outlook Flexible capital structure  Significant cash flow generation today  Long-term contract backlog of USD  Healthy and efficient balance sheet 1.4bn at attractiv

  7. Slide 7: Seagems is a leading subsea player in Brazil with a fleet of six modern PLSVs

    1 2 3 A Company Seagems JV Seagems is a leading subsea player in Brazil with a fleet of six modern PLSVs Seagems is a fully integrated subsea service provider Resilient financials and strong margins through the cycle  Seagems is a 50/50 joint venture between Paratus and Sapura USDm EBITDA margin %(

  8. Slide 8: Fontis Energy owns and operates a fleet of five high-spec jack-up rigs

    1 2 3 A Company Fontis Energy owns and operates a fleet of five high-spec jack-up rigs Fontis Energy is a leading offshore driller in Mexico History of stable financials and strong margins  Fontis Energy, a wholly-owned subsidiary of Paratus, is an USDm EBITDA margin %(1) Gross revenue EBITDA inter

  9. Slide 9: Ideally placed in the value chain, with Seagems being more late cycle than Fontis

    1 2 3 A Company Ideally placed in the value chain, with Seagems being more late cycle than Fontis Fontis Energy and Seagems play a vital role across the whole offshore oil and gas value chain Fontis Energy Seagems Traditional oil and gas value chain Potential new markets Carbon Capture Exploration (

  10. Slide 10: Key investment highlights

    1 Company 2 Key investment highlights 3 Supporting materials A Appendix 10

  11. Slide 11: Key investment highlights

    1 2 3 A Key investment highlights Key investment highlights  Strong financial performance through the cycle with the fleet averaging a utilization of 98% since 2018, resulting in an LTM EBITDA(1),(2) of USD 250m (low-point EBITDA of USD 219m) Exceptional cash flow position today, allowing  Strong

  12. Slide 12: Strong financial and operational performance through cycles

    1 2 3 A Key investment highlights | #1 – Solid cash flow and dividend potential Strong financial and operational performance through cycles Steady financial performance in revenue, EBITDA, and cash conversion(1) Excellent operational track record USDm Revenue EBITDA(2) Cash conversion(3) Paratus G&A

  13. Slide 13: Backlog supports significant distribution capacity the next few years

    1 2 3 A Key investment highlights | #1 – Solid cash flow and dividend potential Backlog supports significant distribution capacity the next few years  Illustrative cash generation to shareholders based on firm contract backlog(1)(2) USDm % of Market Cap(5) 1,010 79% – 86% 1,000 700 Per share (USD)

  14. Slide 14: Significant cash flow upside from increasing dayrates upon re-contracting

    1 2 3 A Key investment highlights | #1 – Solid cash flow and dividend potential Significant cash flow upside from increasing dayrates upon re-contracting Illustrative annual free cash flow generation potential(1) Illustrative share price based on different FCFE yield scenarios Observed FCFE per shar

  15. Slide 15: Upside potential from unwinding the receivable balance post Seadrill transition

    1 2 3 A Key investment highlights | #1 – Solid cash flow and dividend potential Upside potential from unwinding the receivable balance post Seadrill transition Account receivable (“AR”) gross balance bridge (Q4 2023-Q2 2024) Collections summary USDm Invoices Collections Increase to AR USDm Period en

  16. Slide 16: Additional value accretion potential based on underlying steel value

    1 2 3 A Key investment highlights | #1 – Solid cash flow and dividend potential Additional value accretion potential based on underlying steel value PLSV asset values (100% basis) Premium jack-up values USDm Asset value / 3.0x 3.5x 3.5x 4.4x 5.1x USDm Asset value / 3.3x 4.0x 4.5x 5.2x 8.4x EBITDA EB

  17. Slide 17: Firm backlog of $1.4bn + long-term tailwinds for higher re-contracting

    1 2 3 A Key investment highlights | #2 – Industry leading backlog with an attractive outlook Firm backlog of $1.4bn + long-term tailwinds for higher re-contracting 2H 2024 2025 2026 2027 2028 Name Location Vessel Type Diamante PLSV $141k/day $284k/day Topazio PLSV $141k/day $284k/day Seagems JV Esme

  18. Slide 18: Supportive market dynamics for infrastructure-linked PLSVs in Brazil

    1 2 3 A Key investment highlights | #2 – Industry leading backlog with an attractive outlook Supportive market dynamics for infrastructure-linked PLSVs in Brazil PLSV demand in Brazil is expected to surpass available supply Breakdown of available supply in Brazil # vessels High-spec supply available

  19. Slide 19: Underlying demand drivers ensure sustained longevity of PLSV demand

    1 2 3 A Key investment highlights | #2 – Industry leading backlog with an attractive outlook Underlying demand drivers ensure sustained longevity of PLSV demand Contracted floaters are a strong indicator for PLSV demand Further supported by an increasing number of FPSOs in the region # Floaters Cont

  20. Slide 20: Robust global jack-up utilization despite recent suspensions in Saudi Arabia

    1 2 3 A Key investment highlights | #2 – Industry leading backlog with an attractive outlook Robust global jack-up utilization despite recent suspensions in Saudi Arabia Structurally tight market for premium jack-ups Recent fixtures above USD 150k/day for premium jack-ups (%) Marketed utilization PF

  21. Slide 21: Favorable market trends for underlying jack-up demand in Mexico

    1 2 3 A Key investment highlights | #2 – Industry leading backlog with an attractive outlook Favorable market trends for underlying jack-up demand in Mexico Stable underlying demand for jack-ups in Mexico Paratus among the top jack-up contractors in Mexico Rig years # Jack-ups Under contract Fontis

  22. Slide 22: The refinancing secures long debt maturity profile with high dividend flexibility

    1 2 3 A Key investment highlights | #3 – Efficient capital structure with financial flexibility The refinancing secures long debt maturity profile with high dividend flexibility Transaction summary and rationale Key terms related to distributions(1)  On 5 June, Paratus Energy Services Ltd. (the “Is

  23. Slide 23: Demonstrated ability to deleverage, unlocking shareholder returns

    1 2 3 A Key investment highlights | #3 – Efficient capital structure with financial flexibility Demonstrated ability to deleverage, unlocking shareholder returns ~$1bn deleveraging in Seagems since 2015 ~$700m deleveraging in Fontis Energy since 2015(1) Net debt (USDm) Net debt (USDm) 1,200 600 -689

  24. Slide 24: Summary of the Paratus investment opportunity

    1 2 3 A Key investment highlights Summary of the Paratus investment opportunity 1 2 3 Exceptional cash flow Industry leading backlog in Flexible capital structure position today, allowing for market segments with an with additional debt capacity immediate and significant attractive outlook in subsid

  25. Slide 25: Supporting materials

    1 Company 2 Key investment highlights 3 Supporting materials A Appendix 25

  26. Slide 26: Paratus consolidated historical financials

    1 2 3 A Supporting materials | Financials Paratus consolidated historical financials(1) Gross operational revenue(2) EBITDA USDm USDm 500 350 Paratus G&A 300 400 250 250 225 233 300 200 488 455 455 311 413 418 430 150 200 401 270 258 221 219 234 236 100 100 50 0 0 -9 -3 -8 2018 2019 2020 2021 2022 2

  27. Slide 27: Seagems historical financials

    1 2 3 A Supporting materials | Financials Seagems historical financials(1) Gross operational revenue(2) EBITDA USDm USDm 500 350 300 400 250 300 200 496 446 424 450 438 150 321 200 269 264 358 355 254 236 100 178 172 100 50 0 0 2018 2019 2020 2021 2022 2023 LTM Q2 2024 2018 2019 2020 2021 2022 2023

  28. Slide 28: Fontis Energy historical financials

    1 2 3 A Supporting materials | Financials Fontis Energy historical financials(1) Gross operational revenue(2) EBITDA USDm USDm 300 150 200 100 150 140 135 132 133 240 232 234 224 236 107 100 206 205 50 104 0 0 2018 2019 2020 2021 2022 2023 LTM Q2 2024 2018 2019 2020 2021 2022 2023 LTM Q2 2024 Capex

  29. Slide 29: Q2 2024 trading update and financial guidance for 2024

    1 2 3 A Supporting materials | Financials Q2 2024 trading update and financial guidance for 2024 Description of Q2 update Q2 2024 financials(1),(2) 2024 financial guidance  In Q2 2024, the Paratus Group, including the Company’s Revenue(3) EBITDA share in Seagems JV, generated USD 52m in gross reven

  30. Slide 30: Recent contract awards at ~40% higher dayrates ensure earnings visibility

    1 2 3 A Supporting materials | Financials Recent contract awards at ~40% higher dayrates ensure earnings visibility Strong backlog provides high revenue visibility(1) Current backlog is priced at higher day rates compared to historical levels USDm Historical Illustrative re-contracting scenario Seab

  31. Slide 31: Overview of capital structure post refinancing

    1 2 3 A Supporting materials | Financials Overview of capital structure post refinancing Pro forma capital structure (as of Q2 2024) Debt covenant / incurrence test Paratus Ownership 100 % 50% PES Notes New Bonds (figures reflect 100%) Paratus Paratus(1) Seagems JV Debt USDm Consolidated(2)  n/a 

  32. Slide 32: Summary of USD 500m bond issue and partly refinancing of Existing Notes

    1 2 3 A Supporting materials | Financials Summary of USD 500m bond issue and partly refinancing of Existing Notes  Transaction summary  Pro-forma capitalization (consolidated(1)) USDm Q2 2024 Refi PF Q2 2024 Existing Paratus Energy Notes 715 (500) 215  On 5 June, Paratus Energy Services Ltd. (the

  33. Slide 33: Summary of key refinancing terms and conditions

    1 2 3 A Supporting materials | Financials Summary of key refinancing terms and conditions(1) Issuer: Paratus Energy Services Ltd. Original guarantors: Paratus Seabras UK Limited, Paratus Seabras SP UK Limited, Seabras Servicos de Petroleo SA The Issuer, each Guarantor, Paratus Seadragon UK Limited,

  34. Slide 34: Paratus' board brings extensive energy and offshore sector experience

    1 2 3 A Supporting materials | Company Paratus' board brings extensive energy and offshore sector experience Mei Mei Chow, James Ayers, Joachim Bale, Chairperson of the Board Board Member Board Member  Over 20 years of senior and executive management  Director of Seadrill New Finance Limited since

  35. Slide 35: Experienced management with strong records and local anchoring

    1 2 3 A Supporting materials | Company Experienced management with strong records and local anchoring Robert Jensen, Baton Haxhimehmedi, Nika Hasanova, CEO of Paratus CFO of Paratus Group Head of Finance of Paratus  Over 15 years of experience in asset management,  Most recently served as Group He

  36. Slide 36: Paratus has strong backing from its largest shareholder, Seatankers

    1 2 3 A Supporting materials | Company Paratus has strong backing from its largest shareholder, Seatankers(1) Seatankers’ investment philosophy Seatankers group current strategic companies Oil Services Shipping Target the #1 position in the Industry Define position in the cycle and invest accordingl

  37. Slide 37: A brief history of Paratus

    1 2 3 A Supporting materials | Company A brief history of Paratus NSNCo assumes Reorganization of NSNCo A new chapter for Paratus as Seagems formed as a JV SeaMex formed as a JV full ownership of SeaMex and Paratus is formed standalone organization Seagems JV Seagems JV formed Seadrill forms SeaMex

  38. Slide 38: Seagems fleet overview

    1 2 3 A Supporting materials | Company Seagems fleet overview(1) Diamante Topazio Onix Jade Rubi Esmeralda Year Delivered 2014 2014 2015 2015 2016 2015 Yard IHC Merwede IHC Merwede IHC Merwede IHC Merwede IHC Merwede OSX Dimensions 146m x 30m 146m x 30m 146m x 30m 146m x 30m 146m x 30m 134m x 24m Fl

  39. Slide 39: PLSVs are multi-purpose vessels with highly versatile capabilities

    1 2 3 A Supporting materials | Company PLSVs are multi-purpose vessels with highly versatile capabilities PLSVs offer versatile capabilities beyond pipe-laying New versus old pipes New pipes Recycling of old pipes Subsea Maintenance Well Decommissioning Existing track-record Construction Support Com

  40. Slide 40: Fontis Energy fleet overview

    1 2 3 A Supporting materials | Company Fontis Energy fleet overview Defender Courageous Intrepid Oberon Titania FE Built 2007 2007 2008 2013 2014 Dimensions 243ft x 206ft x 26ft 234ft x 206ft x 26ft 297ft x 218ft x 26ft 231ft x 250ft x 31ft 231ft x 249ft x 31ft Specifications LeTourneau Super 116-C

  41. Slide 41: Strong operational performance

    1 2 3 A Supporting materials | Company Strong operational performance Seagems Fontis Energy % Technical utilization % Technical utilization 96% 98% 99% 99% 99% 99% 99% 99% 100 98% 97% 96% 97% 100 98% 97% 80 80 60 60 40 40 20 20 0 0 2018 2019 2020 2021 2022 2023 1H 2024 2018 2019 2020 2021 2022 2023

  42. Slide 42: Archer overview and industry positioning

    1 2 3 A Supporting materials | Company Archer overview and industry positioning  Company overview  Market positioning  Archer is an oilfield services company established in 2007 as a spin-off  Decade-long track record of global operations within energy services of Seadrill’s Well Service divisio

  43. Slide 43: Meeting future oil and gas demand requires more offshore drilling

    1 2 3 A Supporting materials | Market Meeting future oil and gas demand requires more offshore drilling Global offshore E&P spending expected to have a CAGR of 4% from 2023-2026e Supported by high share of profitable undeveloped reserves USDbn Capex Opex % Cumulative % of 2P reserves(1) % of 2P rese

  44. Slide 44: Brazil's higher oil targets and investments ensure long-term PLSV demand

    1 2 3 A Supporting materials | Market Brazil's higher oil targets and investments ensure long-term PLSV demand  Brazil is expected to account for a large share of the growth the next 5 years(1) Petrobras has increased their 5-year spending plan to meet production target of 3.2mboe/d mboe/d USDbn Pr

  45. Slide 45: Seagems holds ~1/3 of the Brazilian PLSV market, a key growth area

    1 2 3 A Supporting materials | Market Seagems holds ~1/3 of the Brazilian PLSV market, a key growth area PLSV market categorized by a few specialized operators Brazilian PLSV market overview and Seagems’ position Limited number of vessels globally, in addition to high degree of ownership  Seagems h

  46. Slide 46: Overview of current PLSVs in the Brazilian market

    1 2 3 A Supporting materials | Market Overview of current PLSVs in the Brazilian market # Vessel Owners Project Client Flexlay (t) 1 Sapura Rubi Seagems Long term 550 2 Sapura Esmeralda Seagems Long term 300 3 Sapura Jade Seagems Long term 550 (1) 4 Sapura Onix Seagems Atlanta 550 5 Sapura Diamante

  47. Slide 47: Fontis Energy has a unique market position in Mexico due to its local setup

    1 2 3 A Supporting materials | Market Fontis Energy has a unique market position in Mexico due to its local setup Fontis Energy is well positioned with advanced jack-up rigs Jack-up market in Mexico and Fontis Energy’s position Premium jack-ups are capable of operating in deeper water depths compare

  48. Slide 48: Asset values supported by rising implied values and high replacement costs

    1 2 3 A Supporting materials | Market Asset values supported by rising implied values and high replacement costs PLSV values supported by attractive EBITDA generation(1),(2) Historical implied values for premium jack-ups(3) USDm Estimated newbuild parity for PLSVs(1) USDm 350 380 5 PLSVs Diamante Ja

  49. Slide 49: Appendix

    1 Company 2 Key investment highlights 3 Supporting materials A Appendix 49

  50. Slide 50: Paratus consolidated income statement

    1 2 3 A Appendix Paratus consolidated income statement(1) USDm 2021 2022 2023 (audited) (audited) (audited) Operating revenues Contract revenues 29 148 167 Total operating revenues 29 148 167 Operating expenses Vessel and rig operating expenses (15) (89) (94) Depreciation (2) (15) (15) Selling, gene

  51. Slide 51: Paratus consolidated balance sheet

    1 2 3 A Appendix Paratus consolidated balance sheet(1) USDm 2021 2022 2023 (audited) (audited) (unaudited) ASSETS Current assets Cash and cash equivalents 49 72 92 Restricted cash 21 22 23 Accounts receivables, net 318 114 169 Amount due from related party current - 56 3 Favorable contracts 43 38 31

  52. Slide 52: Paratus consolidated cash flow statement

    1 2 3 A Appendix Paratus consolidated cash flow statement(1) USDm 2021 2022 2023 (audited) (audited) (audited) Net income/(loss) 12 (36) (23) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 2 15 15 Amortization of deferred loan charges - 8 15 Amortizati

  53. Slide 53: Seagems consolidated income statement

    1 2 3 A Appendix Seagems consolidated income statement USDm 2018 2019 2020 2021 2022 2023 Operating revenues Net income from sales of services 471 431 343 340 407 431 Other income 0.0 0.3 0.0 0.5 0.0 0.4 Total operating revenues 471 432 343 341 407 431 Operating expenses Cost of services sold (208)

  54. Slide 54: Seagems consolidated balance sheet

    1 2 3 A Appendix Seagems consolidated balance sheet USDm 2018 2019 2020 2021 2022 2023 ASSETS Cash and cash equivalents 87 71 40 32 34 34 Financial application 16 - - - - - Restricted cash short-term 90 63 81 43 5 4 Trade accounts receivable 47 50 59 61 69 67 Payments in advances 4 6 6 8 14 5 Recove

  55. Slide 55: Fontis consolidated income statement

    1 2 3 A Appendix Fontis consolidated income statement USDm 2018 2019 2020 2021 2022 2023 SeaMex SeaMex SeaMex SeaMex Ltd. SeaMex Ltd. Finance Ltd. Finance Ltd. Holdings Ltd. Operating revenues Contract revenues 239 232 234 224 206 Other revenues 1 - - - - Total operating revenues 240 232 234 224 206

  56. Slide 56: Fontis consolidated balance sheet

    1 2 3 A Appendix Fontis consolidated balance sheet USDm 2018 2019 2020 2021 2022 2023 SeaMex SeaMex SeaMex SeaMex Ltd. SeaMex Ltd. Finance Ltd. Finance Ltd. Holdings Ltd. ASSETS Current assets Cash and cash equivalents 15 23 14 32 55 Restricted cash 84 70 43 20 22 Accounts receivables, net 121 127 2

  57. Slide 57: Corporate structure

    1 2 3 A Appendix Corporate structure(1) Paratus Energy Services Ltd. Paratus Management Fontis International Paratus Seabras Paratus Seadragon Fontis Holdings Paratus JU NewCo Paratus SKR Paratus Mobile Paratus Management (UK) Ltd Talent Ltd UK Limited UK Limited Limited Bermuda Limited Holdco Limit

  58. Slide 58: Overview of legal entities

    1 2 3 A Appendix Overview of legal entities Company Activities/ Function Seabras Servicos de Petroleo SA Brazilian based holding entity of PESL share in Brazilian Seabras Sapura JV Co. Paratus Seabras SP UK Limited UK based holding entity of PESL share in Austrian Seabras Sapura JV Co (sits below Pa

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