Subsea 7 S.A. · OSL:SUBC
Subsea 7 — DSND Subsea — Merger or Acquisition (October 2001)
18 slides from Subsea 7's merger presentation, Oct 18, 2001
Slide 1: DSND Subsea and Halliburton Subsea: Better value creation in new company
DSND Subsea and Halliburton Subsea: Better value creation in new company 18. October 2001 Diderik Schnitler Geir Aune Chairman CEO
Slide 2: The Agreement
The Agreement • DSND Subsea and Halliburton Subsea have signed a letter of intent to merge the two companies’ subsea activities. • The new company will be owned equally by DSND and Halliburton. • The new company will create more value through market synergies, more capacity, cost reductions and fina
Slide 3: A Good Match in improved market
A Good Match in improved market DSND Subsea + Halliburton Subsea = “Newco” • Modern • Strong engineering Improved earnings by: underutilized and project • World wide Fleet management presence • Deepwater • Halliburton • Better market access Flexible world’s biggest oil • Improved vessel Installation
Slide 4: Strong base for future growth
Strong base for future growth • People, assets and intellectual property combined for better performance • Strong balance sheet • Turnover expected to be NOK 7 billion in 2002 => gearing effect on earnings • Market estimated to double by 2005. DSND Subsea
Slide 5: Why we create a better value in the new company
Why we create a better value in the new company 1. Status DSND Subsea 2. Transaction 3. New Company 4. DSND 5. Subsea Market DSND Subsea
Slide 6: Status DSND Subsea
Status DSND Subsea • Strategy to become a leading global subsea contractor. • Strong revenue growth last 5 years. • High quality and large capacity fleet • Good operational performance in rigid and deep flexible pipelay • Good base of long term contracts. • Need better access to clients world wide t
Slide 7: Transaction
Transaction 1. Board: 3 members from each party, DSND Subsea will nominate Chairman during the initial 5 years. 2. Management: CEO will be nominated by Halliburton during the initial 5 years. 3. Dividend: All excess cash to be distributed to the shareholders. 4. Exit: Exit mechanism can be trigged b
Slide 8: Transaction
Transaction Elements DSND Halliburton Equity 50% 50% Debt transfer (USD mill) 156,5 0 Vessels: 17 8 ROV’s 18 86 Frame agreements 4 7 Organisation • Total 2000 2000 • Engineers 100 400 DSND Subsea
Slide 9: New Company - Status
New Company - Status 1. Significant player through large initial market share in all important markets. 2. Offers complete solutions through wide scope of activities 3. Large capacity through modern and high quality fleet. 4. Large and capable engineering and project management capacity. 5. Market a
Slide 10: Capabilities of HS v DSND v CSO
Capabilities of HS v DSND v CSO Large Reel Trunkline Field Deep Triple Flexible Bundles GOM Brazil West EPC Lay Develop Flexible Flexible Manufacture Africa Contractor ment Lay Lay Vessel DSND HS HS + DSND CSO Full Capability Partial Capability No Capability DSND Subsea
Slide 11: Fleet
Fleet Pipelay ROV/Survey Diving Construction support Geotechnical Seisranger Tossa Persus Rockwater 1 Subsea Viking Rockwater 2 TossaPolaris Regalia DSND Subsea
Slide 12: Geographical Presence
Geographical Presence Norway: Oslo, Grimstad, UK: Aberdeen, Leith Stavanger, Luster and Bergen USA: Houston Mexico Singapore Angola Caspian Sea Brazil: Rio de Janeiro + 4 bases DSND Subsea
Slide 13: New Company - Potential
New Company - Potential 1. Revenue synergy: • Improved market share through wider work scope (more projects, larger projects). • Better utilisation of fleet through; – Optimal combination of assets and higher capacity in engineering and project management. – Better market access through Halliburton’
Slide 14: New Company - Potential
New Company - Potential 2. Revenue growth: • Market expected to grow 100 % in 5 years. • Increase in pipelay capacity through conversion of vessels in current fleet (Fennica, Nordica). 3. Cost synergy • Efficiency from combined management system and consolidated engineering capacity. • Improved purc
Slide 15: DSND
DSND Strategy Assets • Strong and active 2002(E) Operating Revenue NOK Mill involvement in the new Olympic Princess 83 company Modfrag 125 • Manage and enhance value of remaining Joides Resolution 85 investments Big Orange 13 • Develop DSND as an industrial investment Buccaneer 73 company within Sup
Slide 16: Markets
Markets Spare production capacity 80 75 70 65 60 55 50 45 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 World oil demand Source: Pareto World oil production capacity DSND Subsea
Slide 17: Markets: # installations/year
Markets # Subsea vs Fixed Platform Total # Subsea wells 120 3500 100 3000 # installations/year 80 2500 60 2000 40 1500 20 1000 0 500 2001E 2002E 2003E 2004E 2005E 1995 1996 1997 1998 1999 2000 0 1998 1999 2000 2001 2002 2003 2004 2005 Subsea Solution Fixed Plattform Solution Source: Pareto Source: I
Slide 18: Markets
Markets Subsea Support Vessel Demand 2000 - 2001 100 90 80 70 60 50 40 30 20 10 0 ly l n n p v ay ay Ju ar ar Ja Ja Se No Ju M M M M North Sea W orld Source: ODS-Petrodata Group 18 DSND Subsea