Paratus Energy Services Ltd. · OSL:PLSV
Paratus Energy Services — Investor Presentation (November 2024)
64 slides from Paratus Energy Services's investor presentation, Nov 29, 2024
Slide 1: Paratus Energy Services Investor Presentation November 2024
Paratus Energy Services Investor Presentation November 2024
Slide 2: Disclaimer and important information (1/2)
Disclaimer and important information (1/2) This document and any information provided in this presentation (the "Presentation") has been prepared by Paratus Energy Services Ltd (the "Company") solely for the purposes of providing existing investors and other stakeholders with an update about certain
Slide 3: Disclaimer and important information (2/2)
Disclaimer and important information (2/2) Neither the Company nor any member of the Paratus Group undertakes any obligation to update any forward-looking statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events
Slide 4: Paratus is the principal holder of a group of leading energy service providers
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 Operational companies(1) Financial Investments Seagems JV 50% ownership(2) 100% ownership ~24% ownersh
Slide 5: Executive summary
Executive summary An Industry leading yield of >20% (1) 1 Announced cash distributions since September represents ~10% of current market cap(2) Strong value support from existing cash, receivables and contracted cash flows (92% contract coverage 2025(3)) 2 Cash, net working capital and cash flow fro
Slide 6: Industry leading yield of 20%+
Industry leading yield of 20%+ Capital allocation policy Selected subsea and offshore drillers yield comparison(2)(3) (4) Policy: committed to providing shareholders with stable, long-term, and sustainable distributions, subject to 21.2% allowance under debt indentures Cash distribution(1) Q
Slide 7: Backlog supports significant distribution capacity the next few years
Backlog supports significant distribution capacity the next few years Illustrative cash generation to shareholders based on firm contract backlog(1)(2) USDm % of Market EV(5) % of Market Cap(5) 1,200 75% – 80% 99% – 108% 1,010 Per share (USD) 1,000 4.1 – 4.5 650 180 250 800 760 600 590 950 400 700
Slide 8: Significant distribution potential under current market conditions
Significant distribution potential under current market conditions Illustrative annual free cash flow and distribution potential(1) Latest Paratus Highest dayrates Dayrate scenario Units Current backlog contracts 2024(2) PLSV (Seagems) USD/day $260,000 $280,000 $300,000 Jack-up (Fontis) " $125,000 $
Slide 9: Fleet status report
Fleet status report Name Location Asset Type 2H 2024 2025 2026 2027 2028 Diamante PLSV USD 141k/day USD 284k/day Topazio PLSV USD 141k/day USD 284k/day Seagems JV USD 193k USD 342k Esmeralda PLSV USD 259k/day /day /day Onix PLSV USD 170k/day USD 284k/day Jade PLSV USD 282k/day Rubi PLSV USD 263k/day
Slide 10: Overview of capital structure and distribution flexibility
Overview of capital structure and distribution flexibility Pro forma capital structure (as of Q3 2024) Distribution Requirements Paratus Ownership 100 % 50% (figures reflect 100%) Financial Min. free liquidity: the higher of (i) 5% of Group’s USDm Paratus(1) Seagems JV Paratus Group(2) covenant tota
Slide 11: Full year 2024 guidance
Full year 2024 guidance Full year revenue Full year EBITDA Full year CAPEX USD 450-475m USD 250-260m USD ~30m (previously: USD 435-475m) (previously: USD 220-240m) (previously: USD 30-45m) 11
Slide 12: Supplemental information
Supplemental information 1 Company 2 Key investment highlights A Appendix 12
Slide 13: Paratus at a glance
Paratus at a glance ~$1.3bn $257m ~58% Firm backlog(3) LTM(4)(5) EBITDA LTM(4)(5) EBITDA margin Serving top class offshore services through operational and financial investments in Seagems JV, Fontis Energy, and Archer Global presence $597m $165m $283m Net debt(6) Cash position(7) Receivable positio
Slide 14: Seagems is a leading subsea player in Brazil with a fleet of six modern PLSVs
1 2 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 %(1)
Slide 15: Fontis Energy owns and operates a fleet of five high-spec jack-up rigs
1 2 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) Revenue EBITDA international
Slide 16: Ideally placed in the value chain, with Seagems being more late cycle than Fontis
1 2 A Company Ideally placed in the value chain, with Seagems being more late cycle than Fontis Fontis Energy’s service offering Seagems’ service offering Drilling Engineering Pipe-laying IRM and ROV services Subsea construction Fontis energy delivers offshore drilling services Planning, develop
Slide 17: Archer overview and industry positioning
1 2 A 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 division Well positioned in th
Slide 18: Key investment highlights
1 Company 2 Key investment highlights A Appendix 18
Slide 19: Key investment highlights
1 2 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 257m Strong cash and receivables Strong cash position of USD 165m(1) as of Q3 2024 and robus
Slide 20: Strong financial and operational performance through cycles
1 2 A Key investment highlights 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 Fleet utilization % The strong financial perfor
Slide 21: Demonstrated ability to deleverage, unlocking shareholder returns
1 2 A Key investment highlights Demonstrated ability to deleverage, unlocking shareholder returns ~$1bn deleveraging in Seagems since 2015 ~$600m deleveraging in Fontis Energy since 2015(1) Net debt (USDm) Net debt (USDm) 1,200 600 -615 -978 550 1,100 500 1,000 450 900 400 800 350 700 300 588 600 25
Slide 22: Successful refinancing creates flexibility to pursue efficient capital allocation
1 2 A Key investment highlights Successful refinancing creates flexibility to pursue efficient capital allocation The refinancing extended maturities beyond the Group’s firm backlog, establishing clear path to shareholder returns USDm New Bonds Existing Notes Seagems (50%) Financial Min. free liquid
Slide 23: Flexibility to pursue additional liquidity sources opportunistically
1 2 A Key investment highlights Flexibility to pursue additional liquidity sources opportunistically Cash on hand 1 Current cash and marketable securities of USD184mm(1) AR-based facility or financing arrangement 2 Fontis may pursue factoring-like arrangement to monetize or finance against its recei
Slide 24: Supportive market dynamics for infrastructure-linked PLSVs in Brazil
1 2 A Key investment highlights 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 Current supply Demand in Brazil # of vessels Current high-sp
Slide 25: Underlying demand drivers ensure sustained longevity of PLSV demand
1 2 A Key investment highlights 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 Contracted floaters located in Brazil Floaters moving to Brazil f
Slide 26: Robust global jack-up utilization despite recent suspensions in Saudi Arabia
1 2 A Key investment highlights 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 marketed utilization (17 premium jack-ups are available)(1)
Slide 27: Limited financial impact expected from near-term jack-up market uncertainty
1 2 A Key investment highlights Limited financial impact expected from near-term jack-up market uncertainty Limited perceived risk for Fontis related to suspensions Production profile in Mexico set to continue its decline Strong utilization among current supply in Mexico Paratus has noted recent r
Slide 28: Long-standing commercial relationship with key customer in Mexico
1 2 A Key investment highlights Long-standing commercial relationship with key customer in Mexico Fontis key customer relationship Recent developments in Mexico Fontis has a long-standing commercial relationship with its key customer The Mexican government has publicly expressed its plans to sup
Slide 29: Paratus – a name to remember
1 2 A Key investment highlights Paratus – a name to remember 1 2 3 Efficient and Attractive Substantial flexible capital dividend yield backlog visibility structure 29
Slide 30: Appendix
1 Company 2 Key investment highlights A Appendix 30
Slide 31: Paratus consolidated historical financials
1 2 A Appendix Paratus consolidated historical financials(1) Revenue(2) Adjusted EBITDA USDm USDm Paratus G&A 500 350 300 400 257 250 225 233 300 200 488 455 311 418 430 453 150 200 413 401 270 265 221 219 234 236 100 100 50 0 0 -9 -3 -8 2018 2019 2020 2021 2022 2023 LTM Q3 2024 2018 2019 2020 2021
Slide 32: Seagems historical financials
1 2 A Appendix Seagems historical financials(1) Revenue(2) Adjusted EBITDA USDm USDm 500 350 300 400 250 300 200 496 446 424 450 150 321 200 417 269 264 358 355 254 100 223 178 172 100 50 0 0 2018 2019 2020 2021 2022 2023 LTM Q3 2024 2018 2019 2020 2021 2022 2023 LTM Q3 2024 Capex EBITDA less capex
Slide 33: Fontis Energy historical financials
1 2 A Appendix Fontis Energy historical financials(1) Revenue(2) Adjusted EBITDA USDm USDm 300 150 200 100 150 153 135 132 133 240 232 234 224 244 100 206 205 50 107 104 0 0 2018 2019 2020 2021 2022 2023 LTM Q3 2024 2018 2019 2020 2021 2022 2023 LTM Q3 2024 Capex EBITDA less capex USDm USDm 25 150 2
Slide 34: Q3 2024 interim results and financial guidance for 2024
1 2 A Appendix Q3 2024 interim results and financial guidance for 2024 Description of Q3 update Q3 2024 financials(1),(2) 2024 financial guidance In Q3 2024, the Paratus Group, including the Company’s Revenue(3) EBITDA share in Seagems JV, generated USD 110m in revenue and USDm USDm USD 62m in adj
Slide 35: Recent contract awards at ~40% higher dayrates ensure earnings visibility
1 2 A Appendix 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 Seabras (50%) Average dayrate i
Slide 36: Overview of capital structure post refinancing
1 2 A Appendix Overview of capital structure post refinancing Pro forma capital structure (as of Q3 2024) Debt covenant / incurrence test Paratus Ownership 100 % 50% PES Notes New Bonds (figures reflect 100%) USDm Paratus(1) Seagems JV Paratus Group(2) Debt n/a n/a covenants 2026 PES 2029 PES Fa
Slide 37: Summary of key refinancing terms and conditions
1 2 A Appendix 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, Paratus JU Newco Bermuda Li
Slide 38: Significant cash flow upside from increasing dayrates upon re-contracting
1 2 A Appendix 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 Highest FCFE per share(8) (USD) Current Latest Paratus Illustrative Dayrate scenario Un
Slide 39: Additional value accretion potential based on underlying steel value
1 2 A Appendix 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 EBITDA 3,000 1,750 Value per vessel 212 251 252 313 363 Value per r
Slide 40: Paratus' board brings extensive energy and offshore sector experience
1 2 A Appendix 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 December Over 15 year
Slide 41: Experienced management with strong records and local anchoring
1 2 A Appendix 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 Head of Finance of DNO O
Slide 42: Paratus has strong backing from its largest shareholder, Seatankers
1 2 A Appendix 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 accordingly Shareholder alignment
Slide 43: A brief history of Paratus
1 2 A Appendix 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 JV Paratus Energy formed
Slide 44: Seagems fleet overview
1 2 A Appendix 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 Flexlay 550t Flexlay 550t
Slide 45: PLSVs are multi-purpose vessels with highly versatile capabilities
1 2 A Appendix 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 Completion Installation o
Slide 46: Fontis Energy fleet overview
1 2 A Appendix 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 LeTourneau Super 116-C L
Slide 47: Strong operational performance
1 2 A Appendix Strong operational performance Seagems Fontis Energy % Technical utilization % Technical utilization 97% 96% 97% 98% 98% 99% 99% 99% 99% 98% 97% 99% 100 98% 96% 100 80 80 60 60 40 40 20 20 0 0 2018 2019 2020 2021 2022 2023 3Q 2024 2018 2019 2020 2021 2022 2023 3Q 2024 Loss time incide
Slide 48: Meeting future oil and gas demand requires more offshore drilling
1 2 A 3 Appendix 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) %
Slide 49: Brazil's higher oil targets and investments ensure long-term PLSV demand
1 2 A Appendix 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 Production capex Explorat
Slide 50: Seagems holds ~1/3 of the Brazilian PLSV market, a key growth area
1 2 A Appendix 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 has a leading market sha
Slide 51: Overview of current PLSVs in the Brazilian market
1 2 A Appendix Overview of current PLSVs in the Brazilian market # Vessel Owners Project Client Flexlay (t) 1 Sapura Rubi Long term 550 2 Sapura Esmeralda Long term 300 3 Sapura Jade Long term 550 (1) 4 Sapura Onix Atlanta 550 5 Sapura Diamante Long term 550 6 Sapura Topazio Long term 300 7 TOP Cora
Slide 52: Fontis Energy has a unique market position in Mexico due to its local setup
1 2 A Appendix 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 compared to standard Fontis
Slide 53: Asset values supported by rising implied values and high replacement costs
1 2 A Appendix 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 Jade Rubi 300 360 Esmeral
Slide 54: Paratus consolidated income statement
1 2 A Appendix Paratus consolidated income statement(1) USDm 2021 2022 2023 30 Sept 2024 30 Sept 2023 (9 months) (9 months) Operating revenues Operating revenues* 29 148 167 167 120 Total operating revenues $29 $148 $167 $167 $120 Operating expenses Rig operating expenses (15) (89) (94) (70) (77) Ge
Slide 55: Paratus consolidated balance sheet
1 2 A Appendix Paratus consolidated balance sheet(1) USDm 2021 2022 2023 30 Sept 2024 ASSETS Current assets Cash and cash equivalents 70 94 115 150 Accounts receivables, net 318 114 169 279 Amount due from related party current - 56 3 3 Favorable contracts 43 38 31 31 Other current assets 28 46 34 3
Slide 56: Paratus consolidated cash flow statement
1 2 A Appendix Paratus consolidated cash flow statement(1) USDm 2021 2022 2023 30 Sept 2024 30 Sept 2023 (9 months) (9 months) Income/(loss) before income taxes 8 (15) 1 38 (12) Adjustments to add/(deduct) non-cash items (47) 67 78 67 76 Change in working capital items and other 21 189 (49) (108) (5
Slide 57: Seagems income statement
1 2 A Appendix Seagems 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) (219) (224) (23
Slide 58: Seagems balance sheet
1 2 A Appendix Seagems 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 Recoverable taxes sho
Slide 59: Fontis income statement
1 2 A Appendix Fontis 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 Operating expe
Slide 60: Fontis balance sheet
1 2 A Appendix Fontis 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 121 127 204 318 114 Amou
Slide 61: Corporate structure
1 2 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 Limited
Slide 62: Overview of legal entities
1 2 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 Para
Slide 63: Defined Terms
1 2 A Appendix Defined Terms Term Description Includes Paratus, its wholly-owned subsidiary Fontis Energy, and its 50%-owned JV Seagems; figures for Paratus Group are depicted using management reporting as Paratus Group described below. Represents the Company’s internal financial and operational per
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