BW Offshore Limited · OSL:BWO
BW Offshore — Q3 2010 Earnings Presentation
44 slides from BW Offshore's earnings presentation, Nov 30, 2010
Slide 1: BW Offshore Q3 2010 presentation
BW Offshore Q3 2010 presentation 30 November 2010
Slide 2: Disclaimer
Disclaimer This Presentation has been produced by BW Offshore Limited ( “BW Offshore”) exclusively for information purposes. This presentation may not be redistributed, in whole or in part, to any other person. This document contains certain forward-looking statements relating to the business, finan
Slide 3: Agenda
Agenda Highlights and fleet overview Integration Finance Market Summary 30 November 2010 3
Slide 4: Highlights
Highlights Q3 2010 EBITDA of USD 79.3 million before results from associates Successful acquisition of Prosafe Production Signed agreement for the sale of the APL division to National Oilwell Varco for USD 500 million in cash Signed contract for FPSO BW Athena (ex BW Carmen) Extension of contracts f
Slide 5: Global footprint
Global footprint Norway Russia Latvia Cyprus USA China Mexico Bermuda India Philippines Singapore Brazil BW Offshore units BW Offshore offices Recruitment centers 30 November 2010 5
Slide 6: Fleet
Fleet Unit Type Contract 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Sendje Berge FPSO Lease Addax/Sinopec, Nigeria: 2005-2013 Berge Helene FPSO Lease Petronas, Mauritania: 2006-2013 (2021) Yùum K'ak'Náab FPSO Lease Pemex, Mexico: 2007-2022 (2025) BW Cidade d
Slide 7: Project status
Project status FPSO BW Pioneer for Petrobras − Riser and umbilical pull in completed after some weather delay − Final hook up of swivel and disconnect system ongoing FPSO P-63 (Papa Terra) for Petrobras - COSCO Dalian, China − Structural work and steel replacement ongoing − Progress of long lead ite
Slide 8: Prosafe Production fleet overview
Prosafe Production fleet overview Name: Abo Name: Madura Jaya Type: FPSO Type: FSO Location: Nigeria Location: Indonesia Operator: Kodeco Operator: Agip Name: Azurite Name: Petróleo Nautipa Type: FDPSO Type: FPSO Location: Congo Location: Gabon Operator: Murphy Operator: Vaalco Name: Endeavor Name:
Slide 9: Integration
INTEGRATION
Slide 10: Integration and change processes
Integration and change processes Integration of Prosafe Production well under way − Maintaining excellent operation on all vessels − Capturing key employees − Implementing best practice from both companies Combined organization will be presented internally in December − Singapore organization to be
Slide 11: Board and Management
Board and Management Board of Directors Management Dr Helmut Sohmen Carl K. Arnet Chairman CEO Ronny Johan Langeland Knut R. Sæthre Vice Chairman CFO Carine Smith Ihenacho Tom A. Kristiansen EVP Business Development & Technology Christophe Pettenati-Auzière David Sverre Maarten R. Scholten EVP Proje
Slide 12: New organisational structure
New organisational structure TWO MAIN HUBS OSLO SINGAPORE DIVISIONS Business Development and Operations Finance Projects Engineering Technology (Oslo) (Oslo) (Singapore) (Singapore) (Oslo) SUPPORT FUNCTIONS General Business HR Internal auditing IT and Systems Supply Chain Counsel Processes and Devel
Slide 13: Finance
FINANCE
Slide 14: Key takeaways
Key takeaways Stable financial and operational performance Good progress on P-63/Papa Terra project – revenues booked in accordance with percentage of completion method OSX project started – booking of engineering and manager revenues Received USD 32.5 million for BMG settlement APL division booked
Slide 15: P&L
P&L USD million Q3 10 Q2 10 Q3 09 Operating revenue 139.0 74.6 65.2 Operating expenses -59.7 -55.4 -26.2 Share of profit from associates -16.4 0.1 2.3 EBITDA 62.9 19.3 41.3 Depreciation -13.1 -13.2 -12.9 Amortisations -0.9 -1.0 -0.8 Gain on sale of assets 0.0 0.0 -2.2 EBIT 48.9 5.1 25.4 Net interest
Slide 16: Balance sheet
Balance sheet Equity ratio 47.9% Net interest bearing debt USD 811.9 million USD million 30.09.10 30.09.09 31.12.09 Total non-current assets 1,791.0 2,069.1 2,134.8 Assets of disposal group held for sale 498.4 0.0 0.0 Total current assets 689.2 268.9 258.7 Total assets 2,480.2 2,338.0 2,393.5 Total
Slide 17: Cash forecast
Cash forecast Cash at 30 September 2010 USD 76.9 million Operating cash flow of USD 61.2 million in Q3 2010 and USD 217.4 million per 30 September 2010 Growing operational cash flow based on fixed long term contracts with strong counterparties Run-rate EBITDA on current portfolio is USD 450-500 mill
Slide 18: Refinance status
Refinance status BW Offshore is seeking a refinancing of the company’s corporate debt in the bank market Strong interest from existing bank syndicate A complete restructuring will provide predictable terms and flexibility for both growth and dividend payments 30 November 2010 18
Slide 19: Shareholder structure
Shareholder structure 30 November 2010 19
Slide 20: Market
MARKET Picture: Petrobras
Slide 21: Competition
Competition 18 16 14 12 * 10 8 * 6 4 2 0 FPSOs FPSOs under conversion/construction Lease FPSOs, excluding FSOs and hulls Source: BW Offshore, companies 30 November 2010 21
Slide 22: Increased complexity
Increased complexity Sendje Berge (2005) BW Pioneer (2010) − Benign water − Hurricanes − Spread moored − Turret moored − Simple topside − Quick disconnect − 140 m water depth − Fluid swivel − 2,500 m water depth 30 November 2010 22
Slide 23: Future industry challenges
Future industry challenges Larger and more complex units Stricter environmental requirements - Investment up to USD 1.5 bn Technical challenges Local content requirement - Deeper/less benign - Supplier selection - Logistics Pressures and temperatures - Higher 30 November 2010 23
Slide 24: Project and risk management
Project and risk management Commercial Project execution − Country − Engineering progress − Contract conditions − Supply chain Quality of work Clients − − Field development Start-up − Solidity Bidding process − Cost estimating − Complexity 30 November 2010
Slide 25: FPSO market significantly stronger
FPSO market significantly stronger Increased activity in all market regions Financial strength and track record increasingly important factors to secure contracts High activity with BW Offshore focusing on project robustness, financial return and risk factors 30 25 20 15 10 5 0 Past & current orders
Slide 26: Market opportunities
Market opportunities Brazil South East Asia • 30-40 opportunities • 20-30 opportunities • Local content • Price • Limited technology requirements • Size of projects • Limited local content issues • Technology - important • All types of commercial regimes • Commercially tough Gulf of Mexico Africa •
Slide 27: BW Offshore's market proposition
BW Offshore’s market proposition Class leading production uptime - Production uptime five year average uptime is 99.2% 100.0% 99.0% 98.0% Strong project execution capabilities 97.0% 96.0% Track record of more than 30 FPSO 95.0% 94.0% and FSO conversions since 1982 93.0% 92.0% 91.0% Preferential acce
Slide 28: Higher returns for future business
Higher returns for future business Positive market outlook − Limited competition − Target good return projects Expect improvement in value creation − Improved contracts (T&C’s) − Lower prices and improved delivery time from suppliers − Improved project delivery processes and controls − Flexible and
Slide 29: Summary
SUMMARY
Slide 30: Improved shareholder returns
Improved shareholder returns World’s second largest FPSO player Excellent operational results Strong operating cash flow from solid counterparties supports dividends Diversified and solid client base with operations in all key markets Expect attractive opportunities in the FPSO market Well positione
Slide 31: Q&A
Q&A 30 November 2010
Slide 32: 30 November 2010
30 November 2010 32
Slide 33: Appendix
APPENDIX
Slide 34: Fleet
Fleet Unit Type Contract 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Sendje Berge FPSO Lease Addax/Sinopec, Nigeria: 2005-2013 Berge Helene FPSO Lease Petronas, Mauritania: 2006-2013 (2021) Yùum K'ak'Náab FPSO Lease Pemex, Mexico: 2007-2022 (2025) BW Cidade d
Slide 35: Units on contract – in operation
Units on contract – in operation Sendje Berge, FPSO Sinopec, Nigeria • 60,000 bpd oil processing • 55 mmscfd gas compression • 2,000,000 bbls storage • Spread mooring Yùum K’ak’Náab, FPSO Pemex, Mexico • 600,000 bpd oil handling • 200,000 bpd oil processing • 2,500,000 bbls storage • Disconnectable
Slide 36: Units on contract – in operation
Units on contract – in operation Belokamenka, FSO Sovkomflot, Russia • 2,400,000 bbls storage • Cargo heating system • Spread mooring BW Pioneer, FPSO Petrobras, US • 80,000 bpd oil processing • 25.6 mmscfd gas export • 600,000 bbls storage • Disconnectable turret mooring BW Cidade de São Vicente, F
Slide 37: Units on contract – in operation
Units on contract – in operation Ningaloo Vision, FPSO Apache, Australia • 63,000 bpd oil processing • 80 mmscfd gas compression • 620,000 bbls storage • Disconnectable turret Espoir Ivorien, FPSO CNR, Ivory Coast • 40,000 bpd oil processing • 60 mmscfd gas compression • 1,100,000 bbls storage • Tur
Slide 38: Units on contract – in operation
Units on contract – in operation Umuroa, FPSO AWE, New Zealand • 50,000 bpd oil processing • 25 mmscfd gas compression • 775,000 bbls storage • Turret mooring Abo, FPSO Agip, Nigeria • 44,000 bpd oil processing • 44 mmscfd gas compression • 930,000 bbls storage • Spread mooring Petróleo Nautipa, FPS
Slide 39: Units on contract – in operation
Units on contract – in operation Azurite, FDPSO Murphy, Congo • 40,000 bpd oil processing • 18 mmscfd gas compression • 1,400,000 bbls storage • Spread mooring Cidade de São Mateus, FPSO Petrobras, Brazil • 35,000 bpd oil processing • 353 mmscfd gas compression • 700,000 bbl storage Endeavor, FSO Ab
Slide 40: Units on contract – in operation
Units on contract – in operation Madura Jaya FSO Kodeco, Indonesia • 630,000 bbls storage 30 November 2010 40
Slide 41: Units on contract - project
Units on contract - project OSX-1, FPSO OSX, Brazil • 42,000 bpd liquid processing • 40,000 bpd oil processing • 60,000 pbd water injection • 53 mmscfd gas compression • 950,000 bbls storage • Turret mooring BW Jayengrono (TSB), FPSO Kangean Energy, Indonesia • 7,000 bpd fluids processing • 340 mmsc
Slide 42: Units on contract - project
Units on contract - project P-63 (Papa Terra), FPSO Petrobras, Brazil • 2,200,000 bbls storage capacity • Ex BW Nisa (ULCC) 30 November 2010 42
Slide 43: Conversion candidates
Conversion candidates BW Ara • ULCC • 2,000,000 bbls storage capacity Takama • VLCC • 1,900,000 bbls storage capacity 30 November 2010 43
Slide 44: Further information
Further information: www.bwoffshore.com IR contact: Kristian Flaten, VP Finance & IR kristian.flaten@bwoffshore.com 30 November 2010 44