FPSOcean â completing Deep Producer 1
FPSOcean â completing Deep Producer 1
FPSOcean â completing Deep Producer 1
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<strong>FPSOcean</strong> – <strong>completing</strong> <strong>Deep</strong> <strong>Producer</strong> 1<br />
<strong>Deep</strong>water DP floating production vessel<br />
- A unique asset in a niche market<br />
Company Presentation<br />
22nd January 2009<br />
The information contained herein may be subject to change without prior notice.<br />
1
Disclaimer<br />
‣ This presentation and its enclosure and appendices (hereinafter jointly referred to as the “Presentation” has been prepared by <strong>FPSOcean</strong><br />
AS (“<strong>FPSOcean</strong>” or the “Company”) exclusively for information purposes only in order to give an updated status of the Company. This<br />
Presentation has not been reviewed or registered with any public authority or stock exchange.<br />
‣ This Presentation does not constitute an offer to sell or a solicitation of an offer to buy any securities in the Company.<br />
‣ This Presentation contains certain forward-looking statements relating to our business, financial performance and results and/or the<br />
industry in which we operate. Forward-looking statements concern future circumstances and results and other statements that are not<br />
historical facts, sometimes identified by the words “believes”, expects”, “predicts”, “intends”, “projects”, “plans”, “estimates”, “aims”,<br />
“foresees”, “anticipates”, “targets”, and similar expressions. The forward-looking statements contained in this Presentation, including<br />
assumptions, opinions and our views of the Company or cited from third party sources are solely opinions and forecasts which are subject<br />
to risks, uncertainties and other various factors that may cause actual events to differ materially from any anticipated development. We<br />
discuss these factors, including risks and uncertainties, from time to time in our public filings. We disclaim any duty to update the<br />
information presented here.<br />
‣ The Company or any of our parent or subsidiary undertakings or any such person’s officers or employees provides any assurance that the<br />
assumptions underlying such forward-looking statements are free from errors nor does any of them accept any responsibility for the future<br />
accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments. We assume no<br />
obligation, except as required by law, to update any forward-looking statements or to conform these forward-looking statements to our<br />
actual results.<br />
‣ No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including<br />
projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or<br />
misstatements contained herein, and, accordingly, we or any of our parent or subsidiary undertakings or any such person’s officers or<br />
employees accepts any liability whatsoever arising directly or indirectly from the use of this Presentation. This Presentation contains<br />
information obtained from third parties. Such information has been accurately reproduced and, as far as we are aware and able to<br />
ascertain from the information published by that third party, no facts have been omitted that would render the reproduced information to<br />
be inaccurate or misleading.<br />
‣ The Company's properties and certain financial derivatives are included at fair value in the Company's group account. Changes in fair value<br />
are recorded quarterly in the income statement and, with respect to the properties, are based on third party valuation. Consequently,<br />
adjustment based on changes in fair value may affect the company's income.<br />
‣ By attending or receiving this Presentation you acknowledge that you will be solely responsible for your own assessment of the market and<br />
the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of<br />
the potential future performance of the Company’s business.<br />
‣ This Presentation speaks as of 22 January 2009. Neither the delivery of this Presentation nor any further discussions of the Company with<br />
any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company<br />
since such date.<br />
2
Content<br />
1) Executive summary<br />
2) Assets and technology<br />
3) Project status<br />
4) Company and market opportunities<br />
3
<strong>FPSOcean</strong> – a unique player in a niche market<br />
‣ The <strong>FPSOcean</strong> business model is to build, own, lease and operate Floating Production Systems<br />
(FPSOs) with focus on<br />
‣ deepwater extended well testing (EWT)<br />
‣ early production (EP)<br />
‣ marginal field production for benign deep water reservoirs and hurricane areas<br />
‣ <strong>FPSOcean</strong> differentiates from its competitors by using cost effective dynamic positioning systems<br />
and disconnectable buoys with safe, reliable and innovative technology<br />
‣ A generic cost effective vessel and topside design suitable for different areas and field<br />
applications<br />
‣ Strong organizational development<br />
‣ Business critical in-house know how and experience in marine, oil & gas technologies, project management,<br />
design engineering, site management and operations<br />
‣ Marketing and business development presence in target areas<br />
‣ Post-delivery key process and technical competence in place (in-house)<br />
4
Customer value proposition<br />
‣ Attractive schedule for “first oil”<br />
‣ DPP1 can be used for well testing/early production as long as a well has been drilled<br />
‣ DP system avoiding mooring/subsea installations<br />
‣ Focused, cost effective and right sized organization geared to complete the project and operate<br />
the vessel<br />
‣ Changed project management, structure and reporting<br />
‣ Strengthened project team in critical areas<br />
‣ Reduced personnel to be more cost effective and efficient<br />
‣ Operations experiences and partnerships<br />
‣ Cost-efficient solution creating values<br />
‣ Minimum installation cost - no mooring cost<br />
‣ Faster relocation - no mooring allow for simpler and faster hook-up and decommissioning<br />
‣ Flexible topside facility allowing a wide spectra of well fluids to be processed, facilitating<br />
relocation of the FPSO without major process plant modifications<br />
‣ DP and turret solutions<br />
‣ Dis-connectable in less than 45 seconds<br />
‣ Safe and optimized operations for varying weather conditions<br />
5
Investor value proposition<br />
‣ <strong>Deep</strong> <strong>Producer</strong> 1 overall project is 91.2 % complete at end of week 52<br />
‣ Substantial verification process completed to confirm revised capex and delivery schedule<br />
‣ Contracts with Dubai Drydocks conversion yard have been renegotiated and key vendors are committed to support<br />
the completion of the FPSO conversion project<br />
‣ Cushion in revised USDm 335 all-in capex (USDm 10 conversion and corporate contingencies)<br />
‣ Re-structured balance sheet implying attractive USDm ~176 asset cost and robust capital structure<br />
‣ USDm 160 reduction from cash cost: Debt reduction (USDm ~115) and reduced pre-money equity value (USDm ~45)<br />
‣ <strong>FPSOcean</strong> with USDm ~85 of market cap and USDm ~91 of debt post USDm 70 equity issue and re-structuring<br />
‣ Attractive position for near-term employment contracts<br />
‣ Several customers attracted by <strong>FPSOcean</strong> value proposition including unique DP capabilities<br />
‣ Concrete leads and discussions for multi-year use as well testing/early production vessel<br />
‣ Target contract terms supporting attractive return on re-structured DPP1 asset value<br />
‣ Estimated replacement value of similar FPSO approx USDm 250-300<br />
‣ Re-structured balance sheet and NOK 1 issue price providing excellent investor value proposition<br />
‣ USDm ~160m value reduction in place, subject to pending USDm 70 Private Placement<br />
‣ USDm ~176 implied asset cost vs. USDm 335 projected all-in cash cost<br />
‣ USDm 250 DPP1 value implying ~2x equity value, USDm 335 (cash cost) implying ~3x equity value<br />
‣ Value drivers: Employment contract and/or industrial exit<br />
6
Re-structured pro forma capital structure<br />
Re-structured balance sheet Face value $m Value @ fix $m Recovery % # shares m Ownership % Equity / debt<br />
2. pri bondholders 75 25 33% 27 5% Both<br />
of which continued 2. pri debt 25 8 33% - 0% Debt<br />
of which new convertible debt 1) 39 13 33% - 0% Debt<br />
of which new equity 12 4 33% 27 5% Equity<br />
Senior unsecured debt 30 5 18% 38 6% Equity<br />
Convertible debt 25 3 13% 23 4% Equity<br />
DPO claim 2) 9 1 13% 8 1% Equity<br />
Current DPP1 equity 60 1 2% 8 1% Equity<br />
New DPP1 equity na 70 na 490 82% Equity<br />
Total 199 36 18% 594 100%<br />
NOK/USD 7.0<br />
1) Assuming no conversion<br />
2) Subject to approval<br />
‣ Re-structured <strong>FPSOcean</strong> capital structure subject to new equity of USDm 70 in place<br />
‣ Debt reduced by USDm ~118 (from USDm ~139 to USDm 21) and equity by USDm ~45 from USDm<br />
60 (original equity down by USDm 59 less USDm ~14 new equity from debt conversion)<br />
‣ Re-structured balance sheet consisting of USDm ~91 of debt, incl. USDm 70 of 1. pri bank debt<br />
‣ Re-structured balance sheet consisting of USDm ~85 of equity, valued at NOK 1.00 per share<br />
‣ Re-structured EV of USDm ~176 vs. cash cost of USDm ~335<br />
‣ New equity from USDm 70 Private Placement with ~82% ownership<br />
7
NOK 1/share value proposition: 2-3x<br />
‣ FPSO equity valued at USDm 85 post rescue (share price NOK 1)<br />
‣ USD 1m pre-money of existing shares and USD 13m market value of debt/equity swap<br />
‣ USD 70m new equity from Private Placement<br />
‣ Re-structured FPSO balance sheet providing attractive upside on new equity<br />
‣ USDm 85 market cap on USDm ~176 Enterprise Value fully invested/fully financed<br />
‣ USDm 159 equity value (~2x) if exit at USDm 250<br />
‣ USDm 244 equity value (~3x) if exit at projected DPP1 USDm 335 cash cost<br />
400<br />
350<br />
FPS Ocean Equity Value Scenarios<br />
335<br />
300<br />
250<br />
250<br />
244<br />
USDm<br />
200<br />
150<br />
176<br />
159<br />
100<br />
85<br />
50<br />
0<br />
Rescue value USD 250m value Cost (USD 335m)<br />
DPP1 value<br />
Equity value<br />
8
Content<br />
1) Executive summary<br />
2) Assets and technology<br />
3) Project status<br />
4) Company and market opportunities<br />
9
<strong>Deep</strong> <strong>Producer</strong> 1 – high-end deepwater FPSO<br />
Laurita – DPP 1<br />
‣ Purpose built for ultra deepwater extended<br />
well testing, early production and marginal<br />
field development<br />
‣ Riser systems developed for single well and<br />
multi well applications ranging from 250 to<br />
2,500m water depth<br />
‣ Proven technology and components applied<br />
to meet deepwater field development<br />
challenges<br />
Main spec:<br />
Year built/yard<br />
1981/Tsuneishi<br />
Dwt<br />
68,000 tons<br />
Length<br />
244 m<br />
Breadth<br />
32 m<br />
Storage capacity 1)<br />
400,000 bbls<br />
Process capacity, liquids 60,000 bbls/day<br />
Process capacity, oil 2)<br />
40,000 bbls/day<br />
Maximum gas capacity 40 mmscf/day<br />
No. of risers 5<br />
DP system DP 2<br />
Buoy pull-in winch<br />
350 tons<br />
1) Single sided<br />
2) Oil @30-40 API<br />
10
Disconnectable Riser Buoy (DRB TM )<br />
‣ Multi-riser disconnectable buoy for ultra deep<br />
water DP operation based on proven<br />
equipment<br />
‣ New 5-path high pressure swivel with unique<br />
sealing redundancy qualified for gas service<br />
‣ Technology jointly developed and owned by<br />
<strong>FPSOcean</strong> and Scana (patent pending)<br />
‣ All shipboard equipment installed on vessel<br />
‣ Swivel qualification and FAT testing<br />
completed<br />
‣ Based on proven technology<br />
‣ Buoy to be installed in vessel after sea trials<br />
‣ DNV classified<br />
11
Buoyancy (green)<br />
WI Riser (yellow)<br />
Umbilical (red)<br />
Polyester Tether (white)<br />
OP Riser (yellow)<br />
1mt/m Chain (blue)<br />
3-inch Chain (green)<br />
Multi-riser and single well systems<br />
Case documented<br />
by <strong>FPSOcean</strong> / SeaFlex<br />
Pliant wave<br />
Hybrid Mid water arch Catenary<br />
<strong>Deep</strong> Wave Lazy Wave<br />
0<br />
500<br />
West Africa<br />
Far East<br />
1000<br />
West Africa<br />
1500<br />
2000<br />
West Africa<br />
Brasil<br />
West Africa<br />
2500<br />
Brasil<br />
Brasil Brasil Brasil<br />
12
Process plant<br />
‣ Generic Process plant:<br />
‣ 40,000 bopd @API 35, 20,000 bopd @ API 20<br />
(can be increased to 40,000 bopd with<br />
additional separation train)<br />
‣ 60,000 bpd total fluid<br />
‣ 40 mscfd<br />
‣ Fuel gas compression<br />
‣ Installed on ship in February 2007 and<br />
mechanical complete in October 2008<br />
13
Dynamic Positioning (DP) and Power System<br />
‣ DP system<br />
‣ DNV DYNPOS-AUTR (IMO DP Class 2)<br />
‣ 4 Schottel 3.8 MW azimuth thrusters + existing<br />
main controllable pitch propeller and bow<br />
thruster (delivered)<br />
‣ Kongsberg DP 2 control system<br />
‣ Receptacles and drives installed in ship,<br />
underwater units delivered<br />
‣ M80/90 power and power distribution module<br />
‣ 2 x 17 MW Siemens dual fuel gas turbines<br />
‣ Siemens panels and switch gears<br />
‣ Lifted and installed on ship in Feb 08 and<br />
mechanical complete Sep 08<br />
14
DPP2 – DP Offshore AS liquidation status<br />
‣ As part of the restructuring of FPS Ocean to complete DeeP <strong>Producer</strong> 1, the DeeP <strong>Producer</strong> 2<br />
conversion project has been cancelled and its subsidiary DP Offshore is being liquidated<br />
‣ Financiers of MT Semakau has cancelled the bareboat charter with DP Offshore and taken redelivery of the<br />
vessel which is in the process of being sold at a price well below the debt outstanding<br />
‣ DP Offshore is near completion of a cash positive sale of the two Siemens gas turbines<br />
‣ DP Offshore is in dialogue with Schottel with respect to resolving its obligations under the 5 x thruster contract<br />
‣ DP Offshore assets or contract sales will not generate sufficient cash to settle all creditor claims in<br />
full<br />
‣ DP Offshore may, pending receipt of sales proceeds from the turbine sale shortly, seek a voluntary winding up<br />
of its business if agreement and final settlements can be reach with all creditors<br />
‣ FPS Ocean management is seeking to reach agreement with DP Offshore creditors to settle potential<br />
FPS Ocean AS claims through participation in the restructuring plan<br />
‣ Financiers of MT Semakau and Schottel (with potential claims against FPS Ocean AS) have been offered shares<br />
in FPS Ocean AS on terms equal to those terms offered in the restructuring plan to other unsecured creditors to<br />
FPS Ocean AS, in exchange for not making claims against FPS Ocean AS<br />
15
Content<br />
1) Executive summary<br />
2) Assets and technology<br />
3) Project status<br />
4) Company and market opportunities<br />
16
DeeP <strong>Producer</strong> 1 – pictures November 2008<br />
17
DeeP <strong>Producer</strong> 1 – Completion plan<br />
- Review initiated in Sep 2008<br />
‣ “De-risking” and reviewing the project<br />
‣ A task force of 9 working groups with 4 very experienced external individuals and 14 <strong>FPSOcean</strong> employees<br />
‣ Assignments to scrutinize project performance and execution<br />
‣ Reports completed Sept 12th<br />
‣ Overall objectives<br />
‣ Securing final cost and date for completion of DPP1<br />
‣ Cash-flow control and payment schedule management<br />
‣ Creating a credible completion plan and identifying activities to achieve the agreed targets<br />
‣ Actions implemented<br />
‣ Remaining engineering identified and engineering completion coordinated with procurement and conversion<br />
‣ Revised baseline schedule and lump sum completion agreed with Dubai World Drydocks (“DWD”)<br />
‣ Reviewed suppliers and agreed with critical suppliers their continued commitment to complete<br />
‣ Established revised cost estimate and schedule based on task force reviews and verifications<br />
‣ Strengthened Project Team and Site Management,<br />
‣ Revised project structure and reporting<br />
‣ Increased engineering and construction supervision staffing<br />
‣ Increased staff for mechanical completion supervision and commissioning<br />
18
DeeP <strong>Producer</strong> 1 – Completion plan<br />
- Manage DWD performance<br />
‣ DWD contract renegotiated, signed amendment to contract which includes:<br />
‣ USDm 51 lump sum price for total scope<br />
‣ Including all variation orders (VORs) as of 31st Sep 2008<br />
‣ Revised mechanical completion date 31st Mar 2009<br />
‣ Bonus USDm 3 upon completion on 31st Jan 2009<br />
‣ Bonus to be reduced USD 200,000 per day until 15th Feb 2009 and no bonus thereafter<br />
‣ Penalty scheme approx. USDm 3 or 6% of lump sum<br />
‣ Liquidated damages USD 50,000 per day from 1st Feb 2009 until 31st Mar 2009<br />
‣ Current payment conditions maintained:<br />
‣ 40% 30 days prior to the date the parties reasonably expect the work to be completed<br />
‣ 50% upon completion of the work prior to delivery of the vessel<br />
‣ Scope defined in all agreed drawings and documentation<br />
‣ Agreed principles of defined construction packages and milestones<br />
‣ Revised detailed plan established including follow up mechanisms (planning, daily work lists,<br />
counting/check lists)<br />
‣ Mechanical completion, pre-commissioning and commissioning defined and periods agreed<br />
‣ Impact of delays on mechanical completion and bonus/penalty scheme caused by payment<br />
moratorium is being negotiated. Detailed reviews done, concluding no material impact on<br />
overall project cost<br />
19
<strong>Deep</strong> <strong>Producer</strong> 1 - conversion status<br />
‣ By end-Dec 2008 the overall project was 91.2% completed according to new baseline from Oct 08<br />
(1.5% behind schedule)<br />
‣ Conversion progress at 94.2% versus planned 96.4%<br />
‣ Delay caused by late equipment supplies due to payment moratorium and reduced manning at site to preserve cash<br />
‣ Disconnectable riser buoy progress at 90.5% versus planned 92.0%,<br />
‣ Delay caused by required modifications to the buoy (DRB) and later delivery date<br />
‣ Mechanical completion extended to March 2009 and “Sail-away” extended to July 2009<br />
‣ All major equipment delivered except buoy (DRB) and thrusters with expected delivery during<br />
March 2009<br />
‣ Completion of installation work and commissioning/sea trials remaining<br />
Type of work % of total % complete % planned<br />
Topside modules 28.0% 99.7% 100.0%<br />
Disconnectable riser buoy 13.3% 90.5% 92.0%<br />
Vessel systems & conversion 54.4% 94.2% 96.4%<br />
Commissioning 2.0% 0.0% 0.0%<br />
Installation of thrusters, sea trials & buoy testing 2.3% 0.0% 0.0%<br />
Total / average (weighted) 100.0% 91.2% 92.7%<br />
20
<strong>Deep</strong> <strong>Producer</strong> 1 - capex and cash status end Nov<br />
‣ USDm 335 overall DPP1 cost<br />
‣ In line with Oct 08 revised<br />
budgets<br />
‣ USDm 273 overall capex<br />
accrued to date<br />
‣ USDm 62 remaining (19%)<br />
‣ USDm 199 paid to date<br />
‣ USDm ~136 remaining (40%)<br />
‣ USDm 202 of financing<br />
raised/funded<br />
‣ Fully funded post rescue<br />
incl. USDm 70 of additional<br />
equity, and USDm 70 of<br />
1.pr bank debt<br />
‣ 1.pr bank loan due 30<br />
September 2009, extension<br />
will depend on employment<br />
contract for DPP1<br />
‣ Strict cash management<br />
and standstill agreements<br />
in place securing cash to<br />
end Jan 09<br />
As of 31 Dec 2008 (figures in USDm)<br />
FPSO DPP1 capex program<br />
Approved<br />
budget (as of<br />
31 Oct 2008)<br />
Total<br />
forecast Committed Paid to date<br />
Unpaid (to<br />
forecast)<br />
Capitalised<br />
to date<br />
Vessel acquisition, dry dock and process plant 16 16 16 16 - 16<br />
Topsides 57 57 55 51 6 57<br />
Disconnectable Riser Buoy 27 31 31 20 11 24<br />
Vessel 111 111 96 38 72 102<br />
Commissioning 4 4 0 0 4 -<br />
Offshore operation 5 5 - - 5 -<br />
Project subtotal (conversion) 203 207 182 109 98 183<br />
Preliminaries (incl engineering, proc., insurance etc) 33 33 26 22 10 22<br />
Project subtotal incl. preliminaries 236 240 208 131 109 205<br />
Contingency 10 5 - - 5 -<br />
Total conversion incl. contingency 246 246 208 131 114 205<br />
Management 13 16 16 12 4 12<br />
Operations during construction 7 7 7 6 1 6<br />
Finance costs 52 44 44 34 10 34<br />
Corporate contingency 2 6 - - 6 -<br />
Total misc. cost 73 73 67 52 21 52<br />
Total project cost 335 335 291 199 135 273<br />
FPSO DPP1 funding<br />
Restructured<br />
Total funding<br />
Committed<br />
funding<br />
Funding<br />
drawn New funding<br />
Equity 84 129 59 59 70<br />
Convertible - 32 32 32 -<br />
New convertible 13<br />
DPO unsecured debt - - - - -<br />
Unsecured - 36 36 36 -<br />
2. pri bonds 8 75 75 75 -<br />
1. pri bank debt 70 70 - - 70<br />
Total financing 176 342 202 202 140<br />
Implied write-down/cash position (159) 7 (89) 3 5<br />
21
DeeP <strong>Producer</strong> 1 – project progress and cost<br />
‣ Activities to preserve cash until completed refinancing by end January<br />
‣ Reduced staff in Oslo office<br />
‣ Reduced staff at site and prolonged vacations for site personnel in December/January<br />
‣ Implemented voluntary supplier payment moratorium of outstanding invoices by end Nov 08 amounting to<br />
USDm ~14 for payment by mid Feb 09<br />
‣ Reduced forward cash spending to a minimum, but maintaining critical support to allow progress on<br />
conversion project<br />
‣ Agreed with DWD to increase their VOs for critical equipment supply to maintain critical progress on<br />
conversion project<br />
‣ Consequences of cash cost cutting actions<br />
‣ Some engineering and equipment delays with knock-on effect on conversion progress<br />
‣ DWD maintains reasonable progress within their scope<br />
‣ Delay in mechanical completion to March 2009<br />
‣ Delay in ”sail-away” from yard to July 2009<br />
‣ Cost impact modest and well within budget contingencies<br />
‣ Overall: neutral cost impact estimated from schedule delay, debt restructuring and supplier<br />
settlements<br />
‣ Extended schedule adds USDm ~3.5<br />
‣ DRB contract settlement adds USDm ~4.5<br />
‣ Liquidation of DP Offshore adds USDm ~2.5 in increased overhead<br />
‣ Reduced manning and other cost saving actions removes USDm ~1.9<br />
‣ Debt restructuring removes USDm ~8.2 in finance expenses and interest cost<br />
‣ Overall estimated cost increase of USDm ~0.4, maintaining budget contingencies at about USDm 10<br />
22
DeeP <strong>Producer</strong> 1 - progress curves<br />
‣ About 1.5% behind Oct 08 baseline at cut off week 52, due to slower progress during Dec 08<br />
resulting from payment moratorium and cost saving actions<br />
‣ New funding will accelerate progress, but slow progress in Dec 08 and Jan 09 not likely to be<br />
recovered, leading to estimated 1 - 2 months delay<br />
Incremental % Construction Progress Scurve<br />
Cumulative %<br />
4,00<br />
100,00<br />
23<br />
3,50<br />
90,00<br />
3,00<br />
2,50<br />
New Baseline- 16 March<br />
Planned Incr Act Incr<br />
Plan Cumm Act CUmm<br />
80,00<br />
70,00<br />
60,00<br />
2,00<br />
50,00<br />
1,50<br />
40,00<br />
1,00<br />
30,00<br />
20,00<br />
0,50<br />
10,00<br />
0,00<br />
0,00<br />
5-Jan-08<br />
12-Jan-08<br />
19-Jan-08<br />
26-Jan-08<br />
2-Feb-08<br />
9-Feb-08<br />
16-Feb-08<br />
23-Feb-08<br />
1-Mar-08<br />
8-Mar-08<br />
15-Mar-08<br />
22-Mar-08<br />
29-Mar-08<br />
5-Apr-08<br />
12-Apr-08<br />
19-Apr-08<br />
26-Apr-08<br />
3-May-08<br />
10-May-08<br />
17-May-08<br />
24-May-08<br />
31-May-08<br />
7-Jun-08<br />
14-Jun-08<br />
21-Jun-08<br />
28-Jun-08<br />
5-Jul-08<br />
12-Jul-08<br />
19-Jul-08<br />
26-Jul-08<br />
2-Aug-08<br />
9-Aug-08<br />
16-Aug-08<br />
23-Aug-08<br />
30-Aug-08<br />
6-Sep-08<br />
13-Sep-08<br />
20-Sep-08<br />
27-Sep-08<br />
4-Oct-08<br />
11-Oct-08<br />
18-Oct-08<br />
25-Oct-08<br />
1-Nov-08<br />
8-Nov-08<br />
15-Nov-08<br />
22-Nov-08<br />
29-Nov-08<br />
6-Dec-08<br />
13-Dec-08<br />
20-Dec-08<br />
27-Dec-08<br />
3-Jan-09<br />
10-Jan-09<br />
17-Jan-09<br />
24-Jan-09<br />
31-Jan-09
<strong>Deep</strong> <strong>Producer</strong> 1 - remaining work<br />
‣ Major future milestones completion dates<br />
‣ Mechanical completion: March 2009<br />
‣ Disconnectable buoy delivery: March 2009<br />
‣ Thrusters installation: April 2009<br />
‣ Commissioning complete: May/June 2009<br />
‣ Sea trials and testing: June/July 2009<br />
‣ Main activities to completion:<br />
‣ Electrical cable pulling and terminations<br />
‣ Piping installations and hydro test<br />
‣ Completing the living quarter<br />
‣ Mechanical completion checks and tests<br />
‣ Thrusters installation<br />
‣ Commissioning work<br />
24
Content<br />
1) Executive summary<br />
2) Assets and technology<br />
3) Project status<br />
4) Company and market opportunities<br />
25
Highly capable organization with in-house competence<br />
Compliance<br />
Manager<br />
(QA/HSE)<br />
M. Magnussen<br />
CEO<br />
E. Saunes<br />
Project<br />
Manager DPP1<br />
O.F. Jahnsen<br />
Steering Committee DPP1<br />
CEO Einar Saunes (Chairman)<br />
CFO Christian Mowinckel<br />
VP operations Kjetil Bruun-Olsen<br />
VP Business Development Leif Aaker<br />
VP Technology Ola Often<br />
Director Contract Management Owe<br />
Paulsen<br />
Board member Gro Baade-Mathiesen<br />
CFO<br />
C. Mowinckel<br />
Director<br />
Contract<br />
Management<br />
O. W. Paulsen<br />
VP,<br />
Operations<br />
K. Bruun-<br />
Olsen<br />
VP, Bus Dev<br />
L. O. Aaker<br />
Director HR<br />
and<br />
Organisation<br />
H. Strand<br />
VP,<br />
Technology<br />
O. Often<br />
Engineering<br />
Manager<br />
J. Reiersen<br />
Accounting<br />
Manager<br />
K. Eggen<br />
Procurement<br />
Manager<br />
C. Biering<br />
Operation<br />
Manager<br />
E. Brunborg<br />
Sales and<br />
Marketing<br />
S. Bøtker<br />
Office<br />
Manager<br />
M. H. Olsen<br />
Site deputy<br />
Engineering<br />
Manager<br />
B. Bjune<br />
Lead Engineer<br />
Process<br />
J. Collett<br />
Accountant<br />
S. Crancenco<br />
Logistics<br />
Cliff<br />
Rodrigues<br />
Operation<br />
Engineer<br />
N.A Hall<br />
General<br />
Manager Rio<br />
J. L. Phillips<br />
Receptionist<br />
L. Larsen<br />
Lead Engineer<br />
EIT<br />
B. Jenssen<br />
Senior<br />
Engineer S&R<br />
V. Rogn<br />
Finance<br />
Manager<br />
J.E. Bekeng<br />
Project<br />
controller<br />
(temporarily<br />
A.J. Hansen)<br />
General<br />
Manager<br />
Houston<br />
S. Hill<br />
Senior Cost<br />
Controller<br />
A. J. Hansen<br />
Document<br />
Control<br />
S. Sandsdalen<br />
Controller<br />
T. Langerud<br />
Procurement/<br />
adm.<br />
L. Lund<br />
26
Experienced management team<br />
‣ Einar Saunes (1955), acting CEO and Project Director<br />
‣ 25 years extensive management experience from offshore, energy and construction industries<br />
‣ Aibel, Alstom and ABB<br />
‣ Christian Mowinckel (1954), CFO<br />
‣ 25 years financial and project finance experience from offshore, energy, and finance industries<br />
‣ Ocean Rig, Kværner, Elkem and DnB NOR<br />
‣ Kjetil Bruun-Olsen (1956), Vice President, Operations<br />
‣ 12 years offshore and 12 years shipping experience<br />
‣ Fred. Olsen, Star Refer and Neptun<br />
‣ Leif O. Aaker (1951), Vice President, Business Development<br />
‣ 30 years offshore experience<br />
‣ Boa Offshore, Fred. Olsen Energy and Golar-Nor Offshore (Petrojarl)<br />
‣ Ola Often (1956), Vice President, Technology<br />
‣ 25 years offshore engineering experience<br />
‣ Fred. Olsen, PGS and ABB<br />
‣ Owe W. Paulsen (1954), Vice President and Contracts Manager<br />
‣ 25 years of contracting and project management experience from oil & gas and energy industries<br />
‣ Statoil, Saga Petroleum, PGS, Kværner, Statnett<br />
‣ Hege Strand (1968), Director HR and Organization<br />
‣ 15 years experience in HR, organization and legal<br />
‣ Sjøfartsdirektoratet and other public services<br />
27
Board of directors<br />
Substantial experience in founding offshore ventures, running world class shipping<br />
and oil service contractors and performing financial management<br />
‣ Erland P. Bassøe (1957), Co-founder & Chairman<br />
‣ 25 years offshore experience<br />
‣ Seajacks, Floatel Int., Scorpion Offshore, Frontier Drilling, ODS-Petrodata and Bassoe Offshore<br />
‣ Jan R. Næss (1957), Director<br />
‣ 25 years of shipping and offshore market research and investment experience<br />
‣ Northern Navigation Intl, NFC Shipping Funds, R.S.Platou Asset Management and R.S. Platou Research<br />
‣ Tone Wille (1963), Director<br />
‣ 20 years experience from industrial companies<br />
‣ Posten, Norfund, Elkem and Kværner<br />
‣ Felix Tschudi (1960), Director<br />
‣ 20 years experience in shipping and offshore<br />
‣ Tschudi & Eitzen, Tschudi Shipping Company, International Transport Contractors and Estonian Shipping<br />
Company<br />
‣ Gro Baade-Mathisen (1956), Director<br />
‣ 26 years offshore experience<br />
‣ Aibel, ABB, Aker and Kværner<br />
28
Target market areas<br />
‣ Extended well testing<br />
‣ Early production<br />
‣ <strong>Deep</strong>water field developments<br />
‣ Field developments in hurricane areas<br />
‣ Marginal field developments<br />
‣ Environmental exposed development<br />
<strong>FPSOcean</strong> head office<br />
<strong>FPSOcean</strong> sales offic<br />
29
Strong market fundamentals<br />
‣ Increasing need for extended well testing<br />
‣ Increase understanding of more complex reservoirs including sub salt, heavy oil and high<br />
pressure/high temperature (HPHT) challenges<br />
‣ Optimize development solutions for high cost deepwater developments<br />
‣ Increasing need for early production<br />
‣ Benefit from early cash flow<br />
‣ Improve financial viability of high capex deepwater developments<br />
‣ Gain additional reservoir knowledge during development phase for field life optimization<br />
‣ Meeting challenging deadlines for “first oil” often required by governments<br />
‣ Marginal and hurricane field development<br />
‣ Allowing marginal fields with short life span to be developed<br />
‣ Improving financial feasibility for marginal field development<br />
‣ Increased cost and delivery times for installation and mooring<br />
‣ Vessel dynamic positioning can be amortized over life of vessel, not life of field<br />
‣ Competitive environment positive for <strong>FPSOcean</strong><br />
30
Several contract prospects in the pipeline<br />
- <strong>FPSOcean</strong> in discussions with super-majors<br />
Client ENI ENI Kitan Petrobras Kosmos<br />
Unit DPP 1 DPP 1 DPP 1 DPP 1<br />
Type<br />
Extended well<br />
testing, several fields<br />
Marginal field<br />
development<br />
Extended well testing<br />
or marginal field<br />
Extended well testing<br />
Water depth (meters) 100 – 1,300 350 1,450 – 2,500 1,000 – 2,000<br />
Wells 1 – 2 3 – 6 1 – 3 Not determined<br />
Oil prod. (bbl/day) 15 – 40,000 40,000 40,000 15 – 25,000<br />
Possible LOI/<br />
Contract<br />
commitment<br />
Jan/Feb 2009 April 2009 March 2009 April 2009<br />
Mobilization 3Q 2009 1Q 2010 4Q 2009 4Q 2009<br />
Contract terms<br />
(years)<br />
Customer driver<br />
5 or 10 5 years and 5x1 years<br />
options<br />
Schedule and<br />
disconnect - need<br />
EWT soon<br />
Schedule and<br />
disconnect<br />
5 years and options 1 - 2 years<br />
EWT and field<br />
developments<br />
Reservoir<br />
characteristics and<br />
cash-flow<br />
‣ Indicative rates have been submitted to several customers during 2008, ranging from USD 210,000 to<br />
250,000 per day (generic topside – pre cost base reduction)<br />
‣ Adjusted day rates indicated at +/- 200,000 per day (generic topside – post cost reduction)<br />
‣ EBITDA target: USDm 40–45 per year<br />
31
DPP1 - main market opportunities - long list<br />
‣ Vanco EWT in Ghana with Lukoil as partner<br />
‣ Area: Block Tano 500 m WD<br />
‣ Start-up: Q3 2009<br />
‣ LOI: Q2 2009<br />
‣ ENI EP/FFD<br />
‣ Areas: OYO, Nigeria<br />
‣ Start-up: Q3 2009; 6 months operations prior to other commitments<br />
‣ LOI: Q1 2009<br />
‣ Exxon Mobile EWT/EP<br />
‣ Areas: Angola, Nigeria, Brazil & Indonesia<br />
‣ Start-up: end. 2009/ first half 2010<br />
‣ LOI: Q2 2009<br />
‣ Sonangol EWT/EP Angola<br />
‣ Areas: Several Fields in Angola<br />
‣ Start-up: end. 2009 / first half 2010<br />
‣ LOI: Q3 2009<br />
‣ BP Angola<br />
‣ Area: Various Fields<br />
‣ Start-up: Q2 2010<br />
‣ LOI: Q2/Q3 2009<br />
‣ Anadarko EWT/EP Brazil<br />
‣ Area: Block BM-C30, Field Vahoo ( Sub-salt )<br />
‣ Start-up: 2010<br />
‣ LOI: Q3 2009<br />
32
FPSO operations<br />
‣ <strong>FPSOcean</strong> has developed in house competence to define and provide basic requirements to<br />
contractors, including criterias and KPIs, in order to have overall control of all management and<br />
operational processes<br />
‣ <strong>FPSOcean</strong> has built up a corporate QHSE management system, including a generic operations<br />
philosophy. The operational Onboard Management System (OMS) is under development, and will<br />
comply with <strong>FPSOcean</strong>, Class Society and regulatory requirements<br />
‣ <strong>FPSOcean</strong> has signed a technical, operational and maintenance management agreement with<br />
Bibby Offshore Ltd (BOL), a division of Bibby Line Group Ltd, for integrated services for its FPSO<br />
<strong>Deep</strong> <strong>Producer</strong> 1. GreyStar Corporation, based in Houston, USA is working under subcontract to<br />
BOL, providing topside process operations and management and has major activities in GOM and<br />
in several international locations<br />
‣ The BOL management agreement is currently under evaluation, and is bench marked with other<br />
contractor alternatives. A decision on FPSO operational management structure and partners will<br />
be decided after a successful restructuring and capitalization of FPS Ocean<br />
33
2008 Q3 Profit & Loss<br />
Consolidated profit & loss in USD Q3 1.1 – 30.9 1.1 – 31.12<br />
2008 2008 2007<br />
Income 0 0 0<br />
Salary and staff costs 2 453 108 5 640 482 3 520 251<br />
Depreciation and write-downs 50 450 652 50 621 462 197 139<br />
Other operating costs 5 936 834 8 898 711 3 544 604<br />
Operating result -58 840 594 -65 160 655 -7 261 994<br />
Financial income 5 930 717 11 074 654 8 238 075<br />
Financial costs -2 244 374 -7 490 244 -5 417 469<br />
Net financial items 3 686 343 3 584 410 2 820 606<br />
Result before tax -55 154 251 -61 576 245 -4 441 388<br />
Tax 0 43 918 0<br />
Net result -55 154 251 -61 620 163 -4 441 388<br />
34
2008 Q3 Balance Sheet<br />
Consolidated balance sheet in USD 30 Sep 31 Dec<br />
2008 2007<br />
ASSETS<br />
Fixed assets<br />
Tangible fixed assets 208 377 371 149 679 996<br />
Intangible fixed assets 216 111 287 577<br />
Pensions 89 209 0<br />
Prepaid investments 24 891 378 16 256 514<br />
Total fixed assets 233 574 069 166 224 087<br />
Current assets<br />
Receivables 4 697 315 1 729 142<br />
Derivative contracts 0 1 894 498<br />
Cash and cash equivalents 15 903 906 65 845 546<br />
Total current assets 20 601 221 69 469 186<br />
Total assets 254 175 290 235 693 273<br />
35
2008 Q3 Balance Sheet (cont’d)<br />
Consolidated balance sheet in USD 30 Sep 31 Dec<br />
2008 2007<br />
EQUITY AND LIABILITES<br />
Shareholders equity<br />
Share capital 2 597 751 2 797 036<br />
Share premium account 93 419 875 100 586 497<br />
Other paid-up capital 3 374 336 536 246<br />
Other reserves -4 302 423 -14 097 929<br />
Retained earnings (accumulated losses) -68 582 642 -6 962 479<br />
Total equity 26 506 897 82 859 371<br />
Long-term liabilities<br />
Bond issue 169 730 445 114 738 194<br />
Pensions and similar commitments 0 26 864<br />
Total long-term liabilities 169 730 445 114 765 058<br />
Short-term liabilities<br />
Supplier and other short-term liabilities 57 894 030 38 068 844<br />
Tax payable 29 524 0<br />
Deferred tax 14 394 0<br />
Total short-term liabilities 57 937 948 38 068 844<br />
Total liabilities 227 668 393 152 833 902<br />
Total equity and liabilities 254 175 290 235 693 273<br />
36