Pareto World Wide Offshore AS - Pareto Project Finance

PortfolioThe portfolio is currently highly robust, with most assets on long term contracts. It is well distributedacross the different offshore oil services segments.Investments and capitalThe committed capital in PWWO was originally NOK880m. The current portfolio consists of 11 projectswhich owns stakes in 23 units. The average contractlength is 3.6 years and the contract coverage is 91%.The nominal value of the contract backlog is roughlyNOK 724m and is more than sufficient to cover all debtservice costs and projected operating costs. Total debtin the projects amounts to around NOK 420m. Thebacklog is primarily made up by solid counterparts.PWWO had a cash holding of NOK 118m as of30.06.12. Apart from Asian Offshore III, there are nospecific capital requirements in the other underlyingprojects. However, the company has made anallocation for a dispute with Larsen Oil & Gas inconnection with Songa Eclipse. Overall, there isadequate capital available to make cash distributionsto shareholders and to consider value addinginvestments, should they arise.Charterparty Distribution based on NAVBareboat45%Timecharter46%Spot/Asset Play9%Segment Distribution based on NAVThe life cycle of PWWO expires 30 June 2014. Theunderlying projects are expected to yield significantcash flow until then. Asset and/or portfolio sales willbe considered at the opportune time to provideshareholders with the best possible exit values.Current market conditions indicate that exits should bemade as late as possible to maximize values.The contracted cash flow is evenly spread across fivemain segments; rigs, supply, accommodation, seismicand subsea.Contracted cash flows will be more than sufficient tocover scheduled debt service through to 2015. Theprojects in PWWO’s portfolio also have a relativelysteep debt repayment profile, which gives theopportunity to refinance when financing conditionshave improved.SemiSubmersible Rig10%Seismic7%IMR21%Tender Rig36%Accommodation12%PSV/AHTS (Asia)10%PSV/AHTS(Europe)4%Charter hire backlog by counterpartAsset sales from the underlying investments areplanned upon the exit of existing contracts, which willprimarily take place from 2015 and onwards.Therefore, PWWO does not need to expose itself to thecurrent market conditions, where asset values are yetto reach their full potential.Reef Subsea12%AfricanOffshoreServices8%Swiber13% RXT10%Total / CNR43%CGGV6%