Fred.Olsen Production ASA PRESENTATION OF 3rd quarter 2009
3Q 2009 in brief Revenues were USD 29.5 million (USD 24.4 million) EBITDA USD 13.2 million (USD 9.6 million) FPSO Knock Allan EBITDA contribution was USD 6.1 million FSO Knock Nevis completed contract Final payment of USD 2 million received from Knock Nevis upgrade project which was completed in 2008 100% commercial uptime for units in operation
Agenda Financial results 3q 2009 Operations and market
Income Statement - Key Figures (USD 000) Q3-2009 Q3-2008 Variance YTD 2009 YTD 2008 Variance Actual Actual Actual Actual Revenue 29 731 24 381 5 350 77 568 60 551 17 017 Operating revenues: 29 731 24 381 5 350 77 568 60 551 17 017 Operating expenses: Operating expenses (12 449) (11 299) (1 150) (34 772) (28 823) (5 949) Administrative expenses (4 099) (3 524) (575) (9 253) (9 196) (57) Operating result before depr. (EBITDA) 13 183 9 558 3 625 33 543 22 532 11 011 Depreciation (10 382) (2 108) (8 274) (29 434) (10 856) (18 578) Operating result (EBIT) 2 801 7 450 (4 649) 4 109 11 676 (7 567) Net financial items (3 767) (5 742) 1 975 (5 488) (7 762) 2 274 Result before tax (966) 1 708 (2 674) (1 379) 3 914 (5 293) Tax expense (504) - (504) (935) (513) (422) Net result (1 470) 1 708 (3 178) (2 314) 3 401 (5 715)
YTD 3Q 2009 vs. YTD 3Q 2008 EBITDA YTD Q3 2009 vs YTD Q3 2008 EBITDA (USD 000) YTD Q3 2008 EBITDA 22 532 plus: Knock Allan 9 166 Knock Dee 2 593 Knock Taggart 1 603 Knock Adoon 1 395 Petroleo Nautipa 623 minus: FOP group admin. -1 270 FOP Pte Ltd -1 239 Knock Nevis -931 Intercompany Elim. -929 15 381-4 369 YTD Q3 2009 EBITDA 33 543
2009 quarterly EBITDA (USD 000) Q1 2009 Q2 2009 Q3 2009 Actual Actual Actual Revenue 20 941 27 064 29 731 Operating expenses: Direct OPEX (10 811) (13 048) (12 449) Other administrative expenses (2 928) (2 654) (4 099) EBITDA 7 202 11 362 13 183
Financial Items - Breakdown (USD 000) YTD 2009 YTD 2008 (9 Months) (9 Months) Interest income (external) 141 4 418 Financial income 141 4 418 Interest expenses: Unrealized Gain (Loss) Interest Rate Derivatives 276 (735) Interest - Mortgage Loan (4 247) (4 208) Other interest expenses (145) (145) Other financial income (expense): Unrealised Loss on Derivatives - (8 947) Other financial items (1 905) (135) Financial expenses (6 021) (14 170) Net foreign currency gain/(loss) 391 1 990 Net financial items (5 489) (7 762)
Consolidated Balance Sheet (USD 000) 30.09.2009 31.12.2008 Actual Actual Assets Cash and cash equivalents 77 059 103 488 Other current assets 28 558 17 001 Total current assets 105 617 120 489 Fixed assets 423 893 394 532 Other non-current assets 10 464 8 514 Total assets 539 973 523 535 Liabilities Interest bearing loans (current portion) 2 145 1 976 Other current liabilities 21 673 16 193 Total current liabilities 23 818 18 169 Interest bearing loans (LT portion) 237 796 227 555 Other long-term liabilities 14 078 14 528 Total long-term liabilities 251 874 242 083 Equity 264 280 263 283 Total liabilities and equity 539 973 523 535
Cash flow statement YTD 30 September 2009 Operating Activities: YTD Actual Net Income before tax (1 379) Taxes Paid (935) Gain on sale of property, plant and equipment (1 300) Depreciation Expense 29 434 Changes in Balance Sheet Items (7 950) 17 870 Investing Activities: Upgrade and Conversion Costs - Allan (61 339) Upgrade and Conversion Costs - Other Vessels (99) Disposals 5 882 (55 556) Financing Activities: Financing 10 410 10 410 Net change in cash (27 276) Cash beginning period 103 488 Translation differences 846 Cash ending period 77 058
Agenda Financial results 3q 2009 Operations and market
Contract status 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Knock Dee Provisional contract El Paso Brazil 10 yrs (5y option) Petroléo Nautipa Vaalco - Gabon 2y option Knock Nevis Maersk - Qatar Knock Adoon Addax Petroleum - Nigeria 8y option Knock Allan Canadian Natural Resources Gabon 10 yrs (10y option) Marc Lorenceau Addax (operations) Uppgrade / Conversion Option Call-off option
Knock Allan - update Oil production and contract hire commencement 1. May Project capex adjusted by USD 8 mill in carry over work for 2009 to USD 276 mill net of financials items and variation orders Olowi Field development not yet fully operative at design capacity, additional work to tie in three more Well Head Platforms to continue in 4Q 09 and 2010 Oil- and gas commissioning completed in Q3 100% commercial up-time achieved Boilers adjustments and repairs has caused diesel consumption of for approx. USD 0.9 mill. Client partly dispute start date of KAL operations and some variation orders
Existing vessels status Knock Dee Under option to El Paso until end Dec 2009 Option premium cover lay-up cost 2009 Knock Nevis Contract with Mærsk Qatar completed 12 August Dispute regarding redelivery clauses in the contract Pursuing leads in Brazil and India Scrapping is a base case scenario Marc Lorenceau Service contract out for renewal commercial bid delivered in May expect outcome end 2009 Continue contract on 30 days termination notice
Terang Sirasun Batur ( TSB ) Indoneasia Client KEI: 50% by local company EMP 25% Mitsubishi Corp / 25% Japex Aframax gas FPSO Spread moored Technical bid submitted Clarifications ongoing Three tenders expected Commercial bid: Pending announcement of commercial ITB Delays due to Contract T&C s Clarification on contract ongoing, Invitation November? Partnership with Marubeni JAVA
Market outlook Market remains slow, but with clear conditions of pick-up: three contract awards announced end Q3 early Q4 formal tender inquiry numbers are up, particularly in Asia early stage inquiries also indicate an improving prospect flow for 2010 Africa remains slower to recover, one leased FPSO awarded in Equatorial Guinea. Longer lasting effects of the financial crisis remain: tight financing conditions and increased risk aversion healthy clean up in the sector consolidation around the most solid contractors and improved risk management. It remains to be seen if the risk aversion tendency transforms into a permanent shift in balance affecting the lease contracting market. An increasing pool of idle FPSO's may create some supply side pressure on margins again, balanced to some extent by the reduced number of credible contractors. Globally we see another further 1-2 contract awards in the fourth quarter 2009. 2010 is expected to be better than 2009, but with only a moderate level of contracts awarded.