Magnora ASA

Investor Presentation • Nov 11, 2015

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Important information

This presentation and its enclosures and appendices (hereinafter jointly referred to as the "presentation") have been prepared by Sevan Marine ASA ("Sevan" or the "Company") exclusively for information purposes. This presentation has not been reviewed or registered with any public authority or stock exchange. Recipients of this presentation may not reproduce, redistribute or pass on, in whole or in part, the presentation to any other person.

The contents of this presentation are not to be construed as legal, business, investment or tax advice. Each recipient should consult with its own legal, business, investment and tax adviser as to legal, business, investment and tax advice.

There may have been changes in matters which affect the company subsequent to the date of this presentation. Neither the issue nor delivery of this presentation shall under any circumstance create any implication that the information contained herein is correct as of any time subsequent to the date hereof or that the affairs of the company have not since changed, and the company does not intend, and does not assume any obligation, to update or correct any information included in this presentation.

This presentation includes and is based on, among other things, forward-looking information and statements. Such forward-looking information and statements are based on the current expectations, estimates and projections of Sevan or assumptions based on information available to the company. Such forward-looking information and statements reflect current views with respect to future events and are subject to risks, uncertainties and assumptions. Sevan cannot give any assurance as to the correctness of such information and statements.

An investment in the company should be considered as an high-risk investment, and several factors could cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements that may be expressed or implied by statements and information in this presentation, including, among others, risks or uncertainties associated with the company's business, segments, development, management, financing, market acceptance and relations with customers, ability to implement cost reducing initiatives, the company's technology and offshore unit design, latent risks associated with divested businesses (including Teekay's / Logitel's ability to develop the accommodation business unit and repay the USD 60 million convertible loan in full), and, more generally, general economic and business conditions, including, but not limited to, within the oil and gas industry, changes in domestic and foreign laws and regulations, taxes, customs duties, vat or variations thereof, changes in competition and pricing environments, fluctuations in currency exchange rates and interest rates and other factors. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this document. The company does not intend, and does not assume any obligation, to update or correct the information included in this presentation.

This presentation does not constitute or form a part of, and should not be construed as, an offer or invitation to subscribe for or purchase any securities of the company. Neither this presentation nor anything contained herein shall form the basis of, or be relied on in connection with, any potential transaction referred to in this presentation. Any potential offer of securities of the company would be based on a prospectus prepared for that purpose.

This presentation is subject to Norwegian law, and any dispute arising in respect of this presentation is subject to the exclusive jurisdiction of Norwegian courts.

Sevan Marine – Investment Highlights

• Debt free cash of USD 38 million
• Large unutilized tax losses in excess of NOK 3.5 billion
• Asset light and technology heavy no vessel ownership, license fee and engineering revenue model
• Strong partners Teekay (Floating Production, Logitel) and Technip (KANFA)
• Multiple applications FPSOs, FSOs, Drilling rigs, Accomodation units, FLNG
• A proven design with unique benefits
• Competetive cost level 15 25% cost savings estimated compared with turret moored solutions

Third Quarter Highlights

Q3 2015 Highlights

Floating Production:

• Headcount and other cost reductions implemented
• Decline in revenue (lower activity) only partially compensated by improved cost and efficiency
• USD 1m cost of investigation in quarter

Topside and Process:

• KANFA positive on high OCTP workload and project final settlement
• Kanfa Aragon workload and EBITDA improved Note: Topside and Process includes KANFA AS and KANFA

Aragon which are fully consolidated. Sevan ownership is 51% in KANFA AS and 50% in KANFA Aragon

Investigation

• The Board received in October the external investigation report from Selmer, regarding allegations of possible improper conduct related to historical contracts with Petrobras, and has consequently handed the report over to the Norwegian authority for investigation of economic and environmental crime.
• The Board also asked Selmer to look into allegations in Brazilian media that privileged information were provided to investors regarding signing of contracts between Petrobras and Sevan Marine. Selmer has completed their report on this subject and concluded that based on the information available that such allegations cannot be verified.
• While the investigation by Selmer is now completed, Sevan Marine expects to continue its dialog with authorities in 2016. The expected total cost of the investigation remains in the range of USD 2 - 4m
• Sevan Marine is taking this matter very seriously and adheres to the strictest of compliance and ethical standards

Strategic Review Process

• Sevan Marine appointed Pareto Securities in April 2015 to explore potential strategic options for the Company. The corporate investigation carried out between June and October, which has now been completed, has resulted in delays to the strategic review
• The Company will continue the work to explore strategic options for Sevan Marine
• Sevan Marine remains optimistic that the outcome will help Sevan Marine to achieve its full potential and deliver enhanced value to shareholders

Growing global fleet of cylindrical floaters

12 Sevan units currently in operation or under construction

Piranema Spirit Hummingbird Spirit Voyageur Spirit Goliat Western Isles

4 Drilling Units

Sevan Driller Sevan Brasil Sevan Louisiana Sevan Developer

Arendal Spirit Stavanger Spirit Nantong Spirit

Floating Production (FPSO, FSO, FLNG)

Sevan FPSOs: Ongoing projects

Field operator: ENI Location: Sub-arctic Barents Sea Hull size: Sevan 1000

• The Goliat FPSO has now been installed at the field in the Barents Sea
• Sevan activity on the project is continuing to decrease as the project is close to completion

Field operator: Dana Petroleum Location: North Sea, UK Hull size: Sevan 400

• Under construction at the Cosco yard in China
• Sevan involved with personnel at the yard and back office activities

FPSO and FSO market and prospects

• During the third quarter we have been working on several studies and proposals within the FPSO/FSO market
• The selection of the Sevan Marine concept for the UK sector FPSO prospect and continuation of this project into a late FEED and contractor selection phase is a clear positive
• Sevan Marine expects to enter into a license agreement with respect to this prospect during Q4 2015. Payments under the license agreement remain subject to the field developers' final investment decision and start of construction of the unit, which is not expected before the second half of 2016.
• As for the market, we continue to see prospects being postponed or delayed due to continued low oil price and consequent reduction in investment levels

Sevan FLNG concept

Sevan is providing a cost efficient offshore FLNG solution

• No turret and swivel
• Membrane or SPB cargo containment system
• Capacity for many risers
• Being considered by several major oil companies for field development
• During the quarter Sevan Marine was awarded a paid feasibility study with an oil major to explore the use of Sevan Marine's cylindrical hull for a specific FLNG development. This study should be completed by year end and has the potential to lead to further paid study work in 2016

HiLoad LNG

HiLoad for Offloading

• HiLoad is allowing offshore LNG transfer to standard LNG carriers
• Enhanced safety by 200 m separation of FLNG and LNG carrier
• Large savings by using standard LNG carriers
• Maximum flexibility by using standard LNG carriers
• Enables offloading in rough sea-states

HiLoad for Regasification

• Regasification system located on the HiLoad unit
• Standard LNG carrier used for transport and storage
• Gas pipeline to power plant
• Considered for areas with underdeveloped power infrastructure
• FEED study currently being negotiated

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Sevan FPSOs: Future FPSO opportunities

SEVAN SCR FPSO	SEVAN FWPSO	SEVAN FDPSO	Bridge linked FSO/FPSO
• Concept for a non-disconnectable deepwater FPSO utilizing Steel Catenary Risers (SCR) • Suited for harsh environment • Extended skirt reduces heave motions • SCRs arranged in moonpool, less affected by roll/pitch motions	• Concept for Floating Workover Production Storage Unit (FWPSO) • Benign environment • Extended skirt reduces heave motions • Top tensioned vertical risers, arranged in a moonpool • Draft compensation through large ballast capacity, or through movable hang-off platform	• Concept for Floating Drilling, Production and Storage unit (FDPSO) • Extended skirt reduces heave motions • High drilling availability (production drilling) • Mooring system designed for harsh environment	• Concept developed for mooring close to WHP allowing for a bridge connection between the units • Jumpers (flexible pipes, umbilical, cables, etc) between units • Telescopic gangway between units • 4 mooring clusters to control offsets • High availability of gangway • Requiring a simpler WHP platform as equipment and living quarter can be moved to FSO
Concept developed US patent granted	Study proposal prepared to explore the possibility of using dry-trees on a Sevan unit	Concept study completed	Several studies performed both for bridge linked FPSO and FSO

WHP= Well Head Platform

Other Applications (Drilling, Logitel)

Proven technology: Sevan designed drilling units

Sevan Driller	Sevan Brasil	Sevan Louisiana	Sevan Developer
Field operator: Petrobras Field: Pre-salt Brazil Building year: 2009 Design: Sevan 650	Field operator: Petrobras Field: Pre-salt Brazil Building year: 2012 Design: Sevan 650	Field operator: LLOG Location: US GoM Building year: 2013 Design: Sevan 650	Design: Sevan 650 Building year: 2013 /2014 Yard: Cosco Shipyard, China

New Opportunities

• Continued long term interest for an Ice version and a Harsh Environment version
• License provided to Cosco has expired

Proven technology: Sevan designed Logitel Units

Three Units – One delivered and two under construction

Six Options with the Cosco Shipyard – one exercised, one has expired, 4 remaining

• The 'Arendal Spirit' was delivered in February 2015 from the Cosco, Nantong yard to Teekay Offshore Partners and started production in June 2015
• Logitel Offshore has the option to build 4 more at the Cosco Shipyard

Investments (KANFA, KANFA Aragon)

KANFA

• A process technology company focusing on delivering on an EPC basis process equipment packages and modules as well as studies and FEEDs together with Technip
• Traditional process equipment packages and modules include: Main Separation systems, Water Injection systems, Produced Water Treatment systems, Chemical Injection systems
• The USD 50 million Yinson OCTP project is progressing. Margin recognition unlikely before Q4 2015 or early 2016
• KANFA Ingenium Process has begun work on Chemical Injection Package for Johan Sverdrup Field Centre Phase 1. Package will be ready for delivery Q2 2016

KANFA Aragon

• A process technology company focusing on FLNG as well as traditional gas processing packages, also on an EPC basis
• Patented FLNG liquefaction process based on an optimized dual nitrogen expander cycle
• Improved workload in Q3 has led to reduction in loss versus previous quarters
• Further cost reduction measures have been undertaken

Financials

Q3 2015 Net Result

• USD 6m non-cash impairment related to KANFA AS
• Topside and Process segment performance improved and profitable in the quarter
• Floating Production segment decline due to impairment, declining workload, Logitel Offshore variable fee adjustment and cost of investigation

2014 and Q3 2015 Net Result (USD Million)

Q3 2015 Cash Flow

• Positive cash flow quarter
• Driven by Logitel Offshore convertible loan repayment and working capital in topside and process segment
• USD 38.1 million in cash at end Q3 2015
• Majority of cash (USD 34.4 million) in floating production
• Piranema claim unresolved (USD 4.4 million provision)
• Notice from Skatt Sør (Norwegian tax authorities) Potential NOK 40 million cash impact in Q4 2015
• Key target is to maintain cash balance excluding one-off items such as Piranema, tax claims and investigation

2014 and Q3 2015 Cash Flow (USD Million)

Q3 2015 – Profit & Loss statement

Unaudited figures in USD million	Q3 15	Q2 15	Q3 14	Comment
Operating revenue	21,8	15,5	25,2	Lower activity and reversal of License revenue in Floating Production (USD 2.8m). Improved Topside and Process workload from OCTP project (USD 8.8m). Decreased inter-company eliminations (USD 0.3m)
EBITDA	-1,9	-3,0	1,5	Increase in Floating Production (USD 0.1m). Improved Topside and Process performance (USD 1.0m)
Operating profit	-8,0	-3,1	1,4	Write down of Goodwill related to Topside and Process segment of USD 6m
Net profit	-10,0	-39,1	1,3	Net currency related loss of USD 1.3m
Declining activity level in Floating Production partially compensated by cost savings and improvements in Topside and Process. USD 6m impairment of goodwill.

Q3 2015 – Balance Sheet

Unaudited figures in USD million	30.09.2015	30.06.2015	30.09.2014	Comment
				Goodwill related to Topside and Process segment of USD 6m written down.
Intangible assets	1	7	13	Remaining amount related to Software
Deferred income tax assets	-	-	8
Loan	16	15	50	Long term portion of Logitel convertible loan
Other non-current assets	11	12	9	Accrued Logitel license of USD 10m
Total non-current assets	28	34	80
Trade and other receivables	19	29	54	USD 12m related to Topside and Process segment, where USD 10m is in accounts receivable, rest is accrued revenue. USD 7m related to Floating Production segment, where USD 4m is in account receivable, rest is accrued revenue and prepaids
Cash and cash equivalents Total current assets	38 57	30 60	31 85	USD 34m in Floating Production segment
Total assets	85	94	165
Total equity	58	68	128
Total non-current liabilities	1	2	3	USD 0.8m related to Topside and Process segment. Remainder is pension liabilities
				USD 14m related to Topside and Process segment. USD 4.4m Piranema Provision. USD 2.7m vacation and severance accruals. Remainder is
Total current liabilities	26	24	34	accrued liabilities and accounts payable
Total liabilities	27	26	36
Total equity and liabilities	85	94	165

Goodwill related to Topside and Process segment of USD 6m written down. Remaining amount related to Software

USD 12m related to Topside and Process segment, where USD 10m is in accounts receivable, rest is accrued revenue. USD 7m related to Floating Production segment, where USD 4m is in account receivable, rest is accrued revenue and prepaids

USD 0.8m related to Topside and Process segment. Remainder is pension liabilities

USD 14m related to Topside and Process segment. USD 4.4m Piranema Provision. USD 2.7m vacation and severance accruals. Remainder is accrued liabilities and accounts payable

Outlook

Outlook

• The FPSO/FSO market
• − Increased focus on cost effective solutions should be an advantage for Sevan
• − Workload on current projects (Goliat and Western Isles) declining
• − Utilization of staff still high in part due to workforce reduction
• − Study work increasing including for FLNG and HiLoad applications
• − Positive continuing progress on UK sector FPSO prospect
• − One potential FPSO license from late 2016

• Logitel Offshore

• − Variable payment expected in June 2016
• − Challenging floating accomodation market has led to continuing delays in rigs 2 and 3
• − Long term prospects remains strong
• The Drilling market
• − License to Cosco has expired
• − The Drilling market is expected to remain challenging

Outlook

• The Topside Process Systems market
• − OCTP project progressing
• − Chemical injection package for Johan Sverdrup field progressing
• − Improved workload in Kanfa Aragon
• − Further cost reduction measures will be carried out depending on the degree of success in winning new prospects
• Cost Reduction Program
• − Over 20% headcount reduction
• − Impact visible
• − Declining workload and costs associated with investigation offsetting benefits at bottom line
• − Key target is to remain operating cash flow breakeven excluding one-off items in 2015

• Strategic Review

• − Process continues and Sevan Marine remains optimistic that the outcome will help company to achieve its full potential and deliver enhanced value to shareholders
• Dividend
• − The Board will consider further in conjunction with Q4 2015 results