Magnora ASA

Earnings Release • Nov 11, 2015

SEVAN MARINE ASA - Third Quarter 2015 Results

SEVAN MARINE ASA - Third Quarter 2015 Results

Main events and developments, third quarter 2015

- Sevan Marine's FLNG solution continues to attract

attention

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.

- Sevan Marine concept selected for UK sector prospect

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.

- Improved quarter for Topside and Process Technology

KANFA AS (Ownership: 51% Sevan Marine and 49% Technip)

EBITDAFX was positive USD 0.4 million for the quarter

driven by high activity on the USD 50 million Yinson

OCTP project and a positive final settlement on a

project delivered earlier in the year.

KANFA Aragon (Ownership: 50% Sevan Marine and 50%

KANFA Aragon management) EBITDAFX was negative USD 0.1

million which was USD 0.4 million better than Q2 2015

driven by improved workload in Q3 2015.

- Logitel Offshore

Arendal Spirit began operation in June 2015. Variable

compensation associated with this vessel is due 12

months after the start of charter hire, June 2016, and

is currently expected to be USD 6 million. This is a

reduction of USD 2 million versus Q2 2015. This is

driven by a revised assessment based on new

information provided by Logitel Offshore.

- Investigation

As recently announced, the Board received in October

2015 the external investigation report regarding

allegations of possible improper conduct related to

historical contracts with Petrobras in Brazil from

Advokatfirmaet Selmer DA ("Selmer"). Sevan Marine

decided to hand the report over to the Norwegian

authority for investigation and prosecution of

economic and environmental crime ("ØKOKRIM"). Sevan

Marine has made no payments and had no interaction

with the agent in question or any of his companies

since the IPO of drilling activities and restructuring

of Sevan Marine ASA in 2011. Sevan Marine is

cooperating fully with relevant authorities in the

various jurisdictions involved (Norway, Brazil, US and

UK). Sevan Marine adheres to the strictest of

compliance and ethical standards and continues to take

this matter very seriously.

The Board also asked Selmer to look into allegations

suggested in Brazilian media that Petrobras executives

allegedly provided privileged information to investors

regarding signing of contracts between Petrobras and

Sevan. Selmer has completed their report on this topic

and concluded that based on the information available

that such allegations cannot be verified. This

information has also been shared with ØKOKRIM.

While the investigation by Selmer is now completed,

Sevan Marine expects to continue its dialogue with

authorities in 2016. The expected total cost of the

investigation remains in the range of USD 2 - 4

million. As of September 30, 2015, USD 1.4 million of

cost has been incurred.

- Cost Reduction

The cost cutting program launched in Q1 2015 is having

a positive impact on the cost level in Q3 2015 of

approximately USD 0.8 million. Headcount has been

reduced by 21 or over 20 per cent and a number of

other measures, including moving offices, have been

undertaken. Further cost reduction measures will be

implemented.

- 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.

- Dividend policy

The Board has communicated an intention to pay a

dividend depending upon developments. The Board will

consider this further in connection with the Q4 2015

results.

Main Figures, Third Quarter 2015

(Previous quarter figures in brackets)

Operating revenue for the third quarter 2015 was USD

21.8 million (USD 15.5 million). EBITDA was negative

USD 1.9 million (negative USD 3.0 million), and

operating loss was USD 8.0 million (loss of USD 3.1

million). Net loss was USD 10.0 million (loss of USD

39.1 million).

An unrealized foreign exchange loss of USD 1.3 million

related to NOK denominated cash positions negatively

impacted the net result. A USD 6.0 million non-cash,

write down of goodwill related to Sevan Marine's

investment in KANFA AS negatively impacted net profit

further.

As of Q3 2015, cash and cash equivalents amounted to

USD 38.1 million (USD 30.3 million). The change in

cash and cash equivalents is largely attributable to

changes in working capital and the USD 10 million loan

repayment received from Logitel Offshore in August

The equity ratio was 59.2 per cent as of September 30,

2015 (64.7 per cent).

Outlook

- The outlook for the Floating Production segment is

dependent upon the outcome of field investment

decisions and vendor selection for key FPSO / FSO

prospects. Sevan Marine works to achieve a good

utilization of its staff with ongoing and new FEED /

study work during the remainder of 2015 and 2016 and

secure further license income by late 2016 or early

- The selection of the Sevan Marine concept for the UK

sector prospect and movement of this project into the

late FEED and contractor selection phase is a clear

positive. Additional cost reduction measures are also

being pursued.

- Sevan Marine is also optimistic that additional paid

studies can be secured in relation to both the FLNG

concept and opportunities to use the HiLoad as an LNG

regasification unit.

- The outlook for the Topside and Process Technology

segment is dependent upon the progress of the Yinson

OTCP project within KANFA AS and the ability for both

KANFA AS and KANFA Aragon to continue securing new

work. Further cost reduction measures are being taken.

- With the investigation complete, Sevan Marine looks

forward to dedicating its efforts to improving results

and winning new projects.

- Sevan Marine believes with its solid cash position

and cost reduction plans that it has the resources and

ability to successfully weather the current slowdown

in activity. Sevan Marine has initiated action to

eliminate operating losses.

Read more in the attached report.

Carl Lieungh (CEO) and Reese McNeel (CFO) will today

at 1:00 p.m. (CET) give a presentation of the results

at the Company's premises, Skøyen, Verkstedveien 3,

0277 Oslo.

The presentation will be in English.

The presentation will also be broadcasted LIVE on

www.sevanmarine.com.

It is recommended that you log on to the webcast 5

minutes in advance of the presentation.

If you wish to attend the presentation in Oslo, please

confirm by email: IR@sevanmarine.com

If you wish to call-in to listen to the presentation,

please find the call-in details attached.

PDF: Q3 2015 Report

PDF: Call in Details

* * * *

The information in this announcement is subject to the

disclosure requirements of the Norwegian Securities

Trading Act section 5-12 and/or the Oslo Børs -

Continuing Obligations.

Sevan Marine ASA is specializing in design,

engineering and project execution of floating units

for offshore applications, based on its patented

cylindrical floater technology. Sevan Marine ASA is

listed on Oslo Børs with ticker SEVAN. For more

information, please refer to www.sevanmarine.com.

For more information please contact:

Marit Ytreeide, Press Contact (Media)

+47 901 28 308 mobile

Carl Lieungh, CEO, Sevan Marine ASA (Media)

+47 37 40 40 00 office

Reese McNeel, CFO, Sevan Marine ASA (Analysts)

+47 37 40 40 00 office