Magnora ASA

Investor Presentation • Aug 19, 2015

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 30 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

Floating Production

Other Applications

Investments

Financials

Outlook

Second Quarter Highlights

Q2 2015 Highlights

Floating Production:

• Headcount and other cost reduction implemented
• Decline in revenue (lower activity) only partially compensated by improved cost and efficiency
• USD 0.3m cost of investigation in quarter

Topside and Process:

• KANFA breakeven on high OCTP workload
• Kanfa Aragon low workload, improved EBITDA due to cost cutting

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

• Arises out of allegations and most recently criminal charges in Brazil against former Sevan Marine employee and agent Mr. Raul Schmidt Felippe Junior in the Brazilian authorities' investigation into corrupt activities involving Petrobras (Operation Car Wash – Lava Jato)
• The investigation is focused on the historical activities of Mr. Raul Schmidt as employee and agent for Sevan Marine
• Sevan Marine has been in contact with the various jurisdictions involved (Norway, Brazil, US and UK) and is cooperating fully with authorities
• Sevan Marine is currently not aware of any payments or interactions with Mr. Raul Schmidt or any of his known companies since the IPO of the drilling activites and restructuring of Sevan Marine in 2011
• The investigation is expected to continue during Q3 and Q4 at an estimated total cost 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

• Pareto Securities has, as previously announced, been retained as advisor to the Company in order to look into a broad range of strategic alternatives, with the objective to take Sevan to the level in terms of growth and profitability
• This strategic review process continues, albeit at a slower pace than initially foreseen
• 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

5 Floating

Sevan Driller Sevan Brasil Sevan Louisiana Sevan Developer

Arendal Spirit Stavanger Spirit Nantong Spirit

Floating Production

Other Applications

Investments

Financials

Outlook

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

Sevan is well positioned in the current market with a technology that can deliver substantial cost savings versus alternatives

During the second quarter we have been working on several studies and proposals within the FPSO/FSO market opportunities

We believe that we should be able to secure a license for one of these projects later this year or in the beginning of next year

As for the market in general, 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

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

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
Concept developed US patent granted	Study proposal prepared to explore the possibility of using dry-trees on a Sevan unit	Concept study completed	to FSO Several studies performed both for bridge linked FPSO and FSO

WHP= Well Head Platform

Floating Production

Other Applications

Investments

Financials

Outlook

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
• Continue to pursue opportunity with a new market entrant which may materialize in 2015

Proven technology: Sevan designed Logitel Units

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 has arrived in Brazil
• Logitel Offshore has the option to build 4 more at the Cosco Shipyard

Floating Production

Other Applications

Investments

Financials

Outlook

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 well and steel cutting at the yard has recently commenced steel cutting at the yard. Margin is not likely not visible until late 2015, 1st payment milestone achieved
• KANFA Ingenium Process has been awarded the 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
• Poor financial performance in quarter due to low workload and low utilization of staff, however, partly offset by cost cutting measures implemented in Q2
• KANFA Aragon has recently secured more work (mainly engineering manhours), which should improve results in Q3
• Further cost reduction measures have been undertaken

Floating Production

Other Applications

Investments

Financials

Outlook

Financials

Q2 2015 Net Result

• USD 37m non-cash impairment of Logitel Offshore convertible loan and accrued interest in Q2 2015
• Topside and Process segment performance improving but still negative
• Floating Production segment hit by impairment, declining workload and cost of investigation

2014 and Q2 2015 Net Result (USD Million)

Q2 2015 Cash Flow

• Positive cash flow quarter, driven by changes in working capital, including first OCTP down payment
• USD 30.3 million in cash at end Q2 2015
• Majority of cash (USD 28.6 million) in floating production
• 1st USD 10 million from Logitel Offshore received
• Investigation costs of USD 2-4 million expected
• Piranema claim unresolved (USD 4.4 million provision)
• Notice from Skatt Sør (Norwegian tax authorities) Potential NOK 30 – 40 million cash impact
• Key target is to maintain cash balance excluding one-off items such as Piranema, tax claims and investigation

2014 and Q2 2015 Cash Flow (USD Million)

Q2 2015 – Profit & Loss statement

Unaudited figures in USD million	Q2 15	Q1 15	Q2 14	Comment
Operating revenue	15,5	15,4	27,4	Lower activity in Floating Production (USD 2.4m). Improved Topside and Process workload from OCTP project (USD 2.7m). Greater inter-company eliminations (USD 0.3m)
				Decrease in Floating Production (USD 1.5m). Improved Topside and Process performance (USD 1.2m). Floating production in part due to USD
EBITDA	-3,0	-2,7	1,2	0.3m investigation related costs
Operating profit	-3,1	-2,8	1,1
				Impairment of Logitel Offshore
Net profit	-39,1	-4,5	1,4	convertible loan

Declining activity level in Floating Production partially compensated by cost savings and improvements in Topside and Process. USD 37m impairment of Logitel Offshore convertible loan.

Q2 2015 – Balance Sheet

Unaudited figures in USD million	30.06.2015	31.03.2015	30.06.2014	Comment
Intangible assets	7	7	13	Goodwill related to Topside and Process segment
Deferred income tax assets	-	-	8
Loan	15	50	60	Long term portion of Logitel convertible loan
Other non-current assets	12	11	8	Accrued Logitel license of USD 11m
Total non-current assets	34	68	89
				USD 12m related to Topside and Process segment. USD 11m related to current portion of Logitel convertible loan plus accrued interest. Remainder is accounts receivable and accrued
Trade and other receivables	29	38	39	revenue
Cash and cash equivalents	30	27	36	USD 28.6m in Floating Production segment
Total current assets	60	65	75
Total assets	94	133	163
Total equity	68	106	127
Total non-current liabilities	2	2	3	USD 0.9m related to Topside and Process segment. Remainder is long term severance and pension liabilities
				USD 10m related to Topside and Process segment. USD 4.4m Piranema Provision. USD 2.2m vacation and severance accruals. Remainder is accrued liabilities and accounts
Total current liabilities	24	25	33	payable
Total liabilities	26	27	36
Total equity and liabilities	94	133	163

USD 30m cash balance USD 37m Logitel Offshore impairment. Remaining value is also USD 37m

Floating Production

Other Applications

Investments

Financials

Outlook

Logitel Offshore update

• Arendal Spirit delivered in February and on charter in Q2 2015
• − USD 10m fixed payment received in August 2015
• − Currently estimated USD 8m variable payment due June 2016
• Two units under construction without charter contracts
• − Unit 2 delivery delayed for up to one year
• − Unit 3 construction delayed for 120 days, further delays cannot be ruled out
• Payments to Sevan Marine depend on delivery and charter acceptance of the units
• − Fixed payments due 6 months after delivery from yard
• − Variable component payable subject to operational performance and project execution due 12 months after start of charter hire
• Sevan Marine believes likelihood of further new rigs is substantially reduced and highly dependent upon obtaining charter contracts for rigs under construction
• Remaining book value of convertible loan, accrued interest and accrued license income of USD 37m reflects discounted value of expected payments for rigs 1, 2 and 3 only

USDm	Fixed payment	Variable payment*	Total	Status
Arendal Spirit	10	~8	~18	Delivered Q1'15 Delivered Q1'15 On Charter Q2'15
Stavanger Spirit	10	~8-10	~18-20	Uncertain Delivery delayed up to 12 months (Original schedule Q4'15) (Scheduled Q4'2015)
Nantong Spirit	10	~2	~12	Uncertain Construction delayed 120 days (Original schedule Q4'16) (Scheduled Q4'2016)
Option 3	10	~2	~12	TBD (Expires 30.11.15)
Option 4	10	~2	~12	TBD (Expires 30.11.16)
Option 5	10	~2	~12	TBD (Expires 30.11.17)
Option 6	10	~2	~12	TBD (Expires 30.11.18)

(*) Variable component payable subject to operational performance and project execution

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) and studies declining, with utilization still high in part due to workforce reduction
• − Two potential FPSO / FSO awards between Q4 2015 and early 2016
• − Positive continuing progress on UK sector FPSO prospect
• Logitel Offshore
• − An important milestone was achieved with the start of the Arendal Spirit 3 year charter, triggering currently expected USD 8m variable payment in June 2016
• − Challenging floating accomodation market has led to delays in rigs 2 and 3
• − Long term prospects remains strong
• The Drilling market
• − The Drilling market is expected to remain challenging
• − License has been granted to construct Sevan Marine designed unit for new market entrant. Effective date and payment of the license is subject to financing and construction contract becoming effective

Outlook

• The Topside Process Systems market
• − OCTP project progressing well
• − Chemical injection package LOI for Johan Sverdrup field
• − Improved workload in Kanfa Aragon
• − Further cost reduction measures cannot be ruled out
• Cost Reduction Program
• − Over 15% headcount reduction
• − Impact already visible in Q2 2015
• − 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
• − Intention to consider extraordinary dividend in second half of 2015
• − Given activity level and status of new business opportunities, board will revisit first in Q4 2015