Magnora ASA

Investor Presentation • Aug 20, 2014

Sevan Marine ASA Presentation of first half results 2014

Hotel Continental, Oslo, 20 August 2014 Presented by: Carl Lieungh, CEO Kjetil Vangsnes, CFO

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 WICH 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 UNIT BUSINESS AND REPAY THE MSUD 60 MILL. 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.

• Second quarter highlights

• Floating Production (FPSO, FSO, FLNG)
• Other Applications (Drilling, Accommodation)
• Investments (Logitel, KANFA, KANFA Aragon)
• Financials
• Outlook

Highlights

• Increased activity within the FPSO/FSO market segment
• In April, Teekay signed a MOU with Xcite for a bridge-linked FSO solution on the Bentley field, based on the Sevan design
• This, together with studies on prospects such as Bream for Premier Oil and Penguins with Shell, represents increased activity for the company
• Stronger KANFA through strategic partnership with Technip
• In April, Sevan sold 49 per cent of KANFA AS to Technip Norge AS
• KANFA gets access to a larger market within the topside and process industry
• New Logitel agreements with Teekay
• Reduce Sevan's risk exposure relative to Logitel
• Strengthen floating accommodation initiative
• Healthy operations and financial position
• Operating revenue of USD 52 million, USD 6.8 million higher than first half 2013
• EBITDA of USD 2.8 million was USD 1 million lower than first half 2013
• Cash position remains comfortable at 36 USD million as at June 30, 2014
• USD 10.5 million dividend distributed in May
• Strategic target of being able to pay an annual dividend also in the future

Events after balance sheet date

• Logitel Offshore: Another Floating Accommodation Unit ordered
• Teekay exercised the first of six options to build another FAU based on the Sevan design
• Thus expanding the current building programme to three units

• Delivery of the third unit from the Cosco Shipyard, Nantong in Q3 2016

• Second quarter highlights

• Floating Production (FPSO, FSO, FLNG)
• Other Applications (Drilling, Accommodation)
• Investments (Logitel, KANFA, KANFA Aragon)
• Financials
• Outlook

Sevan's core technology

Proven technology: Sevan designed FPSOs

Western Isles

Goliat

Field operator : ENI Field: Goliat Location: Sub-arctic Barents Sea Hull size: Sevan 1000 Under construction at the HHI yard in Korea

Field operator: Dana Petroleum Location: Northern North Sea, 160km east of the Shetlands and 12 km west of Tern Hull size: Sevan 400 Under construction at the Cosco yard in China

Sevan FPSOs current major prospects

FPSO w/SCR

Sevan FSOs current major prospects

Pre-FEED ongoing

Pre-qualification performed

Sevan FLNG concept

Topside

Hull and containment

Offloading based on HiLoad

• Marketing ongoing
• More than 20 FLNG projects
• Encouraging response from several IOCs
• Conceptual design completed
• Liquefaction technology: KANFA Aragon's Dual Nitrogen Expansion
• Liquefaction capacity: 2.4 mtpa
• Storage capacity: 220,000 m³
• HiLoad technology for offloading

• Constructability study with major Korean yard

• Second quarter highlights

• Floating Production (FPSO, FSO, FLNG)
• Other Applications (Drilling, Accommodation)
• Investments (Logitel, KANFA, KANFA Aragon)
• Financials
• Outlook

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

Sevan MODU MKII and Sevan Arctic MODU

• Concept study for Arctic MODU ongoing in co-operation with Sevan Drilling/North Atlantic Drilling/Seadrill

Proven technology: Sevan designed Accommodation Units

Six FAU Options with the Cosco Shipyard

• Teekay Offshore Partner has completed the acquisition of Logitel Offshore
• Logitel Offshore has the option to build 6 more FAUs at the Cosco Shipyard

• The first option was exercised in August 2014, with delivery Q3 2016

• Second quarter highlights

• Floating Production (FPSO, FSO, FLNG)
• Other Applications (Drilling, Accommodation)
• Investments (Logitel, KANFA, KANFA Aragon)
• Financials
• Outlook

Logitel Offshore

• Teekay has acquired Logitel with the intention to become a major player in the market for Floating Accommodation Units (FAUs)
• Hence representing a new business stream for Sevan
• Teekay has exercised the first of six options to build another Floating Accommodation Unit (FAU) based on the Sevan design. The current building programme is three units

Logitel Offshore cont'd

• Sevan is relieved from its exposure as "intervening party" under Logitel Offshore's employment contract with Petrobras
• Repayment profile and maturity for the Convertible to be amended to six instalments of 10 MUSD per unit delivered
• Sevan will receive license fees and provide services, as further FAUs are built by Teekay Offshore Partner

KANFA Technip transaction - strategic rationale

Technip has a global footprint and is one of the world's leading oil & gas services groups

• The cooperation with KANFA is expected to provide:
• ‒ New opportunities to develop the North Sea business
• ‒ Access to other oil and gas markets
• KANFA continues to focus on:
• ‒ Existing business model
• ‒ Support Technip in offshore FEED and EPC projects on the NCS

KANFA

• KANFA has 50 employees, with main offices is in Asker, Norway
• Currently involved in the execution and delivery of process equipment packages for projects like Edvard Grieg, Piranema, Aasta Hansteen, Nyhamna and Martin Linge
• 2 new orders for process equipment packages (Ivar Aasen, Odfjell Drilling) and a FEED study for the THHE Process Topside Layang FPSO won in Q2
• High tendering activities are expected to materialize in new orders within the coming weeks and months

KANFA Aragon

A process technology company focusing on FLNG as well as traditional gas processes

• Patented FLNG liquefaction process based on an optimized dual nitrogen expander cycle
• Traditional gas processing and gas conditioning includes:
• ‒ Gas compression
• ‒ Gas dehydration, CO2 and H2S removal
• ‒ Dew point control
• ‒ Etc

KANFA Aragon

• Located in Bergen, Norway
• 25 employees
• Has designed the 2.4 mtpa topside for the Sevan FLNG concept
• Involved with the dehydration (TEG) and vapour gas recovery packages for the Aasta Hansteen project
• Involved in various FLNG Pre-FEED studies

• Has recently established an engineering company in Houston, Texas together with five experienced engineering professionals in the Gas Processing and LNG Industry

• Second quarter highlights

• Floating Production (FPSO, FSO, FLNG)
• Other Applications (Drilling, accommodation)
• Investments (Logitel, KANFA, KANFA Aragon)

• Financials

• Outlook

Q2 2014 – Profit & Loss statement

Unaudited figures in USD million	Q2 14	Q1 14	Q2 13	Comment
Operating revenue	27,4	24,6	25,7	Increased revenue KANFA
EBITDA	1,2	1,6	3,6	Same activity level as Q1; one-off effects in Q2/13
Operating profit	1,1	1,5	3,5	As above
Net profit	1,4	2,3	25,3	Deconsolidation of Voyageur in Q2/13

Stable activity level (approximately MUSD 100 per year)

Note: See press release and Q2 2014 interim report dated August 19, 2014 for a more detailed description of the Q2 interim financial results.

Q2 2014 – Balance Sheet

Unaudited figures in USD million	30.06.2014	31.03.2014	31.12.2014	30.06.2013	Comment
Sevan Capital Assets	-	-	-	-	Voyageur deconsolidated in Q2/13
Intangible assets	13	13	13	13	Related to KANFA
Deferred income tax assets	8	8	8	8
Loan	60	60	60	51	Loan to Logitel
Other non-current assets	8	6	4	2
Total non-current assets	89	86	85	74
Trade and other receivables	39	42	41	32	Working capital changes
					Healthy cash position after paying
Cash and cash equivalents	36	37	39	53	dividend of MUSD 10.5
Total current assets	75	79	80	84
Assets of Disposal Group (*)	-	-	-	-
Total assets	163	165	165	158
Total equity	127	129	126	120	Paid out dividend NOK 1.2 per share
Total non-current liabilities	3	3	4	5
Total current liabilities	33	33	35	33
Total liabilities	36	36	39	38
Liabilities of Disposal Group (*)	-	-	-	-
Total equity and liabilities	163	165	165	158
equity-% excl. minority interest	71 %	76 %	75 %	75 %

Asset light and high equity

• Second quarter highlights
• Floating Production (FPSO, FSO, FLNG)
• Other Applications (Drilling, accommodation)
• Investments (Logitel, KANFA, KANFA Aragon)
• Financials
• Outlook

Outlook

• Generally positive for the FPSO/FSO market segment
• Increased focus on cost effective solutions should be an advantage for Sevan
• Tighter monitoring of capital expenditure may lead to longer tendering processes and postponements of certain projects
• The drilling segment is expected to remain challenging in the short and medium term
• The co-operation with Sevan Drilling / NADL / Seadrill is expected to generate new opportunities in the longer term
• Teekay's entry into the FAU market is positive for Sevan
• Is likely to generate increased activity in the short and medium term
• The co-operation with Technip is expected to open a larger market for KANFA
• In terms of project size and geographic reach
• Expectations of paid studies for further development of FLNG concept
• Medium term