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Magnora ASA

Investor Presentation • Feb 26, 2014

3659_iss_2014-02-26_e4e54b54-cae0-4b3c-be06-8117dbfd6106.pdf

Investor Presentation

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Sevan Marine ASAPresentation of fourth quarter results 2013

Hotel Continental, Oslo, February 26, 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 RESTRUCTURING, THE COMPANY'S BUSINESS, SEGMENTS, DEVELOPMENT, MANAGEMENT, FINANCING, MARKET ACCEPTANCE AND RELATIONS WITH CUSTOMERS, ABILITY TO SECURE EMPLOYMENY FOR ITS TWO HULLS, ABILITY TO IMPLEMENT COST REDUCING INITIATIVES, THE COMPANY'S TECHNOLOGY AND OFFSHORE UNIT DESIGN, LATENT LIABILITIES ASSOCIATED WITH DIVESTED BUSINESSES, 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. MOREOVER, THE CONTEMPLATED RESTRUCTURING IS ASSOCIATED WITH UNCERTANTIES AND MAY BE CONSUMMATED IN A MANNER THAT DEVIATES FROM THE DISCUSSIONS CONTAINED IN THIS PRESENTATION, OR NOT AT ALL. READERS ARE CAUTIONED THAT, EVEN IF THE RESTRUCTURING IS CONSUMMATED, THE COMPANY MAY NOT ACHIEVE THE BENEFITS FROM THE RESTRUCTURING, OR SUCCESSFULLY BE ABLE TO IMPLEMENT ITS STRATEGIES, IMPLIED BY THIS PRESENTATION. 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.

•Fourth Quarter Highlights

  • •Floating Production (FPSO, FSO, FLNG)
  • •Other Applications (Drilling, Accommodation, etc.)
  • •Investments
  • •Financials
  • •Outlook

Highlights

•Operations

  • o Operating revenue was USD 5.1 million higher than previous quarter
  • oMainly due to a settlement with Samsung on the Flex LNG project ( USD 4.8 million)
  • o Operating expense was USD 6.5 million higher than previous quarter mainly due to:
  • o A restructuring settlement of USD 2.9 million by which Sevan has been cleared of potential future office lease obligations
  • oCosts related to the settlement with subcontractors on the Flex LNG project
  • oUnpaid tendering and BD work in Sevan

•Sales

  • o High tendering activities for FPSO/FSO studies during the quarter as well as tendering for the Catcher project with Teekay. Unfortunately, the latter appears to be lost
  • oProgressing the Sevan concept for FLNG with acquisition of the HiLoad technology for offloading.
  • oKANFA has secured 4 new process packages at a total amount of approx. NOK 40 million
  • oLogitel Offshore entered into a 3 year charter contract with Petrobras commencing end 2014

•Finance

oCash end Q4 13 increased by USD 1.1 million compared with previous quarter

4

  • •Fourth Quarter Highlights
  • •Floating Production (FPSO, FSO, FLNG)
  • •Other Applications (Drilling, Accommodation, etc.)
  • •Investments
  • •Financials
  • •Outlook

Proven technology: Sevan designed FPSOs

Field operator: E.ON Field: Huntington Location: UK Central Water depth: 91m Hull size: Sevan300

Goliat

Field: GoliatLocation: Sub-arctic Barents SeaHull size: Sevan 1000 Under construction at the HHI yard in Korea

Field operator : ENI

Western Isles

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

Sevan FPSO Current Prospects

Penguins

A number of FPSO prospects have been identified among several potential clients

Sevan FSO Current Prospects

Currently working with Teekay Shuttle and Offshore on potential prospects

FSO

FSO with bridge to Prod. Platform

FSO close to Prod. Platform

Sevan FLNG Concept

Topside

Hull and Containment

Offloading based on HiLoad

Main Features

  • •No turret, no swivel
  • • SPB or membrane cargo containment system
  • • Dual Nitrogen expansion or MR liquefaction technology
  • • 220,000 m³ LNG storage

Status

  • •Proven hull
  • • Proven cargo containment systems
  • • Proven liquefaction technologies

  • • Offloading systems under development

  • •Fourth Quarter Highlights

  • •Floating Production (FPSO, FSO, FLNG)
  • •Other Applications (Drilling, Accommodation, etc.)
  • •Investments
  • •Financials
  • •Outlook

Proven technology: Sevan designed units

Sevan Driller

Field operator: Petrobras Field: Pre-salt BrazilBuilding year: 2009 Design: Sevan 650

Sevan Brasil

Field operator: Petrobras Field: Pre-salt BrazilBuilding year: E2012 Design: Sevan 650

Sevan Louisiana

Field operator: LLOG BluewaterLocation: US Gulf of MexicoBuilding year: E2013 Design: Sevan 650

Sevan Developer

Design: Sevan 650 Building year: 2013 /2014 Yards:Cosco Shipyard, China

Logite Offshore – Two Accommodation Units

Logitel Offshore has entered into a 3 year charter contract with Petrobras commencing end 2014 for the provision on one accommodation unit, currently under completion at the COSCO yard in China, to be stationed offshore Brazil.

A partner based approach to new concept development

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  • •Fourth Quarter Highlights
  • •Floating Production (FPSO, FSO, FLNG)
  • •Other Applications (Drilling, Accommodation, etc.)
  • •Investments
  • •Financials
  • •Outlook

Status on Logitel Offshore

  • • Two Floating Accommodation Units (FAUs) under construction at the Cosco Yard in China
  • • Sevan holds a convertible bond of USD 60 million. The bond has been structured as a bullet loan, with a 3 per cent coupon. The loan can be converted, upon certain conditions, by Sevan, into shares in Logitel Offshore

Status on Logitel Offshore

  • • Logitel Offshore has entered into a 3 year charter contract with Petrobras commencing end 2014 for the provision of an accommodation unit
  • • Logitel is reporting progress according to schedule and budget at the yard
  • • Sevan will earn a license fee of USD 5 million for each of FAUs currently under construction. A license fee of USD 10 million has been agreed for any future FAU based on the Sevan design

Status on KANFA Group

  • • 4 new process equipment packages secured in Q4 (total amount approx. 40 MNOK)
  • • KANFA has secured process equipment packages with a total value of approx. 340 MNOK in 2013
  • • Market outlook for 2014 looks softer in general for delivery of process equipment packages. However, remains favourable in terms of securing more engineering studies

KANFA – Growth Strategy

FUTURE

Seek strategic partner with complementary competencies

•

•

•

  • Diversified revenue mix between engineering, process equipment packages and process modules
  • Continue to grow the top line and secure robust financial performance

17

  • •Fourth Quarter Highlights
  • •Floating Production (FPSO, FSO, FLNG)
  • •Other Applications (Drilling, Accomodation, etc.)
  • •Investments
  • •Financials
  • •Outlook

Q4 2013 – Profit & Loss statement

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19Note: See press release and Q4 2013 interim report dated February 25, 2014 for a more detailed description of the Q4 interim financial results.

Q4 2013 – Balance Sheet

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Only minor changes

Note: See press release and Q4 2013 interim report dated February 25, 2014 for a more detailed description of the Q4 interim financial results.

20

Q4 2013 – Outstanding Issues

  • •Agreement with ONGC signed in January. Payment expected within Q1 14 (MUSD 3)
  • •Piranema fine – provision reduced in Q4 (MUSD 1)

  • • Performance guarantee for Sevan Drilling towards Petrobras (guarantee for Sevan Drilling towards lenders was released in October)

  • •Fourth Quarter Highlights

  • •Floating Production (FPSO, FSO, FLNG)
  • •Other Applications (Drilling, Accommodation, etc.)
  • •Investments
  • •Financials
  • •Outlook

Outlook

Operation

•Continue to support the projects under construction, i.e. Goliat and Western Isles

Sales

  • •Secure FPSO, FSO and FLNG studies
  • •Secure FPSO/FSO license agreements with Teekay
  • •Secure license agreements directly with Oil Companies

KANFA

•Continue the growth strategy

LOGITEL

  • •Continue to support LOGITEL throughout the execution phase of the two vessels under construction
  • •Continue to support LOGITEL in their efforts to secure a charter contract for vessel #2

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