Magnora ASA

Investor Presentation • Aug 25, 2016

Sevan Marine ASA

Results

Second Quarter 2016

Oslo, August 25, 2016

Carl Lieungh, CEO

Reese McNeel, 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 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.

Proven designs – with unique benefits

Piranema Spirit Hummingbird Spirit Voyageur Spirit Goliat Western Isles

4 Drilling Units

Sevan Driller Sevan Brasil Sevan Louisiana Sevan Developer

2 Logitel Units

Arendal Spirit Stavanger Spirit

Q2 - Highlights

• Continuing work on UK sector FPSO prospect
• Continuation of FLNG study with U.S. oil major for a specific field
• Award of feasibility studies (some 5,000 hours through year end)
• Logitel Rigs 2 and 3 construction contracts terminated by Logitel
• Topside and Process results significantly improved driven by OCTP project margin recognition
• Sale of KANFA Aragon

Strategic Review Update

• Pareto Securities appointed in April 2015 to support process
• Offers received for core Sevan Marine assets representing a discount to market cap
• Sevan Marine will focus on its development as a standalone Company
• Sevan Marine will work closely with industry partners to promote and develop further its unique cylindrical hull design
• On a stand alone basis, Sevan Marine is well positioned to offer its design across the entire floating production value chain

Floating Production (FPSO, FSO, FLNG)

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Sevan FPSO - Goliat

• Installed summer 2015
• In operation since March 2016
• Good feedback on how the vessel behaves and operates
• 70 MW electrification through a 105 km HVAC cable from shore!
• Continued support by Sevan Marine
• Potential regularity bonus

Sevan FPSO – Western Isles

• First oil planned for Q4 17
• Plateau production is expected to be around 40,000 boepd
• The estimated field life is 15 years
• Continued support from Sevan Marine
• Sevan Marine will receive 50 cents per produced barrel when in operation

Sevan FPSO – UK based oil major

• Sevan Marine entered into a license agreement for 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 now expected during the first half of 2017
• Sevan Marine has been carrying out detailed engineering for the hull under the service agreement entered into
• Currently supporting the client in the bid evaluation phase

Sevan FLNG – U.S. based oil major

• Sevan Marine was last year awarded a feasibility study with an oil major to explore the use of Sevan Marine's cylindrical hull for a specific FLNG development
• Sevan Marine is now working on a follow up study focusing on the hull and marine aspects of Sevan Marine's unique cylindrical design
• This study will continue until the end of 2016 and represents yet a further milestone in the development of Sevan Marine's FLNG concept

HiLoad LNG Regasification

• The first license and service agreement was signed in early January 2016 with Vires Energy Corporation ("Vires") to support their regasification project in the Philippines
• Payment under the license agreement is subject to Vires constructing and operating the regasification terminal
• Pre-FEED work has been completed and currently in discussion with Vires regarding FEED contract and way forward

Other Applications (Drilling, Logitel)

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Proven technology – Sevan designed drilling units

• Units owned and operated by Sevan Drilling / Seadrill
• Sevan Marine has all technology and IP rights
• Sevan Marine has developed MKII and arctic design

Proven technology – Sevan designed Logitel units

• Unit owned and operated by Teekay/Logitel
• Sevan Marine has all technology and IP rights

Investments (KANFA)

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KANFA

• A process technology company focused on delivering 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
• OCTP project delivered in the quarter with additional margin recognized
• Technip has the option in 2017 to acquire KANFA AS based on a multiple of 2014, 2015 and 2016 results

Financials

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Q2 2016 Highlights

Floating Production:.

• Approximately USD 1.3m of loss related to further restructuring measures and one-off costs
• Some USD 1.1 million driven by lack of workload, not offset by cost measures

Topside and Process:

• Further margin recognized on OCTP project in KANFA AS as project was delivered in quarter
• KANFA Aragon postive result for quarter of USD 0.5m. Sold to SembCorp on 28 June 2016

EBITDA (USD Million)

Note: Topside and Process includes KANFA AS and KANFA Aragon which are fully consolidated. Sevan ownership is 51% in KANFA AS

Q2 2016 Cash Flow

• USD 31.7 million in cash at end Q2 2016
• Majority of cash (USD 26.9 million) in Floating Production, USD 4.8 million in Topside and Process
• Negative cash flow in Topside and Process is driven mainly by working capital in relation to OCTP project
• Cash flow in Floating Production is driven by poor underlying cash development offset by sales proceeds from KANFA Aragon

Cash Flow (USD Million)

Cost reduction summary - MNOK

• Substantial cost reductions achieved in past 18 months
• Group Headcount down from 203 to 110

Sevan Marine Value Components

• Cancellation of rigs 2 and 3 leading to further accounting impairment of USD 13 million in quarter
• Sevan Marine maintains that substantial claims can be made against involved parties and is dedicated to realizing the underlying values and outperforming impairments taken for the benefit of all shareholders
• The Board has decided as a first step to:
• − commence legal action against Logitel Offshore Pte Ltd claiming payment of an amount exceeding USD 60 million in relation to the Logitel loan, and;
• − commence arbitration against both Logitel Offshore Pte Ltd and Teekay Offshore Partners LP claiming payment of an amount of approximately USD 10 million in relation to the Fourpartite Agreement
• Sevan Marine reserves the right to, at any time, pursue other involved parties. Agreements suspending timebar limitations have been entered into with such involved parties
• The outcome of the situation, including potential recovery and timing thereof remains uncertain

Outlook 2016

• Continue to work on ENI, DANA ,UK FPSO and FLNG projects
• Cancellation of Logitel Offshore rigs Nr. 2 and 3
• Delays on near term work prospects (Bentley and FRD for example)
• 2016 revenue and profit targets will be missed
• Further cost reductions required
• Additional effort to secure work for 2016 and 2017
• Need to invest in further development work and smaller studies to secure work in future
• KANFA performance likely to be challenging in H2 given market situation

Q1 2016 – Profit & Loss statement

Unaudited figures in USD million	Q2 16	Q1 16	Comment
Operating revenue	16,9	21,0	Reduced activity in Q1 Floating Production (USD1.0m). Reduced project progress in Topside and Process mainly from OCTP project (USD 3.1m).
EBITDA	-0,3	-7,0	Increase in Floating Production (USD 5.2m) mainly due to impairment of Logitel variable fee of USD 5.0m in Q1. Increase in Topside and Process performance (USD 1.5m) due to improved project performance.
Operating profit	-0,4	-7,1
Net profit	-11,6	-8,1	Impacted by impairment of USD 13.0m related to Logitel Loan and NOK 20.0m gain on sale of KANFA Aragon

Logitel loan impairment impacting net profit EBITDA positvely impacted by Topside and Process performance of USD 2.1m

Q1 2016 – Balance Sheet

Unaudited figures in USD million	30.06.2016	31.03.2016	Comment
Intangible assets	1	1	Related to software & rights
Loan	-	13	Carrying value of Logitel Loan impaired in quarter
Other non-current assets	6	6	Accrued Logitel variable fee of USD 5m
Total non-current assets	7	20
Trade and other receivables	14	15	USD 4m in Floating Production and USD 10m in Topside and Process segment.
			USD 27m in Floating Production and USD 5m in Topside and Process segment. Decrease mainly related to working capital changes in Topside
Cash and cash equivalents	32	41	and Process segment
Total current assets	46	56
Total assets	53	76
Total equity	28	42
Total non-current liabilities	1	1	USD 0.7m in Floating Production and USD 0.4m in Topside and Process segment
			USD 11m in Floating Production and USD 23m in Topside and Process segment. Decrease mainly related to working capital changes in Topside
Total current liabilities	24	34	and Process segment
Total liabilities	25	35
Total equity and liabilities	53	76

Q2 2016 – Segment Assets

Unaudited figures in USD million	FP	T&P	Q2 16	Comment
Non-current assets
Intangible assets	1,2	-	1,2	IT, software and rights
Loan	-	-	-	Carrying value of Logitel Loan impaired
Other non-current assets	5,9	0,0	5,9	USD 5m Logitel Variable Fee estimate
Total non-current assets	7,1	0,0	7,1
Trade and other receivables
Short term portion Logitel variable payment	-	-	-
Trade receivables	2,1	1,4	3,5
Project accruals	0,4	8,1	8,5	Mainly related to OCTP project in T&P
Prepaids	1,3	0,2	1,5
Other	0,2	0,3	0,5
Total trade and other receivables	4,0	10,0	14,0
Cash and cash equivalents
Total cash and cash equivalents	26,9	4,8	31,7
Total assets	38,0	14,8	52,8

Floating Production assets excludes NOK 3.5 billion in tax losses

Note: Excludes intra and intersegment assets

Q2 2016 – Segment Liabilities

Unaudited figures in USD million	FP	T&P	Q2 16	Comment
Non-current liabilities
Retirement benefit obligations	0,7	0,1	0,8
Deferred tax	-	0,3	0,3
Total non-current liabilities	0,7	0,4	1,1
Current liabilities
Debt to credit institutions	-	-	-
Trade creditors	0,6	3,6	4,2	Mainly related to OCTP project in T&P
Project accruals	0,2	7,6	7,8	Mainly related to OCTP project in T&P
Tax dispute 2012	1,1	-	1,1	Provision for remaining disputed tax 2012, interest and penalties.
Piranema fine	3,6	-	3,6
VAT & public duties	1,0	0,6	1,6
Employee related accruals	2,7	0,9	3,6
Other	1,4	0,4	1,8
Total current liabilities	10,6	13,1	23,7
Total liabilities	11,3	13,5	24,8

Working capital largely driven by OCTP project in Topside and Process Segment

Note: Excludes intra and intersegment liabilities

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Strategic Focus - Channels to the market

North Sea

• Sevan has gained operational experience in the North Sea since 2007
• Voyager and Hummingbird are operating. Western Isles are under construction and the 'UK prospect' is in its EPC bidding stage
• Several prospects (indicated with the 'red dots') have been chased over the past years
• Very few final investment decisions made in 2016, however, expectation is that several more will be made in 2017

Sevan's strategy is to target small to medium size projects in the North Sea with a very cost efficient and

Barents Sea

• Thirteen companies are offered ten production licenses in the 23rd licensing round
• The Goliat platform for ENI was put in operation in March 2016 as the first floating production facility in the Barents Sea
• The installation includes 70 MW electrification through a 105 km HVAC cable from shore

Sevan's strategy is to target "Goliat size" projects in the Barents Sea with a very cost efficient and proven solution as well as the experience and suitability for electrification

Gulf of Mexico / Ultra Deep Water

• Floating production field developments in the GoM dominated by SPAR, TLP and Semi- submersible concepts
• FPSO developments in the GoM have flexible risers and disconnectable turret
• Sevan has, together with RPSEA, Doris Inc., the OTRC at Texas A&M, carried out further research and model scale testing of Sevan Marine's cylindrical hull for application in GOM ultra deep water

Sevan's strategy is to target the ultra deep GoM market by use of steel catenary risers (SCR). In doing so we need to qualify for a non-disconnectable solution during hurricane with cargo

Sevan SCR FPSO – Main Benefits

• Harsher environment
• Moving to deep and ultra deep water
• Higher pressures and temperatures calls for steel pipes
• No pipeline infrastructure, need oil storage and oil offtake system
• Disconnectable ship shaped FPSO with turret/swivel is more costly
• Sevan FPSO will be permanently moored and non-disconnectable

Gas market – FLNG

• The oversupply of LNG that has developed over the past year has impacted ongoing FLNG contracts as well as several planned FLNG projects
• Sevan Marine is addressing the FLNG with a cost effective solution based on proven elements
• The ongoing feasibility study with the U.S. based oil major is an important recognition of the design
• In dialog with several potential clients

Gas market – FSRU

• Five FSRU contracts or term sheets for floating regas units have been signed over the past year. However, some pending contracts for FSRUs are proving hard to tie down
• Sevan Marine is addressing the FSRU market with its novel Floating Regas Dock (FRD) solution based on the HiLoad LNG technology
• The current focus is on the ongoing discussions with Vires on a regasification solution to the Philippines
• In dialog with several potential clients

Outlook

• The FPSO/FSO/FLNG market
• − Focus on cost effective solutions is an advantage and is leading to increased market interest
• − Study work for FLNG application very positive
• − Positive continuing progress on UK sector FPSO prospect
• − Winning of smaller studies very positive
• − Remainder of 2016 and early 2017 will be challenging given slow down in existing projects, delays occurring on many prospects and continuing reluctance of oil majors to invest

• The Topside Process Systems market

• − Workload for remainder of 2016 is low
• − The number of prospects is picking up which may improve the outlook for 2017
• − A takeover by Technip or pursuit of other strategic options looks increasingly likely

• Strategic Review

• − Focus on Sevan Marine as a standalone Company
• − Need to further reduce costs while increasing investment in technology and business development
• − Need to work closely with partners