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Prosafe SE Investor Presentation 2010
3718_rns_2010-09-01_fb9f50fb-cb25-4318-828f-22314af8532f.pdf
Investor Presentation
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Prosafe Production
September 1, 2010
Pareto Securities Oil & Offshore Conference
Prosafe Production
Disclaimer
All statements in this presentation other than statements of historical fact are forward-looking statements, which are subject to a number of risks, uncertainties, and assumptions that are difficult to predict and are based upon assumptions as to future events that may not prove accurate. Certain such forward-looking statements can be identified by the use of forward-looking terminology such as “believe”, “may”, “will”, “should”, “would be”, “expect” or “anticipate” or similar expressions, or the negative thereof, or other variations thereof, or comparable terminology, or by discussions of strategy, plans or intentions. 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 presentation as anticipated, believed or expected. Prosafe Production does not intend, and does not assume any obligation to update any industry information or forward-looking statements set forth in this presentation to reflect subsequent events or circumstances.
Prosafe Production
Prosafe Production - in brief
- One of the world's leading FPSO contractors
- Fleet of 11 units
- Eight FPSOs
- Two FSOs
- One VLCC conversion candidate
- 25 years of track-record in converting and operating FPSOs and related technology
- Excellent operational uptime
- Good Health, Environment and Safety records
- Proprietary technology
- Approx. 1,000 employees worldwide
Prosafe Production
Summary Q2 10
- EBITDA of USD 59.7 million
- Robust operational performance
- Improved market balance
- Board recommends not to accept offer from BWO
- Process of exploring strategic alternatives – including by actively pursuing other buyers - continues
Prosafe Production
Operations
- Financial results
- Operations
- Market outlook
- BWO offer
5
Prosafe Production
Solid operational performance
- Strong uptime delivered to clients over time
- All new units operating according to plan
- Robust HSE performance
World class operations
Combined fleet uptime per quarter
Prosafe Production
Contract status
- 50% ownership. Fred. Olsen Production holds remaining 50%
- 50% ownership. Equinox holds remaining 50%
Conversion/yard stay
Availability dayrate
Firm contract
Option
Prosafe Production
Proposed changes to lease accounting
- New model on accounting for leases proposed in an Exposure Draft issued 17 August 2010 by IASB/FASB
- Operational leases to be booked as financial leases
- Limited impact on Prosafe Production’s balance sheet
- But clients will most likely have to recognize operational leases on their balance sheets
- Can have implications for the structure of the FPSO market in the long-term
Prosafe Production
Market Outlook
- Financial results
- Operations
- Market outlook
- BWO offer
9
Prosafe Production
Improved market balance
- 15-20 FPSO contract awards expected annually next five years
- Execution capacity on supply side significantly reduced in last few years
- Improved market balance
- Substantial part of market is in challenging areas:
- High local content requirements
- Lack of infrastructure
Possible projects next five years by region
No of players actively pursuing projects
Prosafe Production
Positive short-term outlook
- Possible FPSO lease contracts next 12 months:
- Australia: 2
- Brazil: 7
- WA: 3
- SE Asia: 6
- Prosafe Production is well positioned in key regions
- Few redeployment candidates available will favor new conversions
Historical and expected FPSO orders
Source: Fearnley Offshore
BWO offer
Prosafe Production
Financial results
Operations
Market outlook
BWO offer
12
BWO offer
Board recommends to reject
Prosafe Production
- BWO announced intention to put forward an offer of all outstanding shares in Prosafe Production on 21 June
- The offer was formally put forward on 27 July – offer period lasts to 25 August
- Relevant offer price: 1.2 BWO share + NOK 2.00 in cash per PROD share
- Board of Directors recommends shareholders not to accept the offer as it does not reflect underlying values
- Process of exploring strategic alternatives continues
- Including actively pursuing alternative bidders to present an alternative offer
13
Prosafe Production
BWO offer – valuation
- Offer worth NOK 11.0 per share as of 31 August
- PROD share price at NOK 12.9
- Financial analysts' price targets in range of NOK 16-19*
- BWO has valued its ownership in Prosafe Production at USD 185m in the balance sheet – corresponding to about NOK 19 per share
- Based on DCF valuation (according to Annual Report 2009)
- VWAP share price (prior to offer):
- 1 month: NOK 13.5 (offer discount 19%)
- 3 months: NOK 14.2 (offer discount 23%)
-
12 months: NOK 12.9 (offer discount 15%)
-
Reports published after release of Q210 figures on 16 Aug. according to Factset
Prosafe Production
Summary
- EBITDA of USD 59.7 million in Q2 10
- Robust operational performance
- Improved market balance
- Board recommends not to accept offer from BWO
- Process of exploring strategic alternatives – including actively pursuing other buyers - continues
Prosafe Production
Contact details
Prosafe Production Public Limited
City House, 3rd Floor
6 Karaiskakis Street
CY-3032 Limassol
Cyprus
Phone: +357 2550 3120
Fax: +357 2550 3001
e-mail: [email protected]
Prosafe Production Services Pte Ltd
1 International Business Park
10-01 The Synergy
Singapore 609917
Singapore
Phone: +65 6665 6200
Fax: +65 6567 5110
e-mail: [email protected]
Investor Relations contact
Sven Børre Larsen
EVP and CFO
Tel.: +65 6302 0321
Mob.: +65 9657 2590
E-mail: [email protected]
www.prosafeproduction.com