Transcript Slide 1

Mosvold Jackup Ltd.
Cost efficient jackup’s tailor-made to
meet Middle Eastern demand
Pareto Offshore Seminar
September 2006
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Table of contents
•Introduction
•Overview of Middle East market
•Corporate and project description
•Financials
•Investment considerations
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Why build a Rolls Royce when a BMW will do ?
•Middle East is the fastest growing jack-up market in the world
•More than 90% of acreage relevant for jack-ups can be drilled by
300ft units
•As evidenced by recent ME contracts, dayrates for a 27 year old 300ft
jack-up on long term contracts have been secured at levels only 17%
below the most capable 350-400ft newbuilds
•Current all-in project price for the Mosvold units is 27% less than the
last 350-400 ft newbuilds ordered
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Middle-East – more oil reserves than the rest of
the world combined and 1/3 of global offshore
reserves
Total proven offshore oil reserves
Proven oil reserves by region
10 %
3%
5%
9%
34 %
12 %
66 %
61 %
North America
S & C America
Europe & Eurasia
Middle East
Africa
Asia
Source: BP Statistical Review of World Energy June 2006
Middle East Rest of world
Source: OPEC
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Middle-East – the fastest growing jack-up
region in the world
Recent Fixtures
Company
Rig
Design
WD
Operator
Dayrate
Country
Duration
Rowan
Hank Boswell
Tarzan Class
300'
Saudi Aramco
USD 188,000
Saudi Arabia
4 years
Rowan
Scooter Yeargain
Tarzan Class
300'
Saudi Aramco
USD 188,000
Saudi Arabia
4 years
GSF
GSF Key Hawaii
Mitsui 300-C
300'
Dolphin Energy
USD 195,000
Qatar
6 months
Rowan
Gilbert Rowe
116-C
350'
Maersk Oil
USD 195,000
Qatar
2 years
Rowan
Rowan Paris
116-C
350'
Maersk Oil
USD 195,000
Qatar
2 years
GSF
High Island I
MLT 82-SD-C
250'
Saudi Aramco
USD 164,000
Saudi Arabia
4 years
GSF
High Island II
MLT 82-SD-C
270'
Saudi Aramco
USD 164,000
Saudi Arabia
4 years
GSF
Main Pass I
F&G L-780-II
300'
Saudi Aramco
USD 164,000
Saudi Arabia
4 years
GSF
Main Pass IV
F&G L-780-II
300'
Saudi Aramco
USD 164,000
Saudi Arabia
4 years
Thule Drilling
Thule Power
BMC-200-H
250'
Saudi Aramco
USD 147,260
Saudi Arabia
4 years
PV Drilling
PV Drilling I
KFELS MOD V B
300'
Huan Vu
USD 219,000
Vietnam
2 years
Middle East Jack-up's
250/300 ft JU Dayrates in the Middle East
90 %
80
80 %
70
70 %
Supply
Demand
Utilization
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Utilization
Demand and Supply
Dayrate
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Source: ODS Petrodata/Pareto Offshore
Middle-East - 300ft units perfectly suited
- average waterdepth 115ft
ME definition:
Saudi, Qatar, UAE, Bahrain,
Oman, Iran and Egypt
Summary ME (ex Egypt)
Today
61
Units by 07
75
Need by 08E
92
Source ODS/Pereto Offshore
Today:
9 JU
Units by end 07: 9 JU
Need by 08E: 14 JU
Source ODS/Pareto Offshore
Today:
19 JU
Units by end 07: 25 JU
Need by 08E:
30 JU
Source ODS/Pareto Offshore
Today:
19 JU
Units by end 07: 27 JU
Need by 08E:
30 JU
Source ODS/Pareto Offshore
Today:
14 JU
Units by end 07: 14 JU
Need by 08E:
18 JU
Source ODS/Pareto Offshore
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Mosvold Jackup Ltd. (Cayman) - Summary
• Established by Mosvold Shipping
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Ltd. in April 2006
Listed on the OTC
Turnkey construction contract
with Maritime Industrial Services
Co. Ltd. Inc. (Dubai – UAE) for
2+2 jackups
Turnkey contract price USDm
126, all-in delivered price USDm
143
Delivery August 2008 and
December 2008
USD 90 million in Equity raised.
Sufficient equity in place to allow
for debt financing, for instance
– Bonds 20%
– Bank loans 50%
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Mosvold – an experienced shipping and
offshore services group
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The Mosvold family has continuously been active in shipping since 1910
First investment in offshore: Part ownership of semi early 80ies
Acquired 3 modern J/Us from Keyes Offshore in 1989
Mosvold Shipping was IPO’d on the Oslo Stock Exchange in 1990
Acquired 100% of Dual Drilling Co in 1990. Dual was a Dallas based worldwide
drilling contractor owning 3 J/Us and 10 platform rigs
Through Dual, acquired further 3 J/Us in 1993 combined with raising new
equity/bonds and listing of Dual on NASDAQ (Mosvold Shipping retained 60% of
Dual)
Dual merged with Ensco in 1996 with payment in shares. All shares distributed to
Mosvold shareholders
Board member Morten Borge was the CEO of Mosvold Shipping during the “Dual
Drilling Period” he also served as Chairman of the Board of Dual Drilling in Dallas
Mosvold initiated a J/U project 1H 2004 to build 2 J/U (with 4 options) at PPL
Shipyard and Keppel FELS in Singapore. The entire project sold to Awilco in 2004 and
is the now the foundation of Awilco Offshore
In 2005, Mosvold founded Mosvold Drilling (That contracted two Ultra Deep Water
Drillships with Samsung) which was later acquired by SeaDrill
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Super M2 – Main features
• Design: Friede & Goldman Super M2
• 300ft enhanced leg design
• Wrap around accommodation (around
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forward leg) opening for more deck
space and more efficient
accommodation facility
Modular hull design
25,000ft drilling depth
• 110 person quarters capacity
Source: Friede & Goldman, Pareto Offshore
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Super M2 –
Increasing the capabilities of existing 300ft units
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Status report
• Supervision team in place
• All vendor agreements completed by the yard, delivery
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dates are fixed
Steel cutting commenced on hull number 1
Progress according to schedule
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The yard - Maritime Industrial Services Co. Ltd. Inc.
• Established in 1979
• Headquartered in the Jebel Ali Port near Dubai, United Arab Emirates
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– In addition to top management and administrative staff, the headquarter houses
the MIS Technical Services Division, which coordinates the management of
operations and maintenance contracts
Facilities in six different places near the Persian Gulf
– Mosvold Jackups to be delivered from the Sharjah Facility
Wide range of capabilities, amongst these marine & offshore structures
Total workforce 2,500+ (overall)
Well established customer base
ISO 9001 certified
Reputation of on-time delivery
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Panoramic View of MIS Yard Facilities at Sharjah, UAE
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PRODUCTION AREAS AND FACILITIES
142,000 Sq M Open Production Area
Open / Covered Storage Area
Camp For 500 Resident Craft Workers
Sand Blasting & Stress Relieving
Furnaces
PLATE
PROFILING
OPEN
WAREHOUSE
WORKSHOP EQUIPMENTS
Hydraulic Plate Rolling Machines up to
118mm thickness.
CNC Beam, Plate & Pipe profiling machines
600 MT and 200 MT Hydraulic Brake Press,
Shear & Plate bending machine
Two each 25 MT + 5 MT overhead cranes
servicing the entire workshop
Machine shop equipment
Submerged Arc Welding Stations
RECEIVING AND
LOADOUT FACILITIES
400 m long loadout jetty
for sea access; with a
water
depth of 8m, designed for
heavy crossing loads.
Loadout systems
including dollies, skid
beams, and rollers
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Main
Fabrication
Facilities
200,000 sq
meters.
CAMP
COAST
GUARD
MIS Sharjah Yard Facilities
Layout
MOBILE, YARD, AND AUXILIARY EQUIPMENT
16 Nos. 45-230 T capacity Crawler cranes
11 Nos. Up to 45 T capacity cranes
Forklift, Flat bed trailers, Low bed trailers (100T)
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MIS has experience with all elements required
to build a jack-up
• Conversion of jackups to permanent
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production facilities
Fabrication and supply of decks
Fabrication and supply of early
production facilities
Major hull steel renewal
Power system and cabling
Mud systems
Jacking system refurbishment
Leg extensions
Installation of living quarters
Water treatment facilities
Removal and reinstallation of cranes
Steel repair and modifications for sub
structure
Upgrade of drilling equipment
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Mosvold Jackup - capex and funding
MOSVOLD JACKUP FUNDING SUMMARY
• USD 142.5m estimated delivered
Fig in USDm
Incl. capitalised interest costs
• Total funding requirement of USDm
293
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Incl. G&A, fees and financing costs
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252
Supervision
3.5
7
OFE (Handling equipment/spares)
5.0
10
Contingencies
1.0
2
Capitalised interest costs
7.0
14
142.5
285
4.0
8
146.5
293
G&A, fees & financing
Total Funding Requirement
2006
USD 60m bond issue assumed in
2007
USD 150m of bank debt assumed
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126.0
All-in/ready to operate cost
• USD 90m of equity raised in spring
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Total
Turnkey contract price
cost
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Per Unit
Last 2 yard instalments
Representing approx 50% of all-in
cost
Bank debt
150
Bond debt
60
Equity
90
Total Funding Sources
300
Implied Cash Position at delivery *
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*) Ignoring cash flow from rig #1 until delivery of rig #2
Capex (summary)
Capex
JU #1
JU #2
Capex
Source: Company/Pareto Securities ASA
% of total
USDm
"
2006E
30%
39
39
78
2007E
25%
50
50
99
2008E
Cumul
45% Yard instalment structure
53
142
56
144
109
286
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Pro Forma Mosvold Jackup key figures
(2 jackups)
• EV USD 305m YE 08E fully invested
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– Value of 2 rig options ignored
Market cap USD 111m (NOK 19 per share)
Current JU market (USD 180-200,000/d) implying EV/EBITDA 2.8-3.2x
– P/E 1.3-1.6x
MOSVOLD JACKUP - SCENARIOS (2 RIGS ONLY)
DAY RATES
USD/Day
Utilization
Daily opex incl mgmt fee
PROFORMA P&L
Rig EBITDA
USDm
SG&A
"
EBITDA
"
Depreciation (30yrs)
"
Operating profit
"
Net financials (8% avg)
"
Net Profit
"
Cash Earnings
"
Maintenance capex
"
Free cash flow (to debt amortisation+dividends)
"
Equity value
Net debt fully invested YE 08
Enterprise Value YE 08
EV/EBITDA
P/CF
P/E
RoE (on mkt cap)
Free cash flow yield (on mkt cap)
Source: Pareto Offshore
USDm
"
"
160 000
95 %
-35 000
180 000
95 %
-35 000
200 000
95 %
-35 000
220 000
95 %
-35 000
85
-3
82
-10
73
-16
57
67
-5
62
99
-3
96
-10
87
-16
71
81
-5
76
113
-3
110
-10
100
-16
85
95
-5
90
127
-3
124
-10
114
-16
99
109
-5
104
111
194
305
111
194
305
111
194
305
111
194
305
3,7
1,7
1,9
51,5 %
55,8 %
3,2
1,4
1,6
64,0 %
68,3 %
2,8
1,2
1,3
76,5 %
80,7 %
2,5
1,0
1,1
88,9 %
93,2 %
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Shareholder information
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Number of shares issued: 36,7 million
Issue price (April 2006): NOK 19 per share
Current share price: NOK 18-19 range
Mandatory bid level at 30% vs 40% “standard”
5 largest shareholders per August 31st 2006:
Percentage
Name
Acc type
Country
29,01
12,20
6,92
6,37
Mosvold Investment L CO Mosvold Shipping
Credit Suisse Securi (Europe) LTD/Firms
Olympia Holding AS C/O Banque Invik SA
Goldman Sachs Intern Equity nontreaty Cus
NOM
CYM
GBR
NOR
GBR
5,45
Bear Stearns Security A/C Customer Safe KE
NOM
USA
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Why invest in Mosvold Jackup
• Most leveraged exposure to the fastest growing region for JU’s in
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the world
Tailor-made rigs for the Middle East
Attractive construction price and early delivery make the rigs
competitive
Favourable options provide for additional financial leverage
Construction at a reputable yard in the “heart of the Middle East”
attracts attention from local operators and reduces mobilization
cost/time
Experienced manager with good track record
Opportunistic approach to the investment
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