Transcript Mosvold Jackup Ltd - NFMF : OTC : Login

Confidential
Mosvold Supply Plc.
Pareto Oil & Offshore Conference
August 30, 2007
CEO John G. Bernander
Confidential
Mosvold Supply business opportunity
 Mosvold with opportunistic approach to high-end AHTS market
 Mosvold Supply Plc. (Cyprus) initiated and backed by Mosvold with substantial experience and track record
from offshore drilling, supply and shipping
 Pure and leveraged play on high-end, large AHTS vessels
 Based on attractive turnkey newbuild contracts and proven Vik Sandvik design
 2x AHTS (Vik Sandvik 491 Clean Design) with total USD m 167 all-in delivered price (Oct-09/Jun-10
delivery) vs approx USDm 217 quotes from western European yards
 2x individual options for similar vessels (USD m 82.5/84.5 with calls 19 Sep 2007 and 19 Jan 2008,
respectively). Expected delivery late 2010 and mid 2011
 Robust market outlook
 High-end AHTS order book balanced by strong demand (rig/FPSO/field developments), stricter safety rules
and environmental issues
 Attractive payment schedule and contract terms justifying leveraged capital structure
 USDm 32 equity and USD m 30 bond secured through Pareto Securities. USD m 112 take-out financing
 Financing of optional vessels with optimal capital structure
 Significant equity value potential
 Equity replacement value approx USD m 75 based on current newbuild quotes
 3-yr historical average AHTS day rates yielding P/E 1.2x and EV/EBITDA 3.9x (2 vessels)
 Additional value from 2x attractive newbuild options
 Alternative strategies to be actively pursued by Mosvold
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Confidential
Strong equity return potential
 Current asset replacement cost
estimated at NOKm 640 per vessel
(delivered price)
Implying USDm 217 (2x AHTS)
Ignoring value of 2x Mosvold options
 Mosvold equity worth USDm 76 on
asset replacement values

+ 117% on initial USDm 35 market cap
 Mosvold equity worth USDm 106 on
asset replacement values incl. 2x
options 1)
140
121
120
USD million
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Mosvold Supply Equity Potential
106
100
76
80
60
40
35
20
0
Initial mkt cap
 >USDm 120 equity value potential
based on 3-yr average earnings
scenario
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
EBITDA USDm 46
Assuming target EV/EBITDA 5.5x
Implying P/E 3.8x on target valuation
3.5x initial equity valuation
Repl cost
Repl cost incl
options 1)
Earnings
Potential
1) Options assumed to be USD 15m in the
money vs. alternative quotes
Source: Pareto Securities ASA
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Confidential
Mosvold – an experienced shipping and offshore services group
 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 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
 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
 Mosvold is managing the construction of two semi-submersible baredecks at the Russian yard
Sevmash. Baredecks sold to Saipem and Sea Dragon Offshore with forward delivery
 Mosvold founded Mosvold Drilling Ltd. in 2005 (2x Ultra Deep Water Drillships on order with Samsung,
acquired by Sea Drill)
 Mosvold founded Mosvold Jackup Ltd. in 2006 (2x 300 ft Jackups on order at MIS), sold to Sea Wolf
 Mosvold with innovative approach taking advantage of yard market potential, eg. MIS and Sevmash
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VS 491 CD: high capacity AHTS
- State-of-the art workhorses
Main features
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Design:
Overall length:
Breadth moulded:
Deadweight (7.9 m draft):
Speed at 6.0 m draft:
Total horsepower:
Min. bollard pull:
DP class:
Towing/anchor handling winch:
Crane capacity:
Fuel consumption:
Accommodation:
Prepared for ROV hangar
Vik Sandvik
91 m
22 m
4,000 t
17 knots
28,080
270 t
II
500 t
1x 5t, 1x 6t and 1x 10t
13.5 t diesel per day
60 persons
Well reputed equipment suppliers
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Diesel engines:
Thrusters:
Towing winches:
DP:
MAK
Brunvoll
Hatlapa
Kongsberg
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Mosvold to meet future requirements
New requirements
 MARPOL Annex 1 Reg. 12a requires double hull protection of fuel tanks
 Applicable to all vessels/newbuilding with fuel tanks of total capacity of at least 600 m3 which are
ordered after Aug 2007 and delivered from Aug 2010
 Oil companies starting to ask for ROV capability during critical anchoring
 NOX tax: NOK 15 per kilo emission. Norwegian charterers expected to require modern tonnage with
catalyzer, which may reduce emissions with 90-95%
 Possible requirement for contingency tension testing of anchors up to 300 tons in the North Sea
Mosvold well in advance to meet new requirements
 Double hull construction (DnV Clean Design notation)
 Safeguarding the environment from possible leakage
 Ships prepared for ROV with heave compensator
 Vessels with great stability and large towing and pulling capacity
 Vessels with light construction work capabilities
 Cost efficient fuel economy
 Reduces emissions of greenhouse gases
 Cost effective solution for charterers
 HYBRID propulsion system
 Straight shaft technology when steaming
 Diesel electric principles when the vessel is holding position
►The industry realized, only to late, that CD and larger vessels would be the
consequence of the new requirements
Source: R. S. Platou
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Large AHTS to be preferred going forward
- Meeting new and stricter requirements from clients and authorities
Mosvold Supply VS 491 CD
 22 m breadth
 500 t
7º tilting
Conventional / older vessel
 17 m breadth
 400 t
19º tilting
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Mosvold Supply AHTS with high-end specifications
Mosvold Supply
Siem
Havila
Farstad
Olympic
VS 491 CD
VS 491 CD
Havyard 845
UT 731 CD
Aker AH05
Loa
91
91
87
87.4
94
Breadth
22
22
22
21
23
28080
28000
23000
25000
26500
Bollard Pull
270
300
250
240
260
Winch
500t
500t
500t
500t
500t
Triple
Triple
Triple
Triple
Na
Deck
700
750
675
760
840
Accommodation
60
60
35
40
68
Max Speed
17
18
17
18
17
Economical Speed
13
12
12
13
Na
DP
2
2
2
2
2
Shark Jaws
2 x 350t
2x350t
2x350t
Na
Na
Stern Roller
SWL 600t
SWL 750
SWL 600
Na
Na
ø4m,length 8m
ø4m, length 8m.
ø4.5m, length 6m
Na
Na
Towing Pins
4 x 350t
4x350t
2x300
Na
Na
Deadweight
4000
4250
4000
3900
4925
Fuel
1550
1450
1550
1100
2800
Fresh Water
1090
1160
500
700
800
Mud
679
670
500
850
660
Dry Bulk
306
300
250
175
180
Rig Chain
670
680
610
670
800
Oilrec
1000
870
1000
1000
Na
Prep.II
II
II
Na
Na
Oct 09/Jun 10
May.09
May.09
May.09
Apr.09
Design
BHP (horse power)
Winch Drum
Stern Roller Dimention
FIFI
Delivery
Source: Mosvold and Pareto Securities
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Mosvold Supply construction program
2Q07
AHTS TBN 1
AHTS TBN 2
3Q07
4Q07
1Q08
20% payment
20% payment
2Q08
3Q08
4Q08
10% payment
10% payment
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
70% payment
70% payment
USDm 80 - to be adjusted acc. to chg. on critical equipment , callable 15 Sep 2007 with estimated delivery late 2010
AHTS Opt. 1
USD 82.5m – price adj. to reflect key equipment cost – exercise by mid Sep 07, expected delivery late 2010
USDm 82 - to be adjusted acc. to chg. on critical equipment , callable 30 Jan 2008 with estimated delivery late 2010 / early 2011
AHTS Opt. 2
USD 84.5m – price adj. to reflect key equipment cost – exercise by mid Jan 08, expected delivery mid 2011
 Favorable payment structure securing commitment from Batamec Shipyard
 20% at contract signing
 10% at key equipment delivery
 70% at final delivery
 Turnkey construction contract with parent company Otto Offshore Ltd., Labuan, Malaysia
 Contract price USDm 153
 All-in delivered price USDm 167 (incl. project development, supervision & interest)
 Refund guarantee from Bangkok Bank (BBB+)
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Batamec Shipyard with relevant expertise
 PT Batamec Shipyard wholly owned subsidiary
of Otto Marine Pte Ltd
 Otto Marine Ptd Ltd started operations in 1979
 Principal activities:
 Shipbuilding
 Ship repair & conversion
 Offshore structural engineering
 Batamec is strategically located at Batam Island,
Indonesia
 6 vessels successfully delivered since embarking
 Management comprises over 45 qualified and
on shipbuilding strategy
experienced engineers, primarily from PPL and
 Order book of 30 vessels with deliveries until 2010
Keppel Fels
 Of which 10x 10,000HP AHTS
 Total workforce: 2,200
 Certified to ISO 9001:2000 with Lloyds Register
Quality Assurance as at 25 April 2005
 Major clients:
 Tidewater
 ESNAAD
 Seatrucks
 PETRA
 RK Offshore
 Marine Subsea (Africa Offshore Services)
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Large AHTS rates holding up at record levels
- avg spot rates YTD 2007 approx USD 95,000/d
North Sea Spot Rates
(USD/day)
Current
AHTS > 12' BHP (rig moves)
Spot market
Prior Week
92,000
Last Month
74,000
Estimated 2007E effective day rate*
71,400
57,800 / 96,800
(15,000 BHP / 25,000 BHP)
Large AHTS spot day rates
200,000
 90% spot utilization (80%)
160,000
Recent fixtures
140,000
• Highland Courage $65,000
(Pareto 3Q07E: $65,000)*
• Far Sound at $65,000 (Pareto
3Q07E: $65,000)*
• Sea Lynx at $55,000 (Pareto
3Q07E: $60,000)*
• Olympic Hercules at $76,000
(Pareto 3Q07E: $85,000)*
• Far Scout at $66,000 (Pareto
3Q07E: $65,000)*
120,000
100,000
80,000
60,000
40,000
20,000
2004
2005
2006
2007
Current Spot
ec
D
ov
N
O
ct
p
Se
g
Au
l
Ju
n
Ju
M
ay
r
Ap
M
ar
b
Fe
n
0
Ja
USD/day
180,000
*Term rates and Pareto estimates are effective day rates; total rev./no. of days
Source: Johan G. Olsen Shipbrokers, Pareto estimates
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Total AHTS fleet is old – 21 years avg age
- Larger and more capable vessels will replace older vessels
50
45
40
35
30
25
20
15
10
5
AHTS > 10,000 BHP
12
20
10
20
08
20
06
20
04
20
02
20
00
20
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
19
80
19
78
19
76
19
74
19
72
19
19
70
0
AHTS > 20,000 BHP
Source: Clarksons / Pareto estimates
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Drilling and field development driving AHTS demand
- Boost in drilling activity and growing number of FPSO installations going forward
- Deepwater field development boosting AHTS vessel usage
# units
General floater activity
# units
FPSO units
%
250
250
25
Fleet
Annual growth
(#)
200
200
150
150
15
100
100
10
50
50
5
0
0
0
2003
2010E
2003
20
2010E
Annual growth 2000-2005 vs. 2006-2010
Source: ODS Petrodata, Infield, Pareto estimates
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Company set up
Corporate set-up:
Mosvold Shipping
Holding Ltd.
Est.: Cyprus, June 2007
22.9%
Mosvold Supply Plc.
Est.: Cyprus, June 2007
100%
100%
Mosvold Supply I Ltd
Mosvold Supply II Ltd
Cyprus
Cyprus
 Mosvold Supply Plc. has been established and registered in Cyprus
 No direct employees in Mosvold Supply
 Corporate governance in accordance with public company guidelines (incl. 30% mandatory
offer threshold prior to listing)
 No corporate tax (pay only local tonnage tax)
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Confidential
Board, management and largest shareholders
Board of Directors
 Roy T. Mosvold – Chairman
Management
 John G. Bernander – CEO
 Vasilios Trikoupis
 Per Tønnesen – Technical Director
 Magne Kristiansen
 Marianne Andreassen – Controller
 Eleni Georgiades
 Irene Sarvvides
Shareholder
1 MOSVOLD SHIPPING HOLDING LIMITED
2 GOLDMAN SACHS INTERNATIONAL
3 NORINVEST LTD
4 CREDIT SUISSE SECURITIES
5 CREDIT SUISSE SECURITIES
6 MORGAN STANLEY & CO. INC.
7 BJØRGVIN AS
8 MORGAN STANLEY & CO. INC.
9 CHEYNE GLOBAL CATALYST
10 TEIGEN FRODE
OTHERS
%
22.9%
11.5%
9.4%
7.3%
6.2%
5.6%
4.3%
3.6%
2.9%
2.8%
23.5%
Type
Comp.
Nom.
Comp.
Nom.
Comp.
Nom.
Comp.
Nom.
Comp.
Priv.
Nation
CYP
GBR
VGB
GBR
GBR
GBR
NOR
GBR
CYM
NOR
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Confidential
Pro forma Mosvold Supply key figures (2x AHTS)
 EV USDm 176 fully invested
 Ignoring value of 2x newbuild options
 Post-deal market cap USDm 35
 Incl. pre-money value USDm 3
 Approx 23% Mosvold ownership
 P/E 4.0x on current Pareto 09E
estimates for similar vessels (NOK
275k/d)
 EV/EBITDA 7.1x
 P/E 1.2x on 3-yr historical average of
NOK 450k/d
 EV/EBITDA 3.9x
 P/E 0.8x assuming day rates at 2007E
levels
 EV/EBITDA 3.1x
Mosvold Supply Plc Earnings Scenarios (Fully Invested)
Pareto 09E
Day Rates
NOK/day
275,000
USD/day
46,610
Utilisation
96%
Daily opex incl fixed mgmt fee
($10,000)
No of vessels
2.0
PROFORMA P&L
Vessel EBITDA
SG&A
EBITDA
Depreciation (25yr)
Operating profit
Net financials fully invested (yr1)
Net Profit (after tax)
Cash Earnings
Maintenance capex
Free cash flow (pre debt amortisation)
Free cash flow (post debt amortisation)
EPS
Share price
No of shares (fully invested)
Market capitalisation
Net debt fully invested
Enterprise Value
EV/EBITDA
P/E
RoE (on mkt cap)
FCF yield (post debt amortisation)
Net interest bearing debt/EBITDA
EBITDA/Net interest
Source: Pareto Securities ASA
3yr Avg Pareto 07E
450,000
550,000
76,271
93,220
96%
96%
($10,000)
($10,000)
2.0
2.0
USDm
"
25
(1)
46
(1)
58
(1)
"
"
"
"
"
25
(6)
19
(10)
9
46
(6)
39
(10)
29
58
(6)
51
(10)
41
"
"
"
"
NOK
15
(1)
14
3
2.9
36
(1)
35
24
9.9
48
(1)
47
36
13.9
11.8
17.5
35
141
176
7.1
4.0
24.9 %
10%
5.7x
2.5x
11.8
17.5
35
141
176
3.9
1.2
84.3 %
25%
3.1x
4.6x
11.8
17.5
35
141
176
3.1
0.8
118.2 %
33%
2.5x
5.8x
NOK
mill
USDm
"
"
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Consolidation opportunities ahead
- Fragmented market creates room for consolidation
- New, large AHTS in favor
Source: Petrodata / Platou / Farstad
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