Transcript [Hercules Marine ASA]

Private Placement of Shares
NOK 250 million
27 September 2007
Solely for review in connection with the Equity Offering – not for reproduction or distribution
The information contained herein may be subject to change without prior notice
Please note that this is not an offering document
THIS DOCUMENT MAY NOT BE DISTRIBUTED IN, OR TO A RESIDENT OF, THE UNITED STATES, CANADA OR JAPAN OR TO A U.S. PERSON
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Important notice
This Presentation has been produced by MPU Offshore Lift ASA (the “Company” or “MPU”) with assistance from ABG Sundal Collier Norge ASA, SEB Enskilda Securities ASA and
Pareto Securities ASA, solely for use at the presentation to investors held in connection with the proposed offering of shares by the Company and may not be reproduced or
redistributed, in whole or in part, to any other person. This presentation contains information obtained from third parties. Such information has been accurately reproduced and, as far
as the Company is aware and able to ascertain from the information published by that third party, no facts have been omitted that would render the reproduced information inaccurate
or misleading.
This document contains certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates.
Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words “believes”, expects”,
“predicts”, “intends”, “projects”, “plans”, “estimates”, “aims”, “foresees”, “anticipates”, “targets”, and similar expressions. The forward-looking statements contained in this
Presentation, including assumptions, opinions and views of the Company or cited from third party sources, are solely opinions and forecasts which are subject to risks, uncertainties
and other factors that may cause actual events to differ materially from any anticipated development. None of the Company, ABG Sundal Collier Norge ASA, SEB Enskilda Securities
ASA and Pareto Securities ASA, their respective parent or subsidiary undertakings, and their officers or employees provide no assurance that the assumptions underlying such
forward-looking statements are free from errors nor do any of them accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual
occurrence of the forecasted developments. The Company assumes no obligation to update any forward-looking statements or to conform these forward-looking statements to our
actual results.
AN INVESTMENT IN THE COMPANY INVOLVES RISK 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
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THE COMPANY’S BUSINESS, SEGMENTS, DEVELOPMENT, GROWTH MANAGEMENT, FINANCING, MARKET ACCEPTANCE AND RELATIONS WITH CUSTOMERS,
AND, MORE GENERALLY, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN DOMESTIC AND FOREIGN LAWS AND REGULATIONS, TAXES,
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, THE ACTUAL
RESULTS OF THE COMPANY MAY VARY MATERIALLY FROM THOSE DESCRIBED IN THIS PRESENTATION. THE COMPANY DOES NOT INTEND AND DOES NOT
ASSUME ANY OBLIGATION TO UPDATE OR CORRECT THE INFORMATION INCLUDED IN THIS PRESENTATION.
No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions,
contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein. Accordingly, the Company, ABG Sundal Collier Norge ASA,
SEB Enskilda Securities ASA and Pareto Securities ASA, their respective parent or subsidiary undertakings or any such person’s officers or employees accept no liability whatsoever
arising directly or indirectly from the use of this Presentation.
By attending to or receiving this Presentation you acknowledge that you will take sole responsibility for your own assessment of the market and the market position of the Company
and that you will conduct your own analysis and take sole responsibility for forming your own view of the potential future performance of the Company and its business.
This Presentation is confidential and is being communicated in the United Kingdom to persons who have professional experience in matters relating to investments falling within
Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (such persons being referred to as “investment professionals"). This presentation is only
directed at qualified investors and investment professionals and other persons should not rely on or act upon this Presentation or any of its contents. Any investment or investment
activity to which this communication relates is only available to and will only be engaged in with investment professionals. This Presentation (or any part of it) is not to be reproduced,
distributed, passed on, or the contents otherwise divulged, directly or indirectly, to any other person (excluding an investment professional’s advisers) without the prior written
consent of ABG Sundal Collier Norge ASA, SEB Enskilda Securities ASA and Pareto Securities ASA and the Company.
This Presentation and the information contained herein do not constitute an offer of securities for sale in the United States and are not for publication or distribution to U.S. persons
(within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”)). The securities proposed to be offered by the Company have not been
and will not be registered under the Securities Act and may not be offered or sold in the United States or to U.S. persons except pursuant to an exemption from the registration
requirements of the Securities Act.
This Presentation speaks as of 27 September 2007. Neither the delivery of this Presentation nor any further discussions of the Company with any of the recipients shall, under any
circumstances, create any implication that there has been no change in the affairs of the Company since such date.
THIS DOCUMENT MAY NOT BE DISTRIBUTED IN, OR TO A RESIDENT OF, THE UNITED STATES, CANADA OR JAPAN OR TO A U.S. PERSON
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2
Contents






Investment case
Funding and financials
MPU Offshore Lift
Offshore heavy lift market
Summary
Appendix
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3
MPU investing in a growth market
• Current world fleet of 26 heavy lift
crane vessels
– Incl. combined HL/pipe layers
– 5 vessels on order (incl. MPU)
– Implying 20% supply growth by
2010E (# of vessels)
• HL demand (# jobs) projected to
increase by 65% in 2010-2016E
compared to past six years
– Avg. 670 lifts/yr vs. avg. 410 lifts/yr
current
• Pipeline installation projected to
double by 2010E
+94%
200%
180%
+65%
160%
140%
+20%
120%
100%
80%
60%
40%
20%
0%
# HL Vessels
# HL Jobs
– 7,500km annually by 2010E vs.
3,800km current
Pipeline
installation
Current
2010E
Source: Rystad Energy, Infield, ODS-Petrodata, Pareto Research
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4
The MPU Investment Case
•
Unique single lift vessel under construction at Keppel
–
–
–
•
Large and increasing market for offshore installation and
removal work
–
–
–
•
>60% increase in installation & removal activity next 6 yrs
>500 platforms to be removed in North Sea next 20 years
Long-term, late-cyclical and visible demand, limited supply of
heavy lift capacity
Competitive solution on cost and time
–
–
•
Competent construction yard (Keppel Verolme, Rotterdam)
Early availability (delivery 1Q 2009)
Strong industrial backing (Dr. Techn. Olav Olsen and Solstad
Offshore) & Patented semi submersible design
Safer and faster than conventional crane vessels
All-in delivered cost approx USD 430 mill. vs. conventional semi
sub crane vessel with est. capex >USD 1,4 bn (delivery 2011)
Substantial earnings potential
–
–
Base Case with EV/EBITDA <4x and P/E <2x reflecting 4 jobs per
year (150 days utilisation)
Substantial earnings upside using current market rates and
heavy lift vessel utilisation
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5
NOK 250 mill. Private Placement
•
Current revised all-in capex estimated to EUR 330 mill. incl. contingency
–
•
NOK 250 mill. in equity should fund MPU capex until complete financing package is in place
–
–
–
•
Incl. approx. EUR 28 mill. in estimated investments to improve vessel specifications/flexibility and
modifications to further enhance capability for installation work
Long-term bank financing and subordinated capital expected in place by year-end 2007
All construction contracts signed April 2007
Bond covenant requiring EUR 28 mill. in additional equity 1)
New equity issue enabling MPU to finalize attractive long-term bank financing
–
–
–
Final term sheet for 1.priority bank facility under negotiation with ABN Amro
Bank financing expected to facilitate MPU to become fully financed
ABN Amro facility funding up to 62% of all-in MPU capex project
• ABN Amro loan backed by export guarantees (Dutch and Norwegian)
•
Major MPU shareholders supporting the transaction
–
Pre-commitments of approx. NOK 120 mill. have been received from key MPU shareholders
including Solstad Offshore
1) Bond covenant requires equity to cover final EPC contract price exceeding EUR 215 mill.
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6
Term Sheet NOK 250 mill. Equity Private Placement
Private placement
• Private placement of 38.5 mill. new shares
Timetable & key conditions
• Subscription period:
• Price: NOK 6.50 per share
–
27 September 2007 09:00 CET
• 86.3 mill. shares outstanding after private
placement, equal to a market cap of NOK 561
mill.
–
28 September 2007 17:00 CET
• Minimum subscription: 60,000 shares
• Pre-commitments of approx. NOK 120 mill. have
been received from key MPU shareholders
including Solstad Offshore and management
• Payment on or about 4 October 2007
• Allocation criteria: Preferred allocation to
existing shareholders
• Investor requirement: Institutional and
professional investors / US 144A (QIBs)
• Managers: ABG Sundal Collier Norge ASA,
Pareto Securities ASA, SEB Enskilda ASA
• Allocation on or about 1 October 2007
• Delivery of shares on or about 11 October 2007
• Listed on OTC, Ticker: MPUO
• Private Placement subject to (i) general meeting
to be held on 1 October 2007
• Documentation: Investor presentation, terms of
application and term sheet
THIS DOCUMENT MAY NOT BE DISTRIBUTED IN, OR TO A RESIDENT OF, THE UNITED STATES, CANADA OR JAPAN OR TO A U.S. PERSON
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7
Contents






Investment case
Capex and funding
MPU Offshore Lift
Offshore heavy lift market
Summary
Appendix
THIS DOCUMENT MAY NOT BE DISTRIBUTED IN, OR TO A RESIDENT OF, THE UNITED STATES, CANADA OR JAPAN OR TO A U.S. PERSON
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8
EUR 330 mill. all-in capex estimate
The MPU project - Capex status
•
•
•
•
Signed agreement with Keppel Verolme Dec
2006
Signed agreement with KHL (Joint venture
Van Hattum/BAM Civiel) March 2007 for
concrete work
Signed agreement with Dr. Tech Olav Olsen
AS April 2007 for detail design and
engineering work
Planned vessel upgrades:
– Current committed all-in capex EUR ~290 mill.
– EUR 330 mill. all-in capex estimate includes
approx. EUR 28 mill. investments in improved
capabilities for installation work, extended
decommissioning capabilities and structural
improvements to vessel as well as approx. EUR
14 mill. contingency
Revised all-in capex estimate
MPU Offshore Capex Estimate
EUR mill.
Hull with outfitting
116
DP/thrusters
Power and electrical
Lifting beams
Detail design
All other items
Total equipment
35
22
32
17
49
155
Total costs construction contracts 1)
271
Contingency construction contracts
14
Supervision during construction
Interest costs during construction
Banking and broker fees
12
20
13
Total projected all-in delivered costs
330
1) Current committed construction contracts EUR 243 mill.
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9
Target capital structure and funding
350
• Additional financing (subordinated capital)
EUR
60m
Accumulated capex (EURm)
300
• EUR ~20 mill. excess cash at delivery
250
Bank
EUR
~200m
200
150
•
•
•
•
1.priority senior debt
Funding up to 62% of total capex
Backed by export guarantees (pending)
Existing high yield assumed redeemed
100
Equity
EUR
86m
50
• Current transaction : EUR 30 mill.
• Raised Oct. 2006 : EUR 56 mill.
1Q09
4Q08
3Q08
2Q08
1Q08
4Q07
Until 3Q07
0
Source : MPU Offshore Lift ASA
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10
Base Case P/E <2x, EV/EBITDA <4x
• Conservative Base case scenario 1)
– 4 North Sea lifts p.a. (150 days)
– USD 900,000/day (vs. market rates USD
1-1.5m/d)
– MPU EBITDA USD ~120 mill. p.a.
– EV/EBITDA 3.7x, P/E 1.4x
• Global mode scenario
2)
– 4 North Sea lifts (150 days@USD 900k/d)
+ Winter work in international waters
– USD 20 mill. mobilisation cost to
international waters
– Assuming 90 days of work outside North
Sea at USD ~500,000/day
– EBITDA USD ~150 mill. p.a.
– EV/EBITDA ~3x, P/E ~1x
MPU Earnings Scenarios
Base 1)
Global 2)
Gross Margin (t/c basis)
Utilsation
Opex/day
USD/d
%
USD/d
900,000
41%
28,000
750,000
66%
28,000
Revenues
EBITDA
Net Profit
USDm
"
"
135
124
75
180
149
98
No of shares
Share price
Mkt cap
Net IB Debt Fully Invested
Enterprise Value
mill.
USD
USDm
"
"
86.3
1.2
102
357
458
86.3
1.2
102
357
458
EV/EBITDA
P/E
Source: Company
3.7 x
1.4 x
3.1 x
1.0 x
1) 4x North Sea heavy lifts p.a. at USD 900,000/day (150 days).
2) 4x North Sea heavy lifts p.a. at USD 900,000/day (150 days) and 2 lifts in int'l waters at USD 500,000/day (90 days) with USD 20m mob cost.
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11
Contents






Investment case
Capex and funding
MPU Offshore Lift
Offshore heavy lift market
Summary
Appendix
THIS DOCUMENT MAY NOT BE DISTRIBUTED IN, OR TO A RESIDENT OF, THE UNITED STATES, CANADA OR JAPAN OR TO A U.S. PERSON
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12
MPU with strong industrial backing
Dr. Techn. Olav Olsen
Solstad Offshore ASA
•
•
Responsible for over half of the world’s offshore
concrete structures
–
–
•
Founded in 1962 by Dr. techn. Olav Olsen
Developed the Condeep concept: (Among them
Gullfaks C, Troll A and Draugen)
Project initiator through MPU Enterprise AS
–
–
–
Concept development, testing and design
Support in qualification and tendering process
Invested approx. USD 13 mill. to date
One of the world’s leading suppliers of offshore
AHTS, PSV and CSV vessels
–
–
•
Founded in 1964 by Johannes Solstad
33 vessels in operation. Market cap. NOK 5 900 mill.
Main shareholder with 28% before Private Placement
–
Will add first class track-record from project
execution and operations
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13
The MPU Heavy Lifter
– simple, safe, robust and effective
•
All-in cost approx. EUR 330 mill.
–
Including improved capabilities for installation work
•
Concrete hull dimensions: L x W = 87 x 110m
•
Height 40m to top of column
•
Weight 52,000 tonnes
•
Lifting frames: 1,100 tonnes each
•
Lifting capacity:
–
Topsides 15,000 tonnes
–
Jackets 28,000 tonnes
•
Self propelled for positioning and self station keeping
(DP2)
•
8 azimuth thrusters
•
Accommodation for 50 persons
•
Helideck
•
Certificate of Fitness from DnV (2006)
•
Lloyds classification in process
–
Approval in Principle (2003)
–
To be classed as Heavy Lifter Unit
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14
Status of the construction project at Keppel
•
•
•
•
•
•
•
Signed all major contracts by April 2007
Concrete construction work started 15 July
First concrete pour 13 August
Keel laying ceremony 22 August
Engineering and design work is 65 % complete
and on schedule
Hull/concrete work to be completed July 2008
Construction work is on schedule for completion
1Q 2009
Construction timeline and completion
2007
2008
2009
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
Detailed engineering
Concrete hull construction
Outfitting
Completed
Installation lifting beams
Remaining work
Commissioning
Available for work
Available
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15
MPU technology: Lifting by de-ballasting
Topside
removal
Topside transfer
to T-barge
moored at quayside1
Jacket
removal
1) Offshore transfer to barge is also possible
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16
Single lift more efficient
• MPU can lift entire jacket in
one operation vs. multiple lifts
for conventional crane vessel
– Saving time and costs
• Conventional jacket removal
implies significant operational
risk
– Safety issues
– Time intensive
– Harsh offshore weather
conditions
• Example with 20,000t jacket
– 18 lifts required for removal
with conventional crane
vessel
– 1-2 lifts for MPU Heavy Lifter
20,500 tonnes jacket, WD 160m, 18 lifts and 226 underwater cuts required for conventional lifting
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17
MPU: Lower cost and faster than competition
Timing
Month 1
MPU Heavy
Lifter
Month 2
Month 3
Preparation for removal (75-80 days)
Offshore marine support
Removal and
transportation
onshore (~35d)
Preparation for removal (~120 days)
Conventional
vessel
Month 5
Month 6
~USD 108 mill.
3-4 months
Removal and transportation
onshore (55-60 days)
Offshore marine support
Costs
~USD 150 mill.
5-6 months
Conclusion
•
110
USDm
79
14
Month 4
18
15
14
1
Preparation
Support
Removal & transport
7
Demolition
MPU Heavy Lifter Conventional vessel
Source: Eric Faulds Associates Ltd. (former head of decommissioning, Shell)
Example based on removal of a structure approx. 20,000 tonnes
Independent analysis concludes that MPU
can remove a large installation at a
significant discount to conventional method
–
Assumes $900,000 per day for conventional
crane and $775,000 for MPU
–
Less offshore preparation
–
Less lifting time
–
No need for flotel accommodation
–
More extensive onshore demolition
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18
Marketing strategy
• Target markets for MPU Heavy Lifter:
Decommissioning market
– Removal of topsides and steel jackets from offshore platforms
Installation market
– Mating/installation of platform decks on preinstalled jackets or floaters
– Installation of jackets
– Installation of subsea structures
• Marketed as sub-contractor towards installation/removal projects
• Establish industrial partnerships with leading operators
– Marketing “consortium” as a full scale contractor to qualify for major projects
• Win first decommission/installation contract within next 9 months
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19
MPU Offshore Lift ASA – Organisation and Board
Management
Board
•
MPU OFFSHORE LIFT
ASA
Kolbjørn Høyland
CEO
Tor Ole Olsen (Chairman)
–
•
Lars Peder Solstad
–
Finance and
Business control
Tom Fronth-Mathisen
CFO
Eddie Olsen
Cost Controller
•
TQM
André Bautz
TQM Manager
Business Support
Astrid Merete Moe
- Business Manager
Tonje Solodden
- IT Manager
Charlotte Hellern
- Letting Secretary
MPU HL Building
Project
Kurt Bøe
Project Director
Operation
Kurt Bøe
Director
Dr. techn. Olav Olsen Inc.
Kjell Ola Jørgensen
–
•
Solstad Offshore ASA
Nina Merete Wiley
–
•
MPU Enterprise AS
Gaz de France Norge AS
Kristin Farstad,
–
Vogt & Wiig
Management
consultant
Ronald Seim
Marketing and
Sales
tbn
Director
Techn. &
Projects
Trond Landbø
Director
Business
Development
Jon Børge Stette
Director
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20
MPU shareholder list and share price performance
MPUO share price performance (N.OTC)
Rank
Investor
%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
SOLSTAD OFFSHORE ASA
MPU MULTI PURPOSE OFFSHORE UNIT
ORKLA ASA
SKAGEN VEKST
PERNY LTD. C/O D.CAPPS
IVAN AS
VERDIPAPIRFONDET KLP AKSJENORGE
KLP LIV-NORG1
CREDIT SUISSE SECURITIES
GARMS HOLDING AS
SAF-INVEST AS
MP PENSJON
LEIKVOLLBAKKEN AS
GJENSIDIGE FORSIKRING
LECTIO AS
FOLLUM INVEST AS
STIFTELSEN STATOILS PENSJONSKASSE
CHEYNE GLOBAL CATALYST
OLA RUSTAD A.S
SPAR INVESTOR NORGE
TOTAL TOP 20 INVESTORS
OTHERS
TOTAL SHARES OUTSTANDING
28.38%
16.52%
8.48%
7.52%
4.90%
3.81%
3.75%
1.46%
1.42%
1.19%
1.15%
1.04%
0.86%
0.84%
0.66%
0.63%
0.59%
0.59%
0.58%
0.57%
84.93%
15.07%
100.00%
10.09.2007
13,590,150
7,909,850
4,058,400
3,600,000
2,348,012
1,824,874
1,797,000
700,000
678,120
568,892
552,016
496,900
410,800
400,000
316,900
300,000
283,030
282,734
276,000
270,800
40,664,478
7,215,392
47,879,870
NOK
Vol ('000)
16.0
1,400
14.0
1,200
12.0
1,000
10.0
800
8.0
600
6.0
400
4.0
2.0
200
0.0
0
D J J F F MMM A A MM J J J J A A A S
Volume
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Price
21
Contents






Investment case
Capex and funding
MPU Offshore Lift
Offshore heavy lift market
Summary
Appendix
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22
Strong growth in global heavy lift market
•
•
•
Strong growth in offshore drilling activity (70 % growth during 2005-08)
Increased drilling activity will boost future field development activity
World wide use of heavy lifts expected to increase by 65 % during 2010-16
compared to past six years
Lack of heavy lift capacity has increased use of float-overs (“MPU market”)
•
900
Number of heavy lifts pr. year
800
700
600
Subsea
Decommissioning
Installation
500
400
300
200
Average lifts/year
100
2000-2006
2010-2016
Platform
Installation
Decomm.
229
357
115
219
Subsea
62
95
Total
406
671
Growth
56%
91%
53%
65%
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
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Source: Rystad Energy
23
Subsea market trend requiring large
installation vessels
• Subsea installation going from deep water to ultra deep water
–
–
–
–
More time consuming due to depth
Weight is a challenge
More equipment is installed subsea
Tendency towards installation of systems rather than components
• Market trend requiring more vessel operations, larger vessels and more
specialized vessels
– Strong demand for heavy lift vessels for installations in excess of 300 tons
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>500 North Sea installations to be removed next 20 years
No. of North Sea platforms
No. of fixed steel jackets per weight (tonnes)
350
300
Number of production platforms
>20,000
11%
250
10,000-20,000
10%
200
< 2,500
50%
150
100
2,500-10,000
29%
50
0
Germany /
Ireland
Denmark
Steel jackets
Norway
Gravity structures
Netherlands
UK
Floating platforms
Sources: Douglas-Westwood Limited and the TCS Partnership, PetroAdvisor / R.S. Platou Offshore (Ospar database)
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Global decommissioning market opportunities
• US Gulf of Mexico
– Large market for removal including salvage work and removal of hurricane wrecks
– Such work is priced at USD 1,000,000/day for conventional crane vessels
• Mexican Gulf of Mexico
– Emerging opportunities as the gigantic Cantarell field is rapidly being depleted
• California
– Identified 27 platforms installed 1967-89 from 3,000-50,000t with removal 2010 onwards
• Malaysia (225 platforms) and rest of South East Asia
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Conventional crane vessels – a niche market
Semi-submersible
crane vessels
- Market rate up from
USD 600 000 to
USD 1 200 000
past three years
- Limited capacity for
the decommissioning
market
- Cost of newbuilds
EUR 1 bn.+/del. 2011
Saipem
• SSCV Saipem 7000 – capacity 14,000 tonnes in tandem (built: 1983 /
modified: 1999)
• Dual pipe lay / installation capability
Heerema Marine Contractors
• Thialf – capacity 14,200 tonnes in tandem (built: 1985)
• Hermod – capacity 4,500 + 3,600 tonnes (built: 1977 / upgraded: 1986)
• Balder – capacity 3,600 + 2,700 tonnes (built: 1978 / modified: 2001)
Allseas
• Pieter Schelte – capacity 48,000 tonnes (built: 2010) – cost EUR 1.3 bn.
Smaller heavy lift
vessels
J. Ray McDermott
• DB 101 – 3,500 tonnes capacity (built: 1978)
• DB 50 – 4,000 tonnes capacity (built: 1988)
Seaway Heavy Lift
• Stanislav Yudin – 2,500 tonnes capacity (built: 1985/1993/1996)
• Newbuild – 5,000 tonnes capacity (built: 2010) – cost USD 460 mill.
Nordic Heavy Lift
• Newbuild – 5,000 tonnes capacity (built: 2010) – cost USD 400 mill.
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27
More heavy lift capacity needed to meet demand
• Current world fleet of 26 heavy lift
crane vessels
– Incl. combined HL/pipe layers
– 5 vessels on order (incl. MPU)
– Implying 20% supply growth by
2010E (# of vessels)
• HL demand (# jobs) projected to
increase by 65% in 2010-2016E
compared to past six years
– Avg. 670 lifts/yr vs. avg. 410 lifts/yr
current
• Pipeline installation projected to
double by 2010E
+94%
200%
180%
+65%
160%
140%
+20%
120%
100%
80%
60%
40%
20%
0%
# HL Vessels
# HL Jobs
– 7,500km annually by 2010E vs.
3,800km current
Pipeline
installation
Current
2010E
Source: Rystad Energy, Infield, ODS-Petrodata, Pareto Research
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28
Contents






Investment case
Capex and funding
MPU Offshore Lift
Offshore heavy lift market
Summary
Appendix
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29
MPU Investment Case Wrap-Up
• >60% projected growth in heavy lift activity during 2010-2016
• Late-cyclical oil service play (installation/field development/platform removals)
• Competitive single lift concept –> 30% lower cost than traditional solutions
• Strong industrial backing (Dr Techn Olav Olsen + Solstad Offshore)
• Construction at reputable yard Keppel Verolme Rotterdam
• Available 1Q 2009 – early delivery to meet strong market growth
• Base case target earnings indicating P/E ratio of >2x first year of operation
• Supply shortage in current heavy lift market implying significant earnings potential
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30
Risk factors
•
Forward-looking statements – forecasted financial statements
–
•
Lack of historical financial information
–
•
MPU Offshore Lift has limited staff or employees and is consequently dependent on external parties to undertake the management of the
Company. Such arrangement may reduce the control functions of the Company.
Risks related to the construction contract
–
•
MPU Offshore Lift has a remaining funding requirement. The company cannot guarantee that it will be able to raise this capital.
Dependence on external parties
–
•
MPU Offshore Lift has started construction of a single lift decommissioning vessel with a total project cost of USD 430m. The Company has
no operating income or operating cash flow to finance the vessel and is dependent upon funding from shareholders/investors and/or banks.
Financial leverage
–
•
MPU has a limited operating history. Any historical financial information will not be useful in estimating the Company’s future financial
results.
Significant investments
–
•
The financial forecasts set forth herein are associated with uncertainty and the future development of MPU may deviate significantly from
these forecasts.
Any delays related to the construction contract could have a material adverse effect on the Company and its financial position. Furthermore,
even though the Company has signed all construction contracts, cost overruns and technical problems may be experienced during
construction which may impact the expected delivery of the vessel as well as the expected financial performance.
Risks related to the single lift concept
–
Although each single item of the Company’s technology is well tested and proven, the single lift decommissioning concept is unproven.
Furthermore, the application of the MPU Heavy Lifter is unproven
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31
Risk factors (cont’d)
•
Variability of operating results etc.
–
•
•
Industry
–
The market for decommissioning of offshore platforms may not grow as anticipated.
–
The market for the MPU Offshore Lift’s products and services is competitive. The failure of the Company to maintain a competitive vessel
and services offering could have a material adverse effect on the Company’s business, operating results or financial condition
International operations
–
•
Operations in international markets are subject to risks inherent in international business activities, including, in particular, general economic
conditions in each such country, currency fluctuations, unexpected changes in regulatory requirements, complying with a variety of foreign
laws and regulations etc.
Political risks
–
•
The MPU Offshore Lift’s operating income/losses and operating results may vary from quarter to quarter due to seasonal variations. The
Company’s operating income may be difficult to forecast due to changes in demand for decommissioning services, the competitive
environment, and other general economic and market conditions.
Changes in the legislative and fiscal framework governing the activities of oil and gas business and removal of offshore installations could
have material impact on the demand for the Company’s equipment and services.
Risks related to the equity offer
–
The future share price development of MPU Offshore Lift may be volatile due to various factors, including fluctuations in the Company’s
results. There can be no guarantee that investors subscribing for shares in the offering will be able to sell their shares in the future at a price
exceeding the final subscription price in the offering. The shares will not be listed on any regulated market and there can be no assurance as to
the liquidity of the Norwegian OTC market where the share is presently quoted.
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32
Contents






Investment case
Capex and funding
MPU Offshore Lift
Offshore heavy lift market
Summary
Appendix
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33
Board members
Curriculum vitaes
Tor Ole Olsen (56)
Chairman
Managing Director of Dr. techn. Olav Olsen a.s. 30 years of experience with
marine structures, conceptual development and project management, incl. the
Condeeps.
Lars Peder Solstad (35)
Board member
Managing Director of Solstad Offshore ASA. He has education as Master
Mariner, and is member of various boards, among others chairman of the
offshore vessel group in Norwegian Shipowners Association.
Nina Merete Moen (29)
Board member
Master of Science in structural engineering from the Norwegian University of
Science and Technology. Employed as an engineer in Dr. techn. Olav Olsen a.s,
and holds the position of Vice President of Dr. techn. Olav Olsen Inc.
Kjell Ola Jørgensen (60)
Board member
Master of Science in industrial engineering from the Norwegian University of
Science and Technology. Four years experience in industrial research at NTNU,
three years as small business consultant and 25 years experience from different
management positions in Phillips Petroleum Company within operations,
engineering, project management (Ekofisk Cessation), quality assurance and
authority liaison. The last two years as HSE manager and Gjøa operations
manager in Gaz de France Norge.
Kristin Farstad (48)
Board member
Lawyer. Partner in Vogt & Wiig in Bergen. Experience also from DnBNOR and
as public prosecutor. Special competencies within Company Law, M & A and
Securities Legislation.
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Senior management
Curriculum vitaes
Kolbjørn Høyland (48)
CEO
More than 20 years of experience from conceptual and detail design of concrete
offshore structures. Master of Science – Civil Engineering. Technical Manager of
Dr.techn.Olav Olsen a.s since 1998. Managing Director MPU Enterprise AS since
2000
Tom Fronth-Mathisen
(59)
CFO
Founder and managing director of Export Finance Services AS since 1996.
Director/managing director corporate finance Finanshuset/FIBA Nordic Securities
1989-1995. Over 25 years experience of international finance
Kurt Bøe (52)
Building project /
Operations
More than 25 years of experience from oilfield operations with BP. International
experience from UK and Middle East as OIM and Operations Manager. 2003 to
2007 Operation Manager for deep water field development for Angola. COO and
Project Director for MPU Offshore Lift ASA since 1Q 2007.
Trond Landbø (46)
Projects /
Engineering
Responsible for marine structures within Dr.techn.Olav Olsen a.s since 1999. 14
years of experience from design of offshore structures and project planning and
interface coordination of offshore projects
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35
The yard – Keppel Verolme Rotterdam
Description
•
•
•
•
•
Other
Owned and operated by the Singapore-based
company, Keppel FELS, one of the largest rig
builders in the world
An established yard with the widest graving
dock in Europe
Comprehensive marine services, including
repair, dry-docking, conversion and
modification work on vessels up to VLCC size
Significant engineering capabilities and
experience within conversions and repair work
Known for undertaking complicated and
challenging conversion projects – on time / on
budget
–
–
–
–
–
• Construction Dock
405 x 90 meters
• Water depth 12
meters
• 3 shore cranes
• Separation
bulkhead
• Lay down areas
SAIPEM 7000 and BALDER ”J”-lay modifications
Allseas project
Sevan topsides installations
Ekofisk Tank Concrete Barrier wall
Nam F3 Concrete Gravity Structure (CGS)
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KHL consortium
Description
•
•
Key references
KHL consortium of Van Hattum en
Blankevoort BV and BAM Civiel BV
These civil engineering companies are
100% subsidiaries of:
–
Royal Volker Wessels Stevin nv.
• Turnover 2006: EUR 4.5 bn.
–
Royal BAM Group nv.
• Turnover 2006 : EUR 8.6 bn.
•
Main types of projects:
–
Infrastructure
–
Harbour works
–
Foundation works
–
Industrial complexes
–
Offshore
–
Specialisation
• Design and Construct high
speed line - Zuid
• Design Westerschelde
container terminal
• Design and construct
Hubertus tunnel in den
Haag
• Positioning and placing
tunnel elements for the
Warnowtunnel Rostock
• Design, construction and
placing of 6 precast sill
sections for the
Emmsperwerke (GER)
• Dragon LNG import
terminal, South Wales
• Bjørvika tunnel in Oslo
• Pekoner Ekofisk tank
protection barrier
LNG import terminal
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37