Mosvold Supply Plc Presentation, DnBNor Offshore Seminar

Mosvold Supply Plc
Presentation, DnBNor Offshore Seminar
John Bernander, Oslo 5 March , 2008

VS 491 CD: high capacity AHTS
- State-of-the art workhorses
Main features
Design:
Vik Sandvik
Overall length:
91 m
Breadth moulded:
22 m
Deadweight (7.9 m draft): 4,000 t
Speed at 6.0 m draft:
17 knots
Total horsepower: 28,080
Min. bollard pull:
270 t
DP class:
II
Towing/anchor handling winch: 500 t
Crane capacity:
2x 6t
Fuel consumption:
13.5 t diesel per day
Accommodation:
60 persons
Prepared for ROV hangar
Well reputed equipment suppliers
Diesel engines:
MAK
Thrusters:
Brunvoll
Towing winches:
Hatlapa
DP:
Kongsberg
2

Mosvold Supply AHTS with high-end specifications
Mosvold Supply
Siem
Havila
Farstad
Olympic
Design
VS 491 CD
VS 491 CD
Havyard 845
UT 731 CD
Aker A122
Loa
91
91
87
87.4
94
Breadth
22
22
22
21
23
BHP (horse power)
28080
28000
23000
25000
26500
Bollard Pull
270
300
250
240
260
Winch
500t
500t
500t
500t
500t
Winch Drum
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
Stern Roller Dimention
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
FIFI
Prep.II
II
II
Na
Na
Delivery
Oct 09/Jun 10
May.09
May.09
May.09
Apr.09
Source: Mosvold and Pareto Securities
3

Mosvold Supply to meet future requirements
New requirements focusing on environment, capacity and safety
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 m 3
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
Mosvold Supply VS 491 CD
Double hull construction (DnV Clean Design notation)
Safeguarding the environment from possible leakage
Ships prepared for ROV
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
4

Mosvold Supply Construction program
2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
AHTS TBN 1
20% payment 10% payment
70% payment
AHTS TBN 2
20% payment 10% payment 70% payment
AHTS TBN 3
20% payment 10% payment 70% payment
AHTS TBN 4
20% payment 10% payment 70% payment
Favorable payment structure securing commitment from Batamec Shipyard
20% at contract signing
10% at key equipment delivery
70% at final delivery
Contract price TBN 1 and 2 , USD 77.350 mill. / to be settled 60/40 EURO/USD conversion rate 1.34
Contract price TBN 3 USD 33 mill + EURO 36, 3 mill
Contract price TBN 4 USD 33.8 mill +EURO 37, 2 mill
Refund guarantees from Bangkok Bank (BBB+)Standard Chartered Bank Plc ( A )
5

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
Management comprises over 45 qualified and
experienced engineers, primarily from PPL and
Keppel Fels
Total workforce: 2,200
Certified to ISO 9001:2000 with Lloyds Register
Quality Assurance as at 25 April 2005
6 vessels successfully delivered since embarking
on shipbuilding strategy
Order book of 30 vessels with deliveries until 2010
Of which 10x 10,000HP AHTS
Major clients:
Tidewater
ESNAAD
Seatrucks
PETRA
RK Offshore
Marine Subsea (Africa Offshore Services)
6

Mosvold Site Supervison Team
Left to right Mr. Tri Prasetiyo, Surveyor, Mr. Michael Palfreeman, Head of the Site Supervision Team, and Per Tønnessen Mosvold Shipping AS,
Technical Director and Project Manager for Mosvold Supply PLC.

Block 104 Fore & 105 Aft , 29 Feb 2008
8

Worldwide floater supply and demand forecast
300
Worldwide
250
200
Rigs
150
100
50
0
Total Supply
Effective Supply
Historical Demand
Mid-Case
Low-Case
High-Case
1Q94 1Q96 1Q98 1Q00 1Q02 1Q04 1Q06 1Q08 1Q10 1Q12 1Q14
Source: ODS-Petrodata
9

Historical number of AHTS per rig
• The number of vessels per rig is increasing due to:
• Other demand, for instance FPSO and construction related work
• More activity on deeper water – longer distances to tow the rigs
• High day-rates for rigs: Important that lack of vessels does not slow mob/demob
Need for more vessels per rig
0.5
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
Vessels per rig
Sources: DnB NOR Markets estimates, Clarckson and ODS - Petrodata
10

World AHTS fleet is old (22 years avg age)
- New vessels substantially larger and more capable than older vessels
Number of newbuilds
50
45
40
35
30
25
20
15
10
5
0
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
AHTS > 10,000 BHP
AHTS > 20,000 BHP
Source: Clarksons / JGO Shipbrokers / Pareto estimates
11

NO. OF VESSELS
WORLDWIDE
AHT S DE LIVE RY SCHEDULE
91 vessels 10-15999 BHP & 99 vessels 16000+ B HP
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
8
7
3
2
5
3
2 2
2 3 6
3
2
3 6 4
1
6 6 6
2 6
1
1 1
5
4 4 4 4 2 4 4 4
2 5 4 1 5
4
3 3 3 3 3
2
2 2 2 2 2 2 2 2 2
1 1
1
1
1
1 1 1 1 1 1 1 1
F MA M J J A S ON D J F MA M J J A S ON D J F MAM J J A SO ND J F M AM J J A SO ND J F M AM J J A S O
2008 2009 2010 2011 2012
10-15999 BHP 16000+ BHP Updated: 0 1/0 8
12

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
13

140.000
130.000
120.000
110.000
100.000
GBP/DAY
90.000
80.000
70.000
60.000
50.000
40.000
30.000
20.000
10.000
0
NORTH SEA
AHTS 16000+ BHP Spot Fixtures
(Reported and Estimated)
Full year 2005 average: GBP 25,840 / NOK 299,680
Full year 2006 average: GBP 49,400 / NOK 572,980
Year-to-date 2007 average: GBP 52,372 / NOK 607,511
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51
We e k in 2005/2006/2007
NOK/DAY
1.600.000
1.500.000
1.400.000
1.300.000
1.200.000
1.100.000
1.000.000
900.000
800.000
700.000
600.000
500.000
400.000
300.000
200.000
100.000
0
Weekly Average 2005 Weekly Average 2006 Weekly A verage 2007
Update d: 12/31/07
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North Sea supply vessels
A HT S spot dayrates N ort h Sea
North Sea supply - demand - utilisation
1 500 000
1 250 000
100%
95%
300
250
95%
88% 90%
94%
91%
88% 88%
92%
95% 95%
100%
92% 90%
80%
NOK/d
1 000 000
750 000
500 000
90%
85%
80%
Demand/supply
200
150
100
70%
60%
50%
40%
30%
250 000
75%
50
20%
10%
0
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
31
33
35
37
39
41
43
45
47
49
51
53
70%
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
0%
W eek
2007 2008 2008 spot rate assumptions Utilisat ion
Average demand Average supply Average utilisation
Source: Carnegie Research, ODS Petrodata, Fearnley Offshore
Source: Carnegie Research
PSV spot dayrates N ort h Sea
500 000
100%
NOK/d
400 000
300 000
200 000
100 000
95%
90%
85%
80%
75%
Current fleet of North
Sea supply vessels is at
266 units, +3 w/w.
0
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
31
33
35
37
39
41
43
45
47
49
51
53
Week
2007 2008 2008 spot rate assumptions Utilisation
70%
Source: Carnegie Research, ODS Petrodata, Fearnley Offshore
15

Consolidation opportunities ahead
- Fragmented market creates room for consolidation
- New, large AHTS in favor
Source: Petrodata / Platou / Farstad / Pareto
16

Investor friendly and cost-effective company set up
Mosvold Shipping Holding owned by founders, which owns 22.9% of Mosvold Supply
No 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)
Management agreement with Mosvold Management (100% owned by Mosvold Shipping Holding )
Fixed price mgmt contract (G&A/accounting/reporting) of USD 42,500 per vessel per month
- 12 months cancellation period
Mosvold Management responsible for construction and building supervision at estimated cost of USDm 1.2 per vessel
(may be subcontracted to reputable technical manager)
Post-delivery commercial vessel fixture commission of 1.25%
USDm 2 project development costs first 2 vessels + 1% commission on shipbuilding contracts
1% commission on sale of vessel(s) or change of control in Mosvold Supply (> 30%)
Corporate set-up:
Mosvold Shipping Holding Limited
Cyprus
22.9%
Mosvold
Management Ltd
Mosvold Supply Plc
Cyprus
100%
100%
Mosvold Supply I
Mosvold Supply II
Mosvold Supply III
Mosvold Supply IV
17

List of shareholders as per 28. February 2008
No. of shares
% of total
Mosvold Shipping Holding Limited
Morgan Stanley & Co Client Equity acc.
Deutche Bank AG Lon SA
Credit Suisse Sec. Europe Ltd.
Cheyne Global Catalyst Fund LP
Ole Teigen
Bjørgvin AS
Otto Investment Limited
Saga Shipping and Trading SA
Frode Teigen
Total 10 largest
Others
Total
6 206 594
3 483 700
2 369 600
1 965 500
1 811 300
1 540 000
1 388 000
1 098 800
874 400
749 600
21 487 494
5 012 506
26 500 000
23,42 %
13,15 %
8,94 %
7,42 %
6,84 %
5,81 %
5,24 %
4,15 %
3,30 %
2,83 %
81,08 %
18,92 %
100,00 %
18

Confidential
Mosvold – an experienced shipping and offshore services group
The Mosvold family has continuously been active in shipping since 1910 .Has owned and operated
vessels in many segments (tankers, dry bulk, reefers and passenger ferries.
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. The baredecks are 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
Mosvold with proven track record demonstrating opportunistic approach and shareholder value
creation
19

Mosvold Supply Plc Earnings Scenarios (Fully Invested)
Pareto 11E 3yr Avg* 2007 Real*
Day Rates NOK/day 275 000 490 000 607 500
USD/day 50 000 78 526 103 669
Utilisation 100 % 100 % 100 %
Daily opex ($10 000) ($10 000) ($10 000)
No of vessels 4,0 4,0 4,0
PROFORMA P&L
Vessel EBITDA USDm 58 100 137
SG&A " (2) (2) (2)
EBITDA " 56 98 135
Depreciation (25yr) " (14) (14) (14)
Operating profit " 43 84 121
Net financials fully invested (yr1) " (19) (19) (19)
Net Profit (after tax) " 24 65 102
Cash Earnings " 37 79 116
Maintenance capex " (2) (2) (2)
Free cash flow (pre debt amortisation) " 35 77 114
Free cash flow (post debt amortisation) " 24 66 103
EPS NOK 4,9 13,6 21,2
Share price NOK 14,0 14,0 14,0
No of shares (fully invested) mill 26,5 26,5 26,5
Market capitalisation USDm 67 67 67
Net debt fully invested " 311 311 311
Enterprise Value " 378 378 378
EV/EBITDA 6,7 3,9 2,8
P/E 2,8 1,0 0,7
RoE (on mkt cap) 35,1 % 96,8 % 151,3 %
FCF yield (pre debt amortisation) 11 % 25 % 37 %
Net interest bearing debt/EBITDA 5,5x 3,2x 2,3x
EBITDA/Net interest 3,0x 5,2x 7,1x
* Platou 2007 Offshore Report
20