Q1 2018 Presentation
Contents • Highlights and material events • Segment reporting • Financial information • Summary Page 2
Q1 18 - key summary - Purchase of Deepsea Nordkapp - Strong operational performance across the fleet - Drilling & Technology continues its positive trend - Well Services increases turnover, but still pressured on margins - Clear signs of market improvement Page 3
Highlights and material events in/after Q1 2018 USD 175 million Private Placement successfully completed On 19 April 2018, Odfjell Drilling Ltd., successfully completed a private placement of NOK 1.368 • billion, equivalent to approximately USD 175 million, through issuance of 38,000,000 new common shares at a subscription price of NOK 36.00 per share. The proceeds will be used to finance growth and for general corporate purposes. A subsequent offering directed towards shareholders not participating, and who were not wall crossed, will follow at a later stage. Purchase of “ Deepsea Nordkapp ” and award of drilling contract by Aker BP On 27 April 2018, the Company announced the purchase of “ Deepsea Nordkapp ”, an enhanced Moss • Maritime CS-60 unit winterized and purposely built for harsh environment areas. The Company further entered into a new 2 year drilling contract plus 1+1 year options with Aker BP. Odfjell Drilling estimates delivery of Deepsea Nordkapp to be in Q1 2019 and commencement of operations for Aker BP in Q2/Q3 2019. In addition, Odfjell Drilling signed a preference share investment agreement and a warrant • investment agreement with an affiliate of Akastor ASA (“ Akastor ”) to carry out a USD 75 million preference share issue and an issuance of warrants for 5,925,000 common shares in Odfjell Drilling to such affiliate. The proceeds from Akastor shall be used to partly finance Deepsea Nordkapp. Page 4
Highlights and material events in/after Q1 2018 cont. Drilling & Technology Equinor awarded contract for Platform Drilling services On 3 April 2018, Equinor awarded Odfjell Drilling a Fixed Platform Drilling Services contract for • Heidrun, located on the Norwegian Continental Shelf. Odfjell Drilling will operate both Grane and Heidrun until October this year and will thereafter continue only on Heidrun. The firm contract is for 4 years with 3 x 2 years optional periods. MODU Equinor awarded a letter of intent to Deepsea Atlantic On 16 April 2018, Equinor awarded a conditional Letter of Intent (“LOI”) to Deepsea Atlantic for 6 • firm wells with an estimated total duration of 18 months, scheduled to commence in early first quarter 2019. The LOI contains the option to continue operations for Equinor after the firm period and such options shall be based on market pricing. Page 5
Mobile Offshore drilling Units (MODU) - Strong operations with high utilization Q1 2018 Financial Utilization Financial Utilization 1 Q1 18 Q1 17 FY 17 Deepsea Stavanger 98,6 % 96,7 % 98,4 % Deepsea Atlantic 98,9 % 96,3 % 97,6 % Deepsea Bergen 99,7 % 98,5 % 97,6 % Deepsea Aberdeen 97,0 % 95,2 % 95,5 % 1) Financial Utilisation is measured on a monthly basis and comprises the actual recognised revenue for all hours in a month, expressed as a percentage of the full day rate for all hours in a month. Financial Utilization, by definition, does not take into account periods of non-utilisation when the units are not under contract. Page 6
Mobile Offshore drilling Units (MODU) - Contract status and day rates day rate Drilling unit Contract status Location /operator (USDk/day)* Norway Deepsea Wintershall/ 305/250/305/279 Stavanger Aker BP/Total/Aker BP Norway Deepsea Atlantic 295/296 Equinor UK Deepsea Aberdeen 431 BP Exploration Norway Deepsea Bergen 120/135-200 OMV/Equinor Norway Deepsea Nordkapp TBD Aker BP 2018 2019 2020 2021 2022 2023 2024 Contract Option Firm MODU contract backlog at 31 March 2018 of USD 1.3 billion with additional priced options valued at USD 0.2 billion * Rates may include mix of currencies and fluctuate based on exchange rates. Page 7
Platform Drilling and Technology - Portfolio secured by medium to long-term contracts Customer Platforms Contract status Heidrun (NO) Grane (NO) Johan Sverdrup (NO) Mariner (UK) Bressay (UK) Brage (NO) 4 UK platforms 1 5 UK platforms 2 Magnus (UK) 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Contract Option Firm contract backlog of USD 0.4 billion at 31 March 2018 Value of priced optional periods of USD 0.8 billion 1) Clair, Andrew, Bruce, Clair Ridge 2) Harding, Eider, Tern Alpha, Cormorant A, North Cormorant Page 8
Well Services - Pricing pressure offset by cost efficiency measures Key service offerings Tubular Running Services Drill Tool Rental Services Well Intervention Services ̶ Drill tools (drill pipe, drill collars and ̶ Conventional and remote-operated casing ̶ Wellbore clean-up tools and services tubing) running tools ̶ Casing exits ̶ Tubular handling equipment ̶ Remote-operated and conventional power ̶ Fishing services ̶ Stablisers, subs and valves tongs ̶ Well abandonment ̶ Downhole tools ̶ Casing / tubing running and recovery ̶ Slot recoveries Odfjell Well Services in numbers Operation in Services from 400+ 20+ 10+ Employees bases countries Page 9
Earnings visibility through USD 2.7 billion order backlog Total revenue backlog per year 1 Firm Options USD million Firm contracts USD 1.7 billion Priced options USD 1.0 billion 1 000 Total backlog USD 2.7 billion 800 885 600 551 36 470 411 26 17 400 515 444 200 395 342 - 2018 2019 2020 After 1) Estimates at 31 March 2018. Revenue from frame agreements and call-off contracts in Well Services and revenue from Technology and MODU Management is not included in the backlog. Page 10
Market outlook General • Oil price development in a positive trend • Successful efficiency programs carried out by E&P and service industry => Increasing E&P activity MODU • Still significant oversupply in the global rig market • Harsh environment markets are closer to supply/demand balance • Preference by E&P companies for high-spec and efficient 6 gen units • Substantial scrapping of mature units => Increasing demand for ODL fleet Well Services • Still over-supply of available resources and equipment • Observe an increased tender activity in the European and Middle East markets • Well Services has maintained its low capital expenditures to enhance utilisation of the existing equipment base • Turning point in activity level has passed => Time-lag effect on bottom line improvement Platform Drilling & Technology • Low volatility in the platform drilling market • North Sea modification market still at low level, but likely to increase in the medium to long term => Stable market conditions and scale effects to be materialized Page 11
Financial information Page 12
Group summary financials Condensed consolidated income statement P&L - (USD million) Q1 18 Q1 17 FY 17 Operating revenue 175 148 662 Other gains/losses 0 0 11 Personnel expenses -84 -61 -261 Other operating expenses -35 -33 -139 EBITDA 56 55 274 Depreciation -40 -41 -161 Operating profit (EBIT) 16 14 112 Share of profit (loss) from other joint ventures - -1 -1 Net financial items -23 -19 -74 Profit/(loss) before tax -7 -5 37 Income taxes -0 -2 -1 Profit/(loss) for the period -7 -7 35 Page 13
Segment reporting - MODU financials MODU Key Financials (USD million) Revenues Condensed P&L - (USD million) Q1 18 Q1 17 FY 17 481 Operating revenue 119 111 481 EBITDA 53 54 244 Depreciation and impairments -33 -33 -132 EBIT 20 22 111 119 111 Book value rigs 1 669 1 782 1 699 Q1 18 Q1 17 FY 17 EBITDA-margin 44,2 % 48,9 % 50,7 % EBIT-margin 16,4 % 19,4 % 23,2 % EBITDA Share of group revenue 1 65,8 % 73,0 % 70,4 % 244 Share of group EBITDA 1 88,1 % 91,5 % 83,9 % Share of group EBIT 1 95,8 % 114,4 % 86,3 % 1) Before group eliminations and corporate overheads 53 54 Q1 18 Q1 17 FY 17 Figures above do not include pro-rata 40% of Deep Sea Metro. Page 14
Segment reporting - Drilling & Technology financials Drilling & Technology Key Financials (USD million) Revenues 105 Condensed P&L - (USD million) Q1 18 Q1 17 FY 17 Operating revenue 34 21 105 EBITDA 1 -0 15 Depreciation and impairments -0 -0 -1 34 EBIT 1 -0 14 21 EBITDA-margin 2 % -0,2 % 14,2 % Q1 18 Q1 17 FY 17 EBIT-margin 2 % -1,3 % 13,4 % Share of group revenue 1 19 % 13,6 % 15,4 % EBITDA Share of group EBITDA 1 15 1 % -0,1 % 5,2 % Share of group EBIT 1 4 % -1,4 % 10,9 % 1) Before group eliminations and corporate overheads 1 0 Q1 18 Q1 17 FY 17 Page 15
Segment reporting - Well Services financials Well Services Key Financials (USD million) Condensed P&L - (USD million) Q1 18 Q1 17 FY 17 Revenues Operating revenue 28 20 97 97 EBITDA 6 5 32 Depreciation and impairments -6 -8 -28 EBIT 0 -2 4 28 20 78 99 82 Book value of equipment 386 376 380 Cost price for equipment in use Q1 18 Q1 17 FY 17 EBITDA-margin 22,6 % 24,8 % 32,6 % EBIT-margin 0,3 % -12,0 % 3,8 % EBITDA 32 Share of group revenue 1 15,4 % 13,4 % 14,2 % Share of group EBITDA 1 10,5 % 8,5 % 10,9 % Share of group EBIT 1 0,4 % -13,0 % 2,8 % 1) Before group eliminations and corporate overheads 6 5 Q1 18 Q1 17 FY 17 Page 16
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