2016 Pareto Oil & Offshore Conference 14 Sep 2015 Oslo, Norway - PowerPoint PPT Presentation

2016 Pareto Oil & Offshore Conference – 14 Sep 2015 – Oslo, Norway Bart Heijermans - CEO

Weathering the prolonged oil downturn Forward-Looking Statements This presentation contains certain statements that may be deemed to be “forward -looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, are forward-looking statements. These include statements that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future, general industry conditions, future results of the Company’s operations, capital expenditures, asset sales, expansion and growth opportunities, financing activities, debt repayment and other such matters. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Although the Company believes that its expectations stated in this presentation are based on reasonable assumptions, actual results may differ materially from those expressed or implied in the forward-looking statements. The forward-looking statements are subject to a number of known and unknown risks and uncertainties, including the performance of contracts by suppliers and customers; delays, costs and difficulties related to customer projects; actions by governmental and regulatory authorities; operating hazards and delays; employee management issues; local, national and worldwide economic conditions; uncertainties inherent in the exploration for and development of oil and gas; complexities of global political and economic developments; volatility of oil and gas prices and other risks. Each forward-looking statement speaks only as of the date of this presentation, and the Company undertakes no obligation to publicly update or revise any forward-looking statement. www.deepoceangroup.com 1

Weathering the prolonged oil downturn Brief introduction to DeepOcean – a subsea services company  A leading provider of integrated subsea services for oil & gas, renewables and interconnector customers  A market leader in diverless subsea IMR in the Greater North Sea  One of the most active independent cable installation and burial contractors in renewable industry  Focus on solving our customers’ problems  Recognized global brand for relentless customer focus and operational excellence having operated in the sector since the 1990s Service lines Survey & Seabed Subsea IMR Decommissioning Seabed Mapping Intervention Installation www.deepoceangroup.com 2

Weathering the prolonged oil downturn Company factsheet Vessels ROVs / AUVs Trenchers & Ploughs Human Resources  Owned: 6  40 ROVs  5 ploughs  ~1,000 employees  Chartered:12  2 AUVs  7 jet trenchers  ~100 full time agency  4 mechanical cutters personnel / Current Operations Other Assets contractors  Brazil  Module handling Financials  11 offices in 7 systems (3 off) countries  Ghana  2015 revenue of $411  Geotechnical rig million (1)  Netherlands Ownership  Excavators / dredgers  2015 Adj. EBITDA of  Norway $39 million (1)  Private company  Mattress frames  Mexico  2015 Loss of $69.3  Financial investors  ROV tooling  UAE million  Largest owner ~16%  UK  Net debt of $40 million of shares at 31 Dec 2015 Notes: (1) Continued operations www.deepoceangroup.com 3

Confidential – Not for Public Dissemination Weathering the prolonged oil downturn Operational vessels and offices Maersk Recorder Edda Freya Edda Flora Edda Fauna Maersk Connector Deep Vision Go Pegasus Deep Helder Rem Ocean Havila Phoenix Atlantic Challenger Volantis Arbol Grande Owned Chartered Dina Star Long term ROV operations on:  North Sea Giant (North Sea Shipping)  Normand Ferking (Solstad)  CBO Isabella (CBO) Office locations ROV Ops Trencher Ops Rem Forza  Bourbon Astenix (Bourbon) www.deepoceangroup.com 4 Note: Exclude cold stacked vessels Deep Endeavour, Deep Wave, Deep Investigator and Walker1

Weathering the prolonged oil downturn The Good, the Bad and the Ugly www.deepoceangroup.com 5

Weathering the prolonged oil downturn Backlog up but margins under pressure 49% Backlog (USDm) 900 815 800 3.5x 738 3.1x 703 Y-o-Y 672 700 666 3.0x growth: 14% 625 574 600 2.4x 547 539 2.5x 510 487 477 474 500 456 2.0x 1.9x 437 431 2.0x 411 1.7x 384 1.7x 400 1.5x 300 0.8x 0.8x 0.8x 1.0x 0.7x 200 0.7x 0.6x 0.6x 0.6x 0.6x 0.4x 0.4x 0.4x 0.5x 100 0 0.0x Q1 Q2 Q3 YE12 Q1 Q2 Q3 YE13 Q1 Q2 Q3 YE14 Q1 Q2 Q3 YE15 Q1 Q2  Strong order intake year over year  Several offshore renewables and interconnect projects contracts and new Tullow Ghana contract  Contract margins are under pressure  Previously weaker contractors and ship owners emerge from restructurings with significantly lower cost bases ~ 50% of backlog is renewable and interconnector contracts www.deepoceangroup.com 6

Weathering the prolonged oil downturn Still securing many contracts but high fixed cost base depresses EBITDA  Approx. 50% of 2015 revenue decline was Revenue development 2011-2016FC caused by NOK weakening against USD  Danger of being squeezed between lower $/bbl revenue and high fixed cost of which charter $m 112 800 111 120 109 expense is a large component 100 100 700  Vessel charter cost to be reduced 632 80 609 drastically to bring in line with current market 600 53 60 rates and structure ? 43 513 513 40 500  Three owned vessels laid-up and three 20 411 ? 400 chartered vessels to be released in 2016 0 300 -20  Headcount reductions from ~1,500 to ~1,000 in two years and SGA down 40% -40 200 -60  ~86% of employees have agreed to a 100 -80 voluntary compensation reduction of 5.5%, 0 -100 a sign of a strong company culture 2011 2012 2013 2014 2015 2016FC Revenue Avg. oil price Need to restructure charter contracts or vessels will be returned to owners www.deepoceangroup.com 7

Weathering the prolonged oil downturn Business Foundations Framework Agreements in GNS Operations in Mexico IMR, Survey and installation services IMR, survey and installation services Offshore Renewables and Interconnectors Projects Africa Largest fleet of cable lay and trenchers Successful start in Ghana www.deepoceangroup.com 8

Weathering the prolonged oil downturn Core services for oil & gas customers Hydrate Remediation Decommissioning Installation of flexible risers Pipeline Inspection Laser Survey XMAS Tree Installation Reduced demand at lower prices www.deepoceangroup.com 9

Weathering the prolonged oil downturn Innovation - Superior ROV  Large stable vehicle with optimal placement of sensors and latest generation survey instrumentation (MBEs, INS, lasers, video and still cameras)  Acoustic survey speed of up to 6 knots Productivity improvement compared with 2014-15 Average 200% 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% Visual PI Acoustic PI ROV grid ROV route survey survey Higher productivity resulting in lower cost for customer 10 www.deepoceangroup.com

Weathering the prolonged oil downturn Well positioned for offshore cables with installation vessels and world’s largest trencher fleet T3200 UT1 Mechanical Ploughs Jet trenchers   7 Off 5 off  4 Off   ROV Pipeline  ROV   Track Cable  Track Picking the right tool for the job www.deepoceangroup.com 11

Weathering the prolonged oil downturn Maersk Connector 117 km of cable being spooled onto the 7000 te. carrousel www.deepoceangroup.com 12

Weathering the prolonged oil downturn Renewable and Interconnector Projects in execution phase  Value of DeepOcean’s contracts in excess of $350 million  Large number of DeepOcean’s assets have been deployed  6 vessels  6 trenching tools Western  ROVs / Carrousels Link Race Bank Walney Nemo Bligh Bank www.deepoceangroup.com 13

Weathering the prolonged oil downturn Ghana Operations – Started in February 2015  Rem Forza operational in Ghana since February 2015  3 year IMR Contract with Dina Star since March 2016  ROV Support contract on Bourbon Astenix PSV  Frogging with Rem Forza (18244 trips)  Installation of trees, jumpers, flying leads, manifolds  IMR works  Survey (incl. subsea laser)  Engineering Support  More than 50 Ghanaians are involved in our operations www.deepoceangroup.com 14

Weathering the prolonged oil downturn Our focus  Safety of all employees and other stakeholders  Restructuring charter contracts  Operational excellence  Finding and contracting new work  Collecting payments  Innovation www.deepoceangroup.com 15

Weathering the prolonged oil downturn Follow DeepOcean Group on Twitter @deepoceangroup Q&A Join the discussion on LinkedIn: www.linkedin.com/company/deepocean More than 30,000 followers http://www.youtube.com/deepoceanonline www.deepoceangroup.com www.deepoceangroup.com 16