DeepOcean July 2014 DeepOcean Presentation - Pareto Conference Oslo - - PowerPoint PPT Presentation

July 2014

DeepOcean

DeepOcean Presentation - Pareto Conference – Oslo – 10 September 2014 by Bart Heijermans - CEO

Cliff diving into the Norwegian fjords of Kragerø

Navigating through crowded waters

Could have been worse….

Temporary softening due to demand growth slow down and oversupply of assets

Brief introduction to DeepOcean – a subsea services company

Navigating through crowded waters

 A leading provider of integrated subsea services  Focused on the lower risk subsea service niches with inherent day-

rate nature of contracts

 Revenues predominantly exposed to end-user OPEX budgets  A market leader in diverless subsea IMR in the Greater North Sea  A global leader of trenching services  Recognised global brand for relentless customer focus and

• perational excellence having operated in the sector since the

1990s

Survey & Seabed Mapping Seabed Intervention Subsea Installation IMR Decommissioning

Service lines

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Company overview

2016

• Edda Freya (SURF)
• Interconnector

vessel (Maersk)

delivery in 2014/2015

Human Resources (1) ROVs Trenchers & Ploughs Vessels(1)

personnel / contractors

Notes: 1) As of 30-June-2014 2) Higher turnover in Mexico and Brazil

Other Assets

systems

Ownership

• f shares

2013 Financials

EBITDA

Confidential – Not for Public Dissemination

Current Fleet

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Office locations

Long term ROV operations on:  North Sea Giant  Normand Ferking  CBO Isabella

14 14 14

14

14

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Diverless IMR Operations

Too many companies call themselves IMR contractors. Chartering a PSV or a ROVSV with a rented ROV doesn’t make you an IMR Contractor… Subsea IMR and pipeline inspection  Need ingenuity and fast track problem solving capabilities  > 1500 vessel days per year and >500 call-offs (projects) per year  3000 - 5000 km of pipeline inspected annually  Approximately 60-70 (75-80% are engineers) persons in the Haugesund office are supporting IMR operations One of our dedicated IMR vessels, Edda Fauna, with a third party IMR vessel

Scale squeeze FPSO Thruster Replacement Module Handling Brace installation

Diverless IMR Operations Replacement of Veslefrikk flexible risers YME Platform weld NDT Orman Lange diverless hot-tap

Selection of IMR projects

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Pipeline Validation IMR2 IMR

LOFS / PRM

Cable installation for BP

Selection of Construction and Seabed Intervention Projects

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Trenching in German sector

Renewables

Installation and burial of ~535km of cables and umbilicals on Snorre PRM project

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Laser and Sonar Survey by ADUSDEEPOCEAN

Selection of Survey and Decommissioning projects

Costa Concordia GASSCO

Petrobras

Survey Diverless decommissioning

Secured first long term AUV contract Use of ADUSDeepOcean’s visualization technology Geotechnical work for oil & gas and renewable customers AUV Operations Wind farm IMR Geotechnical Services

New developments

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Edda Freya to be delivered in 1Q2016 Vessel with 7000 te. carousel to be delivered in 1Q2016 Technip – DeepOcean JV received award from Statoil for new 5 year contract IMR2 and SURF Power cables and umbilicals Pipeline Repair System (PRS)

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 Strong long-term drivers, but short-term visibility reduced as projects are pushed out in time  Muted overall sentiment for offshore oil services, as evidenced by e.g. seismic majors trading at all-time low since the global financial crisis after having reported weak Q2 and reduced guidance  Focus on cut-backs in E&P spending (Statoil, Total and Shell most vocal) and greater capital discipline among oil companies has continued resulting in project delays and margin pressure

• contractors. Unlikely that any contractor won’t be impacted by this development

 Worry that less mature companies with low backlog will pursue volume with irrational pricing and drive down margins. While this is unsustainable in the long-term, it can harm the whole industry on the shorter-term  Contractors taking more risk on CAPEX projects in oil & gas and renewable segments  Sale of properties by majors to independents in Greater North Sea resulting in temporarily lower level of activity  Large PSV and AHTS vessel owners are looking at deploying these vessels in subsea market

Industry Developments

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Hot, Floating and Crowded

Why we need consolidation and how it can renew

• ur industry…

Challenges  Too many tier 2 subsea contractors  Potential to be squeezed by:

• Oil & gas producers / Utilities
• Tier 1 contractors
• Peers

 Financial sponsors seeking to exit at some stage  Consolidation is needed Our plan for navigating through crowded waters  Focus on niche areas  Control cost and maintain a healthy balance sheet  Align the company with customers and offer quality services to lower cost  Operational excellence

The Sequel….

 More subsea wells

• Increased demand for construction, IMR and

decommissioning

 Bigger and more complex subsea structures

• Need for larger and more capable vessels
• More pro-active and critical maintenance

requirements

 Ageing Infrastructure

• Increased requirements for IMR and replacement

scope

• Focus on IOR (Increased Oil Recovery)
• Installation, IMR and change-out of subsea

production systems

• Well P&A and intervention (downhole IMR)
• Permanent Reservoir Monitoring (PRM)
• Electrification projects

 Renewables

• Increase in number of Offshore wind farms
• Growing market for IMR and remedial trenching

 West European Grid

• New interconnector power cables

Strong believer in underlying subsea trends

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Join the discussion on LinkedIn: www.linkedin.com/company/deepocean Follow DeepOcean Group on Twitter @deepoceangroup www.deepoceangroup.com http://www.youtube.com/deepoceanonline

Q&A

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