february13 th 2008 - agr reports other...• well management • rig campaigns •...
Post on 25-Sep-2020
4 Views
Preview:
TRANSCRIPT
4th QUARTER 2007
February 13th 2008
CONFIDENTIAL DRAFT 2
Business snapshot
CoreBusiness
SpecialProjects
• Well management
• Rig campaigns
• Reservoir management
• RMR
• Well service tools
• Trenching & excavation
• Operations and maintenance
• Subsea Infrastructure
• Facilities Integrity
• Engineering and project
management
Field OperationsDrilling servicesPetroleum services
• Drill Pipe Assembly
• Deepwater RMR
• New Subsea Excavation
technology
• Integrated asset management
• CannSeal
• Turnkey Drilling
• New pipeline inspection
technology
• Multi Column Floater
CONFIDENTIAL DRAFT 3
Content
1. Key issues
2. Financials & Business Area Review
3. Technology update
4. Detailed financials
CONFIDENTIAL DRAFT 4
Three key issues
1. Q4 EBITDA
2. Financing
3. RMR roll-out
CONFIDENTIAL DRAFT 5
5969
8070
98
63
1. Q4 EBITDA
Q3 ’06 Q4 ’06 Q1 ’07 Q2 ’07 Q3 ’07 Q4 ’07
EBITDA evolution
Proforma, MNOK
Q4 impacts
3. Drilling Services short fall
2.Upstream underperformance*•Reversal of sales profit•Overhead cost increase
1. AED provision
* Reduction in purchase price by AU$31M January 2008
CONFIDENTIAL DRAFT 6
2. No short term liquidity issues
•Refinancing of debt in place–Increased short term loan facility by 300 MNOK for 1st half of 2008
•Significant cash flow from operations expected in 2008
•Ongoing initiatives to improve liquidity situation–Adjust investment program according to free cash flow situation–Sale of some non-core assets–Working capital reduction project–Overhead cost reduction plan
Liquidity status and management plan
No requirement to raise
new equity
CONFIDENTIAL DRAFT 7
•Strong market interest •Strong sales and business development team•First Jack-up contract
3. RMR roll-out 1/2
• 2nd half of 2007 below expectation
•Organizational short fallsincluding:- management change- weak businessdevelopment
- contractual terms
Lower RMR utilization than anticipated
110
515
28
’03 ’04 ’05 ’06 ’07
# of wells drilled with RMR fleet
’08
45+
•Next step deepwater•~20 RMRs on average in 2008•~55% utilization during 2008•45+ wells expected in 2008
Going forward
CONFIDENTIAL DRAFT 8
3. RMR roll-out 2/2
RMR Allocation Strong momentum
68Strong prospect
33Contract negotiations
30+30Total
96Contract,
commencement date
pending
1413Contract and agreed
commencement date
RMR No’s
At 12 02 08
RMR No’s
At 04 02 08
Client Status
CONFIDENTIAL DRAFT 9
Content
1. Key issues
2. Financials & Business Area Review
3. Technology update
4. Detailed financials
CONFIDENTIAL DRAFT 10
Q4 2007 Group financials P&L
1) Excludes acquisitions and acquisition related items
2) Actual figures
Q4 2007 Q4 2006 12M 2007 12M 2006
Figures in MNOK Pro Forma Pro Forma Pro Forma Pro Forma
Operating income 567 467 2.168 1.796
EBITDA 63 59 311 296
Margin (%) 11 % 13 % 14 % 16 %
Depreciation (20) (13) (67) (43)
EBITA 43 46 244 254
Margin (%) 8 % 10 % 11 % 14 %
Amortisation (5) (8) (43) (159)
Write downs and provisions (57) (57)
EBIT (19) 38 144 95
Margin (%) -3 % 8 % 7 % 5 %
Net financial items (37) (3) (116) (65)
Profit before taxes (56) 35 28 30
Margin (%) -10 % 8 % 1 % 2 %
CAPEX(1)(2) 162 82 427 220
• EBITDA Q4 ended at MNOK 63, corresponding to an EBITDA margin of 11%
• Provisions made due to AED outstanding amount
• Slower ramp-up in RMR roll out
• Upstream
•Net financial expenses ended MNOK 37 for Q4, which includes 26 in interest expenses on senior debt, MNOK 10 in net losses on interest rate swaps and currency changes and MNOK 2 related to a loss on financial investment
Q4 key points
CONFIDENTIAL DRAFT 11
Petroleum Services’ Financials(Pro forma)
(1) Actual figures, excluding acquisitions
Q4 2007 Q4 2006 12M 2007 12M 2006
Figures in MNOK Proforma Proforma Proforma Proforma
Operating income 400 370 1.525 1.310
Growth (%) 8 % 16 %
EBITDA 43 46 202 202
Margin (%) 11 % 12 % 13 % 15 %
Growth (%) -6 % 0 %
Capex(1) 46 11 73 22
Q4 results:
•Strong Well Management performance in Q4 (excl. Upstream)•Strong performance by Reservoir Management; potential for further international expansion•Strong pipeline of work for 2008 – 77 firm wells (rig capacity secured for 75)
CONFIDENTIAL DRAFT 12
Rig
NorwayBredford Dolphin
Mærsk Giant
TunisiaOcean Spur
Ensco 85
DenmarkNoble George Sauvagneau
UKEnsco 80
Ensco 92
Byford Dolphin
Transocean Prospect
Ensco 100
Ensco 85
Ensco 80
Sedco 704
AustraliaWilcraft
Stena Clyde
2007 2008 2009 2010
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
AGR option to extend rig contractCurrently contracted
Secured rig campaigns and well prospects
•56 wells drilled in 2007
•77 firm wells for 2008(Rigs for 75)
CONFIDENTIAL DRAFT 13
Petroleum Services – next steps
• Sustainable well management business in NCS, UK & Australia
• Future expansion of the current model into deepwater and new geographic regions
• Integrated services
• Additional planned business models add to Petroleum Services future growth:
1. Turn Key Drilling
2. NOC campaigns
3. Field Development
CONFIDENTIAL DRAFT 14
25000
22500
13800
2000
800
700
500
400
320
225
230
127
73
50
87
18
6300
2008 Well Management currentclient overview (rig consortia)Market Cap per January 30th 2008, MUSD
B*
A
C
D*
E
F*
G
H
I*
J*
K*
L*
M*
N
2008 clients excluding Norway
O
P
Q*
No guarantee plans
No guarantee plans
No guarantee plans
Parent company guarantee
No guarantee plans
Letter of Credit or Escrow
No guarantee plans
Escrow
Letter of Credit
Letter of Credit
Letter of Credit
Escrow
Escrow
Letter of Credit
Escrow
Escrow
Letter of Credit
Financial guarantee**
• R*• S• T*
Private companies
• Letter of Credit
• Letter of Credit
• Letter of Credit
• 7 clients – all contracts direct with the rig owner – AGR has no contractual obligation to rig owner
Norway
* Companies with whom AGR has had a previous working relationship
** Client agreed to form of guarentee
AED: At time of contract for Wilcraft market cap of ~900M and trading history with AGR/Peak
CONFIDENTIAL DRAFT 15
Drilling Services’ Financials(Pro forma)
(1)Actual figures, excluding acquisitions
Q4 2007 Q4 2006 12M 2007 12M 2006
Figures in MNOK Proforma Proforma Proforma Proforma
Operating income 62 53 242 195
Growth (%) 16 % 24 %
EBITDA 22 20 94 82
Margin (%) 36 % 37 % 39 % 42 %
Growth (%) 12 % 14 %
Capex(1) 91 60 299 172
Q4 results:
• Investment into RMR roll out – staff operator recruitment/training - major investment in training has plateaued to reach critical mass
• Client well delays deferred earnings
• RMR secured first contract on Jackup (start up February 2008)
• DPAL plus 10MNOK due to cost activation in inventory
CONFIDENTIAL DRAFT 16
Drilling Services – next steps
(1) Actual figures, excluding acquisitions
•Maintain RMR customer satisfaction
•Build on market penetration and increase robustness
•Deepwater RMR field trial mid 2008 with JIP partners
•Ormen Lange contract on track for new excavation technology Claycutter X (and SeaVator)
•DPAL at 60 pipes per week; controlled ramp up with aim of producing 400 per week YE ’08
CONFIDENTIAL DRAFT 17
RMR market expansion plans
Shallow and medium depth water drilling (<800m)
Tophole Rest of wellTophole
RMR
RMR
DWRMR
RMR
RMR
DW RMR
DWRMR
CMP
CMP
Platform rigs (890)
Offshore drilling platforms and rigs(available #s, May ’07)
Semisubmersibles (178)
Jack-ups (405)
Drillships (40)
Tenders/ barges (115)
Current market
RMR
Near term future markets
Longer term future markets
Potential but not tested
Deep water drilling (>800m)
CONFIDENTIAL DRAFT 18
FieldOperations’ Financials(Pro forma)(1)
(1) Excluding AGR Consultants(2) Actual figures, excluding acquisitions
Q4 2007 Q4 2006 12M 2007 12M 2006
Figures in MNOK Proforma Proforma Proforma Proforma
Operating income 109 68 400 317
Growth (%) 61 % 26 %
EBITDA 15 2 61 36
Margin (%) 14 % 4 % 15 % 11 %
Growth (%) 522 % 69 %
Capex(2) 10 10 26 26
• Roll out of NCS high margin concepts and new technology globally• Pipeline project for BP Thunderhorse in US GoM started in 4Q.• Second Maintenance Management project contracted in Asia • Maintenance management team in place and in operation in Kuala Lumpur• Continuously strong growth for high margin special services.
Q4 results and future outlook:
CONFIDENTIAL DRAFT 19
Content
1. Key issues
2. Financials & Business Area Review
3. Technology update
4. Detailed financials
CONFIDENTIAL DRAFT 20
Claycutter X
Ormen Lange gas field 2008
AGR a leader in excavation globally
Future prospects for Claycutter X positive:
Steep increase in global subsea activity
Move to deeper water for offshore developments
Steep increase in demandfor pipe-lay and trenchingactivity
CONFIDENTIAL DRAFT 21
Neptune
Phased Array
• First high resolution ROV assisted ultrasonic pipe and weld inspection solution.
• Deployment by small inspection class ROVs.
• Operating depth historically restricted by analogue technology, has been extended from metres to kilometres.
Successfully tested in Bergen with 3 oil majors
present
CONFIDENTIAL DRAFT 22
CannSeal
•tool for sealing off water and gas inflow in wells
What is Cannseal?
•Reduced water production •Accelerated oil production
CannSeal Impact?
•Faster, better, less expensive and less risk of damaging well
•Field trial scheduled mid 2008
Value propositions to customers?
Before using CannSeal
After using CannSeal
Water leaks between casing and well bore
CannSeal plug between casing and well bore + plug inside casing stops water flow
Oil flows from reservoir # 1
Water flows from reservoir # 2
CONFIDENTIAL DRAFT 23
Multi Column Floater (MCF)
•Floating drilling and production system•Deep and harsh water drilling and production
What is the MCF and what areas of use are relevant?
•Reduced drilling costs•Accelerated project development•Less weather related downtime
How will the MCF make an impact?
•Successful completion of model tests•Contracts with two individual clientsfor evaluation of the MCF for use on their fields•First request for tender
Current Status
CONFIDENTIAL DRAFT 24
Content
1. Key issues
2. Financials & Business Area Review
3. Technology update
4. Detailed financials
CONFIDENTIAL DRAFT 25
12M 2007 Group financialsBalance sheet (Actual)
(1) Installments on 2006/07 interest-bearing debt
2007-12-31 2007-09-30 2006-12-31
Figures in MNOK Actual Actual Actual
Intangible assets 1.334 1.556 1.203Machinery and equipm. 600 492 299
Other fixed assets 58 54 40
Total fixed assets 1.992 2.101 1.541
Account receivables 1.357 966 515
Other current assets 90 153 220
Cash and cash eq. 137 9 148
Total current assets 1.584 1.128 883
Total assets 3.576 3.229 2.424
Total equity 920 912 902
L-T Interest-bearing debt 1.036 967 820
Other L-T liabilities 186 412 53
Total L-T liabilities 1.223 1.382 872
S-T Interest-bearing debt(1) 140 111 42
Other S-T liabilities 1.293 824 609
Total S-T liabilities 1.433 935 650
Total equity and liab. 3.576 3.229 2.424
At the end of December 2007:
• Total assets = MNOK 3 576.
• The increase in assets from 30
September relates primarily to
investments in equipment related to RMR
and increase in accounts receivables
• Intangible assets = MNOK 1 334,
consisting of MNOK 982 in goodwill and
236 in assets related to acquisitions,
MNOK 87 in patents and R&D
(amortized), and MNOK 29 in deferred
tax assets
• Total equity = MNOK 920, resulting in an
equity to total assets ratio of 26%
• Net interest bearing debt = MNOK 1040
Q4 highlights
CONFIDENTIAL DRAFT 26
Q4 2007 Group financialsCash Flow (Actual)
(1) WC = Inventory + Trade receivables – trade payables + other accruals
(2) Liquidity resources as per Q4 2007 of MNOK 399 including revolver facility
(2)
Q4 2007 Q4 2006 12M 2007 12M 2006
Figures in MNOK Actual Actual Actual Actual
Profit before tax -79 7 -31 47
Gain from sale of shares in subsidiary -6 - -137 -
Taxes -13 -11 -38 -11
Adj. for non-cash items 100 60 359 133Change in working capital(1) 107 -41 -10 -76
Operating cash flow 109 16 145 94
Cash flow from investments -151 -156 -543 -849
Change in debt 99 59 315 126
Issuance of shares 71 161 72 711
Cash flow from financing 170 220 388 836
Change in cash 127 79 -11 81
Cash per start of period 9 69 148 66
Cash per end of period 137 148 137 148
•Operating cash Q4 2007 ended at MNOK
109, compared to MNOK 16 in Q4 2006.
The deviation between EBITDA and cash
flow from operations is due to a decrease
in working capital in accordance with plan.
• During the third quarter of 2007, cash-flow
from investment activities was MNOK 151,
mainly related to investments in RMR and
DW RMR JIP. The number includes final
proceeds from the sale of AGR RC
Consultants
• Cash flow from financing activities was
MNOK 170.
• Capex for Q4 2007 was MNOK 162
primarily related to RMR fleet expansion
Q4 highlights
CONFIDENTIAL DRAFT 27
Interest-bearing debt
(1)A combination of small loans with different terms and conditions(2)Drawdown of MNOK 65 is reported net against cash in Balance
Sheet
Q4 highlights:
•Gross interest-bearing debt at the end December 2007 was MNOK
1176
• At current debt levels, the
company’s borrowing rate is 80bp
above NIBOR
• MNOK 450 fixed interest rate at
4.33% + margin (5 years), and
MNOK 84.0 fixed interest rate at
5.27% + margin (5 years)
• AGR has increased revolver facilities
with MNOK 300 in February 2008
Credit Amount Interest
Loan description available per December rate
MNOK MNOK (%)
Term Loans 710 710 6,28
Revolving credit facility 565 465 6,28
Other credit facilities (1)
5 1 NM
Multipurpose credit facility (2)
200 0 6,60
Interest bearing debt 1 480 1 176
CONFIDENTIAL DRAFT 28
Write Downs
Issues
1
2
3
4
DPAL Stock*
RES acquisitionintangibles
FDPSO
Pipetech
TOTAL
MNOK
31.900
10.763
8.055
6.113
56.831
*10MNOK cost costs included in inventory
CONFIDENTIAL DRAFT 29
In summary – market fundamentals
Strong underlying growth factorsfavor AGR’s portfolio:•More drilling•More complex drilling•More infrastructure•Older infrastructure •An emerging deepwater segment
CONFIDENTIAL DRAFT 30
In summary – AGR Group
2. No liquidity issues•Strong cash flow from operations in 2008•New short term financing in place•CAPEX/ investment program adapted to liquidity situation•Liquidity improving programs initiated: Working Capital reduction and sales of non-core assets
1. AED incident non recurring •Financial backbones of 2008 rig campaign customers evaluated•Financial guarantees put in place where necessary
3. 2008 outlook remains strong •Petroleum Services – a leading player in the outsourced drilling segment; excellent pipeline for 2008; capacity shortage puts AGR in a strong position
•Drilling Services – measures taken to address slowdown in 2nd half 2007•Field Operations – a mature business in a stable industry segment; unique concepts/technologies developed and proved on the NCS to be introduced in Australia, UK continental shelf and GoM
top related