skdp n-class jack-up unit drilling/production
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Oslo Rig Event 2009 Page 1
SKDP N-Class Jack-Up UnitDrilling/Production
N-Class Harsh Environment Jack-up Drilling/Production
N-Class Harsh Environment Jack-up Drilling/Production
Oslo Rig Event
24 September 2009
Oslo Rig Event 2009 Page 2
Company Introduction
Rig Concept and Design
Project status
Financial
Market update
1
2
AGENDA
3
4
5
Oslo Rig Event 2009 Page 3
SKDP established September 2006 and located in Kristiansand, Norway
31% owned by Skeie Technology AS, 12% by Wideluck Enterprises and 57% by external investors (Post financial restructuring in July 2009)
Signed contract for design and construction of three KFELS Class N Jack-up Unit with revised delivery in September and December 2010, and June 2011.
OTC listed in Oslo
Operational Management by Skeie Rig Management
COMPANY BACKGROUND - Skeie Drilling & Production ASA (SKDP)
Oslo Rig Event 2009 Page 4
RIG OPERATION
• Skeie Rig Management AS (SRM) established in Trondheim in 2008 as a wholly owned SKDP subsidiary.
• SRM will be responsible for all rig operations after delivery from yard.
• Key onshore and offshore management positions and section leaders already recruited.
• Pre-operations activities ongoing– Training and competency development
programs under development– QHSE management systems
established.– Maintenance systems.– Logistics (spare parts)
Oslo Rig Event 2009 Page 5
Company Introduction
Rig Concept and Design
Project status
Financial
Market update
1
2
AGENDA
3
4
5
Oslo Rig Event 2009 Page 6
Source: Company, ODS Petrodata
TECHNICAL COMPARISON WITH PEERS AS DRILLING RIG
MSC CJ70-X150A 1)
DNV492
40,000
291/336/3867390
15,000
46,793
15,7234,600
1 000 tons/2x1150 HP3
14,4845,200120
RIG DESIGN Keppel N-Class MSC CJ70-X150A MSC CJ62-S120Class DNV DNV DNV
Operating water depth (ft) 400 (430) 492 380
Drilling depths (ft) 35,000 30,000 30,000
Hull size (ft) (LxBxD) 264/289/35 291/336/38 256/296/35
Leg length (ft) 598 673 541
Cantilever outreach (ft) 75 90 60
BOP (psi rating) 15,000 15,000 15,000
Mud Pumps 3 (space for 4) 4 3Liquid mud capacity (bbls) 6,600 6,793 5,400Bulk mud capacity (bbls) 15,892 15,723 14,027Draw works (hp) 4,600 4,600 3,000Top Drive 1 000 tons/2x1150 HP 750 tons/1150 HP 750 tons/2x1150 HPCranes 3 3 3Main Power(hp) 13,050 14,484 6,880Variable Deck Load (st) 4,535 4,600 3,693Accommodation 120 120 115
1) Enhanced version of the existing CJ-70 design with increased drilling depth, increased variable deck load and 1000 t top drive.
Oslo Rig Event 2009 Page 7
TECHNICAL COMPARISON WITH PEERS (OUTSIDE NORTH SEA UNITS)
SKDP Units Typical Premium Unit (1)
Typical Premium Unit (2)
Typical 116-C Typical L-780
Design N-Class (KFELS) MOD V B
(KFELS)
Pacific Class (BM) LeTourneau 116-
C
F & G - L-780
Mod II
Delivered 2010 2006 to 2009 2006 to 2009 1979 1982
Operating Water Depth 500 ft + (1) 350 ft 375 ft 350 ft 300 ft
Leg Length 598 ft 480 ft 506 ft 477 ft 340 ft
Hull Size (L/B/D) 264/289/35 ft 234/208/25 ft 240/224/28 ft 243/201/26 ft 180/175/25 ft
Drilling depth 35,000 ft 30,000 ft 30,000 ft 25,000 ft 20,000 ft
Cantilever Outreach Transverse Envelope
75 ft66 ft
70 ft40 ft
70 ft40 ft
47 ft24 ft
40 ft25 ft
BOP Stack 18 ¾” - 15,000 psi 18 ¾” - 10,000 psi 18 ¾” - 15,000 psi 13 5/8” - 10,000 psi 13 5/8” - 10,000 psi
Mud Pumps 3 x 2,200 hp(space for 4)
3 x 2,200 hp 3 x 2,200 hp 3 x 1,600 hp 3 x 1,600 hp
Liquid mud cap. 6,600 bbls 3,500 bbls 4,100 bbls 1,500 bbls 2,100 bbls
Bulk capacity 15,900 cuft 11,100 cuft 11,300 cuft 8,160 cuft 8,000 cuft
Draw works 4,600 hp 3,000 hp 3,000 hp 3,000 hp 2,000 hp
Top Drive - Rating 1,000 T 750 T 750 T 750 T 500 T
Variable Load (Drilling) 5,000 T 3,750 T 3,750 T 3,900 T 2,400 T
Main Power 13,050 hp 9,275 hp 10,750 hp 6,600 hp 4,950 hp
Accommodation 120 110 115 106 98
(1) Depending on actual location criteria and leg extensions
Oslo Rig Event 2009 Page 8
COMBINED DRILLING AND PRODUCTION OPERATIONS
The Cantilever and Drill Floor can be repositioned 26ft (7.92M) to the Port side of the Vessel, to allow space for installation of a future production process module.
LimitsArea: 12,918 sq ft (1,200M2) Height: 52.5ft (16M)
Oslo Rig Event 2009 Page 9
Drill Floor located on the substructure above the cantilever.
Cantilever capable of being skidded fore and aft with center line (primary Cantilever position) of rotary up to 75 ft (22.86m) aft of sternIt can be relocated 26 (7,92m) ft to port (secondary Cantilever position)
The Drill Floor can be skidded 20 ft (6.1m) port and starboard of the Cantilever centerline both in primary position and in secondary position
Max operation envelop over a pre-
installed Jacket/Wellhead Platform:75 ft aft of Transom, 20 ft to starboard of hull centerline and 46 ft to port of hull centerline.
SPECIFICATIONS FOR DRILLING OPERATIONS
Oslo Rig Event 2009 Page 10
Proposed Frøy development concept (October 2007)Jack-up production/drilling unit with subsea concrete storage and riser shaft/ wellhead module
Oslo Rig Event 2009 Page 11
Company Introduction
Rig Concept and Design
Project status
Financial
Market update
1
2
AGENDA
3
4
5
Oslo Rig Event 2009 Page 12
OVERALL STATUS
Oslo Rig Event 2009 Page 13
CONSTRUCTION - HULL
Hull structure complete
Main equipment installed
Engines commissioned
First rig undocked Leg fabrication
ongoing Helideck fabrication
ongoing
Oslo Rig Event 2009 Page 14
CONSTRUCTION - CANTILEVER
Structure complete, main fixed equipment installed Commissioning to start November 2009
Oslo Rig Event 2009 Page 15
CONSTRUCTION – DRILL FLOOR
Structure complete, main equipment being installed Derrick assembly is ongoing offsite Drilling equipment - commissioning to start January 2010
Oslo Rig Event 2009 Page 16
Company Introduction
Rig Concept and Design
Project status
Financial
Market update
1
2
AGENDA
3
4
5
Oslo Rig Event 2009 Page 17
SKDP CAPITAL STRUCTURE PRE & POST RESTRUCTURING
Bank
Unfunded
Convert110Bonds
Equity
•Enterprice value down from 1620 MUSD to 1130 mUSD•Each rig from MUSD 540 to MUSD 370
Oslo Rig Event 2009 Page 18
MAIN FINANCIAL IMPLICATIONS FROM THE RESTRUCTURING
NOK 540m/$85m SKDP private placement completed
Current SKDP equity valued at NOK 0.5/share (~$6m)– Implying 3% “recovery” at transaction pricing
NOK 660m/~$100m of SKDP convertible bonds exchanged into new SKDP equity worth $10m at NOK 0.5/sh– Approx 10% recovery at transaction pricing
$495m of 2.pr bond loans written down to $305m– 61.6% average bond recovery – Implying $190m total 2.pr debt reduction/write-off– Remaining $305m to be continued as 2.pr debt– In addition, secured bondholders to receive SKDP shares worth approx $50m
(33% SKDP ownership post re-structuring) in exchange for 18-month write off of forward interest from June 2009
Cash break even day rates significantly reduced, reflecting lower capital costs– Break even rates estimated to come down from ~
USDk 360/day to ~USDk 295/day
Bank
Unfunded
Convert110Bonds
Equity
Oslo Rig Event 2009 Page 19
OWNERSHIP DISTRIBUTION POST DEAL
Post restructuring ownership Skeie Technology 31.5%, Wideluck 12%, other external investors (including
convertible bondholders) 23.5% and secured bondholders 33%
Skeie Technology and Wideluck collectively owns 43.5% of SKDP
International investors (secured bondholders and shareholders) represented through Euroclear Bank/Nominees owns 29.3% of the share capital in SKDP
Bondholders behave as individual investors and not as a group post restructuring
Share status Number of shares increased from 77.110 million to 1916.582 million
Oslo Rig Event 2009 Page 20
SKDP – SCENARIOS POST FIXReduced break-even meeting current dayrate environment
SKDP Post Fix SKDP SCENARIOS DAY RATES USD/day 300,000 325,000 350,000 375,000 400,000 425,000 450,000
Utilisation 96% 96% 96% 96% 96% 96% 96%Daily opex incl fixed mgmt fee ($120,000) ($120,000) ($120,000) ($120,000) ($120,000) ($120,000) ($120,000)No of rigs 3.0 3.0 3.0 3.0 3.0 3.0 3.0
PROFORMA P&LRig EBITDA USDm 184 210 237 263 289 315 342SG&A " (10) (10) (10) (10) (10) (10) (10) EBITDA " 174 200 227 253 279 305 332Depreciation (30yr/15yr) " (35) (35) (35) (35) (35) (35) (35)Operating profit " 139 165 192 218 244 270 297Net financials " (75) (75) (75) (75) (75) (75) (75)Pretax profit " 64 90 116 142 169 195 221Taxes (10%) " (6) (9) (12) (14) (17) (19) (22)Net Profit (after tax) " 57 81 105 128 152 175 199Cash Earnings " 92 116 140 163 187 210 234Debt amortisation " (90) (90) (90) (90) (90) (90) (90)Free cash flow " 2 26 50 73 97 120 144
EPS NOK 0.0 7.7 9.9 12.2 14.4 16.7 18.9
Share price NOK 1.0 1.0 1.0 1.0 1.0 1.0 1.0No of shares (fully invested) mill 945 945 945 945 945 945 945Market capitalisation USDm 141 141 141 141 141 141 141Net debt fully invested " 959 959 959 959 959 959 959Enterprise Value " 1,100 1,100 1,100 1,100 1,100 1,100 1,100EV/Rig 367 367 367 367 367 367 367
EV/EBITDA 6.3 5.5 4.9 4.4 3.9 3.6 3.3 P/E 2.5 1.7 1.3 1.1 0.9 0.8 0.7 RoE (on mkt cap) 40.6 % 57.3 % 74.1 % 90.9 % 107.6 % 124.4 % 141.2 %Free cash flow yield (on mkt cap) 2% 18% 35% 52% 69% 85% 102%Net interest bearing debt/EBITDA 5.5x 4.8x 4.2x 3.8x 3.4x 3.1x 2.9xEBITDA/Net interest 2.3x 2.7x 3.0x 3.4x 3.7x 4.1x 4.4xSource: Pareto Securities AS, Corporate Finance
Oslo Rig Event 2009 Page 21
Company Introduction
Rig Concept and Design
Project status
Financial
Market update
1
2
AGENDA
3
4
5
Oslo Rig Event 2009 Page 22
NCS – JACK-UP CONTRACT STATUS
Current Norwegian jack-up fleet tied up on firm contracts.
Limited no. of available units and new entrants on the NCS in 2010/11.
SKDP units well positioned for new contracts based on revised delivery dates.
2009 2010 2011NAME CURRENT OPERATOR FOLLOWING
OPERATORSAREA CURRENT
COUNTRYCONTRACTOR
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
Rowan Gorilla 06 BG NOS UK/NOR/UK Rowan Companies c c c c c c 2 2 2 c c c c c c c c c 1 1 1 1 1 1 1 1 1 1 1 1SKDP 1 UNDER CONSTRUCTION SEA SGP Skeie D&P 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2West Epsilon StatoilHydro NOS NORWAY Seadrill c c c c c c c c c c c c c c c c c c c c c cPetroProd UNDER CONSTRUCTION SEA SGP Jurong 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2SKDP 2 UNDER CONSTRUCTION SEA SGP Skeie D&P 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2Maersk Guardian Talisman NOS NORWAY Maersk Contractors c c c c c c c c c c c c c c c c c c c c c c c c cSKDP 3 UNDER CONSTRUCTION SEA SGP Skeie D&P 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2Maersk Giant Talisman DONG NOS NORWAY Maersk Contractors c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c cMaersk Inspirer StatoilHydro NOS NORWAY Maersk Contractors c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c cMaersk Gallant ConocoPhillips NOS NORWAY Maersk Contractors c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c cMaersk Innovator ConocoPhillips NOS NORWAY Maersk Contractors c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c
FIRM CONTRACT cOPTION 1
YARD / UNDER CONSTRUCTION 2
©2009©2009
Oslo Rig Event 2009 Page 23
Norway Jackups Supply & Demand: 2005-2013
0
2
4
6
8
10
12
14
16
18
jan.2005 jan.2006 jan.2007 jan.2008 jan.2009 jan.2010 jan.2011 jan.2012
Existing contracts Options Requirements Possibles Supply Including Rowan Gorilla VI
SKDP 1, PetroProd 1 & SKDP 2 & 3 due out of the yard.
Last Updated: 13.07.09
Rowan Gorilla VI - Subject AOCto be clarified around Q3 09
Oslo Rig Event 2009 Page 24
UPCOMING REQUIREMENTS AND PROSPECTS
Client Location/ Field
Statoil Gudrun, DagnyValemon (NCS)
ConocoPhillips Ekofisk area (NCS)
BP Valhall/Tambar (NCS)
Total Hild (NCS)
Lundin Luno, Nemo/Krabbe (NCS)
Talisman Yme, Grevling (NCS)
Det Norske Frøy (Production/drilling) (NCS)
BG MandarinBream (Production/drilling) (NCS)
Client Location / Field
ONGC India
Client Location/ Field
Pemex Gulf of Mexico
Various Deep gas prospects
Client Location / Field
Chevron Nigeria
Husky Location/ Field
Husky Nova Scotia, Canada
Husky Location/ Field
BP/Exxon Sakhalin
Oslo Rig Event 2009 Page 25
SUMMARY
Three N-Class jack-up rigs under construction in Singapore ready for delivery in 2010/11 are on schedule and budget.
Financial restructuring completed in July 2009 securing a significant debt write-off.
All rigs are fully financed during construction period.
New capital structure has triggered close dialogue with several oil companies for drilling projects in North Sea and other markets.
Strong demand for new jack-up drilling units from 2010 onwards with current oil price.
SKDP maintains its optimism that all three rigs will be on contract prior to delivery.
Oslo Rig Event 2009 Page 26
Skeie Drilling & Production ASA
Tordenskjoldsgate 9 4612 Kristiansand Norway
Telephone: +47 38 04 19 40Fax: +47 38 04 19 41
WWW.SKEIEDRILLING.COM
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