bw offshore · bw group is a global maritime company engaged in shipping, floating gas...

BW OFFSHOREInvestor Presentation

15 November 2019

SMARTER TOGETHER

Disclaimer

This Presentation has been produced by BW Offshore Limited exclusively for information purposes. This presentation may not be redistributed, in whole or in part, to any other person.

An investment in the Bonds involves risk and several factors could cause the actual results, performance or achievements of BW Offshore to be materially different from any future results,

performance or achievements that may be expressed or implied by statements and information in this Presentation. Please see slide 40-45 for an overview of the risks related to the Group’s

business and industry, and risks related to the Bonds.

This document contains certain forward-looking statements relating to the business, financial performance and results of BW Offshore and/or the industry in which it operates. Forward-looking

statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words “believes”, expects”, “predicts”, “intends”, “projects”,

“plans”, “estimates”, “aims”, “foresees”, “anticipates”, “targets”, and similar expressions. The forward-looking statements contained in this Presentation, including assumptions, opinions and

views of BW Offshore or cited from third party sources are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ

materially from any anticipated development. None of BW Offshore or any of its parent or subsidiary undertakings or any such person’s officers or employees provides any assurance that the

assumptions underlying such forward-looking statements are free from errors nor does any of them accept any responsibility for the future accuracy of the opinions expressed in this

Presentation or the actual occurrence of the forecasted developments. BW Offshore assumes no obligation, except as required by law, to update any forward-looking statements or to conform

these forward-looking statements to our actual results.

No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein,

and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, neither BW Offshore nor any of its parent or subsidiary undertakings or

any such person’s officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document. Actual experience may differ, and those differences man be

material.

By attending this Presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of BW Offshore and that you will conduct your

own analysis and be solely responsible for forming your own view of the potential future performance of the businesses of BW Offshore. This presentation must be read in conjunction with the

recent Financial Information and the disclosures therein.

This announcement is not an offer for sale or purchase of securities in the United States or any other country. The securities referred to herein have not been registered under the U.S.

Securities Act of 1933, as amended (the “U.S. Securities Act”), and may not be sold in the United States absent registration or pursuant to an exemption from registration under the U.S.

Securities Act. BW Offshore has not registered and does not intend to register its securities in the United States or to conduct a public offering of its securities in the United States. Any offer for

sale or purchase of securities will be made by means of an offer document that may be obtained by certain qualified investors from BW Offshore. Copies of this Presentation are not being made

and may not be distributed or sent into the United States, Canada, Australia, Japan or any other jurisdiction in which such distribution would be unlawful or would require registration or other

measures.

In any EEA Member State that has implemented Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017, as amended (together with any applicable

implementing measures in any member State, the “Prospectus Directive”), this communication is only addressed to and is only directed at qualified investors in that Member State within the

meaning of the Prospectus Directive.

This Presentation is only directed at (a) persons who are outside the United Kingdom; or (b) investment professionals within the meaning of Article 19 of the Financial Services and Markets Act

2000 (Financial Promotion) Order 2005 (the “Order”); or (c) persons falling within Article 49(2)(a) to (d) of the Order; or (d) persons to whom any invitation or inducement to engage in investment

activity can be communicated in circumstances where Section 21(1) of the Financial Services and Markets Act 2000 does not apply.

2

n

Credit investment highlights

Leading global FPSO operator with track record of over 35 years and 40 projects

USD 6 billion backlog, strong cash generation and modest gearing with a Net Debt/EBITDA of 1.4x1

High operational stability and selective approach to new investments

Differentiated strategy and resilient business model support long-term cash-flow generation

2

3

4

1

Highly competent board and management team supported by strong and committed main owner 5

31) Backlog as of Q2 2019, net debt/EBITDA as of preliminary Q3 2019 Operational and Financial Figures update from 5 November 2019

Recent developments

Successful placement of convertible bonds: On 5 November 2019 BWO announced the successful placement of USD 297.4m senior unsecured

convertible bonds due 12 November 2024

Preliminary Q3 2019 financials: In connection with the convertible bond offering, BWO announced updated guidance on Q3 2019 numbers, demonstrating

continued strong performance in both the FPSO and E&P segments with EBITDA of USD 162m and net interest bearing debt of USD 999m

Contemplating issuance of high yield bonds: Announced the intention on 15 November 2019 to issue NOK denominated 4 year senior unsecured bonds

in the Nordic bond market with proceeds to be used to repay existing bonds and for general corporate purposes

Intention to call outstanding bonds: Proceeds from convertible bond and high yield bond issuances intended to be used to call outstanding bonds

BWO01 – BWO04

Umuroa contract termination: Notified by the client Tamarind Resources that the FPSO Umuroa contract will be terminated, effective 31 December 2019.

For the third quarter of 2019, BWO will book a provision related to the overdue charter-hire impacting EBITDA of approximately USD 10 million.

Preparations for listing of BW Energy progressing well: Ready to list on the Oslo Stock Exchange. Prepared to initiate the process subject to conducive

market conditions with BW Offshore continuing to be a major long-term shareholder in BW Energy post listing

Further Dussafu discoveries and revised Ruche phase 1 development plan: Significant oil discovery at Hibiscus adding 45.4 million bbls of 2P reserves

resulting in an expanded development plan which will increase production from 15,000 to 30,000 bbls/day

4

1 Company overview

2

3

BW Energy

4

Financials

5

Summary

Appendix

Specialist in offshore field development and production

The U.S.

Brazil

BW Pioneer | U.S. | Murphy Oil

Yùum K'ak'nàab | Mexico | Pemex

BW Cidade de São Vicente | Petrobras

FPSO Polvo | PetroRio

Maromba field investment Sendje Berge | Nigeria | Addax

Abo FPSO | Nigeria | AGIP/ENI

Espoir Ivoirien | Ivory Coast | CNR

BW Adolo | Gabon | BW Energy

Petróleo Nautipa | Gabon | VAALCO

Dussafu field investment

Kudu field investment

BW Joko Tole | Indonesia | KEI

Umuroa | New Zealand | Tamarind

FPSO Cidade de São Mateus

Berge Helene

BW Catcher | UK | Premier Oil

BW Athena | lay-up

Africa

Oceania

Europe

FPSO Units

Offices

Crew centers

Fields

Onshore staff including design and delivery

(~800 FTEs)

Offshore operations

(1,400 offshore operators)

Subsurface interpretation

(10+ geologist/geophysicist/RE)

Drilling

(20+ drilling team)

Field development

(15+ development managers)

BW Offshore (‘BWO’) core expertise

Significant experience from almost every oil producing

region globally

Delivered 40 projects worldwide since 1983

12 FPSOs in operation producing ~600,000 boe per day

Strong fleet performance with 99% average uptime over

last five years

Revenue backlog of USD 6 billion (including probable

options)

Listed on the Oslo Stock Exchange with a market

capitalisation of ~USD 1.4 billion

6

Supportive main owner with a long-term perspective

7

18 23

49 27 32

To be listed Publicly listed

1BW Group is a global maritime company engaged

in shipping, floating gas infrastructure and offshore

oil & gas production

2Operates over 400 vessels including the world’s

largest gas shipping fleet

3The Sohmen-Pao family owns 100% of holding

company BW Group Limited

FPSO Units

49.9% ownership

# Number of vessels

LPG carriers

47.6% ownership

E&P

30.5% BW Group / 68.6% BWO

Crude carriers

35% ownership

LPG and chemical carriers

83.3% ownership

Dry cargo carriers

100% ownership

LNG Carriers

100% ownership

Product tankers

65.4% ownership

BW Offshore BW Energy

BW LPG DHT Epic Gas

BW Dry Cargo BW LNG Hafnia

OTC listed Privately held

15

102

Experienced management and board with proven track record

Rune Bjorbekk

CCO

Marco Beenen

CEO

Kei Ikeda

COO

Magda Vakil

General Counsel

Lin G. Espey

Chief E&P Officer

Andreas

Sohmen-Pao

Chairman

Christophe

Pettenati-Auzière

Vice Chairman

Clare

Spottiswoode

Director

Maarten R.

Scholten

Director

René Kofod-Olsen

Director

Carl K. Arnet

Director

Management

Ståle Andreassen

CFO

8

Board of Directors

FPSOs are a critical component of O&G field infrastructure

Exploration – more sensitive to oil prices

BWO enables safe and cost-effective operations and delivery of oil & gas products, allowing oil companies to produce oil in remote areas

After processing, FPSOs store oil or gas before offloading to shuttle tankers or transmitting processed petroleum via pipelines

FPSOs are relatively easy to move and consequently a viable option for marginal fields and development fields with no existing pipelines or infrastructure

Business

development

1Engineering

procurement

2Construction

installation

commissioning

3

Production

4

Re-deployment

5

SeismicExploration

/ DrillingSubsea Production Storage Transportation Terminals

Production – less sensitive to oil prices

BWO operates in the less volatile production part of the oil supply chain which provides cash flow visibility

9

Proven reservoir + FPSO redeployment = value creation

Phased

approach

Extensive

local

knowledge

Minimising capex

Sharing

risk/

reward

The right

FPSO

Access to attractive projects

‒ Major divestment efforts of offshore assets by large players

‒ Developments not prioritised by established E&P companies due to

their size failing to meet return requirements under the traditional

development model

Leverage BWO’s global operating experience

‒ FPSO related oil & gas assets

‒ Located in countries and geologies well known to us

Solid understanding of the field’s subsurface

Deploy existing FPSOs

‒ Lower cost of initial infrastructure

‒ Potential for phased development / de-risking development

‒ Robust base case with significant upside

Key field investment criteria The BWE model solves the traditional E&P challenge

Creating the

opportunity

Combined strategy increases ability and probability of BWO extending and redeploying existing FPSOs

Integrated approach unaffected by planned BWE spin-off

10

E&P competence adds visibility to options likely to be

exercised

Strengthened position in negotiations for life-of-field

extensions beyond firm and option periods

Enabler for FPSO redeployment strategy

Improved commercial assessment for new projects

Sources: The Herald, Offshore Energy Today

11

Understanding field risk and reward is key

Combined strategy unlocks value in existing fleet

On Dussafu field offshore

Gabon

BW Adolo

In operation

Reserved for Maromba

field offshore Brazil

Berge Helene

Redeployment candidate

Mainly targeting North Sea

BW Athena

Redeployment candidate

Extended until Q3 2020

FPSO Polvo

Extended until end 2019

Abo FPSO


BW Cidade de

São Vicente

Discussing further

extensions

BW Pioneer

Available from 2020

UmuroaPetróleo Nautipa

Bringing redeployment candidates on contract


Four out of six 2019 FPSO extensions confirmed – one not extended

12

Confirmed / reserved

Pending

Available

Redeployment

Significant value beyond firm period from options and redeployments

BW Catcher

5 x 1

12-month options

13 x 1

12-month options7 years

First oil 2017

Firm period Probable options New contract Possible options

Berge Helene

First oil 2006

Firm period Options declared

Redeployment2 + 2 years

+ 7 months 3 years7 years

Open / conversion BWE Maromba*

First oil 2022

* Berge Helene is reserved pending agreement for use on BW Energy’s Maromba field offshore Brazil

13

Fleet contract overview

14

Lease & Operate - fixed period Operation - fixed period Construction / EPC

Lease & Operate - option period Operation - option period

* Contract duration reflects BWO estimated field life (2028) and current license (2038)

** At yard pending agreement with Client

Unit 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

BW Adolo*

BW Catcher

Yúum K’ak’ Náab

BW Joko Tole

Espoir Ivoirien

Sendje Berge

Petróleo Nautipa

BW Cidade de São Vicente

FPSO Polvo

BW Pioneer

Umuroa

Abo FPSO

Berge Helene (Reserved) Petronas, Mauritania: 2006-2017

FPSO Cidade de São Mateus** Petrobras, Brazil: 2009-2019 (2024)

BW Athena (Tendering) Ithaca, UK: 2012-2016

Premier Oil, UK: 2018-2025 (2043)

BW Energy, Gabon: 2018-2028 (2038)

Pemex, Mexico: 2007-2022 (2025)

Kangean, Indonesia: 2012-2022 (2026)

CNR, Ivory Coast: 2002-2022 (2036)

Addax/Sinopec, Nigeria: 2005-2021 (2023)

Petrobras, Brazil: 2009-2020 (2024)

PetroRio, Brazil: 2007-2020 (2022)

VAALCO, Gabon: 2002-2021 (2022)

Murphy Oil, US: 2012-2020

Tamarind, New Zealand: 2007-2019

Agip/Eni, Nigeria: 2003-2019 (2020)

Selective investment approach enhancing financial performance

BW Catcher confirming ability to deliver

new high-value FPSO projects

BW Adolo redeployment triggered by clearly

defined E&P strategy

Successful launch of BW Energy and

Dussafu investment

133 FPSO | 35 E&P EBITDA1 USD

million

15

43

1) Q3 2019 numbers from Preliminary Q3 2019 Operational and Financial Figures update from 5 November 2019

1

83 75

109 105 120

134 137 156

133

7

15

55

42

35

-20

5

30

55

80

105

130

155

180

Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Prel.Q3 19

FPSO E&P Eliminations

Strong fleet performance and HSE focus

99.8 % 98.4 % 99.6 % 100.0 %95.6 %

98.4 % 99.5 % 99.4 % 99.7 % 99.9 %

0.0

1.0

2.0

3.0

4.0

5.0

The FPSO fleet has delivered 99% average uptime over the

last five years

BWO prioritises safety first in all its operations and strives

towards “zero harm”

Fleet uptime2 HSE record (LTI1)

16

1) Lost time injuries per million man-hours. Last Twelve Months (LTM) figures


2

▪ Provide safe and meaningful jobs to a substantially local

workforce – zero harm policy

▪ Be an equal opportunity employer ensuring diversity

▪ Targeting zero spills and compliance with all regulatory

requirements

▪ Ensure high asset quality and operational integrity

▪ Optimise use of energy, water and other consumables

▪ Adhere to Hong Kong convention for ship recycling

▪ Clear guidelines for ethical and good business conduct

▪ Anti-corruption measures and responsible procurement

Focused on industry and company specific ESG issues

BW Offshore is committed to contributing towards the United

Nations’ Sustainable Development Goals

17

Continuously evolving Environmental Social and

Governance (‘ESG’) strategy and reporting

Separate Sustainability Report published as part of the

2018 Annual Report

Included summary of ESG Key Performance Indicators (‘KPIs’) for

2018

1

2Engaging with relevant stakeholders and agencies

Focusing on material risks and opportunities to further develop

and implement the appropriate polices and procedures

3

Build year-on-year KPI history to monitor performance

and drive improvement

Ambition to establish clearly defined ESG related KPI targets

Summary of ESG KPIs:

1 Company introduction

4

Appendix

3 BW Energy

3 Financials

5

Summary

This is BW Energy

Business model proven by first oil from Dussafu in Gabon 18 months

after acquisition

Recent completion of the Maromba acquisition in Brazil and Hibiscus

discovery increased estimated net reserves and resources to

248 mmbbl

On track to increase Dussafu gross production above 40,000 bopd by

fully implementing Tortue phase 2 and revised Ruche phase 1

development by Q4 2021

Significant upside beyond current commercial reserves in Dussafu

and Maromba

Ready to list on the Oslo Stock Exchange

Encouraging investor feedback from existing BWO shareholders and

potential new investors received during market sounding in May and

June

Current market sentiment is volatile

BWO to continue as major long-term shareholder

Arnet Energy

(CEO Carl K. Arnet)

BW Energy Limited

(Bermuda)

68.6% 0.9%30.5%

BW Maromba

Holdings Pte. Ltd

(Singapore)

BW Kudu Holding Pte.

Ltd

(Singapore)

BW Energy Holdings

Pte. Ltd

(Singapore)

New

investors

Maromba,

Brazil

(100% operated WI)

Kudu,

Namibia

(56% operated WI)

Dussafu Permit,

Gabon

(73.5% operated WI)

19

Combined strategy enables fast-track FPSO redeployment

1P reserves

15 mmbbl (gross)

Dussafu pre-BWE acquisition Creating the opportunity

Phased

approach

Extensive

local

knowledge

Minimising capex

Sharing

risk/

reward

The right

FPSO

8X

increase2P+2C ~112 mmbbl**

18 months to first

oil

~4.5 mmbbl produced**

No path to FID

USD ~500 million

FPSO commitment

USD ~85 million FPSO

investment

Dussafu current status* (gross)

Fastest-ever FPSO

development

USD ~110 million operating

cash flow*

USD ~800 million field

investment

Efficient USD ~175 million

development

1/5asset commitment

1/5field CAPEX

Two successful

exploration wells

* From first oil through August 2019.

**Reserve estimates include Hibiscus discovery as per Q3 2019 Netherland Sewell & Associates Inc (NSAI) report 20

Balanced risk reward and arm’s length FPSO contracting

More flexible FPSO contracts possible due to integrated approach

Balanced risk reward enables longer durations and phased development

Ensure competitive and arm’s length contracting to meet various stakeholder requirements

Parameters BWE approach Conventional oil company approach

Minimum case P50-P90 reserves with good upside potential P50 reserves + prove up total field

Costs At a minimum to sanction P90 Escalating to capture all reserves

FPSO contract Reflecting minimum capex Hell-and-high-water: Reflecting high capex

FPSO termination fee Limited Yes, supported by guarantees

Reservoir risk Shared None

Upside FPSO contractorLong-term contract supported by phased

development and upgrade workNone

Upside Oil Co. More reserves More reserves

Alignment of interest Yes Limited

21

2 BWE cash on hand

3 USD 300 million RBL on Dussafu (including accordion)

4 IPO proceeds

5 Farm-downs and other alternative sources

6 Potential RBL financing of Maromba

1 Operational cash flow from E&P segment

BW Energy will be largely self financed

1) From BWE Investor Presentation 29 May 2019. USD 1.4 billion net figure calculated based on 73.5%

BWE ownership of Dussafu and 100% of Maromba (now 95%) and includes the following:

- Tortue phase 1 and 2, Ruche phase 1 and Maromba phase 1 and 2 development capex

- Maromba acquisition cost of USD 115 million

- Dussafu exploration costs of USD 88 million

2019 to 2025 capex

USD 1.4 billion fully

discretionary net

capex budgeted for

BWE1

Multiple funding sources available

~

Average annual capex

USD 230 million

22


2

4

BW Energy

3 Financials

5

Summary

Appendix

35%

44%

16%

5%

Int. E&P

Catcher partnership

BW Energy

NOC

50%50%Firm

Option

Strong FPSO backlog and increasing E&P reserve base

Note: Options considered likely to be exercised

USD 6bn FPSO revenue backlog1 to a diverse set of clients E&P assets will be financed on a stand-alone basis

Client base

~11,600 bopdQ3 2019 average gross daily

production1

248 mmbbl2

Net reserve estimate

~15x Increase in reserve base from

2017

Maromba

Dussafu

Kudu

NSAI estimate net reserves and resources2


2) Refers to Netherland, Sewell & Associates 2P and 2C (including development unclarified) 2019 end Q3 report. Net reserves assumes 73.5% and 95% working interest in Dussafu and Maromba respectively. 24

13%

8%

14%

11%

53%

Dussafu - Tortue

Dussafu - Ruche

Dussafu - Hibiscus

Dussafu - Other discoveries

Maromba

248

mmbbls

FPSOs

1) In November 2017 BWO issued preference shares with a preferential dividend right to ICBC Financial Leasing Co., Ltd. (ICBCL) for an aggregate subscription price of USD 275.0 million. The company plans to redeem

the preference shares in full over an estimated term of 12 years. The balance was USD240.6 million at the end of Q2 2019.

Public shareholders

(free float – OSE)

BW Offshore Ltd.

(Bermuda)

OSE: “BWO”

68.6%

50.1%49.9%

100%

1All FPSO owning SPVs and management / operational

companies owned 100% directly or indirectly by BWO

5Dussafu assets in Gabon mainly self financed through

strong cash flow and RBL of USD 300 million (including

accordion) being negotiated

6Plans to list on the Oslo Stock Exchange and raise external

capital to finance development of the recently acquired

Maromba field in Brazil and strengthen liquidity ahead of

further growth

Ownership in oil and gas

assets in Gabon, Brazil

and Namibia

100% ownership in 15

FPSOs

Non-recourse to BWO

2All bank debt is secured and issued at the asset owning

level and benefit from a corporate guarantee

Unsecured bonds and convertible bonds issued by parent

BW Offshore while preferred equity1 has been issued at

the BW Catcher FPSO level 3

4Upstream assets have been organised under-stand alone

entity BW Energy (“BWE”) financed by external capital

Transparent corporate and capital structure

Simplified group structure for BW Offshore

25

Strong liquidity and balanced long-term instalment profile

Healthy USD 532 million BWO Group liquidity position end Q3 194 excluding USD ~297 million convertible bond proceeds

Long-term growth in FPSO EBITDA1,4 Existing bond maturities being addressed2,3

1) Reported EBITDA (before eliminations). Q3 2019 numbers from Preliminary Q3 2019 Operational and Financial Figures update from 5 November 2019

2) Corporate facility repayments based on drawn balance of USD 340 million end Q2 19. 2024 maturities includes balloon repayment in addition to scheduled instalments.

3) Bond instalments including cross-currency swaps of ~USD 100 million end Q2 19 to reflect actual cash effect


372

408

468496

547560

0

100

200

300

400

500

600

LTM perQ2 18

LTM perQ3 18

LTM perQ4 18

LTM perQ1 19

LTM perQ2 19

LTM perprel. Q3 19

26

4

4398

200

29

114 114

114

114

143

12 8

8

177134

82

302

257 247

212

343

0

100

200

300

400

500

600

Q4 2019 2020 2021 2022 2023 2024

Corporate facility BW Catcher facility

Petróleo Nautipa facility Bonds

USD 393 million intended to be

refinanced by convertible and new

high yield bond

Strong balance sheet and credit metrics

27

1,631 1,661 1,639 1,635

1,378 1,4071,522

1,275 1,221 1,218 1,233 1,2321,151

1,046 999

3.01 3.2x3.9x 3.9x 3.6x 3.3x 3.6x 3.8x

3.2x 3.3x 3.0x2.5x

2.0x1.6x 1.4x

-3

-2

-1

0

1

2

3

4

5

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

Q12016

Q22016

Q32016

Q42016

Q12017

Q22017

Q32017

Q42017

Q12018

Q22018

Q32018

Q42018

Q12019

Q22019

Prel.Q3

2019

Net debt and leverage development2

Net debt NIBD/EBITDA (reported)

286 288319 323

271

353

293

554597

554

459416

371

538 532

0

100

200

300

400

500

600

700

Q12016

Q22016

Q32016

Q42016

Q12017

Q22017

Q32017

Q42017

Q12018

Q22018

Q32018

Q42018

Q12019

Q22019

Prel.Q3

2019

Liquidity2

9785 77

165

62

119

8274

109 105

126

149

187 192

162

-2

48

98

148

198

Q12016

Q22016

Q32016

Q42016

Q12017

Q22017

Q32017

Q42017

Q12018

Q22018

Q32018

Q42018

Q12019

Q22019

Prel.Q3

2019

EBITDA development1,2

Reported (FPSO) Reported (E&P)

41%

10%

15%

20%

25%

30%

35%

40%

45%

Q12016

Q22016

Q32016

Q42016

Q12017

Q22017

Q32017

Q42017

Q12018

Q22018

Q32018

Q42018

Q12019

Q22019

Equity ratio development

1) Significant one-off items: Q4 2017 includes insurance recovery of USD 94.3 million. Q1 2017 includes USD 13.7 million in provisions related to Sendje Berge. Q2 2017 includes USD 45.5 million reversal of provisions

for overdues on Sendje Berge


2 2

2

Proven access to capital and prudent risk management

~40 BW relationship banks of which ~20 are lenders to BWO

BW Group has accessed the bank / ECA, bond, hybrid and equity as well

as leasing markets across the various group companies

BWO raised USD 672.5 million from 16 banks in the May 2019 corporate

facility refinancing (60% oversubscription)

2.25% margin with a 0.25% step-up if utilisation above 50%

BWO has issued preference shares to ICBC Leasing and is furthermore a

frequent issuer in the Nordic high yield market

BWO has good access to a range of financing sources to fund future capex

BWO bank group

BWO approached all stakeholders at an early stage as a proactive

measure in a challenging market

BW Group contributed its pro-rata share of the equity raise

BWO agreed to certain restrictions including not paying dividends

Banks pushed out amortisation and maturities

Bondholders agreed to extend maturities and give BWO call options on

the bonds in exchange for some amortisation

28

Leveraging existing BW capital sources and relationships 2016 recapitalisation provided a balanced solution


2 BW Energy overview

3 Financials

5

4 Summary

Appendix

Combined FPSO and field development strategy provides predictable debt service capacity through the cycles

Differentiated strategy 1FPSO segment has proven resilient while combined business model and

selective investment approach enhances financial performance

Strong cash flow 2Healthy backlog and successful delivery of E&P and FPSO growth projects

has ensured significant debt service capacity

Financially solid 3Robust balance sheet and establishment of BW Energy as separate entity

enhances the ability of both companies to access the right capital

Key credit considerations

30


2

3

BW Energy

4

Financials

5

Summary

Appendix

Income statement highlights per preliminary Q3 19 update1

-25

25

75

125

175

225

275

Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Prel.Q3 19


238 FPSO | 50 E&P

Operating revenues

USD

million

EBITDA

USD

million

EBIT

USD

million

-20

5

30

55

80

105

130

155

180

Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Prel.Q3 19


-10

10

30

50

70

90

110

Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19


133 FPSO | 35 E&P USD

million 69 FPSO | 22 E&P USD

million

32


1 1

Income statement

USD million H1 2019 2018 2017 2016

Operating revenues 582.4 870.4 626.0 844.7

Operating expenses (204.9) (382.6) (290.7) (421.9)

Share of profit from associates 0.9 1.4 0.9 0.6

EBITDA 378.4 489.2 336.2 423.4

Depreciation (204.0) (336.5) (225.9) (224.6)

Amortisation (1.2) (2.1) (2.7) (2.8)

Impairment 0.0 (0.1) (27.4) (231.0)

Gain/(loss) sale of assets 0.1 7.0 0.0 0.0

EBIT 173.3 157.5 80.2 (35.0)

Net interest expense (42.2) (77.1) (37.8) (44.5)

FX, financial instruments and other financial items (27.4) (3.6) 1.1 (20.7)

Profit (loss) before tax 103.7 76.8 43.5 (100.2)

Income tax expense (37.7) (40.3) (2.3) (32.7)

Net profit (loss) 66.0 36.5 41.2 (132.9)

33

Statement of financial position

USD million H1 2019 2018 2017 2016

Total non-current assets 2,837.2 2,951.7 2,999.0 2,771.3

Total current assets 552.8 464.8 423.8 596.6

Total assets 3,390.0 3,416.5 3,422.8 3,367.9

Total equity 1,373.4 1,320.9 1,259.4 919.9

Total non-current liabilities 1,499.0 1,499.0 1,642.0 2,009.6

Total current liabilities 517.6 596.6 521.4 438.4

Total liabilities 2,016.6 2,095.6 2,163.4 2,448.0

Total equity and liabilities 3,390.0 3,416.5 3,422.8 3,367.9

USD million H1 2019 2018 2017 2016

Reported interest bearing debt 1,311.3 1,373.7 1,420.8 1,741.8

Cash and deposits (265.2) (142.1) (145.5) (106.9)

Net interest bearing debt 1,046.1 1,231.6 1,275.3 1,634.9

34

Cash flow statement

USD million H1 2019 2018 2017 2016

Net cash flow from operating activities 302.3 435.9 659.5 387.5

Net cash flow from investing activities (62.0) (354.8) (476.6) (399.7)

Net cash flow from financing activities (117.2) (84.5) (144.3) (2.7)

Net change in cash and cash equivalents 123.1 (3.4) 38.6 (14.9)

Cash and cash equivalent at start of period 142.1 145.5 106.9 121.8

Cash and cash equivalent at end of period 265.2 142.1 145.5 106.9

35

Bank debt facilities overview per Q2 2019

Facility Corporate credit facility BW Catcher Petroleo Nautipa

Borrower: BW Offshore Shipholding Pte Ltd BW Catcher Limited BW Offshore Nautipa AS

BW Offshore Limited parent

guarantee:Yes Yes Yes

Amount (drawn):USD 672.5 million (USD 340 million

drawn)USD 657.1 million USD 33.4 million

Type: Reducing revolver Term loan Term loan

Maturity: May 2024 July 2024 September 2022

Margin:2.25% with a 0.25% step-up if

utilisation above 50%2.25% 1.70%

Annual instalments / reductions: USD 105.0m USD 114.3m USD 11.6m

Collateral Vessels:

Abo FPSO

BW Adolo

Berge Helene

BW Athena

BW Cidade de São Vicente

BW Pioneer

Espoir Ivoirien

FPSO Polvo

Sendje Berge

Yuum Kak Naab

BW Catcher Petroleo Nautipa

36

1) Available revolving credit facility is USD272.5 million after including USD 60.0 million performance bond in addition to USD340.0 million drawn amount.

Bond BWO01 BWO02 BWO03 BWO04 Total

Borrower: BW Offshore Limited BW Offshore Limited BW Offshore Limited BW Offshore Limited BW Offshore Limited

Amount outstanding NOK 360 million NOK 500 million NOK 750 million NOK 900 million NOK2,510 million

Nominal USD amount USD 42.1 million USD 58.4 million USD 87.6 million USD 104.9 million USD 293.0 million

Swapped USD amount USD 65.0 million USD 86.8 million USD 124.0 million USD 117.0 million USD 392.8 million

Final maturity: March 2020 September 2020 March 2021 March 2022

Margin:

Currently 4.50%

Increased from 4.25% after

initial March 2017 maturity

Currently 4.50%



Currently 4.50%



Currently 4.25%

Will increase to 4.50% after

initial June 2020 maturity

Partial redemptions:March 2020

NOK 100 million

September 2020

NOK 150 million

March 2021

NOK 90 million

December 2021

NOK 180 million

March 2020 through

December 2021

NOK 520 million

Bond debt overview per Q2 2019

37

Tortue phase 2 field development Phase 2

1st oil

Dussa

fuM

aro

mb

a2019 2020 2021 2022

Co

rpo

rate

/

Oth

er

Ruche studies / FEED Ruche field developmentRuche

1st oil

Hibiscus

updipFurther exploration wells

IPO

Further farm-ins or acquisitions

ANP approval

Phase 1 study / FEED

Phase 1 field development

FDP

approval

Phase 1

1st oil

Potential farm-out Maromba

Clear path to BWE production growth

38

Previously reported gross BWE incurred and projected capex

Total gross project cost from 2017 inceptionCapex

(USD million)

Tortue phase 1 175

Tortue phase 2 240

Ruche phase 1 4451

Dussafu exploration cost 88

Maromba phase 1 250

Maromba acquisition cost 115

Maromba phase 2 Not disclosed

391) Based on revised development plan for Ruche phase 1

Risk Factors (1/5)

The Group’s business and services have been and will continue to be affected by the global offshore oil and gas market and any adverse developments in

these markets could have a negative impact on the Group’s profitability

A deterioration in global economic conditions could materially adversely affect the Group’s business, financial condition and results of operation

The FPSO industry is highly competitive and if the Group fails to keep up with its competitors it may have an adverse impact on the Group’s market share

and financial condition

FPSOs are tailed to customer needs and the Group may not be able to redeploy its vessels when client contracts expire or are terminated, which may have

a material negative effect on the Group’s financial position

The process of providing an FPSO is usually subject to set cost and time schedules and failure to comply may have a material negative effect on the Group’s

financial position

The Group is exposed to risk relating to early termination from clients, in some instances without right to full compensation

The Group’s ability to fulfil its obligations to clients relies on the effectiveness and the quality of its sub-contractors

The Group operates across a wide variety of national jurisdictions, which exposes the Group to risks inherent in operating internationally and in politically

unstable regions

The Group’s operations involves inherent environmental and safety risks and accidents may have material adverse consequences for the Group’s financial

position

The Group’s international operations are exposed to the risk of acts of piracy, which could result in increasing costs of operations

Risks related to the business of the Group and the industry in which the Group operates

40

Risk Factors (2/5)

The Group’s international operations face the risk of terrorist attacks, acts of war, escalation of hostilities, riots and civil unrest, the eventuation of which

could adversely affect the Group’s business, results and financial position

The Group’s lack of market diversifciation could adversely affect the Group’s business, financial condition and operating results

In pricing contracts with clients, the Group relies on cost quotes from its suppliers and subcontractors, and must also make assumptions and estimates. If

third-party quotes, or the Group’s own assumptions or estimates of the overall risks, revenue, capital requirements, operating costs or other costs of any

particular project or contract prove inaccurate, or if circumstances change such that those quotes, assumptions or estimates prove inaccurate, then lower

than anticipated profit may be achieved, or a loss may be incurred on such projects

The Group’s lease and operate contracts expose the Group to the risk of inaccuracies in relation to the determination of the residual value of vessels.

Correctly estimating the residual value is an important component of the lease rate calculation. If the actual residual value is below the estimated future

market value, this may adversely affect the Group’s business, results and financial condition

Clients may exercise purchase options on the units contracted from the Group, which will have a negative impact on the Group’s income

The Group operates in a business with inherent risk and the Group’s own insurance may not be adequate to cover the Group’s losses under the contracts or

at law

The Group may suffer from loss of clients, or delay or default by clients could result in a significant loss of revenues and cash flows

Labour interruptions could mean that the Group may not be able to operate its units

The Group has entered into related party transactions, may enter into related party transactions in the future and cannot assure that conflicts of interest will

not arise in the future

41

Risk Factors (3/5)

Change in laws, regulations and political environment may have an adverse effect on the Group’s results of operations

Compliance with environmental laws or other regulations may have an adverse effect on the Group’s results of operations

Significant parts of the Company's activities require licenses and permits. Failure to obtain and keep required regulatory permits and licenses may have a

material negative effect on the Group’s operations

The Group may be subject to litigation that could have an adverse effect on the Group’s business

Changes in tax laws of any country in which the Group operates, or complex tax laws associated with international operations, could result in a higher tax

expense for the Group

Technology disputes involving the Group, the Group’s suppliers or sub-suppliers could impact the Group’s operations or increase its costs

Employee, agent or partner misconduct or failure to comply with anti-corruption and other government laws and regulations could harm the Group’s

reputation, reduce its revenue and profit, and subject it to administrative, criminal and civil enforcement actions

Risks related to laws, regulations and litigation

42

The Group’s operations are exposed to a number of financial risks such as price risk (including currency risk and market risk), credit risk, liquidity risk and

interest rate risk

The Group is subject to covenants under its financial arrangements that limit its operating and financial flexibility

Certain of the Group's customers represent a significant portion of the Group's revenues. Failure by the Group’s major clients to meet their contractual

obligations may have a material adverse effect on the Group’s financial position

Interest rate fluctuations could affect the Group’s cash flow and financial condition

The Group has announced a potential listing of BW Energy, an entity which may have separate funding requirements going forward, irrespective of the

outcome of the potential listing. Any listing and related transaction is subject, inter alia, to market conditions and may not be completed within the anticipated

timelines or at all.

Significant fluctuations in foreign currency may have a material negative effect on the Group’s financial condition and resul ts of operations

Risk Factors (4/5)

43

Risks related to financing and market risk

The Bonds will be subordinated to the Issuer’s secured debt and the debt of its subsidiaries

Certain cash flows of the Group are and may continue to be tied up in current and future debt financing

Debt service and upstream capacity may be limited by applicable laws and contractual restrictions binding on the Issuer's subsidiaries

There may be limited liquidity in the Bonds including due to resale restrictions

The terms and conditions of the Bond Terms will allow for modification of the Bonds or waivers or authorizations of breaches which, in certain circumstances,

may be effected without the consent of Bondholders.

The Bonds may be subject to optional redemption by the Issuer, which may have a material adverse effect on the value of the Bonds, and in such

circumstances an investor may not be able to reinvest the redemption proceeds at an equivalent rate of interest

Investors in the United States may have difficulty enforcing any judgement obtained in the United States or other jurisdictions against the Company or its

directors or executive officers

The Company’s Bye-laws restrict shareholders from bringing legal action against the Company’s officers and directors

Risk Factors (5/5)

44

Risks related to the Company’s incorporation in Bermuda

Risks related to the Bonds

For further information please contact [email protected]

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