bw offshore · bw group is a global maritime company engaged in shipping, floating gas...
Post on 26-Mar-2020
5 Views
Preview:
TRANSCRIPT
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
Extended until Q2 2020
BW Cidade de
São Vicente
Discussing further
extensions
BW Pioneer
Available from 2020
UmuroaPetróleo Nautipa
Bringing redeployment candidates on contract
Extended until Q3 2021
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) Q3 2019 numbers from Preliminary Q3 2019 Operational and Financial Figures update from 5 November 2019
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
1 Company introduction
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
1) Q3 2019 numbers from Preliminary Q3 2019 Operational and Financial Figures update from 5 November 2019
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
4) Q3 2019 numbers from Preliminary Q3 2019 Operational and Financial Figures update from 5 November 2019
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) Q3 2019 numbers from Preliminary Q3 2019 Operational and Financial Figures update from 5 November 2019
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
1 Company introduction
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
1 Company introduction
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
FPSO E&P Eliminations
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
FPSO E&P Eliminations
-10
10
30
50
70
90
110
Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19
FPSO E&P Eliminations
133 FPSO | 35 E&P USD
million 69 FPSO | 22 E&P USD
million
32
1) Q3 2019 numbers from Preliminary Q3 2019 Operational and Financial Figures update from 5 November 2019
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%
Increased from 4.15% after
initial March 2018 maturity
Currently 4.50%
Increased from 3.50% after
initial March 2019 maturity
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 ir@bwoffshore.com
top related