1) The FPSO market is seeing a strong upswing in contract awards in 2010, with 19 projects awarded so far, compared to 6 in the second half of 2009. 2) Demand for FPSOs remains strong, as the number of projects in the bidding/final design phase has remained steady at around 30, despite numerous contract awards. 3) Industry players are more optimistic about the FPSO market, expecting 12 contracts to be awarded in 2010 and 15 in 2011, reflecting higher tendering levels and improved market conditions.

1. FPSO: Perspectives from the equity market
September 2010
Erik Tønne
erik.tonne@arcticsec.no
+47 21 01 32 26
+47 48 40 32 26

2. Agenda/key topics highlighted in this presentation
Market development: Is the situation in the market picking up?
How do investors and analysts look at the FPSO-sector? What are their
evaluation criteria?
Is the market willing to finance new developments? Is the financing
situation on the road to recovery?
What are the main concerns for investors in financing FPSO-projects and
how can you achieve a win-win deal with project financiers?
2

3. Underlying market development: Growth has been good and steady, and will
likely continue to be so
FPS (installed
base)
280
260
SPARs CAGR, number of
240
units 1999-2009 222 225
220
TLPs 214
16 18
15
200 Production Semi’s +9% 190 22 22
22
18 0 176 14
FPSOs 166 13
20 40 41
16 0 149 12 18 40
14 0 137 9 18
127 6 15 40
112 117 3 13 37
12 0 36
2 11 3 14
11 36
10 0 93 35
80 2 34
8 32 33
7 1
80
25 65 137 144 144
57 1 30
60 0 50 0 6 26 116
34 43 0 4 0 5 22 100 108
2 37 0 21 83 89
40 31 0 0 18 76
0 0 0 0 0 0 0 0 19 0 20 0 21 0 10 3 16 3 67 70
20 0 0 0 0 0 0 11 1 13 1 1 1 1 10 2 11 2 12 46 53
36
1 0 2 0 5 1 6 1 7 1 9 3 4 4 12 6 13 6 13 7 13 19 21 22 24 28 31
0 1 2 4 5 6 6 6 8
78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
CAGR of 9% last 10 years
Underlying rationale for floating production solutions is strong – deeper, further from shore, more marginal
fields etc. FPSOs are cost-efficient and versatile solutions (for the oil companies at least)
FPSOs continue to dominate as the most widely used floating production solution
We expect floating production to continue to see
We expect floating production to continue to see
healthy / strong growth rates for the foreseeable future
healthy / strong growth rates for the foreseeable future
3
Source: IMA; Arctic Securities

4. Recent market development: A strong upswing in FPSO contract-awards…
6 Projects awarded H2/09 19 Projects awarded so far
in 2010:
Order intake, new Floating Production Units (FPUs) ordered 1. Aseng to SBM
2. Papa Terra to BWO/Quip 1. Kitan to Bluewater
18 3. Chim Sao to EOC (redeployment)
4. TGT to Bumi Armada 2. Guara to MODEC
16 5. Aquila to Saipem 3. OSX-1 to OSX (old Nexus)
16 6. Baleia Azul to SBM 4. Goliath EPC-contract to
(redeployment) Hyundai
5. Athena LoI to BWO
14 6. Huntington LoI to SEVAN
(redeployment)
12 7. Tupi Nordeste to SBM-
12 consortium
11 11 11 11 11 8. Sidon/Tiro to Teekay
Nr of FPU orders
10 10 9. TSB to BWO
10. Aruana to Teekay
10 9 9 9 (redeployment)
8 8 8 11. Pagerungan Utara to
BLT (redeployment)
8 7 7 7 12.-19. Eight pre-salt FPSO-
hulls (LoI to Engevix/GVA/
6 6 6 Cosco)
6 5 5
4 4 4 4 4
4 3 3 3 3 3
2 2
2
0 0
0
Jun-Sep 97
Oct 97 - Feb 98
Dec 99 - Mar 00
Dec 04 - Mar 05
Dec 06 - Mar 07
Dec 07 - Mar 08
Aug - Dec 08
Nov 98 - Feb 99
Apr - Sep 00
Feb - Jun 01
Feb - Jun 03
Aug 09 - Dec 09
Jan 10 - Jun 10
Jan - Apr 09
Mar - Jun 98
Jul - Oct 98
Mar - Jul 99
Jul - Oct 01
Apr - Jul 02
Apr - Jul 04
Apr - Jul 05
Apr - Jul 07
Apr - Jul 08
Apr - Jul 09
Jul - Aug 10
Aug - Nov 99
Oct 00 - Jan 01
Nov 01 - Mar 02
Aug 02 - Jan 03
Jul - Oct 03
Nov 03 - Mar 04
Aug - Nov 04
Aug - Oct 05
Apr - Jul 06
Nov 05 - Mar 06
Aug - Nov 06
Aug - Nov 07
Even if excluding the eight pre-salt hulls for Petrobras, we are at 11 contracts YTD, representing a decent
Even if excluding the eight pre-salt hulls for Petrobras, we are at 11 contracts YTD, representing a decent
level. More to come with e.g. CLOV, OSX-2 and Frøy so far not announced
level. More to come with e.g. CLOV, OSX-2 and Frøy so far not announced
4
Source: IMA; Arctic Securities

5. …Resulting in the order backlog (nr. of units under construction) at yards
turning again
Floating Production Systems on order/under construction, Quarterly since Q3/96
80 If excluding the 8 pre-salt
hulls, order backlog would
have been at 41 units, still
70 67 confirming the turn (though
65 more modestly)
60 60
60 57 56
49 49
50 46 46
43
41 41 40
37 36 37 37 38 39 38 37 37 37
39
40 35 Average = 39
33 34 34 35 34
31 32
30
30 27
23
21 21 22
20 17
10
0
Q3/96
Q1/97
Q2/97
Q3/97
Q1/98
Q3/98
Q4/98
Q1/99
Q3/99
Q4/99
Q2/00
Q3/00
Q1/01
Q3/01
Q4/01
Q2/02
Q3/02
Q1/03
Q2/03
Q4/03
Q1/04
Q3/04
Q4/04
Q2/05
Q3/05
Q4/05
Q1/06
Q3/06
Q4/06
Q1/07
Q3/07
Q4/07
Q1/08
Q3/08
Q4/08
Q1/09
Q3/09
Q4/09
Q1/10
Q3/10
During Q1/10, order backlog increased again for the first time in eight quarters, following a steady
drop
We expect order backlog to come up further: Demand is pent-up, and backlog should continue to
build as FIDs (Final Investment Decisions) gain momentum
5
Note: Excludes storage-only units, MOPUs and LNG RVs (shuttle/regas vessels)
Source: IMA; Arctic Securities

6. Demand-side remains strong! In spite of many awards since Aug-09, number of projects
in the Bid/final design phase remains steady
Implying oil companies continue to move on projects, gradually progressing them to FID and contract-award
Number of FPSO-projects in the bid/
final design phase (see next two slides for details) Number of projects in the Bid/Final Design phase
describes projects that are close to FID and contract-
Nr of units award
35
33 33 In spite of 25 awards since Aug-09, this number
32 remains fairly steady
31
30
This implies the number of projects progressing from
“Planning” to “Bid/Final design” remains high; i.e.
25 25
demand-side remains strong
We also believe it’s positive that this number
20 remained fairly steady through the financial turmoil,
demonstrating oil companies continued to mature
15 projects
In short, we believe the demand-side is pent-up, and
10 that conditions are now increasingly in place for
more contract awards again
5 The oil price is steady (enabling planning) on
back of healthy demand
0 Input-costs (steel, yard-capacity etc) have come
Oct-08 Dec-08 Sep-09 Nov-09 Current down
Access to financing for smaller E&Ps and FPSO-
Of which operators has improved
1 1 1 1 2
FLNG units
6
Source: IMA; Press; Arctic Securities

7. Industry majors are increasingly positive – both amongst oil companies and
major contractors
We’re noticing more positive signals from most (all) of the companies,
We’re noticing more positive signals from most (all) of the companies,
especially within subsea, field development and floating production
especially within subsea, field development and floating production
7
Source: Technip (Mar/Apr-10); Arctic Securities

8. Industry survey: Industry-players are more optimistic, reflecting higher
tendering-levels and improved market-conditions
Industry sees on average 12 contracts in 2010 and 15 contracts in 2011
Industry-players significantly more On average, the players expect a further
optimistic compared to last year’s survey increase in number of awards during 2011
30 30
“How many FPSO-lease contracts do you expect will 25 “How many FPSO-lease contracts do you expect
25 be awarded across the industry by year-end?” 25 will be awarded across the industry next year?” 23
20 2010-results 20 2010-results
2009-results 2009-results 16
15
15 15
12
10 10 11
10 10
7 7
5 5
5 5
0 0
Low Average High Low Average High
Competitive pressure reduced. Some players even Major input costs have dropped further since last year.
comment being in single-source discussions for projects Companies’ answers for 2010 vary significantly
30 0
How many bidders are there on average -1
25 -1
involved in projects you are tendering for? -2
20 2010-results -3 -3 -3
-3
-4
2009-results -4
15 -5
2010-results
-6
10 8
-7 2009-results
6
5 -7
5 4 -8
3
1 How have input prices developed over the past
-9 12 months? (%-change)
0
- 10
Low Average High
Yard costs Major topside Other costs
equipment costs
8
Note: Survey conducted in Q2/09 and Q2/10 respectively. Participants: MODEC, PROD, Maersk, FOP, SEVAN, BWO (10 only), SBM (09 only)
Source: Companies; Arctic Securities

9. High-end of the lease segment consolidates with BWO-PROD combining.
Competitive pressure should be further reduced, boding well for returns
Company Number of lease FPSOs in operation or under construction
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
SBM
MODEC
Prosafe Production
BW Offshore Combining to
Limited one entity
financial Bluewater
bidding capacity
Maersk
Mainly N.Sea Petrojarl (Teekay)
Sevan FPSO
Financial Saipem
capacity?
Bumi Armada
Fred. Olsen Production
Likely to take Rubicon
one more
project only? Sea Production
Tanker Pacific (TPOT)
Single unit owners
Contracted FPSOs in operation
Contracted FPSOs in operation (operations only)
Contracted units under construction/conversion
Construction on speculation
Idle
To conclude, we believe it’s fair to say the market is picking up and that bargaining position for
To conclude, we believe it’s fair to say the market is picking up and that bargaining position for
the remaining players has improved and continues to do so!
the remaining players has improved and continues to do so!
9
Note: Does not include turnkey FPSOs, i.e. only includes FPSOs owned and operated by the FPSO-companies
Source: Companies; IMA; Arctic Securities

10. Agenda/key topics highlighted in this presentation
Market development: Is the situation in the market picking up?
How do investors and analysts look at the FPSO-sector? What are their
evaluation criteria?
Is the market willing to finance new developments? Is the financing
situation on the road to recovery?
What are the main concerns for investors in financing FPSO-projects and
how can you achieve a win-win deal with project financiers?
10

11. Few (equity) investors have a detailed understanding of the FPSO-segment
Hard to place all in one group. Many are generalists. Investment strategies and
exposures vary - across industries, geographies and asset classes
Some are oil services “specialists” – even these sometimes have detailed knowledge of
the floating production business
Available time to dedicate to detailed analysis of selected companies is limited
Valuation approaches are usually “simple”: Valuation metrics (multiples), relative to
other segments, look at potential for earnings-upgrades/re-valuation. Some do
modeling/DCF-analyses/more detailed work
History matters…
Opinions and momentum can turn rapidly – from loved by everyone to hated by
everyone (usually infectious)
11
Source: Arctic Securities

12. The floating production segment has spooked investors – for obvious reasons
A string of disappointments…
Shares have been a disaster – even in companies perceived to be “solid” and steady-performing
businesses
BWO listed at NOK 25 May-06, currently at NOK 8.0
PROD listed at NOK 36 Feb-08, currently at NOK 13.0
Add to this; Aker Floating Production, Sevan… - not a joyride for shareholders
Leading established players – e.g. SBM – have also disappointed with significant delays to EPC-
contracts (rigs, Yme, Deep Panuke), and are trading at historically low P/B-levels
Speculative entrants (mainly originated out of Norway) didn’t help the situation
Very hard to point to any success-stories. Massive value destruction
Nexus, Petroprod, FPSOcean, MPF, Nortechs/Songa Floating Production
The financial community helped fuel the hype…
“Floating Production is the new deepwater drilling”
“If we assume two new contracts won per year at 15% IRR…”
…and failed to recognize fundamental aspects of the business
No upside through e.g. rate-fluctuations – i.e. rate locked once capex is agreed upon/contract signed
A lot went wrong operationally (poor contracts, too low contingencies, supply-chain tightness 
A lot went wrong operationally (poor contracts, too low contingencies, supply-chain tightness 
delays & overruns etc.), and a lot of investors got burned
delays & overruns etc.), and a lot of investors got burned
12
Source: Arctic Securities

13. Norwegian FPSO-peers: By far the worst segment during the recent meltdown…
140
120
100
80
60
40
20
0
May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10
Drillers NOR Subsea NOR Supply NOR FPSO NOR Seismic NOR
13
Source: Factset; Arctic Securities

14. …and clearly the laggard since the market started improving again
370
320
270
220
170
120
70
Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep-
09 09 09 09 09 09 09 09 09 09 10 10 10 10 10 10 10 10 10
Drillers NOR Subsea NOR Supply NOR FPSO NOR Seismic NOR
Hard to get investors’ enthusiasm up when the segment
Hard to get investors’ enthusiasm up when the segment
has underperformed all other oil services segments
has underperformed all other oil services segments
14
Source: Factset; Arctic Securities

15. Adjusting for worst performers (AKFP & SEVAN), some of the FPSO-peers have performed
more in line with other oil services segments since the market started coming up again
370 BWO up strongly
lately on back of
350 APL-sale
330
310
290
270
250
230 FOP in line with
210 drillers and supply
190
170
150
130 PROD, SBM and
MODEC under-
110
performing
90
70
50
Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep-
09 09 09 09 09 09 09 09 09 09 10 10 10 10 10 10 10 10 10
Drillers NOR Subsea NOR Supply NOR Seismic NOR BWO PROD FOP SBMO MODEC
A key question investors are asking themselves is: “Why should II invest in this, when there are so
A key question investors are asking themselves is: “Why should invest in this, when there are so
many other alternatives”
many other alternatives”
15
Source: Factset; Arctic Securities

16. Creating value for shareholders…?
Shareholders care about this… it’s more or less the only thing they care about!
Shareholders care about this… it’s more or less the only thing they care about!
16
Source: Vitae Energy; Arctic Securities

17. Sector shake-out: A lot of players have disappeared. Speculative newcomers
likely gone for quite some time…
Norwegian FPSO-segment – March-09 Norwegian FPSO-segment – Today
1. AKFP 1. AKFP
2. BWO 2. BWO
3. FLNG 3. FLNG
4. FPSO (FPSOcean) 4. FPSO (FPSOcean) - bankrupt
5. FOP 5. FOP
6. MPF – bankrupt 6. MPF – bankrupt
7. NEXUS 7. NEXUS – NEXUS I sold to OSX
8. PetroProd 8. PetroProd - bankrupt
9. PROD 9. PROD
10.SEAP (Sea Production) 10.SEAP (Sea Production) – OTC/Rubicon/Ashmore
11.SEVAN 11.SEVAN
12.SFLO (Songa Floating Production, 12.SFLO (Songa Floating Production, ex. Nortechs
ex. Nortechs FPSO) FPSO) – Bankrupt
Of the remaining players, equity more or less wiped out in AKFP and the company lacks funding for additional
Of the remaining players, equity more or less wiped out in AKFP and the company lacks funding for additional
projects. FLNG needs significant further funding. PROD will not bid actively before year-end 2010 and SEVAN likely
projects. FLNG needs significant further funding. PROD will not bid actively before year-end 2010 and SEVAN likely
lacks equity to take on new significant capex commitments for some time
lacks equity to take on new significant capex commitments for some time
17
Source: Vitae Energy; Arctic Securities

18. Analysts and investors have moved from “euphoric” to sober. Maybe a bit too
sober…
From To
Trusting companies’ input on capex, time, Strongly fearing capex overruns – running
targeted IRR in contracts sensitivity analyses, incorporating cost
overruns and delays in estimates
Assuming all contracts will be fully utilized,
including options, and potentially beyond NPV-analysis of firm contracts alone –
that options viewed as potential upside only
High residual values / redeployment Modest residual values
opportunities
Assigning no value to growth / system value,
Including a high system value / value of not even for large players
expected further growth (“2 new contracts
per year”) Assuming “super-returns” will never
materialize
Believing in potential “super-returns” due
to the strong and appealing deepwater story Increasing WACCs
(“after DW drilling comes production”)
Low WACCs (abundant cheap financing)
18
Note: Does not necessarily apply to all analysts, but expresses our view on the perceived shift in attitude
Source: Arctic Securities

19. So, with a ”bad” track-record, but a positive market-outlook, what are the
investors telling us?
”The FPSO-sector is ”I’m stuck with
still un-investable” stocks in the worst
segment in all of oil
services”
“The segment has
been a disaster”
“We need to be able to believe in
stronger IRRs to invest in this sector –
how is the industry going to be
credible on this when they weren’t
“How is it possible that capable of extracting stronger margins
everything else in oil in the last super-cycle?”
services rallies and this
segment is lagging so
significantly?”
On a more positive note: We are starting to notice increased interest again from investors. Partially as a
On a more positive note: We are starting to notice increased interest again from investors. Partially as a
result of the segment having lagged so significantly and partially as a result of the BWO-PROD situation –
result of the segment having lagged so significantly and partially as a result of the BWO-PROD situation –
potentially creating a larger and significantly more interesting entity for investors
potentially creating a larger and significantly more interesting entity for investors
19
Source: Arctic Securities

20. Established players have heard the message and started to increasingly
address investors’ concerns
It remains to be seen whether this will result in tangible, profitable projects
”Target good return
FPSO projects”
”Will not agree to
undue contractual risk”
Our take: Credibility needs to be restored (also for industry majors). We are however more
Our take: Credibility needs to be restored (also for industry majors). We are however more
positive than we have been for quite some time and believe this is about to happen! Investor
positive than we have been for quite some time and believe this is about to happen! Investor
interest is increasing
interest is increasing
20
Source: BW Offshore; Arctic Securities

21. Agenda/key topics highlighted in this presentation
Market development: Is the situation in the market picking up?
How do investors and analysts look at the FPSO-sector? What are their
evaluation criteria?
Is the market willing to finance new developments? Is the financing
situation on the road to recovery?
What are the main concerns for investors in financing FPSO-projects and
how can you achieve a win-win deal with project financiers?
21

22. Oil Services/Equity markets have started improving again…
Philadelphia OSX since Sept-00, indexed
300 Global financial
turmoil & steep
oil price drop
250
Macondo
200
150
100
Markets bottom
out and start
50 recovering
0
Sep-00 Sep-01 Sep-02 Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10
Improving equity markets indicated increased risk appetite again. However; At this stage of the
Improving equity markets indicated increased risk appetite again. However; At this stage of the
recovery, it’s our perception that investors are looking more for rebound opportunities in established
recovery, it’s our perception that investors are looking more for rebound opportunities in established
names (less risky), rather than being willing to venture into financing new developments
names (less risky), rather than being willing to venture into financing new developments
22
Source: Factset; Arctic Securities

23. Debt markets are also improving
Low default rates and high liquidity Credit crunch, increased Strong PIIGS
secured record low spreads volatility and low liquidity recovery
250 1400
1200
200
1000
HY Spreads (basis points)
IG Spreads (basis points)
150
800
600
100
400
50
200
0 0
aug. 05 feb. 06 jul. 06 jan. 07 jul. 07 des. 07 jun. 08 nov. 08 mai. 09 okt. 09 apr. 10 sep. 10
High-Yield (RHS) Investment Grade (LHS)
23
Source: Bloomberg; Arctic Securities Credit Research

24. US High-Yield issue volumes YTD already above full-year 2009-level and
significant increase from the low level seen in 2008
US High-Yield
Volume issued (in USDbn)
180
160
140
120
USDbn
100
80
60
40
20
0
2005 2006 2007 2008 2009 YTD 1H 2005 1H 2006 1H 2007 1H 2008 1H 2009 1H 2010
2010
Companies issued about USD 120 billion of junk bonds in the first half of the year, up from
USD 63 billion over the same period in 2009, according to data compiled by Bloomberg.
24
Source: Bloomberg; Arctic Securities Credit Research

25. Risk aversion is decreasing / price of ”insurance” coming down
90 1400
VIX reflects a market-estimate
of future volatility (“fear
80 index”), based on the weighted
average of the implied 1200
volatilities for a wide range of
70 strikes
1000
60
50 800
40 600
30
400
20
200
10
0 0
aug. 05 feb. 06 jul. 06 jan. 07 jul. 07 des. 07 jun. 08 nov. 08 mai. 09 okt. 09 apr. 10 sep. 10
High-Yield (RHS) VIX (LHS)
25
Source: Bloomberg; Arctic Securities Credit Research

26. At USD 70/bbl, fundamentals still look strong. Oil companies increase E&P-
spending again  Should ease financing-burden somewhat
E&P spending 1998-2010e per
E&P spending 1998-2010e (top 23 companies) barrel produced, split by company type
200,000 30 14,000
175,000
12,000
25
E&P capex per barrel produced (USD)
Aggregated production (mboepd)
150,000
10,000
E&P spending (USDm)
20
125,000
8,000
100,000 15
6,000
75,000
10
4,000
50,000
5 2,000
25,000
- 0 -
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010E 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010E
Average supermajors Average majors (ex STL) Average Independents STL Petrobras
Supermajors Majors Independents Total production same co's
Strong rebound in E&P-spending in 2010 (provided oil co’s use budgets)
First indications for 2011 point to +5-10% further increase from 2010-level
A sharp decline in oil price (down another 10-15 USD/bbl) likely required
A sharp decline in oil price (down another 10-15 USD/bbl) likely required
to “de-rail” the current upswing. Our oil analysts do not believe this is a likely scenario
to “de-rail” the current upswing. Our oil analysts do not believe this is a likely scenario
26
Source: Companies; Arctic Securities

27. Is the (equity) market willing to fund new developments?
Established players with track-record and firm contracts/existing operations can still raise
Top tier equity funding at acceptable terms. SBM e.g. successfully raised EUR 181m Nov-09 through a
players (SBM, book building process (price set at/near closing price for the day). MODEC recently raised
MODEC, BWO, more equity, but directed at main shareholders
PROD) Increasing equity requirements pose challenges (for all players)
BWO able to raise debt-funding for PROD-deal at decent terms
More challenging. Few players can raise equity unless at (significant) discount
Needs to be backed by main owners + likely commitments from banks on the debt-side
Mid segment
Track-record must be in place, so should a plan for tangible return on capital to investors
High-yield market potentially becoming increasingly possible again
Impossible?
Newcomers / At least extremely challenging. Speculative projects are likely gone for a long time
speculative In addition to equity markets reluctance, banks are not willing to commit. Though not FPSO,
projects
Master Marine is a good example: Construction project on track (time and cost), 3Y firm
contract in place with ConocoPhillips, still unable to raise remaining bank-funding
More advanced and structured financing required. Up-front payments/milestones from oil companies
More advanced and structured financing required. Up-front payments/milestones from oil companies
likely a way to go. More EPC-contracts. It makes more sense for the oil companies to come up with the
likely a way to go. More EPC-contracts. It makes more sense for the oil companies to come up with the
funding than for the FPSO-companies (lower funding cost)
funding than for the FPSO-companies (lower funding cost)
27
Source: Arctic Securities

28. Agenda/key topics highlighted in this presentation
Market development: Is the situation in the market picking up?
How do investors and analysts look at the FPSO-sector? What are their
evaluation criteria?
Is the market willing to finance new developments? Is the financing
situation on the road to recovery?
What are the main concerns for investors in financing FPSO-projects and
how can you achieve a win-win deal with project financiers?
28

29. What are the main concerns for (equity) investors and how can you achieve a
win-win situation with financiers?
Main concern: Receive decent return on invested capital
Both categories of investors: Secure decent yield on invested capital
Debt side: Avoid downside risk
Equity side: Focused on upside potential. This relates to 1) valuation/pricing and 2)
shareholder return policy
Companies need to:
Define a credible strategy for how investors shall receive a satisfactory ROI
Vs. debt-investors: Convincing risk mitigation (contract coverage/backlog, strong
contract-counterparties, guarantees, debt/value etc.)
Vs. equity-investors: Focus on shareholder (cash) return policy. Investors want to avoid
“value traps”. Look to Fredriksen. Why is implicit value per DW rig in SDRL USD 1bn+, vs.
USD ~470m in RIG, USD ~580m in PDE etc.?
In general, FPSO-sector is likely more debt-friendly than equity-friendly (capped upside)
29
Source: Arctic Securities

30. Disclaimer
The information and views presented in this presentation are prepared by Arctic Securities ASA (“Arctic”) an investment banking firm domiciled in Norway, under the supervision of The Financial
Supervisory Authority of Norway (Kredittilsynet), and member of The Oslo Stock Exchange. This document has been prepared in accordance with the guidelines from the Norwegian Securities
Dealers Association.
The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is
for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this presentation may not be suitable for all investors.
Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting
upon any information or analysis mentioned in this presentation, investors may please note that neither Arctic nor any person connected with Arctic accepts any liability arising from the use of
this information and views mentioned in this document.
The distribution of this presentation and the offering, subscription, purchase or sale of securities issued by the company in certain jurisdictions is restricted by law, including but without
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