skdp presentation 071209

8/7/2019 SKDP Presentation 071209

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London - 7th December 2009 Page 1

SKDP N-Class Jack-Up UnitDrilling/Production

N-Class

Harsh Environment Jack-up

Drilling/Production

SKDP - Quarterly Update

London, 7th December 2009


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DISCLAIMER

DISCLAIMER

This presentation and its enclosure and appendices (hereinafter jointly referred to as the Presentation has been prepared by Skeie Drilling and Production ASA

(SKDP or the Company) exclusively for information purposes in connection with the Companys quarterly update.This Presentation has not been reviewed or registered with any public authority or stock exchange. This presentation is strictly confidential and may not be

reproduced or redistributed, in whole or in part, to any other person.

This Presentation does not constitute an offer to sell or a solicitation of an offer to buy any securities in the Company.

This Presentation contains certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in

which it operates. Forward-looking statements concern future circumstances and results and other statements that are not histori cal 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 the Company 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 the Company or any of itsparent or subsidiary undertakings or any such persons 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. The Company 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, none of

the Company or any of its parent or subsidiary undertakings or any such persons officers or employees accepts any liability whatsoever

arising directly or indirectly from the use of this Presentation.

This Presentation contains information obtained from third parties. Such information has been accurately reproduced and, as far as we are aware and able to

ascertain from the information published by that third party, no facts have been omitted that would render the reproduced information to be inaccurate or

misleading.

The Company's properties and certain financial derivatives are included at fair value in the Company's group account. Changes in fair value are recorded quarterly

in the income statement and, with respect to the properties, are based on third party valuation. Consequently, adjustment based on changes in fair value may affect

the company's income.

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

the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the

Companys business.

This Presentation and the information contained herein do not constitute an offer to sell or a solicitation of an offer to buy any securities in the United States and are

not for publication or distribution to U.S. persons (within the meaning of Regulation S under the U.S. Securities Act of 1933 , as amended (the Securities Act)).

This Presentation speaks as of 7 December 2009. Neither the delivery of this Presentation nor any further discussions of the Company with any of the recipients

shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date.


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Company BackgroundRig Concept and Status

The Jack-Up Market

Financials

2

3

4

SKDP CLASS-N JACK-UP UNIT

TABLE OF CONTENT

1


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SKDP was established on 26 January 2006 by Skeie Technology AS

Business Concept - to offer rigs which will be superior in relation to drillingefficiency & capacity, water & drilling depth capacity and able to providesimultaneous drilling and production operations in harsh environments

The Companys present business activities are focused on project management of

the Keppel FELS contracts, operational preparations and marketing activities

Turn-key contracts for design and construction of three KFELS N Class Jack-upUnits with delivery September 2010, December 2010 and June 2011

31.5 % owned by Skeie Technology AS / Skeie Tech Invest AS and 12.0 % byWideluck Enterprises (Owned by Keppel FELS)

Administrative services provided by Skeie Technology AS

OTC listed in February 2007

COMPANY BACKGROUND

SKEIE DRILLING & PRODUCTION ASA


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The Jack-Up Market

Financials

2

3

4


TABLE OF CONTENT

1


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RIG CONCEPT AND STATUS

SPECIFICATIONS FOR DRILLING AND PRODUCTION OPERATIONS

Harsh Environment (e.g. North Sea and Canadianwaters)

High pressure/high temperature deep-gas wells (e.g.GoM & southern NCS)

Deep water capability - in excess of 500 ft in benignenvironments

Extended reach and transverse skidding of Drill Floor

Combined drilling & production facilities

10 wells tie back or sub sea completion with productionmodule installed

Operations in 122 meters water depth on NCS. Optional131 meters with 30 ft. leg extension on NCS.

Drilling depth up to 35,000 ft (10,667 m)

True 1,000 T lifting capacity.

North Sea type pipe handling systems (on deck & inderrick)

Standbuilding while drilling capability.

Living Quarters accommodates 120 persons.

Closed drain and cutting disposal systems.


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COMBINED DRILLING AND PRODUCTION OPERATIONS

The Cantilever and Drill Floor can be repositioned 26 ft (7.92 m) to thePort side of the Unitl, to allow space for installation of a futureproduction process module.

Limits

Area: 12,918 sq ft (1,200 m2)

Height: 52.5 ft (16 m)




TECHNICAL COMPARISON WITH PEERS - NCS

Design N-Class (KFELS) MSC CJ70-X150A MSC CJ62-120S Hitachi Zosen Design

Delivered 2010/2011 2002/2004 1992/1993 1986

Operating Water Depth 400 (430) ft 492 ft 390 ft 350 ft

Leg Length 598 ft 673 ft 575 ft 515 ft

Hull Size (L/B/D) 264/289/35 ft 291/336/38 ft 257/296/35.5 ft 277/295/31 ft

Drilling depth 35,000 ft 30,000 ft 25,000 ft 25,000 ft

Cantilever Outreach 75 ft 90 ft 60 ft 55 ft

BOP Stack 18 - 15,000 psi 18 - 15,000 psi 18 - 15,000 psi 18 - 15,000 psi

Mud Pumps 3 (4) x 2,200 hp 4 x 2,200 hp 3 x 2,200 hp 3 x 1,600 hp

Liquid mud cap. 6,600 bbls 6,800 bbls 5,400 bbls 2,900 bbls

Bulk capacity 15,900 cuft 15,700 cuft 14,000 cuft 13,500 cuft

Drawworks 4,600 hp 4,600 hp 3,000 hp 2,000 hp

Top Drive - Rating 1,000 T 750 T 750 T 500 T

Main Power 13,050 hp 14,500 hp 6,900 hp 6,600 hp

Accommodation 120 120 100 100




TECHNICAL COMPARISON WITH PEERS - BENIGN ENVIRONMENT

SKDP Units

Typical PremiumUnit

Typical PremiumUnit

Typical 116-C Typical L-780

Design N-Class (KFELS) MOD V B (KFELS) Pacific Class (BM) LeTourneau 116-C F & G - L-780 Mod II

Delivered 2010 2006 to 2009 2006 to 2009 1979 1982

Operating Water Depth 500 ft + 350 ft 375 ft 350 ft 300 ft

Leg Length 598 ft 480 ft 506 ft 477 ft 340 ft

Hull Size (L/B/D) 264/289/35 ft 234/208/25 ft 240/224/28 ft 243/201/26 ft 180/175/25 ft

Drilling depth 35,000 ft 30,000 ft 30,000 ft 25,000 ft 20,000 ft

CantileverOutreachTransverse Envelope

75 ft66 ft

70 ft40 ft

70 ft40 ft

47 ft24 ft

40 ft25 ft

BOP Stack 18 - 15,000 psi 18 - 10,000 psi 18 - 15,000 psi 13 5/8 - 10,000 psi 135/8 - 10,000 psi

Mud Pumps 3 (4) x 2,200 hp 3 x 2,200 hp 3 x 2,200 hp 3 x 1,600 hp 3 x 1,600 hp

Liquid mud cap. 6,600 bbls 3,500 bbls 4,100 bbls 1,500 bbls 2,100 bbls

Bulk capacity 15,900 cuft 11,100 cuft 11,300 cuft 8,160 cuft 8,000 cuft

Drawworks 4,600 hp 3,000 hp 3,000 hp 3,000 hp 2,000 hp

Top Drive - Rating 1,000 T 750 T 750 T 750 T 500 T

Variable Load (Drilling) 5,000 T 3,750 T 3,750 T 3,900 T 2,400 T

Main Power 13,050 hp 9,275 hp 10,750 hp 6,600 hp 4,950 hp

Accommodation 120 110 115 106 98


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PROJECT STATUS

OVERALL STATUS

RIG DELIVERY DATE PLANNED STATUS

(End October 09)

ACTUAL STATUS

(End October 09)

COMMENTS

SKDP 1 30th Sept 2010 87.03 % 86.29 % Engines commissioned,

undocked and jacked up,

commissioning ongoing

SKDP 2 31st Dec 2010 69.23 % 66.96 % Engines commissioned,

undocking December 2009

SKDP 3 30th June 2011 39.59 % 36.90 % Keel laying December 2009


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PROJECT STATUS

SKDP-1 AT OUTFITTING QUAY


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CONSTRUCTION STATUS - BEFORE UNDOCKING


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N-CLASS, PROJECT STATUS

CONSTRUCTION - SKDP-1

1. Hull structure complete

2. Living quarters installed

3. Main equipment installed

4. Power generation, jacking systemand cranes commissioned.

5. Undocked and elevated

6. Cantilever, drill floor and derrick

installed, electrical cable pullingfrom hull is ongoing.

7. Legs erected up to 418 ft (of 568-ft) fabrication of next section is inprogress

8. Helideck installed

9. Commissioning of marine systemsongoing


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PROJECT STATUS

SKDP-2 IN DOCK

1. Hull structure complete

(except bow)2. Living quarters installed

3. Main hull equipmentinstalled

4. Power generation systemcommissioned

5. Undocking mid-December6. Cantilever and drill floor

fabricated, painting inprogress

7. Leg fabrication in progress,175 ft installed

8. Derrick assembly inprogress

9. Helideck assembly inprogress


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PROJECT STATUS

SKDP-3

1. The first three hull blocks are readyfor keel laying in December 2009

2. Construction of all the other hullblocks is well advanced, c/w pipingand HVAC.

3. Construction of the cantilever, drillfloor, living quarters, legs andspudcans is all in progress.

4. The main equipment is beingreceived.


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The Jack-Up Market

Financials

2

3

4


TABLE OF CONTENT

1


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THE JACK-UP MARKET

SUPPLY & DEMAND - NORWAY

Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13

Maersk Innovator (2002)

Maersk Gallant (1993)

Maersk Giant (1986)

Skeie 3 (2011)

Maersk Inspirer (2004)

Maersk Guardian (1986)

Skeie 2 (2011)

West Epsilon (1992)

Petroprod 1(2010)

Skeie 1 (2010)

Construction

Contract

5

1

3

Petro

Prod, 1


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THE JACK-UP MARKET

SUPPLY & DEMAND - NORWAY

Norway Jackups Supply & Demand: 2005-2012

0

2

4

6

8

10

12

14

16

jan.2005 jan.2006 jan.2007 jan.2008 jan.2009 jan.2010 jan.2011 jan.2012

Existing contracts Options Requirements Possibles Supply Development drilling

3 x SKDP units due out of the

yard and anticipated entrance of

the Jurong CJ70 around mid 2011

Last Updated: 23.11.09


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THE JACK-UP MARKET

PLANNED PROGRAMS - NORWAYStatoilHydro

Gudrun/Dagny (1 unit, 3-5 years + opts, prefer large unit/Newbud). 2011

Valemoen, combined drilling/production (1 unit, 20 wells, Newbuild 135m WD). 2012

Possible short term: 1 Expl + 1 Dev well, Southern NCS. 2010

Sleipner/ possible Epsilon Extension . 2011

ConocoPhillips

Ekofisk (2-4 units, long term, prefer high spec units). Timing uncertain possible 2011

Whiskey Platform Accident - restructure and focus on the current drilling program.

BP

Valhall/Tambar (1 unit 5 years). Operator waiting for high oil price/lower dayrates

Valhall DP P&A, 2012

Valhall flanke startup 2011, but flexible startup (Rate & Oil price sensitive)

Total

Hild (1 unit, 3-5 years 120m WD), pending appraisal results (Ongoing West Phoenix, expected in Q2 2010), 2013Lundin

Exploration/Appraisal, 1-2 wells - 2010

Nemo (1 unit, development long term) - 2011

Luno Possible appraisal wells, 2011

Talisman

Yme Phase II and Grevling development (1 unit, 2 years minimum - 2011).

Tender expected soon

Det Norske

Exploration/Appraisal - Commitment well spring 2011 Fry Development - JU Drilling unit 2012, combined solution, could push contract earlier

BG

Mandarin Rowan Gorilla VI Appraisal Then fast track development,

Bream Positive West Alpha appraisal, possible Combined drilling & Prod long term project (6-10 years). 2011

Indication: 1-2 units long term, Mandarin require high spec unit

Others

Some single well exploration prospects in 2010-2012, pending drill or drop decisions and similar

Minor Operators


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Client Location/ Field

Statoil Gudrun, DagnyValemon (NCS)

ConocoPhil lips Ekofisk area (NCS)

BP Valhall/Tambar (NCS)

Total Hild (NCS)

Lundin Luno, Nemo/Krabbe (NCS)

Talisman Yme, Grevling (NCS)

Det Norske Fry (Product ion/dril ling)(NCS)

BG MandarinBream (Production/drilling)(NCS)

..PLUS OTHERS..

Client Location / Field

ONGC India


Pemex Gulf of Mexico

Various Deep gas prospects


Chevron Nigeria


Nova Scotia, Canada


Sakhalin

THE JACK-UP MARKET

WORLDWIDE OPPORTUNITIES IDENTIFIED


Saudi Aramco AG


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Company BackgroundRig Concept and Design

The Jack-Up Market

Financials

Bank Facility

3Q Results

Cash Flow to Delivery

2

3

4


TABLE OF CONTENT

1


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FINANCIALS

THE RESTRUCTURING - CAPITAL STRUCTURE BEFORE ANDAFTER

178 150

495

305

675

675

0

200

400

600

800

1000

1200

1400

1600

1800

Pre-fix Post-fix

Equity

Bonds

Bank

USDm

170

Convertible

Bank

Bonds

Equity

Enterprise value (EV) down from USDm 1,620 to USDm 1,130

Implying EV per rig down from USDm 540 to USDm 370


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FINANCIALS

USD 675 M FACILITY - SUMMARY OF EVENTS

Negotiations since implementation of the Restructuring Restructuring implemented without accepting the Lenders unreasonable conditions

Formal meetings and reservation of rights letters exchanged

Lenders motivation clearly to reduce/terminate financing commitment

Several Term Sheets received and comments exchanged

Last deadline to accept Term Sheet was imposed to noon 19 November 2009

Facility Agreement cancelled on 2 December 2009 - the alternative was Event of Default

Amended terms - some not acceptable

Commitment reduced to a One Rig Facility (USDM 225) with best effort syndicationcommitment for Two Rig Facility

New Term Sheet subject credit approval of Lenders

Some of the new terms were unacceptable The Lenders refused to clarify important terms

Conclusions - availability of funds very uncertain


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FINANCIALS

USD 675 M FACILITY - GOING FORWARD

Structural issues

SKDP will finance each of the rigs on a stand-alone basis and not as a fleet financing

SKDP is looking to raise first lien financing on each of the rig amounting to USD 225 millionand to be split in a commercial bank tranche and a Eksportfinans/GIEK tranche

Tenor to be minimum 6 years with a (10) years profile on the repayments structure

Revised bank terms needs to be aligned with bond loans however some amendments may berequired

Skeie Rig Management AS to be acceptable as drilling operator, and present managementstructure to be pre-approved

Change of Control provision to consolidate ownership by Skeie Group, Wideluck andinternational recognized drilling contractor

Lenders

GIEK/Eksportfinans - continued support and expect to increase commitment

One of the existing bank has indicated continued support to finance the first rig achieving adrilling contract

Initiated dialogue with several new banks - encouraging feed back


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FINANCIALS

3Q 2009


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FINANCIALS

3Q 2009

INCOME STATEMENT Note 3Q 09 3Q 08 3Q 09 3Q 08 2 008

Revenues 0 0 0 0 0

Interest income 0 0 0 0 0

Operating expenses 4 911 1 070 10 201 1 621 3 243

Remission of debt -69 293 0 -274 695 0 0

Write down of non current assets 4 0 0 -51 793 0 517 917

Operating expenses -64 382 1 070 -316 287 1 621 521 160

Operating result 64 382 -1 070 316 287 -1 621 -521 160

Finance income 3 750 311 6 127 4 345 1 413

Finance costs -2 096 -2 117 -2 096 -2 117 -1 787

Net change financial derivatives 0 45 885 0 -863 34 170

Taxes 0 0 0 0 0

Net result after taxes 66 036 43 009 320 318 -256 -487 364


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FINANCIALS

3Q 2009

Statement of changes in equity

NoteSharecapital

Otherreserves

Retainedearnings Total

Balance at 1 January 2008 110 542 38 584 4 672 153 798Profit/(loss) for the period -256 -256

Total comprehensive incomefor the period ended 30September 2008 0 0 -256 -256

Balance at 30 September 2008 110 542 38 584 4 416 153 542

Profit/(loss) for the period -487 108 -487 108

Total comprehensive incomefor the period ended 31

December 2008 0 0 -487 108 -487 108Emission October 2008 13 203 13 203 26 406

Issue expenses -1 194 -1 194Used of share premium to coverloss -50 593 50 593 0

Balance at 31 December 2008 123 745 0 -432 099 -308 354

Profit/(loss) for the period 320 318 320 318

Total comprehensive incomefor the period ended 30September 2009 0 0 320 318 320 318

Reduction of share capital -122 349 122 349 0Share capital increase byconversion of convertible bond 2 000 8 000 10 000

Share capital increase byconversion of bond loans 9 960 39 841 49 801

Private placement July 2009 17 008 68 031 85 039

Issue expenses -4 948 -4 948

Balance at 30 September 2009 30 364 115 872 5 620 151 857


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FINANCIALS

3Q 2009


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FINANCIALS

OWNERSHIP DISTRIBUTION 2.DECEMBER 2009

SKEIE TECHNOLOGY AS 21,6 %

EUROCLEAR BANK S.A./N.V. ('BA') 14,5 %

WIDELUCK ENTERPRISES LIMITED 12,0 %

SKEIE TECH INVEST AS 9,9 %

BANK OF NEW YORK MELLON SA/NV 4,4 %

GOLDMAN SACHS INT. - EQUITY - 2,2 %

JP MORGAN CLEARING CORP. 2,1 %

TRAFALGAR AS 1,8 %

ODIN OFFSHORE 1,6 %

AKERSHUS FYLKESKOMMUNALE 1,5 %


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FINANCIALSCASH FLOW TO DELIVERY

2009 2010 2011

SKDP1 q4 q1 q2 q3 q4 q1 q2 Sum

Yard installments 0,0 0,0 0,0 185,4 185,4

Varitation orders / deferment cost 0,0 0,0 0,2 19,6 19,8

Prep for operations 1,5 2,8 2,5 6,1 12,8Project costs 0,7 0,8 0,8 0,8 3,1

SG&A 0,5 0,5 0,5 0,5 1,8

Interests and other financial costs 0,4 0,0 0,0 0,0 0,4

Total SKDP1 3,1 4,0 3,9 212,3 0,0 0,0 0,0 223,3

SKDP2

Yard installments 0,0 0,0 0,0 0,0 196,5 196,5

Varitation orders / deferment cost 0,0 0,0 0,0 0,4 19,4 19,8

Prep for operations 0,4 0,8 0,7 2,2 5,9 10,1

Project costs 0,7 0,8 0,8 0,8 1,1 4,2

SG&A 0,5 0,5 0,5 0,5 0,5 2,3

Interests and other financial costs 0,4 0,0 0,0 0,0 0,0 0,4

Total SKDP2 2,1 2,0 2,0 3,8 223,4 0,0 0,0 233,3

SKDP3

Yard installments 0,0 40,2 0,0 0,0 0,0 0,0 181,1 221,3

Varitation orders / deferment cost 0,0 0,0 0,0 0,0 0,5 0,0 31,3 31,8

Prep for operations 0,4 0,5 0,6 0,9 2,3 1,4 5,9 12,1

Project costs 0,7 0,8 0,8 0,8 1,1 2 ,2 2 ,2 8,5

SG&A 0,5 0,5 0,5 0,5 0,5 0,5 0,5 3,2

Interests and other financial costs 0,4 0,0 0,0 0,0 0,0 0,0 1,6 2,0

Total SKDP3 2,1 42,0 1,9 2,2 4,4 4,0 222,5 279,0

SG&A 0,2 0,1 0,2 0,2 0,2 0,1 0,2 1,2

Sum SKDP 1, 2 and 3 7,4 48,2 8,0 218,5 228,0 4,1 222,7 736,8

1.priority loan (Bank) 0 0 0 -225 -225 0 -225 675

Total cash end of period 82,4 75,0 26,8 18,8 25,3 22,4 18,2 20,6

No commitment fees included in 2010 and 2011


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L d th D b P

Contact details:Skeie Drilling & Production ASA

Tordenskjoldsgate 9N-4612 KristiansandNorway

Telephone: + 47 38 04 19 40Fax: + 47 38 04 19 41

skdp presentation 071209

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