Marketing Presentation Page 1 Pareto Securities’ 15th annual Oil & Offshore Conference September...

Marketing Presentation

Pareto Securities’ 15th annualOil & Offshore Conference

September 10, 2009


KFELS N-Class harsh environment jack-up drilling/production rigs


Company Introduction

Rig Concept and Design

Market/Financials

Summary

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TABLE OF CONTENTS / AGENDA

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SKDP established September 2006 and located in Kristiansand, Norway

49% Owned by Skeie Technology AS, 5% by Keppel O & M and 46% by external investors

Commercial and technical services hired from Skeie Technology

Operational Management: Skeie Rig Management with support from Pier Offshore Management Services

Signed contract for design and construction of three KFELS Class N Jack-up Unit with delivery Q1-2010, Q3-2010 and Q4-2010

OTC listed in Oslo

COMPANY INTRODUCTION – Skeie Drilling & Production ASA (SKDP)


COMPANY SET-UP

Skeie Technology AS

Skeie D&P

ProdJack 1 ProdJack 2 ProdJack 3

Skeie RigManagement AS

(ex Offshore Production Services AS)

Norsupply AS

Pier Offshore Management

Services ASOSM

Consultants AS

Business Management Agreement

Head Management

Agreement

Sub Management Agreement

Supervision Agreement

Sub Supervision Agreement


CONSTRUCTION PROGRESSD J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D N D J F M A M J J A S O N D N D

Contract signed - Rig #1 - Rig #2 - Rig #3

Engineering - Rig #1 - Rig #2 - Rig #3

Procurement - Rig #1 - Rig #2 - Rig #3

Major deliveries - Rig #1 - Rig #2 - Rig #3

Construction - Rig #1 - Rig #2 - Rig #3

Fabrication/assembly - Rig #1 - Rig #2 - Rig #3

Erection - Rig #1 - Rig #2 - Rig #3

Mechanical - Rig #1 - Rig #2 - Rig #3

Testing/commissioning - Rig #1 - Rig #2 - Rig #3

Delivery - Rig #1 - Rig #2 - Rig #3

2007 2008 2009 2010


OPERATIONS PREPARATIONS

• Skeie Rig Management (wholly owned SKDP subsidiary) to operate the rigs with support from Pier Offshore.

• Key onshore and offshore management positions and section leaders already recruited

• Training and competency development programs under development

• QHSE management systems established

• Maintenance systems

• Logisitcs (spare parts)




Market/Financials

Summary


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New N-Class

Standard Jack-up – ”no” clearance between the legs w/jacking system and cantilever

RIG CONCEPT AND DESIGN RIG CONCEPT AND DESIGN

COMBINED DRILLING AND PRODUCTION OPERATIONS


Drill Floor located on the substructure above the cantilever.

Cantilever capable of being skidded fore and aft with center line (primary Cantilever position) of rotary up to 75 ft (22.86m) aft of sternIt can be relocated 26 (7,92m) ft to port (secondary Cantilever position)

The Drill Floor can be skidded 20 ft (6.1m) port and starboard of the Cantilever centerline both in primary position and in secondary position

Max operation envelop over a pre-

installed Jacket/Wellhead Platform:75 ft aft of Transom, 20 ft to starboard of hull centerline and 46 ft to port of hull centerline.


SPECIFICATIONS FOR DRILLING OPERATIONS



COMBINED DRILLING AND PRODUCTION OPERATIONS

The Cantilever and Drill Floor can be repositioned 26ft (7.92M) to the Port side of the Vessel, to allow space for installation of a future production process module.

LimitsArea: 12,918 sq ft (1,200M2) Height: 52.5ft (16M)



PRODUCTION CONCEPTS WITH STANDARD UNITS/EQUIPMENT



ALTERNATIVE PRODUCTION


Source: Company, ODS Petrodata

TECHNICAL COMPARISON WITH PEERS AS DRILLING RIGS

MSC CJ70-X150A 1)

DNV492

40,000

291/336/3867390

15,000

46,793

15,7234,600

1 000 tons/2x1150 HP3

14,4845,200120

RIG DESIGN Keppel N-Class MSC CJ70-X150A MSC CJ62-S120Class DNV DNV DNV

Operating water depth (ft) 400 (430) 492 380

Drilling depts (ft) 35,000 30,000 30,000

Hull size (ft) (LxBxD) 264/289/35 291/336/38 256/296/35

Leg length (ft) 598 673 541

Cantilever outreach (ft) 75 90 60

BOP (psi rating) 15,000 15,000 15,000

Mud Pumps 3 (space for 4) 4 3Liquid mud capacity (bbls) 6,600 6,793 5,400Bulk mud capacity (bbls) 15,892 15,723 14,027Drawworks (hp) 4,600 4,600 3,000Top Drive 1 000 tons/2x1150 HP 750 tons/1150 HP 750 tons/2x1150 HPCranes 3 3 3Main Power(hp) 13,050 14,484 6,880Variable Deck Load (st) 4,535 4,600 3,693Accomodation 120 120 115

1) Enhanced version of the existing CJ-70 design with increased drilling depth, increased variable deck load and 1000 t top drive.




Market/Financials

Summary

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Skeie Drilling & Production (SKDP)Turnkey contract with the world’s leading jackup builder

Turnkey contracts signed with Keppel FELS for construction of 3 ultra harsh environment jackup rigs

Deliveries in March, August and December 2010

All in average delivered cost of ~USDm 477 per unit (total USDm 1.430)

All 3 units are fully financed with 11 % equity and 89% in debt (incl. convertible bonds)

Low construction risk at Keppel Fels - the world’s leading jackup builder

Favorable payment schedule: 50% at delivery for the first 2 units, 35% for the third unit


Financial Highlights

• All rigs fully financed- Equity- Convertible bonds- Secured bonds (2. priority)- Senior secured loan facility (1. priority)

• Bond loans may be replaced once the rigs are secured contracts

• New rig of equal design up approx. 120 MUSD per rig (3x120=360 MUSD)

• Delivery time new rig equal design end 2011, beginning 2012


Skeie Drilling & Production (SKDP)combined drilling/production units

The jackups are purposed built for the NCS and other harsh environment areas Superior deck-load capacity Deeper water capabilities Significantly larger air-gap than a standard jackup (up to 62 meters) Big drilling envelope – up to 64 wells without moving the rig

Dual mode value enhancing for oil companies. Provides early cash flow from smaller fields Increases oil recovery rates A combined mode contract could bode for even longer contracts. Oil companies likely to pay for upgrade and

downtime related to this

Two existing jack ups and one under construction of the CJ70 design with similar capabilities for drilling & production

Maersk Innovator and Maersk Inspirer PetroProd has one under construction The construction cost for the SKDP rigs is significantly lower than a new CJ70, > 100 MUSD

Operators prefer jackups for semis Jackups give less risk for downtime caused by harsh weather Blow Out Preventer (BOP) on deck compared to BOP on seabed for floaters, thus reduced operational risks The North Sea part of the NCS is to a large extent shallow water


Strong markets with several near term contract opportunities –Limited no. of rigs approved for NCS

Currently 6 jackups operating on the NCS.

Hereof 5 units operating as drilling rigs

Hereof 2 units matching the capabilities to the SKDP rigs: Maersk Inspirer, rebuilt for drilling & production and Maersk Innovator operating as drilling rig, but can be rebuilt for drilling & production

Extremely difficult for existing rigs to be approved for NCS

There is one CJ70 unit to be constructed for PetroProd suited for drilling & production


Contract Status Jackups, Norway

Rowan Gorilla VI: AOC declined. Rowan has re-submitted AOC application in April/May 2008.

Mobilization from UK to be delayed

BG: - Planned mobilization to Norway around Q1 2009, depending on well in progress in UK

2009 2010 2011NAME CURRENT OPERATOR FOLLOWING

OPERATORSAREA CURRENT

COUNTRYCONTRACTOR WD

(ft) COMMENT

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

SKDP 1 UNDER CONSTRUCTION SEA SGP Skeie D&P 430 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2PetroProd UNDER CONSTRUCTION SEA SGP Larsen O&G 492 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2West Epsilon StatoilHydro NOS NORWAY Seadrill 400 c c c c c c c c c c c c c c c c c c c c c cSKDP 3 UNDER CONSTRUCTION SEA SGP Skeie D&P 430 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2Maersk Guardian Dong Talisman NOS NORWAY Maersk Contractors 350 DONG, Talisman 150d, then Talisman 2yrs from Q1 09c c c c c c c c c c c c c c c c c c c c c c c c cRowan Gorilla 06 BG CNR/BG NOS UK/NOR/UK Rowan Companies 400 BGhas 1 yr rolling options. c c c c c c c c c c c c c c c c c c 1 1 1 1 1 1 1 1 1 1 1Maersk Gallant ConocoPhillips Lundin/ConocoPhillipsNOS NORWAY Maersk Contractors 400 c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c cMaersk Giant Talisman NOS NORWAY Maersk Contractors 350 Varg, Yme c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c 1Maersk Inspirer StatoilHydro NOS NORWAY Maersk Contractors 490 Expected to be 5-8 years c c c c c c c c c c c c c c c c c c c c c c c c c c c 1 1 1 1 1 1 1 1 1SKDP 2 UNDER CONSTRUCTION/Skeie EnergySkeie Energy SEA SGP/NOR Skeie D&P 430 3-5 years + 2 x 1 y opts 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1Maersk Innovator ConocoPhillips NOS NORWAY Maersk Contractors 490 c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c

FIRM CONTRACT cOPTION 1

YARD / UNDER CONSTRUCTION 2


Norway Jackups Supply & Demand: 2005-2013

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

Existing contracts Options RequirementsPossibles Supply Including Rowan Gorilla VI

SKDP 1, PetroProd 1 & SKDP 2 & 3 due out of the yard.

©2008©2008

Last Updated: 29.08.08

Rowan Gorilla VI - Uncertain supplyAOC Declined

AOC resubmitted in Q2 08, to be clarified around YE 08


Source: Pareto

JU demand Norway: ConocoPhillips took Innovator and Gallant this week….needs another rig for min 5Y according to the demand below

Source: Pareto Research


Oil production


Replacement Rate, Oil Reserves vs Exploration Drilling Ratio vs Oil Price

0 %

20 %

40 %

60 %

80 %

100 %

120 %

140 %

160 %

180 %

200 %

jul.94 jul.95 jul.96 jul.97 jul.98 jul.99 jul.00 jul.01 jul.02 jul.03 jul.04 jul.05 jul.06 jul.07

Repl. Rate/Expl. Ratio

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120

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200

Oil Price

Oil Price Replacement Rate, Oil Reserves Expl. DrillingSource: SEB Enskilda, Company Research

©2008©2008


Summary

• Contract signed with Skeie Energy for rig # 2 for minimum 3 years

• SKDP prequalified by major oil companies

• Several bids submitted for NCS operators. Together with a number of new prospects for 2010-2011 SKDP maintains its optimism that alle three rigs will be on contract within the end of 2008.

• Extremely difficult and costly to enter NCS for existing rigs

• Identical newbuild N-Class rigs have a price increase of more than USDm 120 with delivery 4th quarter 2011

• Full financing of all three rigs in place, 1st priority bank loans completed

• Equity issue ≈ 28 MUSD medio September 2008 (bond loan agreement)100% underwrited by Skeie Technology and Keppel O & M


Contact details:Skeie Drilling & Production ASA

Tordenskjoldsgate 9 4612 Kristiansand Norway

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

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