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Offering Deepwater Floating Production Systems

FPSOcean - company presentation

Pareto Oil & Offshore Conference29/30 August 2007

Disclaimer – forward looking statementsThis presentation has been prepared by FPS Ocean AS (“FPS Ocean” or the “Company”) solely for the Company’s use in presenting its business or marketing its services to prospective business partners, clients, investors or any other party.

The Company will not be making any representation or warranty, expressed or implied, or assurance of any kind as to the accuracy, reliability or completeness of the Presentation. Neither the Company nor any of their respective directors, officers or employees will thus have any liability or responsibility to the recipients of the Presentation or any other persons resulting from their use of the Presentation.

The content of this Presentation includes and is based, inter alia, upon forward-looking information and statements that are subject to risks and uncertainties. These statements are based on current expectations, estimates and projections about global economic conditions and the economic conditions of the regions and industries that represent major markets for the Company. Important factors that could cause actual results to differ materially from those expectations include, among others, macro economic fluctuations, interest rates, oil prices and such other factors as may be discussed from time to time in the Presentation. No assurance can be given that those expectations will be achieved or that future results will be as set out in the Presentation. This Presentation represents our initial views and we reserve the right (but shall not be obliged) to revise, update or replace any statement herein.

By relying on this Presentation you acknowledge that you will be solely responsible for your own assessment of the information contained herein and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the Company’s business.

In addition, this Presentation and the analyses set out herein are not and do not purport to be an appraisal or valuation of any of the securities, assets or businesses of the Company.

This Presentation is subject to Norwegian law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of the Norwegian courts.

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1. Business plan and market rationale

2. Corporate structure and management

3. Projects – ”DeeP Producer 1” and ”DeeP Producer 2”

4. Technology development

5. Operational platform

6. Financials

Content

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Business plan

The FPSOcean vision is to become a significant niche player in the global market for floating

production of oil & gas in the rapidly expanding deepwater development areas

The FPSOcean business model is to build, own and operate Floating Production Systems, including

conversion of crude oil tankers into Floating Production Storage & Offloading (FPSO) units

FPSOcean is offering FPSO solutions for expedient development of deepwater reservoirs using cost

effective Dynamic Positioning (DP) systems with safe, reliable and innovative technology

The company has a goal of developing a fleet of 4 - 6 units over the next 4 - 6 years

Serving a surging demand for lease of floating production systems

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FPSO market – lease players

Companies with turret technology* Companies in need of 3rd party turret technology

1. Bluewater (turret mooring)

2. BW Offshore (APL)

3. FPSOcean (DP with turret DRB)

4. Modec (turret mooring)

5. Prosafe (turret mooring)

6. SBM (turret mooring)

7. Sevan Marine (*cylindrical shape not requiring turret)

1. Aker Floating Production

2. Bumi Armada

3. Ezra

4. Exmar

5. Fred. Olsen Production

6. Frontier

7. Helix/AGR

8. Maersk

9. M3NERGY

10. Nortechs

11. Oceaneering

12. Petroprod

13. Petroserve

14. Premuda

15. Rubicon

16. Sea Production

17. Tanker Pacific

18. Teekay Petrojarl (own technology mothballed)

Of 25 global players 19 do not have in-house turret technology

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Addressing the deepwater marketDeepwater production to follow the deepwater drilling surge

High degree of deepwater discoveries; high level of deepwater drilling activity

Traditional mooring systems very expensive in deep water; need for innovative solutions

Dynamic Positioning (DP) systems have proved very favourable in subsea construction,

drilling and shuttle tanker segments

20 years successful experience with Seillean DP FPSO in UK and Brazil

DP FPSO requires ability to disconnect risers in case of DP failure/power black-out

The same technology is valid for shut down and demobilisation in hurricane areas

FPSO market - market drivers

Deepwater Rig Demand - WorldwideBy Activity Type - Mid Case

2000-2012

020406080

100120140160180

1Q00

4Q00

3Q01

2Q02

1Q03

4Q03

3Q04

2Q05

1Q06

4Q06

3Q07

2Q08

1Q09

4Q09

3Q10

2Q11

1Q12

4Q12

Rig

s

Exploration Appraisal and Development

* Forecast as of June 2007

Deepwater production to follow deepwater drilling

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Deepwater and/or hurricane areas

FPSO market - target projects

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The DP FPSO proposition Competitive solution for deep water and early production

The deeper the water the more competitive is the Dynamic Positioning system

Easily redeployable, highly competitive for short contracts/EPS

Versatile positioning system independent of water depth

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Corporate structure FPS Ocean AS shares quoted at OTC, Oslo under “FPSO” ticker

FPSOcean AS

DP Producer AS DP Offshore AS SPC No. 3

FPSO Management ASOslo, Rio, Houston, Dubai

”Nordic Laurita””DeeP Producer 1”

”Semakau Spirit””DeeP Producer 2”

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Erland P. Bassøe (1957), Co-founder & Chairman 25 years offshore experience Bassoe Offshore, Scorpion Offshore, Frontier Drilling, ODS-Petrodata

Georg Sverdrup Onsrud (1955), Co-founder & Chief Executive Officer25 years offshore experience Fred. Olsen Production, Aker, Stolt, Kværner

Christian Mowinckel (1954), Chief Financial Officer27 years senior management experience in industry and offshore Ocean Rig, Deloitte & Touche, Kvaerner, DnB NOR

Kjetil Bruun-Olsen (1956), Vice President, Projects & Operations12 years offshore, 12 years shipping experience Fred. Olsen, Star Refer, Neptun

Leif O. Aaker (1951), Vice President, Business Development30 years offshore experience Boa Offshore, Fred. Olsen Energy, Golar-Nor Offshore (Petrojarl)

Ola Often (1956), Vice President, Technology25 years offshore engineering Fred. Olsen, PGS, ABB

Organization of 40 including substantial FPSO experience

Corporate structure

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Projects FPSO conversion ongoing, deepwater technology being developed

“DeeP Producer 1” (DPP1); Panamax shuttle tanker “Nordic

Laurita”, built Tsuneishi Japan 1981, classed August 2006. She

entered Dubai Drydocks in May 2007 for conversion to Dynamic

Positioning FPSO, scheduled for completion by end February 2008.

“DeeP Producer 2” (DPP2); Double sided Aframax tanker

“Semakau Spirit”, built Koyo Japan 1988, to be delivered April

2008. Slots secured with Dubai Drydocks for conversion with

planned completion 2009. Long lead items secured.

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Projects – DPP 1 configurationDesign basis for the deepwater DP FPSO “DeeP Producer 1”

400,000 barrels storage (98% ex. slops); 320,000 with double sides

Production capacity 60,000 bpd, 40,000 bopd

Moon-pool area for Riser inlet; Disconnect-able Riser Buoy (DRB)

2 x 17 MW Dual Fuel Gas Turbine Power gen

4 x 3.8 MW Azimuth thrusters

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Projects – DPP 1 execution plan

Process Module:Engineering / Procurement Assistance by Expro/SPSProcurement by FPSOceanFabrication by Lamprell

Power Plant (Gas Turbines)Gas Turbines by Siemens, Sweden

Disconnectable Riser Buoy (DRB):Engineering, Procurement and Construction (EPC) by Scana

ThrustersThrusters by Schottel, GermanyThruster Drives by Siemens, NorwayThruster Control System by Kongsberg Maritime

Vessel Conversion:Structrual and Marine Systems Engineering by Inocean / MaritecEIT Engineering, Power Distribution and Control System by Siemens, NorwayProcurement of equipment by FPSOceanVessel Conversion by Dubai Drydocks

Offloading System:Hawser Winch and Offloading Reel by ScanaOffloading Hose by Trelleborg

Best-in-class sub-contractors

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Conversion Dubai Drydocks; Process plant construction Lamprell

Projects – DPP 1 construction hub Dubai

Dubai Drydocks, Conversion references:

Saipem Golfinho FPSO VITORIA

Fred. Olsen Production FPSO Knock Adoon, FSO Knock Nevis

BW Offshore (Bergesen) FSO Berge Pioneer

SBM FPSO Mystras, FPSO Xikomba

Woodside FPSO Cossack Pioneer

Lamprell, Process construction references:

Saipem Golfinho FPSO VITORIA process modules

BW Offshore KMZ process modules

SBM Xikomba FPSO Atlantic process modules

SBM Zafiro FPSO Eagle process modules

SBM Turret Mooring Buoys

LEL DDD

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Projects - DPP 1 status August 2007Vessel arrived yard on 22nd May; conversion work in progress

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Projects - DPP 1 status August 2007Conversion project on track

Hull - Dubai Drydocks

Hull demolition work completed

Hull reinforcements ongoing

First dry-dock scheduled for October

Topside - Lamprell

M20 process module main deck completed, installation of process equipment starting

M80/90 power module fabrication of main deck ongoing

DRB fabrication in Dubai on schedule

Long lead items nearing completion

Gas Turbine No. 1 delivered to Dubai, No. 2 on schedule

Main process equipment delivered on schedule

Manufacturing of thrusters on schedule

DP control system completed on schedule

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Projects – DPP 1 status August 2007DRB fabrication at Lamprell, in Dubai

Cone section

Cylindrical section

Bottom section (upside down)

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Projects – DPP 1 status August 2007M20 module at Lamprell; Process deck painted ready to receive equipment

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Projects – DeeP Producer 2 (DPP 2)

Operational envelope > 6.0 meters significant wave height, ULS 10 meters significant

Storage capacity: 600,000 barrels (double sides)

Production capacity 90,000 bpd total fluid, 60,000 bopd API 15 to 40

2 off 17 MW Dual Fuel Gas Turbine Power generation

5 off 3.8 MW Azimuth thrusters

Design basis

Project status

Vessel purchased in May

Seller trading vessel until delivery April 2008

Yard slot secured

Certain long lead items secured

FPSOcean riding squad onboard

Frond End Engineering Design in progress

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Projects - DPP 2 preliminary GA plan

From forward:Flare tower

KO drum

M10 – future gas export/reinjection/GTL

M20 – Process and gas fuel module

M30 – Field specific subsea/chemical injection module

M40 – Inlet manifold

M50 – Turret area

M60 – Future water injection

M70 – Boiler module

M80 – Power generation module

M90 – Switchboard module

Accommodation with safe area/lifeboats

Aft deck with emergency generator and offloading system

Helideck

Hydrocarbons forward and non-hazardous areas aft

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Technology – key componentsState-of-the-art technology securing operational versatility in deep waters

Disconnect-able Riser Buoy (proprietary technology jointly owned with Scana Industrier)

2 x 17 MW Dual Fuel Gas Turbines (Siemens SGT-500)

4 x 3.8 MW Azimuth Thrusters (Schottel SRP 4040 LSU)

Kongsberg DP system (DP-2)

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Technology – field lay-out

All flexible riser solutionRiser buoy tethered to seabed using polyester rope and anchors

Typical Riser configuration (shallow/deep water)

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Technology – field lay-out

Combined rigid pipe and flexible jumpersRiser buoy tethered to seabed using polyester rope and anchors

Hybrid Riser configuration (ultra deep water)

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Technology - Disconnectable Riser Buoy DRB™

Multi-riser system (5 x 8” risers + 5 x control/service lines)

Weather-vane turret (hydraulic drive)

Centrally located in moon-pool

PCT, Norwegian & US patent filed January/February 2007

Quick dis-connect for operational safety (loss of DP power)

Emergency release < 45 seconds

Controlled dis-connect for Hurricane escape

Dis-connected DRB stabilised in 40-100 m below surface

Re-connect sea state 3 m Hs

Re-connect duration < 24 hours

Jointly developed by FPSOcean and Scana AMT

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Colour Codes:

Green: DRB Outer Part -weather-vane with FPSO; released to sea

Yellow: DRB Inner Part -Geostationary; released to sea

Red: QDC upper half linked to swivel; core geostationary

Brass: Swivel rings –weathervane with FPSO

Dark Grey: Locking arms

Grey: Hull structure, swivel handling frame

Blue: Production Risers & Jumpers to process deck

Technology – DRB dynamicsSwivel room lay out arrangement

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FPSOcean management giving high priority to developing a strong operating

platform with utmost attention to HSE issues

FPSOcean has established operating agreements with two highly credible

offshore FPS operators in order to serve oil companies in both harsh & benign

environments:

Bibby Offshore Limited, Aberdeen

Alliance Marine Services, Houston and Lagos

Both companies have long standing operating relationships with key clients in

their respective geographical areas and with strong HSE and up-time records

Agreement in place with reputable offshore ship managers

Operations

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Financials - shareholders

Board of Directors:

Erland Bassøe, Chairman

Felix H. Tschudi

Jan R. Næss

Tone Wille

Gro Baade-Mathiesen

Investor Shares % of total Country

BEAR STEARNS SECURITIES CORP. 1,177,082 15.55% USA

SUNDT AS 820,000 10.84% NOR

BASS INVEST AS 520,527 6.88% NOR

MORGAN STANLEY & CO. INC. 518,430 6.85% GBR

FAIRBANKS JONATHAN B. 412,792 5.45% USA

DEUTSCHE BANK (SUISSE) S.A. 371,520 4.91% CHE

NEXUS CAPITAL AS 270,022 3.57% NOR

TITLIS AS 266,400 3.52% NOR

NORTHERN NAVIGATION INT. 266,000 3.52% LBR

KLAVENESS INVEST AS 246,500 3.26% NOR

GOLDMAN SACHS INTERNATIONAL 204,600 2.70% GBR

CANICA AS 203,600 2.69% NOR

ODIN OFFSHORE 201,000 2.66% NOR

LEHMAN BROTHERS INTERNATL. EUROPE 177,316 2.34% GBR

GOLDMAN SACHS & CO 172,400 2.28% GBR

ING.ONSRUD AS 111,476 1.47% NOR

BANK OF NEW YORK, BRUSSELS BRANCH 107,100 1.42% GBR

KREDIETBANK S.A. LUXEMBOURGEOISE 100,000 1.32% LUX

R AND S FAIRBANKS IRREVOCABLE TR 88,658 1.17% USA

GRIFFIN UMBRELLA FUND PLC 76,000 1.00% IRL

Total number owned by top 20 6,311,423 83.40%

Total number of shares 7,567,381 100%

20 largest shareholders August 2007

NOR

USA

GBR

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Financials – funding statusDeeP Producer 1 fully funded; DeeP Producer 2 initial equity in place

DPP 1 funding

USD 50 mill from equity issues (Feb, Jun, Dec 06)

NOK 210 mill (USD 34 mill) unsecured 2 year bond w/call option

USD 75 mill 2 priority 5 year bond w/ call option

USD 50 mill 1 priority bank construction loan

DPP 2 funding

USD 34 mill from equity issue (Dec 06)

Total funding raised is approximately USD 250 mill

Cash reserve at end of July (including proceeds from unsecured bonds, excluding bank

loan) was approximately USD 100 million

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Financials – Q2 financial statementsConsolidated profit & loss in USD Q2 Year to date Full year

2007 2007 2006

Income 55 144 92 645 145 279

Administrative expenses 675 317 1 163 076 927 667

Depreciation and write down 19 439 47 423 28 838

Cost of rent 11 947 41 377 42 980

Other losses 0 0 190 231

Other expenses 727 208 1 213 200 1 635 406

Operating result -1 378 767 -2 372 431 -2 679 843

Financial income 2 922 418 3 253 752 757 040

Financial expenses -2 667 220 -2 905 384 -670 451

Net financial expenses 255 198 348 368 86 589

Profit before tax -1 123 569 -2 024 063 -2 593 254

Income tax expenses 0 0 12 489

Net result -1 123 569 -2 024 063 -2 605 743

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Financials – Q2 financial statementsConsolidated balance sheet in USD 30. June 31. December

2007 2006

ASSETS

Non-current assets

Property, plant and equipment 88 362 447 34 426 956

Intangible assets 135 122 55 626

Deferred taxes 0 0

88 497 569 34 482 582

Current assets

Trade and other accounts receivable 1 510 554 594 694

Derivatives 2 594 886 2 964 002

Cash and cash equivalents 78 000 064 133 412 928

82 105 504 136 971 624

Total assets 170 603 073 171 454 206

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Financials – Q2 financial statementsEQUITY 30. June 31. December

Equity allocated to the companies shareholders 2007 2006

Issued capital 2 507 623 2 419 588

Share premium 90 178 698 87 012 762

Other reserves -3 466 262 -2 135 518

Retained earnings -2 521 090 -2 521 090

Result -2 024 063 0

84 674 906 84 775 742

LIABILITIES

Non-current liabilities

Interest-bearing loans and borrowings 76 573 511 76 724 645

76 573 511 76 724 645

Current liabilities

Trade accounts and other payables 9 354 656 5 393 819

Income tax payable 0 0

Loan 0 4 560 000

9 354 656 9 953 819

Total liabilities 85 928 167 86 678 464

Total Equity and Liabilities 170 603 073 171 454 206