Company presentation
DNB Markets Energy & Shipping Conference March 2024
Disclaimer
All statements in this presentation other than statements of historical fact are forward-looking statements, which are subject to a number of risks, uncertainties, and assumptions that are difficult to predict and are based upon assumptions as to future events that may not prove accurate. Certain such forward-looking statements can be identified by the use of forward-looking terminology such as "believe", "may", "will", "should", "would be", "expect" or "anticipate" or similar expressions, or the negative thereof, or other variations thereof, or comparable terminology, or by discussions of strategy, plans or intentions. Although we believe that the expectations reflected in such forward -looking statements are reasonable, these forward-looking statements are based on a number of assumptions and forecasts that, by their nature, involve risk and uncertainty. Various factors could cause our actual results to differ materially from those projected in a forward-looking statement or affect the extent to which a particular projection is realized. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this presentation as anticipated, believed or expected. To the extent this information includes information sourced from third parties, such as concerning the industry in which Prosafe operates, has not prepared such information and assumes no responsibility for it. Prosafe does not intend and does not assume any obligation to update any industry information or forward-looking statements set forth in this presentation to reflect subsequent events or circumstances.
2
Prosafe at a glance
- Leading owner and operator of high-end accommodation vessels
- Global operations, Brazil and North Sea presence
- 4 modern vessels built for the harshest environments, 3 legacy assets
- Two additional high-end vessels at yard
- Improving market outlook across key North Sea and Brazil markets
3
Available
Caledonia Boreas
Concordia
Zephyrus EurusNotos
At yard
Nova
Vega
Late-cyclical market trailing E&P spending and drilling rates
Growth in E&P Capex vs. fleet utilisation
40% | Prosafe's annual fleet utilisation (rhs) | Growth E&P capex | 100% | ||||||||||||||||||||||||
30% | 90% | ||||||||||||||||||||||||||
CapexE&PingrowthAnnual(%) | 80% | utilisationfleetannualProsafe's(%) | |||||||||||||||||||||||||
20% | |||||||||||||||||||||||||||
20% | |||||||||||||||||||||||||||
70% | |||||||||||||||||||||||||||
10% | |||||||||||||||||||||||||||
60% | |||||||||||||||||||||||||||
0% | 50% | ||||||||||||||||||||||||||
-10% | 40% | ||||||||||||||||||||||||||
30% | |||||||||||||||||||||||||||
-20% | |||||||||||||||||||||||||||
-30% | |||||||||||||||||||||||||||
10% | |||||||||||||||||||||||||||
-40% | 0 | ||||||||||||||||||||||||||
2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024E |
4 Source: Rigbase, SB1 Markets
Trailing 12-month average fixture rates
Jack-up vs. accommodation
Accommodation (LHS) | JU Rigs (RHS) | ||||
350 | 200 | ||||
300 | JU rigs up 160% | 180 | |||
160 | |||||
(USDk/day)ratesAccommodation | since low | (USDk/day)ratesup-Jack | |||
250 | Accommodation up | 140 | |||
200 | 120 | ||||
Correlation = 0.70 | 100 | ||||
150 | 80 | ||||
100 | 60 | ||||
40 | |||||
50 | 76% since low | 20 | |||
0 | 0 | ||||
Jun-05Jun-06Jun-07 | Jun-08Jun-09Jun-10Jun-11Jun-12Jun-13Jun-14Jun-15 | Jun-16Jun-17Jun-18Jun-19Jun-20Jun-21Jun-22 | Jun-23 |
Brazil FPSO growth driving increased demand
Brazil market balance (units)1 | Potential FPSO | |||||
driven demand | ||||||
Identified open demand | 13 | |||||
Contracted | 12 | |||||
10 | ||||||
9 | 9 | 9 | ||||
2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 |
Floating production units in Brazil2
+29% | |||||||||||||||
88 | 90 | ||||||||||||||
84 | |||||||||||||||
77 | 80 | ||||||||||||||
70 | 72 | ||||||||||||||
62 | 63 | 64 | 66 | ||||||||||||
58 | |||||||||||||||
51 | 53 | ||||||||||||||
48 | |||||||||||||||
46 | |||||||||||||||
42 | |||||||||||||||
32 | 34 | 36 | |||||||||||||
29 | |||||||||||||||
2009 | 2011 | 2013 | 2015 | 2017 | 2019 | 2021 | 2023 | 2025 | 2027 | 2029 |
5 | 1) | Source: Prosafe, company and market reports |
2) | Source: Petrobras Strategic Plan 2024-28, market reports |
Tight North Sea market with Prosafe holding the available capacity
North Sea capable accommodation rigs (UK+NCS)
Vessel | 2023 | 2024 | 2025 | 2026 | 2027 | |||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |||||
Safe Boreas | Only DP3 vessel | in Region (UK and NCS capable) | ||||||||||||||||||||||
Safe Caledonia | Available for work in UK | |||||||||||||||||||||||
Safe Zephyrus | Available for work in Brazil/North Sea (UK and NCS) | |||||||||||||||||||||||
Brazil |
Floatel Endurance | ||||||||
Norway | Norway | North Sea | Canada | North Sea | Norway | |||
Floatel Superior | ||||||||
Nor. | Norway | UK | Norway | Norway | Norway |
Floatel Triumph | |||||||||||||||||||||||||||||||
Australia | UK | Australia | Australia | ||||||||||||||||||||||||||||
Floatel Victory | |||||||||||||||||||||||||||||||
Brazil | US | Brazil | |||||||||||||||||||||||||||||
Haven (jack-up) | |||||||||||||||||||||||||||||||
Denmark | Norway | Norway | |||||||||||||||||||||||||||||
- Firm/option | - Actual or potential mob | - LOI | |||||||||||||||||||||||||||||
6 | Source: Prosafe, company and market reports | ||||||||||||||||||||||||||||||
NCS: Norwegian Continental Shelf |
Comment
- North Sea operators planning future campaigns
- Ongoing bidding for 2025 and awards expected in H1 2024
- Safe Boreas only DP3 semi in North Sea region available for 2024 and 2025 summer work.
- Safe Caledonia available for UK work with limited competition in coming years
- Currently, limited prospects for 2024
- Controlling the open capacity in 2026 when adjusted for vessel location / mobilisation
- Upside potential in rates from last high fixture of USD 200-210k per day
Improving markets for high-end rigs1
Median backlog per rig | Median revenue backlog per rig | Median fixing horizon |
(months) | (USD million) | (years to end of last contract)2 |
2.5x | 3.8x | 5.6x | |||||||||
Options | 32 | 94 | 2.8 | ||||||||
Firm | 5 | ||||||||||
26 | 72 | ||||||||||
4 | 2.1 | ||||||||||
15 | |||||||||||
13 | 2 | 27 | 37 | ||||||||
1 | 1.0 | ||||||||||
22 | |||||||||||
25 | |||||||||||
12 | 13 | 0.5 | |||||||||
Jan '21 | Jan '22 | Jan '23 | Jan '24 | Jan '21 | Jan '22 | Jan '23 | Jan '24 | Jan '21 | Jan '22 | Jan '23 | Jan '24 |
- Includes high end (tier-1) units in North Sea, Brazil, GoM, Canada and Australia (13 units), including options
- Time to the end of latest firm fixture (including gaps between contracts)
7 | Source: Prosafe, company and market reports |
Rates in Brazil and the North Sea reaching 2015 levels
Brazil day rate development (USD/d)
- 000
- 000
160 000 | Latest datapoint |
140 000 | 120k-130k |
120 000 | Latest contract |
100 000 |
80 000
60 000 Current Brazil opex: USD 50-54k/d
- 000
- 000
0 | ||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
North Sea day rate development (USD/d)
400 000
350 000
300 000
250 000
200 000
150 000
100 000
50 000 | Current North Sea opex: USD 25-65k/d1 |
0 | |
Latest datapoint
at 200-210k
Latest contract
Av. Dayrate
NCS UKCS/Denmark
Avg day rate of USD 130k/day would equate to approx. USD 30m EBITDA
Avg day rate of USD 200k/day for 7 months2 would equate to approx. USD 30m EBITDA
8 | 1 | Depends on region and if the vessel is moored, DP or non-DP |
2 | Assuming only summer work in the North Sea |
Indicative earnings potential in an improving market
Current fleet EBITDA potential
USD million | Current | Peak2 | Growth |
market1 | 2014-15 | Case3 | |
EBITDA/vessel North Sea | 22 | 50 | 40 |
EBITDA/vessel Brazil/RoW | 25 | 30 | 30 |
# vessels in North Sea | 2 | 2 | 3 |
# vessels in Brazil/RoW | 4 | 4 | 6 |
EBITDA | 144 | 220 | 300 |
Selling, General & Administrative (SG&A)4 | (19) | (20) | (25) |
Illustrative EBITDA | 125 | 200 | 275 |
Current NIBD of USD 345m5 vs EBITDA potential | 2.8x | 1.7x | 0.9x |
- Based on latest observable and relevant fixtures of USD 200k/day in North Sea and USD 120k/day in Brazil, excluding Safe Scandinavia
- Excluding Mexico and Safe Scandinavia during TSV operation. Excludes Safe Scandinavia
- Includes newbuilds Nova and Vega plus Safe Scandinavia, calculations exclude required delivery payments, mobilisation and reactivation costs
- Expected underlying SG&A run rate
- NIBD per Q4'23, NIBD is reduced by a USD 9.5 million fair value adjustment of which USD 2.9 million is short- term
Historic average EBITDA per vessel of USD 29 million from current fleet1
50 | 53 | ~USD 50m breakeven EBITDA for | |||||||||||
newbuild2 | |||||||||||||
45 | 42 | (day rate of ~USD 200k/day) | |||||||||||
38 | 36 | ||||||||||||
31 | 34 | EBITDA of USD 29 million / vessel | |||||||||||
(day rate of ~USD 145k/day) | |||||||||||||
22 | |||||||||||||
7 | 11 | ||||||||||||
3 | |||||||||||||
1 | |||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023E |
- Based on historical current fleet of Safe Concordia, Safe Caledonia, Safe Eurus, Safe Notos, Safe Zephyrus, Safe Boreas and Safe Scandinavia (excluding TSV contract). Excluding SG&A
- Assumes Brazil capable vessel at a total cost of USD 350m, discounted at 12.5% WACC, rig life of 30 years, USD 56k/d opex, 3% topline tax, USD 4m in capex per year (incl. SPS)
Source: Prosafe, SB1M
9
Enterprise value to replacement cost among the lowest
Accommodation vessels attractively priced compared to other assets1
100% | EV / Replacement Cost | |||||||
90% | ||||||||
80% | ||||||||
70% | 61% | |||||||
60% | 57% | 56% | ||||||
50% | 46% | 40% | ||||||
40% | 34% | |||||||
28% | ||||||||
30% | ||||||||
20% | ||||||||
10% | ||||||||
0% | ||||||||
BORR | SOFF (CSV) | TDW (PSV) ODL (HE | Accomodation | Seadrill (7th | PGS | |||
(Jackup) | semi) | vessel (PRS) | gen. drillship) | (Ramform | ||||
3D vessel) * |
- Lower Average EV / replacement than other assets
Low Prosafe asset valuation relative to replacement cost2
USD million
1 600 | USD 1 - 1.5 bn |
1 400 | |
1 200 | |
1 000 |
800 | ||||
600 | High ~550 | EV ~30 - 45% | ||
of RC | ||||
400 | ||||
105 | Mid ~470 | |||
200345
0
EV | Broker values | Replacement cost | ||
Net Debt | Market Cap | |||
- Accommodation vessels trading at 30% to 45% of historical newbuild cost
- Broker valuations confirm robust asset backing to EV
10 | 1) | Source: Sparebank 1 Markets, Factset, Prosafe. Note* Implied value of PGS' fleet is highly sensitive to assumed MC library value. |
2) | Source: Prosafe, independent brokers. Replacement cost estimated in range of USD 1 to 1.5bn. |
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Disclaimer
Prosafe SE published this content on 06 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 March 2024 14:08:04 UTC.