Pareto Securities’ 15th annual
Oil & Offshore Conference
September 10, 2009
Marketing Presentation
Page 1
KFELS N-Class harsh environment jack-up drilling/production rigs
Marketing Presentation
Page 2
TABLE OF CONTENTS / AGENDA
1
Company Introduction
2
Rig Concept and Design
3
Market/Financials
4
Summary
Marketing Presentation
Page 3
COMPANY INTRODUCTION – Skeie Drilling & Production ASA (SKDP)

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
Marketing Presentation
Page 4
COMPANY SET-UP
Pier Offshore
Management
Services AS
OSM
Consultants AS
Skeie Technology AS
Sub
Management
Agreement
Skeie Rig
Management AS
(ex Offshore Production
Sub Supervision
Agreement
Business Management
Agreement
Norsupply AS
Skeie D&P
Services AS)
Head
Management
Agreement
Marketing Presentation
Supervision
Agreement
ProdJack 1
ProdJack 2
ProdJack 3
Page 5
CONSTRUCTION PROGRESS
2007
2008
2009
2010
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 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
Marketing Presentation
Page 6
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)
Marketing Presentation
Page 7
TABLE OF CONTENTS / AGENDA
1
Company Introduction
2
Rig Concept and Design
3
Market/Financials
4
Summary
Marketing Presentation
Page 8
RIG CONCEPT AND DESIGN
COMBINED DRILLING AND PRODUCTION OPERATIONS
Standard Jack-up – ”no” clearance
between the legs w/jacking system and cantilever
New N-Class
Marketing Presentation
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RIG CONCEPT AND DESIGN
SPECIFICATIONS FOR DRILLING 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 stern
It 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.
Marketing Presentation
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RIG CONCEPT AND DESIGN
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.
Marketing Presentation
Limits
Area:
Height:
12,918 sq ft (1,200M2)
52.5ft (16M)
Page 11
RIG CONCEPT AND DESIGN
PRODUCTION CONCEPTS WITH STANDARD UNITS/EQUIPMENT
Marketing Presentation
Page 12
RIG CONCEPT AND DESIGN
ALTERNATIVE PRODUCTION
Marketing Presentation
Page 13
TECHNICAL COMPARISON WITH PEERS AS DRILLING RIGS
RIG DESIGN
Class
Operating water depth (ft)
Drilling depts (ft)
Hull size (ft) (LxBxD)
Leg length (ft)
Cantilever outreach (ft)
BOP (psi rating)
Mud Pumps
Liquid mud capacity (bbls)
Bulk mud capacity (bbls)
Drawworks (hp)
Top Drive
Cranes
Main Power(hp)
Variable Deck Load (st)
Accomodation
Keppel N-Class
MSC CJ70-X150A
DNV
400 (430)
35,000
264/289/35
598
75
15,000
3 (space for 4)
6,600
15,892
4,600
1 000 tons/2x1150 HP
3
13,050
4,535
120
DNV
492
30,000
291/336/38
673
90
15,000
4
6,793
15,723
4,600
750 tons/1150 HP
3
14,484
4,600
120
MSC CJ62-S120 MSC CJ70-X150A 1)
DNV
380
30,000
256/296/35
541
60
15,000
3
5,400
14,027
3,000
750 tons/2x1150 HP
3
6,880
3,693
115
DNV
492
40,000
291/336/38
673
90
15,000
4
6,793
15,723
4,600
1 000 tons/2x1150 HP
3
14,484
5,200
120
1) Enhanced version of the existing CJ-70 design with increased drilling depth, increased variable deck load and 1000 t top drive.
Source: Company, ODS Petrodata
Marketing Presentation
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TABLE OF CONTENTS / AGENDA
1
Company Introduction
2
Rig Concept and Design
3
Market/Financials
4
Summary
Marketing Presentation
Page 15
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
Marketing Presentation
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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
Marketing Presentation
Page 17
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



Marketing Presentation
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
Page 18
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
Marketing Presentation
Page 19
Contract Status Jackups, Norway
CURRENT OPERATOR
NAME
SKDP 1
PetroProd
West Epsilon
SKDP 3
Maersk Guardian
Rowan Gorilla 06
Maersk Gallant
Maersk Giant
Maersk Inspirer
SKDP 2
Maersk Innovator
FOLLOWING
OPERATORS
AREA
UNDER CONSTRUCTION
SEA
UNDER CONSTRUCTION
SEA
StatoilHydro
NOS
UNDER CONSTRUCTION
SEA
Dong
Talisman
NOS
BG
CNR/BG
NOS
ConocoPhillips
Lundin/ConocoPhillips
NOS
Talisman
NOS
StatoilHydro
NOS
UNDER CONSTRUCTION/Skeie
Skeie
Energy
Energy SEA
ConocoPhillips
NOS
FIRM CONTRACT
c
OPTION
YARD / UNDER CONSTRUCTION
CURRENT
COUNTRY
SGP
SGP
NORWAY
SGP
NORWAY
UK/NOR/UK
NORWAY
NORWAY
NORWAY
SGP/NOR
NORWAY
CONTRACTOR
Skeie D&P
Larsen O&G
Seadrill
Skeie D&P
Maersk Contractors
Rowan Companies
Maersk Contractors
Maersk Contractors
Maersk Contractors
Skeie D&P
Maersk Contractors
WD
(ft)
430
492
400
430
350
400
400
350
490
430
490
2009
2010
2011
J F MA MJ J A S O N D
J F MA MJ J A S O N D
J F MA MJ J A S O N D
2
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COMMENT
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2 2 2 2 2 2 2
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DONG, Talisman 150d, then Talisman 2yrs
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BGhas 1 yr rolling options.
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Varg, Yme
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3-5 years + 2 x 1 y opts
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2
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
Marketing Presentation
Page 20
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Norway Jackups Supply & Demand: 2005-2013
20
©2008
18
SKDP 1, PetroProd 1
& SKDP 2 & 3 due out
of the yard.
16
14
Rowan Gorilla VI - Uncertain supply
AOC Declined
AOC resubmitted in Q2 08, to be
clarified around YE 08
12
10
8
6
4
2
0
jan.2005
jul.2005
jan.2006
jul.2006
jan.2007
jul.2007
Existing contracts
Possibles
Marketing Presentation
jan.2008
jul.2008
Options
Supply
jan.2009
jul.2009
jan.2010
jul.2010
jan.2011
jul.2011
Requirements
Including Rowan Gorilla VI
jan.2012
jul.2012
Last Updated: 29.08.08
Page 21
JU demand Norway: ConocoPhillips took Innovator and Gallant this week
….needs another rig for min 5Y according to the demand below
Source: Pareto
Source: Pareto Research
Marketing Presentation
Page 22
Oil production
Marketing Presentation
Page 23
Replacement Rate, Oil Reserves vs Exploration Drilling Ratio vs Oil Price
Repl. Rate/Expl. Ratio
Oil Price
200
200 %
©2008
180 %
180
160 %
160
140 %
140
120 %
120
100 %
100
80 %
80
60 %
60
40 %
40
20 %
20
0%
jul.94
0
jul.95
jul.96
Source: SEB Enskilda, Company Research
Marketing Presentation
jul.97
jul.98
jul.99
Oil Price
jul.00
jul.01
jul.02
jul.03
jul.04
Replacement Rate, Oil Reserves
jul.05
jul.06
jul.07
Expl. Drilling
Page 24
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
Marketing Presentation
Page 25
Contact details:
Skeie Drilling & Production ASA
Tordenskjoldsgate 9
4612 Kristiansand
Norway
Telephone: +47 38 04 19 40
Fax:
+47 38 04 19 41
Marketing Presentation
Page 26