sevan stabilized platform

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Sevan Marine ASAPresentation Q1 - 2005Shippingklubben, Oslo

April 28, 2005

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Contents

• Current Status

• Sevan Stabilized Platform

• Business Model and Strategy

• Market Potential and Competition

• Organization, Board and Management

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Q1 2005 - Status

• Operating profit NOK –9m (NOK –3.9m)– Provision for cost related to share based incentive plan NOK –2.5 m (NOK 0.5m)

• Total assets NOK 949m (NOK 34m)– Construction in progress SSP 300 FPSO NOK 146m– Cash of NOK 759m (NOK 22 m payable in Q2 as bond transaction costs)– Bond Loan of net 648m

• Petrobras board approves contract for SSP 300 FPSO– 11 years fixed term– Contract value fixed term USD 399m– Commencement mid-2006

• Consolidation of the SSP 300 FPSO– 100% consolidation in Sevan Marine group accounts– Etesco 25% minority share of net profit will be classified as financial expenses in income

statement, 25% minority share of net assets classified as liabilities in balance sheet

• Construction project– Progress according to plan and within budget– 45% of steel has been cut– Site team from Sevan and DNV

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Q1 2005 – Status, cntd.

• Financing activities – Share issue of 6,610,000 shares @ NOK 16.90, gross proceeds NOK

111,7 m– Senior Secured Bond Loan 2005/2008 of NOK 670 m, net NOK 648m

• Bridge loan function• Purchase of Kanfa AS

– 48% of the shares– Process design and engineering specialist– Extensive experience nationally and internationally

• Outlook– Floating production market remains strong– Project opportunities discussed with potential clients

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Kanfa AS has extensive process experience

Selected Projects:Ormen Lange – Aker KværnerGullfaks A/B/C – StatoilDraugen – Norske ShellSiri – DongBorgen Dolphin/Knock Taggart – Fred OlsenBalder FPU – Aker/EssoValhall – BPCorocoro FSO, Venezuela – Conoco Phillips

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Contents

• Current Status





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SSP compared to other floating units

Semi FPSO TLP SPAR SSP

• Drilling equipment (some)

• Deck space• Large no. of risers• Good motions

Pro’s• Storage capacity• Deck space• Deep water• Flexibility (re-use)

• Drilling equipment• Well access• Traditional steel

risers• Track record

• Drilling equipment• Well access• Traditional steel

risers• Deep water

• Limited storage capacity

• Costly risers• Limited well access• Limited deck load

Con’s• Costly risers• Limited no. of risers• No well access

• No storage• Expensive design• Limited depth• Limited deck load

• Limited storage• Not for harsh

environment• Limited no. of risers• Limited deck load

• Limited well access in harsh environment

• Pre-qualified - but no units delivered yet

• Low construction cost• No turret and swivel • Storage capacity• Drilling and well compl.• Large number of risers• High deck load cap.• Good motions• Deep water

Source: Sevan Marine, Enskilda Securities

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Simplified cylinder design based on standard ship building principles

• Compact design• Turret and swivel arrangements replaced by spread mooring solution• Simple integration between hull and topside• Standard panel and block fabrication and structural members with few

dimensions• Reduced cable and piping, no piping in tanks

Keeping cargocompartments

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Reduced investments and improved operation

Reduced investment cost

Compact design

No turret, No swivel

• 20-25% less steel weight• 50% less piping• 50-70% less engineering cost• Shorter construction time

Improved operation

• High deck load capacity and stability reserves

• Any number and type of risers• Excellent motion response• No global bending and reduced

fatigue exposure in hull• Less piping and easy access to all

equipment

Higher flexibility Reduced maintenance

Improved reliability in demanding conditions

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Module based concept offering a wide capacity range

SSP FPSO SSP FSO

SSP 300 300.000 55.000 17 60SSP 600 600.000 110.000 20 75SSP 850 850.000 140.000 24 84SSP 1000 1.000.000 165.000 28 84SSP 1700 1.700.000 278.000 30 106SSP 2000 2.000.000 305.000 33 106

DesignStorage

(bbl)Displacement

(mt)Draft

(m)Diameter

(m)

Production capacity from 20.000 to 200.000 bbl/day

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SSP technology verification process completed

• Sevan has over the last three years invested ~NOK 50 million on the development of the SSP technology

Generic model tests at Marintek

DNV review of technical, cost and

schedule risks

Model tests for Haltenbanken, GoM

and Brazil

DNV Concept Risk Analysis

DNV Design Appraisal

Demo/Model testing LABOCEAN, Rio

Pre-qualified by Petrobras

Patent PCT recommendation

Main scantling appr. initiated

Detail eng. and

fabrication drawings

completed

Verification of riser and mooring

configuration at Marintek

2001 2002 2003 2004Patent process Building of 1st unit at Yantai

Raffles ShipyardQuotations and construction schedules from leading Yards

Co-op with ABB and Schlumberger for the design, fabrication and operation of the process plant

In house hydrostatic and hydrodynamic analysis

Steel design of the hull

Assessment of flexibility, size variation and deck load capacity

Structural design and main scantling drawings

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Complete verification by Det Norske VeritasClassification and Statutory Requirement Status

– Rules and Class Notations established (+OI, FPSO)– Main scantling approval– Global design analysis, incl. fatigue assessment– Approval in principal (AIP)– Class approval of construction drawings

Assessment of Construction and Delivery Risk– Following yards have been assessed: Yantai-Raffles, Hyundai,

Samsung, Keppel Fels, Jurong– “No show stoppers. The concept is simple and effective and has many

advantages over other types of Mobile Production Units”

Safety case assessment for UK

Concept Risk Analysis (CRA)– “The risk results are within the defined acceptance criteria for the North

Sea, satisfying NPD requirements”

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Contents

• Current Status





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Engineering Construction OperationDesign Ownership

• Proprietary technology• In-house expertise

Co-operation with several yards

• May participate• Partnerships

Business model focuses on core competences

Core area Not a core area Case by case

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Patent status – all proprietary rights owned by Sevan Marine ASA

• Sevan has filed patent applications in Norway in connection with the development of the SSP

• Further, Sevan has filed patent applications in various countries, under the PCT convention

• Sevan has been advised from Patentstyret that the patent applications satisfy the requirements for patentability and that patents will be granted

• All patents and proprietary rights are the ownership of the parent company Sevan Marine ASA

Sevan has filed for patents in Norway and all other relevant markets

Sevan has been advised that patents will be granted

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Long term strategy – Maximize long term value creation

Strategic priorities long term

Efficient S&M through closeness to primary

markets

Maximize long term

value creation

• Ensure quick market penetration through local presence• Evaluate the necessity for more locations on a continually basis

Extensive use of alliances in key areas

• Establish sale alliances/agents• Establish R&D alliances• Establish project alliances

Clarify long term value potential • Ensure that the market value reflects the real company values

Max utilization of own units through close control

• Optimize dayrates and contract lengths• Take actions to develop best in class operation management

Ensure focused organic growth

• Ensure necessary actions to attract right competence• Assess in-house / outsourcing strategy on a continually basis

Optimize business model to maximize value creation

• Ensure Sevan’s share of the cost advantage• Continued case by case approach to ownership and operation

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Sevan will strive to make the company share an attractive investment object

Clarify long term value potential Qualify for OSE-categories

• Strategy and markets conditions

• Important value drivers

• Relevant risk factors

• OB Match

• OB Standard

• OB Nye

Open and proactive IR-work Sound Corporate Governance routines

• Available management

• Best practice web site

• Investor presentation in Oslo every quarter

• In accordance to generally accepted recommendations

• Proactively follow up of routines

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Contents

• Summary





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Important market drivers mostly positive

Expected development in important market drivers

R/P ratio

Oil price

Shipyard capacity

0

15

30

45

'81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03

0

15

30

45

2000 2001 2002 2003 2004

• Oil price expected to stabilize at a high level (30-35 USD/bbl)• Increased energy consumption in Kina• Fear of terror in the Middle East and Saudi Arabia

• Stagnation in the World oil reserves-to-production ratio (R/P)• Increased oil price in break even estimates for field development• Exploration expected to increase

• Constrained shipyard capacity• Significant increase in building cost over the last year

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The FPSO market is growing steadily

Demand for FPUs

The FPSO market is growing by approx. 10% p.a.

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16

11

76

4

1

4

16

0

2

4

6

8

10

12

14

16

18

20

22

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WestAfrica

Gulf ofMexico

Brazil S-E Asia Australia NorthernEurope

China Canada Otherregions

87 floaters currently evaluated with first oil within 5-7 yrs

FPUs planned or under study

0

40

80

120

160

200

<90 90 91 92 93 94 95 96 97 98 99 00 01 02 03E 04E 05E

No.

of u

nits

FPSO SEMI TLP SPAR

Acc. growth 45%

Sevan Marine’s main focus areas

Source: Enskilda Securities, Infield, FPSO contractors, Oil companies, IMA

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Increasing share of the fragmented FPSO market is controlled by contractors

• FPSO market end 2003: 88 vessels, distributed on 42 owners

• Only 10 companies controlling more than 2 FPSOs (5 contractors, 5 oil companies)

• 46% of FPSOs are owned and operated by contractors

• Contractors share of the market has increased from 30% in 1990 to 46% in 2003

FPSO Fleet by ownership - end 2003 Contractor’s share of FPSO’s

6 9

30

5118

37

47

30%33%

45%

52%

0

20

40

60

80

100

120

1990 1995 2000 2005EN

o. o

f uni

tsContractor Oil Company

14Contractors

Oil companies

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Asia/Pacific N. Sea West Africa BrazilOther

Source: Enskilda Securities, Infield, FPSO contractors, Oil companies, IMA

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Technologies for different depths

0 500 1,000 1,500 2,000 2,500 3,000

Subsea completion

SSP

FPSO

SPAR

TLP

Compliant tower

Fixed platform

Water depth (m)

SSP FPSO/FSO targets an attractive market – Challenging existing technology

Fixed

FPUs

Source: “Deepwater GoM; Americas Emerging Frontier”; MMS 2000-022

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Promising development in Sevan Marine’s focused markets

North America

• Still no FPSOs in market• Large long term potential

South & Central America

• Focused market • Weather conditions

suited for SSP• Several production

contracts will come out the next 3 years

• Co-op. agreement with Petrobras

Asia Pacific

• Focused market• Weather conditions

suited for SSP• Medium/ marginal

fields• Several production

contracts• Strong growth

Africa

• Benign weather conditions

• Mostly turret-less solutions

Middle East

• Currently no focus area

Europe & Eurasia

• Focused market• Rough weather

conditions• Strict regulations• Marginal field growth

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LOI with Petrobras on Piranema

• For the use of SSP300 as an FPSO• Unit under construction in China to be used• Etesco to have a 25% equity interest in FPSO• First oil mid-2006• 11 year fixed term• Contract value fixed term USD 399m• Horizon of field 20 years+• Water depth 1,000-1,600m• Light oil (40 degrees API)• High gas content – no water• Gas injection of 3.6 million m3 per day• 300,000 bbl oil storage• 30,000 bbl/d processing capacity• Up to 21 risers and umbilicals

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Closure of first agreement may trigger new orders

Unit Type Market Status Contract award

Signed agreements

SSP Coop. Agr. S America Signed 2004/Q3

SSP FPSO LOI Brasil Signed 2005/Q1

Proposals and negotiations for second unit

SSP 300(3)

FPSO North Sea Negotiating/Bid

2005

SSP 1000 FSO North Sea Bid 2005

SSP 300 FPSO S America Tender exp. 2005 2005

Other proposals and negotiations

SSP 300/600 (5)

F(P)SO SE AsiaAustralia

Tender exp. 2005

2005

SSP 300-1000 (5)

FPSO North Sea/SE Asia/Brasil

Proposals 2005

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Contents

• Current Status





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The Sevan management has a proven track-record of creating shareholder value

Commercialized technology:• Navis ASA: Deepwater drill ship

– From concept to delivery in 28 months– Built on time and budget at Samsung

• APL AS: STL and STP technology– More than 15 units in operation on Shuttle

tankers, FSOs and FPSOs– From 0 to NOK 325m in 3 yrs

• MCG AS: Bow loading and offloading systems– More than 60 units in operation world wide on

shuttle tankers and FPSOs– From 0 to NOK 250m in 5 yrs

• Pusnes: Product development, commercialization and internationalization of various products

Transaction & business track-record:• Navis ASA, IPO: Sold to Fred. Olsen Energy

for NOK 1.8bn• Sale/IPO of Anchor Drilling Fluids, NOK 700m

and Prosafe, NOK 800m• Transocean: From NOK 300m to NOK 10bn in

6 yrs, sold to Sonat Offshore• Negotiating and managing 8 contracts worth

USD 850m with Petrobras• Successful build-up and management of

Angola turnkey operations for Petrobras

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Organization and legal structureBoard of Directors

Sevan Marine ASFinance

Sevan Marine do Brasil Ltda

MarketingConceptual DevelopmentBusiness Development

Marine Performance Structural Analysis Machinery & Systems

Arne Smedal, Msc

• Model Tests• Environmental Loads• Motion Response• Hydrostatics• Stability• Mooring Analysis• Riser Analysis

• Lay-out• Structural Design• FEM Analysis• 3-D modeling• Detail Engineering• Production Ass.• Rules & Regulation

• Piping• One line diagrams• F&G ESD• HVAC• Automation• Power Management• Propulsion

Egil Kvannli, CFO

Kåre Syvertsen, MSc

TechnologyEngineeringConstruction

R&D

Jan Erik Tveteraas, CEO

Raul Schmidt

Engineeringverification

Subcontractors:• Marintek• DNV Consulting• LMG Marine• Bdr. Johnsen• Marine Tech. Con

HSE

• HSE• Risk Assessment • Risk Analysis

Sevan Marine ASA

Sevan Marinedo Brasil Ltda

Sevan Production AS

100% Sevan MarineManagement AS

100%

100%

Jan-Fr.Wilhelmsen, COB

Investor relamin.

Henriette Sandvaag

KANFA AS48%

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Board of directors

Jan Fredrik Wilhelmsen(52)Chairman

Mr. Wilhelmsen graduated with a law degree from the University in Oslo in 1979. He was admitted to the Supreme Court Bar in 1992 and is now partner in the law firm Sørlie Wilhelmsen in Oslo. During his law practise he has gained extensive knowledge to the offshore industry.

Arne Smedal (57)Board member

Mr Smedal holds an MSc in hydrodynamics from the Norwegian institute of Technology (NTNU) in Trondheim. Mr. Smedal has previous experience as President and CEO of Navis ASA 1997-2001, Executive Vice President of Hitec ASA from 1996-1997, founder and President of Marine Consulting Group and Advanced Production Loading from 1989-1996, as well as various positions, incl. President at Pusnes from 1979 to 1989. Before this, Mr. Smedal worked for Det Norske Veritas from 1974-79. Mr. Smedal has been a board member of various companies within shipping and electronics.

Jean-Philippe Flament(36)Board Member

Mr. Flament holds a BS in Finance and International Business from New York University. Since 2003, Mr. Flament has worked as a Portfolio Manager in Cheyne Capital Management. Mr. Flament has previously served as a Managing Director of Morgan Stanley & Co Intl Ltd (1993-2002) and as Assistant Director of NatWest Financial Products plc (1993-1991).

Jon Hatleskog (65)Board Member

Mr. Hatleskog graduated with an MBA from Handelshøjskolen in Copenhagen, Denmark in 1964. Mr. Hatleskog manages his own business activities through Jaco Invest AS. He is a co-owner and chairman of Belden Shipping PTE, a shipping company that specializes in the transport of cement and he has various investments in gas carriers operated by Solvang ASA. Previously, Mr Hatleskog was co-owner of Havtor ASA, which was sold to Bergesen in 1996. Mr. Hatleskog is chairman of Gard P&I, GardMarine & Energy Ltd and Gard AS and is also a board member of Solvang ASA and various gas ship companies operated by Solvang ASA..

Kåre Syvertsen (54)Board Member

Mr. Syvertsen graduated with an MSc in ship construction from NTNU in Trondheim in 1973. Mr. Syvertsen was previous Vice President Technology of Navis (1997-2001); Vice President Technology of Advanced Production Loading from 1994 to 1997; Project Manager of Marine Consulting Group from 1990 to 1994 and Professor in marine technology at NTNU, Trondheim from 1976 to 1990.

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Senior management and the board have extensive experience from concept and business development, as well as the capital market

• 1997-2001: Vice President Technology of Navis• 1994-1997: Vice President Technology of Advanced Production Loading• 1990-1994: Project Manager of Marine Consulting Group• Holds an MSc in ship construction from NTNU in Trondheim 1973

VP TechnologyKåre Syvertsen

(54 years)

• 1998-2001: CFO of Navis • 1996-1998: VP Corporate Planning in Sonat Offshore (Transocean Offshore)• 1991-1996: CFO in Transocean AS• Board member of various companies within offshore, landbased industry and finance• Holds an MBA from NHH in Bergen 1985

President Jan Erik Tveteraas(44 years)

Sevan Marine do Brasil Ltda

PresidentRaul Schmidt

(45 years)

• 1998-2001: New Business Development Manager of Interoil, Brasil• 1994-1998: Safety Manager and Coordinator of Procurement and Contracts of

Braspetro Oil Services, Angola• 1981-1994: Various management positions within Petrobras, Brazil• Holds a BSc in Nautical Sciences from Centro de Instrução Almirante Graça Aranha RJ

1981

• 1997-2001: President & CEO of Navis ASA• 1996-1997: Executive Vice President of Hitec ASA• 1989-1996: Founder & President of MCG and APL• Board member of various companies within shipping and electronics• Holds an MSc in hydrodynamics from NTNU in Trondheim 1973

VP Business dvlpArne Smedal

(57 years)

Management

• 2001-2004: Financial Manager MI SWACO Scandinavia (Smith International)• 1997-2001: Analyst MI Norge AS• 1996-1997: Banking• Board member of various companies and organizations• Holds a BA: Business and Administration from Norwegian School of Management and

Bishops University Canada

CFOEgil Kvannli

(33 years)

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Strong shareholder base – 28% foreign ownership

Shareholder Nr of shares %Arne Smedal 3,605,687 4,95Aasen AS 3,114,036 4,28Hallingen AS 3,114,035 4,28Supernova AS 3,114,035 4,28JP Morgan Chase Bank 2,942,074 4,04MP Pensjon 2,555,263 3,51Statoils Pensjonskasse 1,994,273 2,74Morgan Stanley and Clients Safe Custody 1,925,895 2,65Ferncliff AS 1,899,190 2,61Tycoon Industrier AS 1,797,500 2,47Fidelity Funds-Nordic 1,464,900 2,01Enskilda Securities Egenhandelskonto 1,322,500 1,82Credit Agricole Indo 1,266,700 1,74SIS Segaintersettle 1,129,642 1,55Normandie Invest AS 1,100,000 1,51Statoil Forsikring 1,022,391 1,4Jaco Invest AS 1,000,000 1,37Bank of New York , Br S/A Equity Tri-Party 982,396 1,35Whitehorse Investing 850 000 1,17Waterman Holding Inc 839 170 1,1520 largest shareholders 37,039,687 50.88

• Free float 73%• Listed at OSE with

ticker SEVAN

Private Management Institutional

Total shareholder breakdown

Total no of shares: 72,778,921Foreign ownership: 28,14 %

As of April 22, 2005

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Balance sheet & Profit and Loss statement

Sevan Marine ASA accounts as of 31 March, 2005Balance SheetNOKm Q1 05 Q4 04 Q1 04Total long term assets 182,1 127,4 12,2Total current assets 767,0 72,1 21,9Total assets 949,1 199,5 34,1

Total shareholders' equity 287,0 182,8 26,3Total long-term debt 648,2 0,3 0,0Total current liabilities 13,9 16,4 7,8Total shareholders' equity and liabilitie 949,1 199,5 34,1

Profit & Loss accountNOKm Q1 05 Q4 04 Q1 04 31.12.04Operating revenues 0,0 0,0 0,9 1,0Operating expenses 8,8 4,9 4,8 19,4Operating profit -9,0 -5,1 -3,9 -18,8

Net financial items 0,6 0,3 0,1 1,1Profit before tax -8,4 -4,8 -3,8 -17,7

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An attractive investment opportunity

• Breakthrough FPSO/FSO concept

• Technological advantages make business case superior

• Construction underway – on time and within budget

• LOI for first unit signed – several opportunites for second unit

• Co-operation agreements with major industrial players

• Senior management and board with proven track record of creatingshareholder value

sevan stabilized platform

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