PETROMENA ASA - PRELIMINARY RESULT AS PER 3rd QUARTER 2008
Operation and business management
PetroMENA ASA (“PetroMENA” or the “Company”) has entered into EPC contracts with Jurong Shipyard for the construction of three 6th generation semi-submersible drilling rigs. The semi rigs have operating water depth capacity of 7,500 - 10,000 ft. The units will thus meet design criteria for operation in areas such as Gulf of Mexico (GoM), Brazil and West Africa. All rigs will be equipped for harsh environment operations, but will initially not be designed for arctic operations. The rigs are scheduled for delivery in first quarter 2009 (PetroRig I), third quarter 2009 (PetroRig II) and first quarter 2010 (PetroRig III).
PetroMENA also owns the upgraded 2nd generation semisubmersible drilling rig SS Petrolia. SS Petrolia started on a 913 day contract for Pemex in the Gulf of Mexico on 3 February 2008.
Larsen Oil & Gas Ltd. is manager for PetroMENA and drilling contractor for PetroMENA’s rigs.
Contract situation
PetroMENA has secured long-term drilling contracts with Petrobras America Inc. for PetroRig I, with Petroleo Brasileiro S.A for PetroRig II and with Pemex for PetroRig III. The gross values of these contracts are estimated to be approximately mUSD 700 for PetroRig I, mUSD 645 for PetroRig II and mUSD 942 for PetroRig III, respectively, excluding options and possible bonus. The contracts will commence upon delivery of the rigs from Jurong Shipyard.
The gross value of the current 913-day contract undertaken by SS Petrolia equals approximately mUSD 269.
Construction and manning
There have been no lost time accidents on the planning and construction of the rigs. The construction programs are according to plan and on budget. Jurong Shipyard Pte Ltd has recently delivered the first semi in a series of six units of the Friede Goldman Design. Delivery was on budget and time and proves the shipyard’s ability to deliver complex turnkey contracts.
A manning plan and schedule is developed for each vessel to crew up the vessel in a structured and planned mode. The key personnel are sourced first and the lower rankings are sourced last. PetroRig I has currently 68 crew members hired, all key positions.
Financial Information
(All figures in mUSD)
PetroMENA has with effect from 1 January 2008 changed functional currency from NOK to USD in accordance with IFRS. The financial figures for 3Q and the first nine months of 2008 are also presented in USD. All comparative figures have for illustration purposes been presented in USD. The financial data have been prepared in accordance with the IFRS.
The current situation in the financial markets will impact the industry and available funding going forward.
Profit and loss First nine months of 2008
In the first nine months of 2008, revenues mainly came from the upgraded 2nd generation semi-submersible drilling rig, SS Petrolia. The operations under the current contract started on 3 February 2008. SS Petrolia will be PetroMENA’s single source of revenue until delivery of the newbuildings from Jurong.
Total revenues for the first nine months of 2008 were mUSD 54.6. Operating profit before depreciation in the first nine months totalled mUSD 11.5. PetroMENA’s operating expenses includes primarily operating expenses for SS Petrolia with mUSD 19.8 and payment for management services under the contracts with LOG, and various other administrative expenses. Depreciation in the first nine months of 2008 relates to the 2nd generation semi-submersible drilling unit.
Net financial income in the first nine months of 2008 is mUSD 28. Net financial income includes the effect of PetroMENA’s change of functional currency from NOK to USD. PetroMENA’s liabilities nominated in NOK were converted to USD as of 30 September 2008. The USD has increased in 2008 resulting in an unrealised gain of mUSD 50.8 related to the net debt nominated in NOK. In addition, net financial income includes interest expenses of mUSD 25.1 mainly related to the bond loan issued in Q4 2007 for financing of the acquisition of SS Petrolia.
The net, after-tax result for the first nine months of 2008 was mUSD 29.4. The net result was impacted by an unrealised gain on the Company’s debt nominated in NOK, as the USD appreciated during third quarter 2008. Interest income and expenses related to the bonds issued to fund construction of the rigs are capitalised under the construction contract in the group balance sheet.
Enclosure : Preliminary result as per 3rd quarter 2008.
For further information please contact : Mr. Lars Moldestad, phone +47 906 99 197.
Bergen/Oslo, 17 November 2008
Board of Directors
http://www.nesweb.no