Sevan Marine: Cost Increase for FPSO Sevan Voyageur

- Sevan Marine: Cost Increase for FPSO Sevan Voyageur

Friday, August 26, 2011
Sevan Marine ASA

Sevan Marine informed that the results for the second quarter of 2011 will be postponed until August 31, 2011. There will be no public presentation for 2Q-2011.

Following detailed project reviews and assessments on the FPSO Sevan Voyageur upgrade project, there has been identified additional costs to be incurred by the Company, resulting in a current cost estimate for the project in the range of USD 170-190 million. The increase from the previously announced cost estimate of USD 160-170 million is mainly a result of time related costs due to additional delays, in part as a result of the Company's challenging liquidity situation, as well as certain increased procurement costs for equipment and yard services. First oil is currently expected to take place during the second quarter of 2012. FPSO Sevan Voyageur is contracted to E.ON Ruhrgas UK E&P for the Huntington field in the UK North Sea. Estimated contract value is USD 535 million for the fixed term of five years. The contract has extension options.

The Board of Directors continues to hold constructive dialogue with bondholders and other relevant parties regarding a global restructuring of the Company's balance sheet.

Oil & Gas Post

Promote Your Page Too
LINK

Sevan Marine Briefs Financial Position

- Sevan Marine Briefs Financial Position

Monday, July 11, 2011
Sevan Marine ASA

The Board of Directors of Sevan Marine continues to hold constructive dialogue with bondholders and other relevant parties regarding a global restructuring of the Company's balance sheet. In particular, the Board is in dialogue with the advisors to Norsk Tillitsmann ASA (the bond trustee for the Company's bond issues) and an informal group of the Company's largest bondholders. The dialogue with the bondholder group regarding a global restructuring currently assumes that the restructuring would involve:

• a full equitisation of the Company's existing unsecured bonds;
• a partial but reasonably material equitisation of each of the series of the Company's existing secured bonds;
• a corresponding substantial dilution of the Company's existing shareholders;
• a capital raise for the Company, likely in the form of new equity, currently estimated to be at least USD 200 million, to be funded primarily by bondholders, but with a right for existing shareholders to participate;
• extension of maturities for the Company's existing secured bonds; and
• a revision of interest rates and amortization schedules of the Company's secured bonds to correspond with the Company's cash flow profile and debt service capacity.

The above assumptions, and the detailed terms and conditions of a global restructuring proposal, remain to be finally determined and negotiated, and will, inter alia, be affected by the contents of a revised business plan currently being prepared by the Company, and the final cost estimate and schedule developments for the FPSO Sevan Voyageur upgrade project. Any global restructuring proposal will be subject to obtaining necessary agreements with, and consents from, the Company's bondholders, shareholders and other key stakeholders and counterparties to the Company and its subsidiaries.

The Company continues to be under serious short term liquidity pressure, and the Board is currently in discussions regarding bridge financing of at least USD 35 million. Further, the Company intends to request deferrals of interest payments due under the relevant bond loans up to at least end of September 2011, and bondholders who have been approached on a confidential basis have expressed their support in principle to such proposal. The Board is optimistic that its short-term liquidity issues will be resolved and that a long-term solution to the financial challenges facing the Company can be obtained by the end of September 2011.

As for the FPSO Sevan Voyageur upgrade project, further detailed project reviews and assessments have identified additional costs to be incurred by the Company, resulting in a current cost estimate for the project in the range of USD 160-170 million. The increase from the previously announced cost estimate of USD 135 million is mainly a result of time related costs due to additional delays, certain increased procurement costs for equipment, yard services and additional contingencies. First oil is currently expected to take place during the second quarter of 2012. The review is ongoing in close cooperation with the charterer.

The Company's financial situation remains challenging. In connection with the ongoing processes, renewed scrutiny and assessment of booked assets has been required. The Board has initiated a process to impairment test the Company's asset base, which is expected to result in substantial write-downs in the closing of half-year accounts of 2011.

Notwithstanding the ongoing dialogue with lenders, FPSO Sevan Voyageur stakeholders and others, no assurance can be given that a viable global solution can be found in a timely manner, failing which the Board will be required to file for bankruptcy.

Oil & Gas Post

Promote Your Page Too
LINK

Sevan Marine Reports Financial Results for 1Q11

- Sevan Marine Reports Financial Results for 1Q11

Tuesday, June 14, 2011
Sevan Marine ASA

Sevan Marine reported the results for the first quarter of 2011.

The Company's working capital is insufficient to support its present requirements and there is an immediate need to solve the Company's financial situation. The Company, together with its advisors, is in the process of seeking a debt restructuring, potentially in combination with a share issue as well as a reduction of overhead cost to secure the Company's financial position. A robust financial structure coupled with the Company's FPSO assets and technology should form the basis for creating shareholder value and securing stakeholders going forward. However, the Company is dependent on a successful restructuring in order to meet its commitments. The Company is in constructive dialogue with its stakeholders, but at the date of this report, no firm resolution has been reached.

The Board confirms that the 1Q 2011 financial statements have been prepared based on a going concern assumption. The basis for this assumption is the Company's strategic plan and a successful outcome of the restructuring plans described above. The outcome of the restructuring is however, at the date of this report, still uncertain and may impact the assumptions applied in the preparation of the 1Q 2011 financial statements. In addition to the going concern assumption, this particularly relates to "Sevan Capital Assets" and "Deferred Tax Assets" as further described in the attached report. Sevan Marine has engaged ABG Sundal Collier, DnB NOR Markets, Pareto Securities and SEB Enskilda to address a financial and strategic restructuring of Sevan Marine.

The loss from continued business carry only rounding differences compared to the preliminary figures presented in the announcement on May 20, 2011. However, a temporary breach of an equity covenant as further described in note 9 in the attached report, requires that amounts which formally could be held to be mandatory repayable at balance sheet date to be classified as current. All interest-bearing debt was therefore classified as current as per March 31, 2011.

Operating revenue for the quarter amounted to USD 51.1 million (USD 53.5 million). EBITDAFX was USD 20.4 million (USD 27.6 million). Operating profit was USD 3.8 million (USD 13.0 million), and net loss was USD 53.3 million (net loss of USD 63.3 million).

Operating revenue was USD 2.4 million lower than the previous quarter mainly as a result of a non-recurring compensation received from the Oilexco administration in previous quarter. This effect was partly offset by higher revenue from rebillable expenses from FPSO Sevan Voyageur and FPSO Sevan Hummingbird and higher revenue from the Topside and Process Technology segment.

Operating expense was USD 4.7 million higher than the previous quarter mainly due to higher rebillable operating expense on FPSO Sevan Voyageur and FPSO Sevan Hummingbird as well as higher operating expense in the Topside and Process Technology segment, all of which are also reflected in the revenues above.

A net foreign exchange loss relating to financing of USD 21.4 million (gain of USD 0.7 million) was mainly a result of unrealized disagio on NOK-nominated bonds following a strengthening in NOK compared to USD of 5.8% during the quarter.

Financial expense through profit and loss decreased by USD 25.4 million to USD 22.0 million (USD 47.4 million) mainly due to non-recurring expenses relating to refinancing activities in previous quarter.

Net loss on continued business was USD 39.7 million (loss of USD 45.4 million) for the quarter. Net pro forma loss reflects the net loss as if the drilling segment was a third party to the Sevan Marine Group and amounted to USD 33.6 million for the quarter.

Net loss on discontinued business, which reflects the net loss from the drilling segment to be de-consolidated following the initial public offering executed on May 3, 2011, amounted to USD 13.6 million (USD 17.9 million) for the quarter.

As of March 31, 2011, total assets amounted to USD 2.723 billion (USD 2.587 billion), of which USD 1,169.7 million (USD 2,145 billion) was capitalized as 'Sevan Capital Assets'. Assets of disposal group, which reflect the total assets in the drilling segment, amounted to USD 1.298 billion. Cash and cash equivalents amounted to USD 29.2 million (USD 116.1 million).

As of March 31, 2011, Sevan Marine has undrawn USD 52.1 million on a bank facility to part finance the upgrade of FPSO Sevan Voyageur which is not reflected on the balance sheet as per March 31, 2011. As at the date of this report, USD 10.0 million remains undrawn under the financing facility. In addition, the discontinued operation has undrawn USD 342.9 million on a bank facility to fund the construction of Sevan Brasil which is not reflected on the balance sheet as per March 31, 2011.

Oil & Gas Post

Promote Your Page Too

Sevan Marine Board Member Resigns

- Sevan Marine Board Member Resigns

Thursday, May 26, 2011
Sevan Marine ASA

Sevan Marine has received a letter of resignation from Jan Erik Tveteraas, advising that he resigns from the Board of Directors of Sevan Marine ASA for personal reasons. The Company will discuss replacement plans and alternatives with major shareholders and the Nomination Committee.

Oil & Gas Post

Promote Your Page Too

Sevan Marine Says Hello to New CEO

Sevan Marine Says Hello to New CEO

Thursday, April 28, 2011
Sevan Marine ASA

Mr. Jan Erik Tveteraas will retire from the position as CEO of Sevan Marine ASA to take on the position as CEO of Sevan Drilling ASA. Mr. Tveteraas was a founding shareholder of Sevan Marine ASA and has been the CEO since the inception in 2001. He has been proposed by the nomination committee as a Board member of Sevan Marine.

Carl Lieungh has been appointed new CEO of Sevan Marine ASA following the general meeting in Sevan Marine.

Mr. Lieungh comes from the position as CEO for Norse Cutting & Abandonment AS (NCA) and has more than 25 years of experience from the oil and gas industry including management and development of enterprises, project management, marketing and international business development. Mr. Lieungh has held key positions within these areas as Senior Vice President for Business Development of the Oil, Gas and Marine Solutions Division in Siemens AG, President for Kvaerner Process System Group of companies and Managing Director of Hitec Framnes AS.

Mr. Lieungh holds a Master of Science from the Norwegian Institute of Technology and Master of Management from The Norwegian School of Management.

Chairman of the Board, Arne Smedal, commented, "We are very pleased to announce that Carl Lieungh has accepted the position as CEO in Sevan Marine ASA. Mr. Lieungh has extensive knowledge about international business and the offshore industry in general and we are convinced that Mr. Lieungh’s industrial experience will be valuable to Sevan Marine ASA. I want to thank Jan Erik Tveteraas for his valuable contribution to the commercialization of the Sevan technology, and wish him all success with his new role in Sevan Drilling ASA where Sevan Marine ASA remains a main shareholder."