Strong financial and operational results
BW Offshore’s operating revenue in 2009 was USD 408.8 million, with an EBITDA of USD 134.2 million before results from associates. The operational performance remains strong, with a full year production uptime of 99.7%. The FPSO BW Pioneer is now en route to US Gulf of Mexico.
BW Offshore recorded a full year EBITDA of USD 88.6 million in 2009, up from USD -44.2 million in 2008. The EBITDA was negatively influenced by a share of profit of associates amounting to USD -45.6 million (2008: USD -45.7 million). Adjusted EBITDA (EBITDA before share of profit related to associates and before write down and gain on shares) was USD 134.2 million (USD 40.5 million). Included in the EBITDA are the final settlements with Equator Exploration, Aker Marine Construction and the settlement with the insurance companies related to the disposed FPSO Berge Okoloba Toru, resulting in a net gain of USD 12.5 million. Changes in market values of currency derivative instruments, amounting to USD 12.9 million (USD 0.0 million) related to operating cash flows are included in the 2009 EBITDA.
Operating profit was USD 23.2 million in 2009, compared to a loss of USD 429.5 million in 2008. Operating result in 2008 was depressed by impairments of goodwill, the uncommitted fleet and the termination of the BMG project amounting to USD -334.1 million. The operating result in the FPSO segment amounted to USD 56.2 million in 2009 (USD -196.4 million). The operating result in the APL segment amounted to USD -33.0 million in 2009 (USD -233.2 million). The negative result in 2008 was due to impairment charges of Goodwill and investment in associates while the negative result in 2009 was due to negative share of profit of associate amounting to USD 39.5 million.
Operating expenses decreased by USD 159.2 million from USD 433.8 in 2008 to USD 274.6 million in 2009, due to lower activity level in the APL segment and lower operating expenses in the FPSO segment. During2009, the Company has experienced stable operation on its FPSO vessels.
The financial statements show net financial expense of USD 20.6 million in 2009 (USD -87.9 million), of which interest expenses amounted to USD 24.8 million (USD 52.4 million). The reduction in interest expenses is a result of decreased average interest rate.
At 31 December 2009, total assets amounted to USD 2,393.5 million (USD 2,301.4 million) and the total equity amounted to USD 920.9 million (USD 923.4 million). The increase in total assets is primarily a result of increased book value of conversion projects.
At 31 December 2009, the Company held USD 68.0 million (USD 67.7 million) in cash and deposits. Currently, the Company has drawn down USD 893.3 million on the USD 1,500 million credit facility. Net debt amounted to USD 849.3 million at 31 December 2009 (USD 870.0 million).
Operations
The FPSOs YÙUM K`AK`NÀAB, BW Cidade de São Vicente, Berge Helene and Sendje Berge had stable performance during the fourth quarter resulting in an oil process uptime of 99.6% during the period. The uptime for 2009 was 99.7%.
The FPSO BW Carmen was in lay up for the entire quarter and is being marketed for new projects.
The FPSO BW Pioneer is currently on its way for operation on the Cascade & Chinook fields in the US Gulf of Mexico. The sail away from Singapore was delayed by approximately two months but the vessel is still expected to arrive on field within the contractual obligations.
The Papa Terra Joint Venture (Petrobras (operator) and Chevron), has concluded the contracting and negotiation process with the consortium of BW Offshore and the Brazilian industrial group QUIP for the FPSO P-63 for the Papa Terra field. The contract was signed 29 January 2010.
The APL-projects Cascade & Chinook for the FPSO division, two SAL harsh environment terminal systems for an oil major, Pazflor for Total and Peregrino for Maersk, are all progressing according to schedule.
Outlook
The market activity has continued to pick up through the course of the fourth quarter in line with BW Offshore expectations. We expect the increase in activity to continue in 2010.
BW Offshore is fully funded for all ongoing projects. The operating cash flow from existing vessels is secure and long term, and arises from national oil companies. Additional financial capacity is available for new projects if they should meet the Company’s targeted returns.
The Company’s FPSO BW Pioneer is expected to arrive in US waters in March 2010. The vessel will contribute to a significant growth in the EBITDA for the FPSO segment. The APL segment, although still affected by the reduction in the Exploration & Production activity, is experiencing the improved activity level. It is expected that this will result in improved business prospects materializing in 2010
(Picture with courtesy of Petrobras).