MPF1000 Multi Purpose Floater 24 April 2007
MPF History & Status The Multi Purpose Floater (MPF) concept was developed over several years, with feasibility studies and technical case studies performed from 1996 to 2002. A Joint Industry Project initiated in 2001 where The Norwegian Government, BP Norge, Shell Technology Norway, Norsk Hydro, Statoil and Ocean Development Corporation participated The JIP produced requirements and specifications for the vessel, commercial scenarios were studied and dynamic model tests were conducted (Marintek). The JIP verified the technical, operational and commercial feasibility and superiority of the concept with simultaneous drilling and production. MPF Corp. Ltd. was established and funded in 2006 through an international private placement process. MPF Corp. Ltd. is currently on the OTC market in Oslo. Oslo Stock Exchange Axess listing expected in June
MPF01 Deepwater DP Drilling Unit Doubleender DP Tanker Hull & Modularized Topsides All elements are proven technology, but combined in a unique configuration
MPF 01 - Commercial Summary MPF-01 hull is currently under construction in China with completion early 2008 MPF-01 is being outfitted as a DP-3 ultra-deep water drilling unit for wells to 35,000 ft in up to 10,000 feet of water MPF-01 has space, deckload & oil storage capacity to function in early production service. No production equipment is currently included (optional) All equipment for the MPF-01 is currently on order with deliveries to coincide with outfitting requirements and terms for outfitting & installation agreed A large number of employment opportunities identified and under discussion/negotiation MPF has established an operating company based in Houston Operations expected to commence mid 2009
MPF-01 Benefits accepted by oil companies 1. Competitive cost compared to MODU and FPSO combined 2. Accelerated cash flow from early production 3. Improved reservoir information through extended testing and early production 4. Enhanced recovery (additional drilling) while in production phase 5. Increased leverage (MPF unit represents a ticket ) for the acquisition of additional deepwater acreage by farming in (by having available an E & P tool) 6. Unit may be reused, high residual value 7. Unit may be relocated to reduce weather and other risks (political) 8. Limited field abandonment cost
Dayrate and Contract Target MPF targets 5 year firm contract Meets shareholder expectations Allows for immediate construction of second vessel Market rate for comparable drilling unit plus some premium FPSO capability available at very limited additional initial cost Production equipment probably leased If used, day-rate would increase for equipment and operations Mobilization fee dependent on rate and term but should be seen as integrated part of contract
MPF-01 Employment opportunities Gulf of Mexico Several ultra deep discoveries Opened for FPSO solutions Improved reservoir information through extended testing and early production highly valued Majors, NOCs and large independents West Africa Targets in all major operating theaters Seen as independent field development tool limiting exposure to local infrastructure and justifying development of fields on hold Majors, NOCs and governments Other areas
Delivery & Status Review Steel cutting initiated in Cosco Slightly ahead of schedule Final terms for phase 2 of the EPC contract with Dragados Offshore SA agreed Delivery mid 2009 Certain key equipment somewhat delayed (drilling and subsea) More time anticipated for testing and commissioning Possibility to improve with close cooperation Bonus for early delivery, penalties after short grace period Realistic time frame based on previous experience
MPF revised Project funding budget ORIGINAL / FUNDING EXPECTED under-exp / BUDGET TOTAL ( overrun ) Comment INTERNAL DESIGN ETC 6 600 000 7 600 000-1 000 000 3rd PARTY DESIGN & VERIFICATION 15 000 000 11 008 543 3 991 457 TOTAL MPF DESIGN & MANAGEMENT 21 600 000 18 608 543 2 991 457 CRANES AND HANDLING EQUIPMENT 10 700 000 19 720 769-9 020 769 Note 1 DRILLING EQUIPMENT 129 193 354 107 289 937 21 903 417 DRILLING RISER 15 000 000 27 143 806-12 143 806 Note 2 POWER PROPULSION AUTOMATION 55 804 328 74 295 085-18 490 757 Note 3 LIVING QUARTER, CREW EQUIPMENT AND LIFEBOATS 27 200 000 47 057 194-19 857 194 Note 4 OFE TRANSPORTATION 2 081 346 6 000 000-3 918 654 Note 5 Note 1 Note 2 Note 3 Note 4 Two additional offshore cranes and one handling crane Additional risers ordered (also for use on future MPF units) Two additional diesels, thrusters and additional power supply Upgrade and expansion of living quarters TOTAL NSI/OFE EQUIPMENT CONTRACTS 239 979 028 281 506 791-41 527 763 HULL CONSTRUCTION CONTRACT 147 767 412 127 611 700 20 155 712 OTHER HULL COSTS 0 10 000 000-10 000 000 Note 6 TOTAL HULL CONSTRUCTION 147 767 412 137 611 700 10 155 712 CONSTRUCTION & INTEGRATION MAIN CONTRACT 171 913 552 245 200 000-73 286 448 Note 7 CONSTRUCTION & INTEGRATION OTHER COSTS 680 000 0 680 000 COMMISSIONING, TESTS & TRIALS 4 000 000 0 4 000 000 Note 8 TOTAL CONSTRUCTION & COMPLETION 176 593 552 245 200 000-68 606 448 TOTAL PROJECT COST [USD] 585 939 992 682 927 034-96 987 042 Note 5 Note 6 Estimated Equipment transportation Estimated hull towing Note 7 Increased steel (about 2000 t) and about 20% increase in steel price amounting to about 25 MUSD in additional costs. Additional integration costs and upgrade of cargo handling systems, about 50 MUSD including FX effect. Number stated net of expected Spanish ECA benefits Note 8 Included in contract
Revised Financing Plan Total financing requirement usd 775 million to be covered as follows: USD 275 million equity (unchanged) USD 150 million bond issue (unchanged) USD 350 million bank loan (increase from usd 215 million) Pure capex increase accounts for approximately usd 100 million Mid 2009 delivery influence sga and interest during construction which account for balance of increase in financing requirement In advanced discussions with banks
Operations Management Plan MPF intends to build second MPF ASAP Pending firm contract for first vessel Option secured with Cosco hull yard Financing capability in place Significant economies of scale in a second vessel Long lead equipment times secured Critical spares for first rig operations Utilize on 2nd rig in conjunction with additional equipment orders Exploring possibilities to rent or share in cost of critical spares like riser & bop. Invest in training slots to allow quick personnel substitution.
Operations Hiring Strategy Smaller, high tech companies are attractive to entrepreneurial managers Significant turnover in personnel in big drilling contractors MPF Hiring Strategy Plan to offer better success incentives and employment package for senior personnel Offer better training, advancement, wages and benefits for junior personnel Offer personnel incentives based on length of employment milestones Offer a small, employee oriented company atmosphere
Management Depth - Overall Development Schedule 2007 2008 2009 Tasks 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 Engineering, Project Team Key Drilling Management Staff Mgmt Systems, PM, HSEQ, Etc. Drilling & Marine Cadre Drilling & Marine Crew
Management Depth - MPF Corporate Management Chairman & CEO Wilhelm P. Blystad CFO Christian Holst Strategy Bus Development Donn Pedersen Contracts Commercial Eivind Bugge Norway HSEQ/HR Leiken Dahl COO David Toalson
Management Depth Houston Operations Structure OPT-MPF Operating Company Project & Ops Management D. Toalson Certification Training (TBN) HSEQ (TBN) MPF-01 Operations Manager W. Ellis MPF-01 Construction Manager J McMullen OPT-MPF Operating Company Marketing & Admin Management D. Pedersen Marketing D.Pedersen, Acting\ Human Resource Manager Lynne Mahood, Acting General Council J Pavlas Accounting Manager Robert Engelking
Management Depth - Construction Project Management Construction Manager John McMullen Project Administrator Bjorn Vadholm HSEQ Leiken Dahl Site Manager Dahlian, China Torleif Salbo Hull & Systems Engineering Tore Strand Rig Engineering Thor Karlsen DP & Electrical Pending Subsea Engineering Pending (5 Inspectors) Hull & Systems Designer Inocean A/S Drilling Systems Designers RDS- London
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