7th Annual MM Gulf Ship Finance Conference Growing pain in an growing OSV industry? Geir Sjurseth Managing Director DVB Bank SE Dubai 9 March 2011.

7th Annual MM Gulf Ship Finance Conference

Growing pain in an growing OSV industry?

Geir Sjurseth Managing Director DVB Bank SE

Dubai 9 March 2011

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• European Company (SE), listed on the Frankfurt Stock Exchange, with market capitalisation of c. EUR 1.14bn (Nov 10)

• 95% owned by DZ Group, the largest co-operative banking group in Germany

• Rated A for long term debt and A1 for short term debt by Standard & Poor’s

• Basel II core capital ratio of 15.5%

Introducing DVB

DVB Facts

• Over 500 professionals, all specialising in transport finance

• Over 500 clients worldwide, all active in the transport sector

• EUR 18.4bn (USD 25.1bn) loan book (Sep 2010)

• Net profit of EUR 98.0m YTD 2010 vs. EUR 56.9m YTD 2009

• Return on equity before tax of 16.9%

New York

Curaçao

Global Presence Through 13 Offices

Tokyo

Singapore

Market Approach

AviationShipping Land Transport

Structured Asset Financing

Advisory and M&A

Asset Management

Risk Distribution

Loan Participations

Asset & Market Research

Bergen Oslo

HamburgLondon

Cardiff

RotterdamFrankfurt

Piraeus

ZurichNew York

London

Rotterdam

Piraeus

Singapore

Curacao

Bergen

HamburgFrankfurt

Oslo

Tokyo

MonacoZurich

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DVB’s Global Offshore Support Group

Restructuring

Financing

Ability to finance Mexican and Brazilian flag vessels

S&P and Newbuild Finance

Sale & Leasebacks, Acquisition Finance and Mezzanine Finance

Advisory and M&A

Valuations & Fairness Opinions

Mergers & Acquisitions (M&A)

Debt & Equity Capital Raisings

Shipping / Offshore Investment Fund

Structured Equity and Mezzanine Finance

Equity Investments

Sale & Leasebacks

Offshore Support Group

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Overview of the Offshore Support Sector

Supply & Anchor Handling Crew AccommodationTransport Hydrocarbon Exploration

• Anchor Handling Tug (AHT)

• Anchor Handling, Tug & Supply (AHTS)

• Platform Supply Vessel (PSV)

• Crew Boat

• Stand-by Vessel

• Emergency Response Rescue Vessel (ERRV)

• Utility Vessel

Supply

• Jack-up Platforms

• Semisubmersible Platforms

• Mono-hull Vessels

• Accommodation Barges

• Hybrids

Accommodation

• Float on / Float off (Flo / Flo)

• Lift on / Lift off (Lo / Lo)

• Roll on / Roll off (Ro / Ro)

• Semi-submersible Heavy Lift Barge

Heavy Lift

• Seismic Survey Vessel (SSV)

• Electro Magnetic Survey Vessel

Seismic

Seabed Installation

• Diving Support Vessel (DSV)

• Lay Support Vessel

• ROV Support Vessel

• Lay Barge

• Reel Lay Vessel

• Well Intervention Vessels

• Derrick Barge

• Pipe Carrier

Subsea & Construction

Offshore Support Market

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Right now – still recovering

OSV Cycle

Growth in E&P spending

Oil price

The banks

Unfunded NB capex?

Is equity available?

Supply

And demand?

Cycle trough was Q2 2010, however..

We’re back on trend but there are leads..

Above 100 again

Capacity is 40% down but improving

yes but less so

Always, but things have changed a bit..

2011 worse year ever..

Focus on large PSVs, subsea, seismic, accommodation units – DEEP WATER

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How’s the public markets doing – an important indicator Any IPOs out there?

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The Middle East OSV players – keeping track?

Growth is elsewhere Local focus while market is increasingly

regional or global Age limitations on vessels & equipment A fragmented market with many small to

mid cap companies Enough capital to replenish old fleet? IRAN Or just stay local with aging vessels?

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Vessel CAPEX – current state of affairs

· NBs, yard terms

· No debt no equity

· No employment no debt

· Debt leverage

· Equity returns

Mid size to large PSVsSmall to mid size AHTSs

Large AHTS, subsea, CVs Accommodation units

Most likely

Attractive: 10/90 or 5X4 + 80: Challenge is LC

Yes

Maybe not Yes

Max 50%? Max 70%?

Higher Lower

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Fast Expanding OSV players - crisis no obstacle?

Far EastAmericas Europe Middle East

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