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- EBITDA of USD 84.8 million
- Operating cashflow USD 147.9 million
- Equity ratio 35.9% and USD 409.1 million in available liquidity
- Annual dividend increased to include USD 20 million of BW Energy shares as
in-kind distribution
- Barossa FPSO project progressing as planned
- Awarded limited notice to proceed for Shellâs Gato do Mato development in
Brazil
- Agreement to divest the FPSO Polvo to BW Energy
- Contract extensions signed for BW Joko Tole and Espoir Ivoirien
- Recycling of FPSO Umuroa in compliance with Hong Kong convention
In the first quarter, BW Offshore continued to execute the Barossa FPSO project
according to plan. The gas and condensate FPSO project is approximately one-
third completed in line with schedule. BW Offshore has proactively locked in key
subcontractors for the Barossa FPSO to reduce risk, maintain schedule and
mitigate cost inflation as much as possible. The Company is in close dialogue
with its subcontractors and equipment providers to ensure early identification
and mitigation of potential challenges considering the further pressure on
global supply chains in the wake of the Russian invasion of Ukraine and the
continued Covid-19 lockdowns in China.
âOur focus is on the safe and efficient execution of the Barossa project, we are
delivering on divestments on non-core units and we maintain good performance
from our core assets,â said Marco Beenen, CEO of BW Offshore. âWe are therefore
pleased to announce an increase in shareholder distributions as well as an
agreement to proceed with preparatory work for the supply of an FPSO for the
Gato do Mato development, a new infrastructure project which meets our
investment requirements of a long-term contract, investment grade counterparties
and an attractive partnership model.â
Based on the Companyâs financial position and current business and liquidity
outlook, the Board of Directors of BW Offshore has decided to increase the
annual dividend to include USD 20 million of in-kind distribution of BW Energy
shares in addition to the annual USD 25 million cash dividend, both to be paid
on quarterly basis.
This equates to a quarterly cash dividend of USD 6.25 million, or USD 0.035 per
share, and an in-kind distribution of USD 5 million of BW Energy shares, equal
to 0.00890114228042 shares in BW Energy per share in BW Offshore based on a five
days volume weighted average price (VWAP) of NOK 29.94 leading up to 25 May
2022 and the currently outstanding 180,814,883 shares in BW Offshore. Shares in
BW Offshore will trade ex-dividend from and including 8 June 2022. Shareholders
recorded in VPS following the close of trading on Oslo BĂžrs on 9 June 2022 will
be entitled to the cash and share distribution payable on or around 17 June
2022.
On 26 May, the Company announced the award of a limited notice to proceed (LNTP)
by Shell Brasil PetrĂłleo Ltda (Shell) and its partners for early-stage
engineering and supplier reservations for the supply of an FPSO for the Gato do
Mato oil and gas field offshore Brazil. Shell and its partners target to award a
lease and operate contract to a consortium comprising BW Offshore and Saipem
S.p.A., which will be jointly responsible for the engineering, procurement,
construction, and installation (EPCI) of the FPSO with expected delivery in
2026.The award is subject to the parties finalising the commercial and pricing
terms of the contract in view of the current inflationary supply chain situation
and a final investment decision to proceed by Shell and its partners. The FPSO
lease and operate contract will have a firm period of 18 years with seven years
of options.
FINANCIALS
EBITDA for the first quarter of 2022 was USD 84.8 million (USD 102.3 million in
Q4 2021). The reduction was mainly related to the announced sale of BW Joko
Tole. Although the sales transaction has not been closed, the agreement
stipulates that economic impact from and including first quarter would be for
the benefit of the buyer, and profit impact from BW Joko Tole has been
eliminated from the accounts.
EBIT for the first quarter was USD 30.4 million (negative USD 50.9 million in Q4
2021). Q4 2021 was impacted by impairment of USD 86.3 million, which has
resulted in lower depreciation of USD 12.6 million in the first quarter of 2022.
Net financial items were positive by USD 14.2 million. This is mainly driven by
significant positive mark to market (MTM) changes in interest rate hedges as
long-term interest rates have increased significantly during first quarter. BW
Offshore is well hedged on interest rates under all debt facilities.
Net contribution from BW Offshoreâs 27.5% ownership in BW Energy was USD 9.5
million (USD 23.7 million in Q4 2021). The company completed one lifting in the
quarter at USD 120 per barrel.
Net profit for first quarter was USD 46.3 million.
Total equity at 31 March 2022 was USD 1,079.3 million (USD 1021.4 million in Q4
2021). The equity ratio was 35.9% at the end of the quarter (33.9% in Q4 2021).
Net interest-bearing debt was USD 607.3 million (USD 653.4 million in Q4 2021).
Available liquidity was USD 409.1 million, excluding consolidated cash from BW
Ideol and including USD 175 million available to draw under the corporate loan
facility.
FPSO OPERATIONS
The FPSO fleet continued to deliver stable uptime in the quarter with a weighted
average fleet uptime of 94.9% (96.2% in Q4 2021).
In January, a one-year extension was signed for the lease and operation of ABO
FPSO until end of Q4 2022.
In March, BW Offshore received a one-year contract extension for the lease and
operation of the FPSO BW Joko Tole. The closing of the transaction to divest the
FPSO, previously announced, is expected shortly with handover to its new owners.
In March, Umuroa was sold for recycling in compliance with the Hong Kong
Convention at Baijnath Melaram shipyard in India. The sale generated USD 13.5
million in net liquidity. Grieg Green has been nominated as representative on
site at the yard to monitor progress, compliance with environmental and safety
regulations as well as proper application of the ship recycling plan. The FPSO
BW Cidade de SĂŁo Vicente was sold for recycling in early February.
BW Energy announced in April that the Company will proceed with the Maromba
development project offshore Brazil. As part of this BW Offshore has signed an
agreement for the sale of the FPSO Polvo to BW Energy for a total consideration
of USD 50 million. The sale will be completed no later than 24 July 2023. BW
Energy has the option to complete the transaction before that date. If the
transaction is completed early, BW Energy will pay USD 30 million upon the
vessel transfer date, with the remaining USD 20 million provided as a sellerâs
credit by BW Offshore until settlement on 24 July 2023 at the latest. An
independent third-party valuation of the FPSO concluded that the sales price is
within a fair market value range.
In May, the contract for Espoir Ivoirien was extended until end of March 2023.
OFFSHORE FLOATING WIND
BW Offshore is actively pursuing opportunities in the energy transition. The
Companyâs primary investment is in offshore floating wind through the 53.2%
ownership of BW Ideol, a global market leader with more than ten years of
experience from design, execution and development of floating wind projects
based on proprietary and patented Damping PoolÂź technology and engineering
capabilities.
In January 2022, BW Ideol secured the rights to develop a floating offshore wind
farm with an approximate capacity of 1GW off the northeast coast of Scotland in
the ScotWind leasing round, as part of the partnership Floating Energy Allyance
(FEA). In April, FEA signed the formal option agreement for the development
according to plan, with site investigations and environmental studies as the
next major milestones before consent application.
In May, the EolMed partnership comprising Qair, TotalEnergies and BW Ideol, made
the final investment decision (FID) for its 30MW offshore floating wind
development. The Mediterranean Sea pilot wind farm is set to become one of the
first three floating offshore wind farms in France when it is commissioned in
mid-2024. It comprises three 10MW wind turbines, each mounted on BW Ideolâs
patented floating steel foundations and connected to the Electricity
Transmission Network by a subsea cable. BW Ideol and Qair have cooperated on the
project since 2016 with Total joining the development consortium as 20% owner in
2020.
OUTLOOK
BW Offshore expects the core FPSO fleet to generate significant cash flow in the
time ahead. The firm contract backlog at end of March 2022 amounted to USD 6.3
billion, including the Barossa contract. With probable options, the backlog was
USD 7.5 billion at the end of the quarter.
The war in Ukraine and the Covid-19 pandemic continue to affect global markets
through supply chain disruptions and inflation across a wide range of
commodities. The direct impact on operations from the pandemic has however
started to decrease. The higher energy prices from late 2021 and into 2022
reflect both improved market fundamentals as more nations normalise activity
levels in the wake of Covid-19, as well as concerns related to the security of
energy due to the war in Ukraine.
The current high oil and gas prices have led the oil and gas industry to become
more active in progressing new field development projects. The Company expects
continued focus on long-term large field development initiatives with low break-
even costs and low carbon emissions. The Company maintains a selective approach
to such opportunities, progressing discussions on only a few high-end projects
which can be developed in partnership with global infrastructure investors. In
addition, activity tied to potential re-deployments has also increased, with a
particular focus on BW Opportunity.
BW Ideol is BW Offshoreâs vehicle for investment in floating offshore wind. The
company is progressing multiple projects supported by the funding from the
private placement in 2021.
BW Offshore seeks to optimise the asset portfolio and overall cost base. This
may include further divestments or recycling of FPSOs without contracts if
redeployment opportunities do not materialise. The recent asset divestments have
strengthened the Companyâs financial position and support growth into accretive
offshore energy projects and long-term value creation.
Please see attached the Q1 Presentation. The earnings tables are available at:
www.bwoffshore.com/ir/ (http://www.bwoffshore.com/ir/)
BW Offshore will host a conference call of the financial results 09:00 (CEST)
today. The presentation will be given by CEO Marco Beenen and CFO StÄle
Andreassen.
Conference call information:
To dial in to the conference call where the quarterly results and Q&A will be
hosted, please dial one of the following numbers:
Norway: +47 8150 3308
Singapore: +65 3163 4602
UK: +44 2039 362 999
US: +1 646 664 1960
France: +33 970 733 958 (PIN: 717338#)
You can also follow the presentation via webcast with supporting slides,
available on:
https://streams.eventcdn.net/bwo/2022q1/
Please note that if you follow the webcast via the above URL, you will
experience a 30 second delay compared to the main conference call. The web page
works best in an updated browser - Chrome is recommended.
For further information, please contact:
StÄle Andreassen, CFO, +65 97 27 86 47
Anders S. Platou, Head of Corporate Finance and Strategy, +47 99 50 47 40
About BW Offshore:
BW Offshore engineers innovative floating production solutions. The Company has
a fleet of 12 FPSOs with potential and ambition to grow. By leveraging four
decades of offshore operations and project execution, the Company creates
tailored offshore energy solutions for evolving markets world-wide. BW Offshore
has around 2,000 employees and is publicly listed on the Oslo stock exchange.
This information is subject to disclosure requirements pursuant to Section 5-12
of the Norwegian Securities Trading Act.
Kilde
