Petrojack ASA Initial public offering

1
Petrojack ASAInitial public offering

• A pure play jack-up rig investment with high
  leverage to expected increase in rig value
• February 7, 2005

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Important notice

• This document has been prepared exclusively for
  the benefit and use of the reader in order to
  evaluate the feasibility of a possible
  transaction or transactions and does not carry
  any right of publication or disclosure to any
  other party. This document does not represent a
  formal offer to purchase shares in Petrojack ASA.
  This document is incomplete without reference to,
  and should be viewed solely in conjunction with,
  the oral briefing provided by First Securities
  ASA and/or ABG Sundal Collier Norge ASA. This
  presentation may not be used for any other
  purpose without the prior written consent of
  First Securities ASA and/or ABG Sundal Collier
  Norge ASA. In preparing this document we have
  relied upon and assumed, without independent
  verification, the accuracy and completeness of
  all information available from public sources or
  which was provided to us or otherwise reviewed by
  us. The information contained in this document
  has been derived from sources deemed to be
  reliable. We do not represent that such
  information is accurate or complete and it should
  not be relied on as such. Any opinions expresses
  herein reflect our judgement at this date, all of
  which are accordingly subject to change.
• As per February 3., 2005 ABG Sundal Collier Norge
  ASA and First Securities ASA own 0 and 0shares in
  Petrojack ASA. Employees and partners of ABG
  Sundal Collier Norge ASA and First Securities ASA
  own 0 and 0 shares in Petrojack ASA as per the
  same date. ABG Sundal Collier Norge ASA and/or
  First Securities ASA and/or their employees and
  partners may, from time to time, hold shares,
  options or other securities of any issuer
  referred to in this document and may, as
  principal or agent, buy or sell such securities.
  First Securities ASA and/or ABG Sundal Collier
  may have other financial interests in
  transactions involving these securities.
• The Shares have not been nor will be registered
  under the U.S. Securities Act of 1933, as
  amended, (the "Securities Act"), or any state
  securities laws, and are being offered within the
  United States only to qualified institutional
  buyers ("QIB") as defined in Rule 144A under the
  Securities Act ("Rule 144A"), in reliance upon
  the exemption from the registration requirements
  of the Securities Act provided by Rule 144 A.
  Prospective purchasers of the Shares are hereby
  notified that the Shares are subject to certain
  restrictions on transfer under the Securities Act.

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Agenda

• Introduction
• Transaction
• Market
• Company

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Strong outlook for the jack-up market

• Strong oil and gas prices are finally resulting
  in significantly increasing EP expenditure,
  which is the main driver for jack-up rig demand.
• The jack-up rig fleet is close to fully utilized
  and day rates are increasing accordingly.
  Historically, there has been a close relationship
  between utilization and day rates.
• The jack-up rig fleet represents 2/3 of the total
  offshore drilling fleet. The average age of the
  global fleet is 23 years, whereas the order book
  constitutes only 4 of the existing fleet.
• An eventual new-building boom for jack-up rigs is
  expected to increase values (new-buildings and
  second hand) and increase delivery time for new
  rigs.

Strong EP spending outlook. High utilization
for jack-up rigs. The jack-up rig fleet is
growing old.
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Petrojack has one jack-up rig under construction
and two optional units

• Petrojack ASA (Petrojack) has fully financed
  EPC contract for one modern jack-up rig with
  Jurong Shipyard Pte Ltd. (JSPL or Jurong)
  with expected delivery in March 2007.
• Jurong is, together with its sister companies PPL
  and Sembawang, part of the SembCorp Marine Group
  (SCM), a leading offshore rig construction group.
• Additionally, Petrojack has rig option agreement
  with PPL to construct two additional units with
  the same specifications as the first unit (higher
  price and some contractual differences).
• The first option is to be exercised between June
  16 and December 15, 2005, whereas the second
  option is to be exercised between December 16.
  2005 and June 15, 2006. The second option is not
  subject to the first option being exercised.
• Fully financed jack-up project with high
  financial gearing
• Limited financial risk during construction phase
  and the period after delivery.
• Attractive terms in the debt financing package
  (e.g. the last payment of 80 of the contract
  price to Jurong is entirely covered by the debt
  financing package and the debt financing package
  can be moved to one of the optional units if the
  first unit is refinanced or sold).

Fully financed jack-up rig under
construction. Option to build two additional
units. Attractive financing package.
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Petrojacks flexible strategy is expected to
create value for shareholders

• Petrojack offers a highly leveraged exposure to
  the jack-up market. A 10 increase in newbuilding
  values will increase the NAV of Petrojack by 60
  not taking into account new shares issued in
  connection with the IPO.
• Petrojack has a flexible business strategy going
  forward with the goal of maximizing shareholder
  value. Petrojack envisages three main strategic
  alternative paths depending on the situation in
  the ever changing oil and gas market
• Operation of rig(s) with medium to long term
  contracts.
• Merger with leading national or international rig
  company
• Sale of rig(s) to other companies
• Petrojack has an experienced management and board
  of directors with background from the oil and gas
  industry as well as the financial industry.

High leverage to increases in rig
values. Flexible strategy with the goal of
maximizing shareholder value. Experienced
management and board of directors.
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Agenda

• Introduction
• Transaction
• Market
• Company

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The offering

• Minimum 3 700 000 and maximum 9 000 000 new
  shares.
• Institutional offering
• Min subscription per investor 70 000 shares.
• Retail offering
• Min. subscription per investor 1 000 shares.
• Max. subscription per investor 69 000 shares.
• Max. number of shares in tranche 3 000 000
  shares.

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Final subscription price will be based on a
book-building procedure

• Indicative price range
• NOK 7.0 9.0 per share.
• Book-building/order period
• February 7, 2005 to February 18, 2005 at 16.00
  hours Norwegian time (both dates inclusive).
• Only orders in the Institutional offering will be
  considered in setting the final subscription
  price. The indicative price range listed above is
  subject to change
• The final subscription price may be higher or
  lower than the indicative price range.
• Discount for investors participating in the
  retail offering
• Automatically 10 discount relative to the final
  subscription price for subscriptions up to 1 000
  shares per investor.
• The total number of discounted shares to be
  issued in the offering is limited to 2 000 000.
• See prospectus for further details.

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Purpose of the offering and use of proceeds

• The offering is carried out to expand Petrojacks
  shareholder base to facilitate regular trading of
  the Petrojack-shares.
• The Offering proceeds will be used to strengthen
  the Companys working capital / general corporate
  purposes.
• The gross proceeds from the Offering, if fully
  subscribed, will be minimum NOK 29 600 000 and
  maximum NOK 72 000 000, assuming a final
  subscription price of NOK 8.00 per share,
  corresponding to the mid-point of the indicative
  price range.
• The planned stock exchange listing will give
  Petrojack access to a regulated marketplace for
  trading of the Companys shares and is expected
  to provide access to capital for the financing of
  the First and Second rig Options, in case these
  are exercised.

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Agenda

• Introduction
• Transaction
• Market
• Oil and gas market
• Drilling market
• Company

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Oil gas prices are at historically high levels
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and so are forward oil gas prices, which is
attractive for EP activity
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Higher estimated GDP over the next years will
boost demand for energy
First Sec. world GDP-estimates 2004 4,69 2005
4,20 2006 4,11 2007 3,75
Source IEA, CERA, First Securities
15
but the production growth is lower than the oil
companies have promised

• How to increase the oil reserves
• Develop new reserves
• Increased oil recovery from existing fields
• Acquisition of other oil gas companies

Source Offshore Research, First Securities
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Summary oil gas market Despite some
uncertainty concerning oil markets, strong
demand for drilling services may be expected
going forward
Positive
Negative

• Historically high oil gas prices.
• Actual production lower than planned.
• Strong demand growth for energy.
• Shell and others have downgraded proven reserves.
• Investments lower than necessary for sustainable
  growth.
• Several oil companies have increased long-term
  oil price assumption from 16 to 20 USD/boe in new
  project calucations.

• Volatile energy prices.
• Preference for onshore investments in Russia and
  Iraq etc.
• Lack of offshore prospects.
• The major oil resources remain largely impossible
  to reach for western oil gas companies.

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Agenda

• Introduction
• Transaction
• Market
• Oil and gas market
• Drilling market
• Company

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Historically, there has been a close link between
day rates and utilization
Source ODS-Petrodata, EcoWin, First Securities
19
currently the effective utilization for the
global jack-up fleet is close to 100
Source ODS-Petrodata
20
Comparable rigs have a sharp increase in dayrates
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The average age of the jack-up rig fleet is 23
years and one expects that several rigs will be
replaced within a few years
16 jack-up rigs are currently under construction
(approximately 4 of global rig fleet)
Source ODS-Petrodata
22
Low order book

• Order book jan-98
• 16 semisubmersibles
• 19 drillships
• .many of the rigs/drillships in the orderbook of
  jan-98 were never build

23
Newbuilding prices for jackup 300 ft IC Int. rigs
increased with 50 in period 1973-1975 and with
52 in the period 1978-1981
Source ODS-Petrodata/First Securities
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Summary drilling market Improving future jack-up
market conditions expected
Positive
Negative

• Historically high oil gas prices are so far not
  reflected in total rig activity.
• However, jack-up rates have held up better than
  semi rates.
• Continued growth expected in development drilling
  and rebound for exploration drilling to normal
  levels.
• Aging jack-up fleet. Expected continued scrapping
  of older units.
• New-building prices could increase substantially
  when the contracting boom takes off.
• More heavy duty drilling expected on deep
  resources in GoM.
• Expected improved utilization for floaters will
  likely pull jack-up rates as well.

• Oil gas companies continue to delay their
  plans.
• Focus on onshore (Russia and hopes for Iraq).
• Due to present low utilization for floating rigs,
  a very strong market is probably 1-2 years ahead
  when both jack-up and floater markets are
  expected to be tight.

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Agenda

• Introduction
• Transaction
• Market
• Company

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Structure of Petrojack

• Petrojack AS was founded on October 4, 2004 for
  the purpose of the jack-up project.
• Petrojack has entered into a management agreement
  with Larsen Oil Gas AS (LOG).
• Petrojack rents all its employees from LOG.
• The management agreement cannot be changed before
  the loan from DBS Bank has been repaid or the
  rig(s) sold.
• Petrojack will offer pure-play jack-up exposure
  at the Oslo Stock Exchange

Petrojack ASA
New subsidiary (Singapore Company)
Possible new subsidiary 1 (Singapore Company)
Possible new subsidiary 2 (Singapore Company)
Jack-up 1 (under construction)
Option 1 (exercisable between 16.06.05 and
15.12.05)
Option 2 (exercisable between 16.12.05 and
15.06.06)
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Management and board of directors
Petrojack management
Board of directors
Lars Moldestad (CEO)
Berge G. Larsen (Chairman)
Gro Aadahl Kvalheim
(CFO)
Martin Nordås (Head of yard
supervision)
Petter H. Tomren (Board member)
Christian Picot (Board member)
Unni F. Tefre (Office manager)
Gunnar Hirsti (Board member)
Erik Solheim (Board member)
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Profiles of key personnel
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Profiles of board members
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Brief description of Larsen Oil Gas

• LOG is a Norwegian company 100 owned by Berge
  Gerdt Larsen with the following operations
• Business development and investments within the
  oil and offshore industries.
• Rental services renting production equipment to
  offshore companies.
• Management and administrative services for third
  parties.
• LOG is also the provider of management services
  to Petrolia Drilling (PDR), an offshore company
  listed on the Oslo Stock Exchange.
• The project is debt financed, although
  non-recourse, on the standing and track record of
  Berge Gerdt Larsen.
• It is a condition of the loan facility from DBS
  Bank that LOG maintains management control over
  Petrojack ASA until the loan is repaid.

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Jurong is a solid shipyard

• Jurong, Singapore, is a subsidiary of a major
  Asian engineering services group called SembCorp
  Marine (SCM), one of the worlds leading offshore
  rig construction groups.
• Apart from Jurong, the SCM Group inlcudes other
  well known shipyards such as PPL and Sembawang.
• The SCM Group/PPL is one of the most recognized
  rig-builders, having consctructed a significant
  number of rigs of various types and sizes.
• The SCM Group/PPL will deliver similar jack-up
  rigs to Sinvest and Awilco before delivery to
  Petrojack.
• Jurong is currently building two Semis for
  GlobalSantaFe (among other projects).
• PPL (the builder of Awilco and Sinvest rigs) is
  the issuer and contracting party for the Options
  Agreement. PPL will provide total engineering of
  all the Rigs and support JSPL during construction
  of critical components.

Jurong Shipyard (Singapore)
Source Jurong, ODS-Petrodata
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Fully financed jack-up project

• DBS Bank will finance up to 80 (but max. mUSD
  106) of payments under the construction contract
  (estimated at mUSD 130.8 ex. the two optional
  units)
• Petrojack plan to refinance the jack-up rig(s) at
  expiration of the financing agreement.
• The debt financing package can be moved to one of
  the optional units if the first unit is
  refinanced or sold.

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Main rig specifications of jack-up to be built by
Jurong
Jurong jack-up

• Design Baker Pacific class mobile offshore
  self-elevating drilling unit.
• Operating water depth Shallow water / 375 ft.
• Drilling depth 30,000 ft.
• Max. combined variable load 3,401 MT.
• Slush pumps 3 pumps of 2,200 hp each.
• AC power 5 diesel driven generators.
• Cantilever extension 21,33 meters.
• Accomodation capacity 120 persons.
• Potential geographical foot-print of design The
  Gulf of Mexico, Indian Ocean, Southern North-Sea,
  Coast of the Middle-East, Mediterranean, West
  Africa (Nigeria-Angola range), Offshore India,
  Offshore Australia, Offshore New Zealand,
  South-East Asia.
• Operational season All year in most relevant
  areas of operation.

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Price and conditions from Jurong/PPL
Total capital requirement of approx. USD 136
mill. The option to build a third rig is not
subject to the first option being exercised.
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Related party issues

• Petrojack has entered into a management agreement
  with LOG
• Berge Gerdt Larsen owns 100 of LOG and has
  significant direct and indirect ownership stakes
  in PDR.
• LOG, which is Lars Moldestads employer, acts as
  manager for PDR in addition to Petrojack.
• The Management Agreement has been entered into on
  market terms
• For pre-delivery yard supervision (project
  management), the manager is granted a fixed fee
  in the amount of mUSD 2.5. The owner shall
  further pay a management fee to the manager
  corresponding to a margin of 5 of the actual
  costs incurred (see the appendix for further
  details and a definition of the management
  agreement).

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Petrojacks historical financials are limited to
2004
Historical and estimated future financials(1)
Main forecast assumptions No income before
delivery of rig in March 2007 260 income days in
2007 at rate of USD 85 000/day 274 days opex. in
2007 at USD 25 000/day (ex. mgmt). mUSD 133.6
project costs capitalized on balance sheet mUSD
104.6 loan at delivery (7.65 interests) 47 mNOK
net proceeds from the equity offering USD/NOK
6.3
(1) The forecast set forth herein is associated
with uncertainty and that the actual future
results of Petrojack may deviate significantly
from this forecast (see section 7.4. in the
prospectus).
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A number of risk factors may adversely affect
Petrojack (1/2)

• Forward-looking statements forecasted financial
  statements
• The forecast set forth herein is associated with
  uncertainty and that the actual future results of
  Petrojack may deviate significantly from this
  forecast.
• Lack of historical financial information
• Petrojack was founded on October 4, 2004 and has
  limited operating history. The historical
  financial statements included herein may
  therefore not be useful in estimating the
  Companys future financial results.
• Significant investments
• Petrojack has ordered a jack-up rig with a total
  project cost of mUSD 135.9. Petrojack has no
  operating income or operating cash flow to
  finance the jack-up rig and is dependent on
  funding from shareholders/investors or banks.
• Significant financial leverage
• Petrojack intends to borrow up to MUSD 106 to
  finance the jack-up rig. If Petrojack fails to
  repay or refinance the loan facility, additional
  equity financing may be required.
• Risks related to loan agreement
• The loan agreement includes terms, conditions and
  covenants that may impose restrictions on the
  operations of Petrojack.

If any of these risks and uncertainties actually
occurs, the business, operating results and
financial condition of Petrojack may be
materially and adversely affected.
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A number of risk factors may adversely affect
Petrojack (2/2)

• Risks related to possible tax liabilities
• Under the loan agreement, Petrojack is obliged to
  create a new Singapore subsidiary, and transfer
  important contracts thereto by way of novation.
  To mitigate Norwegian tax risk, the transfer
  should be executed without delay.
• Dependence on external parties
• Petrojack has no staff or employees and is
  consequently dependent on external parties to
  undertake the management of the Company. Such
  arrangement may reduce the control functions of
  the Company.
• Risks related to the management agreement
• The loan agreement includes covenants and
  provisions implying that LOG shall remain manager
  of Petrojack for as long as the loan agreement
  remains in effect.
• Risks related to the construction contract
• Any delays, cost overruns and technical problems
  related to the construction contract could have a
  material adverse effect on the Company and its
  financial position.
• Risks related to the offer
• The future share price development of Petrojack
  may be volatile due to various factors, including
  fluctuations in Petrojacks results. There can be
  no guarantee that investors subscribing for
  shares in the offering will be able to sell their
  shares in the future at a price exceeding the
  final subscription price in the offering.