Asian Offshore Support Journal Conference 20158 September 2015

Exploring Growth in

the Liftboat Market

Chan Eng Yew

CEO, TRIYARDS Group

Macro overview

Developments in the Oil & Gas Industry in 2015

Oil prices down by 65% since Jun 2014; reaching lowest levels since the Global Financial Crisis

Extensive capex and cost reductions by major Oil & Gas players; massive lay-offs/ restructuring

announced globally in anticipation of protracted downturn

US$41.59(24 Aug 2015)

Sources: DNB, IHS, Reuters3

4

Indonesia, Malaysia and Brunei lead the oil and

gas production in SEA while potential growth lies

in countries such as Vietnam and Myanmar.

Southeast Asia – A Region of Diverse Growth and Resource Needs

Source: IEA

Crude oil prices drive E&P activities and demand for liftboats – viable in SEA countries despite

current oil prices due to relatively low breakeven cost

Demand for energy in SEA is expected to grow by 80% through 2035

Drivers for Oil & Gas Production in SEA

Sources: IEA, IHS, OECD5

Drivers for liftboat demand in

Southeast Asia

Key Features and Applications of Liftboats

Key Features Applications

• Self-propelled, self-elevating offshore

working platform for shallow water

applications

• Multi-purpose

• Large, open deck space

• Equipped with crane

• Stable platform for construction &

maintenance of offshore production

platforms

• Capable of carrying equipment and

supplies

• Combines capabilities of: i. Conventional crane/ deck barge

ii. Legs and jacking system of MODU

iii. Propulsion of standard workboat

• Construction / installation /

commissioning of offshore platforms

• Operations, maintenance and

modifications of offshore platforms

• Upgrading of offshore platforms

• Oil well intervention

• Removal of old platforms / P+A /

decommissioning

• Windfarm installation / maintenance

• Accommodation / living quarters for

construction and service crews

Sources: Aries Marine, EXIM Bank7

Proven concept with NOCs and IOCsSAFETY/

STABILITY

MOBILITY

COMPETITIVE DAY RATE

OPERATION UPTIME

Exploration Field Construction ProductionMaintenance

Modifications & Operations

Decommissioning

- SEUs typically

not active in

this phase

- Accommodation

- Crane Support

(Construction)

- Accommodation

- Well Services / Intervention

- Enhanced Oil Recovery (EOR)

- Modification & Maintenance

- Accommodation

- Crane Support

(Removals)

Addressable Markets for SEA

Cost effective solution – applicable across wide spectrum of the offshore industry, from O&G

field construction to decommissioning; and renewables assets

Why Are Liftboats an Attractive Proposition?

8

• Liftboats of >150ft had

been built since 1990s

• Capable for operations in

deeper waters

• Can be used for offshore oil

& gas / renewable energy

applications

Evolution of Liftboats Over The Years

Sources: Elevating Boats Inc.; High Waves: History of the Offshore Liftboat, Offshore Magazine, Jan 1999; Innovative Designs on Accommodation Jack-ups from GustoMSC , Mar 2015

• First liftboats were simple

in design

• Only had 4 legs with 2 mud

mats that retracted into the

hull for smooth water flow

• Elevated by cables &

pulleys

• Seismographic surveys/

support for fixed platforms

1950’s – Jehu Post 2000’s – Teras Fortress 21980’s – Dolphin

• Introduction of hydraulics/

rack & pinion jacking

system

• 3-legged concept

• Working depths of 150ft or

less

9

10

Source: DW SEU Report 2014

3257

1717

697

487392

1507 35 36 31

0%

5%

10%

0

500

1000

1500

2000

2500

3000

3500

N. America SEA Middle East

and North

Africa

West Africa NW Europe

Installed O&G platforms Liftboat supply

6250 49

34 32

160

10891

27 26

0

50

100

150

200

SEA Middle East

and North

Africa

NW Europe West Africa N. America

Average water

depth (m)

Average POB

Young market in SEA with high opportunity due to the small amount of

supply at the moment

SEU in SEA are typically higher spec – with higher water depth rating

and more accommodation berths

92% 88%82% 78%

61%

0%

20%

40%

60%

80%

100%

Middle East

and North

Africa

SEA N. America NW Europe West Africa

Shallow water spending as % of total E&P spending

M. East and SEA expected to show highest demand growth for SEUs

Demand driven by shallow water production, which is less affected by capex moderation.

High potential in SEA due to limited units currently in supply.

Demand Outlook

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Market OutlookRegion No. of SEUs No. of platforms Ratio of platforms

per SEU

North

America (GOM)

APAC

Potential Market Size

~250

~28

(by 2018)

~3,200

~1,700

13

61

~100 SEUs

Resilience amid low oil prices

Sources: Credit Suisse, Macquarie

� Compared to a sharp decline in utilisation for

global rig fleet, demand for liftboats relatively

resilient.

� Gulf Marine Services recorded >95% utilisation for

liftboat fleet

� TRIYARDS announced 5 newbuild liftboat

contracts in 2015 despite weak demand for

drilling rigs

� Compared to a sharp decline in utilisation for

global rig fleet, demand for liftboats relatively

resilient.

� Gulf Marine Services recorded >95% utilisation for

liftboat fleet

� TRIYARDS announced 5 newbuild liftboat

contracts in 2015 despite weak demand for

drilling rigs

Market Potential – A Bright Spot within a Depressed Offshore Market?

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Assessing the Competitive Landscape

and Barriers to Entry

Potential / New EntrantsEstablished Players

Key Considerations for Operators

• Under-penetrated market in APAC

• Low capex outlay compared to jackup rigs

• Resilient charter rates (between US$20-80k/day) vs. jackup rigs and traditional OSVs (which have

declined >30% since 2014) depending on vessel specs and working depth

• Various fabrication yards with newbuild capabilities, such as TRIYARDS

• Stringent pre-Q and operational requirements by field operators most significant barrier of entry

• Potential increase in competition due to low barriers to entry and traditional OSV players

entering the market amidst low OSV charter rates/ utilisation

APAC / Middle East Operators

International Operators

Assessing the Competitive Landscape and Barriers to Entry

Source: Credit Suisse 13

Sources: Douglas Westwood, EXIM Bank

With more oil platforms

requiring upgrading,

maintenance &

replacement, the demand

for liftboats is improving

particularly in Southeast

Asia.

As a niche market that has

been under penetrated,

offshore service providers

are taking opportunities to

enter the market.

Demand for jack-up units, particularly in the Middle East

and South East Asia markets, has increased in recent

years. Jack-ups increasingly replacing vessels/barges for

construction and maintenance duties at shallow water

field in these regions.

Regional Segmentation to 2020

Assessing the Competitive Landscape and Barriers to Entry

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Outlook for Liftboat and

Chartering Strategies

• SEA region driven by commercials;

• Low cost alternatives create sustainable business model;

• Long term contracts on offer with low OPEX obligations;

• Occasional high day rate/ technically challenging projects

Outlook for Liftboat Business & Chartering Strategies

Source: Ryan Stewart – The Business Case for Flotels

Southeast Asia – Regional Profile

• Shallow/ Medium water depth: DP/ Moored monohulls, jack-up units, DP/ Moored semi-

subs

• Deep water: DP/ Moored semi-subs, DP/ Moored monohull units

Preferred Technology

• Maximisation on PoB, inc. 2 & 4 men cabins

• DP2 generally accepted, as is moored

Service Required

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Vessels Suitable for Southeast Asia Market

BH335

• ABS Class Self-Propelled & Self-

Elevating unit accompanied with a

large deck area and high capacity

cranes

• A true workhorse for shallow water

field services, such as:

1) Work over

2) Coiled tubing

3) Wire-line operations

4) Platform maintenance and upgrade

programs

5) Accommodation for 160 (BH335) /

250 men (BH450)

BH450

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Enhanced Design & Future

Developments

Liftboats of the Future

State-of-the-art, customisable solutions, capable of operating in deeper waters and harsh environments

(such as the BH-series and variants) propelling TRIYARDS as a regional market leader

BH335

BH450

BH300 BH320

BH336 TSU475

19

20

Liftboats of the Future

• Compact and lightweight

innovative cantilever design

• Modular unit

• Integrated coiled tubing and

wireline support

• Capacity for pipe / equipment

storage on cantilever

• Large hoisting capacity

Source: Gannett Offshore

Innovative designs key differentiators to

stay ahead of competition

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Conclusion

• Asia Pacific liftboat market remains under-penetrated compared to US GoM

and West Africa

• Demand improving in Southeast Asia due to more platforms requiring

upgrading, maintenance and replacement

• Utilisation and charter rates relatively resilient vs. jackup rigs and OSVs amid

low oil price environment

• Lower capex requirements and barriers to entry present opportunities for

new entrants to build up fleet rapidly

• Liftboats with higher specifications and capabilities for operating in deeper

waters and harsh environments key differentiators to stay ahead of

competition

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Business overview

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� Headquartered in Singapore and listed on the SGX Mainboard

� Provides integrated full-service engineering, fabrication and ship construction solutions

� Skilled labor and engineering capabilities

� Strong track records in the fabrication of self elevating units (SEUs) in Southeast Asia

� Diversified and rapidly expanding client base

� Headquartered in Singapore and listed on the SGX Mainboard

� Provides integrated full-service engineering, fabrication and ship construction solutions

� Skilled labor and engineering capabilities

� Strong track records in the fabrication of self elevating units (SEUs) in Southeast Asia

� Diversified and rapidly expanding client base

Business Overview

Integrated Fabrication Solutions Provider

Exploration and Field Development

Production and Services

Transportation Refining

Our track records since 2007

Offshore Service Platform (SEU)& Drilling Rig (TDU)

Offshore Support & Construction Vessels / Multi-Purpose Support

Vessel/ Wind-farm Support & Accommodation

Offshore Fabrication

Offshore Heavy Lift Equipment (Knuckle Boom Crane, Leg

Encircling Crane)

Ship Repair & Conversion

Aluminum Support Vessel

Military/Paramilitary

Patrol Boats

Industrial/ Renewable Energy Fabrication

Type of

assets

Unit(s)

deliveredPrincipal specification

Indicative

Market Value

Liftboats/ 9 Up to 450 ft leg length USD 55-90m

SEUs Service Speed : 6 knot

Compliant to southern north sea

MPSV 1 Ice Class, DP3 USD500m

3000 Mt Crane, 239 pax

AHTS 1 92 m, DP2 USD 50-60m

250 ton bollard pull

PSV 2 3,500 DWT, DP2 USD 25-30m

Oil Tanker 2 6,000 DWT, DP1 USD 10-15m

Offshore fabrication projects in aggregate market value of

approximately USD 10m

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Business Overview

Current Ongoing Projects

Industrial Projects

TRIYARDS Group is currently involved in the construction of a multitude of newbuild projects, including

9 liftboats

FPSO Turret (LHS)

Liftboat No. 1 (BH320-L4T - RHS)Liftboat No. 2 (M300-L4P) Liftboat No. 3 (BH300-L4T)

Liftboat No. 4 (BH335) 40m Aluminium Crew Boat

22.

Q&A