Norway: Sevan Marine Announces 3Q 2010 Results

Operating income for the quarter amounted to USD 73.4 million (USD 58.2 million). EBITDAFX was USD 18.5 million (USD 17.1 million). Operating loss was USD 19.5 million (loss of USD 0.2 million), and net loss was USD 66.4 million (net profit of USD 0.5 million).

Operating income was USD 15.2 million higher than previous quarter mainly as a result of increase in revenue from Sevan Driller following commencement of operations in June, improvements in the Commercial Uptime on FPSO Sevan Piranema and increase in revenue from FPSO Sevan Voyageur in relation to reimbursable expenses.

Operating expense was USD 13.8 million higher than previous quarter mainly as a result of increase in operating expense on Sevan Driller following commencement of operations and incurred reimbursable expenses on FPSO Sevan Voyageur as reflected in the revenues described above. These effects were partly offset by a reduction in operating expense in the Corporate segment.

A net foreign exchange loss relating to financing of USD 35.4 million (gain of USD 25.2 million) was mainly a result of unrealized disagio on NOK-denominated bonds following a weakening in USD compared to NOK of 10.1% during the quarter.

Financial expense through profit and loss increased by USD 4.6 million to USD 29.1 million (USD 24.5 million) mainly due to expensing of a call premium and changes in amortization schedules for financing fees following refinancing of debt.

As of September 30, 2010, total assets amounted to USD 2,450.6 million (USD 2,395.5 million), of which USD 2,080.7 million (USD 2,029.8 million) was capitalized as ‘Sevan Capital Assets’. Cash and cash equivalents amounted to USD 67.7 million (USD 61.7 million).

As of September 30, 2010, the Group had an undrawn long term vendor credit facility relating to Sevan Driller II of USD 80 million. In addition, the Group has secured commitments for a USD 525 million bank facility for the construction of Sevan Driller II and for a USD 230 million bank facility to refinance and fund an upgrade of FPSO Sevan Voyageur. In October, Sevan secured a USD 83 million securitization facility where net cash proceeds, following repurchase of a USD 48 million convertible bond, amounted to approx. USD 16 million which is not reflected on the balance sheet as per September 30, 2010.

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Source: Sevan Marine, November  11, 2010;