Analyst presentation – site visit...
Transcript of Analyst presentation – site visit...
11/1/2011
Lamprell plc
1 November 2011
Analyst presentation – site visit 2011
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Agenda
Topic
HSES Gary Scott
Introduction and welcome Nigel McCue
Facilities & operations overview Chris Hand
Hamriyah and Sharjah facilitiesoverview
Kevin Isles
Hamriyah project summary Sikke Jan Wynia
Sharjah project summary Peter Williams
Jebel Ali project summary Neil Millar
Group strategy Ryan Jervis
Q&A
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Facilities & OperationsChris Hand – Chief Operating Officer
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• Order book – $1.3 bn– Includes NDC options $333.3 mn– Nexen Petroleum new contracts $200 mn– RigMetals NDC land rig order $15 mn
• Bid pipeline– $4.2b as on 31 October 2011
Photo of an E&C project (e.g. RAKGas)
Order book and bid pipeline
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Enlarged group capacity
Allocation of resources and capital• Personnel
– Administration & management 2,000
– Production 12,000Permanent 7,000Contract & labour supply 5,000
• Major equipment
• Engineering
• Capital investment
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• Project execution – Commercial process overview– Facility management structure– Project control and execution
• Quality– Lamprell Group Management System
(LGMS)– Project quality control
• Health and safety– Lamprell 2011 LTI frequency 0.12 (end
September)– UK construction industry 2.83– Up to end of September, the group has
worked over 15.5 million manhourswithout a lost time incident.
Photo of NDC S116E
Operational strategy
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• Value streams and organisation restructured
• LGMS reviewed and updated
• Enlarged Sharjah facility reorganised
• Personnel moved
• Synergies under review
Acquisition integration update
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Hamriyah and Sharjah overviewKevin Isles – Executive Vice President, Hamriyah & Sharjah
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Hamriyah facility overview
HamriyahArea 335,000m²Yard storage 30,000m²
Eastern Free ZoneQuayside 1.4kmWater depth 9mConstruction Start August 2008
Completion Dec 2011Ongoing projects 7 new build ($1.1b in progress)
4 refurbishment
Other highlights API workshopMain administration HQ
Employees 5500 yard, 650 admin
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Sharjah facility overview
SharjahArea 210,000m²
Quayside 760m
Water depth 8m
Pressure vesselsfabrication
3 sets of plate rollers170mm capacity
Ongoing projects 2 new build6 refurbishment
Employees 2,700 yard, 460 admin
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Hamriyah project summarySikke Jan Wynia – Hamriyah General Manager
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Seajacks Zaratan– GustoMSC 5500C Wind Farm Installation Vessel– 85 meter leg length– 800 ton leg encircling crane– Contract effective date: 17th June 2010– Delivery: 17th May 2012– Progress: 67%– Load-out scheduled for 31st January 2012
NDC 1 Makhasib– LeTourneau Super 116E Drilling Rig– 311’ leg length– Contract effective date: 1st August 2010– Delivery: 30th April 2012– Progress: 89%– Loaded out 28th October 2011
Hamriyah project summary | Newbuild
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NDC 2 Muhayimat– LeTourneau Super 116E Drilling Rig– 311’ leg length– Contract Effective Date: 1st August 2010– Delivery: 30th September 2012– Progress: 69%– Load out scheduled for 14th January 2012
Eurasia Drilling– LeTourneau Super 116E Drilling Rig– 377’ leg length– Contract Effective Date: 15th November 2010– Delivery: 28th March 2013– Progress: 47%– Start shipping of the modules to Russia:
1st March 2012
Hamriyah project summary | Newbuild
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Greatdrill Chaaya– LeTourneau Super 116E Drilling Rig– 477’ leg length– Contract Effective Date: 21st February 2011– Delivery: 28th December 2012– Progress: 24%– Load out scheduled for 30th June 2012
NDC 3 & 4– LeTourneau Super 116E Drilling Rig– 311’ leg length– Contract Effective Date: 17th October 2011– Delivery NDC 3: 17th February 2014– Delivery NDC 4: 17th May 2014– Materials being ordered
Hamriyah project summary | Newbuild
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Hamriyah project summary | Refurbishment
Rig Type Completion Value $mn
Noble Gene House Mitsui MODEC 300C-38
November 2011 10
Nabors 655 Pool 140 Series November 2011 19
Nabors 657 Mitsui F-550 February 2012 10
WDI Rig 40 1500hp Double Mast Land Rig
November 2011 5
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Sharjah project summaryPeter Williams – Sharjah General Manager
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• Newbuild– 108 SuperM2 jackup. Delivery Q2 2012– 106 SuperM2 jackup. Delivered 27 October– Legs for Hochtief “Innovation”
• Refurbishment– NDC Al Bzoom RIAP project accepted for
delivery October 2011– Al Burj conversion of jackup to
accommodation rig – Repairs & modifications for Rowan rigs
(Middletown, Arch & Charles)
• Fabrication– Manufacture of approximately 150 pressure
vessels, PAU’s plus 3,000 pipe spools
Operational Highlights (cont)
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Jebel Ali project summaryNeil Millar – Vice President, Jebel Ali facility
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Jebel Ali facility overview
Jebel Ali
Area 178,849 m²
Warehouse & storage
2,300m²
Distance from Quayside
250 m
Water depth 10.5 m
Ongoing projects To follow in next slides
Other highlights 15,000m² of covered workshop space
Employees 2,850 yard, 350 admin
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Fred Olsen Windcarrier Bold and Brave Tern– Multiple Windcarrier wind turbine installation
vessels by Fred. Olsen Windcarrier (FOWC). Self propelled, dynamically positioned, jackup vessels suitable for installation & maintenance of offshore wind turbines.
– Awarded Q1 2010– Delivery
• Brave Tern Q2 2012• Bold Tern Q3 2012
– Load-out weight 12,600 Te– Completed weight 14,800 Te– Progress
• Brave Tern 70%• Bold Tern 57%
Jebel Ali project summary
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Accommodation and utility platform – Awarded Q3 2010– Delivery Q2 2012 – Contract for the platform comprising an
accommodation module and a utility platform. – Scope includes fabrication, assembly and
testing of the utility platform and EPC works for an accommodation module
– Progress and completion• Utility deck 62%• LQ 40%
– Load-out weight – circa 4,700Te
Jebel Ali project summary
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Weatherford Drilling International 3000Hp Land Rigs (Rigs 870 and 871).
– Awarded Q1 2011– Delivery
• Rig 870 – Q1 2012• Rig 871 – Q2 2012
– Oilfield Engineering’s first EPC contract to design and build two new land rigs for Weatherford Drilling International (WDI)
– 3000HP AC / DC land rigs, with a static hook load capacity of 1,500,000 lbs.
– Progress • Rig 870 – 69%• Rig 871 – 66%
Jebel Ali project summary
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Group strategyRyan Jervis – Head of Corporate Transactions
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Lamprell plc – Group Strategy
Contents
Key strategic objectives page 25
Horizontal to Vertical page 26
Sector and Service matrix page 27
Key Strategic Initiatives - SectorE&C page 28Lamprell Wind page 29Other Core initiatives page 30
Key Strategic Initiatives - GeographyLamprell Saudi Arabia and Kuwait page 31Lamprell Kurdish Region of N.Iraq and Southern Iraq page 32
Our Strategic timeline page 33
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Our key strategic objectives 2012-2015
MIS Integration Successful completion of the integration and delivery of synergies
Growth and market share Lamprell as a leading Oil and Gas E&C and Services company by 2015
EPC turnkey provider Vertical structure aligned to clients needs through the complete asset life cycle
Geographic expansion Significant expansion in target growth markets - Saudi Arabia, Iraq, Kuwait
Sector expansion Development into new sectors where core skills are complimentary
Wind energy Leading position in the wind energy installation and transformer market
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Horizontal to Vertical
Conceptual Design
FEED
Detailed Engineering
Procurement
Construction
Testing and Commissioning
Opex and Maintenance
Refurb and Upgrade
WHY?
Increased margins through the value chainLonger term partnership arrangements with clientIncreased ability to influence decision making at an early stageGate-keeper to the projects ensures quality and controlLamprell seen by clients as project managers rather than ‘Builder’Increased cross-selling potentialImproved margins and earnings visibility
HOW?
Structure E&C to deliver through the project life cycleStrategic partnerships with major technology companiesSenior project management oversight throughout the project life cycleReposition the size and significance of our engineering capability with the market post-MIS transaction
Lamprell project involvement from concept to O&M
End life
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Oil & Gas Renewables Strategic development
E&C
Oilfield Engineering
Services
O&M
Structure to deliver our strategy
Aligning to clients needs with turn key technical expertise
Extend existing strong position Harness major growth opportunities
New strategic opportunities
New Build
Service line
Client
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Strategic initiatives | Lamprell E&C
Key aspects of our strategy:
Restructured E&C division
Integration and investment in engineering division
Bid, estimation and procurement teams to be alignedfor EPC contract tenders and delivery
Drive for client and subcontract alliances to enableEPC delivery and provide wider geographic reach
Leverage new concept / product engineering to gainEPC lead role.
Strategy Development Group supporting the drive forlarger value projects and bespoke solutions
Vertical structure and innovative solutions
Aligning to asset life cycle
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Strategic initiatives | Lamprell Wind
Key aspects of our strategy:
Reviewing alternative vessel designs with clients
Establish a foot hold in the rapidly expanding offshoretransformer market
Forecast demand for 90 main step-up transformers and180 sub-stations in the next 6 years in the UK alone
Lamprell facilities represent an attractive cost option forthe major wind farm developers and utility companies
Exploring a partnership with technology and utilitycompanies – opportunity for Lamprell to take an EPC role
Exploit our market leading jackup capabilities to secureentrance as specialist in the build phase
Lamprell core strengths match lack of capacity in the market
EPC self erecting platforms
EPC lead with engineering alliance
Core strengths provide key to EPC model
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Strategic initiatives | other core strategic initiatives
New Build – Continue to build strong market position
Larger and more complex rigsF&G JU2000 focused on harsher environmentsLe Tourneau workhorsePricing being formulated with response this quarter
New vessel design gives rise to license opportunities
FPSO market to strengthen considerably in the next 24 months (Global capex $68bn 2012-2016) *
Abu Dhabi – Strong growth in key market
Upper Zakum
Satah Al-Razboot (SARB)
Umm Lulu
Sunbelt H2S – Continue to build strong market position
Business structure and strategy being reviewed
Expansion to lead entry to new markets for the wider group
Kazakhstan and regional market growth
Inspec – strong growth from multiple sources
Integration of MIS calibration capability and setup of mechanical testing
Strategic bolt on acquisitions to extend capability and geographic reach
*Source: Douglas Westwood – The World floating production market forecast report
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Strategic initiatives | Saudi Arabia and Kuwait
Lamprell Saudi Arabia - key aspects of our strategy:
Significant opportunity to expand downstream operations on the back of the successful MIS Arabia business
Currently piece meal fabrication misses the major portion of the value stream available from refinery life cycle
Harness and extend newly acquired Saudi relationships to ensure Lamprell grows as a O&G provider in KSA
Options being explored for expansion with the existing key relationships
Significant growth in KSA downstream position
Lamprell Kuwait - key aspects of our strategy:
Strengthen long standing relationship with existingsponsor and remove existing barriers to growth
Expand profitable machine shop operations on existingsite within the sponsors facility
Refocus fabrication and share Lamprell commercialexpertise to strengthen fabrication growth prospects
Excellent reputation and strong track recordLong standing and strong sponsor relationshipEstablished team and facility
Current position
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Strategic initiatives | Lamprell IraqKurdish Region of N. Iraq - key aspects of our strategy:
Detailed strategic study of the regional opportunities has been conducted by the team
Joint Venture with key local sponsor being considered
Early entry is an important competitive advantage, and phased entry limits potential risk
Rapidly growing base of potential customers who are approaching the production phase of their respective sites.
Supported by the high demand for early production facilities ( EPFs) across the market – natural hedge to delayed/ cancelled projects
Provides clear entry strategy for other Lamprell services
Phased entry to a key growth market
Northern Iraq team with a wealth of experienceClose relationships with preferred sponsorSunbelt has begun establishing a strong Lamprell reputation
Current position
Southern Iraq - key aspects of our strategy:
Early entrance to the Southern Iraqi market – initially vialeasing a small pre-fabricated and serviced facility
Entry via fabrication and oil field engineering, supportedout of a UAE facility until firmly established
Strong opportunities to expand other Lamprell Serviceson the back of this initial foot print
Strong demand already shown by existing clients andideal market positioning for the end goal of major EPCcontracts in the region
Essential for longer terms goals of securing contract winswith major O&G organisations and consortiums
Strong relations with SOCFocused on first major regional contract win
Current position
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Group strategy | Long Range Plan (LRP)
2011 2012 2013 2014 2015
LAMPRELL• Mid sized regional player
• 98% revenue generated within UAE
• 9000 headcount / 550k m² / 1.8 km quayside
• Limited full EPC contracts
LAMPRELL + MIS• Large regional player with broad Middle East footprint
• Increased revenue generated from outside the UAE
• 14,000 headcount / 925k m² / 2.2 km quayside
• Vertically integrated engineering team 1250 strong
LAMPRELL• Large regional player with increasing non-UAE market share
• Completion of shift to higher margin full EPC contracts
• Iraq business setup and operational
• Significant foothold in KSA downstream market
LAMPRELL• Organic and non-organic growth in new markets
• Leading ME EPC and Services contractor
• Contractor of choice for all jackup projects
• Key player in Iraq, Saudi Arabia and Kuwait
3 year Long Range Plan for the Group
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Q&A