3 rd Quarter 2006 Financial Statements DeepOcean ASA Continued growth in 3rd quarter Operating revenues totalled MNOK 348.6. Pro-forma revenues for the same period in 2005 was NOK 191.4 (The effect of CTC Marine Projects is not included in any of these periods). EBITDA was MNOK 67.4 compared to pro-forma EBITDA of MNOK 35.3 in 2005 (not including CTC Marine Projects) All major projects have been in operation. The decommissioning project on Frigg was successfully completed One of the vessels operating in Mexico have been through some maintenance during the quarter Large efforts have been put in acquiring CTC Marine Projects in UK, which will give effects in 4th quarter Order book at the end of 3rd quarter was MNOK 2,100 (excluding CTC Marine Projects) Financial summary 3 rd quarter Acc. 3 rd quarter MNOK 2006 2005 Change % 2006 2005 Change % Revenues 348.6 191.4 82.1 905.4 511.6 77.0 EBITDA 67.4 35.3 90.9 172.3 102.4 68.3 Pre-tax profit 50.1 22.9 118.8 118.5 65.0 82.3 The Oceanteam Group was acquired in August 2005. The 2005 numbers in the table above is presented on a proforma basis as if Oceanteam was consolidated from 1.1.2005, to ease comparisons. CTC Marine Project accounts are not included in the proforma numbers in the summary table above. However, in the detailed tables at the end of this report the effect of CTC Marine Projects is included (please see below). Operations The third quarter for DeepOcean (DEEP) is characterized by ongoing operations in all major projects with satisfactory utilisation of the vessel fleet. During the period 10 vessels and 9 owned ROV-systems, in addition to 3 hired in ROVs, have been in operation. Both framework contracts with Statoil in the North Sea, the survey and the IMR contract, proceeded according to plan employing a total of four vessels. In addition, the trenching support project for Nexans was ongoing through the quarter with one vessel. The decommissioning project for Total on the Frigg field was completed successfully in the quarter. In Mexico, four vessels have been operating for Diavaz, and in the Holland/UK sector one vessel has been occupied with various spot works. Maintenance work on Acquanaut has caused some downtime during the quarter. DeepOcean has acquired the British trenching company CTC Marine Projects Ltd. The acquisition makes DeepOcean the world s leading provider of subsea trenching services. The accounts of CTC Marine Projects will be consolidated from October 1 st, 2006. Unless otherwise stated, the proforma accounts in this report is prepared to illustrate the effect on the financial statements as if acquisition had occurred on the first day in each period. The recruitment campaign that has been ongoing since 2005 continued in the third quarter. During the period 27 new employees have been recruited, which makes the total number of Page 1 of 7
employees in the Group approximately 300 persons (excluding employees of CTC Marine Projects). The recruitment activities will continue in order to increase the company s onshore and offshore manpower resources. During the third quarter, DeepOcean s investment program has continued with the delivery of 1 new work class ROV system. In addition, DeepOcean is in the process of investing in equipment to be mobilised onboard the new IMR vessel, which is estimated to be delivered in the end of 2007. Comments to the financial accounts Revenues and earnings in the third quarter show a significant increase compared to the same period in 2005. The main reason behind this positive development is the IMR project for Statoil, which was mobilised for the first time this season, and DeepOcean s generally increased capacity to run additional projects in all regions. The equipment acquired during the last year cause an increased fixed asset base, and thus increased the depreciation figures with MNOK 5.8 compared to 2005. Net finance has improved with MNOK 1.0 compared to the same quarter last year. The increase in the total balance is due to the new investments through the period, increased receivables due to the higher activity and increased cash position. Net interest bearing debt at the end of 3rd quarter amounted to MNOK (5.2), and the equity ratio on September 30th was 65%. Future outlook The North Sea market is expected to decline during the winter season (fourth and first quarter). However, operations in the Gulf of Mexico are expected to be stabile. The fourth quarter of 2006 will be affected by the acquisition of CTC Marine Projects, which will be consolidated from October 1st. Overall, DeepOcean believes the subsea service market for the remainder of 2006 and for 2007 to be strong. The company has an order book of about NOK 2.1 billion by the end of 3rd quarter 2006. Including CTC Marine Projects, the order back log is approximately NOK 2.5 billion. Since the end of the quarter extensions on charters in the Gulf of Mexico have increased the order back log with an additional NOK 250 million. Board of Directors DeepOcean ASA November 24th, 2006 Contacts: CEO Kåre Johannes Lie (+47 52 70 04 04) CFO Gerhard Skåleskog (+47 52 70 04 06) Page 2 of 7
3. kvartal 2006 rapport DeepOcean ASA Veksten fortsetter i 3. kvartal Driftsinntekter på MNOK 348,6. Proforma inntekt for samme periode i 2005 var NOK 191,4 (Effekten av CTC Marine Projects er ikke inkludert i noen av disse periodene) EBITDA var MNOK 67,4 sammenlignet med proforma EBITDA på MNOK 35,3 i 2005 (ikke inkludert CTC Marine Projects) Virksomhet i alle hovedprosjekter gjennom kvartalet Vellykket avslutning av decommissioning prosjektet på Frigg En av båtene som selskapet opererer i Mexico har gjennomgått vedlikeholdsarbeid/reperasjoner i løpet av kvartalet Det ble nedlagt mye arbeid i oppkjøpet av CTC Marine Projects i England som forventes å gi gode effekter på resultatene fra og med 4. kvartal. Ordreboken viser ved slutten av 3. kvartal MNOK 2.100 (eksklusiv CTC Marine Projects) Finansiell oppsummering 3. kvartal Akkumulert 3. kvartal MNOK 2006 2005 Endring % 2006 2005 Endring % Inntekter 348.6 191.4 82.1 905.4 511.6 77.0 EBITDA 67.4 35.3 90.9 172.3 102.4 68.3 Resultat før skatt 50.1 22.9 118.8 118.5 65.0 82.3 Oceanteam Gruppen ble kjøpt opp i August 2005. 2005 tallene i tabellen ovenfor er vist på en proforma basis som om Oceanteam var konsolidert fra 1.1.2005, for å forenkle sammenligningen. CTC Marine Project regskap er ikke inkludert i proformatallene i den summariske tabellen ovenfor. I de detaljerte tabellene bak i rapporten er imidlertid effekten av CTC Marine Projects inkludert (vennligst se bak). Drift For DeepOcean (DEEP) er 3. kvartal preget av virksomhet i alle hovedprosjekter, med tilfredsstillende utnyttelse av flåten. I løpet av perioden har 10 skip, 9 egne ROVsystemer og 3 innleide ROVer vært i bruk. Begge rammekontraktene med Statoil i Nordsjøen, Survey og IMR kontrakten, har gått som planlagt hvor i alt 4 fartøyer er benyttet. I tillegg har trenche støtte prosjektet for Nexans pågått i hele kvartalet med ett skip. Decommissioning prosjektet for Total på Frigg feltet ble fullført med suksess i kvartalet. I Mexico har fire fartøyer vært i operasjon for Diavaz, og i Holland/Storbritannia har ett fartøy vært beskjeftiget med forskjellige spot jobber. Vedlikeholdsarbeidet/reperasjoner på Aquanaut har medført noe nedetid i løpet av kvartalet. DeepOcean har kjøpt det britiske trenche selskapet CTC Marine Projects Ltd. Dette oppkjøpet gjør DeepOcean til verdens ledende leverandør av undervanns trenche tjenester. CTC Marine Projects sine regnskap vil bli konsolidert inn i DeepOcean gruppen fra 1. oktober 2006. Hvis ikke annet er angitt, er proforma tallene i denne rapporten tatt med for å illustrere den regnskapsmessige effekten som om oppkjøpet hadde funnet sted første dag i perioden. Page 3 of 7
Rekrutteringsprogrammet som har pågått siden 2005 fortsatte i 3. kvartal. I løpet av dette kvartalet er 27 nye medarbeidere rekruttert, noe som bringer det totale antall ansatte i gruppen opp til ca. 300 (eksklusiv ansatte i CTC Marine Projects). Rekrutteringsprogrammet vil fortsette for å øke selskapets personell både på land og offshore. Gjennom 3. kvartal har DeepOcean sitt investeringsprogram fortsatt med levering av en ny WorkROV. I tillegg er selskapet i gang med investeringer i utstyr som skal installeres ombord i det nye IMR fartøyet som er planlagt levert i slutten av 2007. Kommentarer til regnskapet Både inntekter og fortjeneste viser i 3. kvartal en betydelig vekst sammenlignet med samme periode i 2005. Hovedforklaringen til denne positive utviklingen kan forklares med IMR prosjektet for Statoil, som har hatt sin oppstart i denne sesongen, samt generelt større kapasitet for DeepOcean til å operere flere prosjekter i alle regioner. Utstyret som er anskaffet gjennom det siste året danner en økt kapitalbase som forårsaker økte avskrivninger med MNOK 5.8 sammenlignet med 2005. Netto finanskoster er forbedret med MNOK 1,0 sammenlignet med same kvartal i fjor. Økningen i totalbalansen skyldes nyinvesteringer, økte kundefordringer pga. høyere aktivitet og en økt kontantbeholdning. Netto rentebærende gjeld ved utgang av 3. kvartal var på MNOK (5.2), og egenkapitalandelen pr. 30. september var 65 %. Fremtidsutsiktene Som vanlig forventes Nordsjømarkedet å være noe svakere gjennom vintersesongen (fjerde og første kvartal). Virksomheten i Mexicogulfen forventes imidlertid å være stabil gjennom denne perioden. 4. kvartal vil bli påvirket av oppkjøpet av CTC Marine Projects, som vil konsolideres inn i regnskapene fra 1. oktober 2006. Generelt tror selskapet på et sterkt subsea service marked for resten av 2006 og 2007. Selskapet har en ordrebok på ca. NOK 2,1 milliard ved utgang av 3. kvartal. Inkluderes CTC Marine Projects er ordreboken omtrent NOK 2,5 milliard. Etter utløpet av kvartalet har forlengelse på charter i Mexicogulfen økt ordrereserven med ytterligere MNOK 250. Styret i DeepOcean ASA 24. november 2006 Kontakter: CEO Kåre Johannes Lie (52 70 04 04) CFO Gerhard Skåleskog (52 70 04 06) Page 4 of 7
Income statement / Resultatregnskap 01.07-30.09 01.07-30.09 01.01-30.09 01.01-30.09 01.01-31.12 MNOK 2006 2005 2006 2005 2005 Revenue 348.6 160.2 905.4 353.0 549.1 Total revenue 348.6 160.2 905.4 353.0 549.1 Project cost 206.9 100.3 567.1 218.8 344.3 Employee benefits 52.6 26.3 126.8 64.2 99.6 Other operating costs 21.7 3.5 39.3 9.8 13.2 Total operating exp. 281.2 130.1 733.1 292.8 457.1 EBITDA 67.4 30.1 172.3 60.2 92.0 Depreciation 17.3 9.2 48.6 16.4 29.4 EBIT 50.1 20.9 123.7 43.8 62.6 Net finance cost (0.0) (1.6) (5.1) (2.9) 3.0 Earnings before tax 50.1 19.3 118.6 40.9 65.7 Taxes 14.0 5.3 33.2 11.4 18.3 Net earnings 36.1 14.0 85.4 29.6 47.4 Earnings per share 0.51 0.34 1.21 0.93 1.27 Proforma Proforma Proforma Proforma Proforma 01.07-30.09 01.07-30.09 01.01-30.09 01.01-30.09 01.01-31.12 MNOK 2006 2005 2006 2005 2005 Revenue 549.2 405.2 1 395.6 890.3 1 142.3 Total revenue 549.2 405.2 1 395.6 890.3 1 142.3 Project cost 336.2 239.2 885.4 552.6 704.6 Employee benefits 82.2 50.4 212.6 136.8 191.2 Other operating costs 29.5 11.5 62.9 31.0 40.4 Total operating exp. 448.0 301.1 1 160.8 720.4 936.3 EBITDA 101.2 104.0 234.8 170.0 206.0 Depreciation 29.6 25.2 80.7 71.9 91.5 EBIT 71.6 78.8 154.1 98.0 114.6 Net finance cost (6.1) (5.3) (17.1) (19.9) (18.6) Earnings before tax 65.5 73.5 137.0 78.2 95.9 Taxes 18.3 20.3 38.4 23.2 27.7 Net earnings 47.2 53.2 98.6 55.0 68.2 Earnings per share 0.62 0.90 1.30 0.93 1.08 Page 5 of 7
Balance sheet / Balanse Proforma Proforma Proforma MNOK 30.09.06 30.09.05 30.09.06 30.09.05 31.12.05 31.12.05 ASSETS Intangible fixed assets 188.3 185.1 638.0 616.8 203.8 639.3 Tangible fixed assets 442.7 326.9 720.2 536.1 350.5 566.1 Financial assets - 1.7-21.1 1.7 1.7 Total fixed assets 631.0 513.7 1 358.2 1 174.0 556.0 1 207.1 Trade receivables 276.5 170.0 359.8 342.5 106.0 149.7 Cash and cash equivalents 114.0 17.2 119.5 24.2 267.7 307.4 Other current assets 96.9 17.5 247.4 25.2 26.2 43.5 Total current assets 487.4 204.7 726.7 392.0 399.9 500.7 TOTAL ASSETS 1 118.4 718.5 2 084.9 1 566.0 955.9 1 707.8 MNOK EQUITY AND LIABILITIES Subscribed equity 35.2 311.7 162.3 438.8 576.9 704.0 Retained earnings 672.1 49.3 690.0 48.4 76.0 74.8 Total equity 707.3 361.0 852.3 487.2 652.8 778.8 Long term debt 79.0 119.6 567.9 594.9 102.4 563.6 Other long term liabilities 73.4 56.5 82.6 68.2 41.9 50.1 Total long term liabilities 152.4 176.1 650.5 663.0 144.3 613.7 Payables 168.6 80.4 269.2 176.3 84.7 132.0 Short term debt 29.8 65.3 145.8 133.1 30.6 89.4 Other short term liabilities 60.3 35.7 167.1 106.4 43.5 93.8 Total short term liabilities 258.7 181.4 582.1 415.7 158.7 315.2 TOTAL EQUITY AND LIABILITIES 1 118.4 718.5 2 084.9 1 566.0 955.9 1 707.8 Page 6 of 7
Specification of changes in equity / Egenkapitalavstemming 01.07-30.09 01.07-30.09 1.1-31.12 MNOK 2006 2005 2005 Equity at beginning of period 657.9 72.6 61.2 Net earnings in period 36.1 14.0 47.4 Capital increase - 275.0 558.3 Cost related to capital increase - (1.9) (18.1) Dividend - - (5.0) Cost of share-based payment - - (2.6) Currency translation differences 13.3 1.3 11.7 Equity at end of period 707.3 361.0 652.8 Cash flow statement / Kontantstrømsanalyse 01.07-30.09 01.07-30.09 1.1-31.12 MNOK 2006 2005 2005 Cash flow from operations 53.0 19.3 93.2 Cash flow from investment activities (34.5) 15.3 (33.0) Cash flow from financial activities (6.1) (22.9) 187.9 Currency effects 0.8 (0.0) (0.0) Changes in cash over the period 13.2 11.6 248.2 Cash at beginning of period 100.8 5.6 19.5 Cash at end of period 114.0 17.2 267.7 Segment information / Segmentinformasjon MNOK Survey/ IMR Trenching Other/ Total constr. elimin. Revenue 3rd quarter 2006 134.4 217.0 - (2.8) 348.6 EBIT 3 rd quarter 2006 19.1 38.3 - (7.2) 50.1 Revenue 3 rd quarter 2005 93.2 4.0-62.9 160.2 EBIT 3 rd quarter 2005 3.1 (0.3) - 18.1 20.9 Summary of significant accounting principles As from 1 January 2005, the company prepares its financial statements in accordance with International Financial Reporting Standards. This interim report is prepared in accordance with IAS 34. The consolidated financial statements have been prepared based on a historical cost convention, modified by the revaluation of financial assets and liabilities at fair value through profit and loss. The accounts of Oceanteam AS and its subsidiaries have been included in the consolidated accounts of DeepOcean ASA from 1 August 2005, and the accounts of CTC Marine Projects Ltd. and its subsidiary will be included in the consolidated accounts from 1 October 2006. The proforma financial information has been produced to illustrate the effect on the financial statements as if the business combination between the DeepOcean Group, the Oceanteam Group and the CTC Marine Projects Group had occurred on the first day in each period. Page 7 of 7